THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Thursday, October 24, 2024
The Standing Senate Committee on Foreign Affairs and International Trade met with videoconference this day at 11:30 a.m. [ET], to study Bill C-282, An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management).
Senator Peter M. Boehm (Chair) in the chair.
[Translation]
The Chair: Good evening, honourable senators. My name is Peter Boehm, I am a senator from Ontario and the chair of the Standing Senate Committee on Foreign Affairs and International Trade.
I would now invite the members of the committee participating in today’s meeting to introduce themselves, starting on my left.
Senator Gold: Good morning. Marc Gold, Quebec.
Senator Gerba: Good morning. Amina Gerba, Quebec.
[English]
Senator Al Zaibak: Good morning. Mohammad Al Zaibak, Ontario.
Senator Ravalia: Good morning. Mohamed Ravalia, Newfoundland and Labrador.
Senator MacDonald: Michael MacDonald, Cape Breton, Nova Scotia.
Senator Harder: Peter Harder, Ontario.
Senator Boniface: Gwen Boniface, Ontario.
Senator Woo: Yuen Pau Woo, British Columbia.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia.
[Translation]
Senator Verner: Josée Verner, Quebec.
[English]
The Chair: Welcome, senators, and welcome to all who may be watching us across the country on SenParlVU.
Colleagues, today we continue our study of Bill C-282, An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management).
[Translation]
We welcome, via video conference, Patrick Taillon, Professor and Co-Director, Centre for Constitutional and Administrative Law Studies, Laval University, and Philippe Lagassé, Associate Professor and Barton Chair, School of International Affairs, Carleton University.
[English]
Thank you both for being with us today. Before we hear your opening remarks and proceed to questions and answers, I would ask everyone present to please mute notifications on your devices. We’re now ready to hear your opening remarks.
[Translation]
Professor Taillon, you have the floor.
Patrick Taillon, Professor and Co-Director, Centre for Constitutional and Administrative Law Studies, Laval University, as an individual: Good morning. First of all, I’d like to thank the members of the committee for this invitation.
I’ll be brief, as my message is quite simple and clear. I’m not a specialist in supply management, but as a constitutional lawyer, I believe that it is legally possible to increase Parliament’s role in these matters and to provide a slightly better framework for the executive’s room for manœuvre.
The heart of my message is that here, the law must not be used as a false pretext. It’s one thing to be for or against supply management, but we mustn’t hide behind legal pretexts.
The Chair: Professor Taillon, excuse me. We are currently experiencing technical difficulties.
Professor Taillon, you may continue your presentation.
Mr. Taillon: I’d like to focus my message elsewhere than on the substance of the issue, which is being for or against supply management systems, because I’m not a supply management specialist. I’m more interested in the legal mechanics.
Is it possible to tighten the executive’s room for manœuvre in this area? Is it possible to add a little more parliamentarism? I think so.
Above all, the heart of my message is that the law must not be used here as a false pretext. Whether you’re for or against supply management, that’s one thing, but in my opinion, it would be a mistake to claim that the bill doesn’t work because it requires executive consent, given that some might claim that this bill significantly modifies, limits or seeks to limit the Crown’s prerogative to negotiate foreign affairs treaties.
On this, I want to be very clear. The Supreme Court and the decisions of the House of Commons clearly point in one direction. Section 10 of the Foreign Affairs Act sets out a statutory power, not to be confused with the prerogative, which continues to exist. When we frame the powers of section 10, we are dealing with a statutory power; we are not dealing with the prerogative. This is why, in my opinion, Royal Assent is not required.
The second message I want to share is that once we make this observation, we should neither overestimate nor underestimate the effects of the bill. Since we are only limiting the statutory powers set out in section 10, we can use language prohibiting the negotiation of a treaty.
What we have here instead is a mechanism designed to complicate the life of the executive to force it to act with its visor raised, to introduce transparency, democracy and parliamentarism should it ever wish to question supply management. The bill also aims to give the executive the ability, in future negotiations, to tell other governments that we can’t compromise on supply management because in Canada, there’s a law that makes life difficult and it’s better to make other compromises.
For all these reasons, we need to understand the mechanism before us and neither underestimate nor overestimate the effects of the law. What’s more, this mechanism should be seen as an additional tool to protect certain interests, without necessarily making the issue of supply management irreversible.
That is the heart of my message, to a degree; you don’t need Royal Assent, and at the same time, you need to make an accurate reading of what you can and can’t do with the bill before you.
The Chair: Thank you very much. You now have the floor, Professor Lagassé.
Philippe Lagassé, Associate Professor and Barton Chair, School of International Affairs, Carleton University, as an individual: Thank you for the opportunity to appear before you to discuss the bill.
Today, my goal is to highlight two problems with the bill, and propose a recommendation.
[English]
The first problem with the bill is that it fails to bind the Crown. This oversight may mean that the bill fails to achieve what it sets out to do: limit the executive’s exercise of the Royal Prerogative for foreign affairs as it relates to supply management. This is not a question of Crown consent. This is a question of section 17 of the Interpretation Act which states that acts of Parliament do not necessarily bind the Crown or affect its prerogatives absent express words to that effect. Bill C-282 does not contain language that expressly binds the Crown, which raises doubts about its effects on the prerogative.
[Translation]
While legislation can also bind the Crown by necessary implication, the bill does not appear to meet the criteria established by the Supreme Court of Canada.
Conversely, if one assumes the bill is binding on the Crown, the proposed legislation undermines the separation of powers in Canada.
[English]
As the Supreme Court found in Khadr, it is:
. . . the constitutional responsibility of the executive to make decisions on matters of foreign affairs in the context of complex and ever-changing circumstances, taking into account Canada’s broader national interests.
If it does, indeed, bind the Crown, Bill C-282 represents a significant intrusion on the executive’s ability to conduct foreign affairs with dignity and efficiency. This reinforces the importance of having Bill C-282 bind the Crown with express words. If Parliament truly wishes to hamper Canadian diplomacy and trade negotiations, it should say so explicitly. Parliament has that ability. If that is what it actually intends to do, it can easily express itself clearly.
[Translation]
In light of these considerations, I recommend that the Senate refer the bill back to the House of Commons so that it can determine whether the bill should bind the Crown, and what this would mean for the conduct of foreign affairs. Thank you.
[English]
The Chair: Thank you very much.
I would like to note that Senator Marty Deacon of Ontario has joined the committee.
Colleagues, as per usual, you have four minutes each. Please keep your intervention concise and your question short. That will allow our two witnesses to provide a maximum response.
Senator MacDonald: Thank you to these very good witnesses.
Bill C-282 appears to limit Canada’s flexibility in trade negotiations by protecting supply-managed sectors. From a constitutional perspective, what are the potential legal or federalism-related challenges that could arise from restricting the federal government’s trade power in this way? Either one of you may certainly respond to it.
Mr. Lagassé: This is a key point that needs to be raised with respect to both the legal and the federalism questions. Trade agreements are linked to enabling legislation, and that permits the federal Parliament and the provinces to consider what is being brought before them. The treaty prerogative does not normally allow the executive to impose limitations or changes to supply management of its own accord. It will typically need to have enabling legislation and provincial buy-in to do so.
I think that gets to the core of the issue here: Parliament, through this bill, is supposedly attempting to not even give the executive the ability to propose a full package. It’s attempting to limit the executive’s ability to even weigh different alternatives for Parliament’s and the provinces’ consideration.
My key point of caution here is this: The legislatures already have the ability to express themselves on this question when it comes before them. It strikes me as excessive, and it impinges upon the executive’s constitutional role, to prevent the executive from doing so prior to Parliament and the provinces being asked to consider the enabling legislation that is relevant.
[Translation]
Mr. Taillon: I think that on the question of federalism, in fact for all questions relating to negotiations, we have to distinguish between what happens upstream and downstream of negotiations.
Before negotiations, the legal stakes for the provinces are secondary, but we know that after the negotiations, if there are changes that affect them, their implementing legislation is indispensable. That’s why, between the legal and the political, you are going to involve the provinces more and more preventively in certain negotiations, consulting them or trying to see if a consensus is possible.
This bill does nothing to change this dynamic. Under the terms of the bill, before embarking on a review of the supply management system, the executive can hardly avoid turning to Parliament. The bill, of course, does not prevent the executive from acting through its tried and true Royal Prerogative, but if it wants to exercise the powers set out in section 10, it’s impossible; it will first have to amend section 10, and to do that, it will have to go back to Parliament.
All this is designed to force the government to pre-emptively announce that it’s going to question this. A contrario, it allows the Minister of Foreign Affairs, if she is under pressure, to make last-minute compromises in a complex negotiation and justify her refusal to her partners. This gives her a weapon with which to say that there is a law that prevents her from making this concession that is demanded by foreign partners and that makes the job more complicated.
This can be done in the same way that, sometimes, our governments have arrived at international negotiations saying that they were willing to make this or that concession, but that they had to discuss it with the provinces first. For the executive, these little legal obstacles are sometimes also tools in the negotiation that enable it to stay true to its game plan.
[English]
Senator Ravalia: Thank you to both of our witnesses. We are delighted to have you here.
This bill has become politicized, and we are hearing testimony that is compelling on both sides. This is, however, a private member’s bill that was passed in the House of Commons. We, as the Senate, are doing a deep dive and applying the foundation of sober second thought. Is it within the role of the Senate to, in fact, potentially defeat this bill without legal or constitutional ramifications, particularly by those who might feel adversely affected if it were to pass?
[Translation]
Mr. Taillon: The Senate’s role is indeed one of sober second thought. In this respect, I do not disagree with my colleague’s reading of the bill. However, introducing an amendment, as Mr. Lagassé suggested, would radicalize the bill’s impact.
It is true that there is a slight discrepancy between the wording of the bill, which claims to prohibit any challenge to the supply management system, and the bill’s real impact, which circumscribes the executive’s authority only over its statutory powers under Section 10.
Is there really any point in sending the bill back to the House of Commons for greater clarity? This gain in clarity would also lead to radicalization under the bill. Its effects would be significantly more impactful. I am not sure it’s necessary to get this clarification, since the goal right now is to provide the Minister of Foreign Affairs with an asset allowing him to say that in Canada, it’s difficult to negotiate any compromise on this, because we have this legislation. I think the bill, as it is currently drafted, could tighten up the rules of the game and have a strong political impact, but at the same time, it will not lead to a prohibition that would be too restrictive for the future.
[English]
Mr. Lagassé: In my view, this is a poorly drafted piece of legislation. As Professor Taillon is hinting at, it seems to exist in a grey zone between what it actually seeks to do and what it says it’s doing. In effect, you have a piece of legislation that even its defenders seem to be hinting might not actually legally achieve what it says it’s doing. If it were to legally try to achieve what it’s doing, then that would raise the stakes.
For the Senate, this is exactly its role; it is to say, “Why should we accept a piece of legislation that may or may not do what it says it’s actually doing, that is in sowing confusion, that doesn’t appear properly drafted, that is a private member’s bill and that is being ostensibly driven not by legal considerations at this point but political ones?” If anything, this is really where the Senate has a role to play: putting a pause on things that are highly politically contentious from a legal point of view. It is not rejecting the bill outright, and it is not necessarily preventing it from passing a second time. The Senate is able to propose amendments to either make a bill better or to ask the Commons to express itself more clearly in terms of what it actually seeks to achieve, and I think this is where I fully agree with my colleague, Professor Taillon.
[Translation]
If the House of Commons really wants to bind the Crown, it should say so. If it is instead a political issue or an attempt to impose certain limits on ministers when they negotiate, there are other ways to go about it.
I find it somewhat bizarre to use a bill to achieve political objectives.
[English]
Senator M. Deacon: I will direct my first question to Professor Lagassé. It’s in regard to an article that you had entitled “Supply Managing the Prerogative?” You noted that Bill C-282 doesn’t bind the Crown — and you talked about that earlier — which casts doubt upon whether it imposes binding limits on foreign affairs prerogative. You question why the drafters of the bill did not heed warnings that not explicitly binding the Crown would cause problems down the road, if binding the Crown was indeed the intent.
Today, can you share with us what kinds of problems this bill could cause, if passed, and how much difficulty the ambiguity might cause for trade negotiators, from your perspective?
Mr. Lagassé: Fundamentally, this is just a question of parliamentary intent. If Parliament actually seeks to limit the ability of the executive to negotiate, then it should do so with express words so that there is no confusion as to what exactly they are or are not able to do.
As I raised in the article, for instance, the bill seeks to amend section 10 of the Department of Foreign Affairs, Trade and Development Act, DFATD Act. We have been told by the Supreme Court in Khadr that section 10 doesn’t actually bind the Crown; prerogative persists. In binding section 10, which deals with the Minister of Foreign Affairs, the connection with the Minister of International Trade is not entirely clear in the legislation because the powers of that minister fall under a different part of the act. Similarly, we know the Prime Minister has ultimate responsibility for foreign affairs. What is their role in negotiating? Does the act bind them?
The act simply leaves ambiguity and has a lack of clarity. When it comes to parliamentary intent or trying to provide direction to the executive when it comes to foreign affairs, Parliament should say exactly what it’s actually trying to do. Otherwise, it does sow confusion. In part, I think that is what my colleague, Professor Taillon, is hinting at. It creates ambiguity.
While I understand the desire, politically, to give pause to the executive when it comes to supply management, I don’t think we should be entertaining that kind of ambiguity in our laws. Parliament should be expressing itself clearly when what it seeks to do is infringe upon what the Supreme Court has told us is a constitutional responsibility of the executive.
Senator M. Deacon: Thank you very much.
Professor Taillon, you spoke to the precursor to Bill C-282, Bill C-216, at the House of Commons in June 2021. You stated that Parliament could set limits on the statutory powers of the minister as provided in section 10 of the DFATD Act and that “A move in this direction is a political decision vested in the elected members of the House.” You noted later in that meeting in response to a question that nothing is irreversible, meaning that a decision made by Parliament today to provide a number of protections could be undone by Parliament in the future.
I know the trade part of this might not be your area of expertise, but in a case like this bill where trade with other countries is on the line, would you not see it as being problematic — a back and forth on what the minister can and cannot do based on the politics and the parliamentarians of the day?
[Translation]
Mr. Taillon: That is the very concept of Parliament’s sovereignty, which supposes that tomorrow’s Parliament can change what today’s Parliament decides.
Personally, I think it is important that, no matter how far‑reaching the bill’s effects may be, it can be repealed if ever there is a need for a majority in the House of Commons to introduce a bill, seek a mandate from parliamentarians and open negotiations on these issues. Nothing would prevent tomorrow’s Parliament from revisiting these issues.
We must avoid falling into the trap of thinking that the bill will have no impact. It only has an impact on the powers outlined in Section 10, but from a political point of view, it sends an important message. This is not the first time bills of this kind have been passed.
I will make a comparison far removed from trade, but is closer to my field. When Parliament passed legislation on the fixed election date, it was seen as sending a strong message, but with a very partial limitation of the powers of the Governor General. Since then, it has had major political impacts, at least when there is a majority in Parliament. We are kind of in a field —
[English]
The Chair: Mr. Taillon, I’m sorry to interrupt, but we must move on in the interest of time.
Senator Harder: Thank you to our witnesses this morning.
My question is for Professor Lagassé. Could you outline for us examples where legislation has circumscribed the ability of the Crown? What does that look like?
Mr. Lagassé: That is very common. You will have a preamble or an opening statement. If you look at the Emergencies Act or the Quarantine Act, you have clear statutory language saying “this Act is binding on Her Majesty” or, in this case now, His Majesty. We know, then, that the purpose of the act in that context is clearly to displace the prerogative and put it into abeyance. Many acts fail to do so, and they can, in some instances, displace the prerogative by necessary implication because the entire purpose of the act itself would effectively be null and void if it didn’t.
So the Communications Security Establishment Act does not bind the Crown, but we assume that the purpose here was to create a foreign signals intelligence on a statutory basis and not provide the prerogative to do so. However, part of the reason, I would argue, that we didn’t bind the Crown in that case is because signals intelligence conducted by the Canadian Armed Forces, for instance, may not fall under the purview of CSE, and we therefore need to have some flexibility and fill some gaps — not to have so much rigidity.
When you fail to bind the Crown, you’re effectively admitting that there are some gaps and abeyances that need to be taken into account. When you do bind the Crown, you are taking an additional step. I don’t want to infringe upon my colleague’s time here, but even the Emergencies Act gives us a good example of why this is. Because it binds the Crown the way it did, it severely hampered the ability of the government to rely upon the prerogative to keep the peace, for instance, in dealing with the convoy. As a result, it was found that they acted contrary to the Emergencies Act in acting the way they did, so we need to be cautious when we bind the Crown, and we need to have a fulsome discussion of exactly what it is that we’re doing.
Senator Harder: Thanks very much.
If I have time, I’d like to go beyond the constitutional issues to broader legal issues. Are you aware of any foundational acts in any jurisdiction in the world where the foundational act of a trade department is the basis of trying to bind the negotiators?
Mr. Lagassé: No. I would say it’s the contrary. For instance, even Ireland, in their constitution, makes it clear that the foreign affairs power is exclusive to the executive, precisely for these reasons. You will find the same in the United States. I’m not going to claim to know all jurisdictions, but I will simply say that, in most countries, foreign affairs is understood to be of such a level that it is an executive competency, precisely because of what the Supreme Court told us in Khadr. The government has to respond to changing circumstances and the national interest, and that is limited by parliamentary deliberations in some cases.
[Translation]
Mr. Taillon: If I may, we mustn’t forget that every country in the European Union, when it enters trade negotiations, is now partly governed by legal mechanisms tied to their membership in the Union. So, for all the major liberal democracies of continental Europe, negotiations are subject to all sorts of multi‑level governance issues, which is not really the model followed in the bill we are discussing. Yes, this has traditionally been the case — my colleague Philippe Lagassé is right — but changes have happened, nonetheless. However, I haven’t had a chance to dig deeply into the issue.
The Chair: Thank you very much.
Senator Gerba: Thank you to our witnesses for your very enlightening words. My question is for Professor Taillon, but I think both witnesses can answer it.
The majority in the House of Commons already voted on this bill. In fact, Bill C-282 passed with a significant majority of 262 to 51.
That includes everyone, including the entire executive, meaning all the ministers in office. The 51 votes against it were from a few Conservative Party representatives, but even the leader of the Conservative Party voted in favour of it. If the bill is unconstitutional, wouldn’t that have been raised in the House of Commons before it reached us here?
Mr. Taillon: I think the issue of constitutionality has to do with royal consent. On that point, my colleague and I agree, because the message sent by the Supreme Court in the Khadr case is very strong. The powers in Section 10 of the legislation before us today are distinct from good old royal prerogative, which still exists.
Since they are distinct, the problem does not arise. We can limit one without limiting the other. That’s why the debate is focusing more on the issue of its effects.
In that sense, I think the bill’s constitutionality is no longer a problem.
Mr. Lagassé: Quickly, I wonder if the bill really does bind the Crown and would have the implied effect if ministers voted for it. We do not know. The bill is ambiguous in such a way that ministers could vote in favour of it, without necessarily taking into account what they were told from within the executive: that we didn’t know the bill does not bind the Crown and does not affect its authority. That changes the game somewhat when it’s time to vote.
Senator Gerba: If I understand correctly, that means if Bill C-282 passes, it could be subject to legal challenges, especially with regard to the royal prerogative.
Mr. Taillon: I do not think it will be subject to guarantees.
The fact that the House of Commons passed it is a signal. Ultimately, however, under our rights system, the Supreme Court’s signal in the 2010 Khadr case is what I find convincing.
Mr. Lagassé: There could be a situation where we hear rumours that the government is negotiating supply management, seemingly in violation of legislation, or that the executive intends to propose a new bill to allow it. In principle, that would have a legal impact.
Senator Gold: Hello everyone. Mr. Taillon, you talked about democratization of debates, meaning that this bill would require a parliamentary debate if supply management interests were challenged, which would give parliamentarians the final word on those issues.
Do you think that parliamentarians’ ability to examine these issues is appropriate in a democracy like ours?
Mr. Taillon: Actually, the bill forces a government wanting to open up supply management to go back to Parliament first. Today’s Parliament is prohibited from limiting tomorrow’s Parliament.
The word “prohibition” in the bill means that before acting, a government must go back to Parliament. It ensures more transparent and democratic governance on this issue, with more parliamentarism, and that’s why I think it is a good thing.
Senator Gold: Thank you. I want to follow up on my question, time permitting, about the role of parliamentarians. It’s a somewhat related theme. Given your expertise, Mr. Taillon, could you share your opinions or give your point of view on what is happening lately in the House of Commons on the question of privilege debate?
Mr. Taillon: It’s my understanding that the issue will lead to more work for other committees.
I am partial to parliamentary privilege. It is important, but it is not the only constitutional principle guiding our system. I know that other issues are sensitive. There is a police investigation and we are talking about how justice works. I do not want to give an unmindful opinion on such an important and sensitive matter.
Senator Gold: You have the right to reserve your opinion, if that’s what you say in French, but I still appreciate your point of view. I invite Mr. Lagassé to say a few words on the subject.
Mr. Lagassé: The principle of parliamentary privilege, which is already being diluted at the Supreme Court, needs to be defended.
If you reduce both chambers’ power to demand documents and let the executive give you documents only when it agrees with your intentions, that violates accountability to Parliament.
It’s a matter of principle, even if we don’t agree on the subject as such.
Senator Gold: Thank you.
[English]
The Chair: You still have one minute.
Senator Gold: I’m feeling generous today.
The Chair: Thank you.
Senator Woo: Thank you, witnesses.
I’m trying to think through the implications of the ambiguity that you’ve raised if the bill were to go through. One scenario could be that, in the negotiations, the executive, in fact, disregards the admonition in the bill and negotiates away certain market access for supply-managed industries. They then conclude an agreement that has to come to Parliament through enabling legislation, and it could be that parliamentarians take a different view and seek to not approve the legislation, or make it very difficult to approve the legislation, on the grounds that they thought the executive was, in fact, bound by Bill C-282. That’s one scenario. Another scenario could be that the executive, in fact, does treat Bill C-282 as somewhat binding and uses that as the reason to not put supply-managed industries on the table for further market access, but then when the enabling legislation comes to Parliament, parliamentarians say, “Look, you missed the opportunity to give us a better deal by not allowing some market access.” Are those the kinds of ambiguity and confusion that either or both of you are alluding to? Professor Lagassé, would you like to start?
Mr. Lagassé: Yes, there is that, precisely.
In order to avoid this type of ambiguity, if parliamentarians have strong views about a treaty, its enabling legislation is the time and place for that to be expressed. If Parliament is of the view that supply management should never be included in an international agreement, it has the opportunity to voice that during debates around enabling legislation. Why create this extra layer whereby the executive will have to go back to Parliament, repeal this act and then enter into negotiations? You’re adding time, delay and a bunch of things of that nature.
There’s also simply the question of lawsuits. The minute there seems to be any indication that the government is engaging in treaty negotiations, are we going to find ourselves, as we often do, with various law professors bringing the government before the courts saying they don’t have the authority to do this?
Here, again, it’s simply a question of the fact that if Parliament is actually seeking to do this clearly, then why doesn’t it say so? It shouldn’t have this ambiguity. We shouldn’t be guessing as to what, exactly, the executive’s authority is in this area.
[Translation]
Mr. Taillon: If I may, I have two hypotheses: first, the hypothesis of a government wanting to change supply management. I think it is important to be able to do so legally. It’s not good to create straitjackets, but this bill isn’t one for a government that wants to pursue a policy, has a majority in the House of Commons and may have the Senate’s support. So, it is possible even if the bill exists.
However, a government that does not want change on this issue — but is forced to do so under pressure from a trade partner during the final stretch of negotiations — has a tool in this bill: the ability to tell its trade partner that our country has a restriction and an additional legal obstacle. That way, it can try to direct the negotiation elsewhere. That is why I think if the government wants it and has the required majority, it can do so. It will avoid being cornered, if I can put it that way.
[English]
Senator Boniface: Actually, Senator Woo’s question spurred perhaps a conclusion for me, and I just want to make sure that I’m right.
If I’m a dairy farmer thinking that this is going to protect me, take my product off the table conclusively, what I’m hearing from each of you is that that’s not the case. It will create potentially more confusion and not fulfill the outcome, which was that supply management is off the table. Am I correct in that conclusion? Mr. Lagassé, I’ll start with you.
Mr. Lagassé: Yes, in two ways. First, the bill may not do what it’s aiming to do. Second, as we both agree, a new government can come in and, as part of its first budget, with an omnibus bill, simply strike this right away. There’s nothing that prevents that.
Very clearly, given that this is just a small section of a subsection of an act that has already been declared not to bind the executive and that it can be struck out with an omnibus bill or any other kind of legislation right at the beginning of a mandate, this creates false certainty for anybody involved in the dairy industry.
As I think we’re all alluding to here, this is a political bill. It’s symbolic more than anything else.
Senator Boniface: Is there anything you want to add, Mr. Taillon?
[Translation]
Mr. Taillon: We mustn’t underestimate or overestimate the bill. Very respectfully, I disagree with my colleague, Philippe Lagassé, on it being purely symbolic. The bill helps with increasing protection for the dairy sector, but it is not an absolute protection. The bill seeks to create a slight additional legal obstacle and, above all, to create circumstances leading to the desired political effect. That is not an absolute legal protection.
Senator Gerba: I would like to come back to the fact that the bill intends to create an obstacle. It is obvious, certainly, but this bill was created to follow up on four consecutive motions passed in the House of Commons that were circumvented every single time during negotiations.
If we introduce this limit and it becomes law…. It’s a policy that’s been in place for decades, for more than 50 years. It is known throughout the world and by all our trade partners. You stated — and you believe — that this is becoming a constitutional problem or a prerogative that will be challenged, if I understand correctly. I would like to understand to what extent you suggest going back to the House of Commons to clarify something that is already rather clear.
The Chair: The question is for Professor Lagassé, I believe?
Senator Gerba: Yes.
Mr. Lagassé: We are told, for example, that the government could go back and change the legislation before or during a negotiation. Once again, I wonder. If the aim is really to completely exclude supply management from negotiations, Parliament should say so clearly. We see here that opinions seem to waver between yes and no, that it depends, that these are political issues, and that we just want to create another obstacle so that the government has to go through this stage before getting there. As parliamentarians, you should be demanding clarity from the House of Commons, but especially from the ministers when it comes to their intentions. I think that’s your role as senators.
Mr. Taillon: Even if there were more clarity, a future Parliament could repeal the law, and that’s normal; that’s the basis of British parliamentarianism and Parliament’s sovereignty. Absolute protection cannot happen through legislation. With this legislation, I think we have a good balance. In a way, if there is a majority in Parliament and the government really wants to take on a policy of challenging supply management, there is a procedural way of going about it.
On the other hand, if we have before us a government that, in all good faith, would like to save supply management, but in the heat of the action during negotiations, sometimes it does not have the tools, the arguments or the balance of power. This modest little legal lock can make a difference when we have a government looking for reasons to avoid challenging supply management or, when sitting across from its international partners, sometimes lacks the arguments. This gives it an additional argument that can make a big difference. That is why I believe that the bill, even if it is not as clear as my colleague would like, still has a significant political impact.
Senator Gerba: I see.
Senator Gold: I would like to continue along the same lines.
We have already heard the question as to whether parliamentarians are really serious about their intentions regarding this bill. This bill simply reinforces current government practice in supply management and trade negotiations. As everyone knows, it has the support of all parties in the House.
In this context, Professor Taillon, wouldn’t it be useful for Parliament to proclaim its position through bills, speeches and studies, as we are doing here in committee? In light of all this, if the bill passes, wouldn’t Parliament’s willingness to protect supply management be clearer?
Mr. Taillon: I completely agree with you. This is not the first area where an inherent prerogative of the executive continues to exist, but coexists with a limited statutory power. In most areas — and I’m thinking of criminal law, for example — the power to pardon a prisoner under the Criminal Code is a statutory power. The prerogative still exists, but de facto, the more parliamentarians express their point of view, even if it does not completely bind the Crown, the more this will of parliamentarians makes its way into our system. I cite the example of criminal law, but there could be others.
Therefore, it is extremely important, when parliamentarians send a message and even if the objective is not to put the executive in a straitjacket that leaves no room for discretion…. In fact, the message remains important and this legal tool will make a difference.
Senator Gold: Is it also the case that, when a court wants to know the intent of a Parliament these days, and not in the past, it can take a look at the actual debates and studies to clarify the intent of Parliament? That’s right, isn’t it?
Mr. Taillon: Absolutely.
Senator Gold: Thank you.
Mr. Lagassé: I will say two things. First, the House of Commons can also use a motion. Nothing is preventing it from using other mechanisms, apart from legislation that does not do what it should. Once again, it comes back to your role.
Do you think it makes sense to introduce a bill when a motion could simply be moved? Why not use a motion? It’s the same thing as what the courts tell us. The courts are able to watch the debates, but they have also told us on several occasions that if the government really intends to bind the Crown, it should say so “explicitly.” Once again, we come back to the fact that there are other ways to express the will of the House; there are motions, statements, studies.
I think it’s a shame that a bill that doesn’t achieve its objective is being used to express what could easily be found in a motion, an agreement or something else.
[English]
Senator Harder: Professor Lagassé, you anticipated my question, but I want to expand a bit on this and remind us all that the House of Commons has expressed, by motion, its view on this matter several times, and the government has expressed its view in a policy sense. Are those not expressions less dangerous to the prerogative and to the expectations of the negotiators at the table or the supply managed sector in terms of believing that this legislation is actually meaningful?
Mr. Lagassé: Yes. I would simply argue that motions and reports and other things of that nature that try to create a political impediment or a policy declaration are a more appropriate mechanism to use than a private member’s bill that does not fully achieve what it sets out to do. I find that’s a misuse of the private member’s bill and of acts of Parliament, to be frank.
Equally important, I think it’s important to note that, insofar as we’re using legislation like this to do this, you all know that your sittings are limited, and the ability to get various acts of legislation through are limited, increasingly so. In this world, where we need to respond to things at a very fast pace, we are introducing legislation that then creates additional obligations and additional impediments on the executive, even if the executive has no real intention of abiding by some of these provisions. It is impeding the ability of Canada to compete in a highly complex and a highly fast-paced world, and misusing, I would argue, legislation as opposed to many other mechanisms that Parliament has at its disposal to express itself.
Senator Harder: Thank you.
[Translation]
Mr. Taillon: I think we’re talking more about a political opportunity debate here. Is it appropriate? It’s up to parliamentarians to decide. I think I stressed the importance of not overestimating or underestimating the bill. Its impact is modest, but it is still real. The bill provides important protection and then it’s up to parliamentarians to decide.
The Chair: Thank you.
[English]
We’ve come to the end of our questions. On behalf of the committee, I’d like to thank Professor Philippe Lagassé and Professor Patrick Taillon. I think you’ve educated us a bit today, which is a good thing as we continue our study of Bill C-282. On behalf of the committee, thank you very much for being witnesses today.
Colleagues, we now move to our second panel. We’re pleased to welcome here in the room Ian Burney, Former Chief Trade Negotiator at Global Affairs Canada and a former ambassador to Japan, among other things; John M. Weekes, Former NAFTA Chief Negotiator for Canada and Former Ambassador to the World Trade Organization in Geneva; and by video conference, John D. Tennant, Managing Partner, W2N2 Partnership and a former consul general in Detroit.
Welcome to our witnesses. We’re happy to have you with us, of course, and we’re looking forward to your opening remarks. As per usual, we will have a round of questions and answers afterwards. Mr. Burney, you have the floor first.
Ian Burney, Former Chief Trade Negotiator, Global Affairs Canada, as an individual: Thank you very much, Mr. Chairman. I certainly appreciate the opportunity to appear before the committee on such an important issue and to do so with former colleagues to boot.
I’m here as a private citizen, but the perspectives that I share are informed by a 34-year career at Global Affairs Canada, almost all of which was in the field of trade policy negotiations. This is my first appearance before a parliamentary committee since stepping down from government. It’s refreshing to be able to speak with complete candour, so let me get straight to the point: In my opinion, Bill C-282 is an ill-conceived and deeply flawed proposal that has no discernible upside yet carries very real risks to Canadian interests.
To begin with, the bill is an expression of rank protectionism. It sends a terrible signal to our trading partners about Canada’s commitment to open and rules-based trade, and it will make Canada a less appealing negotiating partner. Canada doesn’t typically start from a position of great strength in that regard. Through the eyes of our partners, we offer a relatively small market that is already largely tariff-free under the WTO, and we come to the table with a long list of demands for exceptions and special treatment. Do we really want to compound that by enshrining our defensive positioning on supply management, a sector that accounts for 1% of our GDP, into a legislative prohibition? We’ve already seen the U.K. walk away from the negotiating table. How many other opportunities will we squander? And with those who do stay at the table, you can be sure that Canada will be made to pay a price for maintaining an iron wall around supply management, and it’s a price that will be paid by the export-oriented industries that are the backbone of our economy via diminished access for their goods.
Also consider the precedent that this will set. If such legislative protectionism is appropriate for the supply-managed sectors, then why not for any other industry or pressure group that has an axe to grind about our trade policy? This is a very slippery slope.
Moreover, the risks are not limited to future initiatives. The bill will exacerbate tensions with existing trade partners that are already unhappy with how we’ve implemented our existing commitments to them.
The biggest risk, as many witnesses have said already, is stirring up a hornet’s nest in the United States, which, given the febrile political climate, could have serious consequences, not least of all for the CUSMA review in 2026.
For those who argue that the bill is no big deal because it just codifies existing government policy, I beg to differ. There is a very big difference between expressing a policy position and putting yourself in a legislative straightjacket — one that precludes the ability of the government of the day to exercise any discretion, even with compelling national interests at stake. To my mind, it is wholly inappropriate and unprecedented for the legislative branch to fetter the minister’s discretion in such a heavy-handed and granular fashion in an area that is plainly an executive branch responsibility: the conduct of international trade negotiations.
Had this measure been in place 10 years ago, we wouldn’t today have the state-of-the-art trade agreement that we have with the EU, we wouldn’t be part of the CPTPP, and the NAFTA would likely have been terminated without a successor agreement. So why would choose to deny ourselves the ability to even consider such potentially advantageous arrangements in future?
In short, this bill represents the triumph of narrow special interests over the broader national good and of small politics over sound policy. In my view, if there were ever a time and place for the Senate to exercise its constitutional role as the body of sober second thought, it is here and now. I urge you to reject Bill C-282.
The Chair: Thank you very much.
John M. Weekes, Former NAFTA Chief Negotiator for Canada and Former Ambassador to the World Trade Organization, as an individual: Honourable senators and chair, thank you for giving me this opportunity to appear here today.
I have worked on trade policy issues for most of my career. I was part of the Canadian delegation to the Tokyo Round of GATT, General Agreement of Tariffs and Trade, negotiations in the 1970s; I was Ambassador to GATT during the formative part of the Uruguay Round from 1987 to 1991; I was Chief Negotiator for NAFTA from 1991 to 1994; and I was ambassador to the World Trade Organisation from 1995 to 1999. From 1999 to 2021, I worked in the private sector as a senior adviser to many businesses, including agricultural organizations such as the Dairy Farmers of Canada and the National Cattle Feeders’ Association, not at the same time, I might add. I also served on the board of the Alberta Livestock and Meat Agency and the Canadian Agri-Food Policy Institute.
I will focus on whether this bill, if enacted, would help protect supply management in future negotiations, whether it would be an efficient way of trying to secure that objective and whether there might be consequences for the pursuit of other Canadian trade objectives. I do not propose to address whether supply management is an appropriate policy for Canada.
To provide a concrete illustration that helps illuminate the matter, let me briefly describe how the government of the day approached the negotiation of supply management in the original NAFTA negotiations, which took place from 1991 to 1992. At the outset, cabinet considered the overall approach to the negotiations and provided general guidance to the negotiating team. Over time, cabinet made these instructions more precise. It was made clear there would be no scope for the negotiation of new obligations on supply-managed products in this new agreement that went beyond what had already been negotiated in the earlier Canada-U.S. Free Trade Agreement.
In the formative part of those negotiations, I made it clear in a private meeting with the other two chief negotiators that Canada would make no concessions in this area. The Americans were clearly unhappy, but we were able to hold this position. Canada made no concessions on supply-managed products in the original negotiation of the NAFTA.
In my view, it would have been much more difficult, if not impossible, to achieve that outcome if this part of our mandate had been contained in statute. A statutory declaration of this nature would provoke a public reaction from the Americans.
To make the example more contemporary, imagine how a President Donald Trump might explain such legislation to the dairy farmers of Wisconsin. Trump, of course, is not a fan of trade agreements, unless everything goes his way. His most likely reaction would be to say, “Fine. We will not renew the CUSMA in 2026 unless Canada repeals this legislation.” Where would that get us? There would be no scope for finessing the matter in private negotiations, as we did in the NAFTA. Canada would have opted for a public slogging match.
From this and other experiences in my career, I conclude that this legislation is unnecessary for achieving the objective of protecting supply management. Indeed, it would complicate and make more difficult Canadian efforts to achieve that objective. Furthermore, I strongly believe that passage of this legislation would severely prejudice the attainment of other Canadian objectives in trade negotiations, particularly in the agricultural sector.
I would be happy to try to respond to any questions you might have. Thank you.
The Chair: Thank you very much.
John D. Tennant, Managing Partner, W2N2 Partnership, as an individual: Thank you very much, chair, and good day, senators. I, too, am another Global Affairs Canada alumni. For 39 years, I was proud to be a member of Canada’s foreign service, with frequent focus on trade, investment and economic matters. I had assignments three times in the United States, twice in Japan, Central America, West Africa and Australia. I am also a signatory, along with both of the speakers you’ve just heard from, to a letter to all senators that seeks to urge you not to approve Bill C-282. That letter sets forth a number of reasons. It was read into the Senate record by Senator Harder.
The question before you is what effects legislating Bill C-282 into law could have on Canada’s future ability to negotiate beneficial, well-balanced trade agreements that will secure and expand access to world markets for Canadian products, services and allow our investors comfort.
To start with, contrary to the expectations of the supply management sector, which supports this bill, their audacious attempt to carve out a legislated trade-negotiating exemption for the supply-managed sectors is very likely to rebound to their disadvantage. It waves a red flag that could make them a priority target in any future trade negotiations. They need to be careful what they wish for.
More broadly, what harm would the provisions of Bill C-282 inflict on Canada’s future ability to be a part of trade negotiations that will further support, open and assure access to international markets? The answer is that it will be a threat that will almost certainly have very serious adverse consequences.
For starters, Canada’s major trading partners will be doubtful as to whether Canada should even be accepted as part of or invited to be a partner at the table in any future trade negotiations. Secondly, if we are fortunate to be part of these trade negotiations, what sectors will our negotiating partners mercilessly target to move us away from the position that we’re faced with given this intransigent legislation? And if indeed, as we soon will, we need to defend and extend vital existing trade agreements such as CUSMA, which was referred to and which was hard won and is foundational to Canada’s overall interest, what less-than-subtle demands and vicious leverage might we face? There has already been reference to that.
Returning to the dynamics within Canada, you’ve heard that other globally competitive Canadian agricultural sectors fear that legislated exclusion of supply-managed sectors could well make them prime targets. Do we want to pit one segment of our vital agriculture and food sector against others? What other sector might step forward and want to seek legislated trade negotiating exemptions?
Not to get involved in the legalities that you’ve been exposed to earlier today, it’s also important, as they did, to underline that the House and the Senate definitely have an important role with trade negotiations. Mandates are given to trade negotiators, but the agreements need to come back to the other place and the Senate for approval. Of course, with the mandates, the negotiators take into account what the expectations are in terms of what will and will not need approval.
Bill C-282 would represent a very serious step back that runs counter to the gains we’ve made through many years of trade negotiation and trade development. Our trade negotiators are really respected around the world. The answer is not to support Bill C-282. Thank you very much.
The Chair: Thank you.
Colleagues, as before, we will go to questions now of four minutes each. Please keep your questions concise.
Senator MacDonald: It’s wonderful to have such great witnesses here this morning with so much experience.
In many ways, you’ve touched upon the questions I was going to ask, so I’m going to spin some questions off of this. You have a lot of experience with NAFTA and all types of trade negotiations with the U.S. When it comes to the NAFTA arrangements in regard to supply management compared with the CUSMA conditions with supply management, how do you think we made out in the end when you compare the two agreements?
Mr. Weekes: Is that question for me?
Senator MacDonald: Whoever thinks they can speak to it.
The Chair: Looks like you volunteered, Mr. Weekes, so go ahead.
Mr. Weekes: I have the advantage of not having been a government employee during the renegotiation of the NAFTA and the creation of the CUSMA, so maybe Mr. Burney might have reflections on that that would be more accurate than mine.
Let me say briefly that I think there were some relatively modest additional concessions made on supply-managed products in the CUSMA negotiation, but I think given the situation we face, where Donald Trump was threatening to tear up the NAFTA and basically said the United States would make no concessions, what their requirement was for continuing the NAFTA was to have the agreement rebalanced in favour of the United States. Given all of that, I think we came out of the CUSMA negotiations very well because the concessions that we made were actually pretty slight.
Mr. Burney: I was going to make essentially the same point. I take no credit for it since I was serving in Tokyo when the negotiations took place. Exactly to that point, when you consider where the U.S. position began with the explicit threat of terminating the agreement, wanting to get completely out of the dispute settlement provisions that we had for trade remedy actions, which was a critical issue for Canada in the original Canada-U.S. free trade agreement, I thought our negotiators did a superb job. Yes, we made some incremental concessions in the area of supply management, but if you look at the totality of the concessions that Canada has made across all three agreements where there are some, it still amounts to somewhere around a maximum of 10% of the domestic market. When you consider what the risks were to Canada and you consider the United States is almost 80% of our export market — it’s existential from a Canadian economic standpoint — I thought that the outcome of that agreement was a very significant success for Canada.
Senator MacDonald: We have five areas that are covered in supply management, but it seems like dairy is always the most controversial. We have New Zealand right now upset with our arrangements with the CPTPP, challenging us, and we saw the trade negotiations collapse with the U.K. over dairy issues. Why is dairy so much more of an issue than eggs, chicken or turkey? Why is it constantly so much more of an issue?
Mr. Weekes: If I might begin, I think we have made some more concessions in the area of eggs and poultry than we have in dairy products. No longer being a government official, I might suggest that the dairy industry has been extremely efficient at its lobbying efforts with the government. It’s perhaps not surprising that we see what has happened. Again, to come back to what my colleague just said, despite all of that, the overall concessions we made in supply management have been for a very small proportion of the total market.
Senator M. Deacon: Thank you all for being here today. We really appreciate it.
First, a two-second answer. Could you tell me, the three of you, “yes” or “no,” were you consulted or any part of the submission or feedback when this bill was being debated in the House committee? Were any of you involved?
Mr. Weekes: No.
Mr. Tennant: No.
Mr. Burney: No.
Senator M. Deacon: Thank you for that. I appreciate that quick answer.
Mr. Burney, I have a question for you. I’m going to leave the NAFTA and CUSMA world and go over to other parts of the world. You obviously have deep experience with Asia, with the work that you’ve done in Thailand and Vietnam and recently in your current work as the Japanese ambassador continues in that region. Recently, just in the last few weeks, we’ve had this ASEAN summit concluded, and our Prime Minister and trade minister were there. Clearly, it is an element of importance, and with the CPTPP, there is certainly a trading bloc of 580 million consumers, which is a huge GDP piece. I’m wondering, given your extensive experience working in the Indo-Pacific region, what does Canada risk with these vital trading partners and agreements, particularly the CPTPP, if Bill C-282 passes? How might this outcome further escalate our trade dispute that my colleague mentioned with New Zealand, for example, over tariff rate quotas on dairy?
Mr. Burney: Thank you for the question.
I think the CPTPP is an extremely important agreement for Canada. It gives us privileged access into the Japanese market that we’ve been seeking for decades. It was absolutely vital from my standpoint for Canadian interests that we found our way into the original TPP negotiations, which would not have happened if we were not prepared to make any concessions on supply management.
The deal, as it was then renegotiated or moved forward with the 11 after the United States came out, reflected a very courageous position of the Japanese to maintain the deal as it was negotiated, even with the U.S. not in it. That enabled Canada to get access into the TPP markets that, frankly, reflected American negotiating leverage, which we then didn’t have to share with the Americans because they took themselves out. It was the best of all possible worlds for Canada.
New Zealand clearly is irritated with how we’ve implemented the dairy concessions. Just last week, they’ve declared their intent to continue dispute settlement over the quota allocation procedures that Canada has adopted. This will continue to be a thorn. It has been for decades. But it does not help to put this into legislation and remove the ability of the government of the day, as I said in my opening remarks, to exercise discretion when it comes to the ability to resolve the dispute in future.
To give you a hypothetical, if there is a scenario that comes up where there is the possibility of resolving our dairy disputes with the United States and others by making an incremental concession on access, which this bill would prohibit, in return for being able to maintain the quota allocation procedures that we currently have, which might even be supported by the supply managed industries, we would be precluded from doing that because of this legislation. It doesn’t make sense to fetter the government’s hands in the future.
Senator M. Deacon: Thank you.
Senator Coyle: Thank you to our witnesses for your letter and for your testimony today. I have two questions, so I’m just going to put them out there.
The second one will be for you, Mr. Burney, and that’s about the situation with the U.K. agreement. You mentioned it. I’d like to know a bit more and how that can be an illustration for us, if it can be.
Everyone has talked about the red flag, the hornet’s nest that is being stirred up if this were to pass. Are we not already at risk even before this bill is either passed or not passed? Aren’t people talking about this already? How dangerous is it that we’re even considering it, let alone passing it? What do you hear about that?
Mr. Weekes: It hasn’t passed, of course, and that’s an important distinction. This is still a bill. It’s a proposal for legislation; it’s not legislation. I think that that makes a very big difference. The problem with legislation is, in part, that it’s so public.
Senator Coyle: Exactly.
Mr. Weekes: Although I listened to the nuance in the earlier hearing before this one began, it does appear there could be perhaps some ambiguity in the wording, but I think it would not be read that way by the Americans. You can’t have a more dramatic political step than passing legislation, and I think it would force the United States to react politically at a senior level in a similar fashion.
Rather than allowing this issue in a negotiation to be managed carefully with perhaps minimal or no concessions, it would turn it into a spotlight. The press would be all over it in the United States. Senators and congressmen will be all over it. Governors would be all over it. It would create a dynamic that I believe would make it much more difficult for Canadian negotiators to resist the pressure, because ultimately, the United States, in this negotiation, if this is what the review turns into, will have the leverage of terminating the NAFTA, and we have a lot more to lose if that were to happen than the United States has.
Mr. Burney: I would just add that dairy is going to be a contentious issue with the United States with or without this legislation, so we should be very clear about that. There are other irritants that are going come up as well, but this compounds it. To the point just made, it makes it much more public, and it almost requires a response from the United States. It’s an own goal. This is unnecessary, so why do it?
With respect to the U.K., yes, my understanding is they did walk away from the negotiations when they became convinced that Canada wasn’t prepared to offer any concessions in supply management and they were about to lose the access that they had under the CETA with the EU, which was sunsetted after three years. Whether it was actually the legislation that convinced them that there was no prospect or it was the policy position, we could debate it, but I think the fact that this legislation was moving forward made it abundantly clear that there was going to be nothing on the table for them in this sector, and, faced with that, they made the decision. They did walk away. My concern would be, how many other opportunities that are out there will similarly not be on the table for Canada because of this?
The Chair: Colleagues, I just want to remind you that we also have Mr. Tennant on line, who can offer his expertise as well.
[Translation]
Senator Gerba: I thank our witnesses for being here today. Thank you for your service to Canada. Canadian negotiators are doing an exceptional job for our country. We’re very proud of that.
Mr. Burney, you said that the sector we are talking about today accounts for barely 1% of our economy. But that 1% is essential and provides us with essential products, products that Canadians want to consume locally and that are essential to our food security.
I don’t understand why you’re still congratulating yourself on having given concessions during the previous agreements, when motions were moved at the last three negotiations. We had unanimous motions in the House of Commons to protect supply management, but you made concessions in relation to that.
Can you explain to us why it is supply management — in other words these products that are essential to the consumption of Canadians that don’t even account for 1% of the economy, as you said, but that account for thousands and thousands of jobs in our regions…. Why must this sector always be subject to negotiations and sacrificed during the negotiation process?
[English]
Mr. Burney: If you will permit me to respond in English. I’m afraid that, since leaving government, I have allowed my French to become a bit rusty.
I don’t mean to diminish the importance of the supply-managed sectors in the Canadian economy — 1% is still 1% — and I realize full well that they play a vital role. I’m not here challenging supply management. That’s a whole other suggestion. I think whether or not you believe supply management should maintain the policy, I would still suggest that this bill is not appropriate to meet Canada’s trading interests.
In terms of the negotiating dynamics, it’s not that the supply managed sectors are being asked to make the sacrifice. It is the one sector that we actually refused to make any concession on. When we go into the negotiation, often the sectors where we’re hoping to achieve the most market access gains for our exporters are other agricultural sectors: beef, pork, grains, canola, you name it.
It is a much more difficult proposition to make when you go into a negotiation if you say, “Yes, we’d like you to give up your protections in your most sensitive areas, but we’re not going to touch ours. We’re going to preserve prohibitive tariffs so that there will be no exports in our markets that are sensitive, but we want you to liberalize yours.” You can understand that that is a difficult negotiating position to take.
As I said, we’ve made small concessions in three agreements adding up to, I think, less than 10% in the case of dairy, of domestic production, in order to obtain the three most important agreements that Canada has in its arsenal: the agreements with North America, Europe and our key trading partners in Asia.
[Translation]
Senator Gerba: Since you have a great deal of experience in this area of negotiations, I imagine you are familiar with the U.S. Farm Bill?
[English]
Mr. Burney: I’m not familiar with the specifics of what is in the Farm Bill, but I have been around the politics of the U.S. Farm Bill for most of my career.
[Translation]
Senator Gerba: I’ll quote from part 7 of the U.S. Farm Bill:
[The] Secretary shall establish the tariff-rate quotas for raw cane sugar and refined sugars at the minimum level necessary to comply with obligations under international trade agreements that have been approved by Congress.
It is clear that the law requires the U.S. executive to restrict sugar imports. Why couldn’t Canada do the same?
[English]
Mr. Burney: In many ways, sugar in the United States would be the equivalent of the dairy industry in Canada from a political sensitivity standpoint. That having been said, we were successful in negotiating important concessions from the Americans in both sugar and sugar-containing products in the original Canada-U.S. Free Trade Agreement, the NAFTA and then CUSMA. Canada’s industry doesn’t have wide-open access — it’s kind of like the access we’ve given up in dairy — but our exporters do have access into a very lucrative market in the United States based on what we were able to negotiate. The Americans aren’t precluded from giving concessions in those areas, but it’s as difficult as it is on the reciprocal side getting concessions from us on supply management.
[Translation]
The Chair: Thank you, senator. We’ve already exceeded the five minutes for your questions.
[English]
Senator Harder: Thank you to our witnesses for being here.
I want to start with Mr. Burney and ask all other panellists to comment. I want to pick up on your statement when you referenced that non-agricultural sectors may be at risk here. I think much of this debate is seen to be an intramural agricultural debate, and my concern, frankly, goes well beyond agriculture. I wonder if you can expand a little bit on the threats that passage of this bill, as written, would pose for some of our other Canadian export interests beyond agriculture. Mr. Tennant, I want to make sure you’re in on this too.
Mr. Burney: In a negotiating dynamic, of course, if you want to go in and say these sectors in Canada are off limits, then the other side will respond in whatever fashion they want. They may target our other agricultural interests or it could be elsewhere. My biggest concern is what red flag this waves in the United States and what implications this carries for the renewal of CUSMA.
Senator Harder: I’m thinking about steel and aluminum, for example.
Mr. Burney: Absolutely. This does wave a red flag, and it makes Canada a bigger target than we need to be in the United States at a very difficult time. Now, obviously, the election will be material to what happens in terms of our future trade negotiations, but regardless of how the election goes, Canada is going to be in for a pretty choppy ride with the Americans when it comes to trade policy.
Senator Harder: Just remember, for the record, that then‑Senator Harris was one of 10 Democrats voting against the CUSMA.
Mr. Tennant, I want to pick up on this from your Detroit experience in the auto sector. How would this play in terms of the potential downside for Canada’s auto sector?
Mr. Tennant: I don’t think we want to hand a lot of suggestions to people who may be negotiating with us, but whatever leverage someone across the table wants to achieve will certainly be measured by how much damage could be done if they were to exclude or cause impediments to our trade in important sectors. You’ve named auto parts, steel and aluminum. There are so many that are between Canada and the United States, and they would have quite a lot to select from, not necessarily just other agricultural products or the supply‑managed sectors themselves. It’s wide open, and negotiators love to gain maximum leverage and stir the pot on the other side, create fear and try to get concessions.
Senator Harder: Mr. Weekes, do we have time for a comment?
Mr. Weekes: I’d say the basic problem is we export a much larger percentage of our economy to the United States than the other way around. Yes, they do benefit from the relationship with us, considerably, but we would be very severely threatened if we were unable to see a further renewal of the CUSMA. We depend on strong rules. That’s what we need for protecting us from vicarious actions on steel and aluminum or in the automobile industry. I get very worried about us taking an action that I think would potentially prejudice the renegotiation of the CUSMA, which would be — did you say 1% of the Canadian economy is covered by supply management? Well, the rest of it is covered by the rest of the agreement, except those that are exclusive to government domains and things of that nature. That’s where I think this comes in here. It affects the whole relationship with the United States.
Senator Boniface: Thank you to all witnesses for being here and particularly bringing the level of expertise you bring. Thank you for serving our country in such a good way on these issues.
I’d like to go to the next step — Senator Harder took my question — on the economic impacts. I heard this yesterday. We heard from the cattleman’s association, as an example, and from one of the import dairy organizations, on the risks for them. I want to go to the challenges we have ahead, with this bill thrown in, for the economy of Canada. I wonder if any of you would be willing to speak about economic impacts. I assume that’s part of your consideration when you’re negotiating.
Mr. Burney: Sure. We come at many levels. One would be the opportunity cost of negotiations that don’t happen because partners decide it’s not worth it. What has Canada lost by virtue of not being able to conclude a negotiation with the U.K., for example, and how do you measure that? As I said in my opening remarks, even with negotiating partners that do agree to continue with us, there will be a price. It’s the same dynamic I pointed to earlier. If we want to protect our most sensitive industries, they will expect to do the same on their side. Those are usually the areas we’re targeting. So there will be material costs to the Canadian interest.
I think the biggest one of all is what we’ve been discussing in terms of the possible fallout in terms of our most important trading relationships. It’s hard to quantify because this is one issue among many that come up in the Canada-U.S. relationship, but it’s an unnecessary one. I keep coming back to that. Why are we doing this?
Senator Boniface: Mr. Weekes, did you want to add anything?
Mr. Weekes: Maybe just to emphasize the last point that Ian made. It’s unnecessary. As I tried to describe by giving the concrete example of how we handled this matter during the original NAFTA negotiations, we didn’t need legislation to allow us to make no new concessions on supply-managed products in the NAFTA.
There are a lot more ways to negotiate and finesse matters. Frankly, one of the things that helped us in the original NAFTA negotiations is, as the honourable senator said here a few minutes ago, they have their own sensitivities. They have the Farm Bill and they have sugar. They refused, for instance, to allow Mexicans — because this was obviously a trilateral negotiation — or any foreigner to have any ownership stake in television stations in the United States. They had all kinds of restrictions in the shipping industry. They had their own sensitivities. You can say when you’re in a private negotiation, “Well, wait a minute, you’ve got this, this, this and this, and now you’re telling us that despite all these protectionist things that you’re maintaining, you think that we should open up our dairy sector? No, thank you.” I think, in the dynamic, that’s a much more effective way of accomplishing government policy.
As I also said in my statement, I’m not here to discuss whether supply management is a good policy for Canada, but on many occasions, I’ve been given instructions as a trade negotiator on what the government wanted to achieve or not see happen, and then you have to look at what’s the most effective way of doing that. In my view, it’s certainly not by passing legislation that says what you’re going to do or not do.
Mr. Tennant: I’d only add that if you’re looking at it from the broad interest of the Canadian economy, business needs certainty to invest, and we need a rules-based world in which to trade. That’s what trade agreements are about. Trade agreements count, particularly some, and we see the risk with the United States and with these other very major trading partners. Canada is fortunate to have the web of agreements it has. It doesn’t want to put them at risk.
Senator Ravalia: Thank you very much for being here today and for your service to our country.
We’ve talked a lot about the United States. I was wondering if you could perhaps elaborate on what the Mexicans are saying in response to this bill.
Mr. Weekes: I don’t know, but I would point out that it’s a little hard to discern exactly what Mexican trade policy is going to be right now because they have a new administration and they’re still setting themselves up. Just as after the American election, regardless of who wins, it will be a number of months before we know what the American direction on trade policy is really going to be because they won’t have ministers or a Secretary of Agriculture. All of that has to percolate through. It will be next summer before we really know that.
But I would say that the Mexicans clearly want to see a continuation of the CUSMA, the USMCA, so they’re definitely going to be hoping to see support from Canada for that same objective. They might be a bit worried by legislation like this, which would, in their minds, create uncertainty about what is going to happen during the negotiation.
From a direct commercial interest, they’re not big exporters of these products, so they have no direct commercial interest in selling these products to us. When we sit down at the table with the Mexicans and the Americans in a negotiation, we don’t have to worry about the Mexicans ganging up with the Americans against us on supply-managed products.
Senator Ravalia: As a followup, as experienced negotiators, do you envisage any potential negative retaliatory measures on currently signed trade pacts?
Mr. Burney: The currently signed trade pacts include the CUSMA. I think we’ve all spoken to our fears about —
Senator Ravalia: I was thinking CETA and the CPTPP on a go-forward basis.
Mr. Burney: I think the committee received a submission from the Business Council of Canada. They are worried about unintended consequences. In that submission, they flagged CUSMA, as well as CETA and CPTPP.
In the case of CETA, we have an agreement that has been applied provisionally. There are at least 10 member states, if my memory is correct, that have not yet ratified the agreement. Does this complicate the ratification process? To be frank, I don’t think this is a major issue in the ratification process in France, Italy or some of the other countries where it’s still being debated, but it certainly doesn’t help. Access into these sectors was an important part of the negotiation when the agreement was struck. Could it be used by some of those who are opposed to the ratification of the agreement in Europe? Sure.
But my biggest concern is the U.S. As I said earlier, nearly 80% of Canada’s exports go to the U.S., despite all of our efforts at diversification over the years. That is job one. That should be everybody’s fixation. “Don’t rock that boat” would be my advice.
Senator Ravalia: Thank you very much.
Senator M. Deacon: I ask this with some reservation, but I would like to hear your perspectives. We’ve had a bill that’s come to the House. We have had some critiquing and support of the bill. The bill was passed by the House into this committee to look at. What’s really going on here?We’ve heard within the agricultural sector that they’re united and they’re not united. It’s an unfair question, I realize as I’m asking it, but I know your perspectives haven’t been absorbed in the House or in committee. I just want to make sure we leave it all on the table.
The Chair: Thank you, senator. Before our witnesses respond, they all have said they are no longer public servants and they feel free to express opinions.
Senator M. Deacon: I heard that very clearly at the beginning.
The Chair: So I ask them to please do.
Mr. Burney: I think the point was made before that these are very effective political lobbies in Canada. You’re dealing with a highly concentrated industry in politically sensitive areas of the country. They know how the system works. It’s very difficult to resist pressure from that sector. There’s a strong political desire on the part of all parties to show support for a sector that is so politically powerful. I understand how these things happen.
My understanding is that the measure was passed relatively quickly. I presume that there would have been those who said, “Well, this is just enshrining current policy, so what’s the big deal?” I think the consequences weren’t fully thought through. It has now been given a lot more attention for reasons we are all aware of, so the Senate is doing what it was set up to do, which is exercising sober second thought.
Mr. Weekes: Let me say, as a private citizen, which is a role I enjoy, actually — I haven’t been in government since 1999, so not in this millennium. However, I watch what’s going on here, and I have to think that the member who put this bill forward in the House thought it was a very clever thing to do. Frankly, from his point of view, the point of view of his party and his cause, it was kind of a win-win situation. He wins if the bill is rejected because people say they’re not paying enough attention to the interests of Quebec. If the bill is passed, he wins because he has shown that he’s very good at defending Quebec’s interests. Maybe the biggest win of all would be if the bill passes and then the Americans force us to repeal it by telling us that, if we don’t, they won’t go ahead with the NAFTA. Then he can portray that as a betrayal of Quebec’s interests by Canada and the Canadian Parliament.
Senator M. Deacon: Thank you. I would like to give an opportunity for Mr. Tennant.
The Chair: Only 30 seconds remain.
Mr. Tennant: The key point in this respect is that the bill did not get very thorough study in the House of Commons. That’s clear. The Senate — congratulations — is making sure that it gets serious second thought. Thank you for doing it.
[Translation]
Senator Gerba: I’ll follow up on Mr. Weekes’ answer, that it’s because this is a Bloc Québécois bill. Is that what you’re trying to tell us? In other words, you’re against this bill because it’s a private member’s bill from a Bloc Québécois member?
[English]
Mr. Weekes: No, I didn’t say that. I could try to recite exactly what I said earlier, but I chose my words very carefully. I said what I said, and I didn’t mean anything beyond what I said.
[Translation]
Senator Gerba: You’re talking about a bill that came from a party, from a member who will go back to Quebec to report that Parliament refused a bill that came from Quebec; is that it?
[English]
Mr. Weekes: No, that’s not exactly what I said, no.
[Translation]
Senator Gerba: I’ll finally ask my question. This bill talks about a pan-Canadian policy. Yes, supply management is highly concentrated in Quebec, but we’re talking about a pan-Canadian bill that was passed by a majority of the members of this House — 262 votes to 51. It’s important for me to point that out. Yes, I represent Quebec and this bill is important to me, but supply management is just as important to Ontario in terms of numbers. You know them better than I do, as you negotiated these issues.
During the negotiations, we were told there were 30 chapters. Of these 30 chapters, only one focuses on agriculture. Supply management is part of that very small chapter. Can you give us any truly objective reasons why you believe that all our future negotiations will fail because we passed legislation that confirms what already exists and what our trading partners already know? I’d like you to give me objective reasons, not hypothetical ones, about what Mr. Trump may think. He will impose potential taxes on softwood lumber and other things — we can talk about that. What are your specific, objective reasons today for protecting a system that is known to all our trading partners?
[English]
Mr. Weekes: I think I’ve made it clear that I’ve been in a position of being the Canadian negotiator and saying, “No, we’re not going to make any concessions on supply-managed products,” and being able to get that carried through in the negotiation. But in terms of whether this legislation could jeopardize our attempts to get concessions in other sectors, I do believe that.
You talked about the sugar policy situation in the United States. There is legislation there that prescribes the quotas and so on, and the Secretary of Agriculture can’t do this or that. But the United States, when they have negotiating authority from Congress, are in a position to negotiate concessions that would require changes in American law. That’s the whole purpose of their procedure of the so-called fast track trade promotion authority that allows them to do that.
Here, we’re saying it doesn’t matter what happens. We’re taking a particular chunk of our economy, maybe a small one, and saying that we’re not going to do anything. We’re trying to immunize ourselves ahead of the negotiations from having to make any concessions. That is not going to be something that our trading partners will want to see from other countries because, in the end, it will create a situation in which nothing can be negotiated by anybody.
Senator MacDonald: You have a lot of experience in negotiating. I certainly don’t, but I’ve had a lot of experience going down to the United States. I’ve been on the Canada-U.S. IPG for 16 years. I’ve been the Senate chair for 10 years. I speak to them all the time in Washington, three or four times a year. I go to a lot of the meetings down there.
This always comes up. I always say to the Americans when they bring this up that I’m a free trader in principle, and in principle I’m not really a supporter of supply management, but in practice, I understand it, and I do support it in practice. I say, “Your problem is you have massive overproduction issues, you massively subsidize your agriculture, and you use growth hormones in your dairy industry, and we don’t like any of those things. Why don’t you get rid of that stuff, give us a level flaying field, and then we’ll talk?” You know what the answer is. They are not doing to do any of that stuff. I think that gives us great leverage with them.
My experience with the Americans has been that if you want to get a good deal from them, we get the best deal from them when they don’t see us as an issue, when we’re not an irritant, because then they look right past us. I think we’re safer on that ground. I’m curious what your observations are when it comes to that.
Mr. Weekes: I agree with what you just said. I would add to that that there’s often scope for us to work with the Americans in pursuit of common objectives in other countries and in the multilateral trading system in the WTO. The extent to which they perceive us as a partner in these efforts to promote our common interests elsewhere, I think, creates conditions that help us deal with our bilateral issues more successfully.
Senator MacDonald: It was 2017 before the negotiations really started, but after Trump was elected, I was in Washington speaking to Alexander Panetta, who was the AP correspondent. We were both watching the television at the same time. Trump was in Ohio. He was at two or three different venues that day, but he was asked on a couple of occasions about Mexico. Somebody hollered out, “Well, what about Canada?” Both times, his answer was, in 2017, “Oh, Canada is not an issue.” Sometimes we make ourselves an issue, and it hurts us.
Senator Harder: This act seeks to amend the Department of Foreign Affairs, Trade and Development Act. I think we have, collectively, more than a century of experience at the table being governed by this act. I just want to put on the record: Are you aware of any attempt to use the department act, the foundational act, to add conditions on negotiations or anything else, and are you aware of any such act anywhere in the world?
Mr. Burney: No and no. This is the kind of language that appears in a very detailed negotiating mandate that cabinet would pass. If you look at the language of the Department of Foreign Affairs, Trade and Development Act, it has a single clause saying that the minister has the power to conduct international negotiations on Canada’s behalf. Then there is another one says that the minister should advance Canada’s economic interests. Now we’re going to add paragraphs on over‑quota tariffs on dairy, poultry and eggs and the management of quotas? It doesn’t make sense on the face of it.
Mr. Weekes: It could make for a very large act. Do you know how many pages there are in the CUSMA?
The Chair: I would like to, on behalf of the committee, thank our witnesses, Ian Burney, John Weekes and John Tennant, and reiterate what others have said. We appreciate your service to our country and your expertise. You’ve given us a lot to think about.
Colleagues, we will continue our study of Bill C-282 next week, and we’ll finish hearing from witnesses on Thursday, October 31.
(The committee adjourned.)