THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Thursday, October 31, 2024
The Standing Senate Committee on Foreign Affairs and International Trade met with videoconference this day at 11:34 a.m. [ET] to examine 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 morning, hon. senators. My name is Peter Boehm, I’m a senator from Ontario, and I’m the Chair of the Standing Senate Committee on Foreign Affairs and International Trade.
[English]
I wish to invite committee members participating in today’s meeting to introduce themselves.
[Translation]
Senator Gerba: Amina Gerba, Quebec.
Senator Gold: Marc Gold, Quebec.
[English]
Senator Greene: Steve Greene, Nova Scotia.
Senator Ravalia: Mohamed Ravalia, Newfoundland and Labrador.
Senator MacDonald: Michael MacDonald, Cape Breton, Nova Scotia.
[Translation]
Senator Dagenais: Jean-Guy Dagenais, Quebec.
[English]
Senator M. Deacon: Marty Deacon, Ontario.
Senator Woo: Yuen Pau Woo, British Columbia.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia.
Senator Busson: Bev Busson from British Columbia.
Senator Duncan: Pat Duncan from the Yukon.
The Chair: Thank you, colleagues.
Welcome to you, as well as to those who have joined us in the room today, and also to those who may be watching us across the country on ParlVU.
A quick note to acknowledge that our clerk, Chantal Cardinal, could not be here for this meeting, so Raymond St. Martin, Clerk of the Standing Senate Committee on Agriculture and Forestry, will guide us today.
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).
We are very pleased to welcome, by video conference, the Honourable John P. Manley, Former Deputy Prime Minister of Canada and Minister of Foreign Affairs, as well as former Minister of Finance and Industry and Former President and CEO of the Business Council of Canada; and John Treleaven, International Trade Consultant and former Canadian Ambassador to the Philippines.
Before we begin, I wish to note that the final form of this meeting today does not reflect our intentions for today. As you all saw from the original public notice for this meeting, we had a full slate of witnesses confirmed across two panels. Unfortunately, Daniel Turp from the University of Montreal, Tim Carroll from the University of Prince Edward Island and Hans Kristensen, Chair of the Egg Farmers of New Brunswick could not meet the technical requirements to appear virtually via Zoom. What that means is that their headsets were not approved, and we have a certain standard for our interpreters. Further, Jeffrey Clarke, Chair of the Egg Farmers of Nova Scotia, decided late this morning not to proceed with his appearance. Other witnesses were invited but were not available or otherwise did not respond. While we have a slimmed-down panel today, it was not for lack of trying on our part.
We appreciate Mr. Manley and Mr. Treleaven joining us today. Thank you both. Before we hear your remarks and proceed to questions and answers, I would ask everyone present to please mute notifications on your devices. We are now ready to hear your opening remarks, which will be followed by questions from senators. Mr. Manley, you have the floor.
Hon. John P. Manley, P.C., O.C., Former Deputy Prime Minister and Minister of Foreign Affairs, As an individual: Thank you, Mr. Chairman.
[Translation]
I’d like to thank all the senators for inviting me to participate in this discussion today. I like to emphasize that I’m here as an independent witness. I do not represent any interest and I would add that I have no financial or other interest in the issues we are about to discuss.
[English]
I am conscious, Mr. Chairman, that your committee has had a long and thorough review of Bill C-282. I applaud the Senate for doing the work for which it was constitutionally mandated, which is to consider legislation, particularly where it has received scant attention in the lower house.
I have to say, having looked at the array of past witnesses, be they industry experts, trade experts, economic experts, professors, all kinds of people, I am challenged to try to think of anything to say that must not have already been said to you by someone along the way, someone probably more qualified than I. I will try to offer perspective for you rather than recite economic statistics or to repeat some of the arguments that have been made.
I will offer you the perspective that I have, largely from my government and then my private sector experience. I point out that I have been in the private sector now for longer than I was in the government, but I did serve as Industry Minister for seven years. That still stands as the longest since C.D. Howe, therefore the longest post-World War II. Unfortunately, the photographs of past ministers at Industry Canada, now ISED, do not rank according to size the length of time that you were there. I would have a very large poster relative to some, but so be it.
Second, I also served as the counterpart to the U.S. Secretary of Homeland Security, Tom Ridge, in the aftermath of 9/11 during which time we developed what was known as the Smart Border accord. I spent a lot of time thinking carefully about how we get what we need in terms of access to the U.S. market in those days following 9/11 when, of course, the border — while never technically closed — was, for many intents and purposes, effectively closed because of the response to 9/11.
My observations are the following. First, from how I look at the Canadian economy, and how I looked at it as Minister of Industry, two things are evident. I do not think anyone will dispute these. The first is our economy, particularly post 1989, has been highly integrated with that of the United States. It is everything from our trade flows going north and south; to the use of pipeline facilities such as that going through the state of Michigan that supplies diesel fuel to Pearson Airport, something that we all rely on; to the power supply going mainly south from Quebec into the U.S. states, sometimes north. For us, the United States remains, by far, our largest export market. Although we are no longer their largest, single trading partner, we continue to be important to them. Our economies are highly integrated.
The second observation I would make is that we are highly export dependent. We are a trading country. Our wealth and prosperity depend upon our ability to export our goods, especially to the United States. Access to that market for our primary, secondary and tertiary industries is crucial. We export, of course, many raw materials, food, energy and mineral resources, but also manufactured goods.
In my time as Industry Minister, we spent a lot of time — as my successors have done — ensuring the ongoing strength of the Canadian automotive sector, which is totally integrated with those of Mexico and the United States.
Our aerospace sector, which is a very important manufacturing sector for several regions of Canada, especially Quebec, Ontario, as well as parts of western Canada where part of the integrated supply chain exists — without access to the U.S. market, that sector, which we have done well with since World War II, would be roughly equivalent to what our shipbuilding sector is today, which has been emasculated by lack of access to the United States market due to the Jones Act, something we have never succeeded in negotiating away despite Canada/U.S. free trade, NAFTA or the USMCA.
Those would be the overall observations I would make.
When I read carefully through Bill C-282 — which is a pretty quick read, I have to admit — I was struck by the fact that we singled out one sector, which is not an export sector, for special protection and comfort in future trade negotiations. I thought, what a curious thing to do. Of all of the sectors I had responsibility for as Industry Minister, it would be a long list of sectors that have more employment and produce more revenues and GDP than the supply-managed sectors. Yes, they are important to the people who work in them. Yes, they are important because Canadians buy the products and rely on their quality. But singling them out in future trade negotiations, first of all, seems to me to be very odd but, secondly, it is like putting a bull’s-eye on them. It is a signal to our trading counterparts that this is where Canada is sensitive, so start with that.
I question it as an oddity. I also question this as a tactic. It seems to me to be more of, “Here’s the target on my back; shoot me,” than any kind of honest protection. Let’s face it, many trade agreements — perhaps all of them, certainly most of them — require legislative change in the aftermath of the agreement.
The Chair: Mr. Manley, I’m sorry. I have to interrupt you. You have gone over time. I have been generous. I am sure that many of these points will come out in the question-and-answer period.
John Treleaven, please, you have the floor.
John Treleaven, International Trade Consultant and former Canadian Ambassador to the Philippines, As an individual: Good morning, honourable senators. Thank you for this unique opportunity to appear before the committee from my home in Victoria, British Columbia.
I appear before you as a former ambassador, as have several of my colleagues. I also appear as the grandson of Ruben Treleaven who, throughout his life, owned the Palmerston Creamery and was a champion butter maker in Ontario. His son Norman owned the Holstein Creamery and was both a butter maker, an egg processor and, at one stage, had a chicken killing operation. His daughter Alma married Ken Alles. The two of them farmed in Grey County, Egremont Township and had a significant dairy herd. My grandmother, Lucinda, gave the name to the iconic Palm Dairies.
You have heard from John Weekes, Jonathan Fried, Ian Burney, Deanna Horton, John Tennant, as you will be aware, all distinguished former public servants who spent decades in international trade policy negotiations for Canada. Each has expressed deep reservations about the risk to our trading position and future success should this bill pass in its present form. I endorse their views in the strongest possible terms, but I do so from a slightly different vantage point.
I spent most of my foreign service career working abroad as a Canadian trade commissioner, seeking to transfer the buying power of Brazil, Puerto Rico, the United Kingdom, Central America, Hong Kong, Japan and the Philippines into economic prosperity in Canada. In Mr. Manley’s time as a minister, I think we called the agenda jobs and growth. During my 32 years in that role and five years as CEO of the Saskatchewan Trade & Export Partnership, I worked with thousands of Canadian entrepreneurs and exporting companies from every province and territory who, collectively, are responsible for Canada’s necessary status as a trading nation.
It isn’t so much that Canada is dependent on international trade; it is that we are successful at it. We are successful because of the undying efforts of thousands of business owners and millions of employees of Canadian businesses across the country who, every day, challenge the global marketplace. Because of their success, as you know, 50 to 60% of the GNP of Canada is internationally trade-related. That means that every job in this country depends, to a greater or lesser extent, on the success of our ability to grow international trade to the benefit of Canada.
Embedding in the Department of Foreign Affairs, Trade and Development Act the provision under question risks success in future negotiations. Why would we ever knowingly add to the burden our exporters carry into the global marketplace and risk adding to their travails at a time when international trade barriers and the difficulty in succeeding abroad may be outpacing opportunities for the first time?
A company in Canada is in a different position. They can handle swings and roundabouts in their price list and interprovincial trade barriers and the normal ebb and flow of constraints in the country. But the moment a company goes to Boston, Buffalo, Sweetgrass, Montana or Bellingham, Washington, every distortion in the Canadian economy is in their price list.
I completely agree with Mr. Manley’s comments and the comments of my former colleagues that the provisions of this act — if they become final law with Royal Assent — will weaken Canada’s trade position. That is a little bit like the Canadian Olympic Committee offering Andre De Grasse a pair of ski boots to run the 100-yard dash.
The Chair: Thank you, Mr. Treleaven. I do not know if you are quite at the end of your remarks, but we are at time.
We will move to questions and answers, the usual four minutes each. I would encourage you to keep preambles short and questions concise so we can extract the maximum commentary from our witnesses. I also wish to acknowledge that Senator Marty Klyne of Saskatchewan has joined the proceedings.
Senator MacDonald: It’s great to have these two witnesses here. Thank you very much.
My first question is this: Given your expertise, how do you assess the potential constitutional tensions that Bill C-282 could introduce between provincial and federal trade authorities? Specifically, could you elaborate on how this legislation might reshape the existing balance of power in trade negotiations and what implications this might have for future intergovernmental relations and Canada’s international trade strategy? Either one of you can go first.
The Chair: Mr. Manley, why don’t you go first?
Mr. Manley: Thank you, senator.
The regional tensions are ones that are already evident when we look at some of the issues around Canadian productivity growth and interprovincial trade. We have had scant ability at solving these over the years. I was a new industry minister in 1994 when we negotiated the first internal trade agreement. It was an achievement at the time, but it was less than a fulsome agreement. It was certainly less comprehensive than the Canada-U.S. Free Trade Agreement or the NAFTA. Here we sit now, 30 years later, and we haven’t improved it markedly since then.
To look at a sector within the agricultural production community and say, “We’re going to protect this one, which is largely focused in Eastern Canada, Quebec, Ontario and, to some degree, the Lower Mainland of British Columbia,” versus the productive interests of agricultural producers in many other sectors — be it in the grains or in the beef, pork and other sectors — is just to exacerbate many of the problems that we have in dealing with the interprovincial trade agreements which we have already had scant success at achieving. I do not think it helps; I think it hurts.
Senator MacDonald: Do you wish to add anything, Mr. Treleaven?
Mr. Treleaven: Let’s put it this way: Canada, like most countries, is an imperfect platform from which to sustain international trade. When Canadian exporters find themselves in direct competition with businesses from other countries, the hope is that Canada as an export platform is just a little bit better than most other countries. For the most part, it is.
One of the little retirement assignments that I had is that I’m chair of the Grumpy Taxpayer$ of Greater Victoria. We do not object to paying taxes; we worry about wasting money. Our motto is “Victoria is almost the best place on earth.”
Why are we satisfied with “almost”? Canada is a major trading nation. We could be so much better. We succeed in spite of being the only G7 country that expects its businesses to compete internationally but routinely denies them portions of the domestic market. Nobody else does that.
The Chair: Thank you, Mr. Treleaven.
Senator Coyle: Thank you to our two witnesses who are here today.
Mr. Manley, I can understand why you said, “What is there left to say?” We have had so much testimony. We do value what both of you are adding to this conversation.
My first question is for Mr. Manley: You have been clear that Bill C-282 would create risks to other important sectors of Canada’s economy. You have clearly outlined the extent and significance of those sectors to our economy. Could you speak in more specific terms, if possible? How do you see Bill C-282 complicating negotiations with critical partners like the U.S., as we will very soon be renegotiating CUSMA, the Canada-United States-Mexico Agreement?
Mr. Manley: Thank you, senator.
First, I would like to get an application for the Grumpy Taxpayer$ Association if it is open to non-Victorians.
In response to your question, I think we would be unwise not to look at this totally in the context of the upcoming renegotiation of NAFTA 2.0. We should bear in mind that, although former President Trump declared it a great success when he negotiated it on behalf of the United States, he is now declaring it inadequate and unsuited for the times. Vice President Harris voted against the United States-Mexico-Canada Agreement, USMCA, in the Senate. We have our work cut out for us.
Let me tell you a couple of anecdotes that would substantiate what I am saying.
First, a group from our Canadian business council did a high-level delegation to Washington, meeting with the Senate majority leader, a senator from New York, a Democrat, Chuck Schumer, who spent the entire session with Canadian business leaders, none of whom were from the agri-food area, complaining about supply management. He is a New Yorker, a Democrat.
Second, I would point out that a former Office of the United States Trade Representative came again to the Business Council of Canada in Calgary a few months ago, and to say that he was pointed would be an understatement. Basically, his words were, “I’m coming for you,” and he was talking about dairy.
To put it in context, we’re all following, I know, the U.S. election. There are maybe five states, perhaps six or seven, that are battleground swing states, one of which is Wisconsin. They don’t call Green Bay Packers fans “Cheeseheads” for nothing. The politics of Wisconsin, which is a heavily dairy-concentrated state, is going to figure very importantly in U.S. political calculations.
All of those things ask, why would we put this target on our backs?
The Chair: Thank you very much.
Senator M. Deacon: Thank you for being here, and thank you to our guests here today.
We’ve heard during many of these hearings all about trade negotiations. Canada has been abundantly clear that these supply managed sectors are off limits and that it’s more or less official policy. Why would this legislation, which codifies an already accepted stance, escalate and potentially spoil trade negotiations?
I’ll also ask, in your opinion, does a law or bill like this fly in the face of accepted trade orthodoxy that Canada has helped establish in this era of globalization?
I’ll start with Mr. Manley, but if both of you could please answer, that would be great.
Mr. Manley: Thank you, senator.
I’m not aware of — and I don’t want to snub our trade minister — any country that stipulates in a legislative fashion with respect to its trade negotiations.
Every country has sensitivities. Let’s face it. Every country goes into trade negotiations with something they prefer to protect. We did the Canada-U.S. Free Trade Agreement and NAFTA, in both cases hoping to get some relief from the Jones Act in the United States. They protect their shipbuilding industry and have historically. Steel is also very sensitive to the U.S. Every country has something, but I’m not aware of any country that has put on this kind of restriction.
I would also point out, in answer to the first part of your question, that I think politicians often make those kinds of statements, but they are taken as part of the game in trade negotiations. You’ve seen access to the Canadian market granted in little pieces, both in the European agreement and in the USMCA. The Canadian industry, at least in dairy, continues to dominate 80% of the Canadian market and still does extremely well, despite these minor incursions. I think this bill is meant as a political statement, but I think it’s tactically wrong and strategically wrong.
Senator C. Deacon: Thank you.
Mr. Treleaven: I completely agree with Mr. Manley. In my statement, risk is a four-letter word, but it’s very difficult to define, confront and mitigate if in the law we start to put behind stone walls portions of the Canadian economy. What’s at risk? The jobs of millions of Canadians. What’s at risk is the success of businesses going, as I said, to Buffalo or Bangalore or Bellingham.
This is Small Business Month in Canada. A measure like this going into Canadian law means that ministers of the Crown will have to make fewer speeches celebrating the success of small business because that provision will, as you’ve heard from some of Canada’s foremost trade negotiators, make maintaining a free market access for the full range of Canadian products in the global marketplace difficult. Why would a major trading nation make it more difficult for the drivers of their trading economy to succeed on behalf of all Canadians?
The Chair: Thank you very much, Mr. Treleaven.
Senator Gold: Thank you, witnesses, for being here. Thank you for your candour with regard to how you see this bill and also, frankly, your candour with regard to your view that Canada would be better served by continuing to give up more market share in this particular area.
Mr. Manley, this question is for you. You mentioned that you saw the bill as a political statement, but I do want to actually ask you not to put aside your long career outside of politics but to speak from the vantage point of a former parliamentarian. This is a bill that has broad-based, all-party support in the House. As a minister and member of Parliament, you had lots of responsibilities and success in spearheading pieces of legislation both through the House and then the Senate. From your vantage point, or former vantage point, were a bill to have passed with all-party support and a very significant majority in the House, how would you want that fact to have been taken into account when it got here to the second chamber?
Mr. Manley: That’s a great question, senator.
I think what I’d look to here is the degree of consultation and consideration given to the bill in the House of Commons. That, I think, was pretty much non-existent.
I understand we’re going to have to bell this cat some day in Canada. We’ve looked at the numbers. It’s not that this is a massive number of people who are engaged in these industries. It’s not that it produces a massive amount of GDP. The reality is that this is the most effective lobby group in Canada. This is Canada’s NRA. At some point, we’re just going to have to confront that.
When you get two years into a Parliament, you change phases. You’re then in the pre-election phase as opposed to the post-election phase, and parties are very careful which sleeping dogs they poke in a pre-election phase or, for that matter, in a pre-referendum phase.
We faced a financial catastrophe in Canada when our government was elected in 1993. We faced a dilemma about how to manage the Canadian economy in the face of having to withdraw massive amounts of federal spending with the largest cuts in Canada at the federal level since demobilization after World War II. One of the things we did was reform the Crow Rate in Western Canada. Looking at the supply management system in the immediate face of a potential Quebec referendum, which occurred in 1995, it was judged politically inexpedient to consider reforming that system at that point in time, although it had been under heavy attack in our trade negotiations winding up the WTO round, which concluded in late 1993.
There is never going to be a politically perfect time to say, “Wait a minute here. Is this really serving Canadians’ interests? Is it serving consumers’ interests? For that matter, is it serving producers’ interests?” When we read reports of the amount of disposed waste dairy product and think about how that could have been feeding people around the world if we had access for our processors to those global markets, it’s a terrible shame. One day, we’re going to have to confront it as a country and move on.
The Chair: Thank you very much. Senator Gold, you can have a follow-up in the second round if you wish.
Senator Gold: Thank you.
Senator Ravalia: Thank you to both our witnesses. Let me begin by acknowledging both of your contributions to our country and our prosperity.
The Government of Canada has indicated that this bill is consistent with the long-standing Government of Canada policy to defend the integrity of Canada’s supply management system. The government has stated that this bill is also consistent with commitments made by the Prime Minister to not provide any new market access on supply-managed products in future trade negotiations.
Can either of you envisage any possible modifications or amendments to this bill that would make it more palatable for our trade negotiators? I’ll begin with you, Mr. Treleaven.
Mr. Treleaven: As I clearly pointed out in my statement, I don’t bring to this hearing a long background in trade policy negotiations, as you’ve heard from some of my fellow colleagues.
I do think that, under the circumstances that have been described ably by former Minister Manley and others appearing before this committee, to say the very least, the timing of this measure could not be worse. Whether the content of it could be worse or could be improved, I’m not sure. But days before the U.S. election, which is going to be followed by months of turmoil, and, as Mr. Manley has pointed out, both major political parties in the United States are retreating into protectionism, I can’t think of a worse time to bring in a worse piece of public policy to the severe potential risk of detriment to the entire Canadian economy.
If I could say, I appreciate the Senate’s role in providing this opportunity for more feedback on the bill. Maybe somebody should reach out to industrial sectors in Canada. Maybe there should be witnesses from sectors that are spectacularly successful in the global marketplace but need not be. Thank you.
Mr. Manley: I don’t want to do legal drafting off the cuff, but looking at the bill, I would say that it could be amended to not make it mandatory or, at least, to qualify it by saying that any commitment that would have those effects that are described in the bill should take into account the broad interests of the Canadian economy and all export sectors of the Canadian economy so that it reinforces the importance of considering the interests of other agricultural, industrial, manufacturing and other groups rather than limiting its outreach to only one sector.
Senator Ravalia: Thank you.
Senator Klyne: Welcome to our two guests.
My two questions are for Mr. Manley. I was going to offer a preamble, but in the interests of time, I know you’re well read and well versed on the subject matter.
First, why are motions in the House of Commons on supply management and a policy direction from the government to our trade negotiators no longer the acceptable standard politically?
Mr. Manley: I’m not sure they ever were, quite honestly. I remember when we were confirming the WTO negotiations at the end of 1993. Some caucus members were asking seriously, not rhetorically, whether we had to stay in the WTO because it compromised some of our supply management sectors.
Yes, we could become North Korea if we want, but I think reality sets in, and when you sit in those rooms — unfortunately, we’re no longer in the Green Room in Geneva; we talked our way out of that. We’re no longer the leaders in open trade, even though we are a small trade-reliant nation. I think that the political rhetoric is sometimes for effect. In fact, I think it has always been that way.
Senator Klyne: Thank you for that. I have another view of that.
Do votes for this bill by party leaders in the House of Commons have anything to do with the timing of it and the upcoming Canadian election to sway savvy voting blocs that might be taking advantage of this?
Mr. Manley: I’d say totally. That’s a very important part of it.
Also, when you go into politics, there are some things you want to achieve, and you have to decide how to spend your political capital. Taking on supply management is going to expend political capital for anyone who does so.
I think people make the judgment that of all the things that they want to fight over, this maybe isn’t worth the salt. But when you go into an international trade negotiation, you have to represent all Canadians, and you have to get the best outcome for all of your interests. You have to weight that not just in terms of political sensitivities, although that’s a factor, but you have to weight it in terms of jobs, contributions to economic growth, contributions to building supply chains and maintaining a constructive relationship with your trading partner. I think those compromises always end up having to be made.
Senator Klyne: Mr. Treleaven, I have a question for you. Thinking back to your time on STEP, which is the Saskatchewan Trade & Export Partnership, you and I had many conversations about economic development in the Regina region. I suspect you had many conversations with organizations interested in expanding beyond our borders, both in the agri-food community and outside. Can you tell me what the impact of this will be on things like lentils being exported, canola protein being sent for further processing and refining canola oil for jet fuels and biodiesel?
Mr. Treleaven: For the benefit of the Senate, Saskatchewan has 44% of Canada’s arable land. It is an agriculture power house to the world. Murad Al-Katib is the president and chief executive officer of AGT Food and Ingredients Inc. in Regina. He makes the world market in pulses and lentils. The prosperity of many Canadians depends on the prosperity of Saskatchewan and the ability of amazing businesspeople in that province to tackle the global marketplace. Why put them at risk?
The Chair: Thank you very much.
[Translation]
Senator Gerba: Welcome to our witnesses and thank you for your loyal service, Mr. Manley. The House of Commons unanimously passed four motions to ensure that supply management was fully protected in 2005, 2017 and 2018.
The government has also repeatedly assured that it wants supply management to be fully protected; according to a 2023 Abacus Data poll, over 90% of Canadians support supply management. However, despite overwhelming and unanimous support, breaches have been made during the last three negotiations.
Our negotiators are doing an exceptional job. This must be recognized. However, this work is sometimes difficult, and we must recognize that as well. Tying the hands of negotiators is not the objective of this bill. Rather, it’s about protecting supply management, which has been a national Canadian policy known to all our partners for over 50 years.
Do you think this bill is a unanimous way for all Canadians to send a clear message to our partners, since most of them are sending it too? It is our government’s, our Parliament’s line in the sand. What do you think?
Mr. Manley: It’s an important issue. I think we may already have some answers. First of all, we shouldn’t be asking Canadians if they want to protect the system. Rather, we need to ask them if they want to keep paying more than they need to for certain food products, including milk.
[English]
Let me tell you another story that I didn’t get to in my opening remarks. When we were looking at the smart border accord, it was adamantly maintained that Quebecers should be able to obtain a passport using their baptismal certificates. That was on the hit list for the U.S. negotiators, and it was an important cultural issue. Everybody in the House of Commons supported it. But guess what? When it came to getting an agreement so that Canadians could continue to cross the border, that was something that could be compromised. Sometimes you can have your position as a starting point, but the reality is you have to face the desires of your partners if you want to get an agreement.
Senator Woo: Thank you, John Treleaven and John Manley.
My question is for John Manley, and it picks up on Senator Gold’s question, the implication of which he’s trying to make is that a private member’s bill supported by a large number of MPs should not be overturned by the upper house. Mr. Manley, because you were a member of the lower chamber and you know the sentiments of your former colleagues towards the upper chamber, am I right in saying that you think this bill meets the test of a bill that the Senate should turn back because it is so egregiously bad?
Mr. Manley: Thank you, senator.
There are two parts to that. The test should include the egregiously bad or misdirected, but also the lack of consideration given in the House of Commons. This was not thoroughly or lengthily debated. It was not subject to the scrutiny that it would have been subject to had the House of Commons taken the normal time and effort. It might have been amended there, had they done so. Therefore, regardless of what some of the members of the House of Commons may think of the Senate, the Senate is a constitutional body. You know your constitutional limitations, both written and unwritten, and it is entirely within your constitutional right to turn a bill like this back to the House of Commons with amendments.
Senator Woo: You believe that both tests have been met?
Mr. Manley: I do.
Senator Woo: Thank you.
Senator Coyle: I had a different question, but I just want to clarify that last point. Mr. Manley, just quickly in terms of what’s the right thing for this upper house to do here, you said turn it back with amendments as opposed to not passing the bill. Is that what I’m hearing from you?
Mr. Manley: I’m less familiar with your procedures in the Senate than I was at the time that I was there in the House of Commons, but I think it would depend on what your options are. I presume that it must come to a vote at some point. I think it is appropriate at this stage that you look at whether it’s amendable in a way that would cure its fundamental flaws. I think the two-part test that Senator Woo helped me describe of egregiously wrong but also having lacked oversight in the House of Commons that it should have received is fully met.
Senator Coyle: Mr. Treleaven, I had a different question for you, but you look like you want to answer this one, so go ahead.
Mr. Treleaven: In terms of the role the Senate plays in the Constitution, I am past chair and a member of the board of directors of Mercy Ships Canada, a registered Canadian charity. We provide health care from two of the largest privately owned hospital ships in the world to African countries. It’s an international charity.
I want to point out that Senator Omidvar, one of your colleagues, led a series of hearings five or six years ago into the need to amend the Charities Registration (Security Information) Act, which had not been amended since the 1950s and is based on the principles of Henry VIII. She and your fellow colleagues working with her did a magnificent job and have produced a report that is mandatory reading for anybody involved in the charities sector in Canada. It was brilliant work.
This series of hearings, no matter what action the Senate actually takes in terms of amending the bill, is providing a rich dialogue to the country which otherwise would not have taken place. Surely, that is the role of the Senate in terms of issue exposure and management in the Canadian Constitution.
Senator Coyle: Thank you for that. I agree with you on the charities study.
I’m going to ask Mr. Treleaven the question I was intending to ask. You talked about burdening Canadian exporters in this context. I believe I heard you say that the challenges in our international trade context are looking like they may be greater than the opportunities for the first time. I believe you said something like that.
Mr. Treleaven: I did.
Senator Coyle: Could you speak in a little more detail not just about the U.S. but the general global context that we are operating under in terms of future and current trade agreements?
Mr. Treleaven: This is one of the most challenging times we’ve faced since the FTA was, thank goodness, negotiated and then extended to Mexico. The trading environment has not been like this. We’ve got embargos on Canadian products to China. You’ve got insane discussions in the United States. Who knows what will follow? It’s never an easy time to be a trade negotiator. This is the most difficult of times. It’s in these times where it’s most difficult to balance Canadian interests with the need to grow our international trade footprint.
Senator MacDonald: I want to ask a couple of questions about the Crown prerogative. In testimony last week before this committee, Patrick Taillon, professor and co-director of the Centre for Constitutional Studies in Laval, suggested that Bill C-282 might limit the statutory powers granted to the Ministry of Foreign Affairs by section 10 of the Department of Foreign Affairs, Trade and Development Act without thereby limiting the Crown prerogative. In your view, would the enactment of Bill C-282, as currently written, affect the Crown prerogative? Do you think it might create ambiguity in the roles of Parliament in the executive branch when setting trade policy?
Mr. Manley: I am a lawyer, but I’m not well enough informed about the argument to weigh in on that. I’ve read about their testimony, but I haven’t given it enough thought, senator, to give you a serious answer on it.
Senator MacDonald: Mr. Treleaven?
Mr. Treleaven: Mr. Manley is a lawyer. I’m not a lawyer. I’ve heard the testimony. I’ve heard the articulate arguments that the experts you’ve called articulated for the Senate. Obviously, that’s a matter that has to be very carefully considered, but I’m in no position to comment on it in a substantive manner, I’m sorry.
Senator Gold: Witnesses, again, thank you. I have enormous respect for your testimony and points of view, but forgive me for wondering whether allusions to Canada becoming like North Korea are not a little over the top in the face of this bill.
Mr. Manley, I wish to suggest to you that your comment about the link between dumping of milk and supply management, which comes from an article that was much discussed and publicized by a witness here, is based upon estimates as opposed to data, and the methodology and conclusions have been challenged. I want to put on the record that it is not self-evidently the case that supply management has resulted in those results.
Previous witnesses, when opposing this bill, were at pains to say that they were not against supply management but simply think that this is bad trade policy. I respect that point of view. I don’t want to put words in your mouth, so could you clarify your view on supply management? It seems fairly clear to me from what you have said, as it was from other witnesses, that, in fact, you think it would be in Canada’s interest to give it up, quite apart from giving up access which you think will be a necessary part of any future trade negotiations. Do you actually believe, as I know some other witnesses seem to have hinted at, that this system should be scrapped despite the advantages that those farmers and producers across the country — not only in Quebec — seem to believe it brings?
Mr. Manley: Let me try to correct some false impressions I might have created. I did not intend to say that this bill was a choice between being an open trading country and being North Korea, but I did want to make the point that our interests are in pursuing our trade opportunities. That is where our prosperity is based. We do not have a big enough domestic market to prosper on our own. We cannot shut our doors. We need access for our products. To try to live in isolation is not going to work.
On the other part, I did not try to justify that study. My point is that Canadian processors of these products could be exporting to global markets, thereby enhancing the sale of Canadian product as well. Instead, we have major processors like Saputo of Montréal taking operations out of Canada to Argentina and Australia, from which they supply a market which has great demand for protein. Canadian protein could be meeting those demands. Whether those amounts are estimates, whether they are right or wrong, is really irrelevant to the point that this is an opportunity for us that we are ignoring.
For that reason, I do conclude that this system needs to be completely scrapped over time. Other countries have demonstrated ways in which to compensate the producers so they are treated fairly. I do not think that this is in Canadian consumers’ interests, nor do I think it is in Canadian processors’ interests. It is not in the interest of other sectors of the economy, and, ad the end of the day, it is not even in the interests of the producers because they could be expanding into global markets which are closed to them.
Senator Gold: I am glad that you clarified that, Mr. Manley. I wanted to give you the ability to not leave that impression. At the end of the day, though, a majority of parliamentarians in the House of Commons think otherwise, as do those who work in the supply management area. This is not a question because I have run out of time, but should that not count for something even if you think that they are wrong from an economic point of view or a free trade point of view. Parliamentarians, for whatever reasons, have expressed otherwise, the elected members of the house. I will leave it at that. Thank you, sir.
The Chair: We are definitely out of time there. Mr. Treleaven, I know that you wanted to comment on that as well. I am sorry, it is not going to work at this time.
[Translation]
Senator Gerba: My question is for Mr. Manley. I imagine you’re familiar with the Farm Bill, the American law that supports American buyers and grants billions, $10 billion in subsidies. Here in Canada, when supply management works as it should, it doesn’t cost taxpayers a penny. You mentioned taxpayers at the start of the meeting. Do you feel that Canada should massively and regularly subsidize its farmers, like the United States does?
[English]
Mr. Manley: You’re asking for my preference as to how we do things. I would prefer that we have an open and competitive economy in a world in which countries do not do that sort of thing. I think that would benefit us tremendously.
Since we don’t live in that imaginary world, I would say it is not true to say that this is not a subsidy. It is just that it is paid for by consumers. How else could it happen? It is paid for by consumers, and they don’t know it. They don’t see it and it is invisible, which results in the polling results that you quoted in your earlier question. Let us have no fantasy that this is a subsidy-free sector. It is fully subsidized by Canadian consumers without any progressivity at all. The poorest families pay the same subsidies as the richest.
I do not know what your family situation is, senator, but I had a teenage boy at one time, and the rule in our household was to buy four litres of milk every time you go to the food store because it will all be gone by the time you go back. He could walk by the refrigerator without opening the door and a bag of milk was gone. I don’t know how he did it. That is what families are paying for. They are paying that subsidy directly out of their pockets.
I think it is a better system, if you are going to subsidize it, for it to be fully transparent and then justified and argued about by parliamentarians, not hidden away like this.
[Translation]
Senator Gerba: Yet we’ve heard from some witnesses here, especially supply-managed producers, that they’d rather not receive subsidies and live off the fruits of their labour. What do you think?
Mr. Manley: As I just said, they’re confused. They receive subsidies, but they receive them from consumers, not from the government. In fact, it’s the same thing, because consumers are taxpayers. So let’s not mix things up. It’s a system that’s based on subsidies.
Senator Gerba: So you want Canada to shut down the system?
Mr. Manley: I’m no longer a minister. I’ve never been prime minister, and everyone in politics should decide what goals they are going to pursue. In my opinion, as the former minister of industry and as the minister who was responsible for the Canada-U.S. border, I think it’s a self-created issue that is unnecessary and causes problems in every other sector. It’s not a good system, but it’s not my decision.
Senator Gerba: Thank you.
The Chair: Thank you very much.
[English]
On behalf of the committee, I would like to thank our two witnesses, John Manley and John Treleaven, for being with us today and for their comments.
Colleagues, we have now reached the end of hearing from witnesses on Bill C-282. At our next scheduled meeting on Wednesday, November 6, we will proceed to clause-by-clause consideration.
(The committee adjourned.)