Standing Senate Committee on Banking, Trade and Commerce
 

THE STANDING SENATE COMMITTEE ON BANKING, TRADE AND COMMERCE

EVIDENCE


OTTAWA, Thursday, March 24, 2016

The Standing Senate Committee on Banking, Trade and Commerce met this day at 10:30 a.m. to study the issues pertaining to internal barriers to trade; and for the consideration of a draft budget.

Senator David Tkachuk (Chair) in the chair.

[English]

The Chair: My name is David Tkachuk, and I'm the chair of this committee. Welcome to the Standing Senate Committee on Banking, Trade and Commerce. Today is our fourth meeting on our study on issues pertaining to internal trade barriers. It's my pleasure to welcome, from AdvantageBC International Business Centre Vancouver, Colin Hansen, President and CEO; from the Business Council of Canada, Brian Kingston, Vice President, Fiscal and International Issues; from the Canadian Centre for Policy Alternatives, Scott Sinclair, Director, Trade and Investment Research Project; and from the Macdonald-Laurier Institute, Brian Lee Crowley, Managing Director; and Sean Speer, Senior Fellow.

Was it Mr. Hansen who flew in yesterday?

Lynn Gordon, Clerk of the Committee: Yes.

The Chair: A special thank you for that, Mr. Hansen. As you know, we cancelled our meeting because of the death of a member of Parliament. Mr. Hansen had flown in for yesterday's meeting. Luckily, he planned to be here this morning for a meeting, which he cancelled, and so is able to be part of the panel today. That's why it looks a little crowded up there. I still think it will be a very interesting session.

Senator L. Smith: Did you see the picture of Mr. Sinclair? You're a casual person, but you look good with a tie on, sir.

The Chair: Why don't we start with the gentleman who was supposed to be here yesterday, Mr. Hansen.

Colin Hansen, President and CEO, AdvantageBC International Business Centre Vancouver: Thank you very much, senator, for accommodating me this morning.

By way of my own background as it pertains to this subject matter, I served as a member of the B.C. legislature for 17 years, 10 of those as a member of cabinet. Actually, 10 years ago next month will be the tenth anniversary of the signing of the Trade, Investment and Labour Mobility Agreement, TILMA, between B.C. and Alberta. I was the B.C. government signatory to the agreement at that time. I was the Minister of Economic Development for the following two years when we implemented that agreement, which later, of course, morphed into the New West Partnership Trade Agreement, which also includes Saskatchewan.

In the spring of 2008, in my capacity as Minister of Economic Development, I chaired the provincial-territorial meeting of ministers where all provinces came to unanimous agreement to extend labour mobility arrangements across Canada for certified professionals. The agreement still has its growing pains, but I think it put us on a good track forward.

From 2008 to 2011, I was the Minister of Finance, where I stick-handled B.C.'s support for what I will underscore as the concept of a national security regulator, although many people at the time interpreted us to be endorsing 100 per cent the position that was taken by Ontario and Canada at the time. It was a significant change towards a national security regulator for the province of British Columbia. After not seeking re-election three years ago, I was about a year catching up on 17 years of chores around my house, when I was asked if I would consider taking on this current role as President of AdvantageBC.

AdvantageBC is an organization trying to build Canada's reputation when it comes to financial services. Part of our mandate is to encourage international companies to locate in Canada. I emphasize "Canada first," and we always fly the Canadian flag. After we engage in the merits of Canada, we also talk about the merits of them locating in British Columbia, needless to say. We're a non-government body. In fact, we receive no government funding. We are entirely funded by our private sector members.

I'll start with just a couple of general comments. I've got six of them that I want to share as sort of high-level thoughts on interprovincial barriers to trade. I don't like the word "barriers" because people have preconceived notions of what that is so I call them "complexities." I'd like to comment more on how we develop such complex systems that really constitute barriers to doing commerce across provincial borders.

First, in many cases, it's easier to do business across international boundaries than it is across provincial boundaries. Second, interprovincial complexities add costs that then get passed on to consumers and diminish Canada's attractiveness as a place to do business. Third, with the prospect of new free trade agreements with Europe and the 12 nations of the Pacific under the TPP, which includes both trade in goods, which we're very familiar with and on which there's been lots of public discourse, and trade in services, which is something we need to wrap our heads around more, we need to accelerate the pace of change in Canada in order to be ready for what I think is a new international free trade environment for goods and services.

Fourth, the incremental approach to changes in the Agreement on Internal Trade will not get us there fast enough. We need a negative list approach where everything is included, unless specifically negotiated out of future agreements. That is the approach we took in negotiating the TILMA with Alberta; and here we are 10 years later after the signing of that document. It's not perfect. It's has its hiccups. There are still sections that I don't believe have been properly or fully implemented. In fact, I think it is a model that should be adopted across Canada.

Fifth, the process needs to respect the provinces' constitutional rights. Faster progress will be made if the federal government is the champion for a process that leads to a national consensus, rather than the federal government trying to extend the current interpretation of division of powers between the provinces and Canada. That was actually one of the hiccups in the evolution of a national security regulator. Sixth, reducing interprovincial barriers to commerce does not mean diminishing the powers of the provinces. It's about ensuring that the provinces do not discriminate against companies just because they operate in other parts of Canada.

I want to talk specifically about the financial services sector. As we engage in this conversation, it's essential that we put that as a priority for breaking down some of these interprovincial complexities, which add to the cost of doing business in Canada.

First, Canada is recognized as having the strongest banking system in the world. The World Economic Forum for eight years in a row has classified Canada as the top and most secure banking system in the entire world. We have a great story to tell. When I'm out talking to companies internationally, primarily in China and other parts of East Asia, I talk with passion about the fact that Canada is a great place to do business because of the stability of our banking system. Given that reputation, we should be seeing our financial services sector in all parts of Canada growing faster than it is; but I think we have built in some structural impediments to that growth. Basically, we're not seeing that growth because our financial services sector needs to be more nimble and needs to be more flexible.

One example I'll give is bank settlement hours. I'll start by giving you a little vignette that helps to explain where the issue is. If you were a Canadian exporter, say, exporting potash from Saskatchewan to China, your ship is being loaded in Vancouver Port today, Thursday before a long weekend, and your payment is FOB Vancouver, so you're looking for certification off the ship that the goods have been loaded and only then will you get paid. If you cannot get that certification by 2 p.m. Vancouver time today, you will not get paid until the next business day because you'll have missed the 3 p.m. deadline for large-value transfers in the Canadian payment system.

You ask why that is the case. It's because the settlement system for payments in Canada under our banking system closes at 6 p.m. Eastern Time. You wind up with half the afternoon cut off for Vancouver-based exporters and all large-value transactions.

If Canadian financial institutions cannot meet the needs of customers by being more flexible, then those customers will take their financial service activities to other cities in other countries. Anecdotally I've heard some of that is already happening, and we can see it increasingly in the future. This is not about a Vancouver versus Central Canada kind of issue because the entire system, the Canadian financial services sector could be diminished if they cannot be more flexible in meeting the needs of their clients.

The other area I want to give some examples from is the insurance sector, and I do so with some trepidation knowing Senator Black's background. Captive insurance is one example of where it's easier for Canadian companies to do business across our national boundaries than it is across provincial boundaries. Captive insurance, for those not familiar, is essentially where larger companies will set up a corporate entity to self-insure their risks in Canada or anywhere in the world.

In B.C., we set up a legislative framework in 1987 for captive insurance regulation and oversight. We are the only province in Canada that has such a system in place. Canadian companies outside British Columbia are forced, if they want to establish captive insurance, to go outside Canada to domicile their captive insurance companies because of the inability of the British Columbia captive insurance system to be recognized by other provinces in Canada. The most recent statistics I have are from 2008, but I don't think they've changed much since then. At that time, there were 151 captive insurance companies in Canada; only 21 of them were domiciled in B.C., while there were 98 in Barbados, 19 in Bermuda, 7 in the Caymans, and 6 elsewhere. It's one example of many where financial services are impeded because of existing rules.

The other is in terms of insurance services generally. In Canada we have probably one of the most complex systems of insurance oversight of any country in the world because we have federal jurisdiction and provincial jurisdiction, and, most importantly, we have the inability of provinces to recognize insurance systems set up across provincial boundaries. An international company coming to set up in every province and territory in Canada would have a formidable challenge in setting up that kind of arrangement.

In closing, as I know my time is running out, it is these kinds of complexities that ultimately result in costs that get passed on to consumers and make Canada a less desirable place from which to do business. I congratulate the committee for taking on the challenge of looking at interprovincial barriers. It's a very important subject; but it needs to be much broader than just a focus on trade and the movement of goods. It also needs to focus on the movement of services across provincial boundaries.

The Chair: Mr. Hansen was recommended to the committee by Senator Neufeld from British Columbia, who served in the government at the same time.

Brian Kingston, Vice President, Fiscal and International Issues, Business Council of Canada: Mr. Chair, honourable senators, thank you for the opportunity to appear this morning as part of your study on internal trade barriers. The Business Council of Canada, previously known as the Canadian Council of Chief Executives, represents the chief executives and entrepreneurs of 150 leading Canadian companies from all sectors and regions of the economy. Our 1.4 million citizens account for more than half the value of the Toronto Stock Exchange, contribute the largest share of federal corporate taxes, and are responsible for most of Canada's exports, corporate philanthropy and private sector investments in research and development.

With one in five jobs linked to exports, Canada's long-term prosperity depends on our ability to sell goods and services around the globe. An extensive network of free trade agreements, including the recently concluded Canada-EU Comprehensive Economic and Trade Agreement and potentially the Trans-Pacific Partnership, ensures that our companies benefit from preferential access to the world's largest and richest markets. However, we will be unable to benefit fully from new trade opportunities if our companies are unable to attain the scale needed to take advantage of them.

The larger the company, the greater the likelihood is that it sells outside Canada. In 2010 only 1 per cent of the small businesses in Canada were exporters. Among large firms, the proportion is 43 per cent. Companies with more than 500 employees represent only 0.2 per cent of Canadian businesses, yet they generate nearly two thirds of our country's total exports.

Large firms are not only more likely to export but are also responsible for a disproportionate share of Canada's exports. Despite accounting for just 3 per cent of Canadian goods exporting enterprises, large firms contributed almost three quarters of the total value of goods exports in 2014. Moreover, the top 10 Canadian goods exporters accounted for 25 per cent of total export values, while the top 50 firms generated 55 per cent of export values.

Establishing a common Canadian marketplace that is free of internal barriers is one important way to help small and medium-sized enterprise, SMEs, to achieve the scale they need to become successful exporters. Industry Canada research shows that SMEs that trade across Canada rather than focusing their activities on one province or region tend to employ more workers, are more innovative and are more likely to export. Conversely, SMEs that don't do business across provincial boundaries are less likely to grow.

Unfortunately, Canada's patchwork of domestic rules and regulations makes it challenging for firms to expand. While progress has been made in recent years to reduce internal trade barriers, much more ambition is needed. For example, efforts to strengthen labour mobility provisions have not eliminated significant differences in occupational standards and certification requirements. Proposals such as Ontario's provincial pension plan will only make it more difficult for Ontarians to move in and out of the province.

Another notable barrier, as mentioned by Mr. Hansen, is Canada's approach to securities regulation. Despite multiple attempts to create a common securities regulator, we still do not have a harmonized capital market. A pan-Canadian regulator would boost competitiveness by eliminating duplication, reducing unnecessary red tape and compliance costs and enhancing oversight.

Fortunately, free trade within Canada can be achieved through an ambitious renewal of the Agreement on Internal Trade, AIT. Canada's business leaders are encouraged by the commitment made by the provinces and territories in 2014 to renew the AIT, and we've recommended that the agreement follow the following principles.

First, the AIT must be as ambitious and comprehensive as any trade agreement Canada has with a foreign country. One way to achieve this is to adopt the negative list approach embedded in the Canada-European Union trade deal, CETA. All sectors of the economy would be covered by the agreement unless explicitly excluded.

Second, the concept of mutual recognition should apply to the full scope of the agreement. Under this concept, any product or service produced in one province or territory should be admitted into the market of any other province or territory unless there is a justified reason for the exemption.

Third, we should aim for the highest possible level of regulatory cooperation among the provinces and territories. The align or explain approach to regulation would accelerate work on achieving common standards. In addition, the AIT should include a formal mechanism to facilitate regulatory cooperation that allows businesses to participate.

Fourth, the agreement must include an effective and efficient dispute settlement mechanism. This could be achieved by adopting a domestic equivalent of the investor-state dispute settlement mechanism and subjecting compliance panel and appellate panel reports and decisions to judicial review.

Fifth, an effective governance structure should be established to manage the economic union and push forward with necessary reforms. Under the current consensus-based decision-making model, any one province or territory can veto or delay important amendments, which is a recipe for inaction. With that, I conclude my remarks.

Scott Sinclair, Director, Trade and Investment Research Project, Canadian Centre for Policy Alternatives: Thank you, Mr. Chair, honourable senators, for the invitation. I'm Director of the Trade and Investment Research Project for the Canadian Centre for Policy Alternatives, which is a non-partisan think tank. I work for the Ottawa office, although I live on Prince Edward Island. We have offices across the country, in British Columbia, Toronto, Atlantic Canada, Saskatchewan and Winnipeg.

Even before the Agreement on Internal Trade came into effect, most empirical studies found that the costs of internal trade barriers were fairly small, ranging from 0.05 per cent to 0.10 per cent of GDP, which would be $1 billion to $2 billion annually in today's dollars. The C.D. Howe Institute has noted that even those internal trade barriers have been substantially reduced since that time; so earlier economic research probably overstates their cost to the economy. Despite this, some lobbyists and pundits continue to make exaggerated claims about the costs of internal trade barriers. The fact is that there is no crisis in internal trade relations, and it's inaccurate to propagate that myth.

Some economists have argued that even though the costs of internal trade barriers are low, they should still be addressed. This is a reasonable position, so long as the proposed policy solutions are commensurate with the seriousness of the problem. For example, it would be a useful exercise to list and estimate the cost of specific trade barriers between provinces. Provincial governments could then cooperate to remove any costly barriers that do not serve any useful purpose.

Many measures that are frequently characterized as "internal trade barriers" are, in fact, deliberate policy choices or simply differences in regulation that should be expected in any federal system. While policy choices such as supply management or alcohol monopolies may result in additional costs or lost opportunities for some, they also bring significant benefits. I will get to more examples in a moment. The point is that if done badly, overhauling the AIT could pose risks to legitimate regulation, including non-discriminatory public interest regulation.

The AIT has already been substantially reformed since 1995. The pressure now, from business groups in particular, is for the agreement to be overhauled to make it more enforceable both by governments and by business directly, and to apply a so-called negative list approach to its obligations. Presumably, this would mean that the AIT's general rules, which are found in Part 3, Chapter 4, would automatically apply to all measures and sectors, unless governments explicitly exclude these through reservations.

Those rules, I should add, go much further than simply barring discriminatory measures. They preclude all AIT parties, including the federal government, from adopting or maintaining even non-discriminatory measures that restrict or prevent the movement of persons, goods, services or investment across provincial boundaries. Another requirement is that any government measure cannot operate to create an obstacle to internal trade, again defined quite broadly.

Obviously, many regulatory measures, such as new restrictions on the use of neonicotinoids, municipal bans on cosmetic pesticides, or restrictions on trans fats or sugary drinks, have repercussions for businesses and commerce that could be construed as restrictions to free movement or obstacles to internal trade. Under the AIT's general rules, such regulations must then be justified as not unduly impairing the access of persons, goods, services or investments and not more trade restrictive than necessary to achieve a legitimate objective.

Such rules of interpretation are drawn from international trade treatment agreements, where they have been interpreted quite restrictively. In fact, the first AIT dispute panel ruled that the federal government's attempt to restrict the interprovincial trade and use of MMT, a neurotoxic gasoline additive, ruled against it on the grounds that the matter could have been handled in a less trade-restrictive way. That cleared the way, I would say, for quite a disastrous settlement for ethyl under the NAFTA, which is our first loss in investor-state dispute settlement.

Differing regulations that have outlived their usefulness or can be easily harmonized of course should be removed or modified. Regulations being considered for possible reduction or elimination should be available publicly, and any reconciliation process must be fully transparent and open. Citizens or interested parties must be able to respond and intervene in evaluating the social, economic and environmental purposes of these regulations.

At its best, federalism encourages policy leadership and innovation, whether it's California's policies on clean air and auto safety, Ontario's moves to curb bee-killing pesticides, or British Columbia's carbon tax. However, provinces adopting or maintaining higher standards can be challenged and compelled to justify them under the top-down application of the AIT's general rules. Meanwhile, the agreement provides no corresponding or equivalent means to compel jurisdictions with lower or deficient standards to raise them. In my view, this is a recipe for harmonization to the lowest common denominator.

There are sound reasons why governments sought to restrict the application of the general rules in the original AIT. By giving other jurisdictions and individuals, including corporations, wide latitude to sue provincial or federal governments over differences in public interest regulations, a revamped AIT would place more downward pressure on standards. Even non-discriminatory regulations, including at the federal level, would not be immune.

Instead, Canada needs more instances of positive cooperation and upward harmonization. Higher standards, such as stronger building codes and energy efficiency regulations, can drive innovation and productivity gains. More cooperative efforts along the lines of the Cost of Credit Disclosure rules, adopted in the late 1990s through the AIT's committee on consumer-related measures and standards; joint crackdowns on payday lenders; common GHG emission targets; or facilitating the creation of a national securities regulator would enhance the relevance and value of the internal trade agenda for ordinary Canadians.

Canada would be better served by a more transparent, incremental approach focused on specific problems. If provinces and local governments are obstructed in exercising their regulatory authority or innovating with different or distinctive approaches and the federal government does not step in to fill that gap, then consumer, health and environmental protection can be expected to suffer.

[Translation]

Brian Lee Crowley, Managing Director, Macdonald-Laurier Institute: Honourable senators, thank you for inviting us to appear before the committee today.

[English]

I congratulate you for taking up this issue. As the committee noted in the study's order of reference, interprovincial trade barriers can have far-reaching economic consequences for the country. We at the Macdonald-Laurier Institute, a public policy think tank based here in Ottawa, are passionate about this issue. As a think tank dedicated to the ideas underpinning Canada's founding in 1867, I suppose our enthusiasm for this issue should not be a surprise. Consider, for example, what the great Liberal parliamentarian George Brown said more than 150 years ago just on the eve of Confederation about the proposal of confederation:

The proposal now before us is to throw down all barriers between the provinces — to make a citizen of one, citizen of the whole.

That was how George Brown characterized the Confederation project. It was to remove barriers between the provinces. I would suggest that the committee's mission in carrying out this study should be to see George Brown's vision through, that is, to eliminate interprovincial barriers and extend economic freedom. That is the necessary consequence. If you throw down the barriers, you extend the economic freedom of Canadians across the country.

What can be done? What is the best path for asserting a one-country economic vision rather than the beggar-thy-neighbour protection that too often stands in the way of economic freedom?

I note in his testimony last month that Minister Bains expressed optimism about the most recent round of negotiations with the provinces and territories on a renewed AIT. The minister said at the time, "I'm optimistic as I think we are headed in the right direction in making meaningful progress." Well, with all due respect to the minister, the fact that a month has passed and the March deadline has come and gone is in itself a powerful sign of the folly of leaving reform to the provinces. Waiting on the provinces to deliver "meaningful progress," as the minister put it, means we could be waiting another 150 years because that's how long we've been waiting already. Canada was created because this doesn't work.

In fact, not only have the provinces failed to produce meaningful reform of internal trade barriers, as was noted by the former Executive Director of the Internal Trade Secretariat, Anna Maria Magnifico, in an article for us, but also they're presently publicly in the process of creating massive new ones. Think, for example, of the obstacles to pipeline development that have sprung up in British Columbia and Quebec. These are new interprovincial barriers to trade, at the precise moment that these same provinces are claiming to be eliminating them.

My view, which I think is shared by my colleagues at the Macdonald-Laurier Institute, is that real reform can come only from Ottawa, as was intended and envisaged in the Constitution we created in 1867. It is the only way to assert a true national economy unshackled from parochial and narrow interests to the absurdity that leads a 62-year-old retired steelworker to be arrested in New Brunswick for buying beer in Quebec. The Government of New Brunswick showed up before the court and said its justification was that it really needed the money. I hope bank robbers were listening, because it's a perfect defence for them. As the former Executive Director of the Internal Trade Secretariat said in an article for the Institute, "The time for baby steps is over." Let's finish the vision that George Brown had for Canada.

I'm sensitive about budgeting my time, so let's focus on a big idea to bring an end to interprovincial barriers to trade. The current round of negotiations has shown once again that attempts to cajole the provinces to give up their barriers voluntarily are an exercise in futility. I mention, in parentheses, that they tried exactly this approach in Australia, and the states finally threw up their hands and said, "We can't do it," and handed over the job to the Commonwealth government in Canberra. At least they had the honesty to admit they couldn't get the job done. The federal government should, as has been recommended by Peter Hogg, one of the leading constitutional scholars in the country — and our worker on this issue has been much inspired by his work — instead introduce a sweeping statute to ensure that no government rules or policies unnecessarily restrict the free movement of goods, of services, of labour and of capital and to give individual citizens clear legal remedies against such restrictions. The federal government can pass an act of Parliament to create an economic charter of rights for Canadians that would be faithful to the vision of 1867, while respecting the constitutional division of powers and responsibilities between the provinces and Ottawa.

Everyone is always so solicitous of provincial jurisdiction. What about federal jurisdiction? That is what we in Ottawa are here to defend and uphold. We too often hand it over to the provinces and say, "Gee, this is a tough problem. Please fix it for us." It's not their job. They existed before 1867; but what we created in 1867 was you, with a job to tear down the barriers between Canadians.

Now, the statute would reflect the federal prerogative in interprovincial trade and commerce. It would be rooted in the principle that a Canadian has the right to seek employment, to earn a living and to sell his or her goods and services anywhere in Canada without exception. I mentioned that such a law would give citizens legal recourse against provincial infringement on their economic rights. This is key. Real enforceability is the only way to ensure that a new set of barriers and obstacles doesn't soon build up. To this point, we recommend the creation of an economic freedom commission with the power to investigate breaches of the economic charter of rights on its own initiative as well as in response to complaints. This would ensure that the system works as intended.

No doubt, there would be those who argue against such a big idea. Well, there were those who argued against the big idea we now call Canada. I think we should stare them down. We cannot let special interests and small thinking stand in the way of the Canadian economic union and the rights of those who find themselves on the outside looking in. I'm talking about the hairdresser who can't find work in Ontario because he or she got their training in Saskatchewan; and I'm referring to the nurse who finds it virtually impossible to move to another province because, to borrow an expression from Freud, of the professional bodies' narcissism of small differences. I'm talking about provincial and local barriers to developing Canada's natural resources, such as the pipeline issue that I referred to a few moments ago.

An economic charter of rights is a big idea; there's no doubt about it. It seeks to complete Canada's nation-building project. It seeks to unshackle Canada's economy. It seeks to help the so-called little guy who is shut out by restrictions and barriers. Most importantly, it seeks to set the conditions for long-term economic prosperity.

It is also, in addition to being a big idea, an idea whose time has come. I hope the committee will consider it as part of its eventual recommendations. I thank you for the opportunity to speak to you today.

The Chair: Thanks very much, Mr. Crowley. Do you have anything to add, Mr. Speer?

We will go to questions. Witnesses, senators may ask all of you or one of you, but that doesn't prevent someone else from commenting.

Senator Tannas: I know that with this group there will be a lot of great questions. I have an interest in the insurance industry so I want to ask Mr. Hansen about captives in British Columbia that you spoke of and the lack of captives in other provinces.

My understanding of captives is that they're more driven by tax than by genuine interest in self-insurance. I was surprised by the numbers. I expected you to say there were zero captives in British Columbia. Do you have any sense of why you have even such a modest market share of captives in British Columbia?

Mr. Hansen: Well, the tax implications of captives have been changing over the last couple of years. In fact, in the 2014 federal budget, new provisions put in place prevent Canadian companies from using offshore captives as a way to avoid taxation. That has been a changing landscape over the last number of years.

In British Columbia, under what is known as the International Business Activity program, the province's international service activities includes captive insurance, where there is foreign risk being insured that can be exempted from provincial corporate income tax. In Canada today, we have a number of companies that would be very interested in having their captive insurance domiciled in Canada to cover Canadian risk. They would like to use the B.C. program. They know that there may be some marginal tax advantages to going to the Caribbean, but they also recognize that those advantages have been diminishing significantly over the last number of years. In part they feel more comfortable having a captive insurance operation set up under Canadian law rather than under foreign legal structures.

Senator Ringuette: Of course, all of you understand that the first responsibility of senators is to review proposed legislation with sober second thought, including the respect of jurisdiction under the Constitution.

Therefore, my question will be mainly about that. Mr. Hansen, you have hands-on experience. How did the provinces of B.C. and Alberta deal with that in respect of their jurisdiction?

I agree with Mr. Sinclair that we cannot venture into forcing the policy or regulation of a province to go to its lowest common denominator, because then we would have a non-progressive society in Canada. How did you deal with that, in your experience?

Mr. Hansen: First of all, I think when the TILMA was negotiated, one of the clear objectives was not to diminish the powers either of the two provincial governments or of municipalities, for example, but saying that as those governments brought in regulations and rules, they had to be non-discriminatory.

For example, if a municipality brought in certain height restrictions on buildings, for example, they couldn't say that if it's a B.C.-based construction firm they would be treated differently than if they were an Alberta-based construction firm operating in British Columbia. That principle of non-discrimination was really the fundamental driver of the wording in those negotiations, so it wasn't about going to the lowest common denominator.

We have harmonized between B.C. and Alberta several pieces of legislation. In fact, one of them is the Insurance Act. Alberta was the first, and B.C. basically modelled our legislation on Alberta’s so that we could have an increasing degree of harmonization, but I think breaking down interprovincial trade barriers and harmonization are not necessarily the same thing.

Senator Ringuette: The provinces are responsible for regulating professionally recognized bodies, such as lawyers, doctors and so forth. In order to establish that, there has to be recognition of credentials and training from the institution certifying the professional. How did you deal with that? Whether it's within this economic study, we've been hearing for quite a number of years that efforts were made to establish a standard in regard to qualifications. How did you specifically deal with that issue, or did you?

Mr. Hansen: Absolutely. The Province of British Columbia and the Province of Alberta basically put in place rules that said to all of the licensing bodies that if an individual was certified and credentialed in one jurisdiction, then that credential had to be recognized in the other jurisdiction.

One example is a case I'm aware of where a licensed practical nurse moved from one province to the other in early July. It was prior to the TILMA being established. She had all of the credentials to be a licensed practical nurse in the other province at a time when there was a severe shortage of nurses, yet she found she could not meet to put in an application for certification because there were summer holidays by the college in the other province. Then when she finally had a chance to put in her application, which took two months, she was then told that because of the backlog, they were unable to meet with her and transfer her credentials for three months. At a time when we have nursing shortages, that makes absolutely no sense.

Another example I will give is another profession where the executive director of the association came to see me and started out by saying, "Minister Hansen, we totally support the TILMA and labour mobility, but in our particular profession, Alberta doesn't quite have the same level of standards that we have, and we think that this is an area where there's a safety issue, as to whether or not somebody with the training in Alberta can practise in British Columbia. We accept everything, but we need to sign off on this particular measure of training."

My response to him was that as a Canadian I travel frequently to Alberta, and I would like to know that all of the individuals practising that profession in the province of Alberta are as competent as the professionals practising in the province of British Colombia. Therefore, if it's a safety issue, you have an obligation to talk to your counterpart in Alberta and make sure the standards are increased to a level that meets public safety.

The Chair: Did you wish to comment, Mr. Crowley?

Mr. Crowley: If I could, since the honourable senator raised the issue of jurisdiction, again my experience is that everybody spends a lot of time being very solicitous about provincial jurisdiction. Let me say what the Constitution says about federal jurisdiction.

There are four places in the Constitution that I think give clear jurisdiction to Ottawa over matters of interprovincial trade and commerce. The first is the general power to make laws for the peace, order and good government of Canada. The second is the regulation of trade and commerce. In fact, it's the second power listed for the federal government.

The third is at section 121 of the Constitution Act, 1867:

All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.

And, of course, there are mobility rights within the Charter; I won't read that through, but those mobility rights are granted to all Canadians, regardless of where they live, as opposed to the jurisdiction of the provinces, which is characterized by the Constitution as generally all matters of a merely local or private nature in the province.

My view is that as soon as an economic relation goes across provincial boundaries, it is no longer a provincial jurisdiction; it is a federal jurisdiction. It is no longer moving from one province to another; it is moving within Canada and falls under the jurisdiction of Canada.

Senator Black: Thank you very much. I have two specific questions for Mr. Sinclair, and then I have a question for the panel, if that is acceptable to you.

The Chair: Absolutely.

Senator Black: Very well. Thank you. Mr. Sinclair, I have a couple of specific questions for you, if I may, to help me understand your evidence in counterbalance to other evidence that we have heard before this panel.

Sir, you indicated that your understanding would be that the economic upside for interprovincial trade is limited. We heard from Professor Mintz on March 10. While acknowledging there are many studies that indicate gains for the Canadian economy are relatively minor, he concludes his evidence by saying, "However, by incorporating more complex features . . . estimates of economic gains rose as high as 6.5 per cent of GDP." And he gives two or three of the more complex features.

Would you care to comment on that?

Mr. Sinclair: Sure. I've reviewed Mr. Mintz's testimony before this committee. I recall that he said his own research was in line with the empirical studies that I cited in my testimony, which showed gains from one-twentieth of 1 per cent to one-tenth of 1 per cent. Most of these studies were done in the 1980s and 1990s. His own personal research is in line with that.

He referred to a study by some University of Calgary colleagues. There have been other studies. One has been done for the federal government in their review of the AIT. I would say these studies are not empirical studies. They don't try to identify the cause of specific barriers. What they do is attempt to measure the gap between, say, economic output or productivity and what they calculate as the potential for economic output or productivity.

They're interesting academic studies. I don't think they're very useful from a public policy perspective because there's no explanation of what specific barriers or complexities — where the friction is. So for a public policy-maker, it doesn't point you to any particular policy. I think the empirical approach is a much more helpful approach.

Senator Black: I wanted to give you an opportunity to comment on that difference. Do I take from your testimony here today that your view is that the existing federal agreement pretty much has been overhauled and is working effectively today?

Mr. Sinclair: I actually have some criticisms of how it has worked, but I will point out that, yes, it has been reformed, I think, 14 times.

Senator Black: So I read.

Mr. Sinclair: For example, we've heard several examples today — and Mr. Hansen, the examples that you gave on labour mobility have been largely addressed, you would agree, in the TILMA. In 2009, the Agreement on Internal Trade was reformed to provide pretty much for automatic recognition of credentials and licensing, both professional and trades, across the country. Ontario has actually enacted that through legislation. In Ontario, it's the law of the land. You can't require additional training of Canadians entering into your province.

Senator Black: Before we drill down too deeply, your view would be that the 14 amendments to the existing agreement pretty much have us in a good place

Mr. Sinclair: I don't see any need for a substantial overhaul of the agreement, no.

Senator Black: In fairness, documentation put forward when the minister was here referred to documentation from the Honourable James Moore, who was the former minister. In the foreword to a document called One Canada, One National Economy: Modernizing Internal Trade in Canada, the former minister says:

Persistent barriers to internal trade, including regulatory differences, inconsistent standards, and restrictions on the free movement of people, goods and services, fragment our economy and put Canadian firms at a disadvantage. The result is a weaker Canadian economy, lost jobs, and a less united Canada.

For full disclosure, a different point of view is clearly being espoused in the information we've seen.

Mr. Sinclair: There's a very powerful myth that internal trade barriers are one of the most serious problems facing the Canadian economy. I think that's untrue.

Senator Black: First, I'd like your view on the consequences of maintaining the existing federal regime. Second, what do you view to be the specific role for Ottawa, if you were of the view that some change needs to be effected?

Mr. Crowley: First of all, senator, I would not characterize the current regime as federal. It is precisely not federal. It is an agreement between the provinces. That doesn't make it federal.

What you decide is federal. That's what Ottawa is for. Ottawa did not design, legislate, create or modify the Agreement on Internal Trade. It is an agreement amongst the provinces. It is a political agreement. It is not a legislative agreement. You cannot take it before the courts. In fact, the provinces have been very careful to make it clear that, as a political agreement, while they are interested in the outcomes of appeals before the appeal mechanisms that they've created, there are many instances in which provinces have lost such appeals and simply carried on with the existing policy regardless.

So there's clearly a lack of desire or drive on the part of the provinces to make this agreement one that is legally binding on them, that is significantly enforceable by people whose interests are actually damaged by it. That's what I would say about the existing agreement.

With respect to the role that Ottawa could play, in my talk I laid out the idea of an economic charter of rights. I got this idea originally from Peter Hogg, one of the leading constitutionalists in the country. We can quote chapter and verse about the constitutional justification and underpinning of such an idea. In my view, Canada is the country that trade created. One of the reasons Canada was created in 1867 was because of all the other major trade conduits we had. We had free trade with the United States. The Americans abrogated it. We had preferential trade within the empire. The British got rid of it in favour of free trade.

The express justification for Confederation in 1867 was that we were in a hard place and we even have barriers amongst ourselves. Let's start by getting rid of those barriers. If you read the constitutional debates, Ottawa was expressly created and its powers designed to give Ottawa the power to get rid of barriers between the provinces. It was the very justification for the country.

Mr. Kingston: Regarding the consequences of not moving ahead or reforming or addressing internal trade barriers, I want to underline what is probably the most damaging consequence of this. You've heard this before having read the evidence, but it's really important.

Once CETA is in place, Canada will be offering foreign companies better access to Canada than Canadian companies, and not only better access, but they will actually have recourse to more effective dispute settlement mechanisms. That has potential to be extremely damaging. We have to, at a very minimum, bring our internal trade agreement in line with what we offer foreign countries.

Secondly, in terms of a role for the federal government, it's relatively minor, but it can have a big impact. That is, making the federal government a permanent co-chair of the Internal Trade Secretariat. Right now we have rotating chairs, so each province will hold the chair for a year. We witnessed this recently when Manitoba was the chair. The minister was very motivated and had a very active plan to renew the agreement. Then due to political reasons, and the fact that 12 months is a relatively short period of time to actually move on this, we then switched chairs again. All of that work that's being advanced suddenly gets lost. Then you have this transition period, a new minister. If you had the federal government as a permanent co-chair, that would move this agreement along with more continuity. That's one action that could be taken.

Mr. Hansen: Thank you. In the role that I've had over these last two years, I look at this issue somewhat from the perspective of an international company looking to do business in Canada. When they start looking at the complexity of rules from province to province, they find Canada a very confusing place to do business. If we want to attract the kind of foreign investment that we need to drive the Canadian economy in the future, breaking down some of these barriers is vitally important.

For example, at one point I tried to explain the Canadian passport system for securities to the third-largest Chinese securities firm. It was looking to establish an operation here in Canada. I'm as well versed in the passport system as many people are, but it was tough to explain it to somebody from outside. If we want to make the Canadian economy an attractive place, we have to address some of these issues going forward. We need to differentiate between a national regime and a federal regime.

The national securities regulator is a case in point. I had a very good working relationship with the late Jim Flaherty. I respected him in so many areas and was more than willing to support a push for a national securities regulator.

One area where we disagreed on was the reference to the Supreme Court to determine whether or not federal jurisdiction could be interpreted to extend to this area. We lost two years of progress on that particular file because the provinces got their backs up. British Columbia actually went into that Supreme Court decision not supporting the federal government's position. We felt we had an obligation to our citizens to do that.

However, there's far more to be gained by these collaborations. I know it's not as efficient. It's very Canadian that we have to sit down and come to a consensus among provinces in terms of how we move forward on some of these things. It would be nice to have a bit more of a direct approach.

The building of national consensus does work. We certainly saw it with regard to the national labour mobility agreement that was negotiated in 2008 and implemented, as Mr. Sinclair mentioned, in 2009. So progress can be made, but I also think the role the federal government can play is to raise the stakes on this subject and to create the environment in which it is imperative that the provinces get to that national consensus much faster than we've been able to achieve up until now.

Mr. Sinclair: Well, as somebody who was involved in AIT negotiations early on, the federal government is a party to the AIT. From my experience, they were a driving force in the creation of the AIT.

Also, I think people need to acknowledge everything that has happened within the framework of the AIT, not all of it positive, from my point of view. I think there are issues around labour mobility and lowest common denominator harmonization, but the enforcement mechanisms of the agreement have been strengthened. There is now enforcement by fines; businesses can bring claims directly.

To me, I think the existing regime needs a lot more transparency, a lot more public involvement. I think that people need to update their talking points and actually look at what has happened at that table.

Now, as for the role of Ottawa, it should be more persuasion and consensus building than some kind of legal hammer, certainly. I agree with Mr. Crowley to a point that I think the courts are actually a good place to find balance on a lot of these issues. Many cases have gone before the courts, such as local fish processing in Newfoundland and Labrador, which was found to be intra vires, or the municipal ban on cosmetic pesticides, which went right to the Supreme Court of Canada and was upheld.

So when you get into these regulatory issues that affect commerce and mobility and internal trade to a certain extent, the court tends to take a more balanced view, that of public interest on one hand and commercial rights on the other. So I'd be more comfortable with them playing a greater role.

[Translation]

Senator Bellemare: One of my questions is for Mr. Sinclair and one is for Mr. Crowley, but everyone is welcome to answer. My questions pick up on what you just said.

Mr. Sinclair, you ended by saying that a cooperative approach to internal trade was ideal, something Mr. Hansen agreed with as well. I’d like to hear your thoughts on labour mobility from a more practical standpoint. We talked about nurses and the existence of certain agreements, but having worked on labour issues, myself, I know how challenging they can be when it comes to certain sectors. I’d like to know how a cooperative approach could produce results quickly in a context where we have ten provinces and one federal government. Do you have any tangible examples in that regard?

Mr. Crowley, you spoke passionately about the importance of removing all the barriers to trade. My question for you also has a practical component. What do we do about the external costs that can stem from unregulated mobility? For those who favour that approach, because that is certainly a possibility — and you mentioned pipelines — what can be done to offset or, at the very least, absorb external costs arising from trade without restrictions? I’d like to hear your thoughts on that. Thank you.

[English]

Mr. Sinclair: I'll begin. Of course, Canadians have Charter rights to move freely and work anywhere in the country. As you said, in some cases it can be a complex matter for an individual. In other cases it's very simple, but it can be complex to have your licensing or certification or professional accreditation recognized. I think those issues have largely been addressed. There are still a few remaining frictions. If you go to the Internal Trade Secretariat website, you'll see a list of labour mobility challenges. In B.C., there's a nurse practitioner's case. I have no idea of the details of that because no details are provided on the website, which is problematic.

These cases are being dealt with. As I said, Ontario has brought that into law; you cannot require additional training of anyone. You must recognize the certification of another jurisdiction.

My concern is that that can lead to issues. We have had regulatory failures like Walkerton and Westray that were related to poor training. Perhaps that's a role for the federal government or for further interprovincial negotiation, to ensure that we have a floor for all those regulated trades and professions. You need both. You need mobility, but you need to be absolutely assured that the consumer and citizens are being protected.

Senator Bellemare: In some countries, they have a system of qualification recognition, such as the NVQ, National Vocational Qualification, in the U.K. and something in Australia that has enabled people to move around. Once they are certified by this broad system, their competencies are recognized no matter how they have been acquired.

If we want to go that route in Canada, how can we do so?

Mr. Sinclair: I don't have an answer to that question. Again, that is the complexity of our federal system, but I would insist on the fact that you can't just look at one side of the mobility equation. You have to also look at the consumer and public health protection side of the equation, whether that's done through federal-provincial cooperation or through some type of national standard.

The Chair: Was the Walkerton issue because of the training, or was it because the people were incompetent, which could be anybody getting training anywhere? It doesn't necessarily make them competent.

Mr. Sinclair: No, but after that incident or similar incidents, it would be reasonable for a province to ensure that that never happened again by requiring additional training. That is now no longer possible for out-of-province engineers or technicians. That's the concern.

The Chair: I'm not sure what you mean. Are you saying that —

Mr. Sinclair: You're not permitted to require additional training if a sanitation engineer or somebody is coming from another jurisdiction. If they are certified, then they are qualified to practise within your jurisdiction.

The Chair: Is that what happened in —

Mr. Sinclair: No, that's not what happened in Walkerton.

The Chair: That's what I thought. Thank you.

Mr. Hansen: If I can just add to Mr. Sinclair's comments, in that case, it would not be the lowest common denominator that would prevail. What it would require is a consensus across the professional representatives in, say, the engineering professions, to increase the training standards required in all parts of Canada. Those mechanisms are in place today as a result of the labour mobility agreement of 2009, wherein they can respond on a national basis so that we continue to have Canadian standards. But that doesn't mean that the standards cannot be increased.

[Translation]

Mr. Crowley: Thank you for your question, Senator. Actually, you had several questions. Let’s start with your first question about a cooperative approach to the labour mobility issue. I’m not sure whether you would agree, but it seems to me that infinite rounds of meetings on construction worker mobility have been held over the years between the premiers of Ontario and Quebec. That’s one example of a cooperative approach.

Senator Bellemare: Between two partners.

Mr. Crowley: Yes, between two partners, but multiple partners could also be involved. In this case, it’s between two partners. Senator, you may know that more workers from Ontario work across the river today than vice versa. If that’s the outcome of a cooperative approach, then, in my opinion, many Canadians’ right to work anywhere in Canada is being violated. As I see it, it’s a right of citizenship. Fundamentally, it’s a matter of Canadians’ rights, not a matter of economic efficiency and so forth. It’s the right of Canadians to work, to sell their wares, anywhere in the country.

Now, your second question was about the possibility of a nationwide open trade regime giving rise to uncontrolled open trade. I’m not trying to put words in your mouth, but that was basically how I interpreted your question. As I understand the Constitution, there is no activity, area of expertise or type of trade that does not fall under the jurisdiction of some level of government. We are not talking about creating a legal or constitutional vacuum in Canada, where internal trade would somehow fall outside the domain of the various levels of governments. On the contrary, we are trying to create a foundation so that Canadians’ rights take precedence over all other considerations when it comes to the policies that are implemented, both provincially and federally, to promote internal trade. Does that answer your question?

Senator Bellemare: Yes. In your pipeline example, you explained that the federal government should have jurisdiction. But some provinces, like Quebec, would like a say in environmental assessments. In those cases, if we were to adopt a wholesale approach — you answered my question about legal frameworks — you would agree to legal regimes at the provincial level?

Mr. Crowley: Let’s consider the real-life example you just gave.

Senator Bellemare: It was the example you gave.

Mr. Crowley: I know, but you reused it.

In that case, the issue is who has jurisdiction over pipeline environmental assessments, constitutionally speaking. Just because Quebec wants jurisdiction over that area does not make it so; it’s an issue for the courts to decide. If the courts decide that Quebec has the right to be involved in the environmental assessment of pipelines running through its territory, then the province will have the constitutional right to sit at the table.

Senator Massicotte: That’s your view?

Mr. Crowley: I’m no lawyer. In other parts of Canada, the issue was dealt with by way of an intergovernmental process, where the province and the federal government adopted a joint process to consider environmental factors. Both governments accepted the findings of a study — multiple studies weren’t conducted, only one — that was conducted jointly on behalf of both governments.

There are ways to resolve these kinds of issues in a cooperative manner, but I don’t think this issue, strictly speaking, has been raised in relation to internal trade. It was a jurisdictional issue involving environmental protection in the case of projects that crossed provincial boundaries.

[English]

The Chair: Senator Enverga is my last questioner. Does anybody else want to be included on the list? Going once, going twice . . . Senator Enverga.

Senator Enverga: Thank you for your presentations. It was such a fascinating presentation, and well done on answering all the questions.

Mr. Crowley, you mentioned earlier that Minister Bains passed the March deadline. The last time he was here, he said that so far about 20 per cent of the barriers have been eliminated since the past minister's term ended. He said that his goal is to have 60 per cent fewer barriers.

The question is for everybody here: Where are we right now? Are we far off from eliminating these barriers?

Mr. Crowley: If I could clarify for a moment, Mr. Chair, if I left the honourable senator with the impression that I was saying the deadline was Minister Bains', I do apologize because that's not what I meant to say. I believe I'm correct in saying that the provinces had a self-imposed deadline. They were going to report on progress and have a renewed agreement ready for the middle of March. That deadline has come and gone. And not only has the deadline come and gone, we haven't heard anything from the provinces. They didn't say, "We're just a week late, hold on." We haven't heard anything from the provinces.

The argument that I made in my presentation was not that provinces can never make any progress on this, or that the AIT is not better than what went before. Of course, that's not the point.

The point is, I think, that the current system asks the people who created the barriers to agree to remove them. Now, it seems to me that they don't create the barriers for no reason. On the contrary, they think they had very good reason to create the barriers. So you're asking them voluntarily to remove the barriers for what they thought were good reasons — for what? I don't understand what we're asking the provinces to do because I think it's completely contradictory. We're asking the people who created the barriers to give them up. What are they going to get in return? There's going to be national improvement in growth rates, but we know what happened when somebody went across the border from New Brunswick to Quebec to buy a case of beer: The New Brunswick government said, "No, we need that money."

I think the whole process is based on a misconception about where barriers come from and who has an interest in eliminating them. I would be willing to bet quite a lot that when the provinces finally do come forward — whenever that is — with a new Agreement on Internal Trade, it will mark some small progress, and we will all call it a disappointment and go back to the drawing board yet again asking the provinces to do what they have no incentive to do correctly.

Senator Enverga: We're going from coast to coast to coast to meet different people around the country. Is there any one particular question you want us to ask that would really make this happen? This question is for everybody.

Mr. Hansen: I don't have that question, but perhaps I can reinterpret it in terms of an opportunity for a closing comment. I think B.C. and Alberta proved, with the TILMA and subsequently the expansion of that agreement to the New West Partnership Trade Agreement that included Saskatchewan, that there is a willingness on the part of provinces to address this. I think we have seen the benefits that have flowed as a result of that.

I guess at the time when we were putting the TILMA in place, our sense was that we would try to lead by example rather than trying to fight for a national consensus involving all provinces at the time. If we make progress on a regional basis, then we can demonstrate that there's merit that should be duplicated by other provinces. I think we have succeeded in doing that in the three western provinces.

Mr. Crowley: In response to your question, I invite you to think back to the decades-long effort that we went through in Canada to patriate the Constitution. As long as we treated the Constitution as something that was the property of the provinces and the federal government, we never succeeded. We succeeded when the Prime Minister, Pierre Trudeau, said we are going to bring in the people's package. This is going to be addressed to Canadians. This is going to be a package that includes a charter of rights for Canadians. This is not about provinces and Ottawa. This is about Canadians. This is about you and your rights. The public outpouring of support for that was such that the provinces didn't dare, when push came to shove, stop that reform from going through.

I think the fundamental question is, do you think that internal commerce is a matter between the provinces and Ottawa, or do you think it's a matter of the rights of Canadians? I think you will get a resoundingly clear answer.

The Chair: Does anyone else have anything to say?

Mr. Sinclair: I reviewed some of the testimony before this committee, and I have to say there is something about the internal trade issue that brings out kind of fuzzy statements, like from the minister. I believe he said — and maybe it was just an off-the-cuff illustration that wasn't actually meant to refer to any data or problems in particular — that 20 per cent of internal trade is free and we want to get it up to 60 per cent. I have no idea what that refers to, but I'm sure that it would give the wrong impression about the strength of Canada's economic union.

I will say emphatically that it is easier, despite the frustrations, to do business and commerce within Canada than it is within, for example, the European Union. We have a common currency. We have two languages, but there are no tariffs or border checkpoints or anything. The national home bias in Europe is much stronger than it is in Canada. By the way, that's probably something that will never be eradicated through any agreement in any country.

I do think Canadians should stop talking down to other countries the strength of the internal economic union. I also think we need much more emphasis on positive integration rather than on negative integration. Negative integration is the tearing down of barriers to mobility, movement of goods, services and investment. Positive integration refers to the creation of common standards and common institutions. It's where we can take a page from the European experience. They didn't just stress the internal market; they also created common institutions to protect the environment, to protect consumers, to transfer funds to underdeveloped regions. That is the type of vision for internal trade that I think can inspire Canadians.

The Chair: I wouldn't be looking forward to adopting a European Union solution as part of the Canadian solution. I suppose we could have our Greece, too.

Go ahead, Mr. Kingston.

Mr. Kingston: I wanted to add to Mr. Sinclair's comment around the minister's 60-20 comment that he made here.

One of the difficult parts of internal trade is that it's difficult to estimate what the costs are. We had that discussion earlier around the various studies and ranges that have come out.

An important study that will be released, which hopefully will help your work, will be the Ernst & Young study that the previous government commissioned to create an internal trade barriers index. I think when we have that it will help create a baseline for how many barriers there are in Canada, and then we can measure going forward how we can address them. When that is available, I think it will be a very powerful tool moving forward on that.

Mr. Crowley: Quickly on that point, the problem with looking at existing barriers is that it neglects the dynamic costs included in the uncertainty about whether or not new barriers will be created. As soon as interprovincial trade creates economic imbalance between one province and another, the province that feels they're on the wrong end of that imbalance will introduce new barriers. This is part of the problem. There is a dynamic process here. This is not a fixed quantity. You have to take account of the risk when new barriers will be created. There was no barrier to moving electricity between British Columbia and Alberta until British Columbia threatened to obstruct the pipeline, and Alberta said, "Well, then, we'll obstruct your hydroelectric lines." This is a dynamic process. When you say you're not allowed to do that, the incentive is for provinces to continue to do it. They will find new ways to do it unless we stop it.

The Chair: Thank you very much. Witnesses, you were terrific today. I think all senators here appreciated the testimony and the dialogue that we had.

Senators, we've got a budget matter to discuss, which is public, and then we're going to go in camera to go over our travel schedule.

This is a small budget item to cover the cost of our email subscription to the Canadian Financial Monitor, which we've had for quite some time. The French service is provided free through the Library of Parliament, but we have to pay for the English service.

Senator Campbell: Can you explain that to me?

The Chair: I wish I could, but I can't.

Senator Campbell: I think we should send a note to them and say we would like an explanation of this. Why is one language free and the other is not? I'm serious. I think that's crazy.

The Chair: Because the Library of Parliament obviously subscribes to the French version and not the English version.

Senator Campbell: I think we should question them on that, chair. I'm serious. This is crazy.

The Chair: It's nice to see the Anglos getting militant. That hasn't happened for a long time. The French get everything, eh?

Senator Ringuette: Chair, further to Senator Campbell's comment, to my knowledge as a francophone, I have not been receiving any reading in French from the Library of Parliament relating to our committee. It may cost nothing, but it may be just because we get nothing right now.

The Chair: You just go to the Library of Parliament and subscribe, and it comes to you. That's all you have to do. In English you can't, but in French you can, unless you don't want to monitor. That's fine, too. Whatever you want. We've had it before. If you want it again —

Senator Day: Who looks at it?

Senator Campbell: My life wouldn't end if I didn't get it. I've never seen it anyway.

The Chair: Do we have consensus?

Senator Greene: I look at it every now and then, but it's not a regular part of my day, for sure.

The Chair: Okay, no problem. Done. We have consensus. If we miss it — if you're starting to get the shakes — we can come back and deal with it.

There's no budget item to worry about. We will now go in camera. Is this an in camera question?

Senator Ringuette: Yes, because I don't know to what extent the Library of Parliament can supply international information with regard to what is happening in the banking sector, with the subscription that we have now, because our information requirement, as far as I'm concerned, is bigger only than what is national in scope. Before we take any recommendations to cancel the subscription, I would like to have more information about what exactly the Library of Parliament can supply us with, with regard to news events and banking around the world.

The Chair: I was going to take up Senator Campbell's suggestion. We're going to find out from the Library of Parliament, number one, why we have to pay for this while the French version is free, but also if there is anything else that we could get from them that would take the place of Quorum — or something like it — that we would receive on the financial service industry. Is that good? We'll get a letter off.

(The committee continued in camera.)