October 30, 2016

To:  House Standing Committee on International Trade

Submission from:  Alice de Wolff, for theComox Valley Council of Canadians

re: The Trans Pacific Partnership (TPP)

We live in the Comox Valley (CV), a vibrant collection of smaller communities and rural areas on Vancouver Island, along the northern coast of the Salish Sea.   First nations people have lived here for centuries.  Their name for the region was Koumuchthay, meaning “land of plenty”, or “abundance”.  Since the 1800sthe Valley has also supported loggers, miners, fishers, farmers and more recently people involved in a wide variety ofservices, recreation, arts and tourist enterprises.

Our comments on the Trans Pacific Partnership are based in the current, stated, growth and sustainability strategies of the Comox Valley Regional District, which is a representative body of elected officials.    The environment itself is a central actor inthe vision of our future that has been developed over the past decade:

“As stewards of the environment, local governments, the K’ómoks First Nation, public agencies, residents, businesses and community and non-governmental organizations will work collaboratively to conserve and enhance land, water and energy resources and ensure a vibrant local economy and productive working landscapes.”  (Schedule “A” Comox Valley Regional Growth Strategy Bylaw No 120, 2010)

Our comments are further based in support for thetrade of local goods, services and ideas that are of use to people in other parts of Vancouver Island, the country and the world, and for the import of goods that are of use to people here.   We support trade that is mutually beneficial to all parties, and that is tied to environmental sustainability and social equity. It makes sense to us that production should take place as close as possible to where goods are consumed.

The TPP and other “modern trade” agreements appear to be only superficially about the trade in goods.  Rather, they appear to be introducing a supra-national level of governing that has very little to with our democratic structures or economies and more to do with a growing body of rights for corporations.  We think that they are being introduced at a time when we badly need focused economic policy from all levels of government that will strengthen relatively fragile local production and distribution, that has strong protections for the environment, and that does not assume that we need more goods than already move into our community.We arevery concerned that our valley may become among the economic “losers” because of the TPP and that it will weaken our community and harm our environment.

 

  1. Independent Analysis of the TPP

We support the development of economic assessments of trade and other economic policies that take into account contemporary regional differences, unemployment, environmental impact and capital flight.  The idea of sustainable development, or growth, is as important to Canada as it is to developing economies.   We need to see and debate an independent economic, social and environmental analysis of the TPP.

The Canadian government has not made a credible economic argument for the TPP.   An optimistic World Bank study puts the gains for Canada at maybe 1% of GDP by 2030.   A recent Tuft’s University study critiques the assumptions and conclusions of previous studies and suggests thatCanada would lose 58,000 jobs, and that our GDP might increase by  .28%.  This estimate echoes that of the CD Howe Institute, which suggests that GDP might increase from .2% to .8% between 2018 and 2035.  These estimates are remarkably small.  If they are accurate (and they echo many Canadians’assessment of previous trade agreements), then it is unclear why our government is heading down this path.

Free trade proponents admit that there are ‘winners’ and ‘losers’ in trade.  The federal government must be transparent about this, show the country both the overall and regionally specific benefits AND costs, and then open the discussion to public debate. In the last two decades the “winners” of our economic system have been supported by existing trade treaties, and they have become the increasingly wealthy one percent while the earnings of working people have stagnated or dropped.    Our concern is that the TPP will continue that trend.

One of the costs that must be included in the calculation is that more of our tax dollars will be spent fighting an expanded field of foreign investment interests.  Canadian taxpayers have already paid out $170 million in NAFTA claims, with at least $6 billion in claims pending. The ISDS trade-off is the removal of investment risks from Canadian-based corporations who want to move their operations off-shore.  Many Canadians have lost jobs as Canadian owners have moved operations to the global south, and the so-called “second economy” of Canadian branch plants shows few significant signs of re-investment or re-distribution back in Canadian communities.  It is not acceptable that our taxes provide risk insurance for companies to leave the country.

  • No responsible government should proceed with the TPP or any other trade agreement without a public, independent analysis of the agreement, conducted by the Parliamentary Budget Office. The analysis must include the costs and benefits for each region and assessments of the impact on first nations, the environment, public health and safety and human rights.
  • Trade agreements must not transfer the costs of corporate risks to tax payers.

 

  1. Impact On Our Local Economy

 

The Comox Valley has a mixed economy, with a population of over 60,500.  Its largest stable contributors are family capital (retirement savings), education and the air force base, with smaller contributions from tourism, health care and agriculture.  The region is in danger of following other coastal communities, where high priced water-front properties drive up real estate and the cost of living in surrounding neighbourhoods.  In combination with the loss of industrial jobs, this makes it difficult for younger residents to afford to stay in the valley.    Our communities aspire to keep workers here, and the Regional District and the Province have modest programs that encourage the growth of small to medium businesses and services that range from agriculture to high tech, but the results are fragile.

The monetary and environmental costs of transportation to and from the Island point to local production of goods and services as one logical area of economic growth.   We are concerned, however, that the TPP will strengthen global supply chains that create impediments to Vancouver Island-based production of the food, services and goods we need, and consequently that it will decrease local economic opportunity and jobs.

As politicians around the world are realizing, the ‘logic” of international markets makes increasingly less sense in people’s day to day lives, and creates a growing sense of alienation from decision making that affects our well-being.   This is a local example.  A community member is building a modest house on a forested property.  She is unable to use the timber from her land to build the house because there is no longer a mill close enough that will produce inspection quality lumber – the mills have moved to the U.S. because of the Softwood Lumber Agreements.  The price she can get for the trees that need to be removed will not cover the costs of their removal, and they will be shipped either to the U.S. or Asia for milling.   Profits in this system are either in transportation or the hands of processors who live nowhere near here and contribute nothing to the local economy.  The TPP would exacerbate this situation:  it will support an expansion of the export of raw logs, and will not support the creation of local timber processing jobs.

The Comox Valley is not likely to become the home of large manufacturing industries, but it is possible that higher-value added industries could thrive here.  We are concerned that analysts of the TPP’s intellectual property framework conclude that it will discourage Canadian innovation.

  • The government must not enter into “modern “trade agreements without ensuring that our local economies are sustainable and strong.


  1. Our Democracy Must Not Be Weakened

The Investor State Dispute Settlement (ISDS) provision is the most concerning component of the TPPand other corporateinvestment treaties.   It is inexplicable that our government proposes to agree to a system where foreign corporations can sue us, as a TPP participant, for any decision that impairs a corporation’s expectation of profit on their investment.   It is equally unacceptable that any dispute that arises will not be handled by our strong and stable courts, but by appointed tribunals that operate with no connection to Canadian court system.

We need governments at all levels to be capable of protecting our public services, our human and labour rights and our environment.   We need governments that can encourage and invest in local economic activity.   The TPP will challenge some of these powers, and remove some tools from sub-national governments, and we strongly oppose it.   Experience with NAFTA is showing us that laws and policies that protect our health and environment are particularly vulnerable to these challenges, and this is of deep concern.

Current Liberal spokespersons have taken pains to point out that ISDS provisions don’t necessarily prevent governments from making decisions that oppose the interests of investors.  While this is technically true, they do mean that decisions and policies can be challenged by foreign money and powers, and this inevitably creates costs and a “chill” on decisions that might be open to an ISDS challenge.   We are concerned the TPP proposal will trade away the effectiveness of our courts, crucial components of our democracy and limit our capacity to define and defend the “public interest”.

  • Canadian governments must have the capacity to legislate in the public interest.
  • The TPP and all other international treaties should not include Investor-State Dispute Settlement processes that over-ride our courts and democratic decision-making.

 

  1. First NationsConsultations

We fully support the federal government’s statements that it intends to reconcile its relationship with the country’s aboriginal peoples.  However, we have seen very little recognition from federal or provincial governments that the TPP and similar treaties could have a profound effect on first nations.  Nor has there been serious discussion of whether the federal government has the capacity to negotiate such agreements on their behalf.

  • Careful, extensive and legal consultations must take place with first nations before the TPP and other agreements are ratified.

 

  1. Strengthen employment, wages and employment standards

Canadians’ experience of globalization has been that corporations have been freed to seek the lowest wages, employment standards, taxation and environmental regulations that they can find, and that manufacturing has left our communities.   The TPP and other “modern trade” agreements are becoming the governing policies in crucial areas that we think should be the domain of local governments.  While we strongly disagree with this direction, if it continues we want to see enforceablepriorities in these agreements that reach for the high ground, where workers are protected by strong employment standards, living wages, and the ability to unionize.  We want our “exports” to be the best support and protections we have for our workforce, and “imports” to be challenges to match the better practices of our trading partners.

  • Strong employment standards, living wages and the ability to unionize must be enforceable priorities in the TPP.

6.Strengthen Food SecurityPolicy

Canada needs national and regional food security policies against which the pros and cons of any trade in agricultural products can be assessed.   Vancouver Island is increasingly dependent on imported food, which leaves us unacceptably vulnerable to disruptions in transportation and costs of production elsewhere.   What follows are several specific observations that relate to the Comox Valley.

  • The TPP agreement on dairy would directly jeopardize the Comox Valley’s vibrant, but mostly artisanal, cheese and dairy industry. We are very proud of our successful cheese and yogurt makers, and they should be encouraged to expand into markets throughout the Island, province and country.  But the introduction of foreign dairy into the Canadian supply could introduce sufficient competition to take even one of our dozen small dairy producers out of business, which in turn would jeopardize the viability of the local milk processing plant.    Our supply management system does a remarkable and complex job of ensuring that Canadians have the amount of diary products we need, and that farmers are compensated fairly.  We do not support the disruption of this system.
  • Several Comox Valleyhealth care institutions have studied the possibility of sourcing local agricultural products for their food services. They have found that there are not enough producers to consistently meet their needs, yet we have both an ideal climate and land base for growing a wide range of fruit and vegetables, and young farmers who want to do the work but can not afford the land.   Rather than expanding imports, we need policies that encourage and protect local agricultural development.
  • The region has a growing shellfish industry that is poised to grow into an international supplier, particularly to Asian markets. This industry, however, faces several crucial environmental challenges.  Seabed creatures (such as sea cumbers)are harvested by raking the ocean floor, which in turn disrupts entire eco-systems in ways that have not been adequately studied.   Oysters, scallops and clam farms are endangered by ocean acidification, which is a strong warning that we must not continue to contribute to climate change – through the transportation of these and millions of other products.    Ocean acidification is a multi-national problem and cannot be addressed without strong multi-lateral environmental protections.
  • We expect our governments to ensure the food security of Canadians in all regions, including the north, before entering into trade agreements. The development of local market and organic farming should be a priority. 
  • Our dairy supply management system should not be disrupted.

7.Protect Food Safety

We support trade that promotes healthy Canadian products and encourages imports that meet or exceed Canadian safety standards.   Health Canada and Agriculture Canada must not be required to compromise or harmonize our regulations to a lower standard.

  • We oppose the TPP’s opening of the Canadian dairy market to foreign products. We understand that this would allow U.S. milk into our system, and that U.S. milk uses Bovine Growth Hormones that are not allowed under Canadian standards.
  • Several local governments on the Island have adopted non-GMO policies, but find that it’s difficult to develop the tools to implement the policies because GMO products are not labeled. We have been actively working for the labeling of all GMO products, and do not support the import or export of GMO goods that are not labeled, even if GMO products are in small amounts.
  • All imports must meet Canadian standards. Health Canada and Agriculture Canada must not be required to compromise or harmonize our regulations to a lower standard.
  1. Lower Drug Costs

The extended patent protections in the TPP that will increase the amount of time before the public has access to less expensive, generic drugs will increase costs to individuals and to our health care system.   The proportion of seniors living in the Comox Valley is relatively high.   Many of these people are living on fixed incomes, and they will be particularly affected.  We understand that the previous federal government had promised a transfer to cover the BC government’s increased costs.  The amount, however, seems to be remarkably arbitrary and easily forgotten by future governments (see the off-shore fish processing agreement with Newfoundland).  The transfer would not address the rise in individual costs.

  • We expect our governments to work to bring generic drugs to the public in a shorter amount of time, rather than extending patent periods.


  1. Water and Environment Protection

Our economic futures are tightly tied to the health of the ocean, ground and surface waters and forests.  Each of these is fragile and in need of substantial protection, and we are struggling to establish adequate water and air quality sustainability policies in Canada.  Until that has been achieved we must not sign agreements that make it increasingly difficult to develop effective programs and legislation.  The environment protection sections of the TPP appear to be largely statements of intent, with fewenforcement or legal requirements.  It does not prevent corporations from using ISDS mechanism to challenge environmental protections.

Comox Valleycommunities are currently grappling with how to pay for costly damage that the forestry industry has caused to our watershed and drinking water.   Unprotected run-off and increased turbidity in our water source has caused regular boil water advisories in the past several years.  The TPP’s projected increase in the export of raw logs could compound that problem in our community and in others.   Any TPP investor with interest in watershed land could have the power to challenge local government decisions about control over our watershed.

  • Water must not be turned into a traded commodity. Water rights must not be traded or controlled through the TPP.  
  • All multi-lateral agreements that Canada signs, including trade agreements, must enforce our Paris commitment to eliminate greenhouse gasses in the next 50 years, and keep global temperatures from rising more than 1.5 degrees Celsius.

 Respectfully submitted,

Comox Valley Council of Canadians