CHER Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, February 17, 1998

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[English]

The Chairman (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): I would like to open the meeting of the Standing Committee on Canadian Heritage.

[Translation]

Pursuant to Standing Order 108(2), we are considering the Multilateral Agreement on Investment.

[English]

There has been so much interest on this issue and it's so important to all of us that because we had a gap today Mr. Jack Stoddart agreed to set up a panel. I thank him for being so prompt in bringing together the panel.

Before I introduce the panel, the panel has kindly let us have text of the MAI book by Tony Clarke and Maude Barlow, called MAI: The Multilateral Agreement on Investment and the Threat to Canadian Sovereignty. There are copies there. If there are not enough copies for the members, Mr. Stoddart, I take it you will provide us with the necessary number.

Also, there is an article from the New York Times, “Should Corporations Govern the World? Top Secret, New MAI Treaty”, that they have also left with us for distribution. I'll ask the clerk to distribute those to the members.

At this time I'm very pleased to introduce Mr. Jack Stoddart, who is well known to a lot of us. He is chairman and publisher of General Publishing Co. Ltd.

[Translation]

From the Association du disque et de l'industrie du spectacle québécois, we have Mr. Robert Pilon who is also very well known and made an important contribution to the work leading to the amendment of the Copyright Act, for which I would sincerely like to thank him.

[English]

From Attic Records Ltd. we have with us Alexander Mair, the president. We also have with us Ms. Anne McCaskill, a consultant from the cultural and international trade sectors, and Mr. Tony Clarke of the Polaris Institute, who is actually a co-author of the book we are distributing to you.

I would like to turn to you, Mr. Stoddart, if you can start your remarks.

Mr. Jack E. Stoddart (Chairman and Publisher, General Publishing Co. Ltd.): Thank you very much, Mr. Chair. It's a pleasure to be here. I hope all of us in the room agree that this is an important issue and we welcome the chance to address it.

I noticed in the Globe and Mail two days ago quotes from Minister Marchi. The headline says, “Marchi says `we can live without' investment pact”. He said, “I want the right deal at the right time, not any deal, any time”. I think that is perhaps the most important thing we've heard from the cultural industries in a long time.

I don't doubt that there's a sense of need for protection of the cultural industries, or whatever we want to call it, but getting the people on record who are actually responsible for this has been very difficult. We welcomed his comments and we were encouraged by them.

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It's important because we can live within the OECD without the MAI. And that's important because many people feel that it's either all or nothing, that we have to be in or we're sort of out in left field. And we already have so many trade deals, so many trade treaties, with all the countries that we are talking about, the 29 countries.

But as Mike Harris, the skip of the Canadian men's curling team, said, tomorrow the sun will rise. Well, if we don't sign this deal, the sun will rise, but I would suggest, however, that it's going to be a difficult day for the cultural industries if the deal goes through the wrong way. So Mr. Marchi's comments were very important.

It's also important because he has identified culture as the key priority, and for this we have to thank Ministers Copps and Marchi for working together and bringing this to the agenda. I also feel that a committee such as this one will play a part in the development of what that final framework for the agreement would be—if there is an agreement on MAI—and where culture begins and ends in that deal.

Perhaps we should go back to the beginning and explore what the MAI is, who needs it, who is pushing it, what we are trying to accomplish, and what and who are the costs and casualties of signing it, as well as the benefits that some see.

This is not an easy exercise, because it's complex in that the details and the negotiations are secret. The agenda is being subversively pushed by a very small group of powerful corporations and people in society. They already have more power today than any of us in this room would ever expect to have, and the MAI is really about that. It's about changing the power base in society.

The MAI is not about investment. We talk about it as an investment treaty, but I would suggest that in fact that's the vehicle, not the main intent. It's not about new Canadian jobs. It's not about the ethics or fairness of this country. And it's not about the 98% of our population's needs as a country.

This is simply a treaty about power, about how global corporations will be able to extend their already incredible power and wealth to limits never before dreamt of in our last hundred years. This is really a question of democracy and whether our elected representatives will have any real power to represent Canadians on many issues in the future.

Perhaps it's a good thing for the world's 500 most powerful men—and most of the leaders of these corporations are men—and their corporations to have greatly increased power. Maybe they should. Maybe we should walk away from our responsibilities and say that the big corporations are going to take care of us. But I wonder why we must, and I wonder why Canada is going to win by turning over so much of its responsibility to corporations.

When was the last time the banks or global corporations made the right decision for people, for people's lives and their culture, their environment, their labour employment standards and their family incomes, when they did a merger? When were decisions made that weren't for the bottom line, the year-end or the quarterly report? How often did mergers result in better conditions for the majority of people involved? Very rarely, I think.

We hear daily about huge takeovers, invariably to pay for the merger or to pay down new debt. People are cut or wages must be renegotiated to be competitive with the U.S., something similar to what's happening with Maple Leaf Foods today. “Rationalization”, it's called. Sounds innocent, this rationalization, but where do we actually end up?

Our banks tell us that they must get bigger to compete. With whom? With larger banks in other countries, of course, because we already have some huge banks. In order to survive, that's what they feel they must do. If you believe this, well, I'm sorry, there is no country, because if our banks can't compete within this country.... I'm not ignoring the fact that we have foreign banks here now, but we have a very strong base in banks. If all we're going to do on this consolidation of banking is do it so we can compete internationally, I would question how the focus for Canada is going to be within those same banks.

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When was the last time a merger of a bank gave you better service, a reduced rate of interest, or more personal attention? I doubt ever, and there have been a lot of takeovers of financial institutions by banks. I'm sorry, but I fail to see any hugely better service we've been getting.

If you follow their logic, after the current merger the next question is who's next? Today we have fewer, but with banking regulations, they still have to pay attention to Canadians' needs because this is still their prime market, even though we're fairly large international players in banking. Surely there's more to banking, though, than just the bottom line and another billion for the shareholders.

What does this have to do with the MAI? Well, taken to its logical conclusion, only the largest, strongest, toughest and meanest will survive or perhaps should survive. That's the law of the global economy: consolidation, consolidation, consolidation, until your position is so strong that nobody can come after you. The trouble is that every time you do this, you reduce competition and you lose service, jobs and independence as a society. Eventually the corporations will set the agenda for countries and for the world, and I think that's really what we're trying to address today.

Given the strange and secret development of the MAI, one must wonder if the countries' agendas aren't already being controlled or affected from a corporate position. We must guard our right as a people, as a society and as a nation, to control the levers of power in government. At risk is the health, wealth and independence of us as a people. We fought for this in wars. As a society we've battled to keep checks and balances in our society, and I think this does an unbalancing situation. That's surely what this is all about.

On February 3, 1998 the Standing Committee on the Environment and Sustainable Development had a similar hearing on the MAI. I don't know how many have been able to get copies of the proceedings of that meeting, but I really would suggest it would be worth getting copies and reading it. It was an extremely well done presentation. That one had a little bit more time for preparation, and a lot of legal work had been done.

Rather than trying today, from our cultural point of view, to re-establish the legal and ethical base that the environmental presentation did so well, we're going to address the effect of a badly completed MAI on culture and what the effect will be on the cultural industries. I think the case was made very, very well in the environment committee about how it works and the pressures and all that, so I would really refer you back to that report. I think that covers those areas.

Today we'll talk about the effect of the MAI on our cultural industries, and that is if we don't have a complete carve-out. We keep hearing about exemptions. We hear about a French exemption, a country-specific exemption. Many of us have looked at this from both legal and operational points of view.

There is only one exemption that will work for this country. It's a complete carve-out. We will talk about that in more detail later, and certainly we'll be happy to answer questions on it. But if it's not a complete carve-out, there's literally no chance that the cultural industries, as we know them today and hopefully appreciate them, will survive.

I'd like now to call on Al to comment. He has his own company in the music industry and will go on to a more industry-specific area at this point in time.

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Mr. Alexander Mair (Representative, Society of Composers, Authors and Music Publishers of Canada): Thank you, Jack.

The chair introduced me as the president of Attic Records in Toronto, which I am. However, I was asked to attend this meeting by SOCAN, with its 59,000 members, songwriters and publishers. I'm also chair of the government relations committee of CIRPA, the Canadian Independent Record Production Association, and a director of the Canadian Musical Rights Reproduction Agency, and finally, vice-chair of the Cultural Industries Council of Ontario. I say that just to put it in perspective.

I am opposed, personally and corporately, to the MAI without a total carve-out for culture and the cultural industries. I do not consider myself a protectionist. I enjoy the best of foreign music, films, television, and even education. I chose to go to Harvard Business School because I felt it was the best school I could attend. However, I also enjoy Canadian music, films, television. My son graduated from the University of Western Ontario and is currently working in Tokyo. My daughter is studying journalism here in Ottawa at Carleton. They may go on to graduate degrees internationally if they choose to.

The TV ratings of the Olympics in the last ten days are among the highest TV viewing CBC television has ever had. When you consider that almost everything is tape-delayed and the results are available from radio stations, over the Internet, and in newspapers, the fact that people in so many millions are watching the Olympics to me is very telling. We want and need our heroes; and our heroes include the storytellers, the songwriters, the authors, the film producers in this country. We need heroes, perhaps more than other countries do.

Why do I say that? There are only two pair of countries in the world where one country is substantially larger than its neighbour speaking the same language. Those two pairs of countries are Canada and the U.S., and Austria and Germany. Every other country in the world has either geographic or linguistic protection from domination by its neighbours. As we all know, we've grown up with the behemoth to the south dominating much of what we see, hear, and read on a daily basis.

As a Canadian-owned and -operated record company, we've had success domestically and internationally. I'm proud to be a recipient of the Canada Export Award from the federal government for our international success. We've had gold records in the United States, in Britain, in Japan, in Holland. We've had in Canada now 103 gold or better records, some as high as triple platinum.

I'm also proud that because we are successful we have been able to make a number of what I consider culturally important records. They are culturally important for a number of reasons. One is so they can exist in perpetuity for those who want them. They also speak to us of our own country.

I have some samples: the Charlottetown cast of Anne of Green Gables; Ancestral Voices, by the College of Piping and Celtic Performing Arts of Canada in Summerside, Prince Edward Island; the Central Band of the Canadian Armed Forces; the 40th anniversary album of the Stratford Festival; the History of Military Music in Canada; the Canadian Pop series, performed by Symphonia Canada and conducted by Boris Brott; Duke Ellington's only recordings he made in Canada with Canadian musicians performing Canadian songs; The Messiah, the first-ever classical recording made in Canada, issued last year for the first time ever on compact disc; the music from the television series Anne of Green Gables by Hagood Hardy; Christmas in Roy Thompson Hall, by the Mendelsshon Choir.

We are currently involved in a fund-raiser for the Canadian Cancer Society, in which 14 prominent Canadian female vocalists, including Holly Cole, Jann Arden, Alannah Myles, Céline Dion, Rita MacNeil, Sarah McLachlan, Loreena McKennitt, Susan Aglukark, Julie Masse, and k.d. lang, all donated tracks to help raise funds for the Canadian Cancer Society. We are on target to raise $1 million from this project.

These are all projects we have undertaken because we are a Canadian company. Some of these have had, in various ways, government support. The History of Military Music in Canada obviously is not going to be a best-seller. A number of these others, either directly or indirectly, received some support from various government mechanisms, but we have been able to take them, put them into the market, put them into the libraries, put them into the National Library, and these are available to Canadians forever.

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It's very important that we do have our acoustic history, so to speak, available to us. And compact disc is virtually indestructible and does not deteriorate over time, as tape does.

Of the 500 largest multinational or transnational companies in the world, six are Canadian. To me, the MAI sure doesn't do very much to level the playing field in favour of Canada, which I think is necessary.

I was vice-president of one of the six multinational record companies in Canada that control and dominate the so-called Canadian music industry. I don't mean that in any derogatory sense, but the majority of records sold in this country are foreign recordings. Their job—and I've had this confirmed to me verbally as recently as 18 months ago by a vice-president of one of those companies—is simply to suck as much money out of Canada as possible for their foreign artists, get that money out of Canada at either tax-free or low tax rates, and send it back to their parent. We all suffer in the Canadian music industry because that is their orientation.

At SOCAN we drafted a document, which has been submitted. We drafted it with the Canadian Conference of the Arts, requesting a total exemption for culture and the cultural industries. At least if we have a total exemption, Canadians can decide what they want to do, without foreign interference.

The concept of country-specific exemptions, which has been floated around as recently as this morning, in the Globe and Mail, to us is totally unacceptable. With the idea that you will list today whatever exemptions you want forever, you're on a slippery slope, and there's only one way you can go on a slippery slope: right downhill. With changing technology, we don't know what programs we will require in the future to allow Canada to continue to hear its storytellers and other heroes. If we had to lock in in 1998 forever, who knows, with changing technologies, with the Internet and others, what is going to be appropriate in the year 2000 or 2005? That is the reason I oppose that concept.

Again, the Globe and Mail this morning, in a supposedly leaked document, said that whatever carve-outs there are, we should be prepared in the future to renegotiate them. If we have a very fixed universe of carve-outs and we're being told we should be prepared to continually renegotiate those, I'm very scared, as a Canadian.

Those are the comments I have. Hopefully, after Robert speaks, we'll have some time for good discussion.

Robert.

[Translation]

Mr. Robert Pilon (Vice-President, Public Affairs, Association du disque et de l'industrie du spectacle québécois): My name is Robert Pilon and I am the Vice-President for Publics Affairs at ADISQ, the association of Quebec independent producers of records and shows. Record producers belonging to ADISQ account for 80 or 85% of the records produced by Canadian artists in Quebec over the past 10 years. This situation is quite special.

As Mr. Mair indicated earlier, the record industry in Canada is dominated by foreign subsidiaries of the multinationals, including the six major ones: Sony, Warner, Polygram, etc. The Quebec market situation is a little different from the norm because there is an independent industry comprising all the small businesses, the largest of which have a turnover of four or five million dollars. However, over the years about 60 of these small businesses have nevertheless managed to assume a large share of the production of Canadian artists, whereas in English Canada the independent companies unfortunately represent a smaller share of the production of Canadian artists since many of the major Canadian artists are produced by Canadian subsidiaries of multinational companies.

Why are we worried? Speaking for myself and on behalf of the Quebec producers of records and shows whom I represent, why are we worried about this international agreement on investments, the MAI about which there has been so much talk?

I will begin by talking about something which reassures me. I am reassured by Mr. Marchi's repeated position that he will not sign an agreement unless it contains a full-fledged cultural exception.

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I am less reassured when I read articles of the kind published in The Globe and Mail this morning, where reference is made to a particular document. Was this document written by senior officials in the Department of Foreign Affairs and International Trade? I don't know exactly. In the said document, they talk about a fallback position, in the event that the cultural exception were not to be accepted, and what could be done on that slippery slope to which Jack referred earlier.

Practically speaking, what are the issues here? In the next five minutes I will try to describe what it may mean for an artist or producer in Quebec or the rest of Canada, if the sovereignty of Canada were to be limited as a result of this agreement.

Our sector, which is the part of the recording industry under Canadian control, is a young one in Canada. In Quebec, the businesses concerned have been in existence for five, ten or fifteen years. There has been a local industry, under Canadian control, producing records in Quebec for only the past 15 years.

This is really a very young industry and the businesses concerned are very small. In many cases, their turnover is not even one million dollars. Nevertheless, as I indicated earlier, this industry produces 85% of the records of Quebec artists, and it is therefore essential. This is an industry which, in good times and bad, remains in Quebec.

It should be remembered that in the 1960s and 1970s, many Quebec artists such as Beau Dommage and Harmonium were produced by local subsidiaries of multinationals. When the recession hit from 1980 to 1983, what happened? Those Canadian subsidiaries of multinational companies were told by head office in London, New York or Los Angeles that, as Al mentioned earlier, they should focus primarily on selling Madonna and Michael Jackson on the Canadian market, and stop making risky investments in Canadian artists, particularly if they sang in French and there was no international market for them.

As a result, production in Quebec fell to almost zero. Between 1980 and 1985, we were not able to provide radio stations with enough material to meet their quota requirements. And the situation was very serious. That is what happens when a whole industry is dependent solely on multinationals. The multinationals go where there are profits to be made and move easily because they enjoy great international mobility, and they concentrate on a limited number of products which they try to sell around the world.

Of course these multinationals occasionally invest in Canadian artists, when they think there is an international market. But once there is no longer an international market or the economic situation becomes difficult, as during a recession, the multinationals withdraw and there are no companies left under Canadian control to take over from them. There is no local production for artists.

That is why we need a balance between Canadian companies and subsidiaries of multinationals. To achieve such a balance, there have to be Canadian companies. That is an important point.

The reason why Canadian companies have been able to develop, particularly in Quebec, is that certain Canadian cultural policies and measures have been implemented. Essentially, what are these measures? Well, there are quotas for Canadian and French songs on the radio.

As you know, since 1971, the CRTC has required that at least 30% of the musical content played by Canadian stations be by Canadian artists. Since 1973, 65% of records played by French- languages stations must be French songs, which means primarily songs by Canadian artists, Quebec artists, in French.

That has given our artists a window of opportunity on the radio. That is very important and, as I indicated earlier, allows us to keep that window open in good times and bad. That is my first point.

Second, in 1986, the federal government established the SRDP, the Sound Recording Development Program. If you compare our sector, the sound recording industry, with television, movies, magazines or book production, you will see that of all the cultural industries, we receive the smallest proportion of financial support: 0.2% of all funding for culture and communications in Canada.

Nevertheless, that program, which stood at 5 million dollars last year and was doubled to 10 million dollars by Ms. Copps, although very modest, has played an important role in a young industry such as ours. When you are in a small business and have a turnover of $500,000 or 1.5 million dollars and are able to receive assistance to produce a record and pay only 50% of the cost, then a small amount of $50,000 or $75,000 in support becomes important. This amount is of course repaid if the record sells well.

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The amounts involved are very modest and we hope they will be increased, but they are important. The bottom line is that those measures are being threatened.

I don't want to get into a debate here, because I am not an expert in international trade, but it is obvious that if the principle of national treatment, which is fundamental to the agreement on investments, is implemented without the inclusion of an exception for the cultural industries, that will mean...

As you know, in the broadcasting sector only companies under Canadian control are entitled to have a television or radio licence. That is very important. We too often forget that has not always been the case. It has been the case only since 1968. Jeanne Sauvé was the Minister of Communications when that legislation was adopted. Since then, only a Canadian company can have the right to obtain a licence and control a television, cable or radio facility. Foreign interests can own only one third of the capital stock.

That is important, and it has been the basis of the Broadcasting Act since 1968. Canadian business people are given a sort of—let's call a spade a spade—monopoly, that is the exclusive right to operate a radio or television station. An American does not have the right to open a radio station in Ottawa or a television station in Montreal. That is a privilege given to Canadians. However, in exchange for the privilege they have obligations, namely to broadcast Canadian content on the radio and television, French-language content on French radio stations, what we know as quotas. There is also an obligation under the Broadcasting Act to contribute to the production of films, television programs and records.

I referred earlier to the SRDP. Under this program, which is funded largely by the federal government, part of the broadcasters' contribution is managed independently. Such contributions are required by the CRTC to help in the production of records and videoclips in Canada.

The reason why the CRTC can oblige radio companies to make such contributions is because they are stipulated under the Broadcasting Act. The Broadcasting Act states that in exchange for having the exclusive right to hold a licence, they must contribute to the presentation and creation of Canadian programming. That is in the Act, in paragraph 3(1)(e), I believe.

If the MAI places national treatment on the same level as investments, that could well threaten our Broadcasting Act. If the provision of the Broadcasting Act prohibiting foreign ownership, particularly U.S. ownership, of television and radio stations were to disappear overnight, any radio station here in Ottawa or any television station in Montreal could become the property of CBS or Infinity Broadcasting.

Do you think that when that day comes it will still be possible to impose quotas on those corporations? Why can we impose quotas on Canadian companies? Because they are given a privilege and in exchange for that privilege, the exclusive right to be owners, they have an obligation. That is to be expected. It is a trade-off. But if you remove part of the trade-off, the other part will automatically disappear. Therefore, we consider it very important to reserve the right of ownership to Canadians. If you change that, the quotas will also disappear.

I'd now like to talk about another issue which is far more technical and which Ms. McCaskill may also discuss later.

Some specialists, and I'm not one, claim that the agreement could also threaten certain parts of the Copyright Act, particularly the amendments adopted last year.

The government created, and we thank the committee members who contributed to that, a new right in Canada, loosely referred to as neighbouring rights. From now on, users, particularly radio stations, will have to pay a small amount in remuneration to singers and producers. The legislation was well drafted. It was drafted so as to ensure that the system will work on a reciprocal basis. In other words, money will be sent to those countries which have similar legislation, such as Great Britain or France, because those countries will also send us money. However, money will not be sent to the United States because they do not have similar legislation.

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I am told that the experts have begun to examine this provision because the decision not to allow the Americans reciprocity unless they have similar legislation could be challenged under the MAI.

In short, we are talking here about ownership, particularly of broadcasting facilities, something fundamental to our Broadcasting Act, about Canadian and francophone content quotas, about the possibility of providing financial assistance through programs such as the SRDP, reserving financial support for Canadian companies and Canadian artists, and lastly the impact that could have on the Copyright Act and neighbouring rights, particularly as regards the amendments adopted.

For all the reasons stated, I believe that this agreement is somewhat controversial. I know that in many other areas, such as the environment to which I myself am quite sensitive, it is also a controversial issue. Therefore, I would urge the government to act with the utmost caution because it could have serious consequences, particularly political consequences. In fact, and I will conclude here, our sovereignty is at issue, that is the right of our elected representatives to adopt legislation they believe best able to safeguard the future of our culture and our cultural industries.

If you have your hands tied since you must ask permission of the United States whenever you want to take steps to promote our cultural industry or our artists, then you can no longer talk about sovereignty. Thank you.

The Chairman: Thank you very much, Mr. Pilon. Your comments are very thought-provoking.

[English]

I think you want to conclude, Mr. Stoddart.

Mr. Jack Stoddart: Yes, I'd like to make a few comments about the book publishing industry and then be finished for questions.

First I'd like to say the cultural industries are not the arts. I believe Keith Kelly has already addressed this committee, and the arts are really more the theatre, the ballet, the opera, the symphony and things like that. Often they're confused.

Secondly, book publishing or magazine publishing is not printing. Most people ask where the presses are when they walk into a publishing company. We hire those services. Publishing is really bringing together the artist's work, contracting to get work done and then selling the goods afterwards.

Cultural industries are private enterprises that take the creative work of artists and writers and make commercial enterprises out of them, so we are very much in the midst of the industry. Although we're arguing about cultural issues, we're arguing that if we undermine the industries that bring forward the creative work of this country, we won't have that creative work coming forward. If Canada does not have indigenous producers of our creative works, we'll just become nothing more than a warehouse or a sales territory for another country's output.

In book publishing, more than 80% of all Canadian writers' work is published by Canadian-owned companies. U.S. companies still do 60% of all the sales in the English language in Canada, but the track record on publishing until about 10 years ago was that less than 5% of all the books published in this country were published by the companies that did 60% to 70% of all the sales.

They're doing more now, but it's because of the conditions of Investment Canada reviews and undertakings. Virtually all of those companies in the last decade have gone through Investment Canada review. One of the criteria Investment Canada put on them is they would start doing publishing. So they are doing much more publishing and they have created a lot more competition for those of us who have been here a lot longer, but at least there is more work being done there.

If the MAI were to take effect on culture, in a very short time Canada's rules and incentives for Canadian companies would be challenged by those U.S. companies. Our industry would either be acquired or crumble. This is a legal document that allows foreign companies to challenge. That's what we've seen under the WTO challenge on the magazine industry and there may be questions about that later.

When the WTO was set up, it was not intended to result in what has happened in the magazine industry, but because it's a framework within which people can challenge legally, we have to understand what it is. It is not a nice document that just gets put on the shelf that nobody pays attention to.

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Today, Canada has the best of both worlds. We have international companies operating here that employ Canadians, sell their U.S. books, and publish a few Canadians books. Canadian companies publish thousands of Canadian authors annually and ensure that there's competition for authors' works. Canada has thousands employed in the writing, publishing, distribution and sale of books. For reasons that we will cover later, I think that would be in jeopardy.

Under the MAI, all our major Canadian publishers will be either bought out by U.S. competitors, or the distribution will change to north-south instead of east-west. Today, almost all the business in books travels across the country, not from warehouses in the U.S. That would be a fundamental change and would cost us thousands of jobs.

Through various incentives and with its limited protective measures, Canada has developed some of the world's great authors, artists, actors, songwriters and performers. For a small country, we have way out-performed most of our competitors in the English language. We do not exclude foreign product. We don't restrict the entry of any materials into this country. What we do try to do is make sure there is a Canadian choice, and that's what I would suggest our rules and incentives are all about.

Do we want to go back to the days—and I think most of you will remember them—when most of what we saw was American TV, when most of the books were American books—or British books at one point in time? In Quebec, I suspect, a lot more of the material was from France. Are we going to give up what we've developed over the last twenty years in author development, etc., just because some global businesses want more access into this market? In other words, are we going to make business decisions that will affect what we have access to? We've achieved greatness in our book industry, so let's be very careful to understand the effect of the MAI.

You've received today a copy of the book MAI, by Tony Clarke and Maude Barlow. The chapter on culture explains very quickly and expertly the MAI's effects—and I think Tony is here to answer any technical questions, if you wish. It could take a couple of hours to explain what's in that chapter, so rather than that, the documentation is there. The effects are serious, however.

In our industry, there would be approximately ten huge global publishing corporations that would win, and probably a hundred Canadians ones would disappear in English-language publishing alone in very short order. We would end up with very small, very specialized poetry and literary publishers. The majority of the larger and medium-sized companies would be bought out.

Today—and people may not understand this—although Canadian companies do get grants to do cultural publishing, we also have a little restriction called ownership. That means a foreign competitor cannot start a new company here, but it also means Canadian companies cannot sell to foreign companies. Every time support is given to a Canadian company, there's a huge price to be paid, because what you bill to the Canadian company, you can't sell to an outside interest.

I can tell you that we've looked at this very carefully within our association. Our companies today would be worth two, three and four times what they are on the Canadian market for purposes of consolidation to the Random Houses and Doubledays so that they could take over this market. As entrepreneurs, we pay a big price to get a very few grants. In the long run, I think it has worked out very well. Although it may cost some of us an awful lot of money in one sense, I think it's something that, in a national sense, is very important and should be continued.

Thank you.

The Chairman: Thank you very much, Mr. Stoddart.

I have requests from several people who wish to ask questions. In view of being fair to all, I would ask members and witnesses to be concise. We have about an hour left.

I'll start with Mr. Penson.

Mr. Charlie Penson (Peace River, Ref.): Yes, thank you, Mr. Chairman.

I'd like to welcome the panel here today.

Mr. Stoddart, first of all, you said this MAI may affect elected officials' ability to have any say in the future. Would you like to comment on whether or not parliamentarians should have a chance to vote on a completed MAI before it's passed through the House of Commons?

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Mr. Jack Stoddart: I can't imagine in a democracy something that is as fundamental for the rights of businesses and Canadians that's not a subject for a bill in the House of Commons. It should be not only a bill having to do with the MAI specifically, as of course it then changes a lot of other treaties and acts that we have to address. Those have to be part of it.

I understand that it's not the intent of the government to take this through as a bill presently; probably an order in council would do it. If I'm incorrect in that, I stand corrected, but that's my understanding. I can't understand why it wouldn't be so, because the FTA was.

Mr. Charlie Penson: Thank you, Mr. Stoddart. As you know, there has been the Canada-Chile Free Trade Agreement and so on, and the WTO process. The appropriate legislation has been amended, but there has been no bill.

Here's my real question. Considering that you identified the threat to Canadian culture coming from the United States, and we already have an investment agreement with United States through NAFTA, and prior to that in the free trade agreement going back to 1988 that governs Canadian-U.S. investment, and considering that we have a cultural exemption, albeit there's the right for the United States to retaliate in kind, how would we be served by not proceeding with an MAI? A lot of people have said we should not go with this MAI unless there's a complete carve-out. But considering that the threat comes from United States, where the NAFTA investment agreement will stay in place in any case, how would you see your interests being served?

Mr. Jack Stoddart: Perhaps Anne could comment.

Ms. Anne McCaskill (Consultant, McCaskill Consulting Inc.): First of all, if we were to enter into a new agreement and the U.S. were a signatory to that agreement, and if there were provisions in that agreement that differed from what is in the NAFTA, then the new agreement could take precedence.

So it's not at all clear. Indeed, I think we would have seek particular provisions if we wanted to make it clear that the NAFTA rights and obligations, including our cultural exemption, would prevail if a subsequent investment agreement like the MAI were signed.

Mr. Charlie Penson: Considering the news out of Washington as recently as Friday that suggests the United States may not see enough in this agreement to go ahead with it, if that's the case, that still leaves us with NAFTA.

Getting back again to the major threat, as you identified it, coming from the United States, how do you see that being resolved if we don't go ahead with an MAI at all?

Mr. Jack Stoddart: If we don't go ahead with it, then the rules under NAFTA, although they're not ideal because of certain provisions, are certainly acceptable, and have been so to the industries since the signing of NAFTA. So I don't see why, if it doesn't go ahead, we would see this as a problem.

Mr. Alexander Mair: The threat is coming from the United States in various ways. In the music industry, of the six multinationals I referred to, only one is American, the others are European, and one is, shall we say, quasi-Canadian, which is Seagram, although the music is controlled out of New York. A lot of the artists are American, but the actual corporations behind them are not necessarily American. There's Sony from Japan, BMG from Germany, Polygram from Holland, and EMI from England. There's one other. I can't recall it, but it's also not American. Warner is the only American-owned company in the music business.

If we don't proceed, whether or not the United States signs MAI, as Jack said earlier, the sun is going to rise the next morning. We know by whatever statistics you want to look at, such as those of the United Nations, etc., Canada is, first, a great place to life. Second, it's a great place to do business.

We already have something like 85% foreign ownership of our companies now. Why would a company not want to invest in Canada if we did not sign the MAI? I don't see why they wouldn't. We're a resource-rich, very highly industrialized, prosperous country. I don't see that that would change in any way if we chose not to sign the MAI.

• 1200

The Chairman: One last question, Mr. Penson.

Mr. Charlie Penson: The Minister for International Trade as well as the chief negotiator have both said before the Standing Committee on Foreign Affairs and International Trade that their intent is to expand the NAFTA-type investment agreement from three countries to 29 member countries at the OECD. Is that what you see as the intent of this deal? Would you be happy if that's all that's required?

Mr. Alexander Mair: I find NAFTA somewhat flawed, and I don't believe the MAI is that simple. As Jack Stoddart said in his opening remarks, to me this is a declaration of multinational corporations, more so than of countries. I just don't share your interpretation that this is only an expansion.

Mr. Charlie Penson: No, no, that's not my interpretation. This is what the minister and the chief negotiator said before a committee.

Mr. Alexander Mair: I don't share his comments then. Looking at the Globe and Mail article this morning about the leaked document, it refers to 56 pages of exemptions that have supposedly already been put forward, yet we have this problem of not having access to what is going on, this secrecy thing.

Ms. Anne McCaskill: I think it might be useful to spend just a moment on the NAFTA cultural exemption, how it works, and what it gives us.

When I was involved in the trade field in government, I had some direct experience with it, and although there is a perception that it in fact doesn't provide Canada with a great deal of protection in terms of the ability to sustain the kinds of cultural policies and programs that we've had in place for a long time, I differ somewhat from that perspective. I think the cultural exemption in fact goes a very long way to maintaining our flexibility.

When we negotiated the free trade agreement with the United States back in the 1980s, we made clear that we were not prepared to take any obligations that would limit our ability to pursue cultural policy and programs. We negotiated at that time the first cultural exemption. The Americans insisted on the right to retaliate if any measures that Canada took as a result of exempting culture would have otherwise been inconsistent with any of the provisions of the free trade agreement.

When we then negotiated NAFTA, we basically insisted on carrying that cultural exemption forward into the new agreement, and the Americans in turn insisted on carrying their right to retaliate forward. That was a linkage we could not avoid in the NAFTA negotiations. However, the scope and value of the cultural exemption in a NAFTA context are much greater for Canada than are the scope and value of the right to retaliate that the U.S. carried forward from the FTA, for one very simple reason: NAFTA covers a number of areas of activity that were not subject to the FTA the first time around.

For example—and this is the most significant thing when it comes to cultural industries—there was no chapter on intellectual property rights in the FTA. We covered intellectual property for the first time in NAFTA, and we took on various obligations in NAFTA, including a national treatment obligation, which meant we would have to extend to U.S. interests the exact same treatment that is provided to Canadian interests, including in critical areas such as copyright protection. But because we have the cultural exemption, we have removed cultural industries from the coverage of those new disciplines under NAFTA.

So we have a much broader scope now with our cultural exemption, because we have saved ourselves from any of the obligations in the expanded NAFTA, which includes services and intellectual property rights that were not covered by the FTA.

• 1205

But the U.S. right to retaliate applies only to obligations that Canada had under the FTA and not under NAFTA. So the U.S. has right to retaliate if Canada takes a measure that would otherwise have been inconsistent with our FTA obligations and not our NAFTA obligations. We are free and clear on NAFTA. And the only area that was covered by the FTA is investment. And there we grandfathered all of our existing investment policies and programs.

So strictly speaking there are very few things, and not one of them has come up so far, where one can anticipate the U.S. actually having access to its right to retaliate, which is currently connected to the cultural exemption in NAFTA.

The Chairman: Could we go back to this. Mr. Clarke, can you please bear with us, because two of our members have to leave at 12.15 p.m. and representatives from the Bloc Québécois and the NDP and Conservatives have kindly given their place so that these members can put questions before they leave. I'll recognize Mr. Bélanger and then Mrs. Bulte and then go back to the order, and maybe then you can make your remarks.

Mr. Mauril Bélanger (Ottawa—Vanier, Lib.): Thank you, Mr. Chairman. Before I make my remarks, I think we should note as a committee that last week the Minister of Canadian Heritage made an announcement concerning the Television Production Fund, which essentially respects the recommendation this committee unanimously made that it be maintained. I think we ought to send a little congratulatory note to the minister for having successfully negotiated that matter.

[Translation]

I would just like to indicate to committee colleagues and our witnesses that generally speaking I agree with their concerns and the view they expressed. This is a viewpoint which a number of us have communicated to the government, and I would just like to add, for the benefit of my colleagues around the table, that this viewpoint is not unique in Canada.

I had the honour of taking part in the Francophone Summit in Hanoï, Vietnam, last November. During the opening speech, President Chirac of France talked primarily about the fear, the serious concern his country has about American cultural exports, particularly US cultural dominance.

What he said struck me. The fact that France would express to the world Francophone community this serious concern led me to worry about what is going on at the present time particularly in these negotiations. It should be noted that this concern about cultural and other matters is shared by a number of countries including France. I think it is a good sign. Thank you, Mr. Chairman.

The Chairman: Thank you very much, Mr. Bélanger. Ms. Bulte.

[English]

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Thank you, Mr. Chairman. Thank you to the members from across the way for allowing us the opportunity to speak first.

My question is to Mr. Stoddart and to Mr. Mair and is regarding what the minister said on Friday in his speech to the Centre for Trade Policy and Law. At that meeting he essentially stated that with regard to culture we support excluding culture from the MAI altogether, but if not then we will except no less than a full country-specific unbound reservation, which is what Mr. Neil of the CCA recommended in his paper.

As you know, the committee on the Multilateral Agreement on Investment has come out with their recommendation, which again supports the principle of the French approach, which is a full exception, but adds to it a concern that Mr. Kelly raised also that culture means self-judging. We've gone through the SOCAN and we're even afraid the SOCAN doesn't cover enough in the future.

Mr. Stoddart, you said the full unbound country-specific reservation is not enough, which I understand legally is the same as an exception except it has political ramifications. Help us out here. Mr. Neil says it's okay and you're saying it's not.

• 1210

Mr. Jack Stoddart: I'm sorry, I know Garry quite well, and I wasn't aware that he had said that and I'm not sure why.

One of the problems is that when you have a country-specific, it's like setting a target up for anybody who wants to take you to court. There's a hit list.

I had the pleasure about three months ago of being invited by the trade attaché in Toronto for the United States government, and he had the latest State Department representative up from Washington. After he had bothered to tell us, well, yes, we had a culture exemption but there was no such thing as culture, and they agreed to that in the treaty as a courtesy to Canada but it didn't mean anything, I thought that was interesting. So I said, what else is on your agenda? He had a list. He had Borders; he had Polygram, which isn't an American....

Ms. Sarmite Bulte: Yes, I know.

Mr. Jack Stoddart: And you go all through it. As a country-specific does that, it actually sets up where you are today and you become a target.

The second thing is, it does also say this is where we are today, and we can't ever go forward as technology changes.

Ms. Sarmite Bulte: But that's if it's subject to standstill and roll-back—

Mr. Jack Stoddart: Right.

Ms. Sarmite Bulte: —and the minister specifically said that it will not be, which makes it unbound, which is where Garry was coming from.

I want you to help me here. If it's not enough, then you have to say so.

My understanding was that based on the recommendation the subcommittee on the MAI made on culture, making an exception like national security, making itself judging, even going beyond what SOCAN recommended, is this enough? If it's not, then we need to know now, but I think we can't look at this in isolation, based on what the committee stated and also what the minister said on Friday. That's not a leaked document; that was a public statement. If you don't have copies, I'd be happy to provide you with them.

Mr. Jack Stoddart: Tony, did you want to comment, or Anne?

Mr. Tony Clarke (Director, Polaris Institute): I'll start with Ms. Bulte's comments.

First of all, I can't comment because I don't know what Garry Neil said on this or whatever, but it just seems to me that it's extremely important to understand that there's a big difference between an exemption and a carve-out on the one hand, and a reservation on the other.

A reservation is meant primarily to be a temporary device that allows governments to get over the political hump of selling a trade or an investment deal to their public, and also provides a time for transition. Really, basically under the current draft of the MAI, once you sign on, even though you have reservations, you are obligated to actually roll back over a period of time those pieces of legislation that are non-conforming.

That could change, but I'm saying right now the current draft and the January, May and October drafts of 1997 all specify that quite clearly. Until that changes, that's a problem.

Secondly, I think what Mr. Marchi was saying on Friday was relatively new in the sense that he is putting forward a wish list of what, under the pressure he has heard and under the response from the public and everything else he's heard, changes have to occur if Canada is going to feel comfortable with this. So it's a wish list.

When he says that roll-back and standstill will not apply to those particular country-specific reservations we have, that's a pure wish list; that's not what other countries are saying. So we have to understand this is a part of a negotiating process that's going on.

The third thing is that Mr. Diamond himself has said, as the chief negotiator, that all of the reservations we put forward are bargaining chips. So that means that some could go by the wayside. I'm saying we have to be wary of this, and therefore regarding the concerns that have been expressed by this panel, especially with respect to culture, demanding an exemption or a full-scale carve-out is absolutely essential if you're going to protect the areas this committee is concerned about.

That's the first point I would make.

The second point is, I would very briefly point out with regard to the NAFTA and the MAI that it's very important to understand that the MAI is different from NAFTA. Therefore, the attempt to say, on the part of whoever, that we're simply taking NAFTA and the eleventh chapter of NAFTA and multilateralizing it to 26 other countries is a bit misleading, to put it mildly.

• 1215

First of all, there is no subsidies code in NAFTA. That is to say, when governments make grants, loans and subsidies to industries—in this case, the cultural industries—they would be subject to the national treatment clause, which means that those subsidies, grants and loans would have to be made available to foreign investors. Period. That's clear. That's different from NAFTA.

Secondly, the ban on performance requirements is considerably larger in the MAI than it is in NAFTA.

Thirdly, the definition of investment itself is quite a bit broader in the MAI than it is in chapter 11 of NAFTA.

Therefore, it seems to me that it's really important to understand that those things alone make it different. And then, when you add the kind of investment-state mechanism that's in there, which gives expanded powers to corporations to sue governments directly, followed by the fact that the MAI rules will apply to sub-national governments as well as the federal or the national governments, it—especially in the case of Quebec—puts this under a considerable amount of constraint with regard to the application of those MAI rules.

It seems to me that it's very important not to get caught in the trap of saying that this is the same as NAFTA and we're simply rolling it over and warming it up in relationship to the MAI.

The Chairman: That's a very big point. Both are.

[Translation]

Ms. St-Hilaire.

Ms. Caroline St-Hilaire (Longueuil, BQ): First, I would like to thank the witnesses for their explanations. They clarified the picture for me somewhat. I think that you have brought home to the committee how important it is to defend and protect Canadian and Quebec culture.

Following up on what Ms. Bulte said, it seems to me that there has been a lot of talk about reservations and general exceptions. As Ms. Bulte pointed out, if you just use the term reservation to refuse to sign an agreement, that has to be very clearly indicated. I am also thinking about what Mr. Pilon said concerning the impact on independent producers. I'd like to hear your views on that subject, Mr. Pilon, as well as other witnesses. At the present time, do we have the right to refuse to sign the agreement just for the reservation?

Mr. Robert Pilon: Yes, that would be my opinion. There is a dynamic here we have to appreciate. this morning's issue of the Ottawa Citizen contains an article entitled "French film-makers protest global pact". Last night in Paris there was in fact a large meeting of people from the movie and music sectors. In Europe, there is a grassroots movement developing. This is growing among artists and people working in cultural industries who want to combat this agreement and have included in it a real cultural exemption clause.

We had that kind of debate in Canada at the time the Free Trade Agreement was being negotiated with the United States. We also had it during the GATT negotiations in 1993, and we will have it again sooner or later when the Free Trade Agreement is renewed or broadened to include South American countries. We will repeat the experience in the year 2000, when negotiations on GATT resume. I try to be realistic because it is important to be so. This is an ongoing debate.

[English]

We're going to live always with that. It's some sort of a Canadian curse in some way.

[Translation]

The Americans have an enormous country, and their cultural industries are their biggest exporters to the rest of the world after the aeronautics industry. In terms of economic logic, it is quite understandable that they should wish to export their films, records, television programs, books and magazines around the world. That is perfectly understandable. And whatever other countries may try to do, they will continue to try to export and reduce to a minimum or, if possible, remove completely any restrictions on markets around the world. That's what they will do. That's the way they see things, and it is understandable that they should do so.

I believe that the ball is in our court, that is with the Canadians, Swedes, Portuguese and Brazilians. The question is whether or not we believe, as we face that constant pressure which may well grow over the next 10, 20, 30, 40 or 100 years, that it is important for people in other countries and other nations, with other cultures and other languages, to maintain a window for the cultural production of their artists and their cultural industries?

• 1220

That is a decision we must make as a society.

There is a strong parallel between this debate and the whole issue of the environment and biodiversity. This very morning I was reading in the train the document, which unfortunately bears my signature since I was a member of the committee, prepared by the Canadian Conference of the Arts, which I consider to be far too weak. There is a passage stating that we are not protectionists and do not want to be. I myself would say that I am a protectionist. I am proud to state that I am a protectionist, just like the people who campaign in environmental organizations to preserve the forests in the Amazon or Canadian wildlife and nature. That is an important point. No one is embarrassed about saying that he or she is a protectionist as regards the environment. Well, I am a protectionist in the area of culture, and I am proud to be so.

It is important to maintain biodiversity, to preserve the number and variety of species of fish, of deer, etc. Don't try and tell me that it is less informed to maintain the diversity of cultures and languages than it is to maintain the diversity of fish and ducks. As far as I'm concerned, it is just as important, if not more so.

So we should stop being embarrassed about defending the diversity of cultures and languages around the world. If I were in Lisbon or Rio this morning, I would say exactly the same thing as I'm saying here today in Ottawa.

The Chairman: Ms. St-Hilaire, please proceed, but very briefly.

Ms. Caroline St-Hilaire: I have just one short question. You talked about protectionism and you are opening up a broad issue for me. As regards quotas, would you tell me whether you agree with current quotas? And, if the MAI were to be signed, despite all our recommendations, should such quotas be increased?

M. Robert Pilon: Last fall or in December, the CRTC carried out a very important review, involving a large number of people, on policies and regulations concerning radio. Thirty or forty groups presented briefs. I'm told that they are beginning their deliberations at the present time, and their decision will be announced in early April. The Canadian music community as a whole asked for an increase in the level of Canadian content, which is only 30% and quite low. Don't forget that 30% means 70% foreign content.

French-language content quotas are at 65%, and we did not ask for an increase, but we did ask that they be applied more effectively, that is not just during the evening but also at peak hours during the day.

Why quotas? We are often told that quotas are a rear guard measure, a defensive measure, a prehistoric measure, an outdated measure. On the contrary, I feel that quotas are an avant-garde measure. If I'm told that it is important for the future of the planet to preserve the Amazonian forests, and I truly feel that it is important for the ecology to preserve all of this, it seems to me that this is an avant-garde measure because its objective is to preserve the planet's ecological balance. Protecting the ecological balance of the human race by maintaining the diversity of cultures and languages is, therefore, an avant-garde measure in my mind.

Unfortunately, restrictive measures are required in order to achieve this. We also require restrictive measures to protect our cultures, our languages and the diversity of expression of our artists. When I say this, I am talking to you as a citizen of the earth and not even as a Canadian because, in my opinion, it is just as important. I vacationed in Spain in September, and I discovered Spanish popular music, which I feel is wonderful. This music has a value and, as a citizen of the earth, I feel that it is important to defend it so that we will continue to have Spanish music and so that there won't be just American music in Spain. In a similar fashion, I feel that it is important that we have Canadian and Québécois music in Canada, and not just American music. This is a societal value, an individual value. I think that the Parliament of Canada is going to have to take a stand on this fundamental philosophic issue. It will be up to the legal and regulatory experts to come up with the technical details reflecting what we want, but first of all a political decision must be made.

Is there a price to be paid for this? Yes. Will the Americans be unhappy? Yes, they are going to be unhappy. However, I think that the only solution is to work together with other countries such as France, Great Britain, Australia and Brazil. Many countries throughout the world share our values and, like us, want to maintain the diversity of culture just as we wish to maintain biodiversity in the environment. We must work with them, and I think that one day the Americans will see reason, even if they do so with great reluctance, because they will realize that the rest of the planet does not agree with them.

• 1225

The Chairman: Thank you very much. Ms. Lill.

[English]

Ms. Wendy Lill (Dartmouth, NDP): Thank you very much for coming in here. I am stunned and impressed by what I'm hearing from you.

An amazing event occurred on Thursday of last week. I actually got Sergio Marchi to say to me, in Question Period, that I was correct in that I heard him say he would get a complete cultural carve-out or he would walk away from the table. He said, yes, you are—you're correct there. I thought that was a major victory of some sort.

Then I heard, of course, that the next day at the trade policy conference he said that with regard to culture we support excluding culture from the MAI altogether, but if that pursuit of a total carve-out is unsuccessful, we'll proceed with a country-specific reservation.

I guess I can ask the question again, and I'll see what kind of answer I get today. I think we're all struggling with what is to be done, when we see that people are in fact just being blown around by the wind, and that in the eleventh hour I don't think anybody has any trust in the wording on this issue and what this wording is going to mean.

That sounds like a statement as opposed to a question. I guess the question is, in your much more sophisticated and long experience in this business, how do you see politicians in this room helping to actually have some impact at this late hour in getting this thing protected?

Mr. Jack Stoddart: I think that hearings such as this, where issues get put on the table.... I don't know—there are many parties in Parliament this time, and many may have different opinions on these things. The MAI—I suspect there's a little that everybody disagrees with. I think there's a lot that most disagree with.

I don't think this is lost. I don't think just because there is a deal that may or may not get done.... If it doesn't get done on April 29, they'll try to do it in June or September.

I think it's a matter of pressure. I think that clearly Minister Marchi has got the message. If he waffled a little bit on the second comment, I think the House is the place to ask about that.

I think there is a need. Within the governing party, the Liberals, I think there is a lot of feeling that some of these things are inappropriate. I think the use of Parliament and the use of Question Period, and the use of committees such as this where you get things on the record and all that....

Maude Barlow, from the Council of Canadians, today is travelling across the country talking about the MAI. It's interesting; there was a good article in the Globe yesterday talking about the hundreds and in some cases thousands of people who have shown up to her talks. It hasn't been like this since the FTA. NAFTA just sort of drifted through, and the WTO nobody knew about. That's why we all got very active on the MAI, because it was going to be a WTO all over again—get signed and just quietly drift into the night.

I think Canada is far ahead of any other nation in the world. As far as raising the question goes, this has been given out to you. This is an American approach to it. There are groups in the United States who are just as absolutely opposed to the MAI as many Canadians are. They use a slightly different technique.

I can't imagine this deal being done in the United States, and no congressional, no Senate, no hearings of any kind. They didn't get fast-tracked, but then they say, well, of course this is an investment deal, not a trade deal, so we don't actually need it.

But this is fundamental to the rights of who can own what and who can't, and who as a government can say what about certain issues. This is just something that the people and the people who represent us in Parliament have to keep talking about. There are perhaps some good values in an international investment deal, but it has to be done right.

I agreed with Mr. Marchi on that. If it can be done right, with the right kind of protections, so be it. There are advantages to protecting investment in other countries and other investors here. But you have to get it right. You have to spend time, have public hearings, and bring the various groups in just as we did with the FTA. We had public hearings and knew what we were getting into. A lot of us disagree with those things.

• 1230

I think the final decisions on the FTA and then laterally after NAFTA were much better because there were public hearings. There was a public perception of them and the result was better than it would have been if they had just been negotiated in secret. That's what we were getting with the MAI. I don't think it's lost but I think we have to keep talking about this and keep that pressure up out there.

Mr. Alexander Mair: I think the article from the Citizen this morning is interesting. Robert read the headline, “French film-makers protest global pact”. It says “The demonstrators, led by film-makers Jean-Jacques Beineix and Bertrand Tavernier and supported by culture minister Catherine Trautmann....”

Here we have the culture ministry in France assisting in creating public awareness of the potential impact of the MAI. I hope our ministers share the desire to ensure the public fully understands at this potentially late point. Until very recently it seems to have been totally ignored by the media and the government from the point of view of making information available to those who care. So you have organizations such as the Council of Canadians, etc., on its own hook going out and telling people what's going on based on what it can read on limited public documents available to it.

The Chairman: Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Mr. Chairman.

These types of issues sometimes allow us, as individuals and political representatives, to define ourselves philosophically. I'm a Progressive Conservative and a free trader with assurances, for instance, that culture and our ability to speak with each other as Canadians is protected.

I see cultural protection as a unity issue. One of the ways we can maintain a dialogue with all Canadians and promote an environment within which we can keep Canada together is by ensuring there is adequate cultural protection.

We all know where my party stood on the FTA, but one of the areas of differences between the FTA and this discussion is the openness of the discussion. Certainly holding a federal election largely fought on the FTA issue is a significant step toward the democratization of a process.

I'm on the trade subcommittee that looked at the MAI. We fought individually and worked with Mr. Speller to ensure that culture...the wording was very nebulous. It was something like “culture should be protected” and it may warm the cockles of your heart to know that a Conservative actually worked to ensure that it became “must” as opposed to “should”. In any case, I'm a Conservative free-trader who likes culture, and I'm proud of that.

Mr. John Godfrey (Don Valley West, Lib.): That's an oxymoron.

Mr. Scott Brison: Well, I can even show you the season's tickets receipts.

One of the things we always have to consider, and I'd appreciate your feedback on this, is the law of unintended consequences with any public policy, and certainly with any type of protectionist policy. There is a double-edged sword and there are always potentially negative ramifications.

I heard someone mention there is a devaluation from a monetary perspective of the corporations that operate within protectionist policies. One of the things that happens with that is that there becomes an opportunity for concentration of power within a country.

In New Brunswick, for instance, an Irving group can effectively own all the English-language media, partly because protectionist policies have devalued those newspapers and radio stations from a commercial perspective.

• 1235

On a national level, for instance, it could be argued that protectionism has benefited someone like Conrad Black by helping him develop significant media concentration with Canada.

The Canadian banks, which are certainly not considered friends of the average Canadian, have benefited to a certain extent from protection against global competition.

The question, then, becomes whether these entities become more responsive to the needs of Canadians. Or are Conrad Black and the Irvings, with their media concentrations, more valuable to Canadians due to cultural protection? Or less so? That's one quick question.

Mr. Jack Stoddart: May I very quickly comment? I think corporate concentration is wrong, and whether it's global or national, I don't really care. It's been a long time since the “competition bureaus” in most of our western countries and in this country did anything. I can't imagine that you would say there wasn't a corporate concentration in newspapers when Conrad Black owns 62% of all the newspapers in the country.

And if you're going to have a closed shop or whatever you want to call it, you must have a way of reviewing concentration.

Whether it is international or Canadian, I don't care. I think it's wrong. One of the things we don't have today in the book publishing industry is a concentration. We have all the international players plus a strong group of Canadian players. That, as I said, is probably the best of the two.

Could I also comment on something you mentioned? I don't understand...or maybe it was because they thought it would go through in secrecy. But since culture and language are so important in Quebec, and there's the Quebec issue and how this country is going to evolve, I can't imagine why the timing of this MAI would be on the agenda for any government. And it gets back to the hearings on the environment where the question was asked of John Gero, who was the representative of the negotiating team, and he said no, it doesn't apply to provinces, and the committee came back and forth two or three times.

I can't understand how you can possibly take a position that investment and ownership provisions or the law around it and the right to give incentives and all that can't have anything to do with the provinces. Of course it does. There may be a technicality and as of today they haven't negotiated with it yet, but clearly it seems to be very strange and ill-timed to be addressing culture, among other things, in an international deal when we have a major problem in our country that is based very heavily on that very issue.

The Chairman: May I come back to you, Mr. Brison? I have four members and 20 minutes left. If you could be concise, all of you, it would be appreciated. I'll come back to you, Mr. Brison.

Mr. Abbott.

Mr. Jim Abbott (Kootenay—Columbia, Ref.): I'll try to be as concise as possible.

Mr. Stoddart started off by talking about the fact that the MAI is part of a race to the bottom. I'm looking at page 67 of this MAI book that was given to us today, and I'm quoting:

While it is doubtful whether foreign-based corporations would try to use the MAI rules to strike down provincial labour codes directly, the new investment treaty would most certainly create a more competitive climate, which would put additional pressure on governments to weaken parts of their labour codes.

Then further down in the next paragraph, referring to things that have been going on in Ontario and B.C., he says:

These examples show that this kind of economic rights legislation is increasingly the target of attack by big business in this country.

I'm wondering if you would agree with this. I'm old enough to remember the comic strip, Pogo, and it seems to me that in one of the comic strips Pogo said, “I have seen the enemy and it's us.”

If we consider that in the case of Maple Leaf Meats in Brandon one of the major shareholders is the Ontario teachers through their pension fund, and if we were to have a show of hands for the people on the panel and the committee members, I dare say that the majority of us would end up putting up our hands to show that indeed we have some kind of a pension fund, which is probably invested through mutual funds or some other strategy where the managers of my money and your money are trying to get the maximum bang for the buck.

So I'm wondering if the enemy isn't us. That's the first point.

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The second point is about the workers in the cultural industry. Are those in the cultural industry more important than the workers in, say, Cominco, Inco, Noranda, or the oil companies? In other words, if this agreement isn't signed, those Canadian-based multinational companies will be faced with the possibility of a foreign nation determining that it doesn't like this or doesn't like that, and that's it. All of a sudden, multimillion or multibillion dollar investments that these companies and our Canadian workers work for are put in jeopardy.

In other words, the question that I'm asking is if the people in the culture industry, and the culture industry itself, by saying nothing—“No, we won't go ahead unless we get a broad exemption”—are putting their financial interests ahead of the teachers who have these investments, of other mutual fund holders, or of the workers who work for those large companies.

Mr. Jack Stoddart: No, I don't think we're putting our interests ahead. We're here to talk about this from the cultural industries' point of view. We've analysed the results of an unrestricted MAI and have said there are going to be thousands and thousands of job losses in our industries. I think that's our responsibility in this industry and this part of the talk about the MAI.

If the enemy is us, we at least can address the question. If the enemy is a global corporation that works out of some tax-free zone at $10 billion a year, the enemy cannot be assailed in many of our cultural issues, at least.

I think we have to keep a playing field on which we, as a country, can keep the checks and balances in play. If there are inequities in any part of the system, for employees, for salaries or for working conditions, let's keep matters where we have a level playing field.

Part of the problem with the MAI is that the corporations from outside the country actually gain more rights than the Canadian corporations themselves under this bill. If that's the case, you will have a second-class citizen, that being the Canadian company. That's not within our own home. We can't adjust that. And it's a twenty-year deal that you can't get out if you sign on.

No, there shouldn't be second-class employees and there shouldn't be second-class corporations, and I think that would be the net effect of it. But, no, I'm not arguing that one group is preferential to another. Clearly, we're just trying to talk about our industry and the effect on it today.

The Chairman: Mr. Clarke is a co-author of the book, so I think he wants to say a word.

Mr. Tony Clarke: Well, I think Mr. Stoddart has responded very well to that. I would just say that in the particular portion you read, if you go back earlier, it talks about two major thrusts of the MAI. One is the actual rules and their application. The second is how it creates a chill effect that forces governments to move in the same direction anyway. I think it's very important to go back to see those other pieces and how they follow through with the rest of that argument.

The point you make about the teachers is a very important point. I think the “enemy is us” kind of thing is worth looking at. With regard to the teachers, I would also point out that there is a huge gulf between the teachers' pension fund and how that's being invested, and the interests of teachers themselves and education and public education. If they were again a part of culture, if we had a broader panel here, we would have teachers sitting here at the table talking about the fact that they are very concerned about how the MAI will affect public education. Much more, they never were concerned about that to any great extent around the free trade agreement.

They are very concerned about that issue in terms of the MAI, principally because the MAI, as we've been discussing, will affect provincial governments. Insofar as we're talking about a government subsidy that's put out there and delivered in any way by non-profit entities of any kind, it is subject to the MAI rules. That means our education programs—public education, universities, etc.—and the grants and subsidies that come from both federal and provincial governments, will all be subject to those rules, and they are very concerned about that. Furthermore, within the MAI itself, even the question of educational products is being considered as a matter that can be tapped directly by the MAI rules.

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So I'm just saying that even the managers of the investment fund for the teachers have no idea what the teachers are saying about the impact of the MAI itself on them and the future of education in this country. And I have to consider that to be, in the broadest sense of the term, a cultural matter as well.

[Translation]

The Chairman: Mr. Saada, Mr. Godfrey and Mr. O'Brien.

Mr. Jacques Saada (Brossard—La Prairie, Lib.): I would like to thank you because you have raised issues which are, in my opinion, fundamental. These are not only words; it goes much deeper than that.

I immigrated to Canada. I live in Quebec and I am a francophone. I made these decisions deliberately and I have the impression that my fundamental choice is what is at stake here. I am a free-trader providing that this does not mean losing part of my own identity, because I am not willing to pay this price.

If globalization means expansion, enrichment, growth, I am in favour of it. However, if globalization means being reduced to a dominant culture to the detriment of my culture of that of my neighbour, then I have problems. It is in this context, and bearing in mind my humble means as a member of Parliament and as a Canadian parliamentarian, that I would like to make a comment and ask a question.

[English]

An MAI that did not take into account a full Canadian exception could be, to me, a bad MAI. The question is—and Mr. Pilon referred to it a moment ago very eloquently—

[Translation]

If many countries feel that it is crucial to preserve their country and their culture and they are willing to join forces, do you not think that it would be appropriate to turn to the recent Foreign Affairs initiative with respect to antipersonnel land mines and to form a global coalition that can express opinions on what it feels to be a good thing even if the United States were not in agreement?

Mr. Robert Pilon: I think that the comparison is quite relevant. Canada took an initiative with respect to antipersonnel land mines which, I believe, was fruitful. I therefore do not see why we could not take similar initiatives regarding the preservation of cultural diversity.

Once again, and I'm repeating myself, it is not only the interest of cultural businesses that is at stake. I am a Québécois and a Canadian and this is in my interest. These are my beliefs. If I were Portuguese and speaking in Lisbon, I would be saying exactly the same thing. Being a Québécois or a Canadian has nothing to do with the position that I am taking this morning. Ultimately, this is a fundamental philosophic position; namely, we feel that cultural and language diversity has value.

Could Canada play a leadership role in this issue? I believe so and I think that Canada and France—at least historically—have played a role.

In response to a request recently made by the cultural milieu, France tabled a proposal for a cultural exception during these negotiations. The experts are telling us that the wording was a bit unfortunate and inadequate, but other wording has been suggested, particularly by SOCAN.

Perhaps the time has come for Canada to table a counterproposal with really strong, extensive wording that would result in a real cultural exception because this is a philosophic value we believe in in Canada.

Mr. Jacques Saada: May I ask a question to receive additional information? It's very short.

The Chairman: If you would like, Mr. Saada.

Mr. Jacques Saada: The question will be very brief, however I'm not sure that it is possible for the answer to be. I would like to ask Ms. MacCaskall a question.

[English]

I would like to ask you the question. To you, in the long term—and I'm referring to the comments made by Mr. Pilon and actually by all people in the front—is there a fundamental contradiction between globalization of the economies, free trade, and so on and so forth on the one hand and preservation of culture on the other?

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Ms. Anne McCaskill: I don't believe so. I don't believe there's a contradiction there, either philosophically on substance or in terms of the scope and ability of our international trading system to accommodate cultural distinctiveness.

In fact, I would argue that the more we advance in terms of economic integration with the United States and globalization, the more important it becomes for individual countries, particularly those that don't have the economic might of the United States, to in fact take steps to ensure that those processes of globalization and economic integration don't lead to the Americanization of our societies. Not only is there a way to draw that line, but we have to draw that line.

I've been involved in trade negotiations for the better part of 20 years, and I am probably the ultimate free trader in that sense, but I have absolutely no problem with the proposition that there is a place where we need to draw a line and say economic development can't go so far as to put us in the position where we're going to lose an ability to remain distinct as a national entity.

I know time is short, but I just wanted to add one final point, which is very relevant to this.

The MAI is not the main event. It certainly goes to very fundamental issues, but this negotiation and this proposed agreement in the OECD is not the main event. And it isn't the main event for any of the participants in that negotiation. It is stage-setting for an event that all of the OECD countries want to engage in a little further down the road, and that is the negotiation of an investment agreement with developing countries under the WTO.

There was a great debate before the negotiation began in the OECD about whether or not developed countries should get together and work out a template investment agreement that could then be transported to Geneva, or whether we should just proceed to the main event in Geneva. There were a number of different views on that. The U.S. view prevailed, which was, no, we need to have a negotiation amongst developed countries so we can get a high-standard boiler-plate investment agreement that we can then put on the table to initiate that process with developing countries in Geneva.

What then becomes very important, if you think of it in those terms—and that's really what this is all about—is positioning. Everybody is positioning themselves for that other process. The Americans want to remove from the landscape the concept and principle of exempting from disciplines, in an international agreement of any sort, culture and cultural industries.

One of the things that I think is a good sign or a good indication of the effectiveness of the cultural exemption in NAFTA is that it has now caused the Americans to make a decision that they don't want to ever see a cultural exemption in any other agreement again. You can be sure that when we re-engage with the Americans under NAFTA for Chilean accession or whatever the next phase is, one of the first things the Americans will do will be to put the cultural exemption on the table, because while they might have thought it was a fiction when they signed on the dotted line, they now realize that, well, maybe it isn't so much of a fiction, and it does indeed give Canada a right to pursue cultural policies and programs that it believes are necessary.

If we go into the main event in Geneva with an agreement out of the OECD that developed countries would then put on the table as the starting point for that subsequent process, the scales will have tilted in favour of the U.S. if there is no special provision that makes clear that culture and cultural industries are not like commodities and utility goods, which so far we have covered under the trade rules in the WTO. The cultural goods and the industries that produce them are in a special category, because they convey a different kind of value and meaning to citizens in this society. They don't want to have that in any template agreement.

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If it's not there, then our positioning going into that main event...because we don't need an MAI. We have an investment deal with the Americans. We have our investment deals. We're positioning for the WTO. If we go into that process with nothing but a country-specific reservation, then I think what we need to consider is how that affects our positioning on the larger principle, not only for an investment agreement in the WTO, when we get there, but for the next round of negotiations in the WTO on services, for the next round under NAFTA, for APEC.

There's a critical principle here. The Americans are trying to nudge it that way. We want to keep it right where it is. I think that's really the dynamic we have to think about and the dimension of whether or not there really is a fundamental conflict there such that we're going to have to give up. I don't think so. But it will certainly take intestinal fortitude to stick to it.

The Chairman: Thank you very much. That's a very important point.

Mr. O'Brien.

Mr. Pat O'Brien (London—Fanshawe, Lib.): Thank you, Mr. Chairman, and my thanks to the witnesses.

I will just confirm, as an Ontario teacher myself, Mr. Clarke's point that there's a great deal of concern among teachers in Ontario about the possible ramifications and implications of this for education.

I have a brief question on process. I hear the panel saying this is being fast-tracked. I didn't hear the word, but that would be my interpretation of what you are saying. You are calling for public hearings.

Several committees have had witnesses on this. We had Ms. Bulte here. Public hearings of what type, and to achieve what? It seems to me we have had some excellent evidence at a number of committees. Are you absolutely firm that there should be public hearings, and of what nature?

Mr. Jack Stoddart: Yes, firmly. The problem is that the hearings today are dealing in error, subjects we don't have detail on. We have early drafts. You have bits and pieces. You don't have the whole thing. I think until the wording is set and we know exactly what we're dealing with....

Some of the things we're suggesting may not be good for the country may, at the end of the day, when you see the final words, be just fine. Some of them may be a lot worse than what we are suggesting. Until we see what the proposed deal is, as opposed to what the deal is—and what they want to do is the deal, not the proposed deal—once we know what that deal is, then I think the teachers and everybody who has a vested interest in their livelihood and their companies and their country should have the right to come forward and talk about this, whether it be through Parliament or it be in hearings before Parliament. There is lots of choice there. But clearly there's a difference.

The Chairman: Mr. Godfrey.

Mr. John Godfrey: I thank the panel for a really fascinating morning. I have to say I had a town hall meeting in my constituency the other day, and it was dominated by the MAI debate, perhaps because in a previous householder I had attempted to defend it on the front page.

I have three questions for Ms. McCaskill. In the first two I really want to know whether I should be deeply concerned about these issues. Then it's an elaboration of things raised by the other panellists.

The first thing I heard, and Jack Stoddart referred to it, is the notion that there's something more sinister about a 20-year lock-in than about a 5-year lock-in and the 6-month opt-out. I would like you to deal with that one. Should I be concerned? Although as you mentioned, what happens when you start to renegotiate NAFTA? Maybe I will wish I had a longer deal.

The second issue, which somebody raised at the meeting, and there are a lot of other ones I won't talk about, is that all other international treaties seem to recognize other covenants and conventions, human rights, all that sort of thing. Is there something sinister or specific about MAI that does not? Is there some way in which it takes precedence or fails to recognize other agreements on labour or anything else? Or is it just like NAFTA?

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The third one is in this whole area of how you get the best exemption, or exception, to protect culture. There are all these different carve-outs, carve-ins, temporary derogations, prudential measures, etc. SOCAN has come up with the platonic ideal, I guess, which would absolutely make sure we were.... But based on your experience, if we can't get the platonic ideal, what would you do, based on our NAFTA experience; what would give you at least a measure of comfort?

Those are the three questions: the 20-year situation, the precedent situation, and then the deal we could go with on exceptions.

Ms. Anne McCaskill: If I may, I would like to start with the last one.

It's a very difficult question, because it goes to assessing the risks and benefits of Canada signing on to a particular agreement now. I would argue that we have a bit of a timing problem here. The whole issue of culture and cultural industries and how trade agreements of various types should deal with that particular sector of our society is really a relatively recent matter for debate, both domestically within Canada and in other countries and at the international level. We've spent however many years—30 years—going through successive rounds of international trade negotiations to bring the international disciplines up to the level they are at now on goods, but it was only in the last WTO round that countries started negotiating in areas such as services and intellectual property, which previously had remained completely untouched by the international trading system.

So we have a relatively new issue here, and for the first time we are looking at international negotiations that involve disciplines that could reach further into the scope of activity of national governments than we have ever reached before. I personally think a lot of work and discussion needs to take place, including in Canada, to get a better handle on where we want to go, what the first principles of our cultural policies and objectives should be, and given a changed environment, what kinds of instruments we want to preserve for use now and in the future. It's a little unfortunate that the pace of the international trading system and the endless negotiations that are now taking place, one on the heels of another, have caught up to this issue of culture, which remained on a back burner for a long time but is now on the front burner, before we have really had the chance to have that full debate, domestically and internationally, about what this is really all about and what the balance of interests should be.

So on the one hand I would be inclined to say we have a timing problem here. We're in a negotiation that's supposed to conclude in a matter of months to address issues that are complex and that we really haven't come to grips with yet. In that light, you would be inclined to say wait. But if you can't wait and the rest of the negotiation is going to drive to a conclusion, then I would say let's just leave unsolved issues unaffected at this stage of the game and get our homework done and conclude the debate and return to that.

On your other two points, the 20-year.... Probably governments and negotiators are thinking of a longer timeframe when it comes to investment than we have necessarily done in the past when it came to trade in goods, because an investment isn't something you do today without thinking about where you're going to want to be 20 years down the road. That's a longer term. So I think you have a longer timeframe. But if there is an agreement, there will be provisions for withdrawal from the agreement. I don't think that's really a big question mark.

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In terms of the relevance of other international agreements and obligations—

Mr. John Godfrey: Not just trade ones. It was put to me that it took precedence over all sorts of things.

Ms. Anne McCaskill: Right. Well, you know, this is a debate and a dilemma that's been going on for some time now in the WTO, and the same issues and principles apply.

When it comes to things like environmental protection and environmental regulation, labour law, all of those kinds of things, the reality is that at the international level there are very few agreements that have the binding nature of a WTO agreement. When it comes to how one is going to affect the other, it's usually the binding commitment in the WTO that wins out at the end of the day, because that's where the legal enforcement mechanism is.

The OECD agreement and MAI would not be legally binding in the way that a WTO agreement is, because there's no penalty, there's no enforcement mechanism in the event of a dispute. It would probably be pretty much on a par with other kinds of international agreements, and there, whichever was most recent in time might have the greatest weight, if there were differences.

Mr. John Godfrey: But I was leading towards the big show, which might be a WTO....

A voice: Which is binding.

The Chairman: Mr. Clarke.

Mr. Tony Clarke: The 20-year lock-in is a very serious point and should not be dismissed at all too quickly. The fact remains that the proposal as it presently stands is that once you sign on, you can't get out of the deal for the first five years. Then the rules will remain in place for an additional 15 years after that, whereas in NAFTA we could have an abrogation clause that said you could get out after 6 months.

It seems to me to be extremely important when you have an investor state mechanism that allows corporations to bypass states and go directly to governments, and to sue them, and to take them to court in terms of international tribunals. These tribunals are binding, and have a binding effect in terms of both the damages that will be rewarded and the potential for ratcheting down legislation.

I don't think this is something to be taken lightly at all. This is very significant. A 20-year lock-in has enormous implications for policy choices, especially when you look at the fact that during the course of a 20-year period we have five federal elections and how many other provincial elections. Add to that the standstill and the roll-back clauses—I mean, this is very, very serious stuff in terms of handcuffing governments and what they can do in terms of regulating corporations—very serious stuff.

The Chairman: We have exhausted our time. If I may, I'll make one remark and ask a question, because I think this has been a really useful panel. One way of informing the public would have been for this to be televised, but the only televised room that we have, we have to fight for. We get it sometimes. Even now, they have restricted the hours of broadcasting to 4 a.m. or 3 a.m. That's another example of how you lose your sovereignty, because it's not controlled by the House of Commons; it's controlled by CPAC, which is a consortium. It just goes to show that maybe there's a point to be made there.

Listening to you, I have a big dilemma. I agree 100% with Mr. Pilon's comments about culture and ecology and what we should be worried about. He challenged the committee, saying why don't you come up with a definition that would be binding and that you could suggest to your government? I was going to, in turn, ask you as experts to produce this for us, so we could put pressure on our minister.

At the same time, my dilemma is this. I have been to the environment committee and questioned the witnesses there, and I have a lot of reservations about this thing. In fact, I think it stinks. I think of Ethyl Corporation, the cheek of it, suing our government for banning MMT. We were the only country in the world that was a sucker enough to accept MMT. And I think to myself, what will the MAI do to us, to the environment, to culture, and all our protections as a country, to protect our identity and sovereignty?

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So on one side we ask why we don't have a carve-out for culture. Should we have a carve-out for environment? Should we have a carve-out for labour? Or is the wisest thing to follow some eminent people who have said don't touch it with a barge pole; it changes nothing to our investment?

If we put the pressure on to leave it aside, would that put us in a bind as a country if we are the only one not in there and then there's a second round with the WTO where we are absent because we refused this deal? I'm not sure. I'm just asking the question.

Ms. Anne McCaskill: If there is a negotiation at a later date in the WTO, we could be there. Participation or non-participation in an OECD agreement is not a deciding factor in terms of who would participate and what kind of role and position we would take in the WTO negotiations. So it would not affect it.

The Chairman: So it wouldn't lessen our leverage or cause any prejudice to Canada if we were to just say no to the MAI. Would the investment people or the economic people say we will lose and we won't be part of the club and will have lost some leverage to negotiate after? I'm just putting the question to you.

Mr. Robert Pilon: I don't think so, but I'm not an expert on that matter. On the environment side, I'm also not an expert. As a citizen I'm very concerned about what I've heard on the environment part, but I'm not an expert.

Should we be in such a rush to sign this thing? Maybe the solution is to take a little longer and look at all aspects of it instead of deciding not to sign or signing something that is not the best thing. Maybe Canada could take a stance and say its citizens are concerned—some are concerned about culture, some are concerned about the environment—so can we slow the pace of those negotiations so we have more time to have a public debate on all those matters? Maybe this is not that terrible. I don't know if this thing is feasible.

In the meantime on culture, I think the most important thing now is to build alliances with other countries. There are a lot of people concerned in all walks of life in every country. Every time I've travelled I've seen and met people who are concerned about preserving their culture and their voice for their artists. But trade negotiations very often are taken charge of by trade ministers.

I guess we're pretty lucky now to have Mr. Marchi in charge. I don't know why—maybe it's because he's close to Ms. Copps—but he seems concerned about the question of culture. But I'm told in many other countries the trade ministers in charge of those negotiations are not as concerned. I'm told in many countries there is some in-fighting between the culture ministers and the trade ministers.

Now, maybe we need some time to build alliances with other countries so at some time all the trade ministers of a great number of countries will become conscious that there is some sort of a world coalition that is developing and is concerned about that. Canada could take leadership there.

The Chairman: Thank you. Mr. Stoddart.

Mr. Jack Stoddart: Mr. Godfrey asked if we can't get the best deal, what's our second best? I've had several conversations with Peter Grant, who is probably the expert on the cultural industries as far as trade issues are concerned. He's been very involved with the WTO and with the CRTC. He's constantly at this.

He says the bottom line is that there is no second answer. We're either in or we're out. We have one chance to get it right. If we can set the precedent here, we have a chance. Once we're in soft on the first deal, the second one will get worse. We're just going to get picked and picked until these things... We happen to be the target, because we are the ones with already an exemption of some sort under NAFTA, and we're a bad example for the U.S. to take around the world. That's why they're so intense on this.

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I would make a bet, to answer another question: if Canada doesn't agree to go along with this, I'll bet you there won't be a deal, not because we're critical to the rest of the world but because cultural industries in particular are what half of this is all about, from the U.S. position. It is very much an attempt to right what wasn't done in NAFTA and the FTA. I'm not sure it's going to go through. It's very clear, but now is the time to battle.

Nobody has brought forward, in our experience anyway, with a lot of discussion on this, any alternative that was acceptable as far as protecting what we have as a nation and culture goes, and something that would be acceptable to the United States—to all the other countries, probably, but not the United States. So where do we end up? I think you have to say no sometimes to win a little bit.

The Chairman: Mr. Clarke.

Mr. Tony Clarke: I would just like to say that I agree with everything my colleagues have just said in the last few minutes on this.

As to your question about what it would do to our leverage, in some ways by pulling out and stopping this process right now for the right reasons and actually taking the next steps to ask what kind of investment treaty we would like to see....

What would it mean to actually come up with an alternative approach to an investment treaty that really incorporates the many concerns we've discussed here, the concerns that have been expressed to the environment committee and to the health committee, and a number of other things that have been on the table around this? We could actually be giving leadership and increasing our leverage as far as the WTO is concerned, because there's no question that if this thing goes back to the WTO, the same issues and the same problems, from a deeper standpoint in some ways, are going to be raised. That's what happened in Singapore in 1996. Therefore the question of leadership at this point is critical.

The wheels are falling off this deal right now to some extent. I think over 1,000 reservations have been filed. They're trying to find a way out of this morass they're in right now. With the United States saying what they're saying, I don't believe for one moment that the United States is giving up on this, but it's a timing problem for the United States right now to push this thing through.

Maybe we should bide our time. Maybe we should be giving leadership and saying we ought to be approaching this and coming up with an alternative model and an alternative process for developing a global investment treaty. In that sense, it would make a huge difference.

I've just come back from meeting with nine people in nine different countries in Europe, and there is a great deal of groundswell building up in a number of these countries right now. A number of ministries in different countries are beginning to say, “Hey, I didn't know about this! What's the effect on environment over here or culture over here or health and services over here?” They're beginning to raise the same questions we are in this country. So I don't think this thing has a lot of legs to stand on much beyond the next few months.

The Chairman: Thank you very much to all of you. I guess we'll see many of you at one of our round tables later on. Thank you very much for taking the time and trouble to come. We really appreciate it.

The meeting is adjourned.