CIIT Committee Report

Supplemental Report of the Official Opposition New Democratic Party of Canada on a Comprehensive Economic Partnership Agreement (CEPA) with India

The Official Opposition New Democratic Party of Canada is supportive of deepening and broadening Canadian economic relations with India. We believe that a well-structured Canada-India CEPA could offer important opportunities for both countries to advance our mutual interests.

New Democrats recognize India’s increasing global political, economic, technological and cultural influence as well as India’s importance as a partner for Canada with shared values, and a commitment to democracy and rule of law.

Evidence received by the Committee has highlighted the complexities of trading with a country such as India. While we believe that India has experienced positive changes that will facilitate trading relations with Canada, issues highlighted by witnesses present challenges and will necessitate caution.

While we support in principle, and in many specifics, the findings and recommendations contained in the Report, we believe that they are incomplete.

The following expresses those additional findings and recommendations that we believe are necessary to achieve stronger long-term economic relations with India, and promote a flourishing Canadian economy, environment and society.

Political Conditions

India has experienced important political and economic changes that are encouraging in the context of Canadian trading relations. However, witnesses such as Dr. Zhan Su, a Professor and Director of Stephen A. Jarislowsky Chair in International Business at Laval University, also testified that India is still categorized as an emerging economy with significant challenges to overcome such as food security and inequality.[1]  According to the World Bank, India ranked 132^nd out of 185 countries in terms of ease of doing business, and 184^th in the world in terms of enforcement of contracts. The Canadian government must take these conditions into account while negotiating a CEPA.

Labour Situation

Canadians want access to affordable goods, but not at the expense of core values such as labour rights, children’s rights, and other basic human rights. The tragedy of the collapse of a garment factory building in Bangladesh on April 24^th 2013 reminds us that the respect and enforcement of adequate labour standards are fundamental to trade and commerce in a globalized economy. From a legal perspective, it is concerning that India has not yet ratified core ILO conventions such as Convention No. 87 on the Freedom of Association and Protection of the Right to Organise, and Convention No. 98 on the Right to Organise and Collective Bargaining. Moreover, witnesses stressed numerous labour challenges that the Indian government still faces. According to Dr. John Harriss, a Professor and Director of the School for International Studies at Simon Fraser University, India has been experiencing “jobless growth”, with “very little development at all of the numbers of good jobs in India.”  He further testified that the biggest development over the last decade has been the “tremendous increase” in the employment of contract labour.  Dr. Harriss stated that this has resulted in labour rights remaining “very undeveloped” as “93% of the Indian labour force are employed in the informal sector, where there is no guarantee of labour protection and very little job security”.[2] Concerning child labour, India has not yet ratified the ILO Convention No. 182 on the Worst Forms of Child Labour, its analogue Recommendation No. 190, or the Convention No. 138 on the Minimum Age.  While progress appears to have been made in this regard, several witnesses referenced the difficulty of ending child labour in India. Accordingly, Suresh Madan, a Director of the Indus Entrepreneurs Toronto, stressed that it was advisable for Canada to seek inclusion of clauses against the exploitation of labour in the agreement.[3] In addition, the Canadian government should consult in an ongoing manner with labour unions in Canada and India regarding means for improving protections for labour rights through the agreement.

Environmental Issues

Canadians believe that trade policies must go hand in hand with sustainable development and the protection and enhancement of the environment. Accordingly, ambitious provisions committing both countries to high standards of environmental protection along with effective monitoring and enforcement mechanisms must be included in trade agreements. This should be emphasized in the CEPA given weak or weakening environmental regulation in both India and Canada. As several witnesses underscored, the issue concerns not only the enactment of legislation, but the monitoring and enforcement of environmental regulations. Dr. John Harriss also noted that there is increasing recognition within India of the importance of environmental issues, which may offer opportunities for Canadian companies with expertise in the development of clean technologies.[4]

Political, Social, Educational and Cultural Support

The vibrant Indo-Canadian community provides Canada and India with strong connections and is a vital facilitator of our trade relations. Numerous witnesses stressed that political, social, educational and cultural supports are key to building long lasting relationships. Testimonies spoke to the leadership of the Indian diaspora in creating trading opportunities with India, and the significant benefits to Canada of the presence of international students from India across the country. We believe that strengthening these relationships is essential in the context of a CEPA with India, as they will help build relations of trust and depth, which in turn generate important economic opportunities. Accordingly, we believe that the Government of Canada ought to provide resources to strengthen social, cultural and educational exchanges between Canadian and Indian civil society and citizens, and increase its participation in Indian and South Asian regional fora.

Temporary Foreign Workers

Canadians are concerned about recent allegations of abuse of the Temporary Foreign Worker Program and intra-company transfers to displace Canadian workers. While we encourage means for Canada and India to pursue the benefits of labour and knowledge mobility between our two countries, we believe that it must be done in a mutually beneficial way. Witnesses spoke about the positive growth that could come from the temporary exchange of business persons between Canada and India, and the potential for CEPA to facilitate this. However, the Temporary Foreign Workers Program and intra-company transfer visas have been badly mismanaged under the Conservative government and resulted in misuse of the programs to displace Canadian jobs. A temporary foreign worker program has a legitimate role to play in addressing skill shortages where Canadian workers are unavailable. However, great care must be taken in the CEPA negotiations to ensure the prevention of misuse of labour mobility clauses.

Investor-State Dispute Settlement (ISDS) Process

As mentioned in Committee, the CEPA between Canada and India will not include an ISDS process. India, along with other countries such as Australia, has expressed its reluctance to pursue these extreme and ideological measures. New Democrats support this caution. These mechanisms are of increasing concern to Canadians as they permit foreign corporations to sue governments (including sub-federal bodies) for enacting measures that are perceived to interfere with their profit expectations. This puts taxpayers at risk for potentially billions of dollars of damage claims and restricts the democratic ability of governments at all levels to legislate in Canadians’ interests. Many experts also expressed concerns that ISDS processes violate principles of the rule of law, including conflicts of interest, the lack of an effective appeal procedure and no security of tenure for adjudicators.   Consequently, we oppose any attempt to include such ISDS provisions in a CEPA, or a Foreign Investment Promotion and Protection Agreement (FIPPA), between Canada and India. We are, however, conscious of challenges in the Indian judicial system.  We therefore stress the importance of a firm negotiation position aimed at developing open and efficient legal systems that will resolve disputes in a timely manner, consistent with the rule of law.  The essence of trade is commerce, and the essence of commerce is contractual relations.  Ensuring that both countries have fair, effective and efficient enforcement processes for upholding the rule of law is essential to building a firmer and deeper trading relationship.

Enhancing our Trading Relationship

Building a commercial relationship with India requires more than a simplistic approach to trade, and the signing of a treaty is not sufficient. It requires leadership from government in the form of continued political engagement and investment in trade promotion. The Committee heard from many witnesses that human and economic resources from the Canadian government are essential to help Canadian companies, small and large, penetrate and succeed in the Indian market. Ailish Campbell, Vice President, Policy, International and Fiscal Issues, at the Canadian Council of Chief Executives, noted that the services provided by Export Development Canada, trade commissioners, the diplomatic corps as well as the engagement of provinces with sub-federal entities in India, are necessary to foster a vital ongoing relationship-building between Canada and India.[5] We therefore strongly support the delivery of a full complement of trade services in India to assist Canadian businesses working to access the Indian market. We further believe that Canada should bolster its trade commission services in Canada, both to assist Indian businesses wishing to operate in Canada, and Canadian businesses who require information about India.  

Recommendations of the New Democratic Party of Canada

1. That the Government of Canada, in a comprehensive economic partnership agreement between Canada and India, include provisions committing both countries to high standards in labour rights, human rights and environmental protection along with effective monitoring and enforcement mechanisms.
2. That the Government of Canada, in a comprehensive economic partnership agreement between Canada and India, support measures to address the development and food security challenges of vulnerable populations in India.
3. That the Government of Canada, in the negotiations for a comprehensive economic partnership agreement between Canada and India, adopt a firm negotiating position stressing the importance to both countries of open and efficient legal systems that will resolve disputes in a timely manner consistent with the rule of law.
4. That the Government of Canada, in a comprehensive economic partnership agreement between Canada and India, neither propose nor accept an investor-state dispute settlement mechanism.
5. That the Government of Canada ensures that any comprehensive economic partnership agreement with India includes measures to prevent the misuse of the temporary foreign worker program and intra-company transfers to displace Canadian workers and increase monitoring and enforcement of TFW applications and intra-company transfer visas to end abuses.
6. That the Government of Canada ensure that Canada has sufficient consular offices in India staffed to provide a full complement of trade services to assist Canadian businesses working to access the Indian market.
7. That the Government of Canada, in the negotiations for a comprehensive economic partnership agreement between Canada and India, invite the provinces and territories to participate in negotiations if provincial and territorial interests are engaged and obtain their consent for any measures that substantially affect their interests.
8. That the Government conduct an impact assessment to determine whether the rights of Aboriginal peoples are likely to be impacted by an economic partnership agreement with India, and if so, conduct the appropriate consultations
9. That the Government of Canada ensure that Canada’s supply-management system be wholly protected in an economic partnership agreement with India.
10. That the Government of Canada ensure that, in a comprehensive economic partnership agreement between Canada and India, if public procurement is addressed, the ability of Canadian governments at all levels to adopt local economic development, environmental protection, job creation or sourcing initiatives is preserved.
11. That the Government of Canada encourage the exchange of social, cultural and economic delegations between Canada and India.
12. That the Government of Canada ensure that Canada’s chief negotiators in a comprehensive economic partnership agreement with India provide the Committee on International Trade and the Canadian Parliament with regular briefings and progress reports on the development of the agreement.