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Ontario 



Select Committee 
on Economic Affairs 



Ontario Trade Review 



Interim Report 



1st Session 33rd Parliament 
34 Elizabeth II 




Ontario 



LEGISLATIVE ASSEMBLY 
ASSEMBLEE LEGISLATIVE 



Queen's Park 
October 1985 



The Honourable Hugh Edighoffer, M.P.P., 
Speaker of the Legislative Assembly. 



Sir, 






Your Select Committee on Economic Affairs has the honour to present its 
Report and commends it to the House. 



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David Cooke, M.P.P. (Kitchener) 
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Joseph Qordiano, M.P.P. 




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Mickey Hennessy, M.P.P. 




Donald S. Knight, M.P.P. 





Bob Mackenzie, M.P.P. 
George McCague, M/P/P. 

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David J. McFadden, M.P.P. 
Karl Morin-Strom, M.P.P. 




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ames A. Taylor, M.P.P. 



Digitized by the Internet Archive 

in 2012 with funding from 

University of Guelph, University of Windsor, York University and University of Toronto Libraries 



http://archive.org/details/ontariotradereviOOonta 



SELECT COMMITTEE ON ECONOMIC AFFAIRS 



MEMBERSHIP AS OF FRIDAY, 18 OCTOBER 1985 



DAVID COOKE (KITCHENER) 
Chairman 



JAMES McGUIGAN 
Vice-Chairman 



BOB MACKENZIE 



JOSEPH CORDIANO 



GEORGE McCAGUE 



RICK E. FERRARO 



DAVID J. McFADDEN 



MICKEY HENNESSY 



KARL MORIN-STROM 



DONALD S. KNIGHT 



JAMES A. TAYLOR 



Douglas Arnott 
Clerk of the Committee 



Fernando Traficante 
Research Officer 



SELECT COMMITTEE ON ECONOMIC AFFAIRS 



MEMBERSHIP AS OF WEDNESDAY, 10 JULY 1985 



DAVID COOKE (KITCHENER) 
Chairman 



CLAUDE BENNETT 
JOSEPH CORDIANO 
RICK E. FERRARO 
DONALD S. KNIGHT 
BOB MACKENZIE 



DAVID J. McFADDEN 

JAMES McGUIGAN 

KARL MORIN-STROM 

BETTE M. STEPHENSON, M.D. 

JAMES A. TAYLOR 



SUBSTITUTE MEMBERS 



ANDREW S. BRANDT 
ROBERT V. CALLAHAN 
SAM L. CUREATZ 
ROBERT L. ELGIE, M.D. 
PHILIP A. GILLIES 
RAY HAGGERTY 
MICKEY HENNESSY 
JOHN LANE 
NICHOLAS G. LELUK 
BOB McKESSOCK 



ALLAN McLEAN 

BERNARD NEWMAN 

JACK F. PIERCE 

CLAUDIO POLSINELLI 

HOWARD SHEPPARD 

JOAN E. SMITH 

DAVID W. SMITH 

RICHARD L. TRELEAVEN 

DOUGLAS J. WISEMAN 



PREFACE 

The Legislature of Ontario authorized the Select Committee on Economic 
Affairs to examine the issues related to bilateral trade between Canada and the 
United States and their possible implications for Ontario. In order to fulfill its 
mandate, the Select Committee on Economic Affairs held hearings in Toronto 
during July, August, September and early October 1985. The Select Committee 
also held hearings in Ottawa on August 28 and 29, in Kitchener-Waterloo on 
September 25 and in Sault Ste. Marie on September 26, 1985. Besides its public 
hearings, the Select Committee was briefed by officials of the Department of 
External Affairs in Ottawa. The Select Committee was in Washington, D.C. 
from September 9 to 13, 1985 and, while there, was briefed by officials of the 
Canadian Embassy, and held discussions with officials and staff of the United 
States Congress and Government, as well as some knowledgeable private 
individuals. 

The Select Committee on Economic Affairs wishes to thank the many witnesses 
who appeared before it. Their presentations exhibited a depth of research and 
preparation that has made an invaluable contribution to the Committee's 
understanding of the complex issues involved. 

The Committee also wishes to thank the following officials of the Ontario 
government and their respective support staff who informed the Committee and 
assisted throughout the deliberations: Mr. G. MacDonell, Deputy Minister of 
Industry, Trade and Technology; Dr. B. Purchase, Assistant Deputy Minister and 
Chief Economist, Ministry of Treasury and Economics; Mr. 3. Finlay, of the 
Ministry of Northern Affairs; Mr. K. Armson, of the Ministry of Natural 
Resources; Dr. C. Switzer, Deputy Minister of Agriculture and Food; and 
Mr. G. Posen, Deputy Minister of Intergovernmental Affairs. 

Officials of the Department of External Affairs Canada provided valuable 
information and advice to the Committee. The Committee wishes to thank 
Mr. W. Dymond and Mr. E. Hobson in Ottawa. Ambassador A. Gotlieb, and 
Counsellors Mr. 3. Wright and Mr. 3. St. Jacques of the Canadian Embassy in 
Washington, D.C, hosted the Committee and arranged fruitful discussions with 
officials of the United States Government. In addition, the Committee thanks 



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the Congressional Research Service and Ms 3. Lindley for their arrangements 
with the Congress. 

Finally, the Select Committee has been ably assisted by its staff and expresses 
its appreciation of them. The Committee's proceedings and its travels were 
administered in exemplary fashion by its Clerk, Douglas Arnott. Fernando 
Traficante, an economist with the Legislative Research Service, performed 
commendable service as the Committee's research officer; he provided 
background material and, pursuant to the Committee's instructions, assisted 
with the drafting of its Interim Report. 



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TABLE OF CONTENTS 

Page 

PREFACE i 

INTRODUCTION I 

THE TRADE DEBATE 3 

THE CONTEXT OF TRADE 9 

CANADA-UNITED STATES TRADE RELATIONS 13 

THE SELECT COMMITTEE'S FURTHER WORK 29 

LIST OF RECOMMENDATIONS 31 

APPENDIX A -Terms of Reference • 35 

APPENDIX B - Schedule of Hearings and Witnesses 39 

APPENDIX C - List of Exhibits 57 

APPENDIX D - Dissent: By New Democrats 77 



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INTRODUCTION 

Since the beginning of 1985, the nature of Canada's trading relations with the 
United States and the rest of the world has continually been under discussion. 
The Canadian Government has released several discussion papers on the 
subject. The Special Joint Committee on Canada's International Relations of 
the Parliament of Canada released an Interim Report which dealt with Canada's 
trade relations with the United States. On September 26, 1985, Prime Minister 
Mulroney announced that Canada would begin discussions with the United States 
on measures to reduce tariff and non-tariff barriers between the two countries. 

Ontario has a significant interest in trade. The province's exports on a per 
capita basis are the highest in the world, above the whole of Canada, West 
Germany, France, the United Kingdom, Japan and the United States. Exports 
were about forty percent of Ontario's total output in 1 984. Ontario's exports 
comprised about forty-nine percent of the nation's total exports in 1984; 
sixty-two percent of Canada's imports went to Ontario in that year. However, 
the province of Ontario has a growing deficit in its trade balance while Canada 
as a whole has a strong surplus. 

On July 10, 1985, the Legislature of Ontario empowered the Select Committee 
on Economic Affairs to examine and report on the appropriate bilateral trade 
options "consistent and pursuant to enhancing Canada's and Ontario's economic 
development and social-cultural-political advancement." The Select 
Committee has conducted hearings, examined witnesses, and held discussions 
with officials of the Ontario, Canadian and United States governments in order 
to make its deliberations as informed as possible. The following Interim Report 
to the Ontario Legislature and the recommendations contained are a record of 
its deliberations and its conclusions to this date. The Select Committee will be 
continuing its examination of these issues in greater detail during the coming 
months. 



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THE TRADE DERATE 



Disputes over the nature of Canada's trading relations have, at times, become 
acrimonious and difficult. There is a tremendous amount at stake. The early 
history and development of this country is the story of its changing patterns of 
trade. As the makeup of Canada's exports expanded and diversified, different 
parts of the country gained— or lost —the basis for their economic well-being. 
Distinct parts of Canada produce and export distinctly different products. 
What they cannot produce is imported, sometimes from other regions of the 
country, sometimes from other countries. 

Canada's production and its exports are divided between natural resources and 
manufactured goods. All of the provinces depend heavily upon the production 
and export of natural resources for their wealth and the standard of living of 
their people. No region of the country has been immune from the effects of the 
unstable commodity markets of the last decade. Rapid price increases 
internationally for some commodities, followed by years of depressed prices and 
volatile currency markets have resulted in an uneven pattern of economic life 
across the country. Although successive governments, nationally and 
provincially, have striven to reduce Canada's dependence on changeable 
commodity markets, many provinces and regions remain natural resource based 
and rely on export markets. 

Canada has built a large and, in some industries, internationally competitive 
manufacturing sector, which has placed the country among the major industrial 
nations. However, some industries—both in manufacturing and natural 
resources— rely on the existence of special protection for their products. These 
industries are disadvantaged by geographic, climatic and historical factors 
which are not easily reversed. The divisions in Canada's makeup are unlikely to 
be resolved by recourse to single-minded or simple solutions. The complex 
relationships between trade and economic well being, between natural resource 
and manufacturing industries, and between competitive needs and people's 
needs for productive, rewarding employment all place pressures on governments 
to take account of these differences. 

This heterogeneous profile of Canada is reproduced in the makeup of Ontario's 
society and economy. Communities and industries depend upon trade with the 



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rest of the country. Others are actively involved in importing or exporting 
internationally. Important segments of the province's economy have been built 
on trading with the United States. In 1984, the province's exports comprised 
fifty-eight percent of the value of Canada's exports to the United States and 
more than seventy-two percent of the nation's imports from there. 
Ontario-United States trade comprised almost ninety percent of total provincial 
exports and eighty-three percent of imports. 

At the same time, some portions of the provincial economy are relatively 
insulated from importing or exporting by high tariffs, by regulation, or by 
special organizational structures. These industries may never be capable of 
becoming active traders. Nor can they exist without some controls over their 
domestic market. In many instances, these industries are efficient within the 
confines of their activity but cannot become competitive internationally due to 
impediments of geography, climate or access to resources. Attempts to solve 
Canada's and Ontario's trade difficulties must deal with these kinds of 
industries in a sympathetic, responsive manner because these industries 
incorporate communities, people, skills, and social infrastructure that cannot be 
ignored. 

The Select Committee on Economic Affairs believes that the debate over 
Canada's trading relations needs to be clarified. Considerable confusion has 
arisen over whether the current debate in Canada is about obtaining a 
comprehensive bilateral free trade agreement with the United States, obtaining 
some form of trade enhancement agreement or holding trade discussions in 
order to deal with existing trade irritants. 

As a result of its hearings, the Committee believes that a comprehensive 
bilateral free trade agreement with the United States is neither achievable nor 
realistic. This belief is based upon what comprehensive free trade means. The 
Committee's understanding is that a comprehensive free trade agreement would 
mean the complete removal of all tariff and non-tariff barriers to trade from 
all sectors of the economy. Further, it would mean that both countries would 
have to ensure that no non-tariff barriers be put in place in future. 

There are two significant problems with comprehensive free trade. One 
problem stems from the question of how non-tariff barriers would be dealt 



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with. Almost any governmental activity affecting the economy—such as 
industrial subsidies, social programs, regional development assistance and 
cultural policies— can be defined as a non-tariff barrier. Although non-tariff 
barriers to trade should be reduced, their elimination is, in fact, impossible. No 
government can be expected to abrogate its right to use whatever means it sees 
fit in order to ensure a viable economy for its people. A second problem stems 
from the "comprehensive" nature of the agreement that some have put 
forward. The Committee believes that the uniform treatment for all industries 
in any trade liberalization program is inappropriate. Some industries have 
special problems or distinct institutional structures that must be accounted for. 

Since the Select Committee feels that a comprehensive free trade agreement 
for Canada and the United States could lead to the weakening of our distinct 
cultural, social and economic programs, it is not a desirable goal for any trade 
discussions. This does not mean that there is no scope for expanding trade by 
removing barriers that restrict trade between countries. There are merits in 
trade agreements that are as broadly based as possible. But any trade 
agreements between Canada and other nations that do not deal with the 
specific differences among the industries and regions in this country may 
aggravate disparities, and lead to severe economic and social problems. 

The body of the Interim Report will deal with the issues that arise from a 
possible agreement to enhance trade or to establish a mechanism for solving 
trade irritants. 



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THE CONTEXT OF TRADE 

The Canadian economy has recently come out of the most severe international 
recession since the Great Depression in the 1930s. Expansion of Canada's 
exports to the United States, particularly automotive exports, proved to be the 
impetus which ended the recession here. This fact is not surprising since the 
United States is both our nearest neighbour and the most significant economy in 
the world. After more than a decade of instability, an economic recovery that 
is so tied to the well-being of the United States remains extremely fragile. 
Since 1982, both Canada and the province of Ontario have improved their 
merchandise trade balances with the United States, although Ontario's balance 
remains in deficit. Simultaneously, both the country and the province have 
experienced a deterioration in trade balances with virtually all other parts of 
the world. This may be due to changes in relative exchange rates. Canada's 
products are cheaper in the United States than they were previously while they 
are more expensive elsewhere. The relatively high United States dollar may be 
a temporary phenomenon. If so, and if Canada's currency declines relative to 
countries other than the United States, our trade balances with these other 
countries could be improved and need not suffer permanent decline. But the 
continuation of Canada's favourable trade balance with the United States will 
depend, in large measure, on the relative values of the two currencies. 

The General Agreement on Tariffs and Trade (GATT) has been the primary 
mechanism that nations have used to reduce tariff barriers since 1947. 
Successive rounds of GATT tariff reductions have been accompanied by 
dramatic increases in the volume of world trade and by prosperity 
internationally. The most recent round of tariff reduction agreed to in Tokyo 
began in 1980 and will be fully in place in 1987. At that time, more than eighty 
percent of Canada's exports to the United States will be duty free and 
sixty-five percent of the United States' exports to Canada will be duty free. 
Although some tariffs of about twenty percent will remain, Canada's overall 
incidence of tariff will be between four and five percent. 

Further tariff reductions using the GATT are likely to be difficult to achieve 
given the diversity of national interests that are at stake. But it is important 
that Canadian and provincial governments bear in mind that Canada is an 



- 10 - 



international trading nation and not simply a North American trading nation. 
Any potential for expanding our trade with other countries exists only if Canada 
and Ontario work seriously to enhance our trade with our traditional trading 
partners and seek to establish firm trade relations with countries that are now 
beginning to trade. The GATT system of multilateral trade negotiations has 
proven itself to be a successful forum for dealing with complex trade issues, 
although the system is often cumbersome and negotiations are often difficult. 
The greatest potential for diversifying Canada's trade lies with multilateral 
negotiations under the GATT system. The Committee believes that these 
negotiations are compatible with trade discussions with the United States. 

Recommendations 

It is recommended that: 



1. The Government of Ontario should encourage the 
Government of Canada to engage in efforts to 
reduce impediments to trade internationally through 
the General Agreement on Tariffs and Trade. 

2. The Government of Ontario should make greater 
efforts to expand and diversify our trading 
relationships with other countries. 



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Producing goods for international trade has not been the sole thrust of Canada's 
economic development. Trade within this country is at least as important. 
Flows of goods and services are from the east to the west as well as from the 
west to the east, crossing provinces and regions. Provincial governments have 
frequently sought to diversify their economies by establishing restraints to the 
movement of goods and services from other provinces. Many of these restraints 
are a legitimate exercise of powers provided in the Constitution. Examples of 
the restraints can be found in provincial content rules for government 
procurement, in subsidy programs that restrict employment of people from 
other provinces, and in provincial production rules for the brewing industry. 
The intention of these programs and policies is to ensure a range of industry 
within each province. Put the frequent consequence has been the development 
of small producers who are restricted to a limited market. These producers, 
while they may be efficient within their market, lack the resources to compete 
internationally. 

As tariffs decline with the implementation of the Tokyo Round of GATT, and if 
tariff and non-tariff barriers internationally are reduced further, Canadian 
firms restricted to provincial markets will be disadvantaged. The Committee 
heard from witnesses that significant restructuring must occur within Canada 
to create efficient international trading companies. The Committee believes 
that provinces should begin to eliminate their restrictions on goods and services 
from other provinces. The issue has such potentially serious consequences that, 
perhaps, Canadian participation in discussions to reduce international trade 
barriers should be premised on discussions to reduce provincial barriers. 

Recommendations 

It is recommended that: 



3. Interprovincial barriers to trade should be reduced 
in conjunction with any agreement to reduce 
barriers between Canada and the United States. 

4. Discussions should begin immediately to reduce 
interprovincial barriers to trade regardless of any 
bilateral action. 



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CANADA-UNITED STATES TRADE RELATIONS 

The significance of Canada's and Ontario's trading relationships with the United 
States is so great that people frequently forget the numerous factors that must 
he kept in halance. Trade is intimately tied into political, social and cultural 
institutions on hoth sides of the border. Stable, secure and expanding trade is 
an important concern for many industries, communities and regions. Although 
Canada and Ontario are more dependent upon trade with the United States than 
the United States is with us, many parts of that country rely heavily upon 
Canadian trade. 

The mutual dependence that exists between our two nations is unique. It cuts 
across regions, provinces and states. Recent protectionist sentiment in the 
United States may jeopardize some sectors of our trade with them. Actions by 
governments on either side of the border that can restrict trade flows are likely 
to harm the economies of both countries. Actions that improve the political 
climate for trade are likely to improve the performance of both economies. 
For this reason, the Committee believes that efforts must be made to respond 
to concerns expressed in the United States over the fairness of Canada's trading 
relations. 

Recommendations 

It is recommended that: 



5. Given the Government of Canada's initiative to 
begin trade discussions with the United States 
Government, the goal of these talks should be to 
reduce or eliminate barriers to trade between our 
two countries in a mutually beneficial manner. 

6. Any discussions should be a forum for reinforcing 
the good trade relationship that has historically 
existed between Canada and the United States, and 
for clarifying the fact that Canada has consistently 
been a fair trader in the United States market. 



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The Canadian federation places the powers of legislation and regulation of 
important parts of the economy under provincial jurisdiction. Some segments 
are exclusively under provincial control, such as the distribution of alcoholic 
beverages and the licensing of professional service activities. Others, such as 
financial services industries, are under mixed federal -provincial jurisdiction, 
with each government regulating portions of the industry and sharing regulation 
of other portions. Any results from trade discussions with the United States are 
likely to require the implementation of adjustment programs in areas of the 
economy where provincial governments are presently active. Although the 
Canadian Government has sole jurisdiction over international trade, provincial 
participation in trade discussions is required in order to inform the Canadian 
Government of the provinces' concerns on an ongoing basis, especially over 
matters where they have constitutional authority. 

Recommendation 

It is recommended that: 



7. The Government of Ontario should be involved in 
any trade discussion where matters of provincial 
jurisdiction or interest are under consideration. 



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Although the issue of negotiating some form of trade agreement has been under 
discussion in Canada for some time, much of the study of the possible 
consequences for Canada has focussed on the effects on the economy as a 
whole. A considerable number of witnesses before the committee expressed 
serious concerns that Canada's trading relations — domestically and 
bilaterally — could be altered by a trade agreement in a way which could be 
disasterous for particular industries. Some industry representatives felt that, 
even though they were efficient producers of goods within Canada, they would 
remain uncompetitive with foreign based firms because of higher costs due to 
Canada's geography and climate, or their capital structure and relatively small 
size, or any number of other significant factors. At the same time, other 
industries felt that they would have few problems adjusting to increased 
Canada-United States trade. 

Recommendation 

It is recommended that: 



8. Before any formal trade negotiations occur, the 
Canadian Government and the Government of 
Ontario should undertake detailed analyses of the 
possible consequences of bilateral trade 
enhancement, paying special attention to the 
effects on particular industries and communities, in 
order to ensure that no industry is inadvertently 
disadvantaged. 



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The Committee has heard representations from a wide spectrum of people who, 
in presenting their own or their organization's position on bilateral trade 
relations with the United States, raised concerns over the effect on Canada's 
sovereignty of a comprehensive bilateral trade arrangement. These worries are 
so fundamental that they cannot be discounted. While our two countries have a 
long tradition of close relations, there cannot be any assurance that the 
interests of both countries will be identical. There have been disagreements 
and there will continue to be disagreements so long as Canada remains a 
sovereign nation. Any formal agreement that a nation makes with another 
impinges upon its freedom of action in those areas covered by the agreement. 
A bilateral trade agreement can severely impinge upon a nation's sovereignty 
by its nature as an economic agreement which has consequences beyond the 
purely trade areas directly dealt with. It is for this reason that the Committee 
does not favour a comprehensive bilateral free trade agreement as previously 
defined. Rut discussions to expand and improve Canada's trade relations with 
the United States have begun and such discussions can have beneficial 
consequences for our two economies. These discussions and possible trade 
agreements need not severely restrict Canada's independence if proper 
guarantees and safeguard measures are in place. 

Recommendation 

It is recommended that: 



9. Any discussions and possible agreements on trade 
between Canada and the United States should 
provide assurances that Canada's position as a 
sovereign, independent state will not be impinged 
upon. 



20 - 



Measures and guarantees which assure sovereignty need to be specific about 
Canada's interests in assuring a balanced economy which can provide Canadians 
with the means of obtaining a good Jiving. Historically, Canadian governments 
have taken action in order to even out disparities caused by distances or lack of 
resources. The Committee believes that the United States Government has no 
intention of interfering with Canada's rights to maintain independent policies 
and positions, or with Canada's ability to do so. But different institutions and 
traditions of government may not make the United States sensitive to Canadian 
concerns. This can be shown by occasional criticism made of Canadian policies 
by individuals or organizations in the United States. Some criticism may be 
well placed. Some critics simply fail to understand the fundamental differences 
between our two countries. One cannot expect the United States Government 
to defend Canada's interests; Canada must do so. 

Recommendations 

It is recommended that: 



10. It is imperative that the Canadian Government 
guarantee that we do not compromise our social, 
cultural, regional and linguistic heritage in any 
trade discussions with the United States. This 
heritage includes, but is not limited to, government 
programs such as the Medicare system; pension and 
social security programs; the system of Workers' 
Compensation Boards; National Unemployment 
Insurance; regional development programs; and 
protection for Canadian content in the nation's 
media. 

11. Any discussions and possible agreements should 
specifically protect Canada's continuing right to 
unique social, cultural and economic policies and 
programs based on its own distinct needs. 



-21 - 



Some witnesses before the Committee have expressed strong concerns over the 
mood of protectionism which has recently grown in the United States. These 
witnesses argued that much of Canada's present trade with that country can be 
threatened by any legislative or administrative measures there that establish 
barriers to trade. Measures designed to deal with another country's unfair 
trading practises with the United States could inadvertently harm Canadian 
trade. 

The United States Constitution distributes powers among three bodies in the 
Federal Government and two levels of government. In addition, over the years 
a number of semi-autonomous tribunals have been established through 
legislation. Jurisdiction for international trade matters lies with the Congress, 
although Congress delegates authority to the President. This particular division 
of powers—different from Canada's distribution of powers — permits the 
establishment of numerous arenas for dealing with trade issues. Recently, 
individual industries and political representatives in the United States have 
raised objections to the level of Canadian imports. Complaints have been made 
that Canada unfairly subsidises its industries. To date, concerted action by 
Canada's representatives there, by Canadian industries, by labour and by 
provincial governments has prevented the implementation of harmful measures. 

Witnesses before the Committee have shown how these complaints over 
Canada's economic and social policies and programs are not justified. Often 
the criticism is based upon a lack of awareness of the distinct traditions of 
government in Canada. Often the criticism arises from their use of different 
types of government programs to provide assistance to industry or to people. 
Neither government would willingly give up its ability to intervene in its 
economy as it sees fit. High levels of Canada-United States trade will continue 
so disputes over government activity are likely to continue to arise. The 
Committee believes that some mechanisms can be established to deal with 
these trade disputes in a fair manner. Disputes should be equitably solved 
before they do serious harm to relations between our two countries. 



-22 - 



Recommendations 



It is recommended that: 



12. In order to resolve the contentious trade issues 
between Canada and the United States, discussions 
between the two countries should settle the 
problems arising from tariffs, non-tariff barriers 
and government subsidies, and should determine 
which are legitimate, bearing in mind that Canada 
and the United States have distinct traditions, 
including different approaches to the governmental 
management of economic activity. 

13. An international joint trade commission should be 
set up to arbitrate trade disputes that arise between 
Canada and the United States. This commission 
should be organized regardless of the outcome of 
any trade enhancement negotiations. 



-23 - 



Efforts to resolve trade disputes should not be left solely to the Canadian 
Government. In the past, involvement by the affected industries—both labour 
and management — and by provincial governments was required to inform United 
States legislators of Canadian concerns. Even those in Washington, D.C. who 
are knowledgeable about Canada are often unaware of the interdependence of 
our two economies. This lack of knowledge is not a result of the inabilities of 
Canada's representatives there. The Canadian Government has some extremely 
proficient people looking after Canada's interests in Washington, D.C. Rather, 
the problem arises from the scope of our trade, and the size and makeup of the 
United States Government. Numerous people are involved in the policymaking 
and arbitration processes in the United States. Other governments from around 
the world are making extraordinary efforts to bring their interests forward. 
Therefore, the Committee believes a presence in Washington by the Ontario 
Government would be a valuable addition to Canada's trade activities. 

It is important for the province's economic well-being for the Ontario 
Government to promote the province's exports more effectively. It is equally 
important for the Ontario Government to assist exporters to present their 
interests more effectively to the United States Government and its legislators. 
Ontario has trade representatives in six United States cities but not in that 
nation's capital. Furthermore, Ontario has an officially designated Ontario 
House in London and in Paris. There has been official Ontario representation in 
London since before Confederation and an Ontario House was opened there in 
1945. This was appropriate given the fact that the United Kingdom was 
Ontario's principal trading partner; it continues to be appropriate due to the 
continuing economic, social and cultural ties that exist. Since Ontario's trading 
patterns have shifted in the twentieth century to a North American focus, the 
Committee believes that this fact should be recognized by including 
Washington, D.C. in the province's trade representation to the United States. 
Whether this is best achieved by adding another office to Ontario's current 
level of representation or by moving an existing office is a matter for the 
Government to decide. 



-24 - 



Recommendation 



It is recommended that: 



14. The Government of Ontario should establish an 
Ontario House in Washington, D.C. in order to assist 
Ontario exporters develop— in cooperation with the 
Government of Canada—a greater means of 
communicating their trade concerns with the United 
States Government and legislators. 



-25 



The Committee heard from representatives of the automobile industry that 
they had serious worries that comprehensive trade negotiations might 
jeopardize existing trade agreements between Canada and the United States, 
such as the Autopact. They fear that the United States administration would 
ask that this agreement be renegotiated as a condition for holding more 
extensive trade discussions. Serious consequences can occur for the province's 
economy if the provisions in the Autopact which guarantee a share of Canadian 
automobile production were eliminated. The automobile industry is a 
significant exporter to the United States in a rationalized North American 
automobile manufacturing system. At times during the life of the Autopact, 
Canada had a deficit in North American automobile trade. Canada now has a 
surplus in trade of assembled automobiles and a continuing deficit in autombile 
parts trade. The automotive parts industry— which is not formally a component 
of the Autopact— has undergone difficult restructuring in order to serve its 
customers better. While there are continuing problems with the Autopact, the 
Committee believes that it has served Canada extremely well. Any bilateral 
trade discussions, or negotiations should they arise, must recognize the 
importance of this industry to Canada and Ontario. 

Recommendations 

It is recommended that: 



15. Existing trade arrangements previously agreed to 
between Canada and the United States— such as the 
Autopact and the Defence Production Sharing 
Agreement— should not be prejudiced by any future 
bilateral trade arrangements. 

16. A trade agreement such as the Autopact, which 
embodies safeguards and requires companies to 
provide Canadian value added, is a model agreement 
that should be pursued. 



-26 - 



The agricultural sector is not protected by any existing bilateral agreement but 
the Committee believes that it, too, is a special case. Climate and soil 
conditions will keep Ontario's agriculture less productive than comparable 
producers in the United States. Canada has developed unique institutions which 
manage the supply of some agricultural products produced and marketed 
domestically. Marketing boards do not exist for all products but they do for 
some significant ones. Governments have instituted numerous subsidy programs 
and special protection for agriculture. There are two broad goals to this 
government activity: Canadian governments wish to ensure that this country 
will continue to produce as much of its food as possible within the given 
geographic limitations; and Canadians wish to preserve the values that are 
embodied in the family farm. Both of these goals could be endangered if United 
States imports of agricultural products were granted unrestricted access to the 
Canadian market. 

R eco m m endat ion 

It is recommended that: 



17. The agricultural sector should not be on the agenda 
for any trade discussions. 



- 27 



A trade agreement or treaty between Canada and the United States that deals 
with trade disputes and seeks to expand bilateral trade may dictate the 
restructuring of some industries. The Committee thinks that whatever is 
agreed to by Canada and the United States probably will require that industrial, 
social and employment adjustments take place. Some time may be needed to 
reduce any harm that could occur. This would undoubtedly mean that all levels 
of government allocate sufficient funds in order to augment existing adjustment 
programs and to initiate specific programs to deal with special problems that 
might arise. 

Recommendations 

It is recommended that: 



18. A bilateral trade agreement should have an 
appropriate phasing-in period where required in 
order to permit business, government and, indeed, 
all facets of society the opportunity to minimize 
any disruption to industries and people. 

19. Governments should initiate programs to allow for 
the employment, training, geographic relocation and 
social needs of people adversely affected by any 
trade arrangements. 



-28 - 



Whatever adjustment programs are put in place cannot properly deal with 
whatever changes may be initiated by a trade agreement in isolation from the 
dynamics of the broader international economy and the adjustments required by 
rapid technological change. Improved international competitiveness is 
required. At the same time, the integrity of Ontario's high standard of living 
must be assured. The Committee believes it would be inappropriate for Canada 
to compete with low wage countries by lowering domestic wages or weakening 
our social programs. Competitive products can be produced in Ontario by using 
our developed industries and skills. Fluctuating international commodity 
markets, unstable prices, the development of new products that render whole 
industries obsolete and changing consumer tastes all necessitate a more 
concerted effort to be competitive. 

Recommendation 

It is recommended that: 



20. In cooperation with industry and labour, the 
Government of Ontario should develop the 
competitiveness of the province's economy through 
greater support for: research and development; the 
technological upgrading of the manufacturing 
industries; improved skills training oriented to new 
technologies; and the building of technologically 
advanced industries. These efforts to enhance the 
productivity and competitiveness of the province's 
economy should firmly place expanding trade as a 
priority in a broad economic policy framework. 



-29 



THE SELECT COMMITTEE'S FURTHER WORK 

The Select Committee on Economic Affairs has spent over three months looking 
at the question of Ontario's trade options, focussing particularly on 
Canada-United States trade. To date, the Committee has concentrated 
primarily on the general questions that have developed over enhancing and 
securing existing markets in the United States. Numerous specific problems 
have been pointed out as requiring further study. Questions have been raised 
that there simply was not sufficient time to deal with. The Committee intends 
to try to answer some of these questions and to learn how Ontario can cope 
with some of its economic problems. The Committee found that there was 
insufficient information on how the province's industries would adjust to 
reduced trade barriers. Four research projects were commissioned in an effort 
to obtain the specific information the Committee requires in order to 
investigate these problems. The Committee expects they will be completed by 
earlv 1986. Meanwhile, the Committee will proceed with further hearings and 
discussions. 

In order to fulfill its terms of reference, the Select Committee on Economic 
Affairs will investigate numerous problems and questions in the coming months, 
including the following: 

1. The Committee wishes to speak with representatives of some of the 
manufacturing industries it has not yet heard from, such as textile, shoe 
and clothing industries, and with mining and natural resource industries. 

2. Many witnesses spoke of the prospects of expanding service trade. The 
Committee wishes to examine the potential of increased trade in services 
and the implications in detail of reduced barriers to service trade. 

3. Legitimate cultural concerns must be preserved in any trade 
liberalization. The Committee wishes to clarify what would be involved 
since cultural guarantees are incorporated in a range of legislation and 
regulations affecting businesses and arts organizations. 



-30 - 



4. Reducing or eliminating tariffs and non-tariff barriers could alter the 
original motivation many multinational firms had for establishing 
Canadian subsidiaries. The Committee wishes to investigate the 
operational differences among Canadian firms, United States-owned 
firms, and non-U. S. foreign-owned firms, and how they would react to 
lower barriers, especially how investment decisions could be affected. 

5. Many recent differences with the United States have developed over their 
countervail actions. To clarify the question of appropriate government 
subsidies, the Committee will look into the comparative level of subsidies 
in Ontario and in some U.S. states, and the effects of countervail actions 
upon Canada. 

6. The Committee will look at the growth and trade potential of Ontario's 
technology industries, and how these might be affected by reduced trade 
barriers. 

7. Adjustment programs will be looked at, as will the posture of the 
Canadian Government regarding these adjustment programs. 

8. The Committee will examine the interprovincial barriers to trade. 

9. The Committee will look more closely than it has been able to at trading 
options with countries other than the United States. 



-31 



LIST OF RECOMMENDATIONS 



Your Select Committee on Economic Affairs recommends that: 



1. The Government of Ontario should encourage the 
Government of Canada to engage in efforts to 
reduce impediments to trade internationally through 
the General Agreement on Tariffs and Trade. 

2. The Government of Ontario should make greater 
efforts to expand and diversify our trading 
relationships with other countries. 

3. Interprovincial barriers to trade should be reduced 
in conjunction with any agreement to reduce 
barriers between Canada and the United States. 

k. Discussions should begin immediately to reduce 
interprovincial barriers to trade regardless of any 
bilateral action. 

5. Given the Government of Canada's initiative to 
begin trade discussions with the United States 
Government, the goal of these talks should be to 
reduce or eliminate barriers to trade between our 
two countries in a mutually beneficial manner. 

6. Any discussions should be a forum for reinforcing 
the good trade relationship that has historically 
existed between Canada and the United States, and 
for clarifying the fact that Canada has consistently 
been a fair trader in the United States market. 

7. The Government of Ontario should be involved in 
any trade discussions where matters of provincial 
jurisdiction or interest are under consideration. 

8. Before any formal trade negotiations occur, the 
Canadian Government and the Government of 
Ontario should undertake detailed analyses of the 
possible consequences of bilateral trade 
enhancement, paying special attention to the 
effects on particular industries and communities, in 
order to ensure that no industry is inadvertently 
disadvantaged. 

9. Any discussions a«d possible agreements on trade 
between Canada and the United States should 
provide assurances that Canada's position as a 
sovereign, independent state will not be impinged 
upon. 



-32 - 



10. It is imperative that the Canadian Government 
guarantee that we do not compromise our social, 
cultural, regional and linguistic heritage in any 
trade discussions with the United States. This 
heritage includes, but is not limited to, government 
programs such as the Medicare system; pension and 
social security programs; the system of Workers' 
Compensation Boards; National Unemployment 
Insurance; regional development programs; and 
protection for Canadian content in the nation's 
media. 

11. Any discussions and possible agreements should 
specifically protect Canada's continuing right to 
unique social, cultural and economic policies and 
programs based on its own distinct needs. 

12. In order to resolve the contentious trade issues 
between Canada and the United States, discussions 
between the two countries should settle the 
problems arising from tariffs, non-tariff barriers 
and government subsidies, and should determine 
which are legitimate, bearing in mind that Canada 
and the United States have distinct traditions, 
including different approaches to the governmental 
management of economic activity. 

13. An international joint trade commission should be 
set up to arbitrate trade disputes that arise between 
Canada and the United States. This commission 
should be organized regardless of the outcome of 
any trade enhancement negotiations. 

14. The Government of Ontario should establish an 
Ontario House in Washington, D.C. in order to assist 
Ontario exporters develop - in cooperation with the 
Government of Canada - a greater means of 
communicating their trade concerns with the United 
States Government and legislators. 

15. Existing trade arrangements previously agreed to 
between Canada and the United States— such as the 
Autopact and the Defence Production Sharing 
Agreement— should not be prejudiced by any future 
bilateral trade arrangements. 

16. A trade agreement such as the Autopact, which 
embodies safeguards and requires companies to 
provide Canadian value added, is a model agreement 
that should be pursued. 

17. The agricultural sector should not be on the agenda 
for any trade discussions. 



-33 



18. A bilateral trade agreement should have an 
appropriate phasing-in period where required in 
order to permit business, government and, indeed, 
all facets of society the opportunity to minimize 
any disruption to industries and people. 

19. Governments should initiate programs to allow for 
the employment, training, geographic relocation and 
social needs of people adversely affected by any 
trade arrangements. 

20. In cooperation with industry and labour, the 
Government of Ontario should develop the 
competitiveness of the province's economy through 
greater support for: research and development; the 
technological upgrading of the manufacturing 
industries; improved skills training oriented to new 
technologies; and the building of technologically 
advanced industries. These efforts to enhance the 
productivity and competitiveness of the province's 
economy should firmly place expanding trade as a 
priority in a broad economic policy framework. 



-34 - 



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APPENDIX A 

-35- 



TERMS OF REFERENCE 

Votes and Proceedings No. 18 

Wednesday, July 10, 1985, pp. 94-96 



The following Select Committee be established for this Session or otherwise as 
indicated, with power to examine and inquire into all such matters as may be 
referred to them by the House, with power to send for persons, papers and 
things, as provided in section 35 of the Legislative Assembly Act; 



Select Committee on Economic Affairs - 11 members, with 5 from the 
Government Party, k from the Official Opposition Party and 2 from the 
Third Party, to examine and report to the House on an interim basis within 
three months, and on a final basis within one calendar year, on: 

(a) the appropriate bilateral trade options that are both consistent and 
pursuant to enhancing Canada's and Ontario's economic development 
and socio-cultural-political advancement, including considerations of: 

improving the competitiveness of the Canadian and specifically 
the Ontario economy 

creating greater and better job opportunities for Ontarians of 
all ages 

increasing value-added and resource processing in Canadian and 
specifically Ontario industries 

securing and enhancing access to the U.S. market for Ontario's 
manufacturers, resource products, and services 

promoting and furthering Ontario's regional development 

ensuring control of Ontario resources by the people of Ontario 

promoting Canadian ownership of industries producing and/or 
marketing in Canada 

promoting Canadian content in products which are major 
imports into Canada 

providing Ontario consumers with access to a wide range of 
products at reasonable prices 

stimulating capital and technological investment in Canada and 
in Ontario in particular 

strengthening Canada's and Ontario's relationships with its 
other trading partners 

promoting the standard of living and social progress of 
Canadians and Ontarians in particular, and the ability of all 
people of Ontario to participate in increased economic 
prosperity 



-36- 



providing a positive environment for Canadians and for 
Ontarians in particular to further advance their political-socio- 
economic development and to promote the well-being of each 
individual Ontario resident. 

(b) the appropriate considerations and factors which are integral to the 
evaluation of the advantages and disadvantages of negotiating a 
Canada-U.S. bilateral trade agreement, including considerations on: 

the impact, in the short term and the medium term, of 
removing barriers to bilateral trade on Ontario economic 
activity and employment, and the desirability of introducing 
policies to aid and assist firms, workers and regions in Ontario 
during the transition period as well as to exploit the 
opportunities created by secured and enhanced access to the 
U.S. market 

the impact of a bilateral trade agreement on the structure of 
and the level as competition of Ontario industries, and the 
operations of a Canadian- and foreign-owned enterprises 

the impact of a bilateral trade agreement on individual Ontario 
communities, particularly those which are heavily dependent on 
one industry 

the impact of a bilateral trade agreement on current economic 
growth and employment and future economic growth and 
employment in Ontario in particular 

the impact on investment in production facilities, capital 
equipment and research and development by Canadian-and 
foreign-owned enterprises 

the implications for current federal-provincial arrangements in 
economic, social, and cultural policy areas 

the implications for labour and labour markets, including skilled 
labour requirements and retraining programs 

the implications for Canadian-sovereignty and federal- 
provincial relations 

the implications for Canadian and related Ontario domestic 
policies in areas such as fiscal, tax, financial, cultural, 
employment and social policy areas 

the implications for Canada's and Ontario's trade relations with 
its other major trading partners 

the implications for labour laws and environmental standards 

an evaluation of the likely issues which the United States would 
want to have resolved as part of a Canada-U.S. trade 
agreement, including such things as foreign investment policy, 
policies affecting the service and financial sectors and so on. 



- 37 - 



(c) the appropriate goals and objectives for entering bilateral trade 
negotiations with the United States, including considerations of: 

how existing Ontario jobs will be protected in all sectors 

how economic growth in Canada can be stimulated so as to 
provide the maximum number of new jobs in Ontario 

whether to seek negotiations in a comprehensive sector or 
functional or sectoral basis 

the need for Canadian content requirements on all major 
imports into Canada 

the rules to govern the use of non-tariff measures such as 
government procurement and in the United States and Canada 
as they affect bilateral trade and Ontario's direct interests and 
their complimentarity to the GATT rules where they exist 

which trade importing measures, and which industries, might 
warrant consideration of exclusion from bilateral trade 
negotiations 

likely assurances that Canada will not be restricted from 
adopting policies which would encourage the development of 
Canadian-owned industry 

desirable transition measures and safeguards to be included in 
any bilateral trade agreement to ensure an orderly adjustment 
of economic activity in the interests of Ontario and the full 
realization of the benefits secured and enhanced access to the 
U.S. market 

the appropriate time-frame for implementing any negotiated 
agreement 

the appropriate negotiating structures in the two countries 
including Ontario's role 

the appropriate structures for consultations with, and 
participation by, the provinces, private sector, and other groups 

the appropriate mechanisms and bilateral institutions for 
dispute resolution and monitoring of compliance of 
commitments 

the appropriate form and means of implementation into Ontario 
legislation of the commitments under a new bilateral 
agreement. 

And that the Select Committee have authority to sit during adjournments 
and the interval between sessions and have full power to employ such staff 
as it deems necessary and to hold meetings and hearings in such places as 
the Committee may deem advisable, subject to budget approval from the 
Board of Internal Economy. 



-38- 



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APPENDIX B 

-39- 



SELECT COMMITTEE ON ECONOMIC AFFAIRS 

ONTARIO TRADE REVIEW 

Schedule of Hearings and Witnesses 

July - October 1985 



Tuesday, 23 July 1985 



10:00 a.m. Ministry of Industry, Trade and Technology: 

George S. MacDonell 
Deputy Minister 



2:00 p.m. Ministry of Industry, Trade and Technology 



Wednesday, 2fr July 1985 



10:00 a.m. Ministry of Treasury and Economics: 

Dr. Bryne B. Purchase 
Assistant Deputy Minister and 
Chief Economist 

David Trick 
Executive Assistant 

Doug Welwood 
Senior Policy Advisor 

Dr. Ron Saunders 
Senior Economist 



1:30 p.m. Ministry of Treasury and Economics 



Thursday, 25 July 1985 



-40- 



10:00 a.m. 



Prof. Ron Wonnacott 

University of Western Ontario 



1:30 p.m. 



Ministry of Northern Affairs and Mines: 
David Hobbs 
Deputy Minister 

James Finlay 
Executive Coordinator 
Mineral Resources Group 

Dr. T. Mohide 

Director 

Mineral Resources Group 

Dr. Gerry Anders 
Senior Policy Advisor 
Metallic Mineral Section 

Bill Stevenson 

Director 

Strategic Planning Secretariat 



Monday, 29 July 1985 



10:00 a.m. 



Ministry of Natural Resources: 
Kenneth Armson 
Executive Coordinator 
Forest Resources Group 

Bill Wardle 

Industrial Liaison Officer 

Forest Resources Group 



2:00 p.m. 



Prof. Stephen Clarkson 
University of Toronto 



-41 - 



Tuesday, 30 July 1985 



2:00 p.m. Frank Stone 

Institute for Research on Public Policy 



Wednesday, 31 July 1985 



10:00 a.m. Ontario Federation of Labour: 

Clifford Pilkey 
President 

Don Holder 
Vice-President 

John Eleen 
Director of Research 

Jo Surich 

Resource Coordinator 



2:00 p.m. Prof. Mel Watkins 

University of Toronto 



Thursday, 1 August 1985 



10:00 a.m. Canadian Manufacturers' Association: 

Laurent Thibault 
President 

Paul Kovacs 
Chief Economist 

Tommy Thompson 
Chairman 
Ontario Division 



-42- 



2:00 p.m. Ministry of Agriculture and Food: 

Dr. Clayton Switzer 
Deputy Minister 

Dr. George Collin 
Assistant Deputy Minister 

Brian Slemko 

Director 

Food Processing Branch 

Grahame Richards 

Director 

Market Development Branch 

Bob Seguin 

Senior Policy Advisor 

Richard Caine 
Policy Advisor 

David Thompson 
Policy Advisor 



Monday, 19 August 1985 
10:00 a.m. 



- 



: 



1. 


Automotive Parts Manufacturers' Association 
Patrick Lavelle 
President 




Morley Bursey 
Executive Director 


2. 


Alan Heisey 


2:00 p.m. 




1. 


Prof. Fred Lazar, 
York University. 



: 



- '43 - 



Connaught Laboratories Ltd: 
Alun Davies 
President 

R. Robert Binnerts 

Director of Technology Transfer 

3ohn Kieran 
Consultant 



Tuesday, 20 August 1983 
10:00 a.m. 



Retail Council of Canada: 
Alasdair McKichan 
President 

Gerry Doucet 
Senior Vice-President 



2. Communist Party of Canada: 

Gordon Vlassie 
Ontario Leader 

John Maclennan 
Ontario Organizer 



2:00 p.m. Boxboard Industry: 

Duncan Campbell 



General Manager - Marketing and Sales 
Paperboard Industries Corporation 
Trent Valley Paperboard Mills Division 

Mike Bailey 

Director - Marketing and Business Development 

Keycorp Industries Limited 

W. Earl Riddolls 

President 

Strathcona Paper Company 



- w - 



Wednesday, 21 August 1985 



10:00 a.m. Board of Trade of Metropolitan Toronto: 

James H. Bursey 

Member, International Trade Committee 
and President, Bursey International Limited 



2:00 p.m. Prof. Richard Lipsey 

CD. Howe Institute 



Thursday, 22 August 1985 



I 
I 
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10:00 a.m. 










1. 








Lisa Bajor 


[ 


2. 








C.W.J. Atkinson 


[ 


2:00 p.m. 








Jack H. Warren 
Vice-Chairman 
Bank of Montreal 

Former Canadian diplomat and participant in GATT 
negotiations 


- 

i 

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Monday, 26 


A 


jgust 


1985 




: 



10:00 a.m. United Electrical Radio and Machine 

Workers of Canada: 
Dick Barry 
National President 

James Turk 
Research Director 



2:00 p.m. Ontario Federation of Agriculture: 

Harry Pelissero 
President 



- 45 



Brigid Pyke 

First Vice-President 

Jack Wilkinson 
Second Vice-President 

Cecil Bradley 

Manager, Economic Research 

Tess Malolos 

Director, Communications 



Tuesday, 27 August 1985 



10:00 a.m. United Steelworkers of America 

Canadian National Office: 
Gerard Docquier 
National Director 



2:00 p.m. Prof. John Crispo 

University of Toronto 



Wednesday, 28 August 1985 Ottawa 



2:00 p.m. Economic Council of Canada: 

Peter M. Cornell 
Director 

Paul Gorecki 
Economist 

Elizabeth Gulyas 

Executive Assistant to the Chairman 

John Knubley 
Economist 



- 46 



Thursday, 29 August 1985 Ottawa 



10:00 a.m. Department of External Affairs: 

W. A. Dymond 

Senior Advisor and Coordinator 
Canada/U.S. Trade Task Force 

Michael Hart 
Special Advisor 
Canada/U.S. Trade Relations 

Germain Denis 

Chairman, Task Force on Multilateral 

Trade Negotiations 

Ted Hobson 

Federal /Provincial Focal Point 
Canada/U.S. Trade Relations and 
Multilateral Trade Negotiations 



Department of Finance: 
Bob Martin 
Director, International Economic Relations 



2:30 p.m. Canadian Export Association: 

Frank Petrie 
President 



T" 



: 



Wednesday, k September 1985 

10:00 a.m. Ontario Forest Industries Association: 

I.D. Bird 
President L 

K. Linn MacDonald <r* 

Group Vice-President (Operation) 
Abitibi-Price Inc. 



E. F. Boswell 

Senior Vice-President 

E.B. Eddy Forest Products Limited 



2:00 p.m. Sinclair Radio Laboratories Ltd.: 

Dr. George Sinclair 
Chairman 



L 



47 



Thursday, 5 September 1985 



10:00 a.m. Brewing Industry: 

Norman Seagram 



2:00 p.m. 



President 

Molson's Brewery (Ontario) Ltd. 

Sandy Morrison 

President 

Brewers Association of Canada 

3.R.A. Brickman 

President 

Brick Brewing Company Ltd. 

3. P. Harrington 

Assistant to the Vice-President and 

General Manager 

Labatt Brewing Company Ltd. 

D.H. Twiner 

President 

Carling O'Keefe Breweries of Ontario Ltd. 



1. Ministry of Intergovernmental Affairs: 

Gary Posen 
Deputy Minister 

Anne Waddell 
Policy Advisor 

Lorraine Ratnik 
Policy Advisor 



Jim McGuigan, M.P.P. 



-48 - 



Tuesday, 10 September 1983 Washington, D.C. 



8:15 a.m. Allan Gotlieb 

Canadian Ambassador to the United States 

Congressional Research Service: 
Dr. Alfred Reifman 
Senior Specialist in International Economics 

Mr. Raymond Ahearn 

Economist, International Economics Division 

1:00 p.m. House of Representatives Ways and 

Means Committee: 

Mr. George Weise 
Professional Staff 
Trade Subcommittee 

House of Representatives Ways and 
Means Committee 

Mr. George Ingram 

Professional Staff 



Wednesday, 11 September 1985 Washington, D.C. 



10:00 a.m. Senate Foreign Relations Committee: 

Kenneth Myers 
Professional Staff 

12:30 p.m. Dow, Lohnes and Albertson: 

Bill Silverman 
Ken Salomon 

Senate Finance Committee: 
Leonard Santos 
Trade Counsel 

Jeffrey Lang 
Trade Counsel 



49 - 



Thursday, 12 September 1985 Washington, D.C. 



9:00 a.m. U.S. Department of Commerce: 

Tom Brewer 
Director, Office of Canadian Affairs 

Murphy, Perlman and Sarkis: 
Ron Perlman 

U.S. Treasury Department: 
Bill Barreda 
Director, Office of International Trade 

U.S. Department of State: 
Sam Fromowitz 
Office of Canadian Affairs 

U.S. Department of Agriculture: 
Carol Harvey 

Director, Western Europe and Inter-America 
Division 

Representative Arlan Stangeland, 7th District, 
Minnesota 

U.S. Department of State: 
Jim Medas 

Deputy Assistant Secretary of State for 
Canadian Affairs 



Friday, 13 September 1985 Washington, D.C. 



8:00 a.m. Office of the U.S. Trade Representative: 

Mr. Bill Merkin 

Deputy Assistant U.S. Trade Representative for 
the 
Americas 

U.S. Chamber of Commerce: 
Mr. Fred Stokeld 

Executive Secretary, USA Section 
Committee on Canada/U.S. Relations 

National Planning Association: 
Mr. Peter Morici 
Vice-President 

Seifman, Serno, Slevin and Marcus P.C.: 
Donald H. Seifman 



-50- 



Monday, 16 September 1985 

10:00 a.m. Association of Canadian Advertisers: 

John Foss, President 

Yves Ameline 
Vice-Chairman 
Board of Directors 



2:00 p.m. Ian Thompson 

Centre for Canadian-American Studies 
University of Windsor 



Tuesday, 17 September 1985 



10:00 a.m. United Automobile Workers: 

Robert White 

UAW Director for Canada and 
International Vice-President 

Sam Gindin 
Research Director 

Basil Hargrove 
Administrative Assistant to 
UAW Director for Canada 



2:00 p.m. Polysar Limited: 

G.F. Bentley 



Group Vice-President 

Basic Petrochemicals Division 

G.J. Finn 

Manager 

Government Relations 



Slater Steels Corporation 
Slacan Division: 

J. David Smart 

General Sales Manager 



- 51 



Wednesday, 18 September 1985 



10:00 a.m. Ontario Trucking Association: 

Raymond Cope 
Executive Vice-President and 
General Manager 

Bernie Jones 

President 

Blue Apple Consulting 

John Sanderson 
Vice-President 
Public Affairs 
CP Trucks 



2:00 p.m. Stelco Inc.: 

John D. Allan 

President Chief and Executive Officer 

Donald K. Belch 
Senior Government 
Trade Relations Manager 



Monday, 23 September 1985 



10:00 a.m. 



1. Canadian Wall Covering Distributors Association: 

Dennis Mascall 
Selectone Paints 

Stuart Brown 

Walter Brown Co. Ltd. 

Barbara O'Neill 
Bapco 

Paul Batchelor 
Sunworthy Wallcoverings 

Howard Isenberg 
Canada Wallcoverings 

Arthur J. Wickham 
Consultant 



-52 



11:00 a.m. 



2. The Manufacturers Life Insurance Company: 

Elvon Harris 
Senior Vice-President 
International Development 



Joseph 3. Pietroski 
Vice-President and Secretary 



- 
- 



Jalynn Bennett 
Vice-President 
Corporate Development 



2:00 p.m. Ontario Provincial Council of Labour: 

Ed Herechuk 
President 

Reg Conrad 
Secretary Treasurer 



Wednesday, 25 September 1985 



[ 
[ 
- 



L 



: 



10:00 a.m. Prof. Toivo Miljan 

Department of Political Science 
Wilfrid Laurier University 
Director, Centre on Foreign Policy and 
Federalism of University of Waterloo and 
Wilfrid Laurier University 



Keith Heintzman 
Research Ass< 
Centre on Foreign Policy and Federalism 



Research Associate I 



2:00 p.m. Prof. Paul Beamish 

School of Business and Economics 

Wilfrid Laurier University _ 

c 



[ 



r 
L 



c 



-53- 



Thursday, 26 September 1985 Sault Ste. Marie 



10:00 a.m. 

1. Algoma Steel Corporation: 

James Melville 
Secretary 

2. Northern Breweries: 

Ross Eaket 
President 

3. Sault Ste. Marie Chamber of Commerce: 

Michael Peets 

Member, Development Committee 



2:00 p.m. 

1. Mr. Lasse Skogberg 

2. Dr. Krishna Kadiyala 

Associate Professor of Economics 
Algoma University College 

3. Algoma Central Railway: 

Stanley Black 
Vice-President and 
Division Manager - Rail 

k. Mr. Brian Oja 

Economist 



Monday, 30 September 1985 



10:00 a.m. Ministry of Industry, Trade and Technology: 

George S. MacDonell 
Deputy Minister 

David S. Barrows 

Director 

Planning and Priorities Secretariat 

John Brady 

Manager, Trade Policy 

Planning and Priorities Secretariat 



-5k- 



2:00 p.m. Urban Transportation Development Corporation: 

Kirk W. Foley 
President and Chief Executive Officer 



Wednesday, 2 October 1985 



10:00 a.m. Consumers Association of Canada (Ontario): 

Miriam Kramer 
Chair 
Economic Committee 



3:30 p.m. Royal Bank of Canada: 

Dr. Edward P. Neufeld 
Senior Vice-President and 
Chief Economist 



Thursday, 3 October 1985 



10:00 a.m. Canadian Business Equipment 

Manufacturers' Association: 
Graeme Hughes 
President 

John Neufeld 

Member, Board of Directors and 

President 

Arconas Corporation 

Grant Murray 

Member, Board of Directors and 

Vice-President 

Law and Corporate Relations 

IBM Canada Limited 



2:00 p.m. Prof. Abraham Rotstein 

University of Toronto 



Crawley Films Limited: 
William Stevens Jr. 
Chief Executive Officer 



- 55 - 



Monday, 7 October 1985 

10:00 a.m. Draft Report 

2:00 p.m. Draft Report 

Tuesday, 8 October 1985 

11:00 a.m. Draft Report 

2:00 p.m. Draft Report 

Wednesday, 9 October 1985 

10:00 a.m. Draft Report 

Thursday, 10 October 1985 

10:00 a.m. Draft Report 

Wednesday, 23 October 1985 

10:00 a.m. Draft Report 

2:00 p.m. Draft Report 



-56- 



APPENDIX C 



- 57 - 



SELECT COMMITTEE ON ECONOMIC AFFAIRS 



LIST OF EXHIBITS 



11 July 1985 
Exhibit No. 1 

23 July 1985 
Exhibit No. 2 
Exhibit No. 3 
Exhibit No. 4 

24 July 1985 
Exhibit No. 5 
Exhibit No. 6 

25 July 1985 
Exhibit No. 7 
Exhibit No. 8 

29 July 1985 
Exhibit No. 9 
Exhibit No. 10 



TERMS OF REFERENCE: 

Votes and Proceedings No. 18 dated Wednesday, 

July 10, 1985, pp. 94-96. 



LEGISLATIVE RESEARCH OFFICER: 
Press clippings. 

LEGISLATIVE RESEARCH OFFICER: 
Briefing Book. 

MINISTRY OF INDUSTRY, TRADE AND 

TECHNOLOGY: 

Submission dated 1985: Ontario Exports Mean Jobs. 



LEGISLATIVE RESEARCH OFFICER: 
Press clipping. 

MINISTRY OF TREASURY AND ECONOMICS: 
Submission dated July 24, 1985 from Office of 
Economic Policy: Canada-U.S. Trade. 



LEGISLATIVE RESEARCH OFFICER: 
Press clipping. 

MINISTRY OF NORTHERN AFFAIRS AND MINES: 
Submission dated July 25, 1985: Status of Ontario 
Metal Mining and Ontario-U.S. Mineral Trade. 



LEGISLATIVE RESEARCH OFFICER: 
Press clippings. 

MINISTRY OF NATURAL RESOURCES: 
Submission. 



-58 



30 July 1985 
Exhibit No. 11 



LEGISLATIVE RESEARCH OFFICER: 
Press clippings. 



Exhibit No. 12 



31 July 1985 
Exhibit No. 13 
Exhibit No. 14 



Exhibit No. 15 



Exhibit No. 16 



Exhibit No. 17 



1 August 1985 
Exhibit No. 18 
Exhibit No. 19 



Exhibit No. 20 



F. STONE: 

Submission dated July 30, 1985 from Frank Stone, 

Research Associate, International Economics Program, 

Institute for Research on Public Policy, 

275 Slater Street, 5th Floor, Ottawa KIP 5H9. 



LEGISLATIVE RESEARCH OFFICER: 
Press clippings. 

ONTARIO FEDERATION OF LABOUR: 
Submission dated July 31, 1985 from 
Clifford G. Pilkey, President, and 
Wally Majesky, Secretary-Treasurer. 

ONTARIO FEDERATION OF LABOUR: 
Summary of Ontario Federation of Labour Brief 
dated July 31, 1985. 

LEGISLATIVE RESEARCH OFFICER: 
Background information re: Mexico. 

COMMITTEE CLERK: 
Background information dated June 1985: 
Free Trade: Salvation or Sell-out? Analysis, 
by David Crane, Toronto Star. 



LEGISLATIVE RESEARCH OFFICER: 
Press clippings. 

CANADIAN MANUFACTURERS' ASSOCIATION: 

Submission dated August 1, 1985 from 

J. Laurent Thibault, President, 

One Yonge Street, Toronto M5E 1J9. 

MINISTRY OF AGRICULTURE AND FOOD: 
Submission dated August, 1985: Ontario's 
International Trade in Agricultural and Food 
Products. 



59 - 



Exhibit No. 21 



Exhibit No. 22 



Exhibit No. 23 



Exhibit No. 2k 



MINISTRY OF AGRICULTURE AND FOOD: 
News Release dated May 31, 1985 re: 
Miami Food Sales Mission. 

MINISTRY OF AGRICULTURE AND FOOD: 
News Release re: Ontario Breakthrough in 
Chinese Market. 

AMERICAN CONSUL: 

Background Information: Prepared Remarks dated 
April 25, 1985 by Ambassador Michael B. Smith, 
Deputy U.S. Trade Representative, to the 
Financial Post Conference on Access USA. 
Submitted by H.R. Lucius, American Consul. 

LEGISLATIVE RESEARCH OFFICER: 
Background Information: World Standard of 
Living. 



19 August 1985 
Exhibit No. 25 

Exhibit No. 26 

Exhibit No. 27 



Exhibit No. 28 



Exhibit No. 29 



Exhibit No. 30 



I. CROCKATT: 

Submission dated July 30, 1985 from Ian Crockatt, 

77 Davisville Avenue, Apt. 315, Toronto M4S 1G4. 

V. GIDWANEY: 

Submission dated July 31, 1985 from Vasdeo 

Gidwaney, 36 Yucatan Road, Willowdale M2H 2K8. 

CENTRE FOR CANADIAN-AMERICAN STUDIES: 
Submission dated August 1, 1985 from Ralph K. 
Cowan, Executive Director, Centre for Canadian- 
American Studies, University of Windsor, 
Windsor N9B 3P4. 

CANADIAN BUSINESS EQUIPMENT 
MANUFACTURERS' ASSOCIATION: 
Submission dated July 1985: "How to secure and 
enhance Canadian access to export markets". To 
the Honourable James Kelleher, Minister for 
International Trade. 

MINISTRY OF AGRICULTURE AND FOOD: 
Supplementary submission: Overhead Slide 
Presentation. 

POLYSAR LIMITED: 

Submission dated August 13, 1985 from G. F. 
Bentley, Group Vice President, Basic 
Petrochemicals, 201 N. Front Street, 
Sarnia N7T 7V1. 



- 60 



Exhibit No. 31 



Exhibit No. 32 



Exhibit No. 33 



Exhibit No. 34 



Exhibit No. 35 



Exhibit No. 36 



AUTOMOTIVE PARTS MANUFACTURERS' 

ASSOCIATION: 

Submission dated August 19, 1985 from Patrick J. 

Lavelle, President. 

AUTOMOTIVE PARTS MANUFACTURERS' 

ASSOCIATION: 

Supplementary Submission: Statistical Appendix. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

A. HEISEY: 

Submission, with enclosures, dated August 19, 1985 

from Alan Heisey, 

29 Bernard Avenue, Toronto M5R 1R3. 

F. LAZAR: 

Background information from Professor Fred Lazar: 

The Unresolved Debate: Free Trade/Industrial 

Policy. 

F. LAZAR: 

Background information from Professor Fred Lazar: 

Free Trade: A Feasible Strategy? 



20 August 1985 
Exhibit No. 37 



Exhibit No. 38 



Exhibit No. 39 



Exhibit No. 40 



Exhibit No. 41 



RETAIL COUNCIL OF CANADA: 
Submission dated August 1985 from Alasdair J. 
McKichan, President, 212-214 King Street West, 
Toronto M5H 1K4. 

COMMUNIST PARTY OF CANADA: 
Submission dated July 24, 1985 from the Central 
Executive Committee, Communist Party of Canada, 
24 Cecil Street, Toronto M5T 1N2, to the Special 
Joint Committee on Canada's International 
Relations. 

COMMUNIST PARTY OF CANADA: 
Background information: An Alternative for 
Canadian Autoworkers. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

STRATHCONA PAPER COMPANY: 
Letter dated July 19, 1985 from W.E. Riddolls, 
President, Division Office and Mill, Box 130, 
Napanee K7R 3LR. 



- 61 - 



Exhibit No. 42 



Exhibit No. 43 



Exhibit No. 44 



Exhibit No. 45 



Exhibit No. 46 



KEYCORP INDUSTRIES LTD: 
Letter dated 9 August 1985 from Mike Bailey, 
Director of Marketing and Business Development, 
P.O. Box 8930, Vancouver, B.C. V6B 4P5, to Hon. 
Ian Scott, Q.C., M.P.P., Attorney General 

KEYCORP INDUSTRIES LTD: 

Letter dated 1 May 1985 from Morris Belkin, 

Chairman, P.O. Box 8930, Vancouver, B.C. V6B 4P5, 

to Hon. James Kelleher, Minister for International 

Trade. 

CANADIAN PULP AND PAPER ASSOCIATION: 
Background Information dated April 25, 1985: Trade 
Liberalization, views of the Canadian Boxboard 
Industry. Presented by Mike Bailey, Keycorp 
Industries Ltd. 

LEGISLATIVE RESEARCH OFFICER: 
Memorandum dated August 20, 1985 from Fernando 
Traficante, Research Officer re: Materials on 
Canada's Trade Relations. 

LEGISLATIVE RESEARCH OFFICER: 

Summary of Presentations dated July 23 - August I, 

1985 from Fernando Traficante, Research Officer. 



21 August 1985 
Exhibit No. 47 



Exhibit No. 48 
Exhibit No. 49 



BOARD OF TRADE OF METROPOLITAN 

TORONTO: 

Submission dated August 21, 1985 from F.G. 

Hamilton, Q.C., Vice President, P.O. Box 60, 3 First 

Canadian Place, Toronto M5X 1C1. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

R.G. LIPSEY: 

Submission from Richard G. Lipsey, FRS, Senior 

Economic Advisor, CD. Howe Institute. 



22 August 1985 
Exhibit No. 50 



ROYAL BANK OF CANADA: 

Submission dated July 22, 1985 from Dr. Edward P. 
Neufeld, Senior Vice President and Chief Economist, 
to the Special Joint Committee on Canada's 
International Relations. 



-62 - 



Exhibit No. 51 



Exhibit No. 52 
Exhibit No. 53 



J. McGUIGAN, M.P.P.: 

Report dated July 29, 1985 from Glenn Flaten, Past 
President, Canadian Federation of Agriculture, to 
Members, Canadian Horticultural Council. 
Presented by Jim McGuigan, M.P.P. 

L. BAJOR: 

Submission from Lisa Bajor, Holiday Tavern. 

L. BAJOR: 

Background information from Lisa Bajor, Holiday 

Tavern. 



Exhibit No. 54 



Exhibit No. 55 



Exhibit No. 56 



Exhibit No. 57 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

BOARD OF TRADE OF METROPOLITAN 

TORONTO: 

Submission dated May 1985 in Response to 

Consultation Papers on Export Financing and How to 

Secure and Enhance Canadian Access to Export 

Markets. 

J.H. WARREN: 

Submission dated June 1985 from Bank of Montreal: 
Response to the Discussion Paper on How to Secure 
and Enhance Canadian Access to Export Markets. 

J.H. WARREN: 

Submission dated July 26, 1985 from Task Force on 
Canada-United States Trade Policy, 200 Elgin 
Street, Suite 301, Ottawa K2P 2J7. 



26 August 1985 



Exhibit No. 58 



Exhibit No. 59 



Exhibit No. 60 



Exhibit No. 61 



UNITED ELECTRICAL, RADIO AND MACHINE 
WORKERS OF CANADA: 
Submission dated August 26, 1985 

SPECIAL JOINT COMMITTEE ON CANADA'S 
INTERNATIONAL RELATIONS: 
Chapter IV of Interim dated August 23, 1985, 
pp. 49-61. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

ONTARIO FEDERATION OF AGRICULTURE: 
Submission dated August 26, 1985. 



63 



27 August 1985 
Exhibit No. 62 

Exhibit No. 63 

Exhibit No. 64 



Exhibit No. 65 
Exhibit No. 66 



Exhibit No. 67 



Exhibit No. 68 



Exhibit No. 69 



Exhibit No. 70 



UNITED STEELWORKERS OF AMERICA: 
Submission dated August 27, 1985 from E. Gerard 
Docquier, National Director for Canada. 

UNITED STEELWORKERS OF AMERICA: 
Background Information dated September 12/84: 
Where We Stand on Steel Trade. 

UNITED STEELWORKERS OF AMERICA: 
Background Information dated May 5, 6, 7/85: 
Analysis of the Steel Industry Labour Market and 
the Adjustments Facing its Work Force. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

JOHN CRISPO: 

Submission dated August 27, 1985 from 
Professor John Crispo, Professor of Political 
Economy, Faculty of Management Studies, 
University Of Toronto. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

JOHN CRISPO: 

Background Information dated July 24, 1985 from 
Professor John Crispo: Notes on Free Trade for an 
Appearance before "The Special Joint Committee on 
Canada's International Relations". 

JOHN CRISPO: 

Background Information dated April 16, 1985 from 

Professor John Crispo: The Case for Free Trade 

with 

the U.S. (Draft Essay). 

JOHN CRISPO: 

Background Information dated October 31, 1983 
from Professor John Crispo: Canadian-American 
Relations: The Case for a New Beginning. 



28 August 1985 
Exhibit No. 71 



ECONOMIC COUNCIL OF CANADA: 
Submission dated August 28, 1985 from Peter M. 
Cornell, Director. 



-64- 



Exhibit No. 72 
Exhibit No. 73 



ECONOMIC COUNCIL OF CANADA: 
Background information. 

ECONOMIC COUNCIL OF CANADA: 
Background information: Bibliography and 
Discussion Papers Series. From Economic Effects 
of Trade Liberalization with the U.S.A., by 
A. R. Moroz and Gregory J. Meredith, June 1985. 



29 August 1985 
Exhibit No. 74 



Exhibit No. 75 



Exhibit No. 76 



Exhibit No. 77 



DEPARTMENT OF EXTERNAL AFFAIRS: 
Communique dated July 19, 1985: Canada Submits 
Initial Views to the GATT on the Upcoming 
Multilateral Trade Negotiations. 

CANADIAN EXPORT ASSOCIATION: 
Submission dated August 29, 1985 from Frank 
Petrie, President, Suite 250, 99 Bank Street, Ottawa 
KIP 6B9. 

CANADIAN EXPORT ASSOCIATION: 

Background information: Guide to Member Services 

of the Canadian Export Association. 

CANADIAN EXPORT ASSOCIATION: 
Background information: 
Annual Report 1984. 



4 September 1985 



Exhibit No. 78 



Exhibit No. 79 



Exhibit No. 80 



Exhibit No. 81 



SPECIAL JOINT COMMITTEE ON CANADA'S 
INTERNATIONAL RELATIONS: 
Interim Report dated August 23, 1985, Chapter I-IV 
and Appendices E and G-l. 

J. McGUIGAN, M.P.P. 

Report dated August 19, 1985 from Jim McGuigan, 

M.P.P. 

J. McGUIGAN, M.P.P. 

Report dated August 20, 1985 from Jim McGuigan, 

M.P.P. 

J. McGUIGAN, M.P.P. 

Report dated August 21, 1985 from Jim McGuigan, 

M.P.P. 



-65 



Exhibit No. 82 



Exhibit No. 83 



Exhibit No. 84 



Exhibit No. 85 



Exhibit No. 86 



Exhibit No. 87 



CP TRUCKS: 

Submission dated August 28, 1985 from J. A. 
Sanderson, Vice-President, Public Affairs, Suite E- 
335, Atria North, 2255 Sheppard Avenue East, 
Willowdale M2J 4Y1. 

M. DALY: 

Submission dated August 1985 from Michael Daly, 
Economic Council of Canada, P.O. Box 527, Ottawa: 
Scale Economies and the Gains from Free Trade, by 
Michael 3. Daly and P. Someshwar Rao. 

ONTARIO FOREST INDUSTRIES ASSOCIATION: 
Submission dated September 4/1985. 

ONTARIO FOREST INDUSTRIES ASSOCIATION: 
Background Information. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

SINCLAIR RADIO LABORATORIES LTD: 
Submission dated September 4/1985 from George 
Sinclair, P. Eng., Chairman of the Board, 122 
Rayette Road, Concord L4K 2G3. 



5 September 1985 
Exhibit No. 88 
Exhibit No. 89 

Exhibit No. 90 



Exhibit No. 91 



Exhibit No. 92 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

BREWERS ASSOCIATION OF CANADA AND 
THE BREWERS OF ONTARIO: 
Submission dated September 5/1985. 

BREWERS ASSOCIATION OF CANADA AND 
THE BREWERS OF ONTARIO: 

Background Information: Summary of the Economic 
Contribution Generated by the Brewing Industry in 
Canada in 1984. 

BREWERS ASSOCIATION OF CANADA AND 
THE BREWERS OF ONTARIO: 
Background Information: dated May 1985 from 
Brewers Association of Canada to the Honourable 
James Kelleher, Minister of International Trade: 
Perspectives on Canada-United States Free Trade. 

ROYAL COMMISSION ON THE ECONOMIC UNION 
AND DEVELOPMENT PROSPECTS FOR CANADA: 
Final Report, Volumes 1-3. 



-66- 



Exhibit No. 93 



Exhibit No. 94 
Exhibit No. 95 



MINISTRY OF INTERGOVERNMENTAL AFFAIRS: 
Government of Ontario Discussion Paper: Canada's 
Trading Relationships in a Changing World. 
For: Premier's Conference, St. John's 
Newfoundland, August 21-22, 1985. 

LEGISLATIVE RESEARCH OFFICER: 
Newsmagazine articles. 

LEGISLATIVE RESEARCH OFFICER: 
Background Information: dated September 1985 
from Patrick Malcolmson, Legislative Research 
Officer: An Overview of the U.S. Government. 



10 September 1985 



Exhibit No. 96 



Exhibit No. 97 



Exhibit No. 98 



Exhibit No. 99 



J. TAYLOR, M.P.P.: 

Background Information: dated May 1985 from 
Jim Taylor, M.P.P.: "Steel Makes a Stand", article 
from Report on Business Magazine. 

COMMITTEE CLERK: 
Press Clippings. 

D. CRENNA: 

Background Information from David Crenna: 

Briefing Note re: MacDonald Royal Commission 

Proposals for Bilateral 'Free Trade' with 

the United States. 

G. INGRAM: 

Background Information: dated June 1985 from 

George Ingram, Professional Staff, House Foreign 

Affairs Committee: 26th Meeting of the Canada - 

United States Interparliamentary Group, May 16-19, 

1985. 



[ 

r 



12 September 1985 
Exhibit No. 100 



R. PERLMAN: 

Submission dated September 12, 1985 from 

Ronald S. Perlman, of Murphy, Perlman and Sarkis, 

1819 H. Street N.W., Suite 640, Washington, D.C. 

20006. 



i 



Exhibit No. 101 



R. PERLMAN: 
Background Information: 
Qualifications. 



Statement of 



-67 



Exhibit No. 102 



Exhibit No. 103 



Exhibit No. 104 



R. PERLMAN: 

Press Clipping from Ronald S. Perlman: 
"Ex-McDonnell Executive Claims Firm is 'Corupt'", 
Washington Post. 

R. PERLMAN: 

Press Clipping dated September 12, 1985 from 
Ronald S. Perlman: "Pentagon Costs a Net For 
Leaked Secrets", Washington Post. 

HON. A. STANGELAND: 

Background Information dated Tuesday, September 
10, 1985 from Hon. Arlan Stangeland of Minnesota, 
House of Representatives: Congressional Record re: 
Support for Joint International Border Commission. 



13 September 1985 
Exhibit No. 105 



Exhibit No, 106 



Exhibit No. 107 



Exhibit No. 108 



Exhibit No. 109 



Exhibit No. 110 



NATIONAL ASSOCIATION OF MANUFACTURERS: 
Background Information dated August 1985: 
U.S. Trade, Industrial Competitiveness and 
Economic Growth. From R. K. Morris, Director, 
International Trade, National Association 
of Manufacturers, 1776 F Street N.W., 
Washington, D.C. 20006. 

NATIONAL ASSOCIATION OF MANUFACTURERS: 
Background Information dated May 24, 1985: 
Paying the Import Bill in Manufacturers. 

U.S. CHAMBER OF COMMERCE: 
News Release dated June 25, 1985: Canadian and 
U.S. Chambers of Commerce State Support for 
Trade Liberalization. From Fred Stokeld, Executive 
Secretary, U.S.A. Section, Committee on 
Canada/U.S. Relations, 1615 H Street N.W., 
Washington, D.C. 20006. 

U.S. CHAMBER OF COMMERCE: 
Background Information dated July 10, 1985: 
Draft Proposal for Establishment of a 
Canadian/American Trade Committee (CATCOM). 

D. H. SEIFMAN: 

Submission dated September 13, 1985 from 
Donald H. Seifman, Esq., President of Seifman, 
Semo, Slevin and Marcus, P.C., 1000 Potomac 
Street, N.W., Suite 204, Washington, D.C. 20007. 

D. H. SEIFMAN: 

Background Information: 

(Statement of Qualifications and Services). 



-68- 



Exhibit No. Ill 



D. H. SEIFMAN: 

Background Information dated 1984 from 
Donald H. Seifman: International Taxation 
A Selective Analysis of the United States 
Internal Revenue Code. 



16 September 1985 
Exhibit No. 112 



Exhibit No. 113 
Exhibit No. 114 
Exhibit No. 115 



Exhibit No. 116 



ASSOCIATION OF CANADIAN ADVERTISERS, 

INC.: 

Submission dated September 16, 1985 from 

John Foss, President, 

180 Bloor Street West, Suite 1010, 

Toronto M5S 2V6. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

J. ST. JACQUES: 

Background Information: U.S. - Israel Free Trade 
Area Agreement Implementing Legislation. 
From Jean St. Jacques, Counselor (Commercial), 
Canadian Embassy, Washington, D.C. 

I.THOMPSON: 

Submission from Ian Thompson, Graduate Research 
Assistant, Centre for Canadian-American Studies, 
Faculty of Business Administration, University of 
Windsor, 400 Sunset Avenue, Windsor N9B 3P4. 



17 September 1985 
Exhibit No. 117 
Exhibit No. 118 

Exhibit No. 119 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

UAW - CANADA: 

Submission dated September 17, 1985 from 

Robert White, UAW Director for Canada. 

LEGISLATIVE RESEARCH OFFICER: 
Summary of presentations dated July 23 - August 
28, 1985 from Fernando Traficante and David 
Neufeld, Research Officers. 



-69- 



Exhibit No. 120 



Exhibit No. 121 



POLYSAR LTD.: 

Submission dated September 17, 1985 from 

G. F. Bentley, Group Vice-President, 

Basic Petrochemicals Division, and G. 3. Finn, 

Manager, Government Relations. 

SLATER STEELS: 

Submission dated September 17, 1985 from 
3. David Smart, General Sales Manager, 
Slater Steels, Slacan Division. 



18 September 1985 
Exhibit No. 123 
Exhibit No. 124 
Exhibit No. 125 



Exhibit No. 126 



Exhibit No. 127 



Exhibit No. 128 



Exhibit No. 129 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

ONTARIO TRUCKING ASSOCIATION: 
Submission dated September 16, 1985. 

ONTARIO TRUCKING ASSOCIATION: 
Letter dated November 17, 1982 from 
William E. Brock, U.S. Trade Representative, 
Washington, D.C., to the Honorable Allan E. 
Gotlieb, Ambassador of Canada to the United 
States. 

MANUFACTURERS LIFE INSURANCE COMPANY: 
Submission dated September 23, 1985 from 
L. Elvon Harris, CLU, Senior Vice-President, 
International Operations, et al: Free Access to 
Trade in Life Insurance with the United States. 

STELCO INC.: 

Submission dated September 17, 1985 from 
3ohn D. Allan, President and Chief Executive 
Officer: Canada's Trading Relationship with the 
United States. 

LEGISLATIVE RESEARCH OFFICER: 
Background Information dated 1984: Digest of 
Public General Bills and Resolutions, 98th Congress 
2nd Session, Cumulative Issue No. 1, Part I, 
pp. 468-470. 

LEGISLATIVE RESEARCH OFFICER: 
Background Information dated 1984: Digest of 
Public General Bills and Resolutions, 98th Congress 
2nd Session, Final Issue Part I, pp. 279-286. 



-70- 



23 September 1985 
Exhibit No. 130 

Exhibit No. 131 



Exhibit No. 132 



Exhibit No. 133 



Exhibit No. 134 



Exhibit No. 135 
Exhibit No. 136 



WALLCOVERING INDUSTRY: 
Submission dated September 17, 
Enhanced/Free Trade. 



1985: The Case for 



WALLCOVERING INDUSTRY: 
Letter dated July 26, 1985 from David C. 
Murchinson, P.C. of Howrey and Simon, 1730 
Pennsylvania Avenue, N.W. Washington, D.C. 
20006, to the Hon. John D. Dingell, Chairman, and 
the Hon. James T. Broyhill, Ranking Minority 
Member, Committee on Energy and Commerce, 
Subcommittee on Oversight and Investigations, 
U.S. House of Representatives. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

LEGISLATIVE RESEARCH OFFICER: 
Background Information dated December 1984: 
Summary of Statutory Provisions Related to Import 
Relief, from U.S. International Trade Commission, 
Washington, D.C. 20436. 

ONTARIO PROVINCIAL COUNCIL OF LABOUR: 
Submission dated September 23, 1985 from 
E. J. Herechuk, President, and 
Reg Conrad, Secretary-Treasurer. 

ONTARIO PROVINCIAL COUNCIL OF LABOUR: 
Executive Summary of Submission. 

B. F. GOODRICH: 

Submission dated July 25, 1985 from Owen H. 
Lackenbauer, Vice-President, Public Affairs, 
B. F. Goodrich Canada Inc., 409 Weber St. West, 
Kitchener, Ontario N2G 4J5. 



-71 - 



25 September 1985 
Exhibit No. 137 
Exhibit No. 138 
Exhibit No. 139 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

PROF. T. MILJAN: 
Background Information. 

PROF. P. BEAMISH: 

Submission dated September 25, 1985 from 

Dr. Paul W. Beamish, Assistant Professor of 

Business Strategy and International Business, School 

of Business and Economics, Wilfrid Laurier 

University, and Chairman, International Business 

Unit, Laurier Institute. 



26 September 1985 
Exhibit No. 140 



Exhibit No. 141 



Exhibit No. 142 



Exhibit No. 143 



Exhibit No. 144 



Exhibit No. 145 



ALGOMA STEEL CORPORATION LTD: 
Submission dated September 26, 1985 from 
James T. Melville, Secretary: 
Bilateral Trade Options. 

NORTHERN BREWERIES LTD: 
Submission dated September 26, 1985 from 
Ross Eaket, President: 
Overview of Canada - U.S. Free Trade. 

SAULT STE. MARIE CHAMBER OF COMMERCE: 
Submission dated September 26, 1985 from 
Mike Peets, Sault Ste. Marie Chamber of 
Commerce, 360 Great Northern Road, 
Sault Ste. Marie. 

L. SKOGBERG: 

Submission dated Thursday, 26 September 1985 from 

Mr. Lasse Skogberg. 

K. KADIYALA: 

Submission dated September 26, 1985 from 

Krishna Kadiyala, Department of Economics, 

Algoma University College, 

Sault Ste. Marie. 

ALGOMA CENTRAL RAILWAY: 
Submission dated September 26, 1985 from 
Stanley A. Black, Vice-President - Rail. 



-72 - 



30 September 1985 
Exhibit No. 146 



Exhibit No. 147 



Exhibit No. 148 



Exhibit No. 149 



Exhibit No. 150 



Exhibit No. 151 



Exhibit No. 152 



NORTHERN TELECOM LTD: 

Submission dated September 18, 1985 from 

W. C. Benger, Executive Vice-President, 

Marketing and Corporate Relations, 

P. O. Box 458, Station A, Mississauga L5A 3A2. 

ONTARIO FOREST INDUSTRIES ASSOCIATION: 
Supplementary Submission dated September 5, 1985 
from Ian D. Bird, President, Suite 1700, 
130 Adelaide St. West, Toronto M5H 3P5. 

CANADIAN PAPERWORKERS UNION: 
Letter dated September 6, 1985 from 
Dan Holder, Vice-President, Region III, 
Suite 709, 701 Evans Avenue 
Etobicoke M9C 1A3. 

GROCERY PRODUCTS MANUFACTURERS OF 

CANADA: 

Submission dated August, 1985 from 

Grocery Products Manufacturers of Canada, 

1185 Eglinton Avenue East, Suite 101 

Don Mills M3C 3C6. 

SINCLAIR RADIO LABORATORIES LTD.: 
Supplementary Submission dated September 10, 1985 
from George Sinclair, Chairman of the Board. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

URBAN TRANSPORTATION DEVELOPMENT 

CORPORATION: 

Submission dated September 30, 1985 from 

Kirk W. Foley, President. 



1 October 1985 



Exhibit No. 153 



LEGISLATIVE RESEARCH OFFICER: 
Summary of Presentations dated July 23 - 
September 26, 1985 from Fernando Traficante, 
Barbara Cotton and David Neufeld, Research 
Officers. 



73 



Exhibit No. 154 



Exhibit No. 155 



MINISTRY OF TREASURY AND ECONOMICS: 
Background Information dated September 26, 1985 
from Office of Economic Policy, Sectoral and 
Regional Policy Branch: Canada-U.S. Trade 
Relations: Responses to Questions Raised by the 
Select Committee on Economic Affairs. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clipping dated September 27, 1985: Free 
trade talks a bid to protect 2 million workers 
Mulroney says. 



2 October 1985 



Exhibit No. 156 
Exhibit No. 157 



Exhibit No. 158 



Exhibit No. 159 



Exhibit No. 160 



Exhibit No. 161 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

CONSUMERS' ASSOCIATION OF CANADA 

(ONTARIO): 

Submission dated October 2, 1985 from the 

Consumers' Association of Canada (Ontario), 

Suite 403, 234 Eglinton Avenue East, 

Toronto M4P 1K5. 

CONSUMERS' ASSOCIATION OF CANADA 

(ONTARIO): 

Background Information dated October 1985: 

"Quotas and Consumers", from Canadian Consumer, 

pp. 10-15. 

ROYAL BANK OF CANADA: 

Submission dated October 2, 1985 from 

Dr. Edward P. Neufeld, Senior Vice-President and 

Chief Economist: Building Consensus on 

Canada /U.S. Trade Policy. 

J. McGUIGAN, M.P.P.: 

Report dated September 24, 1985 from 

Jim McGuigan, M.P.P.: Dallas. 

K.D. SALOMON: 

Letter with attachments dated September 12, 1985 
from Kenneth D. Salomon of Dow, Lohnes and 
Albertson, 1255 Twenty-third Street, Washington, 
D.C. 20037, to Rick Ferraro, M.P.P. 



3 October 1985 



74 - 



Exhibit No. 162 
Exhibit No. 163 



Exhibit No. 164 



Exhibit No. 165 



Exhibit No. 166 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

CANADIAN BUSINESS EQUIPMENT 
MANUFACTURERS' ASSOCIATION: 
Supplementary Submission: Opening Remarks by 
Graeme C. Hughes, President. 

CANADIAN TEXTILES INSTITUTE: 
Submission dated September 24, 1985 from 
Liz Siwicki, Director, Trade Policy Services, 
280 Albert Street, Suite 502, Ottawa KIP 5G8. 

AMERICAN CONSUL: 

Background information dated September 23, 1985: 
Text of U.S. President's Trade Speech, and Text of 
Background Paper on President's Action Plan for 
Trade Policy. 

A. ROTSTEIN: 

Submission dated October 3, 1985 from 
Abraham Rotstein, Department of Economics, 
University of Toronto: Free Trade versus 
Industrial Policy. 



7 October 1985 



Exhibit No. 167 



Exhibit No. 168 



Exhibit No. 169 



LEGISLATIVE RESEARCH OFFICER: 
Background information dated September 26, 1985: 
Statement by Prime Minister Brian Mulroney on 
Canada/U.S.A. Trade Negotiations. 

INSTITUTE FOR POLICY ANALYSIS: 
Background Information dated October 1985 from 
Peter Dungan, Policy and Economic Analysis 
Program, Institute for Policy Analysis, University of 
Toronto: The Macroeconomic Impacts of Free 
Trade with the U.S.: Lessons from the FOCUS- 
PRISM Economic Model. 

LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 



8 October 1985 



Exhibit No. 170 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 



75- 



Exhibit No. 171 



Exhibit No. 172 



LEGISLATIVE RESEARCH OFFICER: 
Summary of Presentations dated July 23 - October 
7, 1985 from Fernando Traficante, Barbara Cotton 
and David Neufeld, Research Officers. 

MINISTRY OF INDUSTRY, TRADE AND 

TECHNOLOGY: 

Background Information: The Global Competitive 

Struggle: Challenges to the United States and 

Canada, by Peter Morici, Canadian-American 

Committee. 



9 October 1985 



Exhibit No. 173 
Exhibit No. 174 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

J. McGUIGAN, M.P.P: 
Press Clippings. 



10 October 1985 



Exhibit No. 175 
Exhibit No. 176 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 

COMMITTEE CLERK: 

Statement dated Tuesday, 8 October 1985 from the 
Honourable William Wrye, Minister of Labour, 
re: Report of the Ontario Task Force on 
Employment and New Technology. 



23 October 1985 



Exhibit No. 177 



Exhibit No. 178 



TOPPING ELECTRONICS LTD.: 

Submission dated May 17, 1985 from F.V. Topping, 

President, Topping Electronics Ltd., 1320 Ellesmere 

Road, Scarborough M1P 2X9: Response to the 

Minister for International Trade paper on How to 

Secure and Enhance Canadian Access to Export 

Markets. 

OFFICE OF THE PREMIER: 

Letter dated September 25, 1985 from Hon. David 
Peterson, Premier, with attached telex dated 
August 21, 1985 from H. Harrison McCain, 
Chairman, McCain Foods Ltd., Florenceville, N.B. 
EOJ 1K0. 



-76 - 



Exhibit No. 179 



I. THOMPSON: 

Supplementary Submission dated September 25, 1985 
from Ian Thompson, 3307 Randolph Avenue, 
Windsor N9E 3E8. 



Exhibit No. 180 



G. M. ALCOCK: 

Background information dated October 1, 1985 from 
G. M. Alcock, Director, Human Resources, 
Electrohome Ltd., 809 Wellington St. North, 
Kitchener N2G 4J6: Speech by James W. 
McCambly, President, Canadian Federation of 
Labour, to Canadian Chamber of Commerce re: 
New Dimensions in Canada - U.S. Trade. 



Exhibit No. 181 



G. M. ALCOCK: 

Background information dated October 1, 1985: 
Speech by Tom Hockin, M.P. to Canadian Chamber 
of Commerce re: Canada - U.S. Trade Relations. 



Exhibit No. 182 



G. M. ALCOCK: 

Background information dated October 1, 1985: 

Speech by Robert L. Pierce to Canadian Chamber of 

Commerce re: New Dimensions in Canada - U.S. 

Trade. 



Exhibit No. 183 



G. M. ALCOCK: 

Background information dated October 1, 1985: 
Speech by Thomas M.T. Niles, U.S. Ambassador to 
Canada, to Canadian Chamber of Commerce: 
Address on Canada - U.S. Trade Issues. 



Exhibit No. 184 



B. STEPHENSON, M.P.P.: 
Letter dated October 4, 1985 from Bette 
Stephenson, M.D., M.P. P., with attached submission 
from Anthony 3. Carrier, President, Carrier 
Footwear (1980) Limited, 90 Ontario Street, Toronto 
M5A 3V6. 



Exhibit No. 185 



LEGISLATIVE RESEARCH OFFICER: 
Press Clippings. 



-77 



APPENDIX D 



DISSENT: BY NEW DEMOCRATS 



The New Democrat members of the Select Committee on Economic Affairs 
cannot agree with the perspective of the majority. 

While we support a number of the recommendations contained in the majority 
report, we do not share the enthusiasm of the Liberals and Conservatives for 
the concept of bilateral free trade with the United States. 

The recommendations of the majority reflect the implicit assumptions that a 
bilateral free trade agreement with the U.S. is a foregone conclusion, that 
Ontario should acquiesce in endorsing the current initiative of the Mulroney 
government in Ottawa, that such an agreement is the only solution to current 
Canada-U.S. trade frictions and that such an agreement will be good for 
Canada. We disagree fundamentally with these points. 

We understand that the threat of U.S. protectionism is a real one and we are 
committed to resolving the growing trade frictions between our two countries. 
But we strongly believe in the alternatives to free trade. Accordingly, we are 
proposing a program that in the short-term would attempt to resolve current 
trade frictions and in the longer term, would respond to the structural problems 
that plague the Canadian economy. 

In the short term we propose: 

1. The creation of a bilateral trade mechanism to resolve specific trade 
disputes between our two countries, and establish a fair trading code of 
conduct that recognizes the need to protect jobs on both sides of the 
border. 

2. The creation of a Federal-Provincial 'Secure Trade 1 program that would: 

(a) monitor U.S. trade developments and assess their implications for 
Canada; 



-78 - 



(b) provide technical and financial assistance to Canadian companies 
confronted by U.S. protectionism; and 

(c) ensure Canada's views are adequately represented to U.S. officials. 

For the longer-term Canada needs to pursue a different economic course than 
the one being set by the federal Conservatives. Instead of free trade, Canada 
needs and industrial strategy that, among other things, 

(a) recognizes as legitimate, regional economic concerns. 

(b) supports domestic industry, by creating an import substitution program to 
reduce certain job-intensive imports and by more effectively using 
Canadian public purchases. 

(c) introduces a program of domestic content legislation that forces 
multinationals selling in Canada to provide Canadians with a fair share of 
jobs. 

(d) builds and diversifies Canadian industries with domestic savings, and 
encourages domestic investment to reduce Canada's dependency on 
foreign investment. 

(e) expands and diversifies our trading links to reduce our dependency on the 
American market. 

(f) supports multilateral trade discussions which give substance to the 
principle of fair trade that was embodied in the original GATT. 

The Liberal and Conservative members of the Committee in our view have done 
a grave disservice not only to the people of Ontario but to the country as a 
whole. Indeed, it is hard to believe that we all sat in the same rooms and 
listened to the same evidence and submissions, because the majority has ignored 
the recommendations of all the labour organizations and many of the industries 
that appeared before us. 



-79 - 



The submissions the Committee received, whether from those in favour of free 
trade or from those opposed, contained a number of common themes. First, 
there are serious concerns regarding the costs and consequences of free trade. 
Second, as a country we simply do not know enough about the impact of free 
trade on various regions, sectors and communities. Third, there is clearly not a 
national consensus on the issue. 

Instead of responding to these concerns, instead of saying clearly that the 
Prime Minister's initiative is premature, instead of saying that as a nation we 
require a solid consensus before proceeding, the Liberals and Conservatives on 
the Committee joined together to accept the agenda and schedule of the 
federal Conservatives. 

In contrast, the New Democrat members of the Committee strongly object to 
the Prime Minister's decision to begin negotiations on a bilateral free trade 
agreement with the United States. 

New Democrats have not been persuaded by those who argue in favour of free 
trade. The anticipated benefits they promise are abstract and their assurances 
are too vague. 

At the same time, we are compelled to see the costs of free trade in terms of 
Canadian jobs and industries that will be lost, and in terms of the threat to our 
sovereignty and our identity. 

During our hearings, the Committee received disturbing information about the 
vulnerability of Canadian jobs. We were told that many thousands of jobs are at 
risk— 20, 000 jobs in the textile and clothing industry, 10,000 jobs in household 
furniture, 45,000 jobs in the electrical sectors and over half of brewery jobs. 
We were told that various industries are threatened, among them trucking, fine 
paper and boxboard, food and beverages, and services. The federal Minister of 
International Trade, James Kelleher, has indicated that up to 7% of the labour 
force—some 900,000 workers— would be forced to undergo a 'transition.' And 
the Ontario Ministry of Industry, Trade and Technology revealed that 212 
industries in Ontario and 270,000 workers could be affected. 



-80 - 



The Committee further heard that under a free trade agreement there would be 
pressure to match the U.S. in such fields as taxation policies, labour laws, 
environmental regulations and private ownership of our forests. Witnesses 
expressed real fears that free trade could mean the end of many Canadian 
social programs, agricultural marketing boards, government procurement 
policies and regional development grants. 

In this light, it is clear that free trade poses a severe threat to Canadian 
sovereignty. 

New Democrats do not believe that Canadians will be better off by giving up 
the real jobs of today for the promise of jobs tomorrow, and we do not accept 
that our national interest in any way can be advanced by a commitment to 
continental economic integration. 

We are convinced that the decision on free trade is a pre-emptive one, 
foreclosing now and in the future the chance for Canadians to chart an 
independent economic course. 

After boxing themselves into the free trade corner, the Liberals and 
Conservatives have attempted to extricate themselves by naively setting 
imagined pre-conditions of a bilateral trade agreement. 

The Liberal and Conservative members on the Committee are playing 'Let's 
Pretend.' They want to pretend that free trade is other than what it is, that 
somehow they can re-define it in their own terms and be rid of it. 

The majority has said let's negotiate free trade with the U.S. but let's define 
free trade to mean that certain sectors, like auto and agriculture, will be 
non-negotiable. 

In other words, they expect the U.S. to negotiate free trade when in advance of 
negotiations over half of Ontario's exports have been taken off the table. 

Both the United States and Canada have indicated that such preconditions are 
not possible; that once we sit down everything is negotiable. 



-81 - 



The only way to guarantee that our industries and jobs will not be traded off is 
by refusing at the outset to negotiate a bilateral free trade agreement. 

Proponents of free trade have argued from two basic positions. Those 
industries, such as lumber and steel, which have had their exports threatened by 
U.S. protectionism want secure access to the U.S. market. They see in free 
trade a defence of the status quo. 

Business associations and right-wing ideologues, on the other hand, want free 
trade as a means of ensuring our political economy is directed and disciplined 
by the market place. 

But industries vulnerable to American protectionism have no guarantees under a 
bilateral free trade agreement. New Democrats understand and share the 
concern of those industries, but we are also aware that the protectionist threat 
to those industries stems fom a variety of factors, including the strength of the 
U.S. dollar and the use of countervailing duties in the U.S. These are issues 
that a bilateral free trade agreement cannot resolve. 

The latter position we simply disagree with. We see no advantage in 
surrendering our economy to the whims and wishes of the multinational 
corporations. 

The Canadian economy remains seriously out of balance. We run large trading 
surpluses in raw materials and semi -finished commodities that deplete 
non-renewable resources while providing relatively few jobs. At the same time, 
we have a large deficit in high value-added products such as finished 
manufactured goods which are much more job intensive. The automotive 
industry is a major exception. There the Auto Pact has insured a fair trade of 
manufacturing jobs through its Canadian content requirements. The Americans 
don't want such Canadian content requirements under a free trade agreement. 

Canada needs an industrial strategy that reduces our dependence on foreign 
ownership and the exploitation of our resources. Rather than trade 
liberalization, we should be aiming for greater self-reliance, by focusing on 
import replacement, greater Canadian content requirements, and putting more 
value-added in our resources by manufacturing finished products here in Canada. 



82 



The real issue is jobs. Only through a coherent industrial strategy can we 
generate the new jobs that Canada needs. A bilateral free trade agreement 
with the U.S. is not a job strategy. 

We hoped that the Committee would treat its mandate seriously, that it would 
carefully weigh the benefits and the costs of free trade, that it would carefully 
examine the options, and that it would explore the alternatives to free trade. 
We hoped that in so doing the Government of Ontario could provide national 
leadership on the issue of free trade. 

Unfortunately, the ideological biases of our Liberal and Conservative colleagues 
have got in the way. 



/^o< /^^<^»u 




^t 



Karl Morin-Strom, MPP Rob Mackenzie, MPP 

Sault Ste. Marie Hamilton East 



. 



[ 



ISBN 0-7729-0920-2