Bill C-282 is contrary to Canada's national interest

I testified at the at the Senate Standing Senate Committee on Foreign Affairs and International Trade on October 30, 2024. The subject was Bill C-282, which proposes to amend the Department of Foreign Affairs, Trade and Development Act to make it legally impossible for Canadian officials to make any concessions on Canada's dairy, poultry and eggs "supply management" system in future international trade negotiations.

My opening remarks and excepts of my comments are below. A video of the full session is also available.

Opening remarks

I am grateful for the invitation to speak with you today.

I should say at the outset that I’m not an agricultural economist. My expertise is in foreign policy and international affairs. It’s from those perspectives that I am pleased to offer some thoughts on this bill.

I have three points to make.

The first is about the context. We have entered a period of great and growing uncertainty in international affairs, including in our trade relations. The post-war era of rules-based globalization is not over, but it has certainly peaked, as we witness a process of de-globalization gathering speed in the form of new tariffs, a variety of new trade restrictions and the rise of economic nationalism, which poses a serious challenge to a country like Canada, whose economy depends so much upon open international trade, especially with our closest trading partners.

But now, even those relations are more uncertain than they were before, so Canada is going to have to work exceptionally hard in the coming years just to hold on to the market access we have secured for our exports to date. That’s certainly true for Canada-U.S. trade and for the vitally important review of the CUSMA coming up next year, but it’s also true for our trade with other countries. If, say, the European Union introduces new protectionist trade or new economic measures in response to what other countries are doing, where will that leave Canada? We’re not, as you know, a member.

The bottom line is that we’ll have to work harder than ever before to secure our own national interests in a much more unpredictable and less stable world, which leads to the second point that I’d like to make.

In this new environment, Canadian trade representatives will have to be adaptable, flexible and ready to deal with challenges, some of which may place Canada’s most fundamental economic interests at risk. The review of the CUSMA is already on the calendar, looming very large for the well-being of our economy and for the livelihood of countless Canadians across the country. That’s serious enough in itself, but what’s not on the calendar and what we don’t know is how the rapid rise in economic nationalism may impact Canada’s other trade relationships.

Given all of this uncertainty and risk, now is arguably the worst possible time to be advancing legislation that would weaken our negotiating leverage by effectively tying the hands of Canadian negotiators, making it even harder to secure concessions from our trading partners or to respond to situations in which Canada’s larger economic interests are at stake.

That leads to my final point, which is the precedent this bill would set.

Unlike Mr. Fried, I am not a lawyer, and I don’t understand the Royal prerogative and executive power in detail, but I would say there is a common sense question raised by this proposal and it is an important one: If this sector deserves to have its interests written in the Department of Foreign Affairs, Trade and Development Act, then why shouldn’t many others?

I think what most Canadians expect is that the Government of Canada will consider the interests of any given sector within the context of the larger national interest to ensure the well-being of all Canadians. I don’t think that’s what is happening here.

To say that Canadian negotiators should be legally prohibited from ever addressing the quotas and tariffs of our existing supply management system, even in the face of potentially serious economic challenges to Canada, is the equivalent of saying that the arrangement itself stands above the interests of our economy as and Canada as a whole.

Thank you for your attention.

Further comments

Senator M. Deacon: ...why did the bill at that moment receive such overwhelming support in the other place if it is so flawed?

Mr. Paris: Let me just say, it is entirely within the rights of the House of Commons to pass this bill, within Parliament’s rights to enact this bill. If it becomes law, it will be legitimate. It still won’t be good policy, but it is entirely within the rights of legislators to do so.

The simple answer to your question is that we have in this case a classic instance of a concentrated, narrow interest prevailing over a generalized, more diffuse interest. It is related to a concept in the fields of economics and political science referred to as regulatory capture, or a situation where a particular interest exercises a commanding influence over the regulatory arrangements governing the sector.

Often in those cases, like this one, the principal benefits of the regulation go to the particular interest, whereas the costs are borne by a large group of people, in this case taxpayers.

What I have been suggesting is that the costs of passing this bill are potentially even greater, in the sense that we are facing rising challenges to our trade relations. This is an increasingly challenging time for Canada and tying the hands of our negotiators, which is seemingly a consequence and overreach of this regulatory capture, could make it harder for Canada to sustain market access with key trading partners going forward.