Hon. François-Philippe Champagne (Minister of International Trade, Lib.)
moved that Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures, be read the third time and passed.
He said: Mr. Speaker, I am very pleased to rise today. There has never been a more important time in our history to talk about trade. Therefore, I am going to talk about Bill C-30. I would invite all my colleagues on both sides to really take this opportunity to rise to the challenge that we are facing.
Twenty years from now we will remember the moment that we seized as parliamentarians to really move forward on trade. The world is waiting for us to ratify this agreement. This is going to be great for Canada. This is going to be great for Europe. This is the gold standard of international agreements.
Obviously, I am delighted to rise in the House today to speak to a very important bill, Bill C-30, an act to implement the comprehensive economic and trade agreement between Canada and the European Union, or CETA.
As Minister of International Trade, CETA is one of my top priorities. Many ministers have worked on this free trade agreement in recent years and, thanks to their efforts, the Prime Minister was able to sign this agreement in Brussels at the end of October 2016.
CETA negotiations began in 2008. It took many years of hard work to reach an agreement that addresses issues that have never been covered in Canada's other trade agreements, including NAFTA.
It is now up to us, as parliamentarians, to complete the legislative process and bring CETA into force so that all Canadians can finally benefit from it. This agreement is the result of a historic initiative to promote the prosperity of our country, and I would venture to say that Canadians in each of the 338 ridings represented in the House of Commons will benefit from it.
By signing this agreement we are gaining market access and improved trade conditions that go beyond the NAFTA provisions. What is more, we achieved this in a progressive and responsible way. This agreement will provide Canada with the growth and jobs its needs, while fully upholding Canadian and European standards in areas such as food safety, environmental protection, and workers' rights.
CETA will open opportunities for Canadian businesses in the EU's estimated $3.3-trillion government procurement market. Once CETA enters into force, Canadian firms will be able to supply goods and select services to all levels of EU government, including the EU's 28 member states and thousands of regional and local government entities. Imagine the opportunities for all the SMEs here at home.
Under CETA, consumers will benefit from lower prices and a wider range of choices. This agreement will also be beneficial for workers, since it will create more high-quality jobs associated with exports. It will also be beneficial for our businesses, no matter their size, as they will see lower costs resulting from the elimination of tariff and non-tariff trade barriers.
This is a progressive trade agreement that prioritizes the middle class, opens new markets to Canadian producers, and means greater prosperity for Canadians from one end of our great country to the other.
I would like to talk about the importance of trade. Canada's participation in international trade is vital to the entire nation's prosperity. Canada has always been a trading nation. Exports are key to our economy. They contribute to growth, productivity, and, of course, employment. Taken together, they represent about 30% of Canada's GDP. One in six Canadian jobs depends directly or indirectly on our export activities.
The small and medium-sized businesses in all of our ridings play a leading role in our economy. Employing some 10 million Canadians, they account for nearly 90% of private-sector employment in Canada.
Small businesses alone make up 90% of Canadian exporters and, in 2011, were responsible for $68 billion, or 25%, of the total value of exports. Creating new commercial opportunities for SMEs is therefore essential to growing our economy, because job growth and opportunities for the middle class depend on those businesses.
In 2015, Innovation, Science and Economic Development Canada released a report profiling SMEs and their characteristics as Canadian exporters. The report found that 10% of Canadian SMEs exported goods and services in 2011, with export sales accounting for about 4% of total company revenues.
The report also points to superior financial performance by exporters compared with non-exporters. Specifically, exporters generated higher sales, pre-tax profit margins, and returns on assets, on average, compared with non-exporters.
In addition, the report indicated that exporters are more research and development intensive than non-exporters, spending 8% of annual revenues on R and D, on average, compared with 6% for non-exporters.
Lastly, exporters are also more growth oriented than non-exporters. Indeed, the sales of 10% of exporters grew by 20% or more per year between 2009 and 2011 compared to only 8% of non-exporters.
I know that my colleagues in the House already appreciate the fact that trade and, in particular, the role of small businesses within all our ridings, is important to Canada's economic growth.
SMEs clearly play a major role in fostering the future prosperity of the country, and Canada firmly believes in the importance of helping our SMEs to be successful because this will create jobs and strengthen the middle class across the country. Concrete tools such as CETA are important as they motivate businesses and encourage them to seize opportunities in major foreign markets such as the European Union.
I will now turn to the government's role and the impact of the positive trade policy on Canada's businesses. The findings of Innovation, Science and Economic Development Canada's report support our government's continuing commitment to stimulating growth of SMEs and advancing an export agenda by entering into new trade agreements. These agreements help our SMEs because they ensure access to export markets abroad and they create conditions conducive to the competitive participation in these markets.
This is especially true in the context of current global value chains because international production requires goods to cross many borders. It is especially important to facilitate the flow of goods across borders to ensure the success of our businesses today and tomorrow.
The European Union is a key market for global value chains. It has more Fortune 500 companies than any other place in the world, including the United States. Broader access to these value chains provides a large number of Canadian SMEs a major opportunity to realize their goals and aspirations on an international scale.
I know that every member of the House would like to help the SMEs in their ridings conquer those markets, and CETA is another tool in the toolbox for our SMEs. Canada's SME exporters continue to focus predominantly on the U.S., with 89% of exporters selling to the United States and 74% of the value of exports generated by U.S. sales.
With CETA, we will see SMEs diversify their exports and pursue opportunities in the European Union, the world's second-largest market for goods. The EU's annual imports alone are worth more than Canada's entire GDP.
In this period of slower economic growth and of growing protectionist and even anti-trade tendencies in many areas of the world, it is particularly important to implement agreements such as CETA.
I will give an overview of CETA for all of my colleagues in the House. CETA represents many firsts for free trade in Canada and the European Union. CETA sets new standards in trade in goods and services, non-tariff barriers, investments, and government procurement, as well as in other areas such as labour and environment.
It offers preferential access to the large, dynamic European market.
It creates tremendous opportunities and gives Canadian businesses a real competitive edge.
It gives Canadian businesses a first-mover advantage compared to their competitors from other markets, such as the United States, which do not have trade agreements with the European Union.
CETA is a comprehensive trade agreement. Once it comes into force, it will cover almost every sector and aspect related to trade between Canada and the European Union. Of the EU's some 9,000 tariff lines, approximately 98% will be duty free for Canadian goods as soon as the agreement comes into force, as compared to the current 25%. An additional 1% will be cut over a seven-year phase-out period.
This agreement is vital to create growth in Canada and, as we know, growth means jobs for the middle class.
The elimination of tariffs under CETA creates immense opportunities for many of Canada's exports to the EU, where tariffs remain high. Let me give members a few examples: fish and seafood, which secures an EU tariff of up to 25%; wood, with an EU tariff of up to 8%; information and communications technology products, with EU tariffs of up to 14%; and machinery equipment, with EU tariffs of up to 8%.
Canadian services providers will also benefit from the best-quality market access the EU, the world's largest importer of services, has ever provided in a trade agreement, as well as the most ambitious commitments on temporary entry the EU has ever been granted.
Beyond increased market access, CETA includes many other significant achievements.
A protocol of conformity assessment will allow Canadian manufacturers in certain sectors to have their products tested and certified in Canada for sale in the EU. This is a significant innovation that will save companies time and money and will be particularly useful to small and medium-sized businesses.
This is also the first bilateral trade agreement in which Canada has included a stand-alone chapter on regulatory co-operation, which is forward looking and promotes early engagement as measures are being developed.
As well, CETA includes a detailed framework for the mutual recognition of professional qualifications, a key aspect of labour mobility.
Canada is one of the largest exporters of services in the world. It exported $16 billion in services to the EU in 2015 alone. CETA gives Canadian service suppliers the best market access the EU has ever granted to any of its free trade agreement partners. CETA will ensure that Canadian service suppliers compete on an equal footing with domestic providers, in certain sectors, and receive better treatment than most competitors from non-EU countries.
Provisions set out in the chapter on cross-border trade in services will provide for better market access assurances in many sectors of interest to Canada's economy, including professional services, environmental services, technical testing and analysis services, and research and development services. This is great news for all Canadian entrepreneurs.
CETA's labour mobility provisions will also enhance the ability of Canadians and EU business persons to move across borders. CETA provisions will make it easier for short-term business visitors, intra-company transferees, investors, contract service suppliers, and independent professionals to conduct business in the EU.
Investment also forms a substantial portion of the Canada-EU economic relationship. In 2015, the known stock of direct investment by Canadian companies in the EU totalled $210 billion, representing 21% of known Canadian direct investment abroad. In the same year, the known stock of direct investment from European companies in Canada totalled $242 billion, representing over 31% of known total foreign investment in Canada.
These numbers are significant. Canada needs more investment. More investment means more jobs for Canadian workers and more growth for our economy and a stronger middle class, something that each and every member in this House would be able to support. CETA provides greater incentive for EU companies to choose Canada as the attractive destination in this world for their investments.
CETA includes provisions to facilitate the establishment of investment, to protect investors against such practices as discriminatory treatment, uncompensated expropriation, arbitrary or abusive conduct, and to ensure that capital may be freely transferred. CETA's obligations are backed by a mechanism for the resolution of investment disputes, which includes both a first instance tribunal and an appellate tribunal.
Let me tell the House about the progressive nature of CETA, and that should make every member of this House very proud. Investment and dispute resolution are some of the themes that have been discussed at length here in Canada and across the EU. Canadian and EU citizens have voiced views and concerns on these important issues, and others, such as environmental protection, workers' rights, consumer health and safety, and a government's right to regulate.
One of the most important things that our government did right after taking office was to listen to the critics of CETA, critics who were gaining steam both in Canada and in Europe, and to understand some of the legitimate concerns people had. We worked with Canadians, including industry and civil society alike and, I would say, members and critics on the other side as well. Together with the EU, we responded to ensure that the economic gains from implementing this agreement would not come at the expense of these vital elements.
This includes making changes during the legal review of the agreement, as well as publishing a joint interpretative instrument with the EU at the time of the signature of CETA. It provided a clear and non-ambiguous statement of what Canada and the EU and its member states agreed with respect to a number of CETA provisions, including those in areas of public concern. CETA cements the paramount right of democratic governments to regulate in the interests of citizens on the environment, on labour standards, and in defence of the public sector. This is even more important in today's world, where we are faced with increasingly challenging times for trade and the global economy.
Let me tell the House about CETA in the world, the context we are living in today, in conclusion. We are seeing many nations now turning more inward and pursuing more protectionist measures following decades of ever-increasing openness. Many people are feeling that globalization has left them behind. People are faced with income inequality. They are suffering from economic hardships. They are worried about their jobs and future prospects. These are real and legitimate concerns.
That is why, at my first WTO meeting, I said to all the ministers, “Let us have a WTO for the people. Let us always make the people first in whatever decision we are taking.” It is all about people.
However, closing borders is not a solution. Doing so will decimate economic growth and make us all poorer as a result, especially for a trading nation like Canada, for which participation in global commerce is key to our prosperity. This path is clearly a perilous direction.
In conclusion, that is why it is important that Canada stands up to this protectionist trend and continues moving toward an open society for free and open trade. We must do so in a way that puts the middle class at the centre of our ambitions and at the heart of any deal. Not only is this the right thing to do, it is in our national economic interest to do it. I urge every member to speak in favour of CETA, vote in favour of CETA and for decades to come, people will remember what we did, a historic agreement.
Mr. Tom Kmiec (Calgary Shepard, CPC):
Madam Speaker, I am very pleased to join the debate on Bill C-30, an act implementing our latest free trade agreement with the European Union. I was very glad to hear the minister speak on the subject. I congratulate him as well on his appointment to the ministry. For all those who did not make it, their time will come I am sure, when the minister faces tough questions and will be unable to answer them in the House.
As I have done before, I have a Yiddish proverb, and I love using them. “Words must be weighed, not counted”. I know when it comes to counting words in the House, two members will disagree with me that they should be weighed. The member for Winnipeg North and my dear colleague, the member for Sherwood Park—Fort Saskatchewan, might disagree with me in their race to the top. However, weighing the words is far more important.
I know many members have come to the House to talk about the details of the bill, the different sections they agree with or agree less with, and the impact it will have on Canada's economy. I want to take it back just a little to talk about the meaning of free trade, the meaning it has had for Canada, and the impact it has had on our history.
Canada has been a trading nation from the very beginning, since pre-Confederation, by our forefathers and those who came here early on when beaver pelts were considered the currency of our country.
In the earliest debates on Confederation at the time, when Canada was founded, there were great debates on how Canada would become a true country. They were about the maritime customs union. That is what the early pre-Confederation politicians of the day were debating. It took Sir John A. Macdonald, taking charge of the situation and hijacking these meetings, to turn it into a discussion about how they could form Canada, a country devoted to trading, both within the British Empire and with our neighbours to the south. From that moment on, the great debates in our country have truly been about how we can make free trade work for us.
At the time, those debates were called reciprocity. The reciprocity treaty had been annulled the year before, in 1866, and that was the great foundation of our country. That impulse that we no longer could trade as easily with the United States, formed a great need among politicians to come together, create Canada and be able to trade more openly with our British motherland, the great mother parliament.
It was Alexander Mackenzie, the second prime minister of Canada, a great Liberal prime minister, a great believer in free trade, who said that reciprocity was really what Canada was all about. It was very important to him and to his party that it be implemented and returned to what it was.
As I mentioned, it has been a foundational debate in Canada: how and with whom can we trade, and as freely as possible. It has never been about how the government can trade with another government, but how people can trade. People create corporations and enterprises. They are entrepreneurial. They look for the best deals, and it is not just about price. It is about the product people want. It is about obtaining the type of product and not looking at only the price, but the quality, its origins, whatever country it comes from, and being able to obtain it freely in a country without government interference telling them, through a tariff or regulation, or imposition of a ban, they cannot obtain it.
In a previous decade, it was a Conservative government that negotiated many free trade agreements, with 46 different countries, which brought the total up to 51 in Canada. That was 4.6 agreements per year.
Sometimes when I speak with students, especially students of history, I like comparing Canada to the Hanseatic League. It is in ancient Europe. We are about to embark on a great free trade agreement with Europe, including many of the countries whose cities were formerly with the Hanseatic League of ancient Europe. Canada is on the cusp of achieving a vast free trade empire, of which Prime Minister Harper used to speak. We have this great opportunity. Free trade will reshape our country and Europe as well. It is that combination of sharing a common history and common culture for many of us. It is an opportunity to shape the future for the next 20 to 50 years. It is not just for ourselves. It is also for our children and grandchildren, who will have opportunities that we did not have when we were much younger.
Other agreements have gone onto the wayside, like the TPP. It is my great hope the government will take up the TPP negotiations again and ensure we sign it with the partners that are still willing to go ahead with it. It is a great loss for the United States not to be moving ahead with the TPP at this time. I still have great hopes that Congress will change its mind and actually move on this. Again, it puts Canada right in the middle between CETA and the TPP and our free trade agreement with the United States.
We have an amazing opportunity to become the hub country through which goods can move, corporations can come and not just create good paying middle-class jobs, but also reshape our country and provide new opportunities and new ways of doing business, and creating wealth for the government to tax and pay for the public services Canadians have come to expect.
While TPP is a great loss for the United States, CETA is a great loss for the United Kingdom. A great many politicians in Europe and the United Kingdom have said this will be a be a loss for the United Kingdom, but they still look forward to negotiating free trade agreements both in Continental Europe and Canada, and finding opportunities to increase trade and to make it possible.
I like to quote from Daniel Hannan, a politician. Sometimes I also look at his videos and his speeches. He is now a former member of the European parliament, and was one of the big promoters of Brexit. He said that the union between the United Kingdom and the European Union was not some great utopia of free trade due to the regulations that were imposed on them. He said that the goal of a great many politicians in the United Kingdom still was to achieve free trade with Europe, Canada and with as many countries as possible to give this great opportunity for their citizens to trade freely with others. It is still good to aim high as much as possible. I am glad the government is pushing forward the legislation to implement the treaty and then to move on from there to other negotiations, to other perspective countries and regions with which we could achieve some type of free trade agreement and provide opportunities for Canadians to trade.
On January 24, The European Union trade committee voted 25 to15 with one abstention. The rapporteur for the CETA said that this was a strong response to growing protectionism and that trade would enable them to continue to bring wealth to both shores of this trans-Atlantic friendship. That is a great way of looking at it. It is not just about the business component. It is also about this great friendship we have had, which predates NATO and the British and French influence on this continent. It is a long-standing relationship that America in the very broad sense, America, Canada, Mexico., has been able to enjoy with Europe. We have a shared history. Our histories and politics are intertwined. We participate in international bodies together. Although we can disagree, and sometimes very profoundly, we maintain that friendship, and that agreement does not turn into rancour, warring among each other anymore, thankfully. Now we have an opportunity, through free trade, to mutually reach an agreement between ourselves that will be beneficial for our citizens and our residents.
Both Canada and the European Union recognize in the deal the right to regulate domestic rights, and both will remain intact. That is found in section 7(d) of the legislation. This should allay the concerns that multinationals will somehow gain more influence and be able to pit one government against another, or pit a regulation in order to try to indicate that it is unnecessarily targeting them in some way. Section 7(d) tries to allay some of the fears of some people who no longer support free trade, the great pull internationally toward more protectionism that we saw 100 years ago. We need to push against that. It is a good sign from the Liberal government that it is moving ahead with the European free trade agreement. It says that we are open for trade and business. We want to find ways to trade more freely with others. We want to reach an agreement to reduce tariffs, to align our regulations to give those opportunities to Canadians to trade freely with them.
CETA will not remove barriers on four specific areas: public services, audiovisual, transport services, and a few agricultural products, including dairy, poultry, and eggs. The European Union expects the trade between its bloc and our country to rise by 20% when the agreement is fully implemented.
If we look at some of the numbers from 2015, according to the European Union, if we count just the imports from Canada, they totalled just about $40 billion. If we look at the exports to Canada, it was $49.5 billion. This is just a rough conversion from the euro.
We could also look at the Observatory of Economic Complexity, which is a website I highly recommend to people interested not only in numbers but to have them visually explained, to visually show what the numbers actually mean in real trade and to convey the numbers in a way that is catchy and attractive to the eye. For Canada, if we have a rough comparator, it means in value.
We exported $45.2 billion in cars in 2014. If we compare that to the exports we got from Europe, it was $49.5 billion. Therefore, we can see the opportunity we have. The car industry in Canada is a sector of the economy. It is very big in Ontario and not so very big in Alberta, but it is an opportunity if we just compare these two numbers. The top imports to Canada were vehicle parts, $20.4 billion, which is about twice as much as our EU trade; refined petroleum was $17.9 billion; and delivery trucks were $12.7 billion. Again, we expected the boost to Canadian trade would be somewhere in the area of $12 billion. Therefore, that boost alone would be like doubling the delivery trucks we import.
Again, it would be like almost doubling the vehicle parts sector of our economy. It is a huge opportunity, a chance for Canadians and Canadian companies to find ways to meet the needs and wants of people overseas and, likewise, for those people in other countries, such as the European Union, to find ways to meet the needs of Canadians without having the government necessarily interfere in that free exchange of goods and services.
The 751-seat European Parliament will be holding a vote on February 15. Therefore, it is very timely to be having this debate and passing the bill. It would be a good signal to send to the European Parliament that we are onside and that we want to proceed as quickly as possible to pass this bill in both the House and the Senate so Canadians can start to do the legwork needed on the ground to prepare themselves to trade with our partners in Europe. I am sure European companies and European residents are getting ready to trade with Canadians.
Sending the message that we still believe in free trade is more important today than it has ever been before. As I mentioned before, there is a great rise in protectionism across the globe. A great many people have seen, for the past 30 years potentially, in their own individual cases the lack of opportunity. They have not been able to obtain the jobs they wanted. The free trade in their countries perhaps was not as successful as they had hoped, or the sector of the economy they were in, perhaps for extended periods of time, suffered from an agreement where someone else with a comparative advantage was able to trade at a lower price or for different quality goods.
Again, we are always trying to find opportunities to help Canadians retrain and find new sectors of their economy to go into, to find entrepreneurial routes to create wealth. Although there are those situations, we have to support this renewal through this agreement, this renewal of our faith in free trade that it is good for Canadians and that it has been part of our history. We can broaden this transatlantic friendship and with that, protectionist sentiment notwithstanding, we will make this work. It will not be perfect. Every sector of the economy may not profit as equally as another, but we will find opportunities to make it work. Where it does not work, we can always make an agreement with our European partners to get it done.
I will go back to my example of the Hanseatic League. That league was based on trade in Europe, especially around the Baltic Sea. It dominated trade for almost 400 years. Yet Hansa societies were working to remove restrictions on trade, especially regulatory restrictions on trade. Permitting and restrictions were a big deal in those countries, in those cities. It was very difficult at the time to freely trade among all regions there. The Hanseatic League, basically, made it possible to trade freely almost among themselves, to provide and ship goods to other areas that needed them.
The opportunities that the league found profoundly reshaped the Baltic states and cities. We can still see it today in the city from which I come. I was born in Danzig, Gdansk in Polish. After 1466, it became the leading grain port and made Poland the dominant exporter of grain through the association it had with the league. I lived in that city for four and a half before my family came here in 1985. It is marked by that profound association it had with the Hanseatic League. The entire port areas are either shipyards or old grain ports. The most historic well-known heritage buildings are old Hansa society buildings. They are all grain storage facilities. Those are the things people mostly recognize.
Even though there was such awful destruction in World War I and World War II and during the many riots and uprisings in Poland during the 1800s during the partitions, those buildings still stand today. They stand as a kind of reminder to generations that have come afterward of the opportunities trade has given cities like Danzig and cities like Hamburg, which greatly profited from the ability to associate with others freely and to trade freely with them.
I am convinced that CETA will reshape Europe and Canada for decades to come in a positive way, a better way. We will find opportunities to trade and will find, perhaps, wants and needs that we did not know existed in Europe. Likewise, they will do it here. We will grow that relationship we have with them, both in trade imports and exports but also in the friendship we enjoy. We will come to a better understanding of what our countries require or do not require. People perhaps will be able to move across to other areas of the world, again seeking opportunities, chances to create wealth for themselves and for their families to live, work, and play as they wish.
The freedom to associate has to also mean the freedom to trade. “Free trade, one of the greatest blessings which government can confer on its people, is in...every country unpopular”. Perhaps members think that was said in 2017, but it was not. It was actually said in 1824, by Thomas Babington Macaulay, the first Baron Macaulay, a British historian and politician, a Whig, no less. At the time, he was looking at continental Europe and saying that he saw a great rise in protectionism and a great rise in people no longer seeing the benefits of free trade and the opportunities they received from engaging in trade with others.
Again, it is the great paradox of our time that those who have gained the most from the liberalization of trade, especially since 1989 and the collapse of the Soviet Union, no longer believe in its ability to reduce extreme poverty. They no longer believe in its ability to reduce extreme deprivation in housing and energy. They no longer believe that it is as effective. We know that all the stats prove it. We can see with our eyes, when we travel to certain areas, that trade has benefited immensely countries in Asia, in Africa, and in Latin America. Things are better today than they were 100 years ago or 50 years ago. Since 1989, countries like Singapore, South Korea, and Poland have immensely benefited, and their middle class has benefited, from the ability to trade freely with others, and so have we.
The trade relationship we have with the United States is the one we know best. It is the one sometimes we take for granted as well. We do not do enough to nurture the relationship we have with our American friends to the south. Sometimes we take it for granted, and we should not, because just as Baron Macaulay said in 1824, the rise of protectionism can always return. We are seeing that today.
What we have to be doing with an agreement like this is passing it as quickly as possible through this House, with judicious debate here and in the Senate. We have to give ourselves the opportunity to at least move it along further so that when the European Parliament, on February 15, has its vote, it will see that Canada is ready to take advantage of this agreement we have negotiated in good faith with the European Union and that we want to follow through on it and deepen the relationship we have had.
The great reductions in poverty and deprivation we have experienced and seen with our own eyes over the past 60 years were not the result of status or socialist command economies. They did not lift more than a billion people out of poverty. It was free trade, free-market economies that succeeded.
Why are people opposed to it today? I will maybe leave off with a quote from Daniel Hannan. He mentions two things that are the problem between protectionism and free trade and the pull between the two: “dispersed gains, concentrated losses”.
We can see that in industries that are protected, that enjoy some type of grant from the government, a monopoly or oligopoly system, such as in sugar and tires. It goes on and on.
On one side, the gains of free trade are dispersed across the population, and it is hard to say, “This is why I have gained over the past 20 years and have been able to obtain a job that feeds my family and gives me the sense of hope and opportunity I have always looked for”. On the other side, concentrated losses, those who lose from it can sometimes lose very profoundly.
My family came to Canada not just because they were fleeing political persecution but because of the opportunities Canada provided. The free trade agreement is deeply embedded in that, and I urge the House to pass this bill as soon as possible.
Ms. Tracey Ramsey (Essex, NDP):
Madam Speaker, I am pleased to rise to speak to Bill C-30 at third reading today. As we know, Bill C-30 is implementing legislation for the Canada-EU comprehensive economic and trade agreement. This debate is the last one we will have before the legislation is passed by this House and moves on to the Senate.
The Canada-EU relationship is extremely important, and perhaps it has grown in importance since Canada's relationship with the U.S. faces new challenges.
The New Democratic Party believes Canada should absolutely be deepening trade relations with the European Union. After all, our countries share deep social and cultural ties, and the EU is already our second largest trading partner. This trading relationship is extremely important. In fact, as I have said before, it is too important to get wrong.
I would like to begin my speech by highlighting some of the testimony received by the Standing Committee on International Trade. After, I would like to revisit some of the New Democratic Party's outstanding concerns with CETA, and the challenges with this agreement, moving forward.
While the trade committee only had four meeting to hear from outside witnesses on CETA, we heard some very good presentations. I wish we could have had more meetings and more witnesses, as I felt they made very valuable contributions.
One of the challenges that is often overlooked in trade discussions is how the government will actually help micro, small, and medium-sized businesses access potential new markets. Only about 10% of Canadian SMEs do business outside of our borders.
It is the job of the Minister of International Trade to develop, and implement a new strategy to support Canadian businesses exporting to international markets. This theme was often raised at the trade committee, as witnesses discussed how the government could support Canadian exporting businesses.
The Canadian Cattlemen's Association testified that it was very supportive of CETA. However, it also highlighted critical issues around the conversion of potential markets into real trade. Canadian meat producers are essentially shut out of the European market, so they welcome the access that CETA may grant them. However, I will point out that for Canadian beef exports, the increased quota would be phased-in over six years. On the other hand, EU exporters would have tarrif-free, quota-free access to Canada on day one.
The Cattlemen's Association pointed out significant differences between Canada and EU food safety regulations. Its support for Bill C-30 and CETA implementation is contingent on three conditions: first, it wants a commitment from the government to develop and fully fund a comprehensive strategy to eliminate non-tariff barriers to Canadian beef; second, it expects EU beef imports would comply with Canadian food safety requirements; and third, it wants to see government investment in beef processing and beef producer operations to help them comply with the complexities of the EU market.
As we can see, there is still a lot of work to be done to ensure that Canadian exporters can access potential new EU markets.
The committee also heard from the Canadian Chamber of Commerce, which affirmed that trade agreements are just a starting point. Canada needs a vigorous trade strategy to help smaller businesses take advantage of new opportunities.
I would like to point out some comments provided to the committee by the Canadian Federation of Independent Businesses which, as we know, represents over 100,000 Canadian SMEs. Ms. Corinne Pohlmann of CFIB said:
|| Almost two-thirds of our members in a very recent survey are supportive of international trade agreements. However, nearly one in five small business owners felt they didn't have enough information to answer this question, suggesting that perhaps more needs to be done to inform them about the opportunities trade agreements can bring to their business.
She also pointed out that supply-managed producers have strong concerns and should be compensated for losses they would incur on CETA. According to the CFIB, smaller businesses want more consistency, fewer regulations, standards that are simple to comply with, simpler border processes, less paperwork, and lower costs. These are all principles that the NDP agrees with resoundingly.
This is exactly the kind of trade that we support. It is a shame that CETA includes so much else that we simply cannot support, like extraordinary legal rights for foreign companies to challenge our domestic environmental laws, and IP rules that favour name brand pharmaceutical companies that would drive up the cost of medication for Canadians.
These are the elements of comprehensive agreements like CETA and TPP that we simply cannot support. These elements are not in the best interests of Canadians. Canadians need elected representatives who are willing to stand up and challenge these harmful ideas.
CETA will also hurt Canada's dairy sector, and the so-called investment package offered to dairy farmers falls far short of compensating them for their losses. I would like to read a quote from Yves Leduc of the Dairy Farmers of Canada who appeared before the trade committee:
|| In regard to the government's announcement of a transition assistance package for CETA on November 10, DFC was pleased to see that the government decided to invest $250 million in dairy farms as well as $100 million in funding to help spur investment into updating Canada's dairy processing infrastructure...However, it only partially addresses the damage that will be caused by CETA. For dairy farmers, CETA will result in an expropriation of up to 2% of Canadian milk production, representing 17,700 tonnes of cheese that will no longer be produced in Canada. This is equivalent to the production of the province of Nova Scotia alone. It will cost Canadian dairy farmers up to $116 million in perpetual lost revenues.
Let us take a look at the math here. Canadian dairy farmers will perpetually lose $115 million-a-year, while the Liberals' so-called transition plan will provide $50 million-a-year for only five years. This simply will not compensate dairy farmers for the losses they will incur under CETA, and some farmers will never see a penny of this money.
The government says that it supports supply management, but when it comes time to act, it turns its back on our dairy farmers. There is no action on diafiltered milk, and now the government has sent Brian Mulroney over to the U.S. on Canada's behalf, who just last week openly called for the elimination of supply management.
This is the person the Liberals have sent to the U.S. to supposedly defend Canadian trade interests. I hope the Minister of Agriculture is urging the Prime Minister to send Mr. Mulroney back to Canada, because Mr. Mulroney cannot claim to be fighting for Canada while opining that supply management has got to go.
Supply management is the backbone of our dairy industry, and it provides Canadian farmers with reliable incomes. It keeps prices stable, requires no government assistance, and supplies Canada with healthy, local milk. However, supply management has been eroded under TPP and CETA. It is time the government makes good on its word, and starts standing up for Canadian dairy farmers.
On CETA, the Liberals have completely ignored the issue of compensating Newfoundland and Labrador, which is expected to give up its minimum processing requirements under CETA. These rules are very important to Newfoundland and Labrador. They require that fish caught in the province must also be processed there. This keeps jobs in the local rural economy.
In 2013, a $400 million fisheries fund was set-up, with Ottawa contributing $280 million and Newfoundland and Labrador contributing $120 million. Where is the money now? Why has the Liberal government backed away from this pledge? For Heaven's sake, why is every Liberal MP from Newfoundland and Labrador not rising to their feet and raising these concerns?
I would like to read a quote:
|| The abolition of minimum processing requirements is clearly of great concern to the people of Newfoundland and Labrador, and your government’s support of the CETA was earned, in part, by a promise from the Government of Canada to help the industry adjust to the new reality. That promise should be honoured.
Do members know who said that? It was the Right Hon. Prime Minister, the member for Papineau, in a letter to the former Prime Minister.
I agree, Mr. Prime Minister, the promise should be honoured, but will the government commit today to the promised compensation, or is this just another Liberal broken promise?
There is another Canadian industry that stands to be severely impacted by CETA, and that is our maritime industry, which supports 250,000 direct and indirect jobs. Under CETA, foreign-owned vessels will be permitted to transport goods between Canadian ports. Opening up cabotage to foreign vessels is a first in Canada, and seafarers are rightly concerned that this will lead to Canadian job losses. These European vessels will be allowed to hire non-Canadian workers.
I would like to draw to the attention of my colleagues the issue of flags of convenience, which is a practice whereby a merchant ship is registered in a country other than that of the ship's owners. Owners do this because it gives them many advantages: minimal regulation, cheap registration fees, lower or no taxes, and freedom to employ cheap labour from around the world. For workers, this means low wages, as low as $2 an hour, as well as poor onboard conditions, inadequate food, clean drinking water, and very poor working conditions.
I hope my hon. colleagues can appreciate the ramifications this may have on Canada's maritime industry. The Canadian Maritime and Supply Chain Coalition, which includes the Seafarers' International Union of Canada and the International Longshore and Warehouse Union, among others, is very concerned about CETA. It estimates it could result in the immediate loss of 3,000 Canadian seafarers' jobs from the east coast, to the Great Lakes, to the west coast.
I would like to highlight CETA's impact on one additional Canadian industry. It is an industry that is very important in my riding of Essex. I know it is important in many of my colleagues' ridings as well, including those with ridings in the Niagara region and British Columbia. Of course, I am speaking about Canada's wine sector.
Currently, the EU exports 180 million litres of wine to Canada, but Canada only exports 123,000 litres to the EU. Under CETA, this trade imbalance will be exacerbated.
The Canadian Vintners Association is asking for federal support to help the Canadian wine sector adjust and prepare for the implementation of CETA. I am hopeful the government has considered the implications of CETA on our wine industry, and that it will offer support to help them adapt.
With any trade agreement, there are trade-offs and concessions to be made. Canada made some significant concessions on the assumption that the U.K. would be part of the agreement. We now know it likely will not.
If CETA moves forward, some sectors will also have to make significant adjustments. I urge the government to be a strong partner to affected Canadian industries, and assist them as needed with transition support and compensation where required.
I have been very disappointed in the Liberals' apparent unwillingness to listen to Canadian concerns with CETA. As I mentioned, we have had a very limited committee study of this legislation, and even sectors that support the agreement had specific conditions and concerns regarding implementation.
This agreement has no doubt had a rocky path, and it is still very unclear whether the EU will ever fully implement it. If the EU parliament ratifies CETA, it still has to be ratified by each individual member state and in some cases, regional parliaments must ratify too.
Last month, the EU trade committee voted 25-15 to endorse the deal. However, this past December, the EU committee for employment and social affairs voted 27-24 to reject the deal. It is clear that there is still a lot of opposition, both in Canada and in the EU, to CETA. The Liberals have been trying to say all progressives in the EU support the agreement, but that is simply not the case.
In addition to political opposition, there is widespread public opposition. Last year, there were several protests with over 100,000 people in attendance at each. A German constitutional challenge against CETA garnered 125,000 signatures, and a recently launched referendum campaign in the Netherlands has already collected over 200,000 signatures.
I do not believe this opposition can be pegged on a rising tide of protectionism. There are very concrete reasons why people are opposed to CETA. Angella MacEwen, senior economist with the Canadian Labour Congress, said to the trade committee:
|The gains of these trade deals are never as big as they are projected to be, and the gains for CETA are small. They are among the error bars for what our economic growth is projected to be anyway.
Of the few studies that have been done on CETA, most are based on unrealistic assumptions, such as full employment, lack of capital mobility, and equal sharing of projected income gains. Even with these assumptions, GDP gains from CETA are not projected to be beyond 0.76%. I would also like to point out that after trade agreements are implemented, there is really no way of measuring whether they create any new jobs, or how their benefits are distributed.
Studies based on a different set of assumptions have shown CETA will increase inequality, and could lead to 204,000 job losses in the EU and 23,000 job losses in Canada.
At the end of the day, I do not see a commitment from the government to mitigating these negative impacts. In fact, Liberals refuse to even speak about them whether here in the House or at the committee level. I urge the government to listen to these very real concerns around CETA.
The Liberals have spent over a year consulting on the TPP and still cannot make up their minds, but on CETA, the other Conservative-negotiated trade deal, they essentially did no consultations. They slapped a gold star on it, called it progressive, and are pushing it through Parliament. I see no difference between the trade policies of the previous Conservative government and those of the current Liberal government. With the change in the U.S. administration, Canadians are looking to this government to stand up and fight for Canadian interests. It is time the Liberals showed us what a progressive trade agenda actually looks like.
Today, The Globe and Mail reported that a new poll shows Canadians expect our Prime Minister to “stand up to the President’s aggressive America-first strategy even if it leads to a trade war with Canada’s biggest trading partner”. For New Democrats, standing up to the President means standing up for Canadian jobs. Canada must stand firm on protecting its dairy industry, softwood lumber industry, and other trade-dependent industries. If the United States wants to reopen NAFTA, there is also an opportunity for us to push for more stringent labour and environmental standards and to get rid of regressive provisions like investor-state arbitration rules similar to those we see in CETA and the TPP.
I would like to conclude my remarks today by adding a word of caution. There has been a lot of criticism of the previous Conservative government for negotiating trade deals in secret. They did that with the TPP and they did that with CETA. There is a better balance to be struck between protecting confidential negotiating details and informing Canadians of what is on the table.
The Liberals promised Canadians more openness and transparency, but when it comes to trade, I see them slipping into the Conservatives' patterns. There has been no peep from them on the trade in services agreement, nor have they given Canadians any clarity about what will be on the table in the NAFTA renegotiations.
I urge the government to be up front with Canadians. They want greater transparency and meaningful, honest discussion with Canadians on the potential impacts of any trade deal.
Mr. Marwan Tabbara (Kitchener South—Hespeler, Lib.):
Madam Speaker, I will be sharing my time with the member for Joliette.
Madam Speaker, thank you for the opportunity to speak here today on this important piece of legislation. It is a privilege to speak in support of the passage of Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures.
I congratulate the Minister of Foreign Affairs, the minister of the previous government who was involved, as well as the team of negotiators for their diligent and successful work in bringing this international trade agreement to the final steps required for implementation.
There are many reasons to support freer trade. It ensures that consumers, businesses, and government have access to a broader assortment of goods and services. It enhances competition and makes available better quality products at lower prices. In a broader policy context, it provides leadership, with an inclusive, progressive approach to global trade and the development of more sophisticated, effective, and valuable trade agreements. However, most of all, trade leads to economic growth, and economic growth means more jobs, and more jobs means greater opportunities for the middle class and those working hard to join it.
In an uncertain global trading environment, Canada's economy will thrive only if we pursue a market diversification strategy. That strategy requires that we should always be exploring new markets while at the same time improving sales performance in as broad a set of our existing markets as possible. The European Union is the world's second largest market. To illustrate the scale, 500 million Europeans buy more from the rest of the world every year than everything that Canada produces in a year.
When trying to improve sales, the first place to look is whether there is room for improvement with the customers we already have, like Europe, where we have been doing business for 200 years. Europe is already one of Canada's best customers. The European Union is Canada's second largest trading partner, after the United States. In 2015, Canada's merchandise exports to the EU totalled $38 billion.
I represent the electoral district of Kitchener South—Hespeler, in southwestern Ontario. To bring the issue a little closer to home, in 2015 Ontario's merchandise exports to the EU totalled $19.7 billion, more than half of all of Canada's exports to the EU. Ontario and Kitchener South—Hespeler stand to benefit from increased access to the European market.
Once CETA is implemented, Canada will be strategically positioned to become one of a few developed countries with preferential access to the world's two largest markets, which are the European Union and the United States.
I want to bring this a little closer to home. In my riding of Kitchener South—Hespeler, the implementation of CETA stands to benefit advanced manufacturing, which is a big economic driver there. It employs many people with well-paying jobs in my riding.
We are able to achieve that $38-billion level of sales to the EU despite the fact that 75% of what we sell to the EU is currently subject to tariffs and taxes, which the EU collects on Canadian goods at the border, adding to the cost of our goods for Europeans, making our merchandise less price competitive. CETA would make Canadian goods more competitive and give our goods an edge over goods from countries that do not have preferential access to the European Union markets.
On the first day that CETA enters into force, 98% of EU tariff lines on Canadian goods will be duty free, including the most significant Ontario exports: metals and mineral products, manufactured goods, chemicals and plastics. Within seven years that duty-free percentage will rise by one more per cent to 99%. Virtually all manufactured goods Canada exports to Europe will be duty free.
Similarly, for agricultural and agrifood products, 94% of EU tariff lines would become duty free immediately, rising to 95% within seven years.
The European Union is also the world's largest importer of services. Under CETA, Canada's service providers would benefit from the greatest access the EU has ever provided in an agreement. This is particularly important for the Ontario economy, in which services accounted for 77% of the province's total GDP and employed more than 4.9 million Ontarians in 2015. Once Canadian goods or services have been imported into the EU, CETA provides that they must be treated no less favourably than the locally produced products. For example, they cannot be subject to higher taxes, stricter product regulation, or restrictions on sale than for a similar domestic good.
At the end of 2015, Europe was a venue for 21% of foreign direct investment by the Canadian companies, totalling $210 billion; and $242 billion of foreign direct investment in Canada had been made by European companies, representing 31% of all foreign direct investment in Canada.
CETA would provide investors in both Canada and Europe with greater protection while respecting governments' ability to enact legislation and to regulate in accordance with the public interest, such as environmental protection or people's health and safety.
Governments are some of the most substantial purchasers of goods and services. The annual procurement spending by European governments is estimated to be in the area of $3.3 trillion. CETA would provide Canadian firms with the opportunity to bid on contracts to supply their goods and services to European governments at all levels.
Under CETA, skilled Canadian professionals and business people would find it easier to work on a temporary basis in the EU and to move across borders as required; for example to establish branch offices and to provide services related to goods sold.
I stand here today, enthusiastic about the increased trade agreement with CETA. Trade means more growth. Growth means more jobs. More jobs mean greater opportunity for those trying to enter the middle class. CETA would be good for my constituents in Kitchener South—Hespeler, creating jobs and opportunities, it would be good for Ontario, and it would be good for all Canadians.
Mr. Gabriel Ste-Marie (Joliette, BQ):
Madam Speaker, as things stand, the Bloc Québécois will not be supporting Bill C-30 at third reading. It is with heavy hearts that we will vote against it. As everyone knows, we supported the Canada-Europe agreement in principle. The agreement will benefit Quebec in many important ways.
Right now, our neighbour to the south is fairly unpredictable. Some would even say erratic. The election of Donald Trump reminds us that hitching our wagon to the American star is not good enough. We need more than one partner. Europe is perfectly suited to be that partner.
The Minister of Canadian Heritage was absolutely right when she said yesterday that Quebec is the high-tech heart of Canada. We have an international reputation for the cutting-edge sectors such as aeronautics and artificial intelligence that are part of our economy. Thanks to our creative people, we are considered world leaders in sectors such as video games.
Quebec is also at the head of the pack in research and development despite inadequate federal government support. We have the most highly rated shipyard in North America. Quebec is a world leader in green energy production. In contrast to Canada, which is mired in tar, we will emerge victorious from fossil fuel dependency. Quebec's future is bright.
However, developing a leading-edge product is a long and expensive process. Our high-tech companies, our industries of the future, could not possibly be profitable based on domestic markets alone. We need access to the world. Our high-tech sectors depend on it. Our future depends on it.
The Canada-Europe agreement could have been a great agreement. It had the potential to be tailor-made for Quebec, which in some ways already serves as a bridge between North America and Europe. Approximately 40% of the trade between Canada and Europe is done with Quebec. On top of that, about 40% of European investments in Canada are made in my province of Quebec. The strength of the Quebec economy speaks for itself. Our development model is a little different than that in the rest of North America, but this does not frighten European investors. After all, Germany is much more unionized than we are, and it is doing very well, thank you. Europeans do not mind that our employees are more unionized than anywhere else in North America. The exact opposite is true of American investors, who fear the differences in Quebec, in part because Canada is doing a terrible job promoting and selling Quebec's strengths.
Considering the growing protectionism in the United States, Europe will be looking more and more to Quebec to act as a gateway to North America.
Yes, this agreement presented its share of opportunities, but we cannot support just any old thing. We see what happens all around the world when governments fail to support those on the losing side of trade agreements. The Canada-Europe agreement has its share of victims in Quebec, and Ottawa is neglecting to compensate them. Quebec is a trading nation and we have always played our cards right, despite the fact that Quebec is not independent and must continually fight to ensure that Ottawa takes Quebec's differences into account in trade agreements.
Unlike the government, we will not leave our people behind. We have a very stable dairy and cheese sector thanks to supply management. The Canadian government has chosen to favour the western beef industry at the expense of Quebec's cheese producers. The reality of the European market is quite different from that of Quebec's market. In Europe, producers are highly subsidized, which is not the case in Quebec. They can easily sell their cheese here in Quebec below cost. That is not possible in a system where supply meets demand in order to avoid waste and where farmers are ensured stability. More often than not, Quebec's cheese producers are small artisanal businesses, fragile businesses. The Canada-Europe agreement will open the Canadian market, including the Quebec market, to European cheese products, but the reverse is not true. Under WTO rules, the supply management system does not allow us to export our products. The cheese producers are in a lose-lose situation.
European businesses that receive very large subsidies will be able to sell cheese in Quebec at a very low price. That will put tremendous pressure on our producers. Given that Quebec produces half of Canada's cheese and more than 60% of its fine cheeses, Quebec is most affected by this agreement.
The agreement will give 7% of the Canadian market to Europe, specifically 18,000 tons of cheese. Almost all future imports will consist of fine cheeses. I will repeat that Quebec produces over 60% of Canada's fine cheeses and it will be the first victim of the agreement. It is estimated that cheese producers will loose more than $300 million year after year.
The government has never committed to compensating producers for all their losses. In fact, it offered the dairy and cheese industry a total of $350 million over five years. It did not provide any details about the criteria or the allocation. Moreover, it gave no guarantees for the future. All we were asking the government to do was to make a firm commitment to fully compensate producers for their losses. It never wanted to do that.
Quebec's cheese producers are resigned to the fact that the government is implementing the Canada-Europe agreement and is opening up our market to European cheese. Consequently, UPA is requesting financial compensation for the losses that dairy and cheese producers will inevitably incur. The Government of Quebec is also asking for compensation for these producers.
Our cheese producers are concerned, and the Canadian government has not done what is necessary to reassure them by giving them the guarantees they have asked for. Diversifying our markets is a good thing because having more trade partners will make our economy more stable. However, unfortunately, the Government of Canada has once again failed to consider the Quebec market.
Since Quebec is not a country, Canada speaks on its behalf, even though Canada does not understand the Quebec model. Often, the Quebec model is not compatible with the Canadian model. Of course, in those types of situations, the federal government does what is best for the rest of Canada, simply because it is more politically expedient to do so. It is a matter of numbers. That is what is happening again with the Canada-Europe agreement.
If the government had done its homework, it could have proposed innovative solutions, such as allowing artisans and small businesses to get import licences for European cheese. That way, they could have profited from selling European cheese and compensated for any losses incurred because of this agreement. If nothing is done, the large chains will get licences and they will be the ones to profit. That will be even more harmful to our producers. To date, the government has not given any indication that it is sensitive to the plight of our cheese producers.
In short, for all of these reasons, we cannot support this bill. The Bloc Québécois will not abandon Quebec's dairy and cheese producers. We made a firm commitment during the last election. We promised that we would support the Canada-Europe agreement only if the government promised to fully compensate the dairy and cheese industry. Since the government has not made a clear commitment in that regard, we will oppose the bill. The Bloc Québécois keeps its promises, and it condemns the government's insensitivity toward producers. We stand with producers.
Mr. Michael Cooper (St. Albert—Edmonton, CPC):
Madam Speaker, I rise this evening in strong support of Bill C-30, an act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures.
It has been a long time coming, more than a decade, and there have been so many people who have been involved on the Canadian side in helping shape CETA. Certainly, much credit is owed to Canada's world-class trade negotiators, who for 10 years did much of the heavy lifting. I would be remiss if I did not acknowledge several hon. members in this House who played an instrumental role in concluding CETA.
Much credit is due to the hon. members for Abbotsford and Battlefords—Lloydminster. Under their leadership, Canada reached an agreement in principle with the European Union in 2014.
Credit is also owed to the hon. member for York Centre, who, as Canada's international trade minister, commenced the negotiations with the European Union back in 2009, and did a lot of the early heavy lifting, as did Stockwell Day when he was the minister of international trade.
Credit is owed to our current Minister of Foreign Affairs, who, in her previous portfolio as Minister of International Trade, helped get CETA across the finish line.
Finally, credit is owed to former Prime Minister Stephen Harper. It was Prime Minister Stephen Harper who had a great vision when it came to market liberalization and free trade. For 10 years, Prime Minister Harper presided over a decade of success when it comes to trade, including the signing of 46 historic free trade agreements, CETA being the largest of those free trade agreements. Indeed, CETA is the largest free trade agreement since NAFTA.
Canada is a trading nation. Two-thirds of Canada's GDP is tied to trade. One in five jobs is tied to trade. Since the ratification of the Canada-U.S. free trade agreement in 1988, trade between Canada and the United States has flourished. Each and every day there is some $2 billion in trade occurring between Canada and the United States. Of course, Canada has preferential access to the U.S. market through NAFTA.
With CETA, Canada stands to gain preferential access to the largest economy in the world, the European Union, which is comprised of 28 member states, has a population of more than 500 million people, and boasts an annual economic activity of nearly $20 trillion.
What is more the European Union is the largest importer in the world, which complements Canada's export-driven economy. Canada already does a lot of trade with the European Union. The European Union is Canada's second largest trading partner. Each and every year, Canada does approximately $80 billion to $90 billion in trade with the European Union.
Over the years, Canada's economic ties with the European Union have been strengthened. When we look at exports, for example, we have seen exports to the European market increase from some $17.9 billion in 1997 to $40 billion today. With CETA, Canada's economic and trade ties to the EU promises to grow even stronger. Indeed, an early Canada-EU joint study projected that bilateral trade between Canada and the European Union stands to gain by some 20%, thanks to CETA.
For my province of Alberta, CETA is nothing short of a big win. The European Union is Alberta's fourth largest export destination. It is also Alberta's third largest trading partner. Simply put, what CETA means for Alberta is the elimination of almost all EU tariff lines on Alberta exports destined for the European market.
Under CETA, EU agricultural and agri-food tariff lines will be eliminated, 94% will be eliminated immediately. That number will eventually rise to 95%. With the elimination of those agricultural and agri-food tariff lines, there are tremendous opportunities for Alberta's large and vibrant agricultural and agri-food sectors.
In that regard, the Canadian Agri-Food Trade Alliance projects that Canadian agri-food exports to the European Union will grow by some $1.5 billion, thanks to CETA.
It is not just the agricultural sector that stands to benefit from CETA, frankly it is all sectors of the Canadian and Alberta economies. That is because under CETA, nearly 100% of non-agricultural tariffs will be eliminated. That presents enormous opportunities for many sectors, including the service sector.
The service sector comprises about 54% of Alberta's GDP; 1.5 million Alberta jobs are tied to the service sector. Under CETA, Canadian service suppliers stand to gain the best market access to the European Union compared to the EU's other free trade partners. What that means is new markets and new opportunities for Alberta and Canada's service suppliers.
Investment is important to the Canadian economy, and it is absolutely crucial in connecting Canada to global supply chains. When we look at, for example, investment, Canadian foreign direct investment to the European Union last year equalled $210 billion. That is roughly 21% or 22% of Canadian foreign direct investment directed into the European Union.
What CETA promises investors is to help facilitate investment, both for Canadian investors and European investors. Not only that, CETA means more certainty, more transparency, and more protection for investors.
While there is much to be proud of and much to look forward to with CETA, it is not entirely good news, because when our government left office 15 months ago and passed the torch to the Liberal government, we gave the government, essentially, a free trade agreement with the European Union on a silver platter.
For whatever reason, the Liberals decided that it somehow was not good enough, that they would reopen it. What did that result in?
It resulted in a lesser deal for Canada when the European Union made the commitment to regional governments to put in agricultural safeguards to protect against import surges. When we talk about investment, which is very important and a very important aspect of the CETA agreement, there is also some uncertainty surrounding the investor state settlement dispute process, which will not be part of the provisional coming into force of this agreement, which it was under the deal that was negotiated by our previous Conservative government.
It is not all good news, but that should not take away from the fact that on the whole, CETA is a good deal. In that regard, when we take a step back and look at CETA, and what it means for Canada, one important fact is that it will mean that Canada will have preferential market access to both the United States and the European Union, the two largest economies in the world.
Combined, the United States and the European Union represent about 50% of global GDP. From a strategic standpoint, CETA is a big win relative to the United States, inasmuch as Canada would get first mover advantage in relation to the European Union.
That presents many opportunities for Canada in terms of becoming an investment gateway for European Union investors seeking access to the United States market for NAFTA, and an investment gateway for U.S. investors seeking access to the European Union market.
CETA means more trade, more opportunities for Canadian businesses, and it means more jobs for Canadians. After 10 years of hard work and tough negotiations, Canada is on the cusp of achieving this historic free trade agreement.
For jobs, for growth, and for the long-term prosperity of Canada, let us get it done. Let us get CETA across the finish line. Let us pass Bill C-30.