I recognize that we are, after all, politicians, so occasionally a question might be political, and that's fine with me.
Let me start by thanking you all for the important work that you have done and that you continue to do. You say the plate is full, but it's full with some pretty terrific ingredients that make for a meal for Canadians—a meal from which there will be growth and jobs for Canadians. That is facilitated by the excellent work you do.
I'll just say, as an aside, how much I honour the role of parliamentary committees. You really are the guts of our parliamentary system. This is the place where politicians are held accountable. This is a place where the ideas are debated respectfully. This is a place where the people of Canada can be well-assured that the business of running our country is in the hands of accountable, and in the case of this committee, thoroughly competent and able parliamentarians.
Let me start by thanking you for the very good work you do for our country, as well as for the opportunity today to talk about Bill , an act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other acts.
Canadians understand the importance of trade to our economy, and how much more important can it be than what Canadians have seen over the last number of months? For this reason, the government has pursued an ambitious trade negotiation agenda, the primary purpose of which is to diversify trade.
I'll give you a few examples of this—and Chair, you've mentioned some of them. Just last month Canada ratified the CPTPP with a speed reflecting the importance of this deal to farmers, ranchers, entrepreneurs and workers across Canada, and on December 30, as members of the committee know, Canada will add Japan, Singapore, New Zealand and Australia to our ever-growing trade network, with Vietnam joining the list early in the new year.
I'll pause for a moment just to say how quickly this agreement made its way through the House of Commons and the Senate, which is a tribute to the co-operation among parties as well as the importance of moving it quickly. We have a material advantage as a result of that speed that put us in the first tranche of six nations, giving the wealth creators an advantage over others that didn't make it quite so quickly. For all of your co-operation to make that happen, thank you again.
In September the government announced it had reached an agreement with the U.S. and Mexico. Our ambition throughout these negotiations was to make sure we had secure access to these markets, which are the most important markets in the world for us, and we achieved that goal.
Also in September we marked a one-year milestone for provisional application of the trade agreement with the European Union, the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA, and in this past year Canada added $1.6 billion in increased exports to Europe and saw a 20% growth in container traffic at the port of Montreal.
We've had a new agreement with Ukraine in place since 2017, and we are working toward ratifying a modernized and inclusive trade agreement with Chile that will distinguish Canada as the first G20 country to adopt a gender chapter in a free trade agreement.
The government is actively pursuing opportunities in other important and fast-growing markets, and it's making inroads. Canada is in negotiations with our partners in the Americas, in the Pacific Alliance and Mercosur, and exploring possible negotiations with ASEAN.
Taken together, we have 14 free trade agreements covering 51 countries, connecting us to 1.5 billion of the world's consumers.
While market access is vital, alone it does not create jobs and prosperity for our people. Our businesses need the right tools to actively pursue international opportunities, especially in markets covered by our trade agreements. That's why the fall economic statement proposes an export diversification strategy to help grow Canada's overseas exports by 50% by 2025, with more help for small and medium businesses to help them explore new export opportunities.
The metaphor, colleagues, that I use is that these trade agreements are bridges negotiated by governments, but what has to cross those bridges are investment dollars, goods, services and people.
Government sets the stage and government helps build the platform, but it's the SMEs that create the growth and the wealth. That's the partnership between government and the private sector that holds so much potential for us creating jobs so necessary for Canadians.
Recently I travelled to Asia, where I joined the , Mr. Morneau, for the inaugural Canada-China economic and financial strategic dialogue. The discussions resulted in 48 tangible outcomes, including a commitment to modernize the WTO, strengthen co-operation on patents and trademarks, and co-operation in leading the global transition to a lower-carbon economy.
Canada also secured deals for the short term. Canadian businesses, Atlantic premiers and agriculture minister , my colleague, were prominent at the recent International Import Expo held in Shanghai. Our presence paid off to the tune of $1.67 billion in deals for Canadian businesses in life sciences, agrifood, aerospace and transportation.
I was just in Edmonton and Saskatoon, and while in Edmonton, I celebrated a deal between the Edmonton International Airport and EHL for China, which will establish Edmonton as an important North American hub for e-commerce and the movement of goods between Canada—and, in fact, all of North America—and Asia. This is a tangible outcome of the work we have been doing and will result in both growth and jobs.
In addition to China, I accompanied our to Singapore to attend events surrounding the annual summit of the Association of Southeast Asian Nations, or ASEAN, and their leaders. As members are aware, the ASEAN market is a significant one, with a population of nearly 643 million people and an ever-expanding middle class, representing the world's sixth-largest economy as a group of 10 countries. The visit, my second since becoming minister, was an opportunity to highlight Canada's comparative commercial advantages, to advocate for intensified exploratory discussions on a possible free trade agreement with ASEAN, to promote Canada as an attractive investment destination and partner, and to mark the success in southeast Asia of some of Canada's most innovative companies.
Our efforts signal to the world that trade matters, that rules matter and that we will not be drawn into the world of protectionism. Canada's commitment to the rules-based order is an essential strength, and we will put it to work for more Canadians. That's why I convened a ministerial meeting in Ottawa last month on World Trade Organization reform, which resulted in a clear message of support for the rules-based multilateral trading system and a common goal to take urgent action to strengthen and modernize the WTO.
We firmly believe our international trade relationships are mutually beneficial. This is demonstrated in the modernized Canada-Israel Free Trade Agreement, or CIFTA. Since CIFTA first came into effect more than two decades ago, Canada's two-way merchandise trade with Israel has more than tripled, totalling $1.7 billion in 2017.
Canada and Israel agreed in 2014 to modernize CIFTA, which at the time was a goods-only trade agreement. The result of those negotiations is an agreement that updates four of the original chapters, including market access, and adds nine new chapters, including intellectual property and e-commerce.
I pause here to acknowledge the work that was done by the previous government, by , and to say that it was very important work that built the platform upon which we have this now modernized agreement. I recognize that contribution to Canadian trade and thank you for it.
We have negotiated rules that are designed to help address non-tariff barriers, to contribute to facilitating trade, to make more trade possible and predictable, and to cut red tape, reducing some of the costs to companies for doing business. Once the agreement is in force, close to 100% of all current Canadian agriculture, agrifood and seafood exports to Israel will benefit from some form of preferential tariff treatment, up from the current level of 90%.
Meaningful market access for Canada's agriculture and agrifood processors was a key interest for these negotiations, and the government delivered, including unlimited duty-free access on sweetened and dried cranberries, on which the current tariff is 12%; baked goods, on which the current tariff is up to 8%; and pet food, which has a current tariff of 4%.
These important tariff outcomes for the agriculture and agrifood sector placed Canada on a more level playing field with exporters from the United States and the European Union, key competitors in this sector. They also give Canadian companies a leg up on competitors in other countries that do not have a free trade agreement with Israel.
In exchange, Canada agreed to eliminate tariffs on certain targeted Israeli agriculture and agrifood imports, such as certain fish and certain nuts, some tropical fruits, and some oils.
I want to reassure all honourable members and all Canadians that the modernized Canada-Israel free trade agreement, like its predecessor, fully respects Canada's supply management system. I am pleased that the negotiated outcome has the support of key Canadian agricultural stakeholders, including Pulse Canada, the Canola Council of Canada, the Canadian Vintners Association and companies involved in the processing of potatoes, cranberries, soybeans and pet foods.
An important aspect of the modernized CIFTA that aims to ensure these opportunities are more widely shared among Canadians is its forward-looking framework, which includes new chapters on trade and gender, small and medium enterprises, and labour and the environment, as well as a new provision on corporate social responsibility. In this regard, the modernized agreement is a new forward-thinking partnership that reflects who we are as vibrant, diverse, open and democratic societies.
I had the opportunity to witness this first-hand during a recent visit to Israel. For those here today who may not know, Israel has a long-standing reputation for technological prowess, with a well-developed scientific and educational base.
We see room to expand and build partnerships in these sectors and many others. There are tremendous opportunities for Canadian companies in sectors such as aerospace, smart mobility, sustainable technologies, information communications technology, life sciences and energy.
When I was in Tel Aviv in September, I announced a pilot program to facilitate new cybersecurity solutions for the energy sector that will consider Israeli solutions to address the needs of Canadian natural gas delivery companies. There are also great prospects for forging increased partnerships in joint research and development.
Mr. Chair, I also visited Ramallah in the West Bank and had an excellent day of conversations with business leaders and government representatives. In Ramallah, we established the Palestinian-Canadian Business Council for the first time and made a significant contribution to women entrepreneurs. We felt very satisfied that we had that very important conversation with Palestinians in Ramallah.
Canadian and Israeli firms have joined forces to develop an ultraviolet water monitoring system that ensures the safety of drinking water. There are even more possibilities on the horizon that will change countless lives in communities around the globe.
With so much potential and opportunity on both sides, it simply makes sense that we work together to deepen our partnership and continue to knit our economies ever more closely together. Canadians want to do more business in and with Israel in the years ahead. A modernized free trade agreement between our countries is a surefire way to help make that happen.
Thank you, Mr. Chair. I welcome our conversation coming up.
Thank you, , for being here. Of course you know you have our support. We're very much free traders.
However, I do want to talk about competitiveness. You mentioned today we seem to be competitive, but major policy changes are coming, and I want your comments on that.
Frankly, as well, I found your metaphor at the beginning a little insensitive. In Oshawa this week we found out that we were going to be losing 2,800 jobs, which means we're not going to be exporting anything from Oshawa. Bridges go both ways, not just one way.
The United States is going to be losing 3,600 jobs and Mexico zero. To put it in perspective, the Americans have ten times our population. With the multiplier effect, that would be like 28,000 jobs, and I think Mr. Trump would even be a little louder if that were the case.
Frankly, businesses need clarity. I'm going to try to get some clarity from you today, sir.
When we're talking about competitiveness, one of the biggest things we've heard around this table is the cost of energy. I know the is committed to a carbon tax as his major way of getting to those commitments in Paris. The United States and Mexico don't have that same policy, and just last month, the United Nations reported that governments would need to impose up to $5,500 per tonne of carbon tax by 2030—$20 a tonne is not going to do it.
Businesses need certainty. They need to understand what their costs are going to be, because companies don't invest billions of dollars in plants for a six-month investment.
I know investments in the auto industry are going out to 2030. Very simply, I'm hoping that maybe we can reverse that decision in Oshawa.
I was wondering if you could be very clear: when will your government be increasing the carbon tax to $5,500 per tonne, or what are your proposed increases, so businesses can know?
If you look at it specifically, it really is about some additions to put into this space. Following proposed paragraph 4(a), we'd like to see....
First of all, in addressing proposed paragraph 4(a), the amendment is proposing to add a paragraph 4(a.1). Proposed paragraph 4(a) is, really, an aspirational statement. These are often included in the beginning of implementing legislation, but we'd really like to see some real goals. If we were to have an addition of a paragraph 4(a.1), which is in NDP-1, it would read:
substantially increase investment opportunities in Canada and the State of Israel while preserving the right of each of the parties to the Agreement to regulate and to achieve legitimate policy goals;
This also really does speak to any type of investor-state or any type of dispute resolution, just really laying out the fact that we still retain the ability to do what we need to do in Canada, and in Israel it's the same. There's the addition of this paragraph 4(a.1) that would follow right after proposed paragraph 4(a) at the bottom of page 1.
If you flip over the page, the next part of the amendment is replacing line 7 on page 2. What it currently has there is:
ensure a high level of environmental protection through comprehensive and legally-binding commitments;
It's always positive, I think, to see language on the environment in trade agreements, but what we do know is that, again, this is largely aspirational. We haven't really been able to address the issues of the environment in an enforceable way in trade agreements. An inclusion there about Canada's obligations under the Paris Agreement that was reached really lays out exactly where Canada is at in terms of our international obligations and commitments so that there's nothing in the agreement that would challenge our ability to honour those commitments that Canada made in Paris in December 2015.
Again, this doesn't alter the spirit of the agreement whatsoever. This would really be something that would speak specifically to our commitment, which I think we all agree on. We know we've signed on to the Paris Agreement. Again, we don't want anything to ever come back on us for implementing our obligation to the Paris Agreement. It's a special nod and is very specific, which I think is very important in trade agreements. If we're not specific, things are open to interpretation. They may not be things that we can address at a later date if the need arises.
The third one that I have there is on lines 8 to 10. Again, what's there proposed paragraph 4(d) talks about the international commitments of Canada and the State of Israel on labour matters. Again, this is very thin language, and I think it could be fleshed out in a way that really indicates where Canada is at.
My amendment that I have put forward essentially reiterates our commitment. The amendment is to:
protect, enhance and enforce workers' rights through mandatory mechanisms recognized by the International Labour Organization's eight core conventions and adherence to its Decent Work Agenda, through the creation of an independent labour secretariat with the power to oversee a dispute-settlement process for violations of labour rights and to enforce penalties for any such violations and through strengthening cooperation between Canada and the State of Israel on labour matters;
This is really important. To date there haven't been any trade agreements that Canada has signed on to internationally, to be fair, that speak about labour matters or labour rights that have been enforceable and that have been a way to address the situations that exist for working people. Again, just fleshing this out and talking about the fact that we want these mandatory mechanisms in there, I think, is very key.
If we are to build upon trade agreements, we have to start improving the language in them. If we keep repeating the same language of the previous trade agreements, then essentially we know that there's nothing enforceable in terms of labour. There's been a case brought that was dismissed, so we really need something here so that if there is a labour issue that comes between our two countries, there's a meaningful way to address it, versus just saying that we build on these respective commitments. We need to honour our international commitments, not just build upon them. I bring that forward.
If we move on to paragraph (d) of NDP-1, which is on the second page of the amendment, it references an addition after line 10 that would read:
(d.1) to facilitate due diligence measures and ensure they are available for Canadian companies and funding agencies, and to create a framework for transnational bargaining to allow unions to represent workers in Canada and the State of Israel; and
We really agree with the CLC that the Government of Canada has to look at due diligence of Canadian companies and funding agencies if we're going to create this framework. This is something that is being called for as an addition to trade agreements, in terms of labour, to make sure that it's meaningful and enforceable. The Canadian Labour Congress is in agreement that this measure should be included in all trade agreements. It doesn't break the spirit of this agreement in any way.
If we go on to page 2 of the bill, lines 11 to 16, what we're looking for is a replacement. We would replace lines 12 to 16 with the following text:
economic empowerment and immediately undertake an annual gender-based analysis and gender impact assessment to be applied to the entire agreement, as well as to ensure the use of enforceable corporate social responsibility standards and principles as set out in the United Nations document entitled Guiding Principles on Business and Human Rights published in 2011.
This is something we've heard pretty consistently at this committee around gender language: that if it's to be meaningful, it has to be applied throughout the entire text of the FTA, not just relegated to one chapter. We heard this from Oxfam and other groups around previous trade agreements, about the way forward and making sure that we are having a meaningful impact on the lives of women. The current way we're writing text doesn't actually ensure that, so this is a fleshing out of that text.
Gender equality shouldn't only be concerns of women entrepreneurs and business owners; it should actually help in regard to systemic discrimination against women who work, who are in the labour force. There's nothing actionable here about that either.
The other thing we strongly believe—and we've heard it at this committee too—is that when we're looking at improving language, we shouldn't have to wait five years for a review to see what the provision will yield or will not yield.
The nature of our trade is happening every single day. Why would we wait a whole five years to figure out whether something is working or not? It just seems a very lengthy period of time. I put that out there, that we need some concrete steps and some actions.
I want to speak a bit about the corporate social responsibility chapter—
Yes. There's quite a bit of comment on this, because at this trade committee we spend a lot of time talking about the impact of trade agreements, but we don't have the government doing its own analysis of trade agreements and their effectiveness, so we'll often see outside groups come forward. We just had the National Bank come forward on CETA, telling us that we've had a 46% decrease in exports over a 10-month period since signing the agreement, but again we don't have any government analysis on this.
If we had a government analysis, it would be helpful to our understanding. The first part of the amendment talks about the costs incurred, about being fiscally responsible, being accountable for the amount of money we're spending, whether we're seeing return on our investment for the money we're spending on these trade agreements. Each agreement would certainly be unique in that way.
In this particular agreement with Israel, we have quite a trade imbalance. We import a great deal more than we export to Israel. It would provide an understanding of how much we're spending to be able to see the benefits of the trade agreement.
The signing of the agreement doesn't end our obligations to it. They continue in costs, in committees, people having to meet, and the gender impact assessment. I just go back to this one because if this government, which professes to be feminist, is going to address gender issues in a meaningful way, then we have to do so in a way that reflects what is being asked for in international circles. The thing that's being asked for is a gender impact assessment of the whole agreement—not just this existing chapter, but a lens on the entire agreement. It's the only thing that will ever address the issue of gender in trade agreements.
Then there is the economic impact analysis. I think this is pretty self-explanatory, with a detailed jobs analysis. How is it that we keep signing trade agreements and not reflecting on their impact? Are we gaining jobs? In what sectors are we gaining jobs? Are we losing jobs? Who's being impacted?
There's a lot of talk out there about sectoral trade because of the way that trade is impacting different sectors in a very real way. Manufacturing and agriculture are often pitted against each other in trade agreements. If the government is professing that the trade agreements and the opening of markets will have an impact and that we will see some benefit to trade out of that, then the question is, how do we analyze that? How do we quantify that? How do we put that in a way Canadians can understand?
I think that having an economic impact analysis before we enter into trade agreements is also very beneficial to give us an understanding. We saw that in the CPTPP; the government didn't have the best economic forecasting included in their own analysis.
I was listening to my colleague talk about the job losses in Oshawa, about manufacturing and how they've been disadvantaged in trade agreements. If we have a way to understand how trade agreements are impacting jobs, then there's a conversation to be had on that impact with working people across our country. I think it's very important and should be a primary goal of this committee, to be honest.
Obviously, we aren't living up to our international commitments on human rights in this agreement. There's a path there for us to do that. We could have simply put in the language that the EU included. It hasn't been controversial, it didn't cause any major ripples across Israel or in their relationship with them, and I think it was the responsible thing to do to be a leader on human rights.
This is something that Canada aspires to do, but it's also something that Canada has committed to do this and to recognize, so to not see that included....
I think we should have an analysis of the impact of this act, of trade, on human rights, because it's often being held up by the Liberal government as something they would like to see addressed in trade agreements. My experience here is that they have yet to do so meaningfully or, quite frankly, at all.
We've seen in other agreements as well an opportunity for Canada to play a leadership role in the way that they—that we—know Canadians want us to do globally. Certainly human rights issues in China and in ASEAN countries really should be addressed. At the very least, if we're not addressing them in the trade agreements, as the Liberals have failed to do here, that's a reflection on how we are doing.
What is the human rights condition in the country? Has trade had any impact on that? It simply calls on that, and on the Minister of Labour specifically to do that.
I think this amendment speaks to a lot of the work we do here, and a lot of the things that we hear from our witnesses on a consistent basis in the public space. If we as a trade committee are to try to find a way to address them, this amendment is an opportunity to do so. I would invite my colleagues to support the work and efforts that we've had here.
I don't think this amendment goes against the spirit of the agreement in any way. I don't think it's something that would harm our relationship. Again, it's just a domestic thing for Canada, to understand trade in a more meaningful way.
Again, there's been a lot of conversation about dispute resolution here and certainly across the globe. In every agreement—most recently, the USMCA—we're looking at the transparency of that process, and what Canadians know or understand. Of course, we're very happy in the NDP to see that the ISDS is removed in the new USMCA. Chapter 11 was a secret tribunal and panel that wasn't accessible to Canadians.
This amendment is an attempt to provide transparency and to insist that the final report of the panels be published, in contrast to the language of “if they wish to publish”. When we provide an opportunity for people to not be transparent, unfortunately, the result most often is that they aren't. They don't provide the information, because it's not actually a requirement.
If we're to continue the conversation around dispute resolution, whether we're talking ISDS, member to member, or all the different ones that can occur in trade agreements, I think it's very important that we see an accounting of it, and that instead of having an option, there is an actual publication of the dispute panels and of the disputes.
I would say too that being able to see and understand what disputes have been brought, and the ruling on those disputes, is also very helpful to companies, small businesses and labour. It really creates a path forward to meaningfully address the issues we have.
I can tell you that I just came back from the U.S., and there was a lot of discussion there about our chapter 19. There was a lot of discussion about dairy, about diafiltered milk and issues that have been brought forward. Softwood lumber is still being discussed down there. It is a very serious issue for them.
These things have been brought to dispute resolution panels or have gone through a dispute resolution process, but again, it's hidden. No one really knows or understands, unless you're a lawyer who's presiding over these things or you're part of those arbitration panels. There isn't a great understanding in the public of what dispute resolution is. Over the summer, a lot of people were asking me in my riding, “Why is it important to have chapter 19?” It was a recurring theme in the new NAFTA that we had to have some form of dispute resolution. “Why is that?” People are now asking, “What is that?”
If we were able to share and have a publication, this would be an attempt to have transparency so that there's a general understanding in the public. It would also be a benefit to our businesses and our SMEs. If they see a similar case and know that other things have been brought or have an interest in something that's being brought, it would be a way to bring this to light and to have a national conversation about how we address issues and resolve them in a trade agreement.