I call this meeting to order.
This is meeting number 17, on Friday, February 26. Pursuant to the order of reference of Monday, February 1, 2021, we are studying Bill , an act to implement the agreement on trade continuity between Canada and the United Kingdom of Great Britain and Northern Ireland. Today's meeting is webcast and is taking place in a hybrid format, pursuant to the House order of January 25, 2021.
Welcome to all of the committee members, the staff and our witnesses. From 1 p.m. until 2:30 p.m., we have the following witnesses who will be presenting to the committee.
We have, from the Business Council of Canada, Trevor Kennedy, director, trade and international policy. From the Canadian Alliance of British Pensioners, we have Ian Andexser, chairman. From the Canadian Cattlemen's Association, we have Fawn Jackson, director, international and government relations; and Doug Sawyer, co-chair, international trade committee.
From the Canadian Federation of Independent Business, we have Corinne Pohlmann, senior vice-president, national affairs and partnerships; and from Canadian Manufacturers & Exporters, we have Matthew Poirier, director, trade policy.
Welcome to you all.
Mr. Kennedy, if you'd like, please lead off.
Madam Chair, committee members, thank you for the invitation to take part in your meeting on Bill , an act to implement the agreement on trade continuity between Canada and the United Kingdom.
The Business Council of Canada is composed of 150 chief executives and entrepreneurs of Canada's leading enterprises. Our members directly and indirectly support more than six million jobs across the country and hundreds of thousands of small businesses. Representing different industries and regions, these men and women are united in their commitment to make Canada the best country in which to live, work, invest and grow.
It's been said many times before, but it bears repeating, that Canada is a trading nation, and many Canadian companies rely on the rules-based trading system, as well as our networks of bilateral free trade agreements, to provide certainty and access to global markets.
Given its prominent role in the economy, we expect international trade to be an important part of Canada's economic recovery. The facts speak for themselves. Merchandise exports to the world fell by 12.3% in 2020 because of the pandemic, a decline of $70 billion. Canada needs to work hard in the years ahead to restore and grow our exports from precrisis levels.
The potential loss of preferential market access to the U.K., secured under CETA, presented a serious risk to the recovery for Canadian exporters. The U.K. is Canada's third-largest merchandise export market. It was also one of the few markets in the world in which we were able to sustain our exports from last year despite the crisis.
The U.K., as part of the EU, has been a critical component of Canada's fast-growing transatlantic trade relationship. Before the pandemic, it accounted for 40% of Canada's merchandise exports and 36% of service exports to the EU. Merchandise exports to the U.K. grew by nearly 12% since provisional application. Canadian exporters had momentum in the U.K. before the pandemic, and it's important that we continue to grow our trade.
When I spoke to the committee during negotiations, I mentioned how time-sensitive a Canada-U.K. trade deal is. Not only did we risk losing preferential market access by reverting to the WTO most-favoured nation tariff rates, but many of our peers were negotiating bilateral deals that would have undermined our competitiveness in the market.
Given our existing trade relationship with the U.K. under CETA, and the uncertainty surrounding the future of U.K.-EU relations during the negotiations, the transitional trade deal approach taken by our negotiators was the best approach for Canada. The transitional approach provided Canada with an opportunity to take this new relationship into account when we negotiate a long-term trade deal.
As with Canada's existing free trade agreements, we want to ensure that we reach a conclusive deal in the future with appropriate consultation and assessment of the market opportunities for Canadian firms. The transitional approach will also allow us to do that while we maintain our position in the market.
We were pleased to see that a Canada-U.K. trade continuity agreement manages to preserve our gains under CETA. Like CETA, the TCA's benefits include the elimination of 98% of tariffs on Canadian merchandise exports to the U.K. and will eliminate 99% within a few years. This is in addition to important market access opportunities in government procurement and services, among others.
At the same time, because Canada and the U.K. agreed to negotiate a new deal in the future, the TCA does not require that our future trade relationship be based exclusively on our existing EU agreement.
Our priority today is to quickly ratify the TCA. The existing memorandum of understanding between Canada and the U.K. is a helpful stopgap measure but it is time-sensitive. The U.K. is retooling its international relationships and there is a clear opportunity to reimage our bilateral trade and investment ties with a comprehensive and ambitious trade agreement. We hope both parties can start working on this with stakeholders as soon as the TCA is in force.
The Business Council of Canada reiterates the importance of swiftly ratifying the TCA. This agreement provides certainty for businesses at a time of great uncertainty. It will help our economy to recover by driving trade and attracting the capital needed to innovate, grow and improve Canadians' quality of life through the creation of well-paying jobs.
Thank you for the opportunity to address your committee. I look forward to answering questions.
Thank you, Madam Chair, and thank you to all committee members for the opportunity to address you today.
I am sure many of you are wondering why I have been given the opportunity to speak to a committee formed to discuss future trade agreements between the U.K. and Canada. I hope in the next few minutes to clearly explain why we feel there is an important connection.
I may be one voice, but I say “we” because I speak on behalf of approximately 136,000 British pensioners who have chosen Canada as their home in retirement. The vast majority of these people, like me, emigrated many years ago in response to Canada's request for certain skilled labour, such as nurses, teachers, firefighters and tradespeople, for the booming oil industry in the 1970s. Others came to Canada, after working all their lives in the U.K., to be with family members who had already emigrated.
Before leaving the U.K., we worked and we paid mandatory contributions into the British state pension scheme, which is the equivalent of CPP, assuming that upon retirement we would be treated equally to all British pensioners residing around the world.
However, we are not treated equally because we have chosen to live in Canada, and indeed neither are pensioners in most Commonwealth countries. This results in almost half a million pensioners never receiving the annual uprating in their British pensions. We are known as frozen pensioners.
You may ask why.
One answer is that the U.K. has continuously refused requests from Canada's officials to sign a reciprocal agreement to stop this discrimination. They argue that pension increases are to take into account inflation in the U.K., but they ignore the fact that they already index pensions for half a million expats overseas in many countries, including, just to the south of us, the United States.
A recent U.K. House of Commons briefing paper covering frozen overseas pensions states that the unfreezing of British pensions in Canada did not arise during the negotiation of a social security agreement with Canada in 1959. This is not surprising. The pension payable overseas was only introduced in 1946. Movement around the world was in its infancy. There were very few people affected in 1959, but here we are 61 years later, and the U.K. still clings to this piece of history.
As more people started to be affected during the high inflation days of the 1960s, more and more United Kingdom MPs began to receive correspondence from pensioners abroad protesting the unfairness of the freezing policy. This protest has magnified over the years as travel around the globe has exploded.
Let me give you a couple of examples of the impact of this policy here in Canada.
Peter Duffey, a 95-year-old from Vancouver, lives only 300 yards from the U.S.A. border. He worked for 40 years in the U.K. He flew bombers in the Second World War and he still receives 52 pounds per week, as he has done for 30 years. A similar individual in the U.S.A, however, is paid 134 pounds. Anne Puckridge, 95, of Calgary—also a war veteran—receives only 72 pounds a week instead of 134 pounds.
Both of these seniors have been cheated out of thousands of pounds of their rightful pension, and the same is true of countless others of the 136,000 frozen pensioners in Canada.
The standard boilerplate response that we receive from the U.K. is that this is a policy that has been continued by successive governments for many years. However, having a history doesn't mean something is right. What was applicable 70 years ago isn't in today's world. If something is morally wrong, it is wrong, plain and simple.
Some years ago, our association joined forces with a similar group in Australia to begin a consolidated approach to seeking justice, and the International Consortium of British Pensioners now advocates on behalf of frozen pensioners everywhere in the world.
Only two months ago, Sir Roger Gale, a Conservative MP in the United Kingdom for 38 years and chairman of the All-Party Parliamentary Group on Frozen British Pensions, released a report that was extremely critical of his own government for perpetuating this practice.
For decades, the U.K. has maintained that they are not entering into any new agreements covering frozen pensions, yet with Brexit, the U.K. recently signed new pension agreements with 23 countries to ensure uprated pensions continue for all expats in EU countries, as indeed they should. The U.K. can no longer claim it's not entering into new agreements, and Canada should most certainly be given the opportunity to enter into an updated agreement under the current trade negotiation discussions.
Earlier this week, Sir Roger Gale invited more than 30 MPs from the U.K. and Canada to discuss ways to advance talks on the frozen pension issue, and a number of Canadian MPs, including , suggested that your upcoming trade negotiations would certainly be a good starting point.
On behalf of the 136,000 frozen pensioners residing in Canada, we would be extremely grateful if you could raise this issue with your counterparts across the pond. As Canada enters into trade negotiations with the U.K., worth an estimated $27 billion annually, there is no better time to have this critical discussion.
This policy is estimated to cost the Canadian economy close to half a billion dollars every year, and the onus to support those struggling on very low incomes should not fall on the backs of the Canadian taxpayers, as it currently does through subsidies such as GIS and welfare.
One recent high commissioner to the U.K. told us that the only thorn in an excellent bilateral relationship was that of frozen pensions in Canada. Surely one would have thought that as a major Commonwealth partner, Canada would have been the last place where this immoral, unjust and discriminatory practice could have been allowed to perpetuate for so long.
I hope that I have demonstrated that the current policy is a cost to Canada and deeply impacts the well-being of many of the most vulnerable in our society.
In conclusion, I realize that this issue might not appear to fall within the parameters of normal trade discussions, but now more than ever, your committee is in an excellent bargaining position to demand that the U.K. quickly respond to the recent official request from Canada to sign a social security agreement.
One definition of the word “trade” is to willingly give things or services and get other things or services in return.
Thank you, Madam Chair, to you and your fellow committee members.
I am Doug Sawyer. I'm a rancher out here in the west, in snowy Alberta. I am also a board member of the Canadian Cattlemen's Association, the national voice of Canada's beef farmers and ranchers. With me today is Fawn Jackson, director of government and international relations with the CCA.
Thank you for the opportunity to reappear before the committee regarding the act to implement the agreement on trade continuity between Canada and the United Kingdom of Great Britain and Northern Ireland. We will refer to this agreement as the “continuity agreement”.
Today we advocate for two things. Firstly, we strongly encourage a swift return to the negotiating table to establish a permanent, progressive and ambitious free trade agreement, with a culmination in the U.K. joining the CPTPP. Secondly, we cannot replicate the trade agreement that we have under CETA in a Canada-U.K. FTA or CPTPP.
I will now expand on these points.
The beef industry is one of Canada's largest agricultural sectors, supporting a total of 228,000 jobs and a contribution of $17.9 billion to GDP. Canadian beef and livestock genetics are sold to 58 markets around the world and about 50% of what we produce is actually exported.
Although COVID has been extremely difficult for all Canadians, agriculture stands out as a vital and resilient part of our whole economy. I am pleased to report that while COVID was very difficult for the first part of the spring of 2020, we were able to recover and the value of trade was up 1.4% in 2020 over 2019. Having a record year, despite the difficult conditions, demonstrates the value of having robust and ambitious trade agreements in place.
Export Development Canada reports that Canada's agricultural exports are growing three times faster than the overall Canadian average, confirming that agricultural products are a net cash generator for Canada's economy and an area for future growth. This is important context indeed for the conversation we are having today about trade, both for recovery and for the long-term economic health of our great country.
Since it became clear that the U.K. would be exiting from the EU, CCA consistently communicated concerns with trade obstacles being carried over from CETA to the Canada-U.K. transitional agreement and any permanent trade agreement with them.
Last time we presented before this committee, the details of the continuity agreement were not available, but today we are able to share some thoughts on what the deal means for Canadian beef producers.
First of all, on access, Canadian beef will have 3,279 tonnes of access in 2021, and 3,869 tonnes in 2022. All beef must be hormone free.
In 2020, Canada exported 1,415 tonnes, which is within the total access we have gained, with some room for growth.
In the same time frame, the U.K. exported 5,393 tonnes to Canada, almost four times more than we exported to them, and significantly over the access we have in their market in this continuity agreement. Under the continuity agreement the U.K. has maintained duty-free access to the Canadian market, so even if we were able to resolve some of the trade limiting factors on our exports, beef will not be a net even trading partner with the U.K.
In 2020, Canada had a negative net beef trade of almost $14 million with the U.K., and a negative net trade of $83 million with the EU. This net trade deficit has grown since the implementation of CETA. The overall Canada-EU beef trade deficit, which includes the U.K., was a half a million dollars in 2018, $17.3 million in 2019 and an astounding $96.8 million for 2020. Needless to say, CCA is significantly concerned with how beef trade with the EU and the U.K. has actually progressed.
Unfortunately, because of the growing trade imbalance between Canada and the EU, we have had to ask the Government of Canada for some compensation. In future agreements, we must obtain reciprocal access. Anything less is unacceptable to our beef producers. It is disappointing to see that this reciprocity has not been obtained in the continuity agreement.
As you all know, CCA as an organization is a proud advocate of free trade, but we cannot have free trade in one direction without free trade in the other direction.
The continuity agreement does have some improvements. We are pleased with the tariff rate quota, TRQ, administration that will be handled on a first-come, first-served basis, which will make shipping to the U.K. less burdensome. Previously, the quota access was managed through a licensing system. We also recognize that this is a continuity agreement largely replicating CETA, and that without a trade agreement in place, the Canada-U.K. trading relationship could have fallen back to the MFN tariffs, which could halt trade between Canada and the United Kingdom.
For the reasons we have discussed today, CCA's highest priority is achieving a long-term FTA with the U.K. that resolves trade barriers and enables reciprocal trade. CCA is pleased to see both governments committed to negotiating a full FTA starting this year, and encourages both parties to do so, especially given the U.K.'s formal application for access into CPTPP.
Aside from reciprocal access, which we stress is imperative, there are a number of other factors that need to be addressed under a future trade agreement with the United Kingdom. We also advocate for a full systems approval. Canada has a world-renowned food safety and meat inspection system that is recognized throughout—
Good afternoon, everybody.
Thank you for the opportunity to be here today to share the CFIB's perspective on Bill .
You should have a slide presentation that was sent to you by the clerk. I'm hoping to walk you through it, so I hope you'll have that in front of you as I present my speaking notes over the next few minutes.
First, I just want to say that the CFIB is a non-profit, non-partisan organization that represents about 110,000 small and medium-sized businesses across Canada. They come from every sector of the economy and are found in every region of the country.
It's important to remember that, normally, Canada's small and medium-sized enterprises employ about 90% of Canadians, and they're responsible for the bulk of new job creation. However, the last year has been particularly challenging for many small businesses right across the country, as they had to deal with shutdowns and limited capacity to help Canada deal with the pandemic.
As of early February, you should know that only 51% of businesses in Canada were fully open, that only 39% were fully staffed and that only 25% were back to normal revenues. The CFIB also released some new data just yesterday that found that seven in 10 businesses have taken on new debt during the pandemic, with the average debt being almost $170,000 per business.
I share these staggering numbers to highlight why it is so important to continue to find ways to bring stability and continuity to businesses trying to operate in these challenging times. I think that is what Bill aims to do.
I also believe that trade, both domestic and international, will be key to Canada's economic recovery. Agreements such as this one are essential in making sure that small and—to be fair—large businesses, as well, have some certainty when dealing with some of our largest trading partners.
To better understand why this is so important to small businesses, I'm going to be referring to a survey that we did back in 2017 that got almost 4,400 responses. As you can see, 31% of survey respondents had some experience with exporting, and 71% had some experience with importing.
These may be slightly higher than what is actually out there, as the survey likely attracted those, but they're not going to be too far off from what's actually the experience of many small businesses. For some, though, it's only an occasional thing. They maybe do it a couple of times a year. Others, though, do engage in trade daily. What's important, though, is that, regardless of the frequency of their trade experience, it needs to be as seamless and as easy as possible if we are to encourage more small businesses to continue to trade internationally.
Which countries do they trade with? Not surprisingly, the United States, of course, dominates the trading experiences of small businesses in Canada. However, as you'll see, more than 5% of small business owners import goods and services from the United Kingdom, and slightly more—closer to 6%—export to the U.K. In fact, amongst small firms, the U.K. is the third most likely region that Canadian small businesses will be exporting to—behind only the U.S. and the EU—and it's the fourth most likely country that Canadian small firms import from. Clearly, it's an important trading partner for small businesses.
We know also that governments around the world are interested in getting more small businesses involved in international trade. Therefore, understanding what motivates them to get involved in trade is still an important question. As you can see, most do it because they see a growing market demand for their product or service, want to expand their business or see good potential market opportunities. However, more than a third—36%—are also citing favourable trade agreements as having an influence on their intention to export. Having trade agreements address small and medium-sized business trade priorities would encourage even more to engage in trade.
That's why we've always welcomed the small business—or SME—chapters that were included in the CPTPP and the Canada-United States-Mexico Agreement, as they're a starting point in recognizing some of the challenges that may be unique to smaller firms.
While CETA did not expressly have an SME chapter, there was some work done through a joint committee to recognize the unique needs of small firms. We would strongly encourage a continued focus on SMEs in this trade continuity agreement. We would also highly recommend that the new Canada-U.K. negotiated trade agreement include a small business chapter that has within it the development of such tools and activities aimed at assisting smaller firms with their trading challenges. It's these types of initiatives that will ultimately encourage more smaller firms to engage in trade.
At the very least, of course, trade agreements have to help small businesses overcome some of the barriers they face. Those challenges can include everything from currency fluctuations to the cost of shipping, but they also include dealing with various duties and taxes and understanding rules and regulations—basically those non-tariff barriers.
We are pleased to see that Bill will honour the tariff elimination agreements made under CETA, which includes the elimination of 98% of tariffs on products exported to the U.K. right away. That, of course, will go up over the next couple of years.
We're also pleased to see that chapters remain on improving technical barriers to trade, as well as an emphasis on working together on regulatory co-operation. Also, it's important, though, to improve customs and trade facilitation, as this is often where small businesses can get discouraged. Efforts to help them better understand all the various rules, all the various customs processes, will be an important component of making this trade agreement and others really work for small businesses.
While much of the information I'm sharing today comes from a survey done prior to the pandemic, I did want to share some more recent data that illustrates that these issues remain important for small businesses, even during troubling times.
A survey was conducted just last August. In it we asked what the federal government priorities should be or what it should focus on. As you can see, over one-third wanted the government to focus on ensuring favourable trade conditions for small businesses. This actually jumps to more than one-half among manufacturing firms. This is despite all the challenges that were in place at the time.
We want to ask that you ratify Bill and then move quickly to negotiate a comprehensive trade agreement with the U.K. The trade agreement to be negotiated should include a small business chapter that addresses their unique needs and provides them with tools like a centralized website that has relevant information in plain language. It also should ensure that Canada and the U.K. provide tailored information for small and medium-sized enterprises on what changes to the agreement may impact their existing trade relationships, and how small businesses can benefit from the agreement. It should also focus on making customs processes easier, as this is often where the greatest stumbling blocks are for smaller companies.
Incorporating some of these ideas and moving quickly on this agreement will help make sure that businesses already trading into the U.K. can continue to do so with limited interruption, and could potentially attract even more smaller firms that are looking to expand into new markets to engage in trade.
I want to thank you for your attention. I look forward to answering any questions.
Good afternoon, and thank you for inviting me to participate in today's discussion.
It's my pleasure to be here on behalf of Canada’s 90,000 manufacturers and exporters, and our association's 2,500 direct members to discuss Bill , the implications for Canada’s manufacturing and exporting sector, and the future of this vital industry.
Our association’s members cover all sizes of companies, from all regions of the country and all industrial sectors. We represent the majority of Canada’s manufacturing output, as well as Canada’s value-added exports.
With over $20 billion in exports, the U.K. is one of Canada’s largest export markets. Canada-U.K. trade was one of our very first trade relationships and traditionally has been our doorway to the European market. According to our management issues survey, which is a large biennial survey of Canadian manufacturers, the European Union, and the U.K. in particular, is one of the top three markets that exporters see as having the most potential in the next five years.
As the committee knows, this is a unique situation. We've had a free trade agreement with the U.K. for many years under CETA, so the discussion today is all about maintaining that access and then, we hope, a discussion on how Canada can take advantage of a new bilateral trade agreement between Canada and the U.K. We, therefore, fully support the Canada-United Kingdom trade continuity agreement, and we urge swift passage of Bill . This interim measure is required, obviously, while our negotiators hammer out a more permanent Canada-U.K. agreement, and like my fellow panellists, I urge that it happen as soon as possible as well.
However, beyond these mechanical trade agreement issues lies an even bigger problem that I must raise. That is the problem of our declining value-added export performance, a decline that has been accelerating despite signing more and more free trade agreements across the globe.
Let me explain what I mean. Two-thirds of Canada’s value-added exports, the types of exports that Canada makes the most money from, are manufactured goods. In other words, Canadian manufacturers take the raw ingredients, transform them into something of higher value and then sell these goods abroad. This “bigger bang for your buck” type of trade has been declining for years. In fact, with the U.K., manufacturing exports have been declining steadily for five years, even after we signed CETA. Canada can no longer afford to ignore the lost economic potential that the decline in value-added exports represents. It's simply not sustainable.
How do we fix that? We have ideas.
Simply put, Canada’s manufacturer-exporters are too small, and at full capacity. Generally speaking, Canada has a higher proportion of its businesses being smaller SMEs than most of our global competitors. From a fundamental structural perspective, we need to get our companies to invest in their businesses and help them grow and scale up. Larger companies are simply better positioned to take advantage of global trade. CME’s manufacturing survey results back this up. When asked what is holding them back from exporting to new markets, they told us that the risks are too high because they lack a competitive edge with foreign companies. They simply feel that they can’t compete and don’t bother.
It's important that we agree that this structural domestic business problem is driving our export underperformance. Landing new global customers through FTAs is rather pointless if we cannot produce the goods to sell to them at competitive prices.
Now, you might ask yourselves, isn’t this the point of EDC, BDC, CCC and the trade commissioner service? Aren’t they supposed to help derisk exporting and help SMEs get out there? The answer is yes, and we would argue that they are all quite good at doing that. The problem is the disconnect between these great programs and exporters knowing that they exist. When we polled manufacturers, we found that those who used these agencies and programs loved them, but a majority of respondents couldn’t even identify the agencies, let alone the programs they offer. This is a big problem.
Therefore, we have the dual challenge of our exporting companies being small, underinvested in and uncompetitive, and a big gap between government assistance and companies using that assistance.
Here are some concrete actions that we would like to put forward to address some of those problems.
Number one, create a manufacturing and export strategy for Canada that focuses on modernizing and growing our industrial sectors. It needs to help companies invest in the technology that will help them scale up and truly become global players. We happen to have such a plan, which we discussed with many of you in the past, and I would be happy to leave a copy with the clerk.
Number two, launch a made-in-Canada branding exercise at home and in international markets to celebrate our manufactured goods. This will boost awareness of Canadian capabilities and technologies as well as sales and exports. The maple leaf is a global brand with a sterling reputation that we don't take advantage of enough.
Number three, bridge government export agencies and exporters by leveraging the vast networks of business trade associations. This can be done by investing in Canada's trade associations' capacity to link the two sides and act as a concierge service for exporters. The government used to support these types of initiatives to great effect. We think they should again.
Number four, expand our efforts on SME exporter mentorship. Organizing and managing private peer-mentoring networks is another way Canada's trade associations can be used to maximize company-to-company learning.
All these actions are table stakes if we want to play a bigger role in global trade. They will also go a long way to helping current manufacturers maximize their export potential for years to come. However, while we at CME believe these solutions are something we need to work on now, the priority, of course, is ensuring we maintain current global market access.
Let me reiterate that CME fully supports Bill . We need a transitional agreement in place between Canada and the U.K. as soon as possible and, in time, a permanent trade agreement between our two nations.
Thank you for inviting me. I look forward to the discussion.
Thank you very much, Madam Chair.
Thank you to all the witnesses for your excellent presentations on this beautiful Friday afternoon.
I'll begin with Mr. Kennedy and the Business Council of Canada.
Mr. Kennedy, you mentioned a few times during your opening remarks the importance of certainty. I have down here that it is a priority for your organization and the members you represent to quickly ratify the TCA, and that the Business Council of Canada reiterates its request for a speedy ratification of the TCA.
I was wondering if you could comment briefly, Mr. Kennedy, on proposals that I believe this committee will have before them shortly for amendments to the TCA, which would require us to go back to the negotiating table. Such amendments obviously would delay the ratification process but also, more importantly, create uncertainty for the business community.
Do you have any comments with respect to that, Mr. Kennedy?
Thank you for your question.
Yes, swift ratification is a priority. We understand there are concerns with CETA, and I think there are sector-specific concerns that you've heard from other witnesses and in other settings.
We think that in this context the best thing Canada can do is to provide certainty around this trade relationship. We have built a trade relationship around CETA before Brexit, and after Brexit we want to continue that relationship to the greatest extent possible. That's what the TCA does.
Looking towards the future—and this is the key with ratifying this agreement—we have a clear commitment, and we have a timeline to start negotiating a permanent arrangement. As we've heard from many people, that agreement doesn't have to be based on CETA and the relationship with the EU. We have an opportunity to recreate that relationship.
I get a sense from counterparts in the U.K. that there is a lot of interest in working with Canada and building a new economic relationship, so I would just reiterate that it's very important that we move forward with this agreement, as is, and that we move quickly to start negotiating the next step in our relationship.
You did cut out briefly but I think I got the gist of your question.
Absolutely, we'd like to see Bill ratified quickly. Again, there are lots of ongoing trading relationships that are reliant on the rules that have been in place for the last few years with CETA. At the very least, we need to minimize disruption at a time when things are very challenging for many businesses out there. Moving into a new agreement, relatively quickly, I think, is also really important.
Again, we need stability and certainty when it comes to the trading relationships that are happening. Knowing that something is coming and that it's not going to dramatically change, or if it does, it will be to improve what's already been out there, is going to be an important message that has to be delivered as these negotiations go on. The quicker it can happen, the better, because that certainty is important.
Certainly, thank you for the question.
Currently, because of the policy, the fact that there are no pensions being indexed here, we all have to pay taxes in Canada.
With the 136,000 people who have been denied their rightful pension, it means that our incomes are obviously reduced and, therefore, we're not paying the taxes in Canada. This ultimately leaves some people in a situation where they're struggling to survive, and Canada is forced, through offering welfare and GIS supplements, to bail these people out.
The onus for supporting pensioners should not fall on the backs of Canadians. It should be the responsibility of Great Britain, and if this policy was to end, it's estimated it would save close to a half billion dollars to the Canadian economy every year. Pensioners tend to be spenders rather than savers, and it would just stimulate the economy.
Obviously, trade for small businesses is both international and domestic, so internal trade is another very big area that needs to be worked on. Probably the issues are similar. In fact, what we found is that a lot of small businesses will start trading within Canada, and if they have trouble with that, they think, “Well, if that's going to be tough, I'm not going to bother going international.” Therefore, fixing internal trade is also, I think, a stepping stone to getting more firms involved in international trade. That means reducing barriers between provinces. That means aligning our regulations a lot more easily across provinces, which is very similar to what we need to do when we start negotiating trade agreements with other countries.
The other added feature, of course, in an international trade agreement is the trade processes, the customs processes, that you have to go through, which can be extremely complicated. That's another key piece of all of this that, I think, is now starting to be addressed more and more, but is often forgotten because the duty is sort of at the top echelon of the issues. Sometimes, for our members, duties are important, but at least they understand them, whereas the trade processes can be very complicated.
Those are some of the things that need to be really looked at in order to make it easier for small businesses to get involved in international trade. Within Canada, it's really about making sure that those trade barriers between provinces—so, the regulations, the weird standards that can happen from province to province—start to be eliminated across the country.
I'll call the meeting back to order for clause-by-clause consideration of Bill .
With us for witnesses, from the Department of Foreign Affairs, Trade and Development, we have Doug Forsyth, director general for market access and chief negotiator, Canada-United Kingdom trade continuity agreement; Allison Trenholm, deputy chief negotiator, Canada-United Kingdom trade continuity agreement; and Torsten Ström, general counsel, trade law bureau. We also have Brad Norwood from the Department of Finance. I believe he is going to be joining us as well.
Thank you all very much.
As we move forward on this, let's all be patient and go slowly.
We have our analysts with us. We have all of our advisers there to make sure we're going in the right direction with this, too, if we have any questions.
Pursuant to Standing Order 75(1), consideration of clause 1, the short title, is postponed.
I will now call the clauses.
Do I have unanimous consent to group the clauses when there are no suggested changes?
Is everyone in favour of that? All right, I will—
Thank you, Madam Chair.
I'd like to thank my colleague Ms. Kwan for moving this proposed amendment, but I believe that she and all members understand that the Constitution holds primacy over all other domestic legislation that we implement, including Bill , and that the Constitution does recognize exactly what is being proposed in this amendment, so it is unnecessary. I would mention as well the importance of not including unnecessary additions into our agreements, because at that point, you can ask yourself the question, “Why aren't other constitutional rights, which are similarly important to all Canadians, not also mentioned specifically?”
I would also note that I did just this week speak to the Canadian Council for Aboriginal Business. I am working hand in hand with indigenous groups in order to ensure that their voices are heard in all trade negotiations, and have specific requests from that association to move forward on our negotiation of a comprehensive free trade agreement with the United Kingdom.
Thank you very much, Madam Chair, and while I appreciate the intent of my colleague's proposed amendment, I will not be voting in favour of it.
Thank you, Madam Chair.
I want to briefly put on the record that the Green Party MPs object to the larger parties in this House reducing our rights. The motion passed by this committee under the terms of which I appear today is not a favour to us. It is not an opportunity we requested. But for this motion, we would have the right under House of Commons procedures to move substantive amendments at report stage, subject to a vote of the House as a whole. The motion passed here and in every committee is the first time in the history of the Canadian Parliament that large, recognized parties acted to reduce the rights of a national party with fewer than 12 seats.
Further, we are the only Westminster-style Parliament that sets a minimum number of seats for a party to be recognized as a party in the Parliament. Our rights are restricted by this motion that this committee has passed. That motion obliges us to bring amendments here with no right to move the amendments, vote on the amendments nor speak to our own amendments other than in a proscribed and limited fashion.
With that, I will bring forward my amendment.
This amendment to Bill adds a sunset clause to ensure that the new agreement is negotiated and that the Canada-U.K. trade continuity agreement does not just continue on with all of the provisions of the EU Comprehensive Economic Trade Agreement, or CETA. In the view of the Green Party, there are many flaws in the EU CETA that we would not like to see carried over in this Canada-U.K. agreement. If this agreement is extended by resolution, then a comprehensive and transparent review will be triggered and must include local communities, indigenous peoples and civil society organizations.
I propose that Bill be amended by adding after line 2 on page 6 the following new clause, clause 15.1:
(1) Sections 1 to 15 cease to have effect at the end of the 15th sitting day of Parliament after the third anniversary of the coming into force of this subsection unless, before the end of that day, the operation of those sections is extended by resolution—whose text is established under subsection (6)—passed by both Houses of Parliament in accordance with the rules set out in subsection (8).
(2) The related amendments enacted by sections 16 to 49 also cease to have effect upon sections 1 to 15 ceasing to have effect.
(3) A comprehensive review of sections 1 to 15 and their operation must be undertaken by any committee of the Senate, of the House of Commons or of both Houses of Parliament that may be designated or established by the Senate or the House of Commons, or by both Houses of Parliament, as the case may be, for that purpose.
(4) The comprehensive review of sections 1 to 15 and their operations must
(a) take into account the perspectives of various groups, including local communities, Indigenous peoples and civil society organizations such as registered charities, non-governmental development organizations, labour unions, environmental organizations, community groups, human rights organizations and advocacy groups; and
(b) include an assessment of their impact in relation to Canada's sovereignty, the economy, jobs, trade balances, regulatory capacity, human rights, labour and environmental standards, the conduct of foreign investors in Canada and of Canadian investors in the United Kingdom, as well as on the rights of Indigenous peoples recognized and affirmed by section 35 of the Constitution Act, 1982.
(5) The committee referred to in subsection (3) must, within a year after a review is undertaken under that subsection or within any further time that may be authorized by the Senate, the House of Commons or both Houses of Parliament, as the case may be, submit a report on the review to both Houses of Parliament, including its recommendation with respect to extending the operation of sections 1 to 15.
Thank you, Madam Chair.
I would just like to start off, because I will be referring to some of the important testimony that we've heard, including the very important testimony today relating to the importance of moving forward with Bill and not going back to the negotiating table, which, unfortunately, the amendment proposed by our colleague from Green Party would require us to do.
It comes back, of course, to his initial opening statement that he is not present at committee. Just speaking for myself personally, I think that is unfortunate, and I certainly would have welcomed, and I believe all the committee members on this committee would have welcomed, his participation through our the debate and witness testimony period of this study.
In order to complete the point on the reason why I will be voting against this amendment, to sum up, we have heard very convincing testimony from business community leaders and from civil society as well, that this transitional agreement needs to move forward in order to provide predictability and certainty to Canadians, especially Canadian exporters.
We've also heard from officials and others that there are many incentives to bring the United Kingdom back to the negotiating table. The United Kingdom has also indicated that it is looking forward to coming back to the negotiating table, and there is a clause in the TCA that requires the parties to come back to the negotiating table.
We will, in the context of negotiating that free trade agreement, be conducting extensive negotiations. We've already had exchanges with witnesses on how they would like to see those negotiations move forward. We have already indicated, as has the , that she plans on making this as broad a consultation as possible, and that is something entirely within the control of Canada. It does not need to be added into the agreement itself.
I would invite the colleague opposite to contact me if he has specific civil society organizations that he would like us to consult prior to the negotiation of the comprehensive free trade agreement.
For all of the above reasons, I will be voting against the proposed amendment.
Thank you, Madam Chair.
I would like to acknowledge that our Green Party colleague is joining us.
We have heard your message and, if we have the opportunity to invite you again, we will certainly do so. Thank you also for your contribution with the proposed amendment.
I want you to know that I fully agree with a number of points in your proposal, including the need for transparency. The lack of transparency in reaching this agreement has caused a real scandal. However, I'm afraid of the sunset clause for the sole reason that we don't know what will happen next. I am immensely afraid, especially for our farmers. As we know, we managed to save supply management at the last minute in this agreement, with no breach opened. But we know that British cheese manufacturers want more exports. I feel that we narrowly escaped this time, but I wouldn't want us to impose an end date and be forced to accept a lesser agreement in three years.
Even if I completely agree with the other considerations, since I see pros and cons, I will abstain from voting for the proposal.
Madam Chair, it's too bad that all the other amendments were ruled inadmissible. The NDP would have supported that scheme.
Notwithstanding, I'd like to bring back the issue surrounding the importance of a sunset clause. I think all members will understand that without the sunset clause, the trade deal in effect is not really a temporary or a transitional one.
The public and parliamentary process around the deal has really been a bit of a train wreck. The government's opinions, of course, change, and we should recognize that. We need to ensure that future U.K. and Canadian governments do not decide to walk away from talks for a successor agreement and leave us with this deal as our permanent trading framework.
One reason, the government has said, that we can be certain that the U.K. will come back to the table is that access to the Canadian cheese market will expire in 2023. They have said, however, that they won't provide any more access to our cheese market in future agreements. Either the Liberal government is misleading Canadians and Canadian dairy producers again, as they did in the CUSMA negotiations, or we need stronger assurance that Canada and the U.K. will be compelled to supersede this agreement.
To that end, Madam Chair, I'm moving an amendment with a sunset clause provision under proposed section 15.1. It would add the language that has been provided to the clerk after line 2 on page 6, a new clause, which is the sunset provision.
There are 10 parts to the sunset clause provision that I'm proposing by way of an amendment. I will only put on the public record, Madam Chair, subclause 15.1(1) with respect to that, and then committee members can follow with respect to the other nine subclauses.
It would amend the bill by adding a sunset provision, clause 15.1, which reads, “15.1 (1) Sections 1 to 15 cease to have effect at the end of the 15th sitting day of Parliament after the third anniversary of the coming into force of this subsection unless, before the end of that day”—
Thank you, Madam Chair. I just want to speak again briefly on this point, because it is a very important one.
Adding a sunset clause would require us to go back to the negotiating table with the United Kingdom, leaving our business community, particularly our Canadian exporters, without the certainty that they need or, quite frankly, the access to the U.K. market that they require in this, the middle of a pandemic.
I would also mention that adding a sunset clause further reduces predictability and stability because we do not know how the negotiations will go with the United Kingdom on a comprehensive free trade agreement. I do not think that it is in the interest of Canadian businesses to have the possibility of a gap between the time when the sunset clause should end and when the negotiations should be finalized on a full free trade agreement. I would note that it would provide extra pressure on our negotiators to perhaps cede things that we wouldn't normally cede in negotiations were we to have a finite end date.
I would also like to add, with respect to the member's comments regarding the consultations that were done in advance of this transitional agreement, there were 10 years of negotiations under CETA. This is a rollover of CETA. It is what we have been saying for quite some time now. Members now have in front of them the text of the agreement and the enabling legislation, and they can see quite clearly that it is a reproduction of CETA until we have a full and comprehensive free trade agreement.
I would be remiss if I did not add that those consultations were commenced by the Conservative government at the time and that those consultations were very effective.
Thank you very much, Madam Chair.
I just want to respond to the parliamentary secretary's comments. It is wrong to say that, because there were consultations on CETA, there have been consultations on this agreement. I think the process here was a train wreck, and it's really important to note that, if we don't end up with a successor agreement, this is not a transitional or temporary agreement. This is a permanent agreement. What kind of process was this, to have a permanent trade agreement with the United Kingdom, frankly?
Therefore, no, in terms of the consultations on CETA, which I maintain and the New Democratic Party maintains was a bad deal anyway, and we've heard testimony even in the hearings on this bill that there are serious problems with CETA, those consultations don't count for this agreement because this is about a permanent agreement with another country. This is only not permanent if we replace it.
The government has said that there are three things that are going to get the U.K. back to the table. One is a good faith commitment to a new agreement, which in no way means that we will conclude a successor agreement. Canada has had intentions to sign agreements with other countries that we haven't in fact signed agreements with. One is around rules of origin. There may be some substance to that. The other one is around cheese. They say, the U.K. will want to come back to the table and get a new agreement because the cheese TRQs under the WTO are going to expire, except that they also say that they're not going to make any concessions on cheese. Therefore, why would the U.K. be incentivized to come back to the table on the issue of cheese, if the Canadian government has no intention of making concessions on cheese?
Which is it? Are they prepared to create further access to the Canadian cheese market under a future agreement, in which case I could see the U.K. wanting to come back to the table for that, or are they not, in which case that's not a leverage point to come back?
One of the things we can do is sunset this legislation so that this is something that has to come back before Parliament, so that there's internal pressure on our government to make sure that we get back to the table, and so that we don't end up, by inertia, having created a permanent and long-lasting trade deal with the United Kingdom today, by passing this legislation, that doesn't ever get to the stuff that the government continues to say is going to come up in a successor deal, which we have no guarantee will actually be negotiated, never mind concluded.
I just find this whole idea of a transitional agreement, frankly, preposterous. I've said it many times, but the more the government brings it up, the more irritating I find it, because as this whole process has gone on, what we found is that in fact we're signing a permanent agreement. Nobody signed up for that. Nobody was consulted about that. The government didn't even let on that was what was going on until they had already signed the deal. It's preposterous.
Let's stop pretending that somehow we have this temporary transitional agreement. It's a permanent agreement until another one is concluded, and there's no guarantee of that happening. Parliamentarians should be doing what they can to ensure that we get back to the table in a meaningful process that issues something other than CETA, which has not been great for Canada.
We've heard in many different sectors how our trade deficit has increased as result of CETA and that Canadian producers and Canadian manufacturers continue to struggle to get entry into markets that they might have access to on paper, but they don't actually have any real access to.
Once again, as with the Green Party's proposal earlier, I will have to abstain. I think it is a good idea, and I understand the idea behind the sunset clause. I agree with most of the criticisms made by my NDP colleague. But, for the same reason I mentioned earlier, I am more concerned about the potential aftermath.
I would, however, like to point out that I am very surprised to hear today from our Liberal colleagues that the idea is not to reopen the negotiations. We were assured that having an agreement that would be renegotiated in the next year was enough and that there was no need for binding provisions. I think it's actually quite a flip-flop of the official message.
My position stays the same on that, but I would like to know whether there will be a return to the negotiating table within the year or not. We had that guarantee and, in the end, we are being told that it is not in the interest of Canadians.