Mr. Speaker, I am glad that we are finally here for this debate to, hopefully, get this important trade agreement ratified quickly. CPTPP is a trade agreement that will greatly benefit Canadians and Canadian businesses. It will help diversify and grow our economy, and most importantly, it will help create needed Canadian jobs.
I have to say that it has taken longer than we thought for the current government to be able to get this implementation process in place. Having said that, now that we have NAFTA in jeopardy and a series of other issues on other major trade files, we need Canada to successfully continue to diversify its export markets now. There is no time to wait. We could have easily done this earlier in the summer when the opposition leader asked the Prime Minister to immediately convene an emergency session of the House to approve this agreement. It was disappointing to see that the Liberals rejected that offer. However, we are here now and we are ready to get it done.
For Canadians watching at home, it is important to explain what the CPTPP is. It is important because one out of every five Canadian jobs depends on international trade, and these are essential trading relationships that help generate 60% of our GDP.
CPTPP stands for the comprehensive and progressive agreement for trans-Pacific partnership. It is the successor to the TPP agreement signed by our previous Conservative government. It includes 11 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It was signed in March of this year and is still waiting to be ratified. Hopefully the government will finally get this job done.
CPTPP reduces tariffs in countries representing 13% of the global economy, or a total of $10 trillion. The Peterson Institute for International Economics estimated that the TPP, in the version signed by the previous Conservative government, would boost Canadian income by over $20 billion over the next decade. The agreement comes into force 60 days after at least six signatory countries ratify it, and the deadline to ratify it is in February 2019. After that, we lose our first-mover advantage, and Canada will have to play catch-up with the other signatory countries.
The Prime Minister replaced his international trade minister earlier this summer and told Canadians that the government would renew its efforts to diversify our exports. This opportunity is now. In fact, the opportunity was there even in June when, on this side of the House, we stood ready to get this deal ratified when the House was still sitting. It is not just Conservative MPs but Canadians throughout the country who have been waiting for the Liberal government to wake up to the many threats that loom large over our national economy.
The Liberals are doing poorly on many fronts: market access for our natural resources, tax and regulatory competitiveness, and international trade diversification. They are also pursuing failed policies to increase taxes and drive down growth. They are trying to ram through a carbon tax and are going overboard with over-regulation.
Imposing the carbon tax on provinces, businesses and families has been a complete disaster for the Liberals. Now the environment minister says that any province that does not get on board with the Liberals' climate plan will not get its share of the government's $2 billion low-carbon economy fund. We ask, “Why are they blackmailing the provinces?”
Despite this, many provinces refuse to sign on to the Liberals' carbon tax. Even Alberta's NDP premier withdrew her support for Ottawa's national climate change strategy. Seeing this, the Prime Minister tried quietly to walk-back how much some large companies will have to pay under this new carbon tax, yet he still plans to impose the carbon tax on smaller businesses and families to make up for the taxes the big guys are not paying. This makes no sense and is fundamentally unfair. The carbon tax is bad for everyone, not just the companies that can afford it most. The fact of the matter is that the Liberal carbon tax has increased the cost of living for every Canadian, including driving already skyrocketing gas prices even higher.
On top of everything, the Liberals are refusing to come clean on the true cost of the carbon tax for the average family. What we know so far is that gas prices will go up by at least 11¢ a litre and the cost of living to heat one's home will increase by over $200. However, again, the Liberals will not tell us the overall cost to an average Canadian family, because they do not want people to know what this scheme will actually cost. The Parliamentary Budget Officer released a report recently that found that the carbon tax will take over $10 billion out of the Canadian economy by 2022, while other estimates argue that this cost could be as much as $35 billion a year. This will, without a doubt, hurt jobs, workers and their families.
The good news is that common sense is winning the debate on this issue. More and more Canadians realize that the carbon tax is unfair and will leave them with less and less of their hard-earned tax dollars. Foreign investors are concerned, because the Liberals are simply making Canada a less attractive place to invest. Investment from abroad went down by 42% in 2016 and a further 27% in 2017.
Even the CEO of CIBC, Victor Dodig, is sounding the alarm over falling levels of foreign investment in Canada, warning that the country needs clearer rules to shore up investor confidence. Last week, The Globe and Mail reported that during a lunchtime speech in Toronto Mr. Dodig said he is increasingly hearing from the bank's clients that opportunities for investment returns are better south of the border. He cited several reasons, from the U.S. tax cuts and regulatory changes to trade uncertainty. He also went on to say that Ottawa's criteria for approving large deals involving foreign firms are not always clear, creating uncertainty for potential investors. He pointed to the debate over the Trans Mountain pipeline expansion project as a prime example of Canada sending the wrong signals:
“That, to me, should be a siren call that that money is here. It will leave”, he said, “and I can't see any upside to it leaving....” Foreign investors “need confidence”, Mr. Dodig said. “They need an element of certainty. They need to know the rules. They need a clear understanding of how things get approved [here in Canada].”
The Globe and Mail article goes on to say that these comments are in addition to Suncor CEO Steve Williams, who told investors in New York, “There is clearly a question of confidence in Canada”, echoing Imperial Oil Limited CEO Rich Kruger, who said this summer that regulatory uncertainty and concerns about competitiveness are causing investment decisions to be delayed.
This is very worrisome. We can just look at what the Liberals have done with Canadian pipelines. It is absolutely stunning. When the Prime Minister was elected, three major energy companies had pipeline projects: northern gateway, energy east and Trans Mountain. They were prepared to build in Canada. Now, thanks to Liberal policies and decisions, we have none of these.
The Liberals piled on new regulations and red tape, and introduced an oil tanker ban and a bill that would effectively ban the future construction of pipelines, and that is on top of their carbon tax. These policies need to be repealed to restore investor confidence in the Canadian energy sector.
However, nowhere has the Liberal mismanagement been more evident than in their handling of the Trans Mountain pipeline expansion. It would be difficult for them to top this one.
When the Liberals announced that they were nationalizing the existing Trans Mountain pipeline, Canadians were told that it was going to cost 4.5 billion of their tax dollars to allow construction to begin immediately. The reality is that taxpayers are now the shareholders of this monstrous Liberal boondoggle, and not one centimetre of pipeline has been built. It is absolutely unacceptable that Canadian taxpayers are on the hook for $4.5 billion of pipeline that may never be built, and that is in addition to the estimated cost of somewhere around $9.3 billion to actually twin the pipeline. Also, recently, the Federal Court of Appeal found that the government had failed to consult indigenous people on the Trans Mountain expansion and overturned approval of the project.
Thousands of Canadians have lost their jobs because of Liberal failures. We gave the Prime Minister another opportunity to outline his plan on how he will get the Trans Mountain expansion built and Canadians back to work. We tried to do this through an emergency meeting of the Standing Committee on Indigenous and Northern Affairs, and, yet again, the Prime Minister forced the Liberal MPs to shut down a study of the government's handling of the Trans Mountain expansion. His government has been given multiple chances to reassure Canadians, but instead he has chosen to rely on empty rhetoric.
Our hard-working men and women in the resource sector, whose jobs and livelihoods depend on these projects, deserve to have a competent government that does not get in the way of resource sector jobs at every opportunity it gets. These workers deserve a concrete plan to ensure that the Trans Mountain expansion is actually going to be completed. The failure to get the Trans Mountain expansion built is now threatening other expansions in the oil and gas sector, adding to the total number of jobs at risk. The Trans Mountain pipeline is crucial to oil and gas workers across Canada and to the regional economies that stand to benefit from its expansion, including 43 first nation communities that have benefit agreements worth over $400 million, which now hang in the balance. I also mentioned that right here in Ontario, there are all kinds of businesses close to my riding and in southwestern Ontario that would also benefit from building pipelines.
How do we persuade potential trading partners that our country is open for business, when Liberal policies prove the opposite? The Liberals have not been able to address Canada's faltering position on the global economy. It is a position they put us in with their policies. It is one thing after another with the government. In fact, it is difficult to think of an example of a foreign policy win for the government since it took office in 2015.
That is why I hope that ratification of the CPTPP goes through smoothly. We cannot afford any more issues and delays.
Time and again the Liberals have demonstrated their lack of seriousness to our potential international trading partners. Last year, the Prime Minister touted a free trade agreement with China. What happened there? The Prime Minister's visit to Beijing actually set back our trading relationship. It also failed to address any of the concerns Canadians have about trade with China. The Prime Minister then skipped a critical meeting at the CPTPP, angering our Asia-Pacific partners like Australia, New Zealand, and Japan. There was also his embarrassing trip to India that still haunts us to this day. It is time for the government and the Prime Minister to take trade and our relationships around the world seriously.
I want to dedicate some time to speaking about our trade relationship with the United States, who at one point was a signatory to the original TPP agreement. It is important to note that the United States is Canada's most important trading partner. Twenty per cent of Canada's GDP is tied to our commercial relationship with the United States, and over 74% of Canadian exports go to the United States.
It is no secret that the government is in the midst of very difficult NAFTA negotiations. At this stage, the Americans seem to have already struck an agreement with Mexico and are using that as leverage. This could potentially impact millions of Canadian jobs. Canadians are concerned that our government was not at the table while these decisions were being made. It seems like we were on the outside looking in while major sectors of our economy and millions of Canadian jobs have hung in the balance.
We are heavily dependent on our American neighbours. This makes any tariff action against us very painful for our economy. American tariffs imposed on Canadian steel and aluminum are just another example of why we need to expand foreign markets for Canadian manufacturers. The CPTPP is one effective avenue for this expansion. It has the potential to boost Canadian income by billions over the next decade. That is why we cannot risk looking our first mover advantage. We do not want to jeopardize jobs and supply lines by not being part of the first six ratifying signatories.
We all know that this agreement has broad support. Several industry groups representing agriculture, agri-food, and forestry have all come forward in support of the CPTPP. That said, we would work with all sectors to minimize the risk under the agreement. However, we maintain that on balance this agreement is good for the broadest range of Canadian manufacturers.
Economic modelling by both the Canada West Foundation and the federal government confirm that there would be hundreds of billions of dollars in immediate benefits for Canadian firms if we are among the first wave of signatories to ratify the agreement.
I want to go back to American tariffs on Canadian steel and aluminum for a second, because they tie in with the urgency of diversifying our trade.
American tariffs have caused great concern among our workers in the Canadian steel and aluminum industries. Thousands of jobs and the livelihood of Canadian workers and businesses are all being threatened. This is even more worrisome considering the U.S. government's repeated threats to impose a 25% tariff on the auto sector. The longer we go without a deal on NAFTA and the closer we get to auto tariffs being imposed, the more anxious Canadians will get and the less certain they will be when it comes to making business decisions. The most pressing priority, and I believe we are all united on this, is to protect Canadian jobs and industry by having tariffs removed from Canadian steel and aluminum, and by stopping new tariffs from being imposed.
That is why we made it clear to the government that we would continue to work with it to bring forward concrete ideas to defend local jobs. Defending local jobs is exactly what my colleagues and I on this side of the House did during the summertime. We travelled across Canada to meet with workers, businesses, and labour groups to determine how best to respond to threats posed by U.S. tariffs and the continued trade uncertainty around NAFTA. We met with over 200 stakeholders from the steel, aluminum, automotive, and manufacturing sectors across four provinces.
We heard from stakeholders that they want the government to do three things: first, conclude negotiations and sign a NAFTA deal as soon as possible; second, provide immediate support to companies struggling to stay afloat; and third, take steps to improve Canada's competitiveness by reducing red tape.
Businesses need certainty. That is why the first recommendation to sign a NAFTA deal was by far the most repeated one by stakeholders this summer. We also heard that businesses have already cut orders, that shifts are being reduced, workers are being laid off, and that others will lose their jobs in the next couple of months.
I also want to mention that despite the government's promise of $2 billion in aid, we found that no one has been able to access any of this money. The $2 billion was earmarked for additional debt offered by EDC and BDC, as well as employment insurance programs like work sharing and retraining.
The challenge I have with the $2 billion is that $1.7 of that was to go to EDC or BDC in the form of additional loans, not tariff relief. We had $250 million to run the strategic innovation fund, and when we dug into that, we found it was for companies doing over $10 million in sales and employing over 200 people. Let us think about that.
No SMEs could get any access to the $2 billion fund. Then we see monies committed for work sharing. Work sharing, to me, sounds a lot like a postmortem of what is going on. It sounds like the horse has left the barn and we are just trying to save the furniture now. Work sharing is a good program, but we need to make sure that people can expand their businesses, not find ways for them not to be able do it. That is the challenge I have with the $2 billion.
We read a great Global News article last week. It said that only $11,000 has gone out, and yet there has been almost $300 million collected in tariffs.
The other thing we found out from talking to businesses is that the tariffs are not actually tariffs, but a surtax. They are actually not eligible for any kind of duty deferral or duty remittances, or any of these kinds of things. It is actually an additional tax.
We have over $16 billion's worth of items being tariffed, anywhere from 25% to 10%, depending on what the products are, which would, if we calculate that out, be somewhere in the neighbourhood of $2 billion in additional tax revenue, and yet we have not seen one nickel of that going back to SMEs. There is $2 billion of tax revenue coming in, in the form of surtaxes, and right now we have no plan, other than what was a perceived announcement, on how our small- and medium-sized enterprises are actually going to access any of that kind of tariff relief.
Some of the SMEs are going to have the conversation, asking how they are going to get the money back. They are being informed that they will be told in 60 or 90 days, whatever the case may be. I heard one company say that it may be up to 200 days. Let us think about that. Some of these companies will not be around if that is allowed to continue.
We talked to companies. I was with one of our members in Concord. We asked an aerospace company about what would happen if we did not resolve the issue around tariffs, and they said that it represented an existential threat to their company. They have parts whose prices have now gone up almost 100%.
We see what has happened because of tariffs. We see steel and aluminum prices, steel in particular, going up anywhere from 25% to 50% across the country. That presents a real problem.
I just do not think that piling on more debt, as I mentioned before, or easing workers' transitions into unemployment are adequate solutions. Companies affected by steel and aluminum tariffs are struggling to stay afloat, and need immediate support. This tit-for-tat with the United States makes it even more urgent that we seize every opportunity to expand and diversify our trading relationships.
On this side of the House, we have always supported this. The previous Conservative government had the foresight to conclude free trade negotiations and investment agreements with 53 other countries, including the countries of the original trans-Pacific partnership and the other 28 countries of CETA, which concluded in 2014. Speaking about CETA, another Conservative trade accomplishment, last week the Financial Post reported that CETA has boosted container shipping and promoted a hiring spree at the docks in Montreal.
Once again, the minister mentioned that there had been some increased activity at the docks in Montreal, and it is certainly great to see in Canada that the European free trade agreement is doing exactly what it was designed to do. I would caution, though, that as we have seen imports expand by 12%, our exports have only gone up by 1%. That means there is more work for government to do to get our companies prepared to be able to sell into these markets.
The Financial Post went on to say that the employers association that handles training for the port workforce, as well as the Montreal Port Authority, attributes much of the container flow to the CETA agreement. That is a good new story, but there is still more work that we need to do to expand our exports.
It is also said that the extra dock traffic spurred the association to start hiring 50 more longshoremen and 15 more auditors, resulting in several key terminals nearly doubling their operating time to 17 hours each work day. This is an incredible accomplishment and evidence that benefits come from diversifying Canada's trade.
Canada's Conservative Party is the party of free trade, and we understand the importance of reliable access to markets for Canadian business and workers. In conclusion, I would like to say that given the importance of the bill to Canadian livelihoods, it is crucial to the public interest that Canada ratify the CPTPP agreement as soon as possible.