44th Parl. 1st Sess.
October 23, 2023 11:00AM
Mr. Speaker, I rise today in the House to speak to Bill C‑57, which seeks to modernize the 2017 Canada-Ukraine Free Trade Agreement, or CUFTA. I rise as the Bloc Québécois international trade critic, and I am pleased to speak on behalf of my political party today.
I just want to remind the House that our party is continuing a tradition, because Quebec's independence movement has been advocating for free trade since the 1980s with a view to exiting the Canadian economic framework, which is too narrow. It has been a quite a deal for our SMEs, whose expertise is as valuable as it is diverse. I should note, however, that our position is not categorical: A trade agreement may be bad, and it is what it contains that determines whether or not we support it. If an agreement is going to be harmful to our key sectors, commodify our public services to an unreasonable degree, give multinationals the upper hand or hurt the environment or workers' rights, we would not support it merely because we believe in the virtues of international trade.
In the present case, I will say right now that we will be voting in favour of the principle of the modernized 2023 agreement, since we are still at the principle stage. However, we have a major concern about something that I will talk about a bit later, something that we will be urging the government to commit to changing.
Let us first look at the context. We are talking about modernizing an agreement that dates back to 2017, but we could basically call it a new agreement. The 2017 CUFTA, which was essentially negotiated by Stephen Harper's Conservative government, was mostly about extending a hand of friendship to Ukraine, a symbolic stance, since trade with Ukraine was rather marginal at the time. The negotiations ended in the summer of 2015, just before the election, but the agreement was signed by the current government during the Ukrainian Prime Minister's visit to Ottawa in 2016 and it took effect in 2017. The Bloc Québécois supported that agreement. Given that we wanted to move forward quickly since Ukraine was looking for international support, the 2017 CUFTA was pretty bare-bones. More work could have been done, particularly with regard to the implementation mechanisms that were meant to ensure compliance with the agreement. They were rather weak.
What we have before us today is a real trade agreement. Bill C‑57 is 15 pages long and merely amends Canadian legislation to align it with the agreement's requirements so that the government can go ahead and ratify it. Bill C‑57's clauses are largely technical, as most of them change references to the 2017 CUFTA or other agreements, replacing them with references to the modernized 2023 agreement for consistency. It also authorizes the establishment, recognizes the authority and allows for the funding of the various institutional mechanisms provided for in the agreement, including the secretariat responsible for overseeing the agreement and the various dispute settlement bodies.
The modernized 2023 agreement is a comprehensive agreement. We are talking about 1,000 pages. It contains 30 chapters covering trade in goods and services—including special provisions in a number of areas—as well as investment, government procurement, sanitary and phytosanitary measures, labour law and environmental law. It also includes provisions to favour SMEs or businesses owned and operated by women and indigenous people. It casts the net wide.
For starters, we were pleased to see that the content of the June 2022 order was not included in this agreement. Countries in difficulty or at war are often exempted from Canadian tariffs, but this was the first time supply management was included. Ukraine became totally, or almost totally, exempt from supply management in relation to Canada and its borders. Chicken farmers were very concerned, and for a year, they suffered the ill effects of that access. It was unacceptable. There was no reason for this to happen, especially given the rather ridiculous reasoning behind it. For example, it was alleged, on the basis of studies from several years ago, that there is no bird flu in Ukraine. However, we know that viruses can mutate and that one of the main sources of bird flu in Europe is Poland, which is right next door. Until proven otherwise, birds, such as chickens, do not respect borders. They are not screened at the border. If there were a major outbreak in Poland, it would be surprising if there were no cases, contrary to what was being said in Ukraine.
In short, this agreement covers the components of trade and various related sectors likely to impact trade. Among its 30 chapters, 11 are new since the 2017 CUFTA. The “Cross-Border Trade in Services” chapter sets out the rules applicable to services. The chapter entitled “Development and Administration of Measures” ensures that administrative practices are predictable and consistent. The “Investment” chapter protects investments and replaces the 1994 bilateral agreement for the protection of investments.
The annexes on services and investment non-conforming measures complement the chapter on cross-border trade in services. They clarify its application in specific areas and list the exceptions that both countries wish to retain.
The “Temporary Entry for Business Persons” chapter is a necessary provision for business to occur between the two countries. It did not appear in the 2017 CUFTA.
Although the “Telecommunications” chapter does not completely open up access to the telecommunications market, it guarantees access to the telecommunications infrastructure. It does not cover broadcasting and therefore has no impact on cultural policy. Fortunately, the cultural exemption, as we call it, remains intact, and a good thing too, because we certainly would have fought this provision if it violated the cultural exemption.
The “Financial Services” chapter, which complements the chapter on cross-border trade in services, sets out the rules applicable to financial services without completely opening up the market. The Canadian banking market remains essentially protected. This chapter sets out the rules that facilitate the use of financial services in the other country and the simple flow of capital.
Three chapters are being added to the 2017 CUFTA concerning the participation of certain groups in trade, specifically SMEs, women and indigenous people. This allows preferential measures to be put in place.
There is also the chapter entitled “Good Regulatory Practices”, which codifies the manner in which regulations are adopted to ensure transparency and predictability.
Eight of the chapters in the 2017 CUFTA are being amended. The chapter entitled “Rules of Origin and Origin Procedures” relaxes the rules of origin for products containing materials that come from a country with which a free trade agreement has been concluded. The chapter entitled “Digital Trade” clarifies the rules that apply to electronically transmitted data to ensure more efficient flow. The chapter entitled “Competition Policy” clarifies the competition rules that could hinder trade, particularly in the case of Ukraine, where mass privatization occurred after the fall of the U.S.S.R. State monopolies were replaced by private quasi-monopolies that were difficult to break into. The agreement will help address that. The chapter entitled “Designated Monopolies and State-Owned Enterprises” includes the provisions of the 2017 CUFTA, but in a separate chapter to facilitate its implementation.
The chapter entitled “Government Procurement” was in the 2017 CUFTA, but in the form of a statement of intent only. The new agreement includes provisions from the WTO Agreement on Government Procurement, which takes it away from the WTO's dispute settlement bodies, which have been paralyzed for years, and gives it instead to the panels under the Canada-Ukraine agreement. This chapter is very important, considering the huge contracts that will be awarded for rebuilding Ukraine, presumably in the near future, as soon as the war is over, which we hope is not too long from now.
The chapters on the environment and labour, which were also statements of intent in the 2017 CUFTA, will now be binding.
Now let us talk about the chapter entitled “Transparency, Anti-Corruption, and Responsible Business Conduct”. The 2017 CUFTA contained anti-corruption measures. The 2023 agreement adds provisions on responsible business conduct. We know that the government is boasting about this chapter. This section encourages businesses to adopt internationally recognized guidelines and principles of responsible business conduct and corporate social responsibility, but these codes are purely voluntary. It is merely a fine principle. It is completely empty. There is nothing in it but encouragement to follow lofty principles. There is no body to oversee or verify compliance with this chapter.
In other words, we should disregard the siren songs of the Liberals, who are bragging that this chapter will do even more to help in the fight against corruption in Ukraine. That concludes the overview of the new and amended chapters.
Now, there are some potentially predictable effects that would encourage us to support the principle of this agreement. Even though trade between Canada and Ukraine is up by one-third since the 2017 agreement was signed, Ukraine remains a small trading partner for Canada. In 2022, the value of Canada's merchandise exports to Ukraine was $150.2 million, or 0.02% of the $760 billion in goods Canada exported last year, even in the context of a country at war. The top three exports to Ukraine were motor vehicles and parts, fish and seafood, and pharmaceutical products. Again in 2022, imports from Ukraine were valued at $271.2 million, or 0.04% of the $780 billion in Canadian imports. Canada's top imports from Ukraine were animal and vegetable fats and oils, iron and steel, and electrical machinery and equipment.
The trade impact of this new agreement will therefore be marginal, especially given that most of the goods and services are already subject to free trade, because, until proven otherwise, like Ukraine, we are still part of the World Trade Organization. However, this agreement will bring greater predictability than the previous 2017 agreement, which should make things easier.
I will point out that the 2023 agreement provides one extra year of guaranteed access to the Ukrainian market for 20,000 metric tonnes of Canadian pork, a major production sector for Quebec. These provisions should please pork producers. The chapter on government procurement could also become very important during Ukraine's post-war reconstruction, especially for Quebec engineering firms, some of which are very successful internationally. They could be enlisted to help rebuild the country's infrastructure. Dam building, for instance, is an area where our expertise is internationally recognized.
I will now address the concerns we have. As usual, the main one is transparency. Parliament's ability to amend Bill C-57, the subject of today's debate, is fairly limited. Amendments must relate only to the bill and cannot affect the agreement itself. This limitation of parliamentary powers is not exclusive to the Canada-Ukraine agreement; indeed, the people's elected representatives in this House, the issue of a monarchical culture, have very little involvement in international treaties. Their power is limited to saying yes or no to whatever the government has signed. We have this agreement before us and there is very little we can do. We cannot say that one item or another needs to be improved or that we are opposed to certain aspects. It is just not possible. We cannot influence the contents of these agreements in any way. By the same token, while provinces are responsible for implementing the parts of the treaty that pertain to their jurisdictions, they are not involved in the negotiations, as opposed to what is done in Europe, for instance, where member states play an integral part. Even if the treaty is with the European Union, negotiations happen with the parliaments of member states.
Again, these democratic shortcomings are not exclusive to the Canada-Ukraine agreement. The entire Canadian approach to signing treaties has to be reviewed. Regardless of the issue or political stripe, governments do not really appreciate it when their opponents look too closely at what they do. When it comes to trade agreements, secrecy is in order. Canada, with its deep-seated monarchical traditions, keeps the treaties it signs in the dark, afraid that they might turn to ashes like vampires if they see the light of day. As a member of Parliament, I have had the unfortunate opportunity to experience that first-hand. In November and December 2020, at the Standing Committee on International Trade, we were forced to examine the Canada-United Kingdom free trade agreement without seeing the text of the agreement. During that sad bit of absurd theatre, we had witnesses, experts and groups telling us about an agreement about which they knew as much as we did as elected representatives, which is nothing at all.
When Canada's foreign affairs department was created in 1909, the minister was supposed to table before Parliament an annual report on the department's operations. This report would logically include an overview of Canada's international discussions and commitments.
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Mr. Speaker, I am proud to rise today to speak to Bill C-57, the new Canada-Ukraine free trade agreement. This bill would update the agreement made in 2017. Much has happened in the past six years, as we all know.
First, I would like to speak a bit about the original agreement, as it forms the core of the present one, then cover some of the changes outlined in Bill C-57. I will wrap up with some comments about how free trade agreements are presented to Parliament for the debate that they deserve.
The NDP is very much in favour of free trade agreements. We hear catcalls from both sides every time we debate free trade agreements here, saying that the NDP is always against them. We are not. We have voted for free trade agreements in the past and we voted for the Ukraine free trade agreement when it was presented. Our main caveat for these agreements is that they be designed to protect and create Canadian jobs, protect the ability of Canadian governments at all levels to care for our environment, and promote the well-being of our citizens. The measure of success of free trade deals must not be just the profits made by Canadian companies. It must also include measures of good labour agreements, both here and in the countries we are making deals with, and measures of good environmental and human rights laws on both sides as well.
These agreements must be beneficial to the people of both countries involved. I have to say that this new agreement with Ukraine and the bill before us that would implement that agreement seem to do a good job in that direction. The Canada-Ukraine friendship is very special. In fact, when Ukraine declared its independence from the Soviet Union in 1991, Canada was the first western country to recognize that act. Today, there are more than 1.3 million Canadians of Ukrainian heritage. They are very proud of that heritage and their cultural traditions.
Canada has consistently supported Ukraine's development and reform efforts, providing over $460 million in international assistance between 2014 and 2021. Of course, Canada and Canadians have been strong supporters of Ukraine since the illegal invasion by Russia in February 2022. Since then, Canada has committed over $8.9 billion in assistance, including financial, development, humanitarian, military security, stabilization and immigration aid.
With respect to trade, Canada issued remission orders to temporarily open up trade with Ukraine, allowing supply managed products, such as poultry, to enter Canada. We have heard some concerns about these remission orders in the international trade and agriculture committees, but I think it is fair to say that Canadians are happy to help Ukraine in any way during these horrific times in their struggles.
I would like to step back a bit in time and spend some time talking about the original agreement. I would like to thank Tracey Ramsey, who is the former member for Essex, the NDP international trade critic when the first Canada-Ukraine free trade agreement was debated and came into effect. Tracey was and remains a passionate defender of Canadian workers, and she took her role very seriously. She recommended that the NDP support the original Canada-Ukraine free trade agreement because it upheld those basic principles I mentioned previously.
The Canada-Ukraine trade relationship is relatively small. Ukraine represents less than 1% of the total Canadian global exports. Following the signature of the original trade agreement, Canada's non-coal exports to Ukraine grew by 28.5% between 2016 and 2019. Total merchandise trade reached an all-time high of $447 million in 2021, although that of course declined in 2022 because of the illegal invasion.
The original free trade agreement eliminated most of the tariffs on Canadian imports to Ukraine and Ukrainian imports to Canada. Canadian exporters have largely welcomed the deal. Canadian products that benefit from the free trade agreement include iron and steel, industrial machinery, pulses, canola oil, and fish and seafood.
While the original free trade agreement includes a state-to-state dispute settlement mechanism, it did not include the investor-state dispute settlement system, ISDS provisions. It is important to note that these provisions actually existed before the free trade agreement came into place because in 1995, Canada and Ukraine signed a Foreign Investment Promotion and Protection Agreement, which included these investor-state provisions.
The NDP, in general, does not like ISDS provisions because they allow foreign corporations to literally tell Canadian governments at all levels how they should be protecting their environment or protecting their people. We believe that is an infringement on our sovereignty and we think that ISDS provisions do not have a place in any foreign free trade agreement. We are happy to see that the new Canada-United States-Mexico Agreement did not include them. They were in both the Canada-Europe trade agreement and the CPTPP. We believe that foreign investors should be obligated to go through domestic courts before being granted access to a special court where they can sue our governments, and that should be done at the state-to-state level.
New Democrats analyze trade deals as a whole. As I say, we have supported trade deals in the past, including the Ukraine agreement and the South Korea deal.
The original Canada-Ukraine Free Trade Agreement entered into force in 2017. It has a review clause that it be reviewed within two years of entry into force with a regard to expanding it and that was done. In 2019, Canada and Ukraine agreed to modernize the free trade agreement with expanded sections. There were public consultations held in the winter of 2020, but those consultations did not seem to include the Parliament of Canada. I will talk more about that later.
Canadian and Ukrainian officials conducted negotiations from May 2022 to April 2023. The new agreement includes more chapters on a broader array of services and business. It covers professional services like engineering, legal, computer services and telecommunications. It covers investment. It covers temporary entry for business persons. There are other sections that promote more broad interactions around trade and commerce. These are chapters that are included in other free trade agreements that Canada has with other countries and we welcome them here.
The agreement also has an updated environment chapter, which is subject to dispute settlement, aiming to ensure parties do not lower the levels of environmental protection to attract trade or investment. Again, that is obviously an important part of trade agreements. Trade agreements should raise the level of the standard of living of people in both countries in commercial and financial terms, but also in terms of their environment, human rights and labour dealings.
This bill has an updated labour chapter, which is again subject to dispute settlement provisions. It aims to improve labour standards and working conditions in both countries.
As I say, the NDP in general supports this kind of free trade agreement. Whether we support this bill or not, I would like to say here that, unfortunately, this bill was tabled only last Tuesday and I have not had time to bring it before the NDP caucus for discussion, which happens on Wednesdays, as we all know. This is a big, complex agreement and the NDP caucus likes to discuss all legislation before we decide whether we will support it.
We think it is important to allow Parliament to have input into trade negotiations before they begin. It is also important to allow ample notice once the treaties are signed for debate in this place before they are ratified. When the first Canada-Ukraine free trade agreement was tabled, the government followed that policy. It tabled the enabling legislation along with an explanatory memorandum and a final environmental assessment more than 21 sitting days after tabling the treaty. However, the government did not follow any of these standard procedures when introducing CETA, the Canada-Europe trade agreement. We were happy when it followed those procedures in the previous first version of the Canada-Ukraine agreement, but it seems that the government has forgotten those policies with this new agreement.
When the government negotiated CETA and CPTPP, Canadians were kept in the dark about what was being negotiated. When we finally learned what was on the table, the deal was already finalized, and the government said that there was absolutely no way to change anything at that point. It is not too much to ask for input on these important policies. The United States Congress has the right and ability to debate what the priorities of their country will be before entering into free trade negotiations.
The member for Elmwood—Transcona wrote a letter, in December 2019, to the Minister of International Trade, who is now the Minister of Finance, regarding increased transparency around the negotiations for the new Canada-U.S.-Mexico free trade agreement. In response to that letter, the minister agreed, on February 19, 2020, to change the policy on tabling treaties in Parliament. Those changes:
To require that a notice of intent to enter into negotiations towards a new free trade agreement be tabled in the House of Commons at least 90 calendar days prior to the commencement of negotiations. Under normal parliamentary procedures, the notice of intent would be referred to the [committee on international trade].
To require objectives for negotiations towards a new free trade agreement to be tabled in the House of Commons at least 30 calendar days prior to the commencement of negotiations. Under normal parliamentary procedures, those objectives would be referred to the [committee on international trade].
As I mentioned previously, there were discussions with some stakeholders about the scope of changes to this free trade agreement in the winter of 2020, but as far as I can tell, and we have done some research on this, the matter was never referred to the international trade committee or tabled in the House.
The government also seems to have broken standard policies on introducing implementation legislation for free trade agreements and other treaties. There should be 21 sitting days between the tabling of treaties and tabling of legislation, and that did not happen with this agreement. On top of that, as I mentioned, the minister tabled this legislation last Tuesday and here we are debating it on Monday. This is a big, complicated bill. There was no opportunity for opposition parties to discuss this in caucus last Wednesday.
To conclude, the NDP is very much in favour of free trade. We supported the original version of this agreement with Ukraine and we will be discussing this new legislation in caucus on Wednesday. I urge the minister and her government to follow the standard policies on how to introduce treaties and implement legislation before Parliament. These are not minor details; these are important points on how Canadians expect us here in this place to hold the government to account.
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Madam Speaker, we have stood with Ukraine since the start of Russia's illegal invasion and will stand strong when Ukraine is once again free. The introduction of Bill C-57, an act to implement the 2023 free trade agreement between Canada and Ukraine, is an important milestone in the implementation of the modernized Canada-Ukraine free trade agreement. As the first trade agreement Ukraine has signed since the onset of Russia's illegal war, this modernization would result in a comprehensive and progressive agreement ensuring that everyone feels the benefit of trade. Canada is a trading nation and trade accounts for about 65% of the GDP.
Canada is currently the only G7 country to have free trade agreements in force with all other G7 countries. Canada currently has 15 free trade agreements with 51 different countries and covers 61% of the world's GDP. Together, these agreements cover 1.5 billion consumers worldwide.
I have to give a shout-out to our farmers. Though small in number, our farmers in the agri-food sector are the most aggressive in leveraging every free trade agreement we have signed so far. Canada is the fifth-largest exporter of agri-food and seafood in the world and exports to nearly 200 countries. In 2022, Canada exported nearly $92.8 billion in agriculture and food products, including raw materials, agricultural materials, fish and seafood, and processed foods. I wish other sectors in Canada where we have resource advantage would follow our agriculture sector in exporting all across the world. For example, the steel and aluminum sector could look beyond the North American market and export to Europe and to the Indo-Pacific region.
Despite challenges, Canadian trade reached record highs again in 2022. Canada's goods and and services exports increased by 31.2% to reach $940.4 billion in 2022 and the imports advanced 20.5% to reach $936.2 billion.
Even with Russia's illegal and unjustified invasion of Ukraine last year, which caused a horrific humanitarian crisis and sent shock waves around the world, global trade has remained resilient. Global economic growth advanced by 3.5% in 2022, following the 6.3% rebound witnessed in 2021. Canada continues to uphold and promote rules-based trade, providing confidence and predictability for our businesses.
Free trade agreements represent about 80% of Canada's imports and 90% of Canada's exports in 2018. Free trade agreements are essential for several reasons. They promote economic growth by expanding markets and increasing access to a wider consumer base. These agreements reduce tariffs and trade barriers, encouraging the flow of goods and services across borders. This fosters competition and innovation, driving down costs for consumers and enhancing product quality. Moreover, free trade agreements create a framework for resolving trade disputes, ensuring stability and predictability in international trade relations. They also strengthen diplomatic ties between nations, promoting co-operation and peace. In a globalized world, free trade agreements are crucial for spurring economic development, job creation and overall prosperity. Free trade agreements are effective at lowering trade barriers and overall cost of trade.
The original Canada-Ukraine Free Trade Agreement entered into force in August 2017. Upon entry into force, Canada eliminated duties on 99.9% of the imports from Ukraine. Similarly, Ukraine immediately eliminated tariffs on approximately 86% of imports from Canada with the balance of tariff concessions to be implemented over seven years. This will align with the proposed date for the modernized CUFTA's entry into force.
While comprehensive from a trade-in-goods perspective, the 2017 CUFTA did not include services, investment and many other areas. It instead included a clause committing the parties to review and explore expanding the agreement within two years of its entry into force.
On September 22, 2023, we signed the modernized Canada-Ukraine free trade agreement. This would support long-term security, stability and economic development in Ukraine while also ensuring high-quality market access for Canadian businesses participating in Ukraine’s economic recovery. This would create good, middle-class jobs in both of our countries.
The modernized CUFTA would maintain the preferential market access gained in the original FTA for all current Canadian merchandise exports to Ukraine. It would mark a new era in Canada and Ukraine’s economic relationship and be fundamental to the participation of Canadian businesses in Ukraine’s economic reconstruction and recovery from Russia’s illegal and unjustified invasion. The modernized agreement also includes dedicated new chapters on trade in services, investment, temporary entry, telecommunication, financial services, and inclusive trade, and updated chapters on labour, environment, transparency and anti-corruption, among other areas.
The agreement would facilitate enhanced co-operation, improve the ability of parties to resolve trade irritants, promote openness and inclusivity, increase transparency in regulatory matters and help reduce transaction costs for businesses. CUFTA would commit Canada and Ukraine to respecting and promoting internationally recognized labour rights and principles and to effectively enforcing their labour and environment laws.
For the first time in either country's history, the FTA also includes a new dedicated chapter on trade and indigenous peoples, in addition to new chapters on trade and small and medium-sized enterprises and trade and gender. These elements are designed to increase opportunities for traditionally marginalized groups in trade to participate in and benefit from the agreement. When in force, the modernized CUFTA would not only continue to provide preferential market access for merchandise trade but would also establish ambitious new market access terms for services, trade and investment.
Amid the ongoing conflict in Ukraine and the economic devastation it is enduring, a free trade agreement is of paramount importance. Such an agreement can provide a lifeline to Ukraine's economy by opening up new markets, reducing trade barriers and fostering economic growth. It would enable Ukrainian businesses to diversify and expand their exports, reducing reliance on domestic markets that may be severely impacted by the war. Moreover, the free trade agreement would bring in financial aid and investments that are crucial for rebuilding infrastructure and industries. In these challenging times, agreements like this can play a pivotal role in Ukraine's recovery and long-term stability.
I want to emphasize the significance for Canada and other western democracies of nurturing and strengthening relations with Ukraine. Ukraine, with its rich history and resilience, has been a pivotal player in recent geopolitical events. It is crucial for us to maintain economic relations and strategically prepare for post-war co-operation and the economic rebuilding of Ukraine. Our relationship with Ukraine holds immense importance due to shared democratic values and principles. Ukraine has made remarkable progress in its democratic journey since gaining independence in 1991.
By fostering economic ties, Canada can provide critical support for Ukraine's democratic institutions, helping them to thrive and promote stability in the region. Economic relations are the backbone of any thriving nation, and in this context, free trade agreements are indispensable. These agreements can pave the way for increased economic opportunity and prosperity for both Ukraine and its trading partners. They stimulate job growth, foster innovation and boost the economic well-being of both parties involved.
Post-war co-operation is equally vital. Ukraine has endured considerable challenges, particularly in the aftermath of the conflict in the eastern regions. We must plan ahead for the reconstruction and revitalization—
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