Bill C-2 (Historical)

Canada-EFTA Free Trade Agreement Implementation Act

An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation

This enactment implements the Free Trade Agreement and the bilateral agreements between Canada and the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation signed at Davos on January 26, 2008.
The general provisions of the enactment specify that no recourse may be taken on the basis of the provisions of Part 1 of the enactment or any order made under that Part, or the provisions of the Free Trade Agreement or the bilateral agreements themselves, without the consent of the Attorney General for Canada.
Part 1 of the enactment approves the Free Trade Agreement and the bilateral agreements and provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional aspects of the Free Trade Agreement and the power of the Governor in Council to make orders for carrying out the provisions of the enactment.
Part 2 of the enactment amends existing laws in order to bring them into conformity with Canada’s obligations under the Free Trade Agreement and the bilateral agreements.
Part 3 of the enactment provides for its coming into force.

The House resumed from March 5 consideration of Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, as reported (with amendment) from the committee, and of Motion No. 1.

Motion in amendment

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, it is indeed a great pleasure to contribute to this debate on a subject of huge importance to the economy of Canada.

In January 2008 Canada, along with Iceland, Norway, Switzerland and Liechtenstein, collectively known as the European Free Trade Association, or EFTA, signed the Canada-EFTA Free Trade Agreement.

In today's economic times, we have to continue to open doors for our businesses in global markets, in contrast to the NDP's desire to close doors and try to make it as a stand-alone trade zone within Canada. It is simply impossible to do that.

The November 2008 throne speech underscored the importance this government places on trade and investment and reaffirmed our commitment to actively pursue trade negotiations and partners around the world. The Standing Committee on International Trade has reviewed Bill C-2 and has now reported back to the House with just one minor technical amendment.

The opposition, the NDP, proposed to vote 16 amendments to this bill, claiming that Bill C-2 did not effectively recognize Canada's shipbuilding industry, as we just heard from the member from Burnaby. Nothing could be further from the truth.

The government is fully aware of the views of the shipbuilding industry. We negotiated and consulted extensively with stakeholders in the industry to ensure their concerns and interests were fully understood and considered during the negotiations.

Government officials also consulted with the provinces and the territories on the treatment of ships in the Canada-EFTA Free Trade Agreement, and today we are about to sign a free trade agreement that we can be proud of. It is a deal that addresses Canadian shipbuilding concerns in a number of different ways.

For example, it contains a 15-year tariff phase-out on the most sensitive shipbuilding products, and a 10-year phase-out on all other sensitive shipbuilding products, protecting our shipbuilders in Canada. These phase-out periods include a bridge period of three years, during which tariffs will be maintained at the most favoured nation level. These provisions give our shipbuilders considerable time to adjust to a duty-free environment.

This is important. Fifteen years is the longest tariff phase-out period for an industrial tariff in free trade agreement history in this country. These provisions respond directly to the concerns vocalized by the shipbuilding industry and by the NDP.

On rules of origin, the provisions under the EFTA are those sought by the Canadian industry. They are consistent with those in Canada's other free trade agreements. The EFTA also contains specific provisions for the collection of customs duties in accordance with the tariff phase-out program on the value of repairs and alterations to ships that are temporarily exported from Canada to EFTA countries.

We have ensured that this new agreement does not introduce any new obligations for Canada in the area of government procurement, whether for ships or any other products. Accordingly, and this is important, federal and provincial governments will continue to have the right to restrict their bids to Canadian shipyards for the purchase, lease, repair or refit of all types of vehicles.

That is very important. That is something that the NDP does not recognize exists in this contract.

Separately, this Conservative government has announced more than $43 billion--that is billion--for the procurement of maritime vessels in the next 30 years. These are vessels that the government will purchase.

Furthermore, the government continues to encourage the use of Canadian shipyards through the renewed structured financing facility--

Speaker's Ruling

[The Speaker, Liberal, Peter Milliken]

There is one motion in amendment standing on the notice paper for the report stage of Bill C-2. Motion No. 1 will be debated and voted upon.

I shall now put Motion No. 1 to the House.

The House proceeded to the consideration of Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, as reported (with amendment) from the committee.

Business of the House

[Jay Hill, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I thank my hon. colleague for those questions. It just seems like every Thursday, the Thursday question becomes the Thursday questions and becomes a longer and longer list.

Yesterday, the House adopted the budget implementation bill, which is now before the Senate. I would take this opportunity to urge all senators to deal with the bill quickly so that the funds that are provided by it will begin to flow and to help our country and Canadian families weather this economic storm as quickly as possible.

Today, we are continuing debate on the opposition motion.

Tomorrow, we will begin debate on report stage of Bill C-2, the Canada-European free trade agreement, followed by Bill C-13, the Canada grains, and Bill C-7, marine liability.

Monday, March 9 and Tuesday, March 10 shall be allotted days. As to the last day in this cycle, I am pleased to announce that it will be sometime during that week after our constituency week when members return to their ridings.

On Wednesday, we will continue with the Canada-European free trade bill. It will either be at report stage or third reading, depending on the progress that we make tomorrow.

When the debate on Bill C-2 is complete, we will call for second reading debate on Bill C-14, the organized crime bill, and Bill C-15, the drug offensive bill.

As my hon. colleague knows, the official opposition House leader, there have been discussions with all parties and, at this point in time, despite the acceptance and, indeed, the willingness of the government to move forward with these two crime bills as expeditiously as possible, unfortunately that is not the case with all parties and therefore we will not be able to proceed as quickly as possible.

However, on behalf of all Canadians who are worried about their safety and who want to move forward with this type of legislation, I do thank the hon. member and his party, the Liberal Party, for their support to try to move these bills very quickly through the process.

Following the justice bills, we will continue with the uncompleted business schedule for tomorrow, plus the new bill that was tabled this morning, Bill C-17, An Act to recognize Beechwood Cemetery as the national cemetery of Canada. I understand there may be interest in expediting this bill. I would hope, unlike the justice bills, that perhaps we can get agreement from all four parties to move very quickly with this bill at all stages and move it through.

As to private member's Bill C-285, I am always interested in discussing ways in which we can move quickly with legislation. This government certainly is interested in getting action on behalf of Canadians as fast as possible on all legislation that will positively impact on their lives. I am always open to those types of discussions.

International Trade

[Lee Richardson, Conservative, Calgary Centre, AB]

Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on International Trade on Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation.

[The Chair, Conservative, Lee Richardson]

I appreciate the interest of many people. Obviously, over time, we have had many people who wished to appear before the committee. In fact, many people, including some of those you suggest would like to appear again on Tuesday, have appeared before the committee on the EFTA free trade agreement.

This bill is an implementation bill, and it may be that such testimony will be redundant in this case. In any event, we did receive from all parties their lists of potential witnesses. We went to great lengths to contact those witnesses. The clerk's office did extend invitations to several, including to some of those you said wished to appear on Tuesday. They weren't available to appear at the time the committee was dealing with this matter and hearing witnesses. So we proceeded in the manner that we have done, and today was a day for witnesses.

It was the will of the committee to hear from the Minister of Industry and the Minister of Agriculture, so this day was dedicated to them. Unfortunately, we've not been able to hear from the Department of Agriculture because of procedural matters that delayed us.

We do have a motion to deal with and to complete the clause-by-clause Bill C-2 consideration by the end of business on Tuesday.

I guess the only thing I would suggest, if you want some latitude, Mr. Julian, is that our purpose here is to get on with the business of the committee. We have, I think, in fairness, heard from these witnesses. We've heard from them before. We can certainly hear from them again. I think we have heard their testimony, as I say. We do want to get on with the bill. The business of the committee is to pass the bill. The will of the committee is to do this on Tuesday.

I'm sorry that we didn't have them here today, but I think the motion has been carried. If you could guarantee me that we could complete clause-by-clause consideration of the bill in less than the full two hours, then that time could be used, I'm sure, to accommodate witnesses. But I would have to have an assurance that we could complete the bill by the end of Tuesday.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Chair, thank you for holding that vote. We have witnesses who were both on the Liberal list and the NDP list who have said they're available and are coming to Ottawa on Tuesday morning. Might I suggest, given the motion the parliamentary secretary put through, that we hear from them on Tuesday morning, that we take the time to have those discussions, and then in keeping with the motion we move to clause-by-clause. That would allow those individuals to speak to the motion.

I should say that if we go to clause-by-clause and the carve-out is achieved on Bill C-2, that would mean the Conservatives could not filibuster this bill. In a sense they are handcuffing themselves, but I'm comfortable with that. I believe we should be respecting people who have already indicated they want to come before this committee and people whom both the Liberals and the NDP have submitted to come before this committee for Bill C-2.

[The Chair, Conservative, Lee Richardson]

Again the chair is sustained. For a matter of record, we are sustaining the vote of the committee. Democracy reigns.

We are going to do a complete clause-by-clause of Bill C-2 at Tuesday's meeting, and we have the delegation on Thursday. So Tuesday at the next meeting we will go clause-by-clause and complete Bill C-2 at committee.

Mr. Cannis wanted to raise a point for clarification. Out of respect for Monsieur Cardin's point earlier, I apologize for any concern you had, Monsieur Cardin. I think you made your point very clearly with regard to rushing motions. I don't want to go too quickly. We are trying to stay within the time allotted to the committee. We have had discussions regarding unintended time restrictions on debate of motions. We will do our utmost to ensure that doesn't occur again. It certainly was not the intent to limit anyone's ability to speak at the committee. I want it to be absolutely clear that I didn't see your name on the list. In fact, your name wasn't on the list, but it wasn't my intention to limit debate in any way. With the consent and the will of the committee, we will do our utmost to make sure that debate on motions is allowed in future.

Mr. Cannis, did you have something you wanted to add?

[The Chair, Conservative, Lee Richardson]

Welcome to the fifth meeting of this session of the Standing Committee on International Trade.

We're continuing our discussion of Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation.

Appearing today is the Honourable Tony Clement , the Minister of Industry. With Minister Clement we have the deputy minister, Richard Dicerni. Thank you for coming. We also have the assistant deputy minister, industry sector, David Maloney. And we have the director general, aerospace, defence and marine branch, Chummer Farina.

I appreciate your coming again today. We have a particular section of this bill that is relevant, and a request was made for you to discuss it.

In practice, we have one hour. We'll go to a vote at...I think it will now be 10 o'clock, because we're a little slow starting.

If you could, Mr. Minister, I'd like you to give us a brief opening statement. Generally I think the questions are prepared. We've studied this for about eight months now, so I think most of us are very familiar with the situation. I'll let you open, and then we'll go to questioning.

We'll begin the questioning with seven-minute rounds, and we'll try to keep our questions and answers in each case to seven minutes in the first round.

With that, Mr. Minister, thank you again for coming. I'll let you begin.

[The Chair, Conservative, Lee Richardson]

We have a motion from Mr. Keddy that the Standing Committee on International Trade complete its study of Bill C-2 on Thursday, February 26, 2009, and complete clause-by-clause on March 3, 2009. Do I have a seconder?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Merci.

My question again is about the shipbuilding industry. In the briefings that I'm receiving from the shipbuilding industry I'm being told that despite the fact that there is a 15-year phase-out of the tariffs and despite the fact that there is access to either the accelerated capital cost allowance or the structured financial facility program, this will not create a level playing field for the shipbuilding industry and ultimately it will wither.

I'd like to receive for the record, Monsieur Laurin, your opinion on whether you feel that Bill C-2 as currently written offers a level playing field for the shipbuilding industry in Canada—and of course if the Canadian Council of Chief Executives cares to comment as well, although I suspect I already know your answer on that one.

[Greg Yost]

As I said, some witnesses argued that the Criminal Code should immediately allow for this, if that is what the province wanted.

Furthermore, in keeping with what the provinces wanted, Bill C-2 aimed to bring in a certain degree of harmonization. In the past, the order had to come from the judge. Today, if the judge does not expressly prohibit this, the provinces are entirely free to decide if the person can enrol.

We are working with the provinces to come up with a formula that works.

[David Plunkett]

I appreciate the opportunity to appear once again before this committee to talk about the Canada-EFTA agreement, this time in the context of Bill C-2. As you know, the Canada-EFTA agreement was the first treaty tabled in Parliament under the new treaties in Parliament policy back in February of 2008.

This committee studied the agreement and your careful review culminated in a positive conclusion. Today, I will briefly highlight some of the benefits of the Canada-EFTA FTA, as well as discuss generally the implementing legislation, Bill C-2. My colleagues and I will then be available to answer your questions.

The Canada-EFTA agreement is a big achievement for Canada. It's our first free trade agreement signed with European countries. It will provide Canadian businesses access to some of the wealthiest and most sophisticated economies in the world, as well as a platform to tap into European value chains.

The EFTA states are already significant economic partners with Canada and include some of the wealthiest and most sophisticated markets in the world, ranking among countries with the highest GDP per capita in the world. Taken as one, the EFTA countries are the world’s seventeenth-largest merchandise trader and Canada’s fifth-largest merchandise export destination in 2007.

Canada and the EFTA countries saw $12.9 billion in two-way merchandise trade in 2007, with Canadian exports at $5.2 billion and imports at $7.7 billion. Canada exported agrifood products worth more than $89 million to EFTA countries, while importing approximately $130 million in agricultural products. In addition, two-way direct investment was some $28.4 billion in 2007.

Norway saw the largest increase in Canadian exports in dollar terms in 2007. Also in 2007, the value of Canadian merchandise exports to Switzerland grew by 33%, driven mainly by gold exports. In fact, in 2007 Canada exported more to the EFTA countries than to the South America 10—that being Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela—combined.

The implementation of the Canada-EFTA Free Trade Agreement will build significantly on these already impressive numbers. While the Canada-EFTA FTA is a goods-only agreement, it is worth recalling that both Switzerland and Norway are significant investors in Canada. On a single country basis, Switzerland was the fifth largest foreign direct investor in Canada in 2007, while Norway was the eleventh largest foreign direct investor that year.

In terms of the benefits of this agreement, Canadian exporters and producers are expected to benefit considerably through the reduction or elimination of tariffs under the Canada-EFTA agreement. Specific benefits include the immediate elimination of duties on all industrial goods, the only exception being those for Canadian ship tariffs. These include numerous small tariffs, which impose not only an administrative burden on Canadian exporters, but also what our private sector has called an unnecessary tax on the intra-firm trade; the elimination or reduction of tariffs on certain agricultural products; prohibitions on the use of agricultural export subsidies by the EFTA countries for products exported to Canada and covered by the free trade agreement; a level playing field with the European Union exporters in EFTA markets with respect to tariffs on a significant number of processed agrifood products. Immediate benefits will include an estimated $5 million in duty savings on Canadian agricultural exports annually.

The EFTA countries are also closely integrated with EU markets through their membership in the European Economic Area, and the Canada-EFTA FTA will help Canadian companies to expand commercial ties, both with the EFTA countries themselves, and with the European Union more broadly.

In addition to that, there are other benefits.

The parties commit in the preamble to sustainable development and respect for labour rights; Canada's cultural exemption is maintained under this Agreement;

Canadian supply management programs for dairy, egg, and poultry products are fully protected under this FTA. Over-quota tariffs for these products are not covered and are therefore not subject to any reductions, nor are they subject to the dispute settlement provisions of the Canada-EFTA FTA.

As members of this committee will recall, the issue of ships has been a key issue in this process. I can assure you that government officials consulted extensively with Canadian marine industry stakeholders during the negotiations and explored with industry representatives how shipbuilding sensitivities could best be addressed in the FTA. Reflective of the input received from industry stakeholders, which was often contradictory, the Canada-EFTA FTA includes the following ship-specific provisions. First, there will be a 15-year phase-out for Canada's most sensitive shipbuilding products, the longest industrial phase-out Canada has ever obtained in an FTA. Second, there will be a 10-year phase-out for all other sensitive shipbuilding products. Third, there will be an initial bridging period of three years as part of both these phase-out periods during which tariffs will be maintained at the MFN level.

Finally, repairs and alterations on Canadian ships undertaken in EFTA countries will be subject to tariffs upon re-entry into Canada, in accordance with the tariff phase-out schedule.

The agreement also includes rules of origin for ships that were renegotiated in Canada's favour at the request of industry stakeholders. And there is no obligation--I repeat, no obligation--to modify the government's buy-Canada procurement policy for ships.

Briefly, implementation of the Canada-EFTA FTA is to be achieved in Bill C-2 through a number of general provisions and through amendments to three pieces of legislation: the Canadian International Trade Tribunal Act, the Customs Act and the Customs Tariff.

These legislative amendments provide for the agreed-upon Canadian tariff reductions and related mechanisms such as customs verification and emergency action measures. These include various administrative provisions in clauses 9 to 15 pertaining to the implementation of the Canada-EFTA FTA and the bilateral agreements generally, including provisions that support the operation of a joint committee and the arbitral tribunals. Clauses 16 to 37 will amend the Canadian International Trade Tribunal Act, the Customs Act, and the customs tariff in accordance with Canada's new rights and obligations under the Canada-EFTA FTA.

There was originally an expectation, with our EFTA partners, that the Agreement would come into effect on January 1, 2009. While our colleagues at the EFTA Secretariat have told us that they have taken the necessary steps to implement the Agreements, circumstances did not allow Canada to meet this deadline.

Mr. Chairman, I and my colleagues--assuming they arrive in due course--will be pleased to answer any detailed questions on the EFTA. I will introduce them as they arrive.

Thank you.

Canada–EFTA Free Trade Agreement Implementation Act

[The Speaker, Liberal, Peter Milliken]

The House will now proceed to the taking of the deferred recorded division on the motion at the second reading stage of Bill C-2.

The hon. chief government whip is rising on a point of order.