Bill C-57

Canada-Ukraine Free Trade Agreement Implementation Act, 2023

An Act to implement the 2023 Free Trade Agreement between Canada and Ukraine

This enactment implements the Canada–Ukraine Free Trade Agreement, done at Ottawa on September 22, 2023.
Among other things, the enactment
(a) sets out rules of interpretation;
(b) specifies that no recourse is to be taken on the basis of sections 9 to 15 or any order made under those sections, or on the basis of the provisions of that Agreement, without the consent of the Attorney General of Canada;
(c) approves that Agreement;
(d) provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional and administrative aspects of that Agreement;
(e) gives the Governor in Council the power to make orders in accordance with that Agreement;
(f) requires the Minister for International Trade to ensure that Canadian companies operating in Ukraine comply with the principles and guidelines referred to in the Agreement; and
(g) amends certain Acts to give effect to Canada’s obligations under that Agreement.
Finally, the enactment repeals the Canada–Ukraine Free Trade Agreement Implementation Act that was enacted in 2017.

Canada-Ukraine Free Trade Agreement Implementation Act, 2023

[Mary Ng, Liberal, Minister of Export Promotion]

moved that Bill C-57, An Act to implement the 2023 Free Trade Agreement between Canada and Ukraine, be read the second time and referred to a committee.

Mr. Speaker, I rise in the House today in support of Bill C-57, an act to implement the 2023 Free Trade Agreement between Canada and Ukraine. This is not the first time I have stood in this House to introduce a new trade agreement, but this trade agreement is special. I rise today to enter into the record the story behind this agreement, because all members in the House, all Canadians and, especially, the 1.3 million members of the Ukrainian Canadian community, should know how it came about.

The story of this agreement begins with Ukrainian President Volodymyr Zelenskyy's first visit to Canada back in 2019. During that visit, President Zelenskyy and the Prime Minister announced a mutual intention to modernize the existing Canada-Ukraine Free Trade Agreement. Following that announcement, public servants in both countries went about doing their respective homework to prepare for renewed negotiations.

That homework often takes many months. It is just part of the routine for our respective civil servants and trade negotiators. However, there was nothing routine about the way these negotiations unfolded.

First came the pandemic, which stalled progress for over a year. Then, when we were finally ready to launch negotiations, Russian troops were massing along the Ukrainian border.

On January 27, 2022, I held a virtual event with Yulia Svyrydenko, Ukraine's deputy prime minister and minister of economy, to announce the start of negotiations on this agreement. Russia had not yet invaded Ukraine at that time, but it was already clear that the situation was reaching a precipice. The world was seeing that an invasion was imminent, and there was a lot of uncertainty.

A short time before that announcement, I asked my Ukrainian counterpart if she and her government were still willing and able to move forward with negotiations. Her answer was candid and unequivocal: She told me that her government was determined to move ahead, and she told me how much it mattered that Canada was showing confidence in Ukraine at a time when many were beginning to question its resolve.

Ukraine knew then which path it wanted to take for its future. Ukraine had chosen the values of democracy, openness and transparency, as well as a rules-based international order. A sovereign Ukraine was seeking to modernize its infrastructure, its economy and its laws. A comprehensive and progressive free trade agreement would be an important step toward modernization for Ukraine, and Canada would be its gateway.

One month after that announcement, on February 24, 2022, Russia moved in with its full-scale invasion of Ukraine, and it invaded for all the reasons I just listed: Ukrainian territorial and economic sovereignty, values of openness and democracy, and a rules-based international order. Vladimir Putin despises all these things, and he could not stand to see Ukraine embrace them, uphold them and blossom into a great modern nation. That is why he invaded Ukraine.

On that day, I knew, the Prime Minister knew and the government knew what we had to do. As long as the government of Ukraine stood, we would stand with it. Since the war began, Canada has committed $9 billion in military, humanitarian, financial and development assistance to Ukraine. We also understood that standing with Ukraine meant that we would see these trade negotiations through to the end.

At the outset, it was not easy. The war made travel dangerous and even routine calls impossible for our Ukrainian counterparts. Negotiations had barely begun; suddenly, they came to a standstill. They stayed at a standstill for four months, until I travelled for meetings at the OECD in Paris. That is where I met Ukraine's chief negotiator, Taras Kachka.

It is important to understand that we did not plan a formal meeting that day. He and I, along with Canada's chief negotiator, simply sat in the cafeteria of the OECD building and talked. Mr. Kachka recounted the first 120 days of the war and the challenges he had to overcome just to make that one trip to the OECD. I again asked if Ukraine was able and willing to begin negotiations. Mr. Kachka said yes and I said yes, and negotiations began in earnest.

A few weeks later, at the G7 summit in Germany, I finally met Deputy Prime Minister Svyrydenko face to face. We revisited our earlier conversations and talked of how our earlier hope of avoiding the conflict had been so savagely dispelled. We reiterated our mutual intention to reach an agreement, and then we hugged.

The private conversations I had with my Ukrainian counterparts moved me in ways that are hard to describe. If they had told me that they were not yet ready to begin trade talks, of course we would have waited. Canada would have given Ukraine as much time as it needed.

Ukraine's quiet resolve to move forward was unmistakable and unbreakable. These negotiations were driven by the very values of openness and self-determination that Ukrainian soldiers were and are fighting and dying for. I can tell the House today that, even in the midst of an all-consuming war effort, Ukraine's commitment to those values never wavered and neither did Canada's.

I am proud to say that this agreement was achieved in record time, a mere 12 months from start to finish. That shows the resolve that Canada and Ukraine share on this crucial matter. This process reached its conclusion just a few weeks ago, when our Prime Minister and President Zelenskyy signed this agreement as part of President Zelenskyy's second visit to Canada. It is my true honour to speak to it in this House.

It is not just that we reached a deal in 12 months; it is that we reached an exceptional deal. In trade circles, it is known as a “high-quality agreement”. It includes provisions for trade in services and investments, a binding dispute settlement mechanism to ensure fair treatment, and labour protections. It recognizes the importance of small- and medium-sized businesses, women-owned businesses and indigenous-owned businesses, and it includes environmental protections that are the strongest of those in any of Canada's trade agreements currently on record.

In terms of its contents, it is on par with best practice agreements such as CUSMA, the CPTPP and CETA. With this agreement, Canada becomes the first country to sign a comprehensive trade agreement with Ukraine.

Ukraine has told us that this trade deal would serve as a model for further agreements with other prospective partners. That is one of the reasons I said this agreement is special.

Above all, this agreement is special because Canadians support Ukraine's fight against Putin's barbaric invasion. They demonstrate their support through their government with military, humanitarian and financial aid. However, support for Ukraine is not limited to government alone. Here in Canada, many individuals and organizations are helping by welcoming Ukrainian families fleeing the war. Many more Canadian organizations and businesses want to join that effort, both here at home and in the Ukrainian heartland.

This agreement opens up new avenues for Canadians to support Ukraine. It establishes the rules by which Canadian companies could invest in Ukraine's reconstruction, modernize its infrastructure and create jobs in Ukraine, as well as here in Canada. There are Canadian companies already active in Ukraine, and more are joining as we speak. The Canadian construction firm of Aecon is now forming partnerships in Ukraine under a memorandum of collaboration for the construction of a hydro power plant in Ukraine.

The presence of Canadian companies will help Ukraine persevere amid the strife of war. Thanks to this agreement, more can and will join them. Through all these activities, Canada and a victorious Ukraine will strengthen our shared values in our pursuit of peace, mutual success and prosperity. At the end of the day, trade is not just about business; it is about shared values.

Ukrainians and Canadians both want a free, modern and democratic Ukraine. This trade agreement is a manifestation of those shared values. I am truly proud to have been a part of it.

Today, I urge the House to reaffirm its commitment to those values and its support for Ukraine by ensuring the swiftest possible passage of this bill. Slava Ukraini.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Mr. Speaker, article 13.10 of the trade agreement, subsection 8(d) says, “promote the rapid transition from unabated coal power to clean energy sources.”

We know that the Russian war machine has been powered by energy exports. This certainly seems to contemplate the transition from coal to other less-polluting fuels. To me, this is a massive opportunity for Canada to work on exporting LNG from Canada, which many European countries have asked us to do.

This would not only to starve the Russian war machine of funds but also be good for the environment. Does the minister now admit that this is something Canada should do?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Mr. Speaker, that is a very important question from my hon. colleague, the critic on the trade file.

We see in this agreement an effort to establish a framework that would not only enable Canadian businesses to participate in the reconstruction of Ukraine, but also, indeed, include the highest environmental protections of any trade agreement on record. It would very much allow Canadians to participate and allow Ukrainian businesses and investors to rapidly pursue that transition to a greener economy.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I thank the minister for her speech and for these negotiations, which are very important. I would like to ask her a two-part question.

First, supply management was included when the order to import products from Ukraine duty-free was adopted. The groups that were impacted and the opposition parties fought hard to have this removed when the order was renewed, and it was in fact removed. Can the minister assure me that supply-managed products are not covered by this agreement? That is the first part of my question.

Second, I would like to make a comment. The section on investor-state dispute settlement mechanisms puts multinationals and governments on the same footing. This means that, technically, it would be possible for a multinational company to sue a government that is hindering trade. I find that unacceptable.

Does the minister not feel that this would have been a good opportunity to make this clarification?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Mr. Speaker, I want to thank my hon. colleague and all members in the House. At a time when Canada chose to unequivocally support Ukraine, there was a tariff-free ability for them to export into Canada, including the supply-managed sector. I know what a commitment that took for Canadians to permit that to take place, and that really did show the support that Canadians have and that my hon. colleague had, for Ukraine. Of course, in this agreement, it is clear, just like in our other trade agreements, that the supply-managed sectors are not, and are excluded from this agreement, just as they have been with others.

I believe that this is a very important and progressive agreement and a good agreement. It has provisions for investment protections. There is a chapter that deals with binding dispute settlements. Therefore, this is very much the modern agreement that we have negotiated with Ukraine, and it would facilitate what Canadians want to do, which is to participate in that reconstruction in due course.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Speaker, I appreciate the minister's speech on this important free trade agreement. The NDP supported the previous agreement, and we are looking into what this new agreement looks like.

One thing we do like about the old agreement is that it did not have the investor state dispute mechanism in there. That is something that we have held as essential for any new trade agreements going forward. CETA and CPTPP both have that in them, and we do not like that. The NDP supports free trade, but we do not like foreign corporations telling governments what to do.

One thing I am disappointed with is the speed at which this is coming before us. I have not had time to bring this before caucus to even have a basic discussion. Why was this being rushed through without following any of the standard procedures about introducing treaties and agreements before the House?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Mr. Speaker, one of the things that I am really proud about in this agreement are the highest standards in environmental protections of any trade agreement that we have on record today. We would agree that is really important, particularly in the trade agreements that we negotiate today, in which we can indeed support an economy and protect the environment at the same time.

What is also remarkable about this agreement, which members heard me say in my opening remarks, is the speed at which we were able to reach an agreement with Ukraine and how much the Ukrainians participated in this, despite the fact that they have been and continue to be in a war effort.

I am encouraged by the work that we always do in ensuring good debate on something like this, which we all agree with, and is continuing to support Ukraine.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the minister has rightly highlighted the unique nature of trade with a democracy on the front lines of the fight against totalitarian threats. This is important. Ukraine is not the only country in that situation. I wonder if she can share the government's position on Taiwan's application to the CPTPP?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Mr. Speaker, the CPTPP is an excellent agreement and many Canadian firms and exporters have benefited. It is not just a good agreement because of its commercial success, but it also has some of those very high-quality provisions for the environment, for inclusiveness.

As my hon. colleague will know, CPTPP colleagues around the table, who party to that agreement, make those decisions about accession together. We are very pleased that the first accession candidate is the United Kingdom, another of Canada's trading partners. We have just finished that very important work.

No doubt we will continue to work, along with our partners, with all the other applicants for accession.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Speaker, I would like to return to a question asked by my hon. colleague from Berthier—Maskinongé that the minister did not have time to answer. My colleague asked her two questions. She answered the question about supply management.

However, concerning the fact that the government and multinationals are on an equal footing and that multinationals are therefore able to take legal action against states, would this not have been a good opportunity to reassert government jurisdiction over multinational corporations?

I think it would have been a good opportunity. What does she think?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Mr. Speaker, in the other agreements, governments have the right to regulate within their jurisdictions. That is not different for this agreement.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, could the minister inform us as to how she sees this trade agreement being so important, given what has happened in Ukraine over the last year and a half. Once Ukraine ultimately wins this war, which we know it will, why will this be such an important trade agreement, not just for the benefit of Canada but indeed to help our ally, Ukraine?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Mr. Speaker, Canada is the first country to have a comprehensive and progressive free-trade agreement with Ukraine. It is going to set the framework for Canadian companies, exporters and investors to very much be a part of the reconstruction when Ukraine wins the war. We have heard a lot from Canadian exporters and Canadians with respect to their support for an agreement like this with Ukraine.

When I reflect on the early days of the negotiations, before the war had begun, Canada was there, and continues to be there, with unequivocal support for Ukraine, showing confidence in it, especially in a matter like this, an economic trade agreement, which is so important. As Canada showed its confidence, we were also able to demonstrate that to others, which really did make a difference.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Mr. Speaker, Conservatives have a very long, storied and proud tradition of supporting free trade. We only have to look back to the negotiations of the original Canada-United States free trade agreement, which was, of course, something Conservatives were in favour of and that Liberals campaigned very hard against. I was a young lad back then, but I remember a commercial from the Liberal Party on this, talking about free trade. It said that there was only one more line that we had to remove, and then it erased the border between Canada and the United States. That was a long time ago, but I just want to talk briefly about how strongly Conservatives support free trade. We believe in free trade between free nations as an integral part of improving the prosperity of all people.

We were also the people who started the negotiations on CETA. The CETA deal is a Conservative deal that was started by Prime Minister Harper as part of our aggressive trade expansion. The same thing with the CPTPP, which was a Conservative initiative. Conservatives are very supportive of free trade.

This original free trade agreement between Canada and Ukraine was originated by a Conservative government under Prime Minister Harper. The member for Abbotsford, from the Conservative Party, was the lead negotiator on that. He will speak to this, and we will have some wonderful insights on this agreement.

When we talk about the importance of the Canada-Ukraine relationship, we have to talk about the 1.3 million Canadians of Ukrainian origin who live here in Canada. Many of them were integral in the development of western Canada. They are an incredible and important part of the social fabric of Canada, and their contributions to Canada cannot go unnoticed. As a result of that, in part, we have very strong people-to-people ties between Canada and Ukraine. Of course, we are strong supporters of Ukraine during the illegal invasion being prosecuted by Russia.

With respect to this agreement in particular, this modernization would build on the 2017 agreement, which updated or added 11 new chapters to the free trade agreement. The updated chapters included rules of origin and procedures, government procurement, competition policy, monopolies and state enterprises, electronic commerce, digital trade, labour, the environment, transparency, anti-corruption and responsible business conduct.

There is also a significant number of new chapters, 11 new chapters, in this trade agreement, and I will talk a little more about that later in my remarks. However, these are on investment; cross-border trade and services; temporary entry for business people; development and administration of measures; financial services; services and investment, non-conforming measures; telecommunications; trade and gender; trade and small and medium-sized enterprises; trade and indigenous peoples; and good regulatory practices. This is a substantial change from the original agreement that was signed in 2017.

On that, I would echo some of the comments made by the NDP, which is that this agreement is actually substantial. It is a very large trade agreement. Of course, we have to take our time to make sure we study free trade agreements in detail and thoroughly. However, it does seem as though the government is trying to rush this forward, and I am not sure that is necessarily the way Parliament should look at things. We should do our jobs as parliamentarians.

I would like to talk about the original trade agreement. In 2022, Canada's total merchandise trade with Ukraine was $420 million, $150 million in exports and $270 million in imports. The way the original agreement was designed, as it was negotiated by the Conservative government, was that this would be, in a sense, a bit of an asymmetrical agreement.

It was set up such that Ukraine would have a little more advantage in the early stages of the agreement, with the anticipation that there would be a final agreement in which more things would be added. Originally, this was primarily a merchandise agreement. We can see now that a lot of chapters have been added on the services side. I suspect that as a result of that, we will see the trade balance perhaps narrow between Canada and Ukraine, but in general increase the trade between the two countries.

After the ratification of the original agreement, exports to Ukraine, other than coal, grew about 28% between 2016 and 2019, which reinforces the view that trade, especially free trade, is good for both countries. We saw a significant increase in the two-way trade between two countries as a result of the free trade agreements, which goes back to why Conservatives absolutely and unequivocally support free trade agreements.

Interestingly enough, the top three exports to Ukraine were motor vehicles and parts, fish and seafood, and pharmaceutical products. The top imports from Ukraine were animal and vegetable fats, oils, iron and steel, and electrical machinery and equipment. Canadian businesses certainly have an opportunity to expand their trade with Ukraine.

I have undertaken to consult with industry with respect to this. I have spoken with agricultural companies, agricultural industries, etc. The challenge of course is the very condensed time frame, and I should explain this.

What we have before Parliament is the enabling legislation to implement the free trade agreement, but that is probably not what we are debating today. We are not actually going to look at and debate whether “subsection 42.1(1.1) of the act is amended by adding the following paragraph after (a).” I suspect that is not what we will debate here today.

The implementation legislation is how we implement the changes to relevant statutes and other things to implement the actual free trade agreement. This implementation bill's enabling legislation does not seem to have much in it that any of us will spend a lot of time debating in this chamber, although I could be wrong, as some members do enjoy debating those kinds of things.

The member for Sherwood Park—Fort Saskatchewan might enjoy going through and deciding whether “paragraphs (b) and (c) of the definition Ukraine in subsection 2(1) of the act are replaced by the following” is a good or significant change, but that is not what I will talk about today.

What we can talk about are the general principles of supporting free trade and the free trade agreement itself. In that is some of the difficulty that was expressed by the NDP member. He said he had not had the time to discuss this legislation with his caucus and colleagues, which takes me back to discussions with stakeholders.

As part of looking at whether this will be a trade agreement that benefits Canada, we want to talk to stakeholders to see whether they view some of the changes to this free trade agreement as being good or bad. In particular, in the agricultural sector, we are going to be talk about things like sanitary and phytosanitary measures. We are going to look at whether the quotas that will be allowed, the products that are coming in without tariff, are appropriate. This could be in the beef sector, the pork sector or in a whole bunch of agricultural sectors.

Those consultations are ongoing right now. I have reached out to the industries that would be affected by that to find out where they stand on it.

When I attended law school, we had professors very clearly say that the devil was often in the details. I am not 100% sure that Parliament should just pass things without any scrutiny whatsoever. We have learned that when other trade agreements were put forward by the Liberal government and passed rapidly, we ended up with some challenges.

If we look at, for example, free trade with the European Union, we have all kinds of challenges now with the sanitary and phytosanitary measures surrounding beef and pork. It is a particular issue right now in our negotiations with the U.K. It is almost impossible for Canadian beef or pork producers to export into the United Kingdom. They also have great difficulty exporting into the European Union. Why? It is because there are sanitary and phytosanitary measures preventing those exports from taking place. We would think that after this amount of time that these things would be resolved. However, for both things, there are very complicated dispute resolution procedures in place to try to resolve issues of sanitary and phytosanitary measures.

Sanitary and phytosanitary measures are important. They are put in place to ensure the health of people consuming the products. They are also protections put in place to protect biodiversity, to ensure things are not contained within certain products that could harm biodiversity. These measures are important, but sometimes these sanitary and phytosanitary measures are used as non-tariff barriers, or NTBs. NTBs have become sort of the new way to frustrate free trade. As we look around the world, we see that NTBs are growing in number and there are challenges in resolving those free trade agreements.

I took the time to look at the section in this free trade agreement on sanitary and phytosanitary measures. I am pleased to see that this section sets out that they will be resolved within the rules set out by the World Trade Organization. That is quite a difference from the measures that have been put in place for the resolution of sanitary and phytosanitary measures within CETA, which the U.K. benefits from in the transitional agreement. Trying to resolve those issues through that process has proven to be, if not incredibly complicated, almost impossible. It is good to see that is in this agreement.

If we look at the opportunities for Canada, one of the things I raised in my question to the minister was that the agreement talked about the phase-out of coal. However, in Europe, we have seen the rise in the use of coal by a number of countries as a result of them trying to stop buying Russian gas. As we all know, the purchase of Russian gas is providing revenues and profits to Russia so it can use those monies to fund its illegal war in Ukraine.

Many European countries have asked Canada to export more LNG, and the United States has actually taken that up. It has built a number of LNG export facilities over the last number of years to take advantage of the demand for LNG, including that demand in Europe. Unfortunately, Canada has not taken advantage of that and, in fact, has lost all kinds of opportunities.

However, when talk about transition, we do not transition from coal to a solar panel. Those kinds of transitions generally do not work. We do not transition from coal to a wind turbine and solar. Those things do not work. Both of these things provide intermittent power. Intermittent power makes maintenance of the electric grid more expensive and it is unreliable when there are surges in demand. We need a strong baseload of electricity generation.

I hope that when I have the time to go through this agreement in full, I will see this addresses a great area of potential opportunity for Canada and Ukraine with respect to electricity generation. We have amazing expertise in the production of nuclear reactors, as does Ukraine. Canada has all kinds of uranium that it can export. I really hope there will be some things in the agreement that talk about furthering this kind of development and partnership. It would be both good for Ukraine and good for Canada.

However, transitioning from coal would be beneficial to the world. When we look at energy transitions, we know they do not happen rapidly. In fact, they take a long time. All we have to do is think about how coal was discovered 200 to 250 years ago. We have had gas, natural gas and nuclear for a much shorter period of time, but they have not completely displaced coal even though the power density for both gas and nuclear is far more dense than for coal. Therefore, it makes sense to transition to these things.

This is the challenge in suggesting we transition from coal to solar or wind, because the actual energy density is so much smaller. An electricity plant that would use LNG or nuclear would take up 20 acres, but to get a similar amount of energy from wind or solar, we would be looking at 10 to 100 times that amount of land. The suggestion that we can make those transitions quickly from coal to wind and solar is not feasible and it does not make sense. We should be exploring the opportunities that Canada has with LNG and nuclear.

The Conservative Party is 100% behind supporting Ukraine, supporting trade and free trade. Free trade between free nations is something we support 100%. I look forward to going through this agreement and to the debate on this agreement in the House.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I like how my colleague touched on the fact that when this type of legislation and these types of agreements come before the House, it is necessary for us, as parliamentarians, to do wide consultation with stakeholders.

I have been a member of the Standing Committee on Agriculture and Agri-Food for five and a half years now. One of the concerns brought up to our committee by Chicken Farmers of Canada was the Ukraine remission order that allowed Ukrainian poultry to come into Canada.

It is not that Chicken Farmers of Canada does not want to support our Ukrainian allies, but it felt that more time was needed to ensure that the high standards we have in Canada, especially with the Canadian Food Inspection Agency, were in place. Before we had such a system, it felt it was rushed too quickly.

Could my colleague expand on that one notable example? Perhaps there is more that he knows on why with these kinds of agreements, while we know they are being done in good faith and for good reason, we still, as parliamentarians, owe it to the Canadian public and to stakeholders to ensure we iron out all those very fine details because of the unintended consequences.