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.
In 1995, when globalization was in full swing, the legislation governing the department was amended to give the minister a freer hand by granting him jurisdiction over international trade to the detriment of the institution of Parliament. The requirement to submit an annual report was abolished. A Parliament worthy of its name should have procedures to increase democratic control over agreements. The Bloc Québécois tabled seven bills on this between 1999 and 2004.
The other irritants in this agreement are the investor-state dispute settlement provisions. They are in there. This mechanism allows foreign multinationals, foreign investors to sue a state if a policy hampers their ability to turn a profit. This is extremely serious. These types of dispute settlement mechanisms found their way into each and every agreement when signing such agreements was all the rage during the aggressive, triumphant neoliberal years, but it is very serious that Canada is continuing to persistently accept, negotiate and encourage these kinds of agreements.
There are a few things we need to remember about this. These are clauses that have enabled multinationals to sue governments over increases in minimum wage, environmental measures, taxes on soft drinks to counter obesity epidemics in certain countries and moratoriums on drilling. These are protection clauses, a legal tool available to foreign investors to undermine the government's ability to act by leaving the perpetual threat of legal recourse from foreign companies dangling overhead. It is a threat to national sovereignty. It makes it increasingly difficult for governments to legislate on issues such as social justice, the environment, working conditions and public health if a transnational company believes its right to profit has been infringed. This is censorship of the democratic will.
According to a 2013 UN report, states won these suits 42% of the time and corporations, 31% of the time. The remaining disputes were settled out of court. This means that plaintiffs were able to override the political will of states in 58% of cases either in part, through agreements, or in whole, by winning their case. This quantitative figure, however, overlooks one important factor, namely, the pressure put on states by investor protection clauses. States give up on certain policies early in the discussion and decision-making process to avoid being sued. They self-censor for fear of ending up in court.
In 2014, a report by the European Union's Directorate-General for External Policies stated that these investor-state dispute settlement mechanisms were indeed a public policy roadblock. I remind members that this is the Bloc Québécois's fight. In 2021, I presented a motion that led my committee to undertake a study on the impact of these mechanisms. At our last convention, opposing these mechanisms became part of our platform.
After a health crisis, there is no reason for Canada to stubbornly continue to support such provisions, especially since they were removed from the Canada-United States-Mexico Agreement, or CUSMA. They were included in NAFTA, but removed from CUSMA. Why continue to defend the sovereignty of multinationals and the right to profit, rather than democratic rights and the sovereignty of states?
In the specific case of Ukraine, let me first point out that it will be a rather fragile post-war state. Even though there are opportunities for Quebec and Canadian companies, do we want to colonize that country with a mechanism that could be embarrassing for Ukraine and could incite it to adopt certain measures, because it would be afraid of the backlash from Canadian and Quebec companies looking to make a profit?
At the same time, allowing a company to sue a foreign country directly without obtaining the consent of its home country could have consequences for us. In the case of Ukraine, we know that it has sanctioned several of its own citizens for collaborating with Russia. These sanctions could go as far as seizing their assets. If these Ukrainian citizens who collaborated with Russia also have investments here, and Ottawa decides to mimic the Ukrainian government and seize their assets here, the federal government could be sued for discriminatory expropriation under the agreement.
I will close by urging the government to move forward with an exchange of letters if this agreement is adopted in order to remove this dangerous and unique provision.
