Bill C-41 (Historical)

Canada-Korea Economic Growth and Prosperity Act

An Act to implement the Free Trade Agreement between Canada and the Republic of Korea

This enactment implements the Free Trade Agreement between Canada and the Republic of Korea that was done at Ottawa on September 22, 2014.
The general provisions of the enactment set out rules of interpretation and specify that no recourse may 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 the Free Trade Agreement, without the consent of the Attorney General of Canada.
Part 1 approves the Free Trade Agreement and provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional aspects of the Agreement and the power of the Governor in Council to make orders for carrying out the provisions of the enactment. Part 1 also provides protection for certain geographical indications.
Part 2 amends existing laws in order to bring them into conformity with Canada’s obligations under the Free Trade Agreement between Canada and the Republic of Korea.
Part 3 contains coordinating amendments and the coming into force provision.

Canada-Korea Economic Growth and Prosperity Act

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, this relevant question cannot be repeated enough to counter the misinformation that many government members want to spread about us.

The first criterion pertains to the level of democracy and respect for human rights, environmental rights and working conditions. These provisions are essential.

I found it interesting that a parliamentary secretary indicated that this criterion was part of the free trade negotiations with South Korea. However, why was it not included in the negotiations with Honduras, where human rights are clearly not respected? The situation in that country is far more urgent than that in South Korea, which is an excellent global citizen.

The first criterion should be essential when considering a free trade agreement, and it should even be a principle under which we include provisions that would allow the partner country to raise its standards in order to meet the conditions established by the future agreement. Right now, we are not using that tool even though we should be able to do so.

As for the two other conditions, it goes without saying that we should prioritize negotiating an agreement if the country is a strategically and economically important partner to Canada. At the end of the day, if these first two criteria are met, we look at the effect the agreement will have on the Canadian economy. Then we can decide whether we support this trade agreement.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I congratulate my colleague on his speech.

He clearly pointed out in practical terms that New Democrats support Canada's trade development and prosperity. It goes without saying that it is crucial to diversify our economy with multiple players.

That said, I would like to hear more from my colleague about the weakening of our environmental standards, which he talked about in his speech. We proposed an amendment that the government unfortunately rejected.

What does he think that means?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, these amendments would help reassure Canadians who are concerned about compliance with the investor state dispute settlement process.

With respect to NAFTA, some American investors filed lawsuits against Canada as a result of environmental regulations or legislation. Canada lost some of the lawsuits, but more importantly, ended up withdrawing the regulations or legislation to avoid the whole process.

As a result, the Canadian government and the provincial, territorial and municipal governments hesitate to enact legislation or make regulations for the common good, since they are afraid that they will be the target of a lawsuit because of the investor state dispute settlement process.

One of the two proposed amendments to reassure the Canadian public had to do with environmental regulations or legislation, but the Conservative government is clearly not interested in trying to alleviate the public's legitimate and serious concerns.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, I would like to thank my brilliant colleague for his speech.

I would like to draw on his extensive knowledge and ask him if he could talk a bit about the threat that currency manipulation represents for exporters.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, it is not only a threat to exporters. Currency manipulation can have a tremendous impact on the global economy. In the late 1990s and early 2000s, there were large waves of currency market speculation, which seriously affected many economies, particularly in Southeast Asia. Those repercussions were also global.

In the late 1980s and early 1990s, there was a massive devaluation of the Mexican peso, in part because of currency market manipulation. It had a serious impact on Mexico itself as well as the United States, which was Mexico's largest partner.

We need to be very careful. Canada needs to be vigilant as a country but also as a partner with many other major economies. I am thinking about the G20. We need to try to minimize the impact that speculation could have on the currency market and prevent this type of economic upheaval, which greatly affects the general public, but only benefits the speculators, who generally do not have the same concerns as the general public.

[Jonathan Tremblay, NDP, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, I would like my colleague to clarify something that bothers me a bit.

We know that our neighbours, the United States, managed to get benefits and protections for their industries that we, in Canada and with our government, are not managing to get. I wonder why the United States is able to protect its industries, while here we either do not want or cannot do so. What is the reason?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, that is a very good question. It goes to the heart of one of the concerns I raised in my speech, namely the minimal resources the government allocated to such an important agreement. It doled out all kinds of resources to negotiate strategic agreements that are much less crucial than this one. At the end of the day, since the government eventually had to act swiftly to conclude this agreement that the United States and the European Union had concluded two years earlier, the government probably had to make a few concessions to sign the agreement quickly.

The question is important because it also allows me to respond to an argument I heard an hon. member and parliamentary secretary use, specifically that an investor state dispute settlement mechanism is the cornerstone of any trade agreement. Currently, the United States and the European Union are on the verge of entering into negotiations for which such a mechanism would not be included. We insist on having such an agreement, despite the fact that it could derail the trade agreement with the European Union. Germany and Austria do not support this agreement. The United States is entering into negotiations with this issue off the table and not negotiated.

The government will eventually have to get serious and carefully reflect on the criteria and the approach currently being used for negotiating trade agreements.

[Dan Albas, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, it is with great pleasure that I talk about the landmark Canada-South Korea free trade agreement.

I will be sharing my time with the Parliamentary Secretary to the Minister of Natural Resources.

The fact that even the NDP can see the benefits and support this deal is a testament to its importance to Canada and to my home province of British Columbia.

I would also like to take a brief moment to recognize the great work of the member for Abbotsford, who is to be commended for his ongoing efforts in this important area.

As a member of Parliament from British Columbia, I find the Canada-Korea free trade deal an easy one to support. That is because South Korea is an important market for British Columbia. In fact, 50% of all Canadian exports to South Korea are from British Columbia. South Korea is British Columbia's fourth-largest trading partner, with exports worth an annual average of $2.2 billion from 2011 to 2013.

Today I would like to take a few moments to explain why this particular deal is good for my riding of Okanagan—Coquihalla.

One of the many things that I love about Okanagan—Coquihalla is the vast diversity of this beautiful part of British Columbia. We are well known as an incredible wine region and as a popular tourist destination, but we are also so much more. Mining, forestry, ranching, farming, manufacturing, IT and technology services, retail, education, and even retirement are all industries that support jobs in my region.

I suspect it will not surprise any member of the House that many of these industries have customers that extend outside Canada. In fact, a growing number of these industries now have an increasing number of customers outside North America. That is very exciting. However, it is also a reality of today's global business environment.

Let us not forget also that mining, forestry, farming, manufacturing, IT and technology, and many other industries are not unique just to Okanagan—Coquihalla; many members of this place will also be familiar with these activities in their own ridings.

Let us also not forget that across the border is the United States. These activities not only exist there, but also compete against our Canadian interests. Let us not forget that the United States of America has enjoyed the opportunities of free trade access to the South Korean market since 2012. That provides a competitive edge for U.S. employers against whom our Canadian employers must then compete, because U.S. employers are not subject to the punitive tariffs and duties that increase the cost of Canadian-produced exports entering Korea.

I would like to take a moment to provide some local examples of how this trade deal would affect Okanagan—Coquihalla. Farming, as an example, remains a vibrant and important activity in Okanagan—Coquihalla. In particular, soft fruits such as apples, peaches, pears, grapes, and apricots are all things for which our region is well renowned.

One thing every farmer has in common is a tractor. In a discussion with one of our region's largest tractor dealers, it so happens that I discovered this dealer sells a tractor that is built in South Korea. As Canada has no free trade agreement with South Korea, that means two things for that dealer: he pays more to land a shipment of these tractors into Canada than do his competitors in the United States, and this in turn means that the farmers he sells to have to pay more for that very same tractor than their competitors do in Washington State. It also means that both are at a competitive disadvantage compared to the farmers just across the border in Washington State. This Canada-South Korea trade deal would help level the playing field to address that inequity.

I should also point out the benefits to British Columbia in other sectors, such as forestry and value-added wood products. Some of those products hail from the riding of the member of Parliament for British Columbia Southern Interior.

Despite the pine beetle devastation of B.C. forests, our forest export lumber and value-added wood producers are still very important to our British Columbia economy. In 2012, this sector employed over 56,000 people. British Columbia exports of forestry and value-added wood products to South Korea averaged close to $330 million annually between 2011 and 2013. We can just imagine what will happen when 58% of tariffs on forestry and value-added wood products become duty free upon this agreement's implementation.

I am particularly excited about this point, because in the community of Okanagan Falls is Structurlam Products, which produces an extremely innovative, environmentally value-added wood product that utilizes cross-laminate construction. This is an innovative and emerging value-added wood technology with an exciting future in Okanagan—Coquihalla.

However, I would be remiss if I did not mention mining. In my region, we have mining in Logan Lake and Merritt. Princeton, in the riding of the member of Parliament for British Columbia Southern Interior, has a mine as well that is adding to the local economy and helping people put food on the table. We also have an extensive mine service industry and equipment services in communities like Penticton and Okanagan Falls. These employers, as part of the B.C. mining industry, collectively employ 33,000 British Columbians and pay some of the highest wages, and these go to our local economies.

Let us not overlook the hard work of these 33,000 British Columbians in the mineral exploration and mining industry, which represents 5.8% of B.C.'s total gross domestic product. We can imagine what will happen when tariffs on 99% of the minerals Canada sells to South Korea are eliminated once this agreement comes into force.

Let us also not forget that trade is a two-way street. The Canada–Korea free trade agreement's investment chapter also means that Canadian investors in the metal and mineral sector would have non-discriminatory access to the South Korea mining sector. That is, of course, why this agreement is strongly endorsed by the Mining Association of Canada.

I, of course, have to mention another sector that would greatly benefit from a Canada–South Korea free trade deal, and that is Canada's outstanding wine production. This summer, during my listening tour, people at one winery mentioned that the domestic demand for icewine is on the decline. This deal would eliminate a 15% tariff on icewine in the large and lucrative market of South Korea, which would greatly benefit Okanagan icewine producers. People at another winery recently shared with me the outstanding success they had in achieving and signing a $1 million export deal. For a small family winery, these deals are huge. That is why opening more markets and eliminating trade barriers is critically important to them.

I must take a moment here and again lament, for the wine producers in Quebec, Nova Scotia, and British Columbia, that it will soon be easier to sell wine directly to Korea than to Ontario. On that note, I want to thank the member for Port Moody—Westwood—Port Coquitlam for his work in promoting interprovincial trade.

I did not mention that there are a number of tariffs that would help many industries in British Columbia: cherries, blueberries, and agri-foods. This agreement would help provide jobs. It would help provide markets that would help keep farmers farming, help keep people working, and help put food on the table. This agreement means that all British Columbian Canadians could finally compete on a level playing field with other countries that have implemented free trade agreements with South Korea, including our friends and competitors, the United States and the European Union.

We have learned that when Canadians get out and compete internationally, we can succeed, because we have great products and we have great people. There is so much potential this country has. I am happy to support this bill moving forward. I would ask other members to consider supporting this and other vehicles as well.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, the member mentioned mining, and I would like to reiterate what he said. We have some real success stories in the area that we serve. Certainly the mine in Princeton, the copper mine, is a success story. I have had a chance to visit it. It is a good corporate citizen. It would benefit, as would others, from the agreement. There are obviously good things in this agreement, and we are supporting it.

I still cannot fathom this whole investor state mechanism that we and I keep referring to because of things that have happened in the past or are happening now. I would like my colleague to give us his thoughts on the following. This is a quotation from the CCPA Monitor:

Lone Pine Resources, a Canadian firm registered in Delaware, is suing Canada for $250 million under NAFTA because Quebec's fracking moratorium is apparently an illegal barrier to its investment opportunities. Again, the decision will be made by paid arbitrators, not the courts.

This is the kind of model that will be part of this agreement.

I have asked my constituents and others whether they think a company should be able to sue the federal government because a province or a municipality or the federal government wants to enact laws in the interest of its citizens. They said no, it does not make any sense.

I would like to get my hon. colleague's comments on that aspect of this agreement.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Mr. Speaker, I always find it ironic when the NDP or, in this case, this particular member praises a local industry. Yes, absolutely, this copper mine has helped Princeton, and actually the whole Okanagan-Similkameen has seen economic activity. However, on the same aspect, the member has written in the Penticton Herald that free trade will destroy Canada.

He cannot have both. He cannot say that this mine, with its products that go all across the world, is a good corporate citizen but then not support it in these kinds of things.

As to the investor state provisions, there has to be a way to ensure that when Canadian companies are working abroad, or vice versa, the companies are not singled out and treated arbitrarily in an unfair way that would basically amount to expropriation without compensation.

Every government has a right to regulate, and that would not change under this particular provision. What it would ensure is that our business investors would not be singled out and treated unfairly in Korea or in any other country where we have these agreements.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Mr. Speaker, the member opposite concluded his remarks by saying that he hopes we will be supporting the Korean free trade deal. As I hope he has heard from our previous remarks, we certainly will be. The Korean deal is important and I think is widely supported in this House, partly because it is an important opening for Canada into Asia.

I would love to hear the member's view on the TPP talks, which are the very essential next step, and whether he has a view on when we might expect those talks to be concluded.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Mr. Speaker, I certainly appreciate the member reiterating her support, as well as the Liberal Party of Canada's support, for this important free trade agreement. I do think that when we have good deals and bring them here and debate them, we can also see some support for things. It makes sense, not just for my home province of British Columbia but for Canada.

The trans-Pacific partnership is one of many deals that the government is working on. Obviously that is a wider effort because there are so many different countries involved. In fact, other countries are looking to perhaps join in. However, I would not want to give an impression other than to say that efforts are ongoing. I am concerned that we have seen slowdowns at the WTO, where there has not been agreement.

In the lack of progress on these large regional or multilateral agreements, I do think that the government has taken a prudent approach, and we are able to open up significant markets such as Korea, which is a gateway to the Asia-Pacific region, as the member said. Those bilateral agreements are important, because Canadian businesses and farmers, as I said in my speech, are at a competitive disadvantage compared with others such as the European Union or the United States.

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, our government is focused on creating jobs and opportunities for hard-working Canadians in every corner of this country. That is why we have launched the most ambitious pro-trade plan in Canadian history. Canada's prosperity requires expansion beyond our borders into new markets for economic opportunities that serve to grow Canada's exports and investments.

In our volatile global economy, one of the greatest opportunities for our country to expand trade and create prosperity is in the fast-growing markets of the Asia-Pacific. The Canada-Korea free trade agreement is our first bilateral free trade agreement in the Asia-Pacific region. This landmark agreement would bring enormous benefits to both our countries. It would create thousands of good jobs for Canadians, boosting Canada's economy by an estimated $1.7 billion, and increasing Canadian exports to South Korea by an estimated 32%. It would lead to greater investment in both of our countries and would mean more choices and better prices for Canadian consumers.

South Korea is already Canada's seventh-largest merchandise trading partner. The movement of goods between our countries was nearly $11 billion in 2013. That number would only grow with this new agreement.

This agreement will cover all aspects of the Canada-South Korea trade relationship. It will eliminate many tariffs and other measures that hinder trade between our two countries, providing greater transparency and confidence for investors. Right now, some of the areas with the greatest potential for growth are Canada's minerals and metals, which includes oil and gas, forestry, and value-added wood product sectors.

With the entry into force of the Canada-Korea free trade agreement, the potential for even greater growth in trade of these commodities is huge. For example, South Korea imported an average of $2.8 billion of Canadian metal and mineral products per year between 2011 and 2013. South Korean tariffs on these goods can reach up to 8%. Once this agreement is in force, South Korea will immediately remove tariffs on iron, steel, nickel, and non-ferrous metals, and immediately eliminate tariffs on almost 100% of exports of aluminum, with all remaining duties eliminated within five years. South Korea will also immediately eliminate tariffs on nearly 100% of mineral product exports, again with all remaining tariffs being eliminated within five years.

South Korea relies chiefly on imports to meet most of its energy needs. Over the next five years, South Korea's demands for energy are expected to rise dramatically due to its growing industrial sector. Canada is in a good position to help meet that growing demand. Canada is a global leader when it comes to energy. We are the sixth-largest producer of oil, with the world's third-largest proven oil reserves. We are the fifth-largest producer of natural gas, and the second-largest producer of uranium, which is a critical resource for South Korea, one of the world's top generators of nuclear energy. Once this agreement is in force, South Korea will immediately remove tariffs on more than 88% of Canadian exports of petroleum products. The tariffs on the remaining petroleum products will be phased out within five years. Import duties on petroleum coke will be immediately eliminated. With respect to natural gas, South Korea's current duty of 3% will be eliminated upon entry into force of the agreement.

South Korean investors also have a keen interest in Canada's growing liquefied natural gas market and the potential for export of LNG. As you know, Canada has enormous natural gas reserves and the potential to become a major player in the global LNG market. The challenge has always been a lack of infrastructure in Canada to meet global demands. However, all of that is about to change. If the seven major LNG projects proposed for B.C. go ahead, they could generate more than $1 trillion in economic activity over the next 30 years. Over the next decade, hundreds of major resource projects, worth more than $675 billion, are planned or currently under way, so there is enormous economic potential. This agreement opens up the possibility for Canada to become the North American platform for LNG exports to Asia.

The Canada-Korea free trade agreement also builds on the positive relationship we have built with the Republic of Korea in the field of clean energy technology. Canada and South Korea have a long and fruitful research partnership in clean energy technology dating back decades. The South Korean market offers many opportunities for Canada in niche areas, such as smart grids, biomass energy and waste energy, all areas where Canada has strong expertise and proven technologies. We are working together with the goal of translating research into demonstration projects and commercial ventures in the field of renewable energy, including smart grids, and carbon capture and storage.

Beyond energy, the trade agreement also opens the door to strengthening trade ties with South Korea when it comes to forestry. South Korea is currently the fourth largest market for Canadian forest products, with exports averaging more than $597 million per year between 2011 and 2013, of which an average of $92 million per year is subject to tariffs up to 10%. Within 5 to 10 years of implementation of this agreement, South Korea will eliminate all tariffs on Canadian forest products.

Building on this agreement, the Prime Minister and President Park of the Republic of Korea recently witnessed the signing of a memorandum of understanding for co-operation in the field of forestry. It represents an important milestone for sustainable forest management in both our countries.

We stand with Canadians incredibly disappointed that the NDP members tried to completely gut the bill at the trade committee, where they tabled amendments to remove the investor protection provisions, which are cornerstones of modern trade and investment agreements. This is just as harmful as the neglect of international trade under the Liberals who took Canada virtually out of the game of trade negotiations, putting Canadian workers and businesses at severe risk of falling behind in this era of global markets.

In less than seven years, our government has reached free trade agreements with 38 countries, bringing Canada's total to 43 agreements. Thanks to these actions, under our government's free trade leadership, Canadian workers, businesses and exporters now have preferred access and a real competitive edge in more markets around the world than at any other time in our history.

In our global economy, free trade paves the way to prosperity. South Korea is not only a major economic player in its own right and a key market for Canada, it also serves as an important gateway for Canadian businesses to the dynamic Asia-Pacific market.

With this ground-breaking agreement with South Korea and the trade agreement our country recently negotiated with the European Union, Canada has now concluded free trade agreements with nearly one-quarter of the countries in the world. It means that Canada will now enjoy access to more than half of the global economy.

We know that as trade increases so does our nation's prosperity, which creates jobs and puts more money into the pockets of hard-working Canadians. By continuing to actively pursue broader market access and new investment opportunities, we are providing Canadian businesses and exporters with access on preferred terms to the largest, most dynamic and fastest-growing economies and regions around the world. To put it simply, this agreement is a game changer for our country.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, I always listen with great pride when I hear people talk about new markets, because I represent the riding of Newmarket—Aurora. I am always happy to hear about opportunities for people in my riding to find new places to sell the things they manufacture and to purchase new products.

I know my colleague comes from a riding where there are natural resources, and they will be looking for new markets. Would she like to speak about some of those opportunities for her constituents?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, as I mentioned in the House last week, trade is very important to my home province of Saskatchewan. Not only are we resource rich with resources like potash, uranium, oil, coal and forest products, but Saskatchewan's agricultural exports to South Korea were worth an average of $149.5 million from 2010 to 2012. This was led by wheat, canola, oil, unroasted barley malt, animal feed, rye and pork.

The Canada-Korea free trade agreement would eliminate tariffs on 86% of agricultural tariff lines and continue to open up new markets for Saskatchewan.