Bill C-4 (Historical)

Canada–United States–Mexico Agreement Implementation Act

An Act to implement the Agreement between Canada, the United States of America and the United Mexican States

This enactment implements the Agreement between Canada, the United States of America and the United Mexican States, done at Buenos Aires on November 30, 2018, as amended by the Protocol of Amendment to that Agreement, done at Mexico City on December 10, 2019.
The general provisions of the enactment set out rules of interpretation and specify that no recourse is to be taken on the basis of sections 9 to 20 or any order made under those sections, or on the basis of the provisions of the Agreement, without the consent of the Attorney General of Canada.
Part 1 approves the Agreement, provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional and administrative aspects of the Agreement and gives the Governor in Council the power to make orders in accordance with the Agreement.
Part 2 amends certain Acts to bring them into conformity with Canada’s obligations under the Agreement.
Part 3 contains the coming into force provisions.

Canada-United States-Mexico Agreement Implementation Act

[Gary Anandasangaree, Liberal, Scarborough—Rouge Park, ON]

Madam Speaker, to my friend opposite, we worked very closely on the indigenous affairs committee in the last Parliament and I look forward to working with him again in this Parliament.

I do disagree with him on a number of issues, particularly when he describes this as a “half NAFTA”. In fact, this is a newly improved agreement that will protect Canadian jobs, ensure that our businesses are able to compete and continue to allow our middle class to grow. That is really what this agreement is about.

There are provisions in the agreement that protect our auto workers. It allows our auto industry to continue its groundbreaking work, and it makes sure that our workers are protected. I view it in the context of other areas in other countries where the auto sectors are struggling in relation to the Canadian auto sector. Of course, we have seen some reduction in employment. What is important is that we have enough protection within this agreement to allow our auto sector to continue to build on what it is doing already.

[Martin Champoux, Bloc, Drummond, QC]

Madam Speaker, I have been hearing plenty of glowing praise for the Canada—United States—Mexico agreement from my colleagues opposite. They say the agreement is a big win for Canada on many fronts. I just want to say “you're welcome” on behalf of Quebec's aluminum workers and supply managed farmers, whose major sacrifices gave Canada that win.

Now that aluminum workers and supply managed farmers have made those sacrifices, would my colleague be willing to enshrine supply management in law so that it cannot be touched during future international trade negotiations? Also, could they perhaps stop saying that the agreement protects cast aluminum and make it clear that the agreement protects only North American aluminum parts?

[Gary Anandasangaree, Liberal, Scarborough—Rouge Park, ON]

Madam Speaker, I thank my colleague from Drummond for his question.

What is important in terms of aluminum is that there are protections in this agreement that were not in the original NAFTA. This is progress and it protects workers.

As for the cultural exemption, it will directly impact workers in Quebec. In fact, 75,000 workers in Quebec are protected because of the cultural exemption provisions contained in this agreement. It will allow for our creative sectors to continue and thrive within Canada.

[Alain Therrien, Bloc, La Prairie, QC]

Madam Speaker, this is a broad and heavy topic, so today, I will just keep to the country of origin rule. I will give a brief history to explain where that comes from, why it is important and how this agreement threatens Quebec's aluminum industry.

First, modern agreements originated with the European Economic Community, which was established under the Treaty of Rome in 1957. At the time, the parties concerned created a customs union where goods could move within their countries tariff-free.

The six countries could move goods and services without any trade barriers. However, when they negotiated with other countries, a single negotiator spoke on their behalf. At the time, this decision was made to ensure they could better compete with the Americans under GATT, for example. This was not complicated for them. I will give an example that is easy to follow. Under that agreement, if a Japanese car wanted to enter any of the six countries, the same tariffs would apply for all six. There was no advantage for the car to enter one country first and then be sent to another. At the time, that was how things were done.

The Canada-U.S. agreement signed and implemented in 1989 is a bit different. Canada and the United States decided to merge their markets to remove any trade barriers between the two countries. Tariffs could not be imposed on products being exported from Quebec or Canada to the United States.

Take the example of the Japanese car to be exported to the United States. The Americans had the right to independently decide that products from Japan would not be imported to the U.S. In a free trade zone, the Japanese car could enter Canada and then get a free pass to go to the United States. Obviously, that was disrespectful and inconsistent with the intentions of those who had signed the agreement.

To protect themselves from that, the Americans and Canadians told the Japanese, among others, that if they wanted to take advantage of this customs free zone between the countries, they would have to manufacture the car in Canada and then export it unencumbered to the United States. For a car to be able to go to the United States, the country of origin rule stated that at least 50% of the car needed to be manufactured within Canada's borders.

When Mexico joined the agreement in 1994, this percentage rose to 62.5%. Today, this is a free trade zone where three countries have some sovereignty over what can happen in other countries. Two out of the three countries produce aluminum, namely Canada and the United States. Mexico does not produce any. There is one foreign producer, which is China. In five years, China has increased its production by 48%. It produces four times as much aluminum as the second-largest producer in the world. This is a hefty competitor. It produces 15 times as much aluminum as we do. It is well known that China is dumping products.

Dumping refers to the practice of producing goods that are then sold at a loss. There are several reasons why China would do this, but one of the main reasons is that it can eliminate competition in a country and take over the entire market. It can then increase rates and its profit margins.

That is the game played by countries that engage in dumping. Canada and the United States, both aluminum producers, passed anti-dumping legislation, since they have the right to protect their own markets. China's solution was to go through Mexico. Mexico does not produce aluminum and has no need for an anti-dumping law to protect its market. In two months, between May and July 2019, the Chinese increased their aluminum exports to Mexico by 240%. No, they are not all dressing up as RoboCop. They simply figured out a way around the rules. The Chinese sell their aluminum to the Mexicans, who process this aluminum into aluminum parts, which are then sent across the border into the United States and Canada.

They could not get that aluminum across the border because we have anti-dumping laws. This is a way for Mexico to get dumped materials into markets that are supposed to have protections against dumping. To get this aluminum across borders, to create jobs in Mexico and to support Chinese production, which is the most polluting in the world, the aluminum is transformed into automotive parts. It is a good scheme. Between May and July, aluminum parts exports from Mexico to the United States increased by 260%. This is an established, well-known and lucrative scheme that must absolutely be eliminated.

The agreement does nothing to address this. Given that Canada, and especially Quebec, relies heavily on aluminum production, the Liberals talked a good game and said all the right things to lull people to sleep. They said that 70% of aluminum parts used in automotive manufacturing had to be produced in Mexico, Canada or the U.S. What I just explained is supported by the numbers, and numbers do not lie. As the numbers show, this scheme will continue under this trade agreement.

There is a lot of talk about Donald Trump. Everyone is afraid of Donald Trump. Essentially, the government did not capitulate to Donald Trump, it capitulated to Mexico, which decided to produce auto parts with aluminum dumped by China. They are doing this right under our noses and think we will not notice. We figured out this scheme and have condemned it many times because aluminum is Quebec's second-largest export. It is an extremely important market for us. Just go to Lac-Saint-Jean or visit an aluminum plant in Quebec, on the North Shore or elsewhere, and you will see the number of people working in this sector. They have well-paying jobs. We are talking about more than 30,000 direct and indirect jobs, not to mention those that would be created by planned expansions. That is the legacy the government will leave with a flawed agreement. It was unable to negotiate perhaps because it is used to making concessions, but somehow it is always Quebec that ends up making the concessions, and we are sick of it. It is quite clear that Quebec is always the one to make concessions.

We are here to say that this agreement must be amended. We need to agree on that. I know the government is not going to reopen the agreement and renegotiate it, but there are things it can do. We are calling on the government to do what must be done because Quebeckers' jobs depend on it, because Quebec's second-largest export depends on it and because regions depend on it.

That is why the Bloc is rising. We are in the right here. We know we are defending Quebec's interests. That is why we were elected, and that is what we are going to fight for throughout this Parliament.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Madam Speaker, I appreciate the member's passion on this issue. Obviously, it is an important issue for all of Canada, with particular focus from the Bloc with respect to the aluminum industry in the province of Quebec.

I would ask the member to reflect on what is currently in place prior to this particular agreement. This agreement would provide something that was not there previously. I see that as a good thing. Hopefully, we may be able to get some of the more specific questions answered once it gets to committee.

I would further note that even the Premier of Quebec is strongly in favour of this agreement. He has raised concerns, but also encourages its passage. Could the member provide his thoughts in regards to that?

[Alain Therrien, Bloc, La Prairie, QC]

Madam Speaker, I thank the member for his question.

Obviously, trade deals are always a good thing for the parties and countries involved. This has been known since Adam Smith published his thesis in 1776. I do not fall off my chair when I hear someone talk about the importance of trade deals.

Our fundamental problem is that we missed out on getting an agreement that addressed the scheme that is currently leaving Quebeckers in an extremely uncomfortable situation with regard to aluminum. The scheme that was created for aluminum is Chinese dumping in Mexico. The figures are growing, they are soaring, and this is a recent situation. The government should have negotiated an agreement that put an end to this unfair competition from China. The government did not do that, and once again, Quebec is paying the price.

Yes, it is a good thing to have an agreement, and there are good aspects to this. We are not denying that. What we are saying is that this agreement has been drafted with a loophole that jeopardizes a major industry in Quebec. Why not close that loophole? It would be feasible, and the government has the wherewithal to do it.

I am reaching out to the other side. Let us get it done together, make sure Quebec stops being the one to pay the price, and sign agreements on an expedited basis.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Madam Speaker, I heard what the member said.

We, the Conservatives, absolutely agree that not enough work was done on this agreement, particularly on aluminum. Yes, we support the Bloc. We support the province of Quebec and, of course, we support the aluminum industry.

That being said, I would like to know what the member and the Bloc Québécois will do to support Alberta's oil industry.

[Alain Therrien, Bloc, La Prairie, QC]

Madam Speaker, we are not bargaining here.

We are not about to say that we will trade support for aluminum for support for other industries. That is not what is happening here. We have here a trade agreement that does not close the insidious loophole that was forced down Quebecker's throats when it comes to aluminum. That is where we are now. Before we start talking about other industries that are not affected by this agreement, before we get into any more analyses, let us start by working in favour of Quebeckers' legitimate interests. All we want is for justice to be done, nothing more. We want to be on equal footing with the other aluminum producers in the world.

We can do good things. We produce the cleanest aluminum in the world. We can compete with anyone, but not if the competition is unfair. We should not have to deal with unfair competition. No country in the world would accept that, and Quebec will not either.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I thank my colleague, the Bloc Québécois House leader.

I have a question for him. As I understand it, the new NAFTA provides more protection to the aluminum industry than the existing one. It is natural to want more, but I think the new NAFTA is better for the aluminum sector than the old NAFTA.

[Alain Therrien, Bloc, La Prairie, QC]

Madam Speaker, first of all, the dairy sector and the steel sector both got the kind of protection I was talking about earlier.

I talked about the history of international relations within various organizations, such as customs unions and free trade zones. The steel industry got this measure; why not the aluminum industry? Why are people saying there is an emergency now that was not there before?

The urgency of the situation is ramping up for two reasons. We are in a vicious cycle. I have the numbers to prove it, which I shared earlier in my speech. Chinese aluminum dumping is a threat to Quebec aluminum because aluminum parts are being made in Mexico. The trade agreement endorses that.

If we let this slide, that could eventually mean a death sentence for the cleanest aluminum in the world, which is from Quebec.

[Colin Carrie, Conservative, Oshawa, ON]

Madam Speaker, I stand among my colleagues today with the duty of holding the Liberals accountable over the new NAFTA they have agreed to and now asked the House to ratify. I would note that they want us to ratify this as soon as possible, yet they still have not provided the requested documents, including the cost-benefit analysis.

I do intend on voting to ratify this agreement because industry, especially the automotive sector, needs certainty so we can keep Canadians working and obtain new investment. Sadly, it is too late for Oshawa. Though this trade agreement has its issues, the certainty of a trade deal will keep our exporting companies in Canada and hopefully bring an end to four turbulent years.

When the Prime Minister originally took office, he had the TPP and CETA ready to sign. We had good relations with both China and India. There were talks of potential trade agreements with each of those growing economies.

However, both China and India want nothing to do with the Prime Minister and the new TPP is a shell of its original form. It does not include the United States. One in four may be average for a baseball player, but it is an awful record for the Prime Minister.

The government has misstepped at every possible turn on the world stage. In fact, this all could have been avoided five years ago with the signing of the original trans-Pacific partnership in 2015 or 2016. The TPP was set to open up Canada to some of the largest markets in the world, over 1.2 billion people. Canada is now a signatory to a new version of the agreement, but there is one noticeably absent signatory: the United States.

The trans-Pacific partnership, in its original form, was the renegotiation of NAFTA, given both Mexico and the United States were involved in the agreement. It solved key bilateral and, more importantly, multilateral issues. One of the TPP's main purposes was to counter the rapid economic expansionism of China, an issue that is growing larger day by day. China is now holding its economic power over our heads as the Prime Minister tries to navigate the current situation he created.

I rose in this House during the last month of the previous Parliament to raise the point that the Prime Minister had the opportunity to avoid the turbulent last four years of NAFTA renegotiation if he had just signed the original TPP. In response, the member for Mississauga Centre completely ignored history and said, “The claim is that if we had ratified the TPP, it would have solved so many problems, but the U.S. pulled out [of] the TPP.” This attitude is still taken by the Liberals today. They cannot seem to remember that the Prime Minister refused to sign the original TPP more than once.

By October 6, 2015, almost two weeks before the 2015 election, the ministers from each of the 12 signatories gathered to announce that the negotiations were complete for the TPP. All the Prime Minister had to do was put pen to paper.

As reported by Bill Curry on November 15, 2015, 14 months before President Trump was sworn in, the Prime Minister's best friend internationally, Barack Obama, was in the Philippines and referenced Canada when he said, “We are both soon to be signatories of the TPP agreement.” Alas, the Prime Minister did not sign.

If we fast forward to March 2016, it is still nine or 10 months before President Trump took office. This time the Prime Minister said he was confident that the softwood lumber dispute would be resolved in a matter of weeks to a month under the TPP, a sentiment shared by President Obama during the Prime Minister's first official to the White House. Sadly, the Prime Minister did not sign again. Even with the most progressive president in recent U.S. history and the Prime Minister's BFF, he refused to sign the agreement because it was not progressive enough for him.

Virtue signalling aside, the TPP was important because it was set to resolve many issues that we still face today. For example, under the agreement, there would not have been issues with section 232 steel and aluminum tariffs. Signing that agreement would have stopped this years-long debacle in its tracks before it even started.

President Trump may have been able to renegotiate a trade agreement with two other countries, as he did with NAFTA, but he did that over the past two years. Trying to negotiate a trade deal with 11 other signatories would have been next to impossible, and the original TPP was a template for that agreement going forward. If the Prime Minister had signed the TPP in the first place, this mess he created would likely have been avoided.

The handling of the TPP was the first time the Prime Minister angered other world leaders, but it would not be the last. After the Prime Minister kicked the TPP down the road, a new president took the Oval Office. President Trump pulled our southern neighbour out of the agreement.

The remaining countries proceeded without the U.S. and were ready to sign in 2017. In fact, the leaders of each soon-to-be signatory gathered in a room for a historic event, but the Prime Minister decided to play hooky and refused to sign once again.

The Prime Minister was nowhere to be found; he just did not show up. Over and over again, the Prime Minister has failed Canada on the international trade file and has angered our global partners.

In response to these antics, the leaders of the aspiring TPP signatories were outraged. High-level Australian officials described the Prime Minister's no-show as “sabotaging the Trans-Pacific Partnership”, according to the National Post. One official even told Australia's ABC News that Canada screwed everybody. How bad does it have to be for Australia to get so upset?

The Prime Minister later signed the updated agreement, but not until he angered world leaders and waited for the United States to withdraw.

It gets worse. In 2017, when President Trump officially indicated his intention to renegotiate NAFTA, the administration issued a list of specific provisions and issues that it was looking to have renegotiated. At that time, it put forward concerns regarding supply management, rules of origin and other specific areas of interest. The Liberal government responded by voicing its outspoken commitment to the so-called progressive agenda and did not even address the list of priorities put forward by the United States administration.

This began a negotiating process that saw our U.S. counterparts leave the negotiating table and deal only with Mexico until they had worked out all the details, without Canadian input. The government's inability to get the job done appropriately led Canada to an agreement that would only maintain certain standards and provisions, but would gain nothing over the original NAFTA agreement.

This is basically a Mexico-United States agreement, and we are only involved because Mexico felt bad for Canada. The Liberal government's negotiating team was forced to sit at the kids' table while the adults settled the details.

I have never been the prime minister of this great country, but it does not take a genius to know that if one screws up an opportunity like the trans-Pacific partnership, one should at least try to make up for it. However, the Prime Minister decided not to bring an end to the softwood lumber dispute and made our trade relationships with lndo-Pacific nations like China and India even worse.

Rather than finding a solution to the softwood lumber dispute and getting exemptions to “buy America”, the Prime Minister's logic has been to give away our trade sovereignty to the United States. For example, if Canada wants to sign a trade agreement with a non-market economy like China, we now have to ask the U.S. for permission. The last time I checked, Canada was a strong, powerful country that should not need to ask dad for a treat.

I can understand why the Prime Minister might not trust his own decision-making, but to forfeit Canada's sovereignty is not the solution. The Prime Minister needs to understand that people's entire livelihoods are at stake when he repeatedly makes mistakes that could have been easily avoided. We know this all too well in Oshawa: Our assembly plant did not receive a new product allocation. While the Prime Minister dithered, Oshawa lost.

We are debating this bill in its current form, yet issues remain. On December 12, members of the Conservative caucus requested the release of the economic impact study for the new NAFTA agreement. It has now been 54 days since the request and we have yet to see the report.

On this side of the House, we have been asking when the economic impact study will be released and, as usual, the Prime Minister and his government are ducking the questions. It is a simple question that does not need to be dodged. The economic impact study will give greater insight on the effects of the agreement. The question remains: What do the Liberals have to hide?

This study is important because Canada deserves a trade agreement that will benefit all of us. For example, something that is very important in my community is that the agreement requires that 40% of cars produced in Mexico be completed by workers making at least $16 per hour. However, because of this, there is an assumption that automotive manufacturing jobs will migrate north. How many jobs are expected to be created in Canada? It is impossible to know because the economic impact study has not been released. As well, what effect will this have on the price of cars? Again, we do not know, because the Liberals refuse to release the study.

With that said, I plan on supporting the deal. Though the agreement has issues as a result of the Prime Minister's bad decisions, premiers, small businesses, farmers and manufacturers need the certainty so they can resume their day-to-day business. Canadian businesses cannot wait any longer for certainty and they need to make investments and decisions for their livelihoods. Canadians need a deal, and that is why I plan on supporting the agreement.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Madam Speaker, I had the opportunity to sit with the hon. member on the international trade committee.

If the member could recall the election of 2015, the Liberal Party made a commitment to Canadians to consult widely, to have a trade agreement be transparent and accountable to Canadians. With the member, we travelled from coast to coast to coast to many different communities. We heard from the people. We heard from agricultural groups, industry groups and labour groups. In the presidential debate, we heard that the United States would rip up the TPP.

We wanted to ensure that this government got it right, and that is what we did. Does the member not think it was right to consult with all stakeholders, especially with the people of Canada, allowing them to speak, rather than what the Conservative government wanted, which was to do things in secret and push through a TPP that was not in Canada's interest?

[Colin Carrie, Conservative, Oshawa, ON]

Madam Speaker, the hypocrisy of the Liberals is unbelievable. I have worked with him and I have a lot of respect for the member for Mississauga-East—Cooksville.

However, the Liberal government has not even given us the economic impact studies. It is saying that it wants this passed as soon as possible. We requested the studies in December, and the Liberals still have not given them to us. He says that the Liberals had to do their due diligence, which I actually agree with, but the member omits the fact that Conservatives had already done much of that.

The TPP was an agreement we worked on with President Obama for seven years. It was his legacy. He wanted to have it. With the Americans onboard with the new TPP, which was part of NAFTA, it could have been resolved. All this silliness could have been resolved if the Liberals had just signed that agreement.

By the way, just a note for the hon. member. The Liberals did sign the agreement eventually. He would remember we had the bureaucrats in front of committee, and it was exactly the same agreement except for two sidebars. Of course the United States was not in it. We could have avoided this whole mess if the Liberals had signed it five years ago and we could have been working on other agreements, such as the agreements with China and India, on which the Americans are already ahead of us.

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

Madam Speaker, I see the two main parties passing the buck back and forth and blaming each other for past failings in various deals over the years. What does all this really amount to? Concessions have been granted over the years, especially in supply management, and now in the aluminum sector. Virtually all the concessions made to reach a comprehensive agreement that is good for all of Canada have one thing in common: Quebec pays the price. It is unfortunate, but there is no other way to see it.

I would ask the House, the government and specifically my Conservative colleague whether they would be willing to put an end, once and for all, to these concessions that are undermining our agricultural system and supply management. We have already given up 18% of our market. The government has conceded not only on that but also on our capacity to export to countries that are not even parties to the agreement. This is unheard of, and it is just not right. I would like the political parties to make a clear commitment and tell us whether they will protect supply management, through legislation, to ensure that this never happens again.

[Colin Carrie, Conservative, Oshawa, ON]

Madam Speaker, negotiations should never be on the backs of hard-working farmers. I do appreciate the fact that the member is speaking up for all Canadian farmers in the supply management field.

I will go back to the original TPP agreement, on which there were some concessions. Our Conservative government was very proactive and very committed in saying that there would be proper compensation for that.

We have the agreement with NAFTA, and my colleague is absolutely right in asking what the plan is moving forward. We have been asking the Liberals about this. I know my friends in the Bloc want to see the cost benefit analysis too, showing exactly how things will be affected and the industries that will be hurt by this. The Bloc members have brought up supply management, but there is also the aluminum sector. Again, with this agreement, we now have new rules for aluminum, which we did not have in the past.

I am in agreement. In committee, we will bring forward witnesses to ensure the government has a plan, so if somebody is negatively affected, a proactive approach can be taken to ensure certain compensation is available for that, like our Conservative government did. We have to let the government know that to dither any further is not appropriate.