Bill C-18 (Historical)

Canada—United Kingdom Trade Continuity Agreement Implementation Act

An Act to implement the Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland

This enactment implements the Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland.
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 10 to 15 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 and contains a transitional provision.
Part 3 contains a coordinating amendment and the coming-into-force provision.

[Corinne Pohlmann]

Thank you.

You did cut out briefly but I think I got the gist of your question.

Absolutely, we'd like to see Bill C-18 ratified quickly. Again, there are lots of ongoing trading relationships that are reliant on the rules that have been in place for the last few years with CETA. At the very least, we need to minimize disruption at a time when things are very challenging for many businesses out there. Moving into a new agreement, relatively quickly, I think, is also really important.

Again, we need stability and certainty when it comes to the trading relationships that are happening. Knowing that something is coming and that it's not going to dramatically change, or if it does, it will be to improve what's already been out there, is going to be an important message that has to be delivered as these negotiations go on. The quicker it can happen, the better, because that certainty is important.

[Rachel Bendayan, Liberal, Outremont, QC]

Absolutely. I certainly concur with your comment with respect to not having this drag on.

If I may turn to the CFIB, I think you can see me coming already. Let me just begin by saying that you were mentioned a few times in question period today. We certainly appreciate your engagement on behalf of small businesses and also your encouragement that we should swiftly pass Bill C-14, which would continue to support our small businesses.

With respect to Bill C-18, which is before this committee today, I note that you would like to see a continued focus on SMEs, that you are happy with the chapter on removing technical barriers to trade in this transitional agreement, but that you would like to see a dedicated chapter for small businesses in a final free trade agreement. That certainly has been noted.

With respect to where we are today and the ratification process, you said that trade will be key to our economic [Technical difficulty—Editor].

Would you also urge us to move quickly on the passage of Bill C-18 and avoid any possible return to the negotiation table at this stage?

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Mr. Kennedy.

Let me also say that we, too, are hearing a lot of interest on the part of the United Kingdom to return to the negotiating table, and as a government we certainly look forward to consulting you and the Business Council of Canada before entering into those negotiations.

If I can move quickly to Mr. Poirier and the Canadian Manufacturers & Exporters, I did note with great interest some of your recommendations around communications and the importance of supporting the scale-up of our manufacturers in this country. I really do thank you for being so eloquent on those points.

I also heard you mention that you urge the swift passage of Bill C-18. What do you think about the possibility of having to go back to the negotiating table? What effect would that have on the manufacturers you represent? Do they want us to move forward in a way that provides certainty?

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Thank you, Minister Ng, for your presentation.

Honestly, I get the impression that softwood lumber is often used as a bargaining chip in trade agreement negotiations. I'll tell you why I get that impression.

Not too long ago, as part of the Canada-U.S.-Mexico agreement, or CUSMA, Canada's chief negotiator appeared before our committee. I asked him why the softwood lumber issue hadn't been addressed. He told us that it wasn't a priority for them at that time. Canada's chief negotiator told us this.

Also not too long ago, when I was talking to him about softwood lumber, the Parliamentary Secretary to the Leader of the Government in the House of Commons, as part of the study of Bill C-18, told me personally that trade agreements involve compromises. This leads me to believe that, when Canada negotiates trade agreements with the United States, compromises are often made with regard to softwood lumber.

I get the impression that you've never really fought to ensure that our American neighbours respect this industry. I'd like you to tell us more about this.

[Matthew Poirier, Director, Trade Policy, Canadian Manufacturers & Exporters]

Good afternoon, and thank you for inviting me to participate in today's discussion.

It's my pleasure to be here on behalf of Canada’s 90,000 manufacturers and exporters, and our association's 2,500 direct members to discuss Bill C-18, the implications for Canada’s manufacturing and exporting sector, and the future of this vital industry.

Our association’s members cover all sizes of companies, from all regions of the country and all industrial sectors. We represent the majority of Canada’s manufacturing output, as well as Canada’s value-added exports.

With over $20 billion in exports, the U.K. is one of Canada’s largest export markets. Canada-U.K. trade was one of our very first trade relationships and traditionally has been our doorway to the European market. According to our management issues survey, which is a large biennial survey of Canadian manufacturers, the European Union, and the U.K. in particular, is one of the top three markets that exporters see as having the most potential in the next five years.

As the committee knows, this is a unique situation. We've had a free trade agreement with the U.K. for many years under CETA, so the discussion today is all about maintaining that access and then, we hope, a discussion on how Canada can take advantage of a new bilateral trade agreement between Canada and the U.K. We, therefore, fully support the Canada-United Kingdom trade continuity agreement, and we urge swift passage of Bill C-18. This interim measure is required, obviously, while our negotiators hammer out a more permanent Canada-U.K. agreement, and like my fellow panellists, I urge that it happen as soon as possible as well.

However, beyond these mechanical trade agreement issues lies an even bigger problem that I must raise. That is the problem of our declining value-added export performance, a decline that has been accelerating despite signing more and more free trade agreements across the globe.

Let me explain what I mean. Two-thirds of Canada’s value-added exports, the types of exports that Canada makes the most money from, are manufactured goods. In other words, Canadian manufacturers take the raw ingredients, transform them into something of higher value and then sell these goods abroad. This “bigger bang for your buck” type of trade has been declining for years. In fact, with the U.K., manufacturing exports have been declining steadily for five years, even after we signed CETA. Canada can no longer afford to ignore the lost economic potential that the decline in value-added exports represents. It's simply not sustainable.

How do we fix that? We have ideas.

Simply put, Canada’s manufacturer-exporters are too small, and at full capacity. Generally speaking, Canada has a higher proportion of its businesses being smaller SMEs than most of our global competitors. From a fundamental structural perspective, we need to get our companies to invest in their businesses and help them grow and scale up. Larger companies are simply better positioned to take advantage of global trade. CME’s manufacturing survey results back this up. When asked what is holding them back from exporting to new markets, they told us that the risks are too high because they lack a competitive edge with foreign companies. They simply feel that they can’t compete and don’t bother.

It's important that we agree that this structural domestic business problem is driving our export underperformance. Landing new global customers through FTAs is rather pointless if we cannot produce the goods to sell to them at competitive prices.

Now, you might ask yourselves, isn’t this the point of EDC, BDC, CCC and the trade commissioner service? Aren’t they supposed to help derisk exporting and help SMEs get out there? The answer is yes, and we would argue that they are all quite good at doing that. The problem is the disconnect between these great programs and exporters knowing that they exist. When we polled manufacturers, we found that those who used these agencies and programs loved them, but a majority of respondents couldn’t even identify the agencies, let alone the programs they offer. This is a big problem.

Therefore, we have the dual challenge of our exporting companies being small, underinvested in and uncompetitive, and a big gap between government assistance and companies using that assistance.

Here are some concrete actions that we would like to put forward to address some of those problems.

Number one, create a manufacturing and export strategy for Canada that focuses on modernizing and growing our industrial sectors. It needs to help companies invest in the technology that will help them scale up and truly become global players. We happen to have such a plan, which we discussed with many of you in the past, and I would be happy to leave a copy with the clerk.

Number two, launch a made-in-Canada branding exercise at home and in international markets to celebrate our manufactured goods. This will boost awareness of Canadian capabilities and technologies as well as sales and exports. The maple leaf is a global brand with a sterling reputation that we don't take advantage of enough.

Number three, bridge government export agencies and exporters by leveraging the vast networks of business trade associations. This can be done by investing in Canada's trade associations' capacity to link the two sides and act as a concierge service for exporters. The government used to support these types of initiatives to great effect. We think they should again.

Number four, expand our efforts on SME exporter mentorship. Organizing and managing private peer-mentoring networks is another way Canada's trade associations can be used to maximize company-to-company learning.

All these actions are table stakes if we want to play a bigger role in global trade. They will also go a long way to helping current manufacturers maximize their export potential for years to come. However, while we at CME believe these solutions are something we need to work on now, the priority, of course, is ensuring we maintain current global market access.

Let me reiterate that CME fully supports Bill C-18. We need a transitional agreement in place between Canada and the U.K. as soon as possible and, in time, a permanent trade agreement between our two nations.

Thank you for inviting me. I look forward to the discussion.

[Corinne Pohlmann, Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business]

Good afternoon, everybody.

Thank you for the opportunity to be here today to share the CFIB's perspective on Bill C-18.

You should have a slide presentation that was sent to you by the clerk. I'm hoping to walk you through it, so I hope you'll have that in front of you as I present my speaking notes over the next few minutes.

First, I just want to say that the CFIB is a non-profit, non-partisan organization that represents about 110,000 small and medium-sized businesses across Canada. They come from every sector of the economy and are found in every region of the country.

It's important to remember that, normally, Canada's small and medium-sized enterprises employ about 90% of Canadians, and they're responsible for the bulk of new job creation. However, the last year has been particularly challenging for many small businesses right across the country, as they had to deal with shutdowns and limited capacity to help Canada deal with the pandemic.

As of early February, you should know that only 51% of businesses in Canada were fully open, that only 39% were fully staffed and that only 25% were back to normal revenues. The CFIB also released some new data just yesterday that found that seven in 10 businesses have taken on new debt during the pandemic, with the average debt being almost $170,000 per business.

I share these staggering numbers to highlight why it is so important to continue to find ways to bring stability and continuity to businesses trying to operate in these challenging times. I think that is what Bill C-18 aims to do.

I also believe that trade, both domestic and international, will be key to Canada's economic recovery. Agreements such as this one are essential in making sure that small and—to be fair—large businesses, as well, have some certainty when dealing with some of our largest trading partners.

To better understand why this is so important to small businesses, I'm going to be referring to a survey that we did back in 2017 that got almost 4,400 responses. As you can see, 31% of survey respondents had some experience with exporting, and 71% had some experience with importing.

These may be slightly higher than what is actually out there, as the survey likely attracted those, but they're not going to be too far off from what's actually the experience of many small businesses. For some, though, it's only an occasional thing. They maybe do it a couple of times a year. Others, though, do engage in trade daily. What's important, though, is that, regardless of the frequency of their trade experience, it needs to be as seamless and as easy as possible if we are to encourage more small businesses to continue to trade internationally.

Which countries do they trade with? Not surprisingly, the United States, of course, dominates the trading experiences of small businesses in Canada. However, as you'll see, more than 5% of small business owners import goods and services from the United Kingdom, and slightly more—closer to 6%—export to the U.K. In fact, amongst small firms, the U.K. is the third most likely region that Canadian small businesses will be exporting to—behind only the U.S. and the EU—and it's the fourth most likely country that Canadian small firms import from. Clearly, it's an important trading partner for small businesses.

We know also that governments around the world are interested in getting more small businesses involved in international trade. Therefore, understanding what motivates them to get involved in trade is still an important question. As you can see, most do it because they see a growing market demand for their product or service, want to expand their business or see good potential market opportunities. However, more than a third—36%—are also citing favourable trade agreements as having an influence on their intention to export. Having trade agreements address small and medium-sized business trade priorities would encourage even more to engage in trade.

That's why we've always welcomed the small business—or SME—chapters that were included in the CPTPP and the Canada-United States-Mexico Agreement, as they're a starting point in recognizing some of the challenges that may be unique to smaller firms.

While CETA did not expressly have an SME chapter, there was some work done through a joint committee to recognize the unique needs of small firms. We would strongly encourage a continued focus on SMEs in this trade continuity agreement. We would also highly recommend that the new Canada-U.K. negotiated trade agreement include a small business chapter that has within it the development of such tools and activities aimed at assisting smaller firms with their trading challenges. It's these types of initiatives that will ultimately encourage more smaller firms to engage in trade.

At the very least, of course, trade agreements have to help small businesses overcome some of the barriers they face. Those challenges can include everything from currency fluctuations to the cost of shipping, but they also include dealing with various duties and taxes and understanding rules and regulations—basically those non-tariff barriers.

We are pleased to see that Bill C-18 will honour the tariff elimination agreements made under CETA, which includes the elimination of 98% of tariffs on products exported to the U.K. right away. That, of course, will go up over the next couple of years.

We're also pleased to see that chapters remain on improving technical barriers to trade, as well as an emphasis on working together on regulatory co-operation. Also, it's important, though, to improve customs and trade facilitation, as this is often where small businesses can get discouraged. Efforts to help them better understand all the various rules, all the various customs processes, will be an important component of making this trade agreement and others really work for small businesses.

While much of the information I'm sharing today comes from a survey done prior to the pandemic, I did want to share some more recent data that illustrates that these issues remain important for small businesses, even during troubling times.

A survey was conducted just last August. In it we asked what the federal government priorities should be or what it should focus on. As you can see, over one-third wanted the government to focus on ensuring favourable trade conditions for small businesses. This actually jumps to more than one-half among manufacturing firms. This is despite all the challenges that were in place at the time.

We want to ask that you ratify Bill C-18 and then move quickly to negotiate a comprehensive trade agreement with the U.K. The trade agreement to be negotiated should include a small business chapter that addresses their unique needs and provides them with tools like a centralized website that has relevant information in plain language. It also should ensure that Canada and the U.K. provide tailored information for small and medium-sized enterprises on what changes to the agreement may impact their existing trade relationships, and how small businesses can benefit from the agreement. It should also focus on making customs processes easier, as this is often where the greatest stumbling blocks are for smaller companies.

Incorporating some of these ideas and moving quickly on this agreement will help make sure that businesses already trading into the U.K. can continue to do so with limited interruption, and could potentially attract even more smaller firms that are looking to expand into new markets to engage in trade.

I want to thank you for your attention. I look forward to answering any questions.

[Trevor Kennedy, Director, Trade and International Policy, Business Council of Canada]

Thank you very much.

Madam Chair, committee members, thank you for the invitation to take part in your meeting on Bill C-18, an act to implement the agreement on trade continuity between Canada and the United Kingdom.

The Business Council of Canada is composed of 150 chief executives and entrepreneurs of Canada's leading enterprises. Our members directly and indirectly support more than six million jobs across the country and hundreds of thousands of small businesses. Representing different industries and regions, these men and women are united in their commitment to make Canada the best country in which to live, work, invest and grow.

It's been said many times before, but it bears repeating, that Canada is a trading nation, and many Canadian companies rely on the rules-based trading system, as well as our networks of bilateral free trade agreements, to provide certainty and access to global markets.

Given its prominent role in the economy, we expect international trade to be an important part of Canada's economic recovery. The facts speak for themselves. Merchandise exports to the world fell by 12.3% in 2020 because of the pandemic, a decline of $70 billion. Canada needs to work hard in the years ahead to restore and grow our exports from precrisis levels.

The potential loss of preferential market access to the U.K., secured under CETA, presented a serious risk to the recovery for Canadian exporters. The U.K. is Canada's third-largest merchandise export market. It was also one of the few markets in the world in which we were able to sustain our exports from last year despite the crisis.

The U.K., as part of the EU, has been a critical component of Canada's fast-growing transatlantic trade relationship. Before the pandemic, it accounted for 40% of Canada's merchandise exports and 36% of service exports to the EU. Merchandise exports to the U.K. grew by nearly 12% since provisional application. Canadian exporters had momentum in the U.K. before the pandemic, and it's important that we continue to grow our trade.

When I spoke to the committee during negotiations, I mentioned how time-sensitive a Canada-U.K. trade deal is. Not only did we risk losing preferential market access by reverting to the WTO most-favoured nation tariff rates, but many of our peers were negotiating bilateral deals that would have undermined our competitiveness in the market.

Given our existing trade relationship with the U.K. under CETA, and the uncertainty surrounding the future of U.K.-EU relations during the negotiations, the transitional trade deal approach taken by our negotiators was the best approach for Canada. The transitional approach provided Canada with an opportunity to take this new relationship into account when we negotiate a long-term trade deal.

As with Canada's existing free trade agreements, we want to ensure that we reach a conclusive deal in the future with appropriate consultation and assessment of the market opportunities for Canadian firms. The transitional approach will also allow us to do that while we maintain our position in the market.

We were pleased to see that a Canada-U.K. trade continuity agreement manages to preserve our gains under CETA. Like CETA, the TCA's benefits include the elimination of 98% of tariffs on Canadian merchandise exports to the U.K. and will eliminate 99% within a few years. This is in addition to important market access opportunities in government procurement and services, among others.

At the same time, because Canada and the U.K. agreed to negotiate a new deal in the future, the TCA does not require that our future trade relationship be based exclusively on our existing EU agreement.

Our priority today is to quickly ratify the TCA. The existing memorandum of understanding between Canada and the U.K. is a helpful stopgap measure but it is time-sensitive. The U.K. is retooling its international relationships and there is a clear opportunity to reimage our bilateral trade and investment ties with a comprehensive and ambitious trade agreement. We hope both parties can start working on this with stakeholders as soon as the TCA is in force.

The Business Council of Canada reiterates the importance of swiftly ratifying the TCA. This agreement provides certainty for businesses at a time of great uncertainty. It will help our economy to recover by driving trade and attracting the capital needed to innovate, grow and improve Canadians' quality of life through the creation of well-paying jobs.

Thank you for the opportunity to address your committee. I look forward to answering questions.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call this meeting to order.

This is meeting number 17, on Friday, February 26. Pursuant to the order of reference of Monday, February 1, 2021, we are studying Bill C-18, an act to implement the agreement on trade continuity between Canada and the United Kingdom of Great Britain and Northern Ireland. Today's meeting is webcast and is taking place in a hybrid format, pursuant to the House order of January 25, 2021.

Welcome to all of the committee members, the staff and our witnesses. From 1 p.m. until 2:30 p.m., we have the following witnesses who will be presenting to the committee.

We have, from the Business Council of Canada, Trevor Kennedy, director, trade and international policy. From the Canadian Alliance of British Pensioners, we have Ian Andexser, chairman. From the Canadian Cattlemen's Association, we have Fawn Jackson, director, international and government relations; and Doug Sawyer, co-chair, international trade committee.

From the Canadian Federation of Independent Business, we have Corinne Pohlmann, senior vice-president, national affairs and partnerships; and from Canadian Manufacturers & Exporters, we have Matthew Poirier, director, trade policy.

Welcome to you all.

Mr. Kennedy, if you'd like, please lead off.

Economic Statement Implementation Act, 2020

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Speaker, I do not think any of my colleagues, from either side of the aisle, would disagree with me when I say that this bill is incredibly important to Canadians.

We are now over a year into this pandemic. I know that the first case in Canada was confirmed in January 2020, and the first recorded case of COVID-19 in Alberta was in March of last year. However, I do not know when the first plan to get back to normal will be presented, either to Canadians, or to the House of Commons. I honestly cannot believe that I had to say those words.

We are now over a year into this pandemic, and the government has not yet presented a plan. I do not think there is a way for anyone to easily describe how disappointing that is, and how disappointing it is that the bill before us does not present any sort of plan either. Of course, this raises the question of what the government would do if it did have a plan.

I am not asking about policies here. I am asking about how the government expects to get its plan through the House of Commons. While I and many of my colleagues appreciate the time we have had to go through the contents of the bill before us, I have to seriously ask what the government is thinking. The fact is that we are debating the 2020 fall economic statement in the winter of 2021. Obviously, we had our winter break, which contributed to the delay, but the government has a bit of a secret that I would like to let members in on.

The Liberals are big procrastinators. They love to leave some of their most important bills, the ones Canadians are asking for, until the last minute. They will also introduce a bill, have the first reading, and then sit on it for weeks on end until it finally goes to second reading. That is the tactic of this government.

There are far too many examples of this for me to list. However, there are plenty of examples from this very parliamentary session. I will start with a big one, which I know my colleagues from the Standing Committee on International Trade have heard me ask about plenty of times. I am referring to Bill C-18, an act to implement the agreement on trade continuity between Canada and the United Kingdom of Great Britain and Northern Ireland.

As the title of the bill so clearly lays out, it would implement a trade deal worked out between Canada and our close friends and allies the United Kingdom. Originally, we were going to lose many of our preferential tariff levels with the United Kingdom by the end of last year, and we had to pass the bill to ensure that would not happen.

What did the government do? It introduced the bill about a week before we rose for the winter break. As I am sure members are aware, we only voted on the second reading of the bill on Monday, February 1, 2021. The only reason we still have those preferential tariff levels with the United Kingdom is because the government realized its folly and signed a memorandum of understanding that temporarily extends those levels until we pass Bill C-18. Believe it or not, this is not the only bill the Liberals have delayed on.

I am sure all my colleagues, and of course many, many Canadians, are very familiar with Bill C-7 by now. We had a court-imposed deadline to pass this bill, which was December 18, 2020. I am sure my colleagues opposite will try to blame the opposition for it taking a long time to get to the other place, but it was nearly two weeks between the Speech from the Throne that kicked off this session and the bill being introduced. I wonder why.

This was not a surprise. The court decision that mandated the law be changed was made back in 2019, but it took two weeks to reintroduce this bill. On top of that, last February was the last time we looked at Bill C-7, an act that would amend the Criminal Code with respect to medical assistance in dying. That is right, it was February of 2020.

Why was this not introduced right after the 2019 federal election, as soon as we returned in December of 2019? Why not in January of 2020, or early February? The answer is that the government loves to delay the introduction and debate of important pieces of legislation. The bill we are debating today, Bill C-14, is no different.

Obviously she needed some time to be introduced to the job, but why did the Minister of Finance wait until November 30, 2020, to introduce this bill? By that point, Canadians had been asking for a plan for eight and a half months, if not longer, depending on the province. Why did she wait for two whole months after the start of the second session to introduce this bill?

It was certainly not to give my colleagues in the opposition and I time to study the bill. The Minister of Finance complained on Twitter that we were allegedly delaying this bill, but I think the answer is a little different. I think it was simply another example of Liberals leaving important business until the 11th hour.

I know my Conservative colleagues and I welcome some of the parts of this bill, such as the Canada child benefit top-up, which our leader has been calling for, but we want to make sure we have time to discuss it. The Liberal government has had plenty of poorly written legislation during this pandemic. How else does one explain that this bill would do such things as amend the rent relief legislation for the second time? This is the third try for the rent relief legislation. I know Canadians across the country are hoping this third time will be the charm, but I am not sure.

Liberals like to blame Conservatives for everything, and I know they love blaming former prime minister Harper for everything too, but in the case of Bill C-14, I am pretty sure any and all problems are their fault and theirs only. At this point, it is unacceptable that the Liberals still cannot get anything done.

I know all my colleagues in this House want to support Canadians who are still struggling against this pandemic, but the Liberals are still playing their classic game of delaying and blaming the Tories, and it is doing anything but helping Canadians. The Prime Minister and his party are just busy preparing for a snap election. They are not busy making sure the lives of Canadians are better. A fiscal update has to be in place so we know where we are going in these tough times.

[Brad Chandler, Chief Executive Officer and President, Hensall District Co-Operative Inc.]

Thank you, Madam Chair and the members of the committee, for this invitation to appear before the committee.

I represent Hensall Co-Operative. We are one of the largest farmers co-operatives in Canada with over 6,000 farmer members and owners, and we have over 30 locations across Ontario and Manitoba.

Our business is very diversified; it's made up of animal nutrition, crop services, energy, freight-forwarding logistics, grain marketing and marketing of ingredients.

The largest section of our business is made up of our food products, which is our dry bean and IP, non-GMO soybean business, which is an export-type business.

Our growth has been tremendous. Some history is $300 million revenue with 250 employees in 2010, and today, 2020, we stand with over $800 million of revenue and 650 employees, and the biggest growth sector has been in export.

We have entered into commodity and value-added contracts with more 2,500 growers. We have contracts of between 300,000-350,000 acres annually for higher-value human grade soybeans, edible beans and identity preserved soybeans, all going to the U.K. and Asia.

Currently we ship 80 food-grade containers a day of food products out of our facilities to over 40 countries globally. We have invested more than $100 million in hard assets across rural communities in Ontario, and these are primary investments to improve our facilities and our services and to expand our geographical footprint.

Quality, of course, is critical to our success. We ensure that all our food production facilities have quality accreditations, including SQF. Also, with all this shipment globally and to Asia and the U.K., it allows us collaboration with our freight-forwarding business, Hensall Global Logistics, which is one of the largest freight-forwarding businesses in Canada and in the top 10 in North America.

To give you some background, edible beans, human-grade soybeans, represent a critical sector between IP soybeans and dry beans. They represent $300 million-$350 million of our $800 million gross revenue. It's been a key driver of our growth. It's provided a launch to our successful global logistics business. Looking back, we have edible beans and identity-preserved soybeans. The edible beans are our biggest product going into the U.K.; identity-preserved soybeans would be going into Asia.

When we're marketing these with our Canadians growers, we're a totally independent, all-Canadian co-operative, and we try to represent value added to these contracts so growers will grow these dry beans and IP soybeans, which brings another $22 million-$25 million into the farmers' hands and in their sectors. This is all based on export-type business.

As for our customers globally, we have developed long-standing trade with over 44 different countries. These relationships act as a springboard to allow us to offer higher value-added contracts to our Canadian growers.

Our customer list contains many names that you may recognize: Heinz beans, Princes beans and Kikkoman, which is soy sauce. Heinz and Princes are both U.K.-based, and they make up the biggest part of our dry bean business. When I say dry beans, I'm speaking of white beans, which are baked beans, kidney beans, different types of black beans and anything in that type of food sector.

We are also one of the sole major suppliers to Princes Foods in the U.K. We also have customers like Campbell's soup, and many may know that, if you eat Tim Hortons or Wendy's chili, those are our customers also, so you can see how we are diversified across the food sector.

The opportunity today and in the future is the growth of plant-based protein and meat alternatives, today projected to increase from a $4.6-billion industry to an $85-billion industry in 2030. This is an increase of 18-20 times, so you can see what the importance of CETA and Bill C-18 means to our business and Canadian growers.

Our Canadian climate is growing regions with access to arable land and water, a unique opportunity for favourable conditions for growing wide ranges of crops such as IP soybeans, non-GMO, pulses and dry beans.

Canadian agriproducts have a solid reputation all across the world, especially in Asia and Europe, giving us a unique opportunity to create advantages and opportunities for our Canadian growers.

Imperative for our success is that we must have free trade. Quotas will limit our growth opportunities. Duties and taxes can destroy markets since there is price sensitivity to food products and the retailers.

We must deliver our products to our customers on time, making reliable transportation infrastructure vitally important, and that includes ports, rails and roads.

Our primary ports are Montreal and Vancouver for outboard exports to the U.K. and Asia. Our bean-processing facilities are in southwestern Ontario and Manitoba, both utilizing rail and truck, so that's important.

Labour disruptions and blockades and heavy activity at ports and on our rail lines can be catastrophic to how we are viewed by our customers around the globe. Every time we miss a shipment or our product isn't the highest quality, it puts our business at risk.

Local access to employees and affordable housing [Technical difficulty—Editor]. We'd like to see fair access to improved broadband services and support for more innovative projects geared towards agricultural and food processing. The more value we add, [Technical difficulty—Editor] are for others to enter.

We deliver anywhere from 50,000 to 65,000 metric tons of beans annually to the U.K. market, which represents about $150 million to $200 million. This represents probably 50,000 to 80,000 acres of contracts and value-added crops for our Ontario and Manitoba growers.

Today in the U.K. we ship into Liverpool, Felixstowe and Southampton. We are currently seeing issues related to Brexit impacting congestion at some ports, which is an unintended consequence but a consequence all the same. We currently enjoy no tariffs on our products entering into the U.K.

Concerning Bill C-18, in the near term we currently have large trade with the U.K. Failure to put a CETA replacement in place will put substantial revenues at risk for our business, exporters in Ontario and the farmers we all represent. We are owned by 6,000 farm members. For the longer term, our history has proven that we can be leaders capturing share in growing markets of agricultural products. Canadian growers have a solid reputation around the world for quality and stewardship. We have this arable land, access to water, and weather to strengthen our position in the market for agricultural products, in particular dry beans, IPs and pulses.

Other countries have the same access to land and water, so we need to have a solid trade policy that promotes free trade and limits duties and excise taxes. We also need a very reliable transportation infrastructure. Having these will allow us the opportunity to take advantage of our current leadership in the sector, coupled with the reputation of growers.

In short, we need tariff quota-free trade with the U.K. to capture our share of the growth forecast for the pulse sector over the next 10 to 15 years. The benefits to Canadian farmers will be stronger rural communities and a stronger contribution to Canada's economic growth.

Thank you.

[Mark Agnew, Vice-President, Policy and International, Canadian Chamber of Commerce]

Thank you, Madam Chair and honourable members, for the invitation to speak as part of the committee's Bill C-18 study. It's a pleasure to be back. Certainly quite a bit has changed since I last appeared, in the autumn. While on the one hand we do have an agreement signed, certainly it's not yet been implemented. Hopefully, we can talk a bit about that this afternoon.

It won’t surprise members of the committee to hear me say that the Canadian Chamber strongly supports the passage of Bill C-18 in an expeditious manner. The U.K. is a significant trading partner for Canada for all the reasons that we all know, including being both our third-largest goods export market and our second-largest destination for FDI abroad. Despite those rankings, it still remains a small overall proportion of our trade flows, behind the United States. I think this actually means that there's room and potential for the relationship to grow.

Since December 2020, Canadian companies have managed to avoid going off the cliff and having tariffs reimposed, either for exports going to the U.K. or companies that are sourcing products from the U.K. into Canada. However, this doesn't mean that the current arrangements are perfect. We have an MOU implementing remissions orders to apply parts of a transitional agreement that's based on a provisionally applied CETA. As you can imagine, that’s quite a mouthful for a lot of companies to be able to understand.

Therefore, while the execution of remissions orders has been a welcome relief for our members, we should not coast. Bill C-18 provides an ability to simplify the architecture that governs the trade between Canada and the U.K. as well as limit any operational questions that companies may come across during this current period.

I will highlight some of the benefits that we see from the TCA, which I did have a chance to speak to in more detail at my last committee appearance. Number one are the tariff eliminations on such products as lobster, plastics, vehicles and beef.

The second main benefit we see is in and around regulatory co-operation. As I said at my last appearance, CETA provides a critical framework for regulatory dialogues to occur on agriculture and industrial product non-tariff barriers that are keeping our products out of the market in terms of being able to use the CETA preferential tariff rates that were granted in the negotiations.

The third area of benefit we would point to in the TCA is in and around services. CETA’s temporary entry chapter had provisions on intra-company transferees. That enabled Canadian companies to bring in specialized talent from the U.K. to service their Canadian operations. The contractual service supplier provisions mean that specialized skills can be brought in to fill niche supply chain gaps that companies aren't able to fill in-house. The CETA provisions on these entry categories reduce the business burden for bringing in these specialized talents. Without them in a U.K. context it will have a negative impact on Canadian businesses. This is not an area that currently is part of the MOU, as was discussed in the first half of the committee meeting.

As the government’s economic assessment notes, the TCA will preserve an estimated $2 billion in bilateral trade. At a time of significant economic uncertainty, we need to leave no stone unturned for Canadian businesses to find ways to grow our economy. Trade agreements are a way for governments to support growth at a minimal cost to the public purse.

As I noted when last appearing before the committee, if CETA matters, then transitioning it to a bilateral agreement with our largest trading partner in Europe also matters. As we approach March 31, we hope the TCA can be implemented rather than the two governments needing to roll over the current MOU.

Bill C-18 is fundamentally about preserving market access that we already have. Now is not the time to rock the boat on that. From a forward-looking perspective, drawing a line under Bill C-18 will enable us to devote our efforts to focusing on the issues that will allow us to actually expand and improve our market access. This includes such issues as digital trade, regulatory co-operation, trade facilitation, labour mobility and others.

Thank you for your attention. I look forward to taking your questions.

[David Chartrand]

I will just put in the IM's recommendations: Develop an industrial policy that includes a national aerospace policy to support the industry nationally; support the industry in remaining globally competitive in accessing global markets; ensure under Bill C-18 that there are Canadian content requirements in public contracts; review and revise problematic CETA chapters, such as labour rights, public procurement, trade regulations and quotas.

Thank you.

[David Chartrand, Quebec Coordinator, International Association of Machinists and Aerospace Workers]

Thank you for the invitation and the opportunity to share the position of the International Association of Machinists and Aerospace Workers on this important matter.

The IAM is the leading union in the aerospace sector and air transportation industry. We represent over 55,000 members across Canada of whom 22,000 work in the aviation, aerospace and air transportation sector. We also have members who work in a range of sectors and industries, from screening services across airports in Canada, automotive parts manufacturing, the hospitality sector, health care, custom paint additives, industrial pump manufacturing, plastics manufacturing to woodworking. We are as diverse as our membership and take every opportunity to advocate on issues that impact our members and workers across Canada.

The U.K.'s departure from the European Union has far-reaching ramifications, and securing a transitional agreement provides for continued trade and stability in trade relations between Canada and the U.K. This is irrefutable. The IAM unequivocally supports efforts to diversify and expand trade opportunities since healthy industries provide jobs Canadians can rely on. But with opportunities come challenges and today, on behalf of the IAM, I would like to highlight where we see both opportunities and shortcomings under the proposed agreement.

We strongly recommend that CETA not be continued in its original form and that the federal government address problem areas before proceeding with Bill C-18. In this interim period, we see an opportunity for the federal government to improve CETA through Bill C-18 and ensure the best possible trade deal for Canada and Canadians.

The contribution of Canada's aerospace industry should not be ignored. The aerospace industry has irrefutably proven to be the driver of innovation and technology across sectors. For decades, Canada's expertise, knowledge and skill base has been world renowned. In fact, the Canadian government relies more on this industry for revenue than Canada's competitors. Aerospace is a large contributor to the Canadian economy, some $28 billion annually, and as a large contributor to our GDP, it's an export-extensive industry. Ninety-three per cent of aerospace manufacturing firms were exporters, which is 44% higher than the manufacturing average. Aerospace manufacturing firms also have more diversified trade than the manufacturing average, underlining the importance of trade to this industry, which must be on favourable terms.

The industry is also a source of well-paid, stable, unionized jobs that support middle-class Canadians. In the Canadian labour market, the aerospace industry employs more workers than the auto industry by a large margin: 208,000 versus 123,000 workers or 60% more workers than auto. Yet, to date, the industry has seen little direct support as a whole. We advocated for support in this industry prior to the pandemic and we support all efforts to grow Canadian aerospace, making us more competitive. Certainly, trade opportunities open doors for growth and exposure.

There are opportunities in the U.K. aerospace market. According to a study done by the trade commissioner, there is a niche for Canadian aerospace in the U.K. market. Although we make up a small portion of the U.K.'s trade portfolio, approximately 1.6%, we believe the Canadian aerospace industry should take advantage of opportunities afforded by the transition agreement.

The trade commissioner has identified opportunities for Canadian aerospace companies, which would be supported by the continuation of agreement terms under CETA. Disruptions in global markets due to the pandemic are inevitably leading to mergers and acquisitions with the aerospace and defence industry having been flagged as the most susceptible. The trade commissioner advises Canadian companies with cash flow to consider acquisition targets and to invest in the U.K.

Other opportunities of interest are software solutions that support the digitization of supply chain management, as well as technology supporting the transformation of industry due to the coronavirus crisis, such as cyber solutions, monitoring solutions and CBRN-type capabilities that support disinfection.

We need to position the aerospace industry for success in the U.K market by the development of an industrial policy. Globally, economies have been shaken by the pandemic, paralyzing several industries. Government spending has increased in efforts to sustain both workers and businesses during this challenging time. It's clear a recovery will take years, and we recommend the development of a thorough industrial policy targeted at supporting and stimulating hard hit sectors, such as aerospace, aviation, tourism and related industries. Getting the economy back on track will not only require funding, but a comprehensive and well-thought-out plan to ensure a strong and full recovery in the form of an industrial policy.

We need the development of a national aerospace policy. A pan-Canadian aerospace policy would address several issues that Canadian aerospace faces. Canada's largest aerospace cluster is centralized in Quebec, however practically every province has an aerospace cluster. The industry is often caught between provincial and federal governments, which has made a cohesive funding framework and fostering of regional clusters difficult. The approach the government has taken is to fund individual aerospace companies and randomly transfer money to provinces with aerospace clusters.

This is neither an efficient use of money nor an effective means to ensure that Canada remains globally competitive, despite being unsurpassed in production of flight simulators, civil aircraft engines and MRO.

On support for regional clusters, practically every province has a regional cluster, yet there is no coordination amongst them. A healthy level of competition within an industry is beneficial. However, as an industry of national importance, there must be some level of coordination and cohesion at the national level. Simply put, strengthening the domestic industry supports its global competitiveness.

With regard to support in the procurement process, we recommend that Bill C-18 outline stipulations for Canadian content requirements in public contracts. Additionally, measures that allow the Canadian government to support and guarantee economic benefits must be part and parcel of the new agreement. The IM also recommends that a form of insurance framework be included, with the goal of protecting struggling economic sectors such as aerospace in the current climate, without facing penalties for breach of contact.

On CETA's gaps and erosion of labour rights, labour groups rang the alarm bells before CETA was adopted, highlighting the agreement's shortcomings in protecting labour rights. For instance, CETA's chapter 23 is excluded from general dispute settlement, meaning that labour disputes couldn't be resolved through a formal mechanism that involved penalties. While investors can rely on a binding investment court system, labour disputes are resolved through a non-binding process of co-operation and recommendation, which companies can ignore without penalties.

Furthermore, labour provisions did not provide for any binding or enforceable labour provisions for implementation of core international labour standards. International labour standards prevent the erosion of standards and a race to the bottom, which is likely, given that CETA allows parties to shift investments to areas where labour standards are lowest and through challenging new regulations that would negatively impact investments.

CETA also allows certain classes of workers to move between countries and bypass the Canadian immigration process. CETA limits government's ability to put limits on migrant workers in areas of high unemployment, even if local workers are available. This provision clearly undercuts government's efforts to train and hire local workers.

Last but not least, temporary entry provisions do not provide a path to permanent residency or immigration, as is the case in other European trade agreements. Moreover, this provision is expected to have a greater impact on Canada than the U.K.

CETA also imposed a condition on the Canadian government to treat foreign suppliers at least as well as domestic suppliers, which, in some cases, would disadvantage domestic businesses. Under the original agreement, our government's ability to regulate entry and activity of foreign firms was limited, even in instances when such regulations didn't discriminate between foreign service suppliers and domestic service suppliers. This places emerging domestic businesses in a precarious position, such as the majority of the SMEs in the Canadian aerospace market.

With regard to public procurement, CETA allowed procurement rules to apply to Canadian municipal and provincial governments, in addition to the federal government. Local bodies are prohibited from favouring local suppliers and even applying local content requirements to procurement contracts, as it would infringe on non-discrimination provisions.

What is more concerning is that CETA's provisions give unconditional access to Canadian procurement markets to European companies. Moreover, procuring entities are not able to obligate foreign suppliers to contribute positively to local economic development.

Under the new transition agreement, we recommend that Bill C-18 outlines stipulations for Canadian content requirements in public contracts, a measure that allows the Canadian government to support and guarantee that economic benefits be part and parcel of the new agreement.

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

We are here to make sure that our businesses get the continuity they need through this agreement. We of course hear that there are issues, but the purpose of Bill C-18 is to replicate CETA, and I would remind you that while the EU was still a part of the CETA, they were not able to undertake new international trade negotiations, so the discussion that has taken place with the U.K. is in terms of replicating CETA on a bilateral basis, which is what we've got here.

We're going to continue to work very hard for the agriculture sector, and indeed all sectors of the economy, so that in this new set of negotiations, we are considering what they are looking for and how we will pursue that in the next set of negotiations. I'm looking forward to ratifying Bill C-18 as quickly as we can so that we can begin those negotiations once Bill C-18 is ratified.

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

Absolutely, it's really important that we get this bill ratified.

You pointed out that the access to $118 billion of the U.K. procurement market is but one. I would also say that the numbers that I read out earlier, in answer to a question, around the benefits of CETA with the EU—and that includes the U.K.—such as the 16.6% increase in export levels to pre-CETA time, are one reason we continue to provide as much certainty and as much predictability as we can to Canadian businesses.

Certainly the business groups and the workers they employ are really counting on all of us to speedily pass Bill C-18 so that predictability and that certainty can be had for workers.

On that, I want to thank everyone for their terrific hard work. I'm looking forward to continuing to do that, because it is absolutely crucial to the stability that businesses need, and they're looking for us to do that with the passage of this legislation.