Thank you, Mr. Chair.
I'm very happy to talk to you, and I'm very happy that you have invited an economist to address your committee, because I will be presenting the broad views on the impact of the agreement on the whole Canadian economy.
I don't have detailed knowledge of some of the industries that some of your other presenters have, but I would like to speak strongly in favour of the agreement and its positive impact on at least five components of the Canadian economy.
The first component is Canadians as consumers. I believe the position of this government is to improve the standard of living for consumers and to make things better for ordinary Canadians, whether it is by lowering the tax burden or by other means.
This agreement, with freer trade between Canada and Europe, is going to make things better for consumers by offering access to a wider variety of goods and services, and offering them at better prices, because the increased competition will increase productivity. So people will have more goods, more services, better prices, and it will improve the basic standard of living for Canadians as consumers. I think that is probably the most important thing. That's why we have a government running the economy, to help our standard of living.
The second group that will be helped, and this has been mentioned by others as well, is exporters. Trade is a very important part of the Canadian economy—the agricultural sector, the resource sector, and virtually every other sector as well. Fewer barriers to trade and reduced tariffs are going to greatly help our exporters to continue to export, continue to improve our balance of payments, and continue to prosper as businesses.
I am on the board of a forest company, among other companies. We've already noticed—although this committee isn't primarily concerned with forestry—that the 10% and 15% reductions on some of the wood products we export are already helping us build the specialized and high-value-added markets that we were hoping to build in Europe. That is going to make it an awful lot easier.
What any economy needs, what any business needs—and sometimes people planning businesses forget about this—is customers. What the European free trade agreement gives us is customers. It gives us access to a market roughly equal in size, wealth, and number of people to the United States.
Much of our trade has been concentrated on the American market, and Canada has benefited greatly from free trade with the United States and Mexico. We are going to get at least an equal boost by having access to the European market.
Having customers, people who are interested in our manufactured food products, our basic grains, and the other goods we produce in Canada, is going to make it that much easier to have opportunities for businesses to grow and thrive in Canada.
There is another side to that coin, of course. A free trade agreement means that Europe will have more access to Canada. How will that help us?
It will help us by dealing with one of the persistent challenges that the Canadian economy has had to deal with for lo these many decades, and that is productivity. We don't get as much bang for our buck, we don't get as much output out of the amount of input—the labour, the capital, and so on—that we put into our economy. We're not as productive. This means our workers can't get paid as well, and our standard of living is affected.
What the free trade agreement and Europe's access to Canadian markets is going to do is increase our productivity. When producers, whether of cheeses or other products, realize that Europe is going to have more access to the Canadian market, they will sharpen their pencils. I believe Canadians are smart, capable, and intelligent. When they realize that, hey, other people are sending cheaper products, less expensive products, good-quality products, products that customers might want into Canada and they are going to have to compete with them, I believe that Canadian business people will find ways to be more productive. They will sharpen their pencils. They will develop a great many Canadian geographically designated cheeses—it doesn't just have to be Oka anymore—and they will compete effectively to maintain their share of Canadian markets, as well as expanding into European markets.
This isn't just a pipe dream. It has happened, probably about 20 years ago now, in New Zealand, when New Zealand faced a financial crisis and had to remove all the tariffs and protections its heavily protected industries, including agriculture, enjoyed. Everyone had said that if it didn't have this protection on its home market, all the businesses and the economy would fail and the country would die. The country didn't die. The country became much more productive; a wider variety of goods and service of better quality were made available; prices for many goods and services in the country fell; the improved quality and pricing expanded export markets; and New Zealand has gone on to prosper. That is the kind of increased prosperity I see in Canada as we become more productive in response to being a more open market to Europe, as well as to the United States.
So productivity, a big factor in our economy and our standard of living, will be given a very strong push in the right direction by having more European goods and services come into Canada, encouraging Canadian producers to work harder to get a better product and better value for Canadians, as well as to meet export demand.
Another thing: as a global economy, Canada needs to be competitive. I apologize for the cliché—you've heard it a million times—but we have to have globally competitive producers in agriculture and in all our other sectors, and we are going to get one huge competitive advantage that we don't even have to share with Europe as a result of this agreement. As this agreement is implemented, Canada becomes the only major economy in the world that will have free trade access both to the United States and to Europe. That will help Canadian businesses. They will have that many more customers, markets, and so on available to them. It will also help to attract outside investment and other global businesses that are seeking a place to do business.
Canada is a very good place to do business. We have rule of law, stability, and many other advantages. We will have the additional advantage of free access to two of the biggest, richest industrialized economies in the world, and I believe we'll be the only major economy to do that.
So we will be a good place to do business: we will be a more productive economy, with more competitive businesses providing goods and services at better value; we will have more customers for our producers and more market for our exporters; and, as I said, most important of all, we will have more goods and services offering better value and a higher standard of living for all Canadians.
I think this is one of the greatest things that has happened to the Canadian economy, and I think many, many people are eagerly looking forward to its implementation.
Thank you. Je vous remercie.