Thank you, Mr. Chair.
Thank you, Mr. Chair.
This is my first appearance at this committee as minister, and I appreciate this opportunity.
I would also like to acknowledge the committee members here today, those from all parties, for their important work on trade issues.
Our government believes that free trade is the lifeblood of our economy. It of course represents fully two-thirds of our gross domestic product, so you really can't talk about the Canadian economy or economic recovery without talking about trade. That's why our government is putting such a strong emphasis on freer trade, an aggressive free trade agenda that will create jobs and foster economic growth.
Our government will continue to promote competition and provide more choice for Canadians during this time of fragile economic recovery. As the global economy continues to recover, one thing is clear: free trade and not protectionism is the key to long-term prosperity for Canadian workers.
Our government is eliminating tariffs for our manufacturers to get the machinery, equipment, and inputs they need to stay competitive. It includes a number of important free trade negotiations as well, including with the European Union, the most significant free trade initiative since the North American Free Trade Agreement.
But you cannot talk about trade in Canada without also talking about trade with the United States, our number one trading partner anywhere, by far, and a partner in supply chains for a number of key industries.
As this committee knows, our two economies are deeply interconnected. We are both stronger and more prosperous because of these strong links. Hundreds of thousands of jobs on both sides of the border depend on the free flow of goods, products, and services across our border every day.
Before the United States' recovery act took effect, our two nations enjoyed a relatively open trade in government procurement at the sub-federal level. Canadian suppliers have always been top notch competitors in the United States, going head to head with the competition in a number of sectors and winning. The result was a strong and unbroken continental supply chain. The Buy American provisions of the recovery act changed that. Those chains faced strains and breaks.
In our view, it made no sense for the United States to close its doors to Canadian suppliers for its government-procurement needs—especially at a time when our economies were struggling to recover. After all, in a time of recovery, it is essential to sharpen your competitive advantages. For Canada and for the United States, our bilateral commercial relationship—the largest of its kind in the world—is perhaps the biggest competitive advantage we have.
It came as no surprise that businesses on both sides of the border, as well as the provinces and territories and a number of state governments, called for an exemption for Canada from the Buy American rules in the act. The deal we negotiated is a big victory for Canadian companies and workers who rely on access to the American market today and in the future.
There are three parts to the deal. The first part of the agreement exempts Canadian firms and Canadian goods from the Buy American provisions applied to infrastructure projects funded by the recovery act. The waiver that Canada obtained is applicable in all 50 states, and we're confident it will mean jobs for Canadians in the months ahead. With stimulus funds under the recovery act available until the end of next September, significant opportunities remain for Canadian firms to participate in infrastructure projects being funded under the act in major American states.
The second element of the agreement is via the World Trade Organization's Agreement on Government Procurement. It provides permanent reciprocal access to sub-federal procurement for both countries. This will allow Canadian companies to compete in the U.S. market and will create jobs and prosperity for Canadians for years to come. This access means more wins for Canadian companies and more opportunities for Canadian workers.
The third element of the agreement is what I call future considerations, and there are two aspects to that. The first is a provision that should we face similar Buy American provisions in subsequent legislation, there is a commitment to have fast-tracked consultations within 10 days of a request whereby we could explore solutions similar to those in the existing Buy American agreement. The second element is a commitment between Canada and the United States to enter into negotiations this calendar year for a deeper and more profound long-term agreement on government procurement.
We think that Canadian workers and businesses can compete with the best in the world, whether on projects here at home, or in global markets like the US. They can win against the toughest competition. This agreement will help them.
Our embassy in Washington, D.C., and our consulates throughout the United States are now actively informing local governments and American contracting and distribution firms that Canadian companies can bid on contracts covered by this agreement. Our officials posted throughout the United States are constantly working to help Canadian companies tap into these opportunities. Thus, over both the short and the long terms, this is an important win for Canada.
In return, Canada is offering American firms temporary access to procurement contracts valued above $8.5 million of Canadian municipalities, some provincial crown corporations, and provincial agencies.
There are no negative measures here. The alternative was a protracted trade war of escalating protectionist measures. A war like that would end up costing jobs and hurting both economies, and I'm sure you would agree today that is the last thing Canada would need at a time like this.
l am happy to say that the provinces and territories feel the same way: they support the agreement. Major Canadian industry groups representing millions of Canadian workers support it, too. They understand that protracted trade wars do not create jobs and prosperity.
Canada's history, and certainly our experience with the United States, has been that jobs and prosperity are created by freer trade, not protectionism. That's why our government stood up for Canadian businesses and workers and negotiated this agreement. We are thinking about Canada's long-term game. We are thinking beyond emotional and shortsighted policies and the potential for retaliation. We are thinking about the potential for growth, and that is why we're moving forward on an ambitious trade agenda that will open more doors for our businesses, workers, and investors in the years to come.
I look forward to working with the members of this committee to do that and help create a more prosperous and competitive Canada for the future.
Thank you, and I look forward to any questions you might have.
