It's this issue of reciprocity that leads us to our second area of concern. For us, the idea of trade reciprocity has meant levelling the playing field of global trade with smart and managed trade policies. Trade reciprocity does not mean blindly and needlessly forcing countries to dismantle policies that aim to achieve positive social and economic ends. Trade reciprocity also does not mean abiding by the strictest doctrines of free trade at any cost.
We recognize the importance and near-universal use of domestic purchasing policies, especially in the area of public procurement. Many of our largest trading partners, including the United States, the EU, China, and Japan, which make up 90% of our trade in goods and services, consistently attach domestic content requirements to public purchases. These policies actively promote domestic economic development and also encourage foreign investment. These are also not all knee-jerk reactionary policies to the economic crisis.
Canadian firms competing on the global stage have had to respect these provisions, and they will continue to respect these provisions moving forward. The competitive landscape on this front has changed very little.
New Flyer bus in Winnipeg, for example, Orion bus in Mississauga, or Nova bus in Quebec will still have to respect U.S. content levels whenever a contract is won south of the border. Bombardier, as another example, will still have to utilize its various satellite rolling stock manufacturing plants around the world to comply with domestic content rules. Canadian shipbuilders will be restricted from exporting vessels to foreign markets.
In fact, Canada remains one of the few major world economies that does not actively utilize domestic content policies as economic levers, although there are some exceptions.
Under this deal, there will now be even fewer rules requiring suppliers to maintain a portion of investment in our domestic economy, and we are now stripping the rights of sub-national governments to enact such rules. We risk further exacerbating the decline in our manufacturing base.
We can provide a long list of examples to the committee of opportunities missed by government to ensure that at least a proportion of public procurement dollars flows back to the Canadian economy. The most recent example was Canada Post's decision to purchase nearly 5,000 new light postal vehicles from Turkey. The crown corporation attached no conditions in their procurement to ensure that the use of taxpayer dollars would spur economic activity in Canada.
However, there are also examples of Buy Canadian policies proving effective in leveraging meaningful economic activity in Canada in recent years. The City of Toronto's procurement of new light rail vehicles maintained a 25% Canadian content provision, which ensured Canada would receive a sizable share of the economic benefits associated with this record $1.2-billion public purchase.
In 2008 a cost-benefit analysis of the deal indicated that over 1,000 Canadian jobs would be created if the winning bidder maintained a Canadian manufacturing presence, 10 times the number of jobs created if these railcars were to be imported from offshore. Additionally, the monetary benefits that would flow back into the economy totaled over $400 million, about half the cost of the project itself.
Even more recently, a 60% Canadian content policy attached to subway car purchases in the Province of Quebec, in line with current Buy American provisions for rolling stock purchases, has actually resulted in a major Chinese railcar manufacturer offering to assemble these cars in Canada to comply with the Buy Canadian regulation. This is expected to create between 750 and 1,000 jobs for Canadian workers.
In our estimation, based on these specific examples and with an understanding of the competitive landscape for public procurement, this exemption deal only serves to limit the ability of Canadian governments in equalizing international trade relations and leveling the playing field.
As our provinces and territories must now abide by the rules and regulations of the WTO, it is even more imperative that our federal government take the lead in studying the merits of what a fair and reasonable Buy Canadian domestic content policy would look like for Canada.
We thank you for the opportunity to address the committee.