Thank you very much, Chair.
I look forward to our discussion today.
I'd like to thank the committee for responding positively to my letter requesting to appear before you to update you on the important negotiations under way between Canada and the European Union toward a comprehensive and ambitious trade agreement.
As you know, creating jobs and securing Canada's economic recovery remain the top priority of our government, and expanding trade is a cornerstone of our ambitious pro-trade plan. After all, trade accounts for 60% of our annual GDP, and one in five Canadian jobs is directly or indirectly dependent on trade. That is why broadening and deepening our trading relationships is a key part of our government's strategy to protect and sustain Canada's economic recovery.
That's also why we're moving forward with our ambitious pro-trade plan that will create more opportunities to sell our goods, products, and services to key markets around the world and protect and create more jobs for hardworking Canadian families here at home.
Under the Prime Minister's strong leadership, we've accelerated efforts to expand our trade relationships. Indeed, we've completed trade agreements with nine countries in less than six years. And we're in various stages of negotiations with many, many more. In fact, the WTO itself pointed out that “Canada's considerably expanded FTA agenda marks a departure with its past practice”.
We're proud of this record, because the benefits to Canadian families generated by international trade are clear. When we expand trade, prices for goods and services go down. Wages, salaries, and our standard of living go up, as does our productivity and level of innovation. And critically, businesses are able to hire more workers. In fact, just two weeks ago British Prime Minister David Cameron echoed these same benefits in his speech to Parliament.
Our ongoing negotiations with the EU include what are by far the most significant trade talks for Canada since the historic North American Free Trade Agreement was signed. I thank you for your interest in these negotiations as we move towards the ninth round coming up very soon right here in Ottawa.
I should also acknowledge the great support we've received from municipalities and provincial and territorial premiers across Canada. They recognize, as we do, that the benefits of an agreement would be enormous for Canada. The scoping exercise, which preceded these negotiations, indicated that a Canada-EU free trade agreement would be expected to boost our national economy by $12 billion each year and increase two-way trade by $38 billion, an increase of 20%.
At the level of individual families, essentially at the kitchen table, a free trade agreement with the EU would mean an increase of almost $1,000 in the average Canadian family's income, not to mention the 80,000 new Canadian jobs that are expected to be created. That's like adding the entire workforce of Moncton, Trois-Rivières, Kingston, or Abbotsford to Canada's employment ranks. It would give Canadian workers and businesses preferential access to the single largest goods-importing market in the world—much larger than the U.S., in fact.
We're talking about preferential access to a market with 500 million consumers, giving Canadian businesses a real competitive edge. When we look at specific sectors of our economy, the potential benefits of this agreement become even clearer. In manufacturing, for example, Ontario leads all provinces with over $12 billion in goods exported to the EU. Under this agreement we expect all industrial tariffs will either be removed immediately or be phased out over time. Removing tariffs in such a vital sector will allow Canadian businesses to expand production and hire new workers.
In Atlantic Canada, where potatoes, fish, and seafood are main export sectors to the EU, current tariffs average 11% but are as high as 25% on some products. Under this agreement, Canada is seeking to completely eliminate tariffs on all these products. Again, the benefits to Canadians are real.
In western Canada, the forestry, agricultural, and technology sectors will all benefit from preferential access to the European market.
We know that when Canadian businesses succeed abroad, they create jobs and prosperity right here at home. These are the tangible benefits of this agreement, and they will be felt in communities large and small across Canada.
During the summer, I had the opportunity to visit Nova Scotia and P.E.I. to talk directly with people involved in exporting sectors about the importance of this agreement. Take fish and seafood—as I mentioned, this is a critical sector in both provinces. The EU is the largest import market of fish in the world, valued in excess of $18 billion last year. Just think of the benefits to the hardworking Canadians employed in this sector if we were able to expand their ability to export to this market. In fact, we met with Ian Smith, the chief executive officer of Clearwater, one of the world's leading seafood companies, based out of Bedford, Nova Scotia. Speaking for this major employer of hardworking Canadians, Mr. Smith said:
A trade agreement with the European Union would give businesses on the East Coast a level playing field on which to expand, compete and invest for growth and to benefit workers. We welcome the government's efforts to strengthen the transatlantic ties that make our economies stronger.
In P.E.I., I met with people involved in agrifood exports, which represent about 65% of P.E.I.’s exports. Potatoes are a good example, with worldwide exports of potato products reaching over $52 million a year. However, due to tariffs of as high as 18%, only $2 million of potatoes were shipped to the EU last year. Yet the EU market for potatoes is in the billions of dollars.
I visited Cavendish Farms in New Annan, P.E.I., a huge employer on P.E.I. In fact, it’s one of the biggest employers in the riding of Malpeque, as my colleague Mr. Easter knows well, and one that relies on exporting its products around the world. Cavendish Farms currently exports to the U.S., the Caribbean, Central America, and Asia—but not to the EU. Our government is hoping to change that. In fact, the people at Cavendish Farms told me they've seen a surge in trade with Iceland, a 40% increase as a result of the agreement our government concluded with the European Free Trade Association two years ago--40%. Imagine what a trade agreement with the entire European Union would mean for a company like Cavendish Farms and the workers it employs. Cavendish Farms told me during our visit that the EU opportunity is very significant to them. Just imagine what it would mean if the 40% surge that Cavendish Farms experienced in Iceland were to be replicated across the entire EU zone.
That's what I mean when I say trade is a kitchen table issue. It has a direct impact on people's jobs and how they provide for their families. Trade is key to protecting and strengthening their financial security and stability. That's why I'm pleased by our progress to date and very hopeful that we'll be able to conclude a truly ambitious agreement in the near future.
We've moved forward in several key areas, including goods, services, investment, government procurement, and many others. The negotiating text is well advanced, with a number of chapters closed. We've narrowed down the remaining chapters and isolated the key differences in our negotiating positions. We're actively seeking ways to bridge these last gaps. Let me tell you, the political will to do so is very much there on both sides.
With negotiations making excellent progress, I feel it's vitally important that Canadians understand the great benefits of this agreement and are not misled by those who fearmonger and misrepresent the immense opportunities that a free trade agreement with the EU will open up for Canadians.
Let me also be crystal clear on one point, Mr. Chair. Although there is still much to be discussed and negotiated with the EU, we will only conclude a free trade agreement that is in the best interests of Canadians. As I've made clear to the FCM and to municipal leaders, we're committed to preserving government powers and abilities to regulate. Canadian products, services, and commercial expertise are for sale. Our government's powers and ability to regulate are not. Foreign companies doing business in Canada, as always, must comply with all our laws and regulations.
Mr. Chair, let me conclude with these thoughts.
Free trade has been a powerful engine for Canada's economy. Indeed, it is the lifeblood of our economy. It is a kitchen table issue for Canadians.
In other words, Canadians intuitively understand that their long-term prosperity is inextricably linked to improved trading relationships around the world. History has proven it.
That's why I'm committed to broadening and deepening our trading relationships with emerging markets around the world. In fact, tomorrow I will be departing for China on a trade visit in order to help expand opportunities for Canadian workers and companies in that high-growth market.
Last week, I was in Japan and Indonesia, working to strengthen and expand our trade relationships with those markets. A month ago, I was in Latin America, exploring deeper relationships with that dynamic market.
But what we can't afford--and will not do--is to neglect our relationships with our biggest and most established trading partners: the United States and the European Union. That is why we're continuing to remain focused on broadening and deepening those trade relationships.
As I mentioned earlier, the potential benefits to Canadians under a free trade agreement with the European Union are immense. Canadian businesses, workers, and families in every region of our country will benefit from the tens of thousands of jobs that this agreement will create. The agreement will open up new markets for fish and seafood, potatoes and cherries, forest products and plastics, grains and oilseeds, beef and pork, and many, many other products that have, for the most part, been shut out of the world's largest common market.
Our government clearly understands that trade must be a win-win for both parties. That's why we're consulting broadly with Canadian stakeholders. I've personally spoken to my counterparts in most of the provinces, who have expressed support for an ambitious trade agreement with the EU. I've also consulted with the Federation of Canadian Municipalities, which understands the benefits of an ambitious trade agreement. We've also consulted broadly with key industry stakeholder groups and organizations to ensure their views are taken into account.
Mr. Chair, our government will continue to pursue its ambitious, job-creating, low-tax, pro-trade plan. We know that our plan is working, having created close to 600,000 new jobs since July of 2009. We will keep Canada's economy heading in the right direction, ensuring the long-term prosperity of all Canadians.
Thank you. I look forward to your questions.