International Trade Committee on Dec. 1st, 2016

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Peterson.

That ends our first round. We're going to start the second round with the Liberals.

Madam Lapointe, you have the floor.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Chair.

I thank the witnesses for being here.

Earlier, you said that the chambers of commerce were very active with regard to the Free Trade Agreement between Canada and Ukraine. Earlier, our chair said that fish and coal markets were very important.

My colleague Ms. Ramsey asked which sectors could benefit from the Free Trade Agreement between Canada and Ukraine. In what other sectors could there be good opportunities for Canadian businesses?

[Marvin Hildebrand]

Thank you for the question.

We could answer that in relation to three categories: agriculture, fish and seafood, and industrial goods.

I mentioned a couple already in agriculture. I mentioned wine. Our largest agricultural export to Ukraine is pork, and we will have duty-free access from day one for pork, both fresh and frozen. There's also maple syrup, maple sugar, and pulses, principally from western Canada. Canola oil is currently subject to a tariff. Things like pet food, animal feed, frozen french fries, and other processed foods are some of the main agricultural products that stand to benefit and will be subject to a duty-free treatment.

In the case of fish and seafood, mackerel, caviar substitutes, and a range of other frozen fish will benefit. Also benefiting will be industrial goods such as automotive tires, plastics of various types, articles made of asphalt, and various watercraft. I mentioned surveying instruments earlier, and other articles of iron and steel, such as reservoir tanks, as well as actual iron and steel, all of which are currently subject to tariffs.

I should also mention electrical machinery, non-electrical machinery, tools—particularly metal tools—and various consumer products, such as cosmetics. These are products that Canada exports a fair amount of, and they will all benefit from duty-free treatment.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you. This will be useful when I go back to my riding. I will be able to tell the SMEs which ones could benefit from some advantages.

In my riding, there are a lot of maple product producers. This could open doors for them.

Do you think the SMEs know that a market is going to open up and that there will be no tariff barriers?

Do you think the government is ready to help them prepare to export their products?

[Marvin Hildebrand]

That's a very good question. The short answer to your question, I would say, is that there is a growing awareness of the deal. The conclusion of negotiations was announced, the agreement was signed one year later, and now it's going through a parliamentary process in Canada—and in Ukraine, for that matter.

Yes, we are working with industry associations. As you know, given the thousands and thousands of SMEs in Canada, we have to rely on industry associations to some degree to be able to help us get the message out to individual companies, but it's an area of growing emphasis for Global Affairs. We recognize that unlike very large corporations, many SMEs have limited resources for certain activities and limited ability to pursue certain things. We want to do all we can through the trade commissioner service, which operates within Canada across a network of regional offices as well as abroad.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

You spoke earlier about wine. Asians like sweet wine.

Do the people of Ukraine consume wine like the wines we produce here?

[Marvin Hildebrand]

Ice wine is a specialty product, as you know, and it will benefit from this deal. It will be duty-free like all of the other kinds of wines.

Ice wine is produced in fairly limited quantities because of the nature of the product. I think it's in fairly high demand, and I know that some of that demand is in Ukraine. We look forward to seeing how much it grows over time.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you very much.

[The Chair, Liberal, Mark Eyking]

We're going to go to the Conservatives now.

Mr. Ritz, you have the floor.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you for your presentations today, ladies and gentlemen.

Saskatchewan has a large Ukrainian presence, and they look at this as a family reunification trade deal from that perspective. They're also quite happy that from a geopolitical perspective, this draws Ukraine west as opposed to sliding east.

Mr. Hildebrand, in your presentation you talked about dollars allocated for implementation. Do you have a number in mind? Is this only for Canadian implementation, or are we covering some of the Ukrainian costs too, to make it a little more enticing?

[Marvin Hildebrand]

The legislation only provides for paying for Canada's share of the costs. In fact, I would say that a large majority of those costs are anticipatory, because, for example, some of them pertain to the possibility of formal dispute settlement. Well, we don't foresee that happening anytime soon, and—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

At least not for the first seven years, as we implement.

[Marvin Hildebrand]

In terms of the establishment of the commission, a lot of the expenses would be covered through existing budgets and so on.

In answer to your question, I don't have a number, but a lot of it is—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

But it would be across government. There would be agricultural dollars. There would be dollars from different departments.

[Marvin Hildebrand]

Right.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Okay.

I have one other question, and then I'll turn it over to Mr. Van Kesteren to finish off.

You talked about the trade commissioner service looking at Ukraine and helping SMEs and so on. Is EDC now prioritizing the Ukrainian market? If EDC isn't there to backstop them, then it's very difficult for cattle, livestock genetics, crop genetics, and all of these people to be able to actually trade and feel comfortable about doing that. Is EDC getting a message that this is now a priority market in the developmental phase?

[Marvin Hildebrand]

I can't really comment on the extent to how exactly they're prioritizing it. I know that they're active in that part of the world. They serve Ukraine from another office in a nearby country, and—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

That's part of the point. If you're serving it from a nearby country, it's not like your boots are on the ground and you're actually paying 100% attention.

[Marvin Hildebrand]

As I said, I think we all know that they're focusing on the opportunities there. I can't speak to their specific programs and how that stacks up with other opportunities in the region.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Those are questions for another day.

Thank you.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Chair.

Thank you for coming.

I had the opportunity to travel to Ukraine with the Department of Foreign Affairs a number of years ago, as a matter of fact. I was quite shocked to see the connection still—and I want to go in the same vein as Mr. Ritz was going—with the diaspora here, which is remarkable. In some instances they were teaching the Ukrainians some of their older customs that they'd maintained here. When I think about trade deals, and this has been something that has been a revolving theme, oftentimes it's the unintended consequences. Usually those are quite good. Sometimes they're negative, but usually they're positive.

When I think about that huge diaspora that is so connected to Ukraine, my first question would be, how engaged are they? Second, do you see some other avenue? You've mentioned where we're strong and where most of the trade is going to be, but could that possibly spill over into other trade facilitations and agreements, or just trade in general, because of the diaspora?

[Marvin Hildebrand]

In terms of the level of interest, I think a good indicator of that is the large event that was held in Toronto in June. There were hundreds and hundreds of people there from both countries, and I think the results exceeded expectations on some level. There were senior political figures at that event from both countries. The Prime Minister was there, and ministers from the Ukraine. There was a very significant presence and display of interest in this deal and in the prospects for deepening the bilateral relationship.

I myself was asked to speak to a gathering of the Canada-Ukraine Chamber of Commerce earlier this year, so I think there are multiple indications and expressions of interest that suggest there will be a lot of traction and a lot of effort and emphasis to take advantage of this deal once it's in place.

[The Chair, Liberal, Mark Eyking]

Thank you, sir. That wraps up the time.

We'll go over to the Liberals.

I see Madam Lockhart is here, from Fundy Royal. It's good to have another New Brunswicker at the table. It's good to see you here.

My understanding is you have a question.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Yes, thank you.

[The Chair, Liberal, Mark Eyking]

Okay, you have the floor. Go ahead.