Evidence of meeting #9 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was businesses.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Ms. Christine Lafrance

11:05 a.m.

Liberal

The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)) Liberal Judy Sgro

I am calling the meeting to order.

Welcome to meeting number nine of the House of Commons Standing Committee on International Trade.

Today's meeting is taking place in a hybrid format, pursuant to the House Order of September 23. The proceedings are available via the House of Commons website.

To ensure an orderly meeting, I would like to outline a few rules. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either the floor, English or French.

For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.

Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When you are not speaking, your mike should be on mute.

Pursuant to Standing Order 108(2), the committee will now proceed with the study of trade between Canada and the United Kingdom and a potential transitional trade agreement.

We welcome as our witnesses today, the Honourable Mary Ng, member of Parliament, Minister of Small Business, Export Promotion and International Trade; as well as Steve Verheul, the chief negotiator and assistant deputy minister, trade policy and negotiations; and Doug Forsyth, chief negotiator for the Canada-United Kingdom Transitional Trade Agreement.

Welcome to you all.

Minister Ng, a special welcome to you today. I will turn the floor over to you, Minister.

11:05 a.m.

Markham—Thornhill Ontario

Liberal

Mary Ng LiberalMinister of Small Business

Thank you very much, Madam Chair and honourable members, for the invitation to appear before the House Standing Committee on International Trade to provide an update on the Canada-U.K. trade dialogue, based on the Canada-EU Comprehensive Economic and Trade Agreement, or CETA.

Our government remains committed to supporting Canadian businesses through economic recovery and beyond.

That is why I was happy to announce on November 21, alongside the Prime Minister and our British counterparts, that we have successfully concluded negotiations on the Canada-U.K. Trade Continuity Agreement.

The U.K. is our fifth-largest trading partner globally. In 2019, two-way merchandise trade with the U.K. amounted to $29 billion. This meant opportunities for our businesses and thousands of good jobs for people in both countries.

This agreement ensures Canada and the U.K. can sustain—and build upon—that relationship by preserving the main benefits of CETA.

More importantly, as it is based on CETA, an agreement Canadians are already familiar with, it provides continuity, predictability and stability for Canadian businesses, exporters, workers and consumers, which is more important than ever as we grapple with COVID-19.

Once the agreement is fully implemented, it will preserve CETA's tariff elimination on 98% of Canadian products exported to the U.K.;

fully protect Canadian producers of all supply-managed products;

maintain priority access for Canadian service suppliers, including access to the U.K. government's procurement market, which is estimated to be worth approximately $118 billion annually; continue to balance investor protections with Canada's right to regulate in the public interest; and finally uphold and preserve CETA's high-standard provisions on issues like women, small businesses, the environment and labour.

Canadian businesses have told us that what they want most at this time is stability, and this agreement would provide that.

Of course, we look forward to working towards a new comprehensive bilateral free trade agreement with the U.K. that best serves Canada's interests over the long term, including through strong provisions on women, the environment, small businesses and the importance of digital trade.

And we will continue to seek Canadians' views to ensure that post-Brexit negotiations and agreements with the U.K. continue to reflect Canada's interests.

Before I go any further, allow me to elaborate on how this continuity agreement between Canada and U.K. came to be and why preserving preferential access to the U.K. is a key priority for our government.

When the U.K. decided to leave the EU single market, customs union and free trade area, that decision drastically affected the U.K.'s trade and economic relations with its largest trading partner, the EU, as well as with Canada, of course.

I need not remind you that once the Brexit transition period ends on December 31, the country will no longer be party to CETA.

While we continue to closely monitor developments in the Brexit process to see how Canadian interests might be affected, we also realize that it is in Canada's best interests to conclude a stable, mutually beneficial continuity agreement with the U.K. that serves to mitigate Brexit uncertainty.

That is why we have been working on a smooth transition and a path to follow for the future between our two countries.

I know that many of you are wondering why we did not conclude this agreement earlier. Allow me to explain how we got here.

When Prime Minister Trudeau and then-U.K. Prime Minister May met in September 2017 to discuss ways to strengthen our bilateral relations following the U.K.’s decision to leave the EU, both pledged to make the transition as seamless as possible and sought to preserve CETA’s preferential trade agreements. Although the U.K. was still a party to CETA and therefore not able to undertake new international trade negotiations, preliminary discussions began regarding converting the terms of CETA to a bilateral agreement.

If members recall, at that time there was still much uncertainty surrounding whether the U.K. and the EU would reach an agreement on the U.K.’s departure, or whether the U.K. Parliament might reverse the course of Brexit. At times we were close to arriving at a deal, but the ever-changing circumstances of the U.K.'s exit from the EU made it virtually impossible to conclude a deal that would be in the best interests of Canada. Canada even had to pause negotiations when the U.K. abruptly announced a new tariff rate schedule that would have wiped out any benefit Canada would gain from a trade deal with the U.K.

Then in June of this year the U.K. announced its decision not to seek an extension to the Brexit transition period.

It was in this spirit that Secretary Truss and I reopened negotiations and committed to concluding a trade continuity agreement to provide certainty for our businesses.

As we approach the end of the U.K.'s participation in CETA, the successful conclusion of this agreement goes a long way to minimizing disruptions for Canadian businesses at this critical time.

That is why negotiators are working diligently to finalize the legal texts in both official languages.

It’s also why preparations are under way to seek the government’s approval for signature of the trade continuity agreement on an expedited basis so that Parliament may consider the bill.

Lastly, it is why we are also preparing for all scenarios, including mitigating measures that would ensure business flows are not temporarily disrupted under any circumstances in the event that Parliament is not in a position to pass implementing legislation before the end of 2020.

Throughout this process, Canada has continued and will continue to support Canadian companies doing business with and in the U.K. and the EU through what I call the team Canada approach to trade.

This is critical to Canada's economic recovery and future prosperity.

That is the message I will carry with me later this week as I begin a series of events to mark CETA's third anniversary and engage with Canadian businesses to learn more about their concerns, interests and priorities, as well as opportunities for growth.

Madam Chair, let me conclude by saying that the trade continuity agreement with the U.K. is good for Canadians and for the people of the U.K.

It is good for the strong, mutually beneficial relationship that our nations have built over more than 150 years. While CETA will continue to govern Canada-EU trade, this continuity agreement will continue to provide the predictability and remove uncertainty for Canadian businesses doing business with and in the U.K.

I would note that I was happy to speak with my critics from each party this past week on this important topic. I look forward to working with them and with my colleagues on all sides of the House to ensure a smooth transition in the Canada-U.K. trade relations in the coming weeks and a better outcome for Canadians in the months and years to come.

Thank you, everyone.

I look forward to your questions and our discussion.

Thank you, Madam Chair.

11:15 a.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much.

We go to Ms. Gray for six minutes.

11:15 a.m.

Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

Thank you, Madam Chair, and thank you, Minister, for being here with us today.

Minister, last week we learned that it might take two to four weeks before the text of this agreement is finalized. When is this planned to be released?

11:15 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

Thank you so much, MP Gray. It really is terrific to speak to you and to see you today and to have spoken to you last week.

Our officials on both sides in the U.K. and Canada are finalizing the review of the legal text. I will follow the necessary cabinet and parliamentary processes, but know that it is my absolute commitment to make sure that I get this to you and to all of my colleagues as soon a possible.

11:15 a.m.

Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

If you don't have an exact date, what is the estimated date that you're working towards?

11:15 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

We're working very quickly now on both sides to finalize the text. Our hope is to do the introduction before we all go away for the holidays. It is certainly my hope that we get through both the cabinet processes to enable me to provide the information to you and colleagues.

11:15 a.m.

Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

Minister, I understand that you're hoping, but is there a commitment to have this legislation to us before we rise on December 11 and to go through the processes? Is there a commitment to do that or is it just hopeful?

11:15 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

We have an agreement, and that is really positive and good. We have officials working on both sides making sure that the legal text is finalized and accurate. It is certainly my hope that we get this to colleagues, but we want to make sure that that important work and the important process around cabinet and parliamentary process is followed.

It is my commitment to do this as soon as possible, mostly because I know that all of our businesses and Canadians are looking to us to do that work quickly.

11:15 a.m.

Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

Okay, Minister. We heard that this is a rollover of CETA and not a comprehensive agreement, as has been stated by you and the departments. We still don't have a text. If it's a simple rollover, why are we here with eleven Parliamentary sitting days left with no text at the 11th hour?

If it were that simple rollover.... I know you explained some of the historical deadlines, but here we are. If it were that simple, why are we literally here in the 11th hour with no information other than an announcement and no text in front of us?

11:15 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

Madam Chair, to the member's question, it is a replication of CETA. It is still, however, an agreement between Canada and the United Kingdom. We want to be sure that the proper work is done by our extraordinary officials here in Canada and those in the U.K. do that work.

I want to share the elements of what is in this agreement. It protects 98% of our Canadian products being exported to the U.K. It fully protects Canadian producers of all supply-managed sectors. It's going to maintain priority access for Canada to our service suppliers. It's going to uphold the provisions that are high in CETA around access for women and small businesses and the labour and environment protection components.

That work has to be done by our officials and a continuity agreement has been reached. I assure the member that our officials are working as quickly as they can.

11:20 a.m.

Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

Thank you, Minister. That's basically the same information that we had in the announcement about nine days ago. I wanted to ask what tariffs are changing. Are any tariffs changing, and can you give us an example?

11:20 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

There are no tariff changes. This agreement largely preserves what is in CETA for our businesses. I think what's really important here is the predictability this agreement will provide to Canadian businesses.

11:20 a.m.

Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

We learned that Canada and the U.K. are set to go back to negotiating a full agreement within a year. That's to get back to negotiating, and we were just informed by Global Affairs this morning, just hours before this meeting, that there's an aim to complete those discussions within three years. So we are to start the negotiations and then to complete them within three years, and we're now four years out. Are these both written into the agreement?

11:20 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

Yes, the subsequent negotiations provision that commits both Canada and the U.K. to enter into negotiations on a new FTA within a year of this CETA's coming into force is in the agreement. Both parties are seeking to conclude the negotiations of the new FTA within a three-year period.

11:20 a.m.

Liberal

The Chair Liberal Judy Sgro

Make it a short question, Mrs. Gray.

11:20 a.m.

Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

Is that binding?

11:20 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

It will be in the agreement that we will enter within a year and that we seek to conclude it within three.

11:20 a.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Mrs. Gray.

On to Mr. Dhaliwal.

11:20 a.m.

Liberal

Sukh Dhaliwal Liberal Surrey—Newton, BC

Thank you, Madam Chair.

I would like to welcome and thank you, Minister Ng, for all of the great work that you do and the outreach that you or your office provide, either directly from you or Rachel. Minister, you mentioned in particular that this trade will include the environment, digital, women and, of course, LGBTQ communities as well. Could you tell us how it will benefit in particular the communities that are concerned with these issues?

11:20 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

Thank you, MP Dhaliwal.

Both the U.K. and Canada are committed to entering into a comprehensive agreement that will maintain the high standards reached in CETA. I might remind colleagues that the high ambitions in CETA around the environment and labour were the first of their kind. This continuity agreement will preserve that. However, going forward, there really is synergy and agreement between Canada and the U.K. on the importance of creating even more opportunities for women entrepreneurs, under-represented groups and also for small businesses. Given the importance of digital trade, we are also going to look at how to ensure that a new agreement includes those provisions as well.

I must say that, in this period leading up to the negotiation of a comprehensive FTA, I'm looking forward—and I think we are all looking forward—to speaking with Canadians and businesses about what is important for them so that we can include their input in those negotiations with the U.K.

11:20 a.m.

Liberal

Sukh Dhaliwal Liberal Surrey—Newton, BC

Thank you.

Over 80% of the businesses in Surrey-Newton, and of course in my colleagues' ridings and across B.C., are small and medium-sized. I would particularly like to know—because those are the businesses that we have to help—how it will happen, what government will do to make sure that it benefits them and how you will make them aware of these members. It's a three-pronged question.

11:25 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

l think it's very important to do that. It is basically fundamental to the mandate I was given by the Prime Minister in this file, as both the small business minister and the international trade minister. It's to ensure that we provide, through trade agreements like this continuity one and all of our trade agreements, opportunities for businesses to grow, particularly for our small and medium-sized businesses to get the benefits of trade and to be able to grow into those markets.

I use a Canada trade or team Canada-type approach where we have many tools in the tool box. It includes the trade commissioner service that helps so many small businesses not only become more ready to export but also helps them when they get in-country. We have a terrific team in the U.K. making sure that businesses get access to capital or the export insurance they need through EDC. Making sure that the resources of government in this Canada trade tool box are completely focused on helping our Canadian businesses start up and scale up in access into those new markets is the commitment of our work.

11:25 a.m.

Liberal

Sukh Dhaliwal Liberal Surrey—Newton, BC

Minister, you mentioned trade commissioners. On the other side you also mentioned digital trade. We have been going through COVID-19 situation for the past few months, and work has changed.

Can you tell us if your trade commissioners have already started implementing digital technologies?

11:25 a.m.

Liberal

Mary Ng Liberal Markham—Thornhill, ON

I was very proud just a couple of weeks ago when I launched the very first ever virtual trade commission. It is to another jurisdiction like South Korea, but we took over 200 businesses virtually into a new market. The trade commissioner service absolutely has adapted their services, and they're going to keep doing that during COVID-19 and beyond. This is going to help businesses do more trade, get access and learn about those opportunities.

I also want to say that our CanExport program has been modified during COVID so that businesses can get access to up to $75,000 to do things like have a greater e-commerce presence so that they take their businesses internationally. They are doing really terrific work, and we will continue to do that to support our small and medium-sized businesses.