Mr. Speaker, I am indeed rising to speak on the speech from the throne specifically with regard to the area of which I have jurisdiction as minister, the area of international trade.
Expanding trade is not a matter of choice for Canadians. With a relatively small population we simply must find markets beyond our own. This is a challenge which Canadians are taking on with tenacity and success. Exports have been growing at an unprecedented rate and now represent nearly 37 per cent of our gross domestic product compared to 24 per cent in 1991. One in three jobs in Canada now depends on exports. That is one in three.
The final figures have just come in on our merchandise trade and I am delighted to announce today that it now stands at a record surplus of $28 billion. This record surplus smashes the previous record of $20 billion that was set back in 1984.
Significantly much of this export growth is taking place in value added sectors which means that we are no longer simply exporting raw materials for others to refine and then sell back to us at increased prices. This is good news for the long term economic prospects of Canadians.
It is also encouraging to note that while the United States remains by far our largest trading partner, there has also been a significant increase in our exports to other major markets around the world. Our trade is growing. Our exports are diversifying and our markets are expanding.
What accounts for this phenomenal success? There are three main reasons. First, of course the lower Canadian dollar has made
it easier for Canadians to sell their goods and services in international markets. But that is not the full story.
Second, we must also recognize the role played by our success in liberalizing trade, in opening up these markets around the world through the World Trade Organization and through the North American Free Trade Agreement. By levelling the playing field for Canadian firms our trade policy successes have allowed many seasoned exporters to take on new markets. It has also meant that many Canadian businesses have begun to export for the very first time.
Third, our exports have soared because of the initiative and the imagination of individual Canadians and individual Canadian companies which have found ways to compete and to compete profitably in the global marketplace. They are the authors of their own success and their achievements are benefiting all of us in Canada.
The successes of the past impose upon us the responsibility to maintain and exceed that performance in the future. If we are to continue to offer quality jobs to Canadians, we must continue to set our sights higher and we are doing just that.
Last October my predecessor as Minister for International Trade challenged Canadians to double the number of active exporters by the year 2000. This is indeed an ambitious goal, but consider the potential of it.
Relatively few Canadian companies are currently exporting. In fact 50 firms alone account for half of the exports of this country. There is lots of margin for improvement. To expand exports we need to dramatically increase the number of companies exporting and encourage current exporters to expand into new markets.
There is also the other side of the coin. Just as Canada must increase its exports to others, so too must we attract quality, technology rich, foreign, direct investment to this country because more than one job in ten and more than half of Canada's exports are directly due to international investment in Canada. Companies which invest in this country end up carrying much of the exports into other countries.
Foreign investment brings us the latest technology and helps our subsidiaries compete in world markets.
All regions of Canada benefit from such investments. For example, Stora of Sweden recently announced the construction of a new $650 million pulp and paper facility in Nova Scotia, creating 300 new jobs. The Montreal subsidiary of Ericsson Communications also of Sweden is providing 700 jobs for Canadian engineers and technicians. The recently announced expansions of Toyota and Honda in Ontario mean 2,200 new jobs for Canadians. The recent decisions by Merck-Frosst mean 200 new jobs for research scientists in British Columbia and Quebec.
These are large numbers but behind each one is an individual Canadian who is granted the dignity of holding a job, of paying his or her own way and who can begin to dream that their tomorrows will be brighter than their yesterdays. This is what foreign investment really means.
We know that the competition for such foreign investment is keen so we must be both aggressive and strategic in our efforts to attract and retain it in Canada. We have the best country in the world in which to invest and we need to continue to get that message out.
It is absolutely essential to offer foreign investors an investment climate that is second to none. That is why the government remains committed to deficit reduction. That is why we are working to eliminate regulatory burdens, barriers to interprovincial trade and to end disputes and regulations which restrict the flow of business and business people.
If, as it has been often said, trade is the lifeblood of our economic prosperity, then access is its arteries. The free circulation of goods is essential to our economic health. Our government will continue to open new markets and create new opportunities for Canadian companies.
To ensure the continued development of our trade, this government has identified three key priorities. The first is to effectively manage our most important trading relationship, that with the United States. The second is to liberalize trade around the world based on clear rules and level playing fields. To this end we are working through the World Trade Organization and the North American Free Trade Agreement. The third is to ensure that Canadian companies realize the benefits presented by the global marketplace. This means championing Canadian companies abroad, helping companies find new markets, assisting with financing where appropriate and attracting new investment to Canada.
These priorities were not pulled out of thin air. They are the result of extensive consultations with Canadian industry and with our provincial partners. We will continue in this collaborative manner as we proceed to implement these priorities.
It should come as no surprise that our trading relationship with the United States should be our first priority. After all, 82 per cent of our exports go to that country. In fact, two-way trade between Canada and the United States is a billion dollars every single day going both ways. It is the biggest trading relationship for both of our countries. It is the biggest trading relationship that exists in the world and one on which tens of thousands of jobs depend. It is also one in which, in spite of the headlines that show the controversies and issues in a number of areas, more than 95 per cent of that trade
with the United States goes across the borders harassment free, without any difficulties whatsoever. The relationship is a strong one.
The relatively stable and predictable trade environment that has been created by NAFTA and the WTO has certainly improved conditions a lot. It has encouraged an enormous expansion of this trade and trade in other parts of the world. Our exports have risen by 90 per cent over the last nine years under NAFTA and its earlier FTA.
Over time we have been able to bring more and more of the bilateral trade relationship with the U.S. within the scope of agreed on trade rules. It is not perfect yet and we have still a way to go, but we are getting more of it based on rules.
For example, we will continue to be making the case that anti-dump and countervail laws have no place in a free trade area. While we have not yet convinced the United States of this, we will keep working toward it. We will keep working toward a bilateral trading relationship free of such trade remedy laws. This will be a key objective as we work to expand and tighten the rules in NAFTA.
These principles of rule based trade and freedom from countervail also animate our approach in other multilateral and regional fora such as the WTO and the Asia Pacific. With our partners in the WTO we aim to avoid the hub and spoke approach to trade policies, ensure the development of fair rules and obligations, and demonstrate the benefits of participating in the WTO.
We are also engaged in regional liberalization discussions where these are deemed important to Canadian interests. They include the negotiation by the year 2005 of a free trade area of the Americas. They also include participation in Asia and through APEC in efforts to pursue a Canada-European action plan and do some of the discussions jointly with the United States in a trilateral consultation.
Bilaterally we are close to concluding a free trade agreement with Israel. We are now negotiating a free trade agreement with Chile which will act as a bridge toward the eventual accession of that country into the North American free trade agreement.
With all of these efforts and initiatives we have tried to establish the access to foreign markets which Canadian companies need. Access is only half the battle. Canadian companies must be made aware of the opportunities available to them. They must be supported in their efforts to create beach heads in these new markets. The benefits of investing in Canada must be communicated to foreign investors.
In all of these areas the government is taking action. Canadians are well aware of the Prime Minister's highly successful Team Canada missions abroad. The latest mission to Southeast Asia underlined the merits of the united approach, leading to some $9 billion in new contracts for Canadian firms. This is on top of the $13 billion generated by two previous Team Canada missions.
The government has no intention of stopping there and, as indicated in the speech from the throne, the Prime Minister will lead more such missions in the future. When we look at the fact that for every billion dollars in new trade and exports we create 11,000 jobs for Canadians, that $20 billion has produced tens of thousands of jobs in our economy.
These missions show how much Canadians can achieve when we work together as a Team Canada. Now we must borrow the same approach at home in order to increase the number of companies trading abroad. To this end we have built a domestic Team Canada in partnership with relevant federal departments and agencies, the provinces and the private sector. Its mission is to help existing exporters find new markets, and to ensure that all Canadian exporters have access to the best possible market intelligence about these world markets.
Over the next three months all of the partners at the federal level in the provinces and the private sector will be determining what sectors and what markets we should be keying in on. Where do we focus? Where do we set our priorities?
Team Canada's task will be to identify, prepare and assist companies with export potential, develop their interest in foreign markets, help them gain access to all export assistance programs, and facilitate their export involvement. We are becoming much more proactive than ever before.
It is more important than ever that we commit our resources where they will have the greatest impact. Certainly in our economy exports have had an enormous impact in creating jobs and growth. That is why our direct funding assistance for international business development is now limited and will be focusing on small or medium size companies in which a lot of the growth and jobs can take place.
We also recognize the vital role played by our trade commissioners in all this. In 107 trade posts throughout the world these commissioners provide Canadian entrepreneurs with business leads, introductions to buyers and partners in foreign markets as well as with timely, strategic advice on markets and how best to tap into them.
We must support and strengthen our trade commissioners by enhancing their client focus and by providing means of monitoring client satisfaction.
The final ingredient of export success is access to competitive export financing. This often determines whether a firm can export or not. In times of diminishing resources, when governments can no longer afford to provide all the funding they would like to or
which companies may feel they need, we need to become more creative and imaginative in our approach.
The old ways of the old days when export orders were purchased with highly subsidized export financing must give way to new forms of risk sharing with the private sector.
We understand these new realities and we will work through the Export Development Corporation, the EDC, to expand the export finance system by leveraging public and private sector resources in new and innovative ways.
We will also look at ways to encourage Canadian financial institutions to become more involved in export financing. Some of the banks have already begun to develop strong relationships with EDC. We want to see these relationships grow with true risk sharing partnerships.
As we approach the 21st century our reputation as a trading power is well established and will continue to grow because Canadians have demonstrated their ability to take on the world and win. As a government our role is to solidify the gains we have made, to open new markets to Canadian enterprises, to encourage more Canadian companies to sell abroad, to be more proactive in how we help them and to continue to market Canada as a wonderful place to invest.
Our prosperity as a nation is always dependent on trade. In earlier days in other ways we met the challenges that faced us. I am confident we will again rise to the occasion. Our recent trade performance, as I have talked about it here this morning, has indicated that we can achieve when Canadians work together, when Canadian work in unison, when Canadians work as a team.
I am convinced these successes will pale with the achievements that are still to come.