Madam Speaker, I am pleased to rise in the House today to debate the motion. I note that NDP members have taken some latitude in their comments. I would like to take the same latitude, address some of their comments and then debate more directly the motion that is before us today.
I challenge the leader of the NDP to give me one example of a more open and transparent trade negotiation than the one Canada has been involved in. She ducked the question.
The very same question was put to the trade critic for the NDP by the Minister for International Trade not long ago in committee. The member for Burnaby—Douglas also ducked the question. Members of the NDP are very good at ducking questions that they do not have answers for when they relate to trade or anything else.
The trade critic for the NDP who spoke before me made the point that we have not yet made our position known on investment because we do not have a position. The reality is that the Liberal Party and the government believe in consulting with Canadians on important issues before we announce our position. Unlike the NDP we are not tied to a rigid straitjacket of left wing ideology, which is the reason we see so few of them in the House of Commons following the last election.
I welcome during questions and comments somebody in the NDP telling us when there has been a more open and transparent trade negotiation. I rather doubt anyone could. The trade critic and the leader could not do it. I would like their whole caucus to reflect on it. Maybe those members could come up with something other than utter silence.
I would now like to speak about a subject which is often overlooked in the debate that refers directly to the motion. It is the vital role investment plays in the Canadian economy. There is no doubt that foreign direct investment in Canada and Canadian direct investment abroad have joined international trade in goods and services to become our principal engines of growth and job creation.
Foreign direct investment helps ensure that Canadian firms have the capital they need to succeed and grow in the highly competitive global economy. We know that investment creates jobs, spurs innovation and provides Canadians with access to the capital and expertise that make our country stronger. Canadian direct investment abroad is equally important. It helps Canadian firms establish a presence in key foreign markets, to share Canadian expertise and values, and to export goods and services to key markets.
I should like to share some recent statistics that help to paint a clear picture of the situation. In 2000 the stock of foreign direct investment in Canada reached a record $291 billion. At the same time Canadian direct investment abroad increased to an all time high of $301 billion in 2000 and exceeded foreign direct investment in Canada for the fifth year in a row.
Traditionally Canada has been viewed as a net recipient of foreign direct investment. Many people do not realize that Canada is a strong and vital net exporter of foreign direct investment.
Foreign investment in Canada has over the years been an important source for jobs, especially high skilled and high value added jobs. Foreign investment in Canada has brought with it advantages in research and development, technology and talented people, which have all made real and lasting contributions to our economic and social well-being.
An economic forecast prepared by Industry Canada and the Department of Foreign Affairs and International Trade estimates that each $1 billion increase in new inward investment to Canada could generated up to 45,000 jobs and $4.5 billion in GDP over a five year period. The study also postulates that one job in ten and approximately 50% of Canada's total exports are derived from foreign direct investment.
It should be noted further that a large proportion of profits from new investments is reinvested in Canada, contributing to a higher growth rate and a rise in Canadian living standards.
Canada has an affluent domestic market, a highly skilled and well educated labour force, efficient transportation systems and a telecommunications infrastructure which is the envy of the world. The Canadian private sector is competitive and knowledge intensive, whether in telecommunications, biotechnology or computer software. In encryption capabilities, medical devices, pharmaceuticals and ocean technologies Canadian firms lead the way.
Our excellent health care and education systems are cornerstones to our high quality of life. Canada remains an attractive location for foreign investment.
These Canadian advantages have not been gained by compromising our overriding economic and social values. Foreign investors in Canada are subject to the same laws and regulations as our Canadian investors, including those aimed at protecting the environment and those ensuring the highest labour, health, building and safety standards. We should not forget that creating prosperity and wealth in Canada is a necessary first step.
We have progressive social policies to utilize that wealth to create a healthy and educated society. This is an element that the NDP leaves out. It wants to redistribute wealth but does not want to focus on wealth creation as a precondition. Hence the ideological straitjacket that I mentioned at the start of my remarks which is shared by few Canadians.
Investment is not a one way street. One of the most significant features of Canada's recent economic history has been the rapid growth of Canadian investment abroad. The value of this investment has increased by fivefold between 1985 and 2000 from $57.2 billion to $301 billion. In 2000 and for the fifth consecutive year direct investment abroad by Canadians overtook foreign investment in Canada. That is an outstanding performance.
Direct investment abroad by Canadian industry is part of its strategic effort to increase market share and stay competitive in foreign markets. Firms are increasingly using outward investment to strengthen their operations, penetrate new markets and acquire new technologies, resources and skills. Evidence suggests that this type of investment does not precipitate an export of jobs but rather results in increased sales and production from home facilities.
A recent study by the OECD found that on average every $1 of investment is followed by $2 of exports. It all adds up to jobs and opportunities for Canadians. The growth of Canadian foreign direct investment abroad has led to an increase in exports. This has directly affected Canada's economic health.
These investments create opportunities for Canadians by giving Canadian firms new markets to extend their businesses through exports and through local sales. Canadian direct investment abroad often secures new customers and creates sales in new markets. In addition, it provides much needed capital infusion in growing economies.
When Canadians invest abroad we also bring our values together with the products we export. Additional research has shown that the growth of productivity and profits of Canadian firms involved in global markets has been superior to the performance of domestically oriented firms. We have also seen that income from Canada's outward foreign direct investments increase during recent years helping to improve our standard of living.
The motion is not founded on fact. The Minister for International Trade has been repeatedly very clear in the House of Commons, in committee and in the media that the Government of Canada does not seek to scrap or reopen chapter 11 of NAFTA but seeks to clarify it.
It seeks to have adjudicating bodies more accurately respect the intentions of the NAFTA partners when they signed this clause. Points of clarification are very important. The minister has made that clear. However he has repeatedly said that there is no need or interest in scrapping or reopening such a clause because there has to be balance and sensible protection for investment in Canada and for Canadian investment abroad.
The motion is devious in that it seeks to contrast the NDP's interpretation of what the minister said with what the Prime Minister said. That will not hold water or bear scrutiny.
The reality is that chapter 11 of NAFTA is working reasonably well when put in the context of the enormous volume of trade that we do with our NAFTA partners, especially the United States with whom we have a two way trade daily of $1.3 billion.
In that context the clause is working relatively well. However we would like to see further clarification and tightening up of the clause in how it has been interpreted by adjudicating panels.
It is interesting to listen to the rhetoric of NDP members. They love to use the word rhetoric but do not like it applied to themselves. I eagerly await an answer to the question they have continually ducked about a more transparent trade negotiation.
It was fascinating to sit in the House a few short weeks ago and watch NDP members grind their teeth as the labour prime minister of the United Kingdom, Tony Blair, said very bluntly that no matter how well intentioned critics of freer trade may be they cannot be allowed to stand in the way of logic. He said the best thing we could do for our own nations and for poorer nations was to globalize and liberalize trade.
NDP members dismiss Tony Blair as a labour leader who is out of touch.