moved that Bill C-100, An Act to implement the Agreement between Canada, the United States of America and the United Mexican States, be read the second time and referred to a committee.
Mr. Speaker, I want to start by acknowledging that we are meeting on the traditional territory of the Algonquin people.
I am pleased to rise in the House today to support Bill C-100, the new NAFTA implementation act.
Because of its size and geography, Canada has always been a trading nation. Exports are the very bedrock of our economy and account for fully one-third of our GDP. Imports supply our businesses, fuel our production and meet consumers' needs. Naturally, for geographic reasons, a significant proportion of those exports and imports are with our biggest trading partner, the United States.
The vast majority of them cross the border tariff-free because of our North American free trade agreement. The region covered by this North American free trade agreement is now the largest economic region in the world. Together, Canada, the United States and Mexico account for a quarter of the world's GDP, with just 7% of the global population. We exchange goods, services, investment and people in a growing market that now encompasses 486 million consumers and is worth some US$22 trillion.
Every day, more than two billion dollars' worth of trade and investment move back and forth between Canada and the United States. Our continental supply chains have strengthened North America's ability to compete and to succeed in the global marketplace, and we benefit from that strength here in Canada.
This successful trading arrangement was the foundation upon which we built the agreement being debated here today, and I am pleased to be here to speak in support of the new NAFTA.
When the U.S. administration announced that it would seek to renegotiate NAFTA, we saw an opportunity to update, modernize and improve a trade agreement that was already a strong foundation for North American commerce. We knew that in order to be effective, it was critical that we present a united front and speak for all Canadians in our negotiation.
We came to the negotiating table united as a country. Throughout our intense negotiations, we stayed focused on what matters most to Canadians: jobs, growth and expanding the middle class. We knew these priorities were Canadians' priorities because we spoke with Canadians, industry, agriculture and labour across the country. We sought advice and insight across party lines and asked current and former politicians, including many premiers and mayors, for their help in shaping Canada's priorities and in championing them.
Crucially, we created a NAFTA advisory council, which counted among its members former politicians from the NDP and the Conservatives, as well as business leaders, labour leaders, agricultural leaders and indigenous leaders.
I would like to pause here to thank the council for the excellent work it has done and continues to do on behalf of our great country.
I would also like to thank Canadians from all across the country, especially from business, labour, agriculture, politicians of all stripes, premiers and mayors for their hard work on the new NAFTA. This was a true team Canada effort, and I am so proud of the way our whole country approached these sometimes difficult negotiations.
I also want to thank my hon. colleagues throughout this House for their advocacy and insight throughout this process. So many of them have been integral to our work.
Throughout the negotiation, we kept our cool in the face of uncertainty and worked on getting a new agreement that would preserve jobs and market access, and in turn, support the middle class and economic growth. We held firm. We held out for a good deal and that is what we have today.
I would be remiss if I failed to note that a major obstacle remained even after the agreement was signed in Buenos Aires last November: the United States' unjust and illegal section 232 tariffs on Canadian steel and aluminum.
When the United States imposed the tariffs, Canada immediately took retaliatory measures by imposing counter-tariffs. Canada stood its ground, asserting that the tariffs were inappropriate between two countries that not only are key national security allies but also have a free trade agreement. We made that clear to the American administration, members of Congress, union leaders and business leaders south of the border. We also made it clear that it would be very difficult to ratify the new agreement as long as the tariffs remained in place.
On May 17, we succeeded in getting the steel and aluminum tariffs eliminated.
As I said when I recently met with workers in Regina and in Saguenay, here is why we have succeeded in getting those tariffs lifted. We knew the facts were on our side. We knew that Canada did not represent a national security threat to the United States. We knew our trade with the United States in steel is balanced and reciprocal. We stayed united. We were patient. We persevered, and in the end, we prevailed.
Now that the tariffs have been fully lifted, we are ready to move forward with the ratification of the new NAFTA. Our aim was to preserve Canada's preferential access to our largest and closest market, and that is what we achieved. This is essential for our businesses, our entrepreneurs, our farmers, and for the millions of jobs and all the middle-class families across Canada who rely on a strong trade relationship with our neighbour.
We succeeded in preserving key elements of NAFTA, including chapter 19, the all-important dispute settlement mechanism. No trading relationship is ever without irritants. In the case of the Canada-U.S. relationship, we are aware of the importance of maintaining an effective mechanism to settle disputes. For us, this was non-negotiable.
Over the years, we have used dispute settlement mechanisms many times to make impartial decisions for Canadian industry and workers, particularly in the case of softwood lumber.
We also protected the cultural exception. Canada’s cultural industries provide more than 650,000 jobs across the country. Beyond this vital economic role, they are integral to our ability to maintain a strong sense of national identity, tell our stories and express our culture in all of its diversity. By preserving this exception, we will ensure that Canadian culture is protected and that our unique linguistic and cultural identity will not be jeopardized.
NAFTA is an agreement that is a quarter of a century old. In preparing for this negotiation, we heard from Canadian exporters that there were a lot of bread-and-butter issues preventing them from taking full advantage of the deal. We heard what Canadian businesses needed and we responded.
The new NAFTA includes important updates that will modernize our deal for the 21st century and simplify life for Canadian exporters. In fact, in our consultations before the start of the negotiations, we found that about 40% of Canadians doing business with the U.S. did not bother to use their NAFTA preferences at all. It is a stunning number. The new NAFTA will make life easier for business people on both sides of the border by cutting red tape and harmonizing regulations.
Our job as a government is to safeguard economic gains and prevent economic threats. That is what we have done through this modernized agreement.
Consider Canada's automotive sector, which contributes $19 billion to our country's annual GDP. This is a sector that directly employs more than 125,000 people with an additional 400,000 jobs created in after-market services and dealership networks. Unfair tariffs on Canadian cars and car parts would threaten our economy and hundreds of thousands of well-paying jobs and the families they support. Canada was able to negotiate a gold-plated insurance policy for Canadian automobiles and auto parts, protecting our industry from future potential section 232 tariff measures by the U.S. on cars and car parts. This provides added stability and predictability for the car sector and reaffirms Canada as an attractive investment destination.
In addition, the new NAFTA's rules of origin chapter addresses automotive manufacturing wages in North America by including a labour value content requirement. This means that a percentage of the value of a tariff-free NAFTA vehicle must be produced by workers earning at least $16 U.S. an hour. This is a provision that should help level the playing field for Canadian workers.
The new agreement seeks to improve labour standards and working conditions in all three countries. The labour chapter contains key provisions that support fair and inclusive trade, such as enforceable obligations to address issues related to migrant workers, forced or compulsory labour and violence against union members. It promotes increased trade and investment opportunities for small and medium-sized businesses through the small business chapter.
Perhaps one of the achievements I am most proud of is that the investor-state dispute resolution system, which in the past allowed foreign companies to sue Canada, will be gone. This means that Canada can make its own rules about public health and safety, for example, without the risk of being sued. Known as ISDS, this provision has cost Canadian taxpayers more than $300 million in penalties and legal fees.
Over the past 25 years, North American trade in agriculture and agri-food products has nearly quadrupled. Canada and the U.S. enjoy one of the largest agricultural trading relationships in the world. It is worth more than $48 billion U.S. a year. Under this new agreement, Canadian exporters will continue to benefit, including new market access for Canadian exports of refined sugar, sugar-containing products, and margarine. This is significant for our farmers and our food industry.
Importantly, the agreement preserves and maintains Canada's system of supply management for dairy, poultry and egg products, despite strong attempts by the U.S. to dismantle it. While the new NAFTA introduces a specific amount of liberalization of market access, the future of supply management itself—production control, pricing mechanisms and import controls—is not in doubt. To mitigate the impact of these changes, the government will compensate producers for any loss of market share and work with them to further strengthen their industry.
Our shared North American environment is vital to our economic prosperity. The new NAFTA will ensure that our trading partners do not gain an unfair competitive advantage by failing to enforce their environmental laws. It also includes a new environment chapter, subject to the same dispute settlement mechanism, to help uphold air quality and fight marine pollution.
We secured a general exception related to the rights of indigenous peoples. We have ensured that the environment chapter recognizes the important role of indigenous peoples in conservation, sustainable fisheries and forest management.
The new labour chapter includes a non-discrimination clause for employment and occupation, and addresses barriers to the full participation of women in the workforce.
We also ensured that LBGTQ2 individuals are supported. In fact, the new NAFTA is the first international trade deal that recognizes gender identity and sexual orientation as grounds for discrimination in its labour chapter.
In renewing and modernizing NAFTA, it is important to underscore the importance of our long-standing and mutually beneficial trade relationship with the United States. Our relationship is special and enduring because of our geography and history. It is special and enduring because of our close business, family and personal ties. It has been a significant contributor to jobs, economic growth and prosperity in both countries.
Our partnership with Mexico is critically important as well, and the new NAFTA will ensure that the trilateral North American relationship remains mutually beneficial for years to come.
I would like to take this opportunity to thank United States trade representative Ambassador Bob Lighthizer; the former Mexican secretary of the economy, lldefonso Guajardo; his successor, the current Mexican Secretary of the Economy, Graciela Márquez; and Mexican Undersecretary Jesús Seade. All of us worked hard together, and in the end, we achieved a win-win-win deal for our three countries.
With regard to ratification, insofar as it is possible, we intend to move in tandem with our partners. I am in very close contact with my counterparts in both countries as we discuss our domestic ratification processes.
Our government's purpose is to create the conditions to grow a stronger middle class and improve opportunities for all Canadians. That is what we have achieved with the new NAFTA, and this is something all Canadians can be proud of.