Madam Speaker, it is a pleasure to participate in the debate. I will be sharing my time with the hon. member for Toronto Centre—Rosedale.
The Americas is one of the most dynamic regions in the world. With its 800 million people, even though we are not but one-sixth of the world's population, we account for more than one-third of the world's total economic activity.
At about $11 trillion U.S., the combined gross domestic product of the Americas is greater than that of the European Union. No wonder then that leaders of the western hemisphere believed in the potential of the Americas. They knew that their countries could work together more effectively on every front, social, political and economic, to promote democracy, development and growth.
At the Miami summit of the Americas in 1994, leaders endorsed a declaration and a plan of action that expressed their common commitment to strengthening democracy and creating even greater prosperity. They also committed themselves to practical measures to improve health care, increase access to quality education, protect biodiversity, collective action against such scourges as drugs and corruption, and expanding and deepening dialogue with civil society on regional priorities.
At the second summit in Santiago in 1998, this co-operation was carried forward in detail. Once again leaders endorsed action to support the development of democratic institutions, protection of human rights, and enhanced transparency and respect for the rule of law. They gave specific instructions to begin the process of negotiating the free trade areas of the Americas.
Once it is completed, the FTAA will be the world's largest free trade area. In short, the summit of the Americas process offers numerous opportunities to further enhance Canada's openness to the world and to the western hemisphere in particular.
The FTAA is one of the tangible opportunities on the economic front, with its potential for enhanced market access for Canadian exports. If there is one sector where new access could lead to significant benefits for Canada and Canadian businesses, it is in the service sector.
The service sector is a key engine of Canada's economy. It is responsible for more than two-thirds of Canada's GDP, almost three-quarters of our employment with 10.5 million people and nearly 90% of new job creation in Canada. It is leading the transformation of the Canadian economy into a knowledge based economy.
Many employees in the service sector are highly educated and enjoy well above average earnings. Services are at the heart of Canada's innovation. For example, communications, financial services and technical business services are among the most innovative industries in Canada. We are a world leader.
As a trading nation Canada counts on its service exports to strengthen our prosperity. Not counting Canada's direct investment abroad in service companies, Canada is the 12th largest exporter of services in the world, exporting $51.8 billion in 1999 alone. Canadian companies like SNC-Lavallin, Teleglobe, Enbridge and Hydro Quebec are among world leaders in their field and their expertise is sought across the hemisphere.
Service exports only account for 12% of total Canadian exports. Canada's trade in services is increasing at a much faster pace than our trade in goods and shows tremendous potential. Given the importance of trade in our economy, we could say without fear of exaggeration that improving market access for our service providers abroad is vital to sustaining our prosperity.
The argument for supporting Canada's service exports is particularly eloquent when it comes to the Americas. Canada's commercial service exports to the FTAA countries, including the U.S. and Mexico, were worth about $1.9 billion in 1998, up from under $800 million in 1993, growing at an average annual rate of 19% during that period.
Countries such as Argentina, Chile, Costa Rica, Venezuela, Columbia and Brazil are all key existing or potential export markets for Canadian service providers.
I draw the attention of the House to three sectors in particular: telecommunications, financial services and engineering services, all of which are found in the greater Toronto area, some in my riding of Thornhill, and right across the country.
The Canadian telecommunications sector is enjoying tremendous success exporting services valued at over $2 billion each year and employing some 104,000 Canadians. As a consequence, since 1993 the sector has been growing at a rate of just over 9% per year.
Canadian exporters of telecommunication services still face market access and regulatory restrictions in many countries of the hemisphere, in part due to the presence of telecommunication monopolies in several Central and Latin American countries; the lack of transparency, predictability and timeliness in the process of awarding operating permits and licences; or prohibitive fees for licences and interconnection. This hurts our businesses. Reducing such barriers would significantly increase export opportunities for Canada's growing telecommunication companies.
In recent years Canada's financial institutions have been very active in Central and Latin America. We have a number of examples. Scotiabank is active in Argentina and Chile. In fact in Chile it is the seventh largest bank. In El Salvador, Scotiabank has 33 branches in that country alone, but it is also active in Brazil, Costa Rica, Belize, Guyana, Panama, Peru, Uruguay and Venezuela.
Another good example is the National Bank which recently teamed up with three U.S. venture capital companies and a local Chilean partner to form the CorpBanca consortium to purchase banking institutions in South American countries.
The same is true for our insurance sector. Our life and health insurance companies have identified Latin America as a growth market for the future.
Another sector where Canadian expertise is renowned is in the world of engineering and other related services. Canada is currently the third largest exporter of engineering services. The high calibre of Canadian engineers is internationally recognized.
Business opportunities are significant especially in Central and Latin America where the expertise of Canadian engineers in resource based and energy related as well as infrastructure projects is in high demand.
In this regard Hydro-Quebec's recent acquisition of Chile's Transelec, which owns 50% of the Chilean power transmission lines, is a good example of the type of business opportunities in the countries the western hemisphere have to offer.
That is why Canada is pursuing and actively participating in the service negotiations under the free trade area of the Americas. Canada has much to gain from the establishment of a comprehensive set of rules in trade and services under FTAA. Canada's general objective in the service negotiations is to seek improved market access for Canadian service providers under a transparent and predictable rules based regime.
In the elaboration of FTAA rules on services Canada will be guided by its existing rights and obligations under NAFTA, the Canada-Chile free trade agreement and the WTO general agreement on trade and services.
Contrary to what some critics have said, these objectives could be achieved without putting at risk those things which all Canadians value and cherish. As is now the case in other trade agreements, the FTAA services chapter will allow countries to file exceptions for those measures they wish to maintain irrespective of some of the FTAA obligations. In addition, and this is extremely important, nothing in these negotiations will jeopardize our public health and our public education systems. They are simply not negotiable.
I have shown in my remarks how world competitive Canadian telecommunications, financial services and engineering services are, and that is only to name three sectors. I could go on and on, but I do want to share my time.
In conclusion, the countries of the western hemisphere could prosper as they learn to work together and be good economic partners with Canada and with each other.
