Mr. Speaker, as much as I would love to spend the next 20 minutes clarifying that point, we better get on to discussing the Canada-EU free trade deal. I think this will be my last opportunity in the House to address this important agreement, and even my colleagues are happy about that fact.
This really is a very important trade deal. It is important for Canada's prosperity and it is important for the prosperity of the European Union. It also comes at an important time in terms of the broader international conversations that we are having about trade.
To review the basic facts, this is a trade agreement that could bring a 20% boost in bilateral trade between Canada and the EU, a $12-billion annual increase in Canada's economy. That is the economic equivalent of adding $1,000 to the average Canadian family's income or almost 80,000 new jobs to the Canadian economy. It is a significant, very direct impact. People watching at home should know that we are talking about $1,000 to the average family's income possibly resulting from the expansion of economic activity that would result from this trade deal. This is a clear benefit in terms of prosperity that flows from this trade deal, but there are other benefits.
For the first part of my speech, before I go on to discuss some of the positives in terms of trade, I want to respond to some of the arguments that I have heard in the House throughout this debate on this particular agreement but also on other agreements. What are people saying against this trade deal and what can or should be said in response to that?
We hear five principal criticisms of trade coming from different parties in the House and other directions as well. We have heard concerns raised about investor-state provisions. We have heard some people say that we should not be signing these big multilateral trade deals and that they would prefer that Canada focus on bilateral trade deals, which is what the NDP is talking about. We have heard people say that there is a risk to jobs from this. We have heard people talk about trade balance. We have also heard in this discussion about fair trade, that trade is fine but it has to be fair. I want to speak to each of these points, which may not be criticisms but arguments that come generally from those who are more critical of trade.
First, on the question of investor-state provisions, the criticism is raised by some people that trade deals involve a process inevitably of adjudication. When a company or an individual feels that the commitments made in a trade deal are not being followed, there is an adjudication process. This allows the critics of trade to come out and say that trade deals allow private companies to sue the government, which is sort of held up as a big red flag.
Let us put this criticism of trade deals in context. We know that a key hallmark of a free society is that governments as well as all of us are bound by law. The law is not simply the means by which the state controls the rest of society; rather, the law is a thing that binds every actor, governmental and non-governmental, within a society. There is a fixed process by which a law is changed, and that process as well must be honoured by the government. This idea that the rule of law structures our life in every way outside of even trade deals has its roots in our very ancient constitutional tradition as well as theories of natural law, that government is bound by law as well.
Even in the absence of trade deals, there is an opportunity for individuals, companies, and civil society groups to bring legal action against the government, to hold the government accountable to the law. That is part of the rule of law. It is central to a good society that government is bound by law. In the context of trade deals, of course, these trade deals impose certain requirements on government.
Governments make commitments to abide by certain provisions with respect to these trade deals. It is necessary, if one is going to have a trade deal that has force, that has meaning, that there be a mechanism by which those who feel they are negatively affected when governments do not follow the provisions of the trade deal can bring forward legal action to challenge the behaviour of governments that are not following through on the commitments that are in these deals.
That speaks to why we have to have some kind of adjudication process as part of trade deals. We have to have an ability for companies, individuals, civil society groups, to bring action against governments if those individuals, companies, civil society groups are negatively impacted by the government's failure to adhere to the provisions of the deal. That is why trade deals have these kinds of provisions that allow the bringing forward of action against governments. It is because governments have to be bound by their commitments in trade deals or elsewhere. Governments, like the rest of us, have to follow the law.
I would understand if some people object and say that they do not like this, that or another provision of a particular trade deal, although I think, on balance, this trade deal is very good. It is one thing to say we do not like specific aspects of a trade deal, but it does not make much sense to me to say we should not have an adjudication process to hold governments up to the standards set by the trade deal. If we are going to have a meaningful trade deal, we have to have some kind of process of adjudication against that deal to ensure that the commitments made in the deal are actually followed through on. That is why these investor-state provisions are important. I think that point needs to be understood and appreciated by some members of the House and elsewhere who have focused their criticisms on this particular aspect of the different trade deals that we have seen here and seen debated elsewhere.
The second criticism we have heard, and we have heard this from the NDP members, is they are willing to support certain bilateral trade deals but have generally been suspicious or critical of trade deals that are undertaken on a more multilateral basis. I know they supported the Canada-Korea free trade deal and they are supportive, at this stage at least, of the Canada-Ukraine free trade deal, but they have made the point, in questions and comments, that these are bilateral trade deals and not multilateral trade deals. I scratch my head when I hear that point in terms of trying to understand what the actual difference is.
Of course, there is the obvious difference that one involves more countries than another but really, philosophically, multilateral trade deals move us faster forward in getting trade access to more countries. They allow us to advance our desire to access more markets and give more economic freedom to Canadians more quickly. The negotiation process can be more elongated and more complex, but there is no fundamental reason to support bilateral trade deals and not multilateral trade deals.
I would also make the point that if we are not keen on multilateral trade deals, effectively we shut out the possibility of trade with certain blocs of countries that have already entered into trading arrangements which preclude any individual country from within that arrangement from making individual bilateral agreements.
Within the European Union, of course, as we are discussing today, an individual country in the EU cannot go out and sign a bilateral trade deal with Canada because the conditions of the union are such that the union as a collective must sign these new trade deals to move forward.
The position of the NDP in accepting bilateral trade deals but not multilateral trade deals is effectively to shut off the possibility of trade with large regional blocs. I would just add that as we see the emergence of more of these regional trade blocs, that position would effectively really limit Canada's ability to expand its economic relationships with other countries. I think we should hope for trade deals that bring in as many countries as possible, that expand the sphere of prosperity and of freedom, and cast that net as wide as we can.
The third criticism we have heard throughout this debate is people say that a trade deal is going to put jobs at risk. Usually it is not phrased like that. They say that in a particular sector we're going to expose jobs to competition, so we're going to lose those jobs.
It, of course, does not follow that when we open up the possibility of exchange and competition we are necessarily going to lose those jobs. We may well create the conditions for improvements in that sector, for the expansion of jobs here, and improvements in technology and other things through competition that is beneficial to consumers.
What is the alternative to open trade? One can understand maybe the allure of protectionism, putting up trade walls and preventing one's industry from needing to compete against other industries, but in the long run, protectionism does not create jobs; it kills jobs, because when one limits the market access of one's industry, investments that might otherwise get made here get made in other places. In the long run, we do not see the new investments in a protectionist environment that would actually create jobs for the future.
On this side of the House, as the Conservative Party, we are thinking not only about the businesses and jobs that exist today, but the businesses and jobs that do not yet exist but could exist under the right conditions. When we move forward with a robust trade agenda, it is with an eye, yes, to benefiting consumers and existing businesses, giving them access to new markets, but also to opening up the opportunity for businesses which do not yet exist to come into existence.
With this trade deal, Canada would be extremely well positioned to encourage the creation of new business. We would have preferential trade access to the United States and the European Union. I might add that we would have an opportunity, if the government proceeds in this direction, to pursue deeper trading relationships with major economies and like-minded democracies within the Asia-Pacific region. We have a real opportunity.
On the other hand, when we open ourselves up to competition through trade, it is important that we do not take steps that undermine the competitiveness of our industry. I worry that the government is doing things that are going to, in fact, undermine our competitiveness, such as the new taxes the Liberals are imposing, the carbon tax, the increase to the payroll tax, the elimination of the small business hiring credit, the effective tax increase on small businesses.
Yes, there is a squeeze on the taxation side coming from the government which is putting our economy at risk and is hurting our competitiveness, but nonetheless, in general terms, we see that opening ourselves up to competition and the benefits that come from exchange will benefit us and create jobs in the long run. The strategy of building up protectionist walls does not encourage investment. It is not a job-creation strategy. Protectionism is a job-killing strategy.
One of the other points we hear from those who are critical of trade is the need to be hypersensitive around the issue of a trade balance, that we cannot be running a trade deficit, that we should always be trying to export more than we import. Let us be very clear about what the objective of trade is. Fundamentally, the objective of trade is to increase the standard of living and quality of life for Canadians.
Some people still think about trade in this kind of 17th century mercantilist economic mode, where it is all about exports over imports. We have heard this criticism, in fact, from the government, saying that we have a trade deficit and that is somehow catastrophic. The reality is that a trade deficit, unlike a budget deficit, is not something that has to be paid off. In any normal economic exchange system, there are going to be times when one imports more than one exports, or vice versa.
Finally, I want to talk about the issue of fair trade. This is a frequent talking point around the trade issue: yes, free trade, but what about fair trade? When governments enter into trade negotiations, they are not themselves determining what goods will be traded. They are not determining the prices or the terms of trade between countries. Rather, they are undertaking negotiations to open up the space for trade to occur between private actors in individual countries. It is up to those private actors, of course, to make trades and exchanges that they regard as being in their own interests. People do not make exchanges if they are not usually beneficial. That is fairly clear in any normal interaction.
In the international trade discussion, people are often asking whether it is fair and who is winning in that trade deal. I made this point before. When I go to the grocery store, who is winning? Is it me or the store? Actually, we are both winning. The store is getting my money and I am getting groceries that I need. Mutually beneficial exchange is not about someone winning or losing; it is about everyone being better off.
Therefore, when governments undertake trade negotiations, they open up the possibility for a mutually beneficial exchange to occur between individuals in the different countries. There might be certain conditions, where in the absence of proper environmental protections or proper labour rights protections, there would be an unfairness that would result from that. However, generally speaking there is no creation of compulsory trade as a result of these agreements, so there is not a need to worry that there would be some unfairness that emerges in trade, for instance, in an agreement between Canada and the EU. What we are doing is giving private individuals and companies the freedom to enter into trading relationships that are beneficial for them, for their customers, and for the people they are exchanging things with.
I hope that for those members of other parties who are listening, this addresses many of the principal criticisms of trade deals that are out there, the criticisms around investor-state provisions, around multilateral versus bilateral trade deals, around jobs, around trade balance, and around questions of fairness.
If I can, in the time I have, I will briefly make some comments about the future of our trade agenda.
I commend the government on moving forward to implement a number of trade initiatives that were begun, and, in the case of this deal, signed by the previous government. It is a credit to the Liberals that they are moving forward with a trade deal that was put on their desk.
On the other hand, we had the trans-Pacific partnership, which was put on their desk, and they dragged their feet and it is still there. Of course, the signals we are getting from the American administration has put a big question mark beside that. In whatever form, it is critical that the government lead on trade in the Asia-Pacific region. There is huge opportunity for Canada to expand its economic activity in the Asia-Pacific. The basic logic of emphasizing our relationships in the Pacific is still very much there. It is important, because we need to make trading agreements with like-minded democratic countries, like Japan, Australia, and New Zealand, countries that share our values, and to use those agreements to set the terms of trade in a way that is consistent with the rule of law in that region. That is an opportunity that we have, and we need to lead and speak clearly about the value of that trade.
We need to work with the Americans to have them continue to engage with freer trade in the Asia-Pacific region as well. I was always a big supporter of the trans-Pacific partnership and will continue to be. In whatever form we move forward, I would encourage the government to not just move forward with some of the agreements that we signed, but to undertake new trade initiatives that reflect new challenges and new realities, and especially to consider that opportunity and need in the context of the Asia-Pacific region.
We know, as I said at the beginning of my remarks, the benefits that come from free trade, and from this deal in particular. Estimates tell us that this could bring in a $12-billion annual increase to Canada's economy. That is the equivalent of adding $1,000 to the average family's income and almost 80,000 new jobs to the Canadian economy. That involves exposing existing industry to competition. It involves giving consumers the benefit of a much wider degree of trade access, and it creates an opportunity for not one side to win or lose, but for Canada and Europe to prosper and to strengthen ourselves together.
I hope we move forward with this, and I hope we see the continuing development of new trade initiatives that will allow us to achieve shared prosperity with other countries as well.
