Mr. Speaker, I will be splitting my time with the member for Oshawa, who is also the hard-working Parliamentary Secretary to the Minister of the Environment.
I am pleased to stand today to speak to the issue that has been raised and to the benefits of the Canada-EU comprehensive economic and trade agreement, also known as CETA. I will focus today on the fact that the agreement will have great benefits for the fish and seafood industry, in addition to the Canadian economy more broadly.
The agreement will provide new and expanded economic opportunities for those who make their living from the fishery and seafood sectors, both in Newfoundland and Labrador and across Canada. The timely implementation of this agreement is in the best interests of hard-working fishermen and seafood producers throughout our nation.
As members are aware, CETA is a key component of our government's ambitious trade agenda, which is aimed at creating jobs and economic prosperity for all Canadians.
First I would note that this is Canada's most ambitious trade agreement ever. The agreement would provide Canada with preferential market access to Europe's 500-million-strong consumer economy and $17 trillion of economic activity. In fact, a joint study conducted with the EU prior to the outset of negotiations concluded that the agreement could boost Canada's income by $12 billion annually and bilateral trade by 20% across all sectors.
CETA would have significant benefits across the spectrum of all fishing and seafood activities, from wild harvest to aquaculture to processing. Aquaculture, as well, is a big player in the Newfoundland and Labrador economy.
Between 2011 and 2013, Canada's fish and seafood exports to the EU were worth an average of about $390 million per year. These exports are currently subject to high tariffs, averaging 11% and reaching as high as 25%. Between the years 2008 and 2012, Canadian firms paid between $20 million and $30 million annually in tariffs on the export of seafood products. Those tariffs are what the negotiation is about. They will be removed, and as processors in Newfoundland and Labrador are quite willing to acknowledge, this will be a tremendous aspect of the agreement, and it will create opportunities for Newfoundland and Labrador.
For example, Newfoundland and Labrador exports a significant amount of seafood to the EU, which is subject to these tariffs. Such charges include up to 12% of the export value of frozen shrimp.
As a member of the fisheries committee a few years ago, I was in Newfoundland and Labrador visiting some of the processing facilities. I remember clearly a visit to St. Anthony, at the northern tip of the peninsula of Newfoundland, and a huge state-of-the-art factory there. I think Clearwater was part of that. The amazing factory there was open in 1999. It processes something like 14 million pounds of shrimp every season and employs between 200 and 215 people. It can also make 120 metric tonnes of ice per day. That is a big operation. It is state-of-the-art and very impressive.
That factory and others like it would have unfettered access. The tariff on exported shrimp, cooked and peeled, in retail packages currently is a rate of 20%. That tariff would be removed when CETA is finally signed. The agreement has been signed in principle on both sides, but it will be finally implemented on both sides as all the legal drafting goes through. In Canada, we deal with two official languages, and when we are dealing with international agreements, they have to be translated and the text has to be agreed upon. However, in Europe, where they have 22 official languages, it takes a little longer to work through some of the legal processes. That process is playing itself out right now.
There is an 8% tariff on snow crab and an 8% tariff on frozen scallops. These additional costs have negatively impacted the competitiveness of Newfoundland and Labrador's seafood products in the European market. They have made it an uphill battle for our industry to attract new consumers and expand its market share.
Those tariffs and barriers will be removed under the new CETA.
Today Canadian seafood producers export about 377 types of fish and seafood products to the EU. Because of our ambitious trade agreement, led by our government, tariffs on 360 of those will be eliminated on day one of the agreement being in force. That day has not yet arrived, which is why the negative impacts that are the subject of the discussion today have not appeared at the present time. If there are negative impacts, they will need to be assessed, but that agreement and those impacts will not be in play until the agreement comes into force.
The tariffs on the other 17 products will be phased out after three, five, or seven years, but it will not be necessary for fishermen and seafood producers to wait to see these benefits accrue. If it is a three-year timeline, the tariffs will drop by one-third the first year and two-thirds the second and will be completely removed by the third year.
As I stated, the Canadian seafood industry will see real benefits of this deal accumulate quickly, once the agreement is brought into force. The reductions in tariffs will translate into savings that can be either reinvested into businesses to make them more competitive and more innovative or to help them grow their share of the European market through more competitive pricing. The bottom line is that tariff elimination will make Canada's seafood products more competitive and lucrative in Europe, which means more jobs and greater prosperity for the sector and for Canada's coastal communities here at home.
I should note that all of these figures are based on recent exports of Canadian fish and seafood products. The numbers do not account for the increased opportunities CETA will provide for additional Canadian fish and seafood products as new demand is generated in the European market.
CETA also contains important flexibility for Canadian industry, such as rules of origin, which will benefit Canadian fish and seafood processors and ensure that they remain competitive in a global marketplace. Rules of origin allow customs authorities to determine where a product originates or is wholly obtained so that they can apply the relevant tariff to the product as it enters the country.
In practice, these favourable product-specific rules of origin will allow Canada to import fish to our country from a non-party, like the United States, and enable the Canadian industry to process the fish for export to the European Union under the preferential tariffs granted through CETA. This will benefit the Canadian seafood processing industry greatly and those who work in the field. For example, in my home province of British Columbia, the industry processes Alaskan sockeye salmon for export, in addition to Canadian catches. On the east coast, New Brunswick processes Maine lobsters to sell abroad.
The fact is that these favourable rules of origin will result in more opportunity for seafood processors across Canada, including Newfoundland's processing industry.
Our government has managed to achieve all of these benefits while maintaining Canada's full discretion over licensing of fishing and related activities, including the government's ongoing policy of preventing foreign firms from having greater than 49% ownership of a processing plant and from holding a commercial fishing licence.
With regard to port access, CETA does not change how we control port access or how we apply the Coastal Fisheries Protection Act. We will still have the power and the authority to require the vessels entering our fishing waters to do so under the authorities of the Minister of Fisheries and Oceans, and the minister will continue to have the discretion to grant a licence for them to operate in our waters or to transit our waters to a Canadian port. Therefore, this agreement does not change our current operations with regard to European vessels.
Our government has embarked on an ambitious trade agenda, and we are opening other sections, such as the trans-Pacific partnership and the Canada-Korea Free Trade Agreement. Korea is our seventh largest trading partner. All of these measures bring new opportunities for Canadian producers.
Therefore, I hope that all members will support CETA and that the members who raised the concerns today will allow the process to work through and will allow negotiations to take place with the federal government and the Province of Newfoundland and Labrador. As was indicated, we are in a position to and are willing to negotiate the terms.
However, to expect to have a fund administered without demonstrable harms is not reasonable and is unfair to other agreements with other provinces. I hope members will appreciate that as we carry on with the discussion today and support the CETA in every way.