Canada-Ukraine Free Trade Negotiations

Final Environmental Assessment Report - January 2016

1. Introduction

Canada and Ukraine launched free trade agreement (FTA) negotiations in 2010. Six rounds of talks were held between 2010 and 2015, with negotiations concluding in Kyiv in July 2015.

The conclusion of Canada-Ukraine Free Trade Agreement (CUFTA) negotiations was announced by Canada and Ukraine on July 14, 2015, and represents an important milestone in the Canada-Ukraine bilateral relationship. In addition to generating significant commercial benefits for Canadian businesses, the CUFTA will also support the economic reform and development efforts of the Government of Ukraine, strengthen the Canada-Ukraine partnership for peace and prosperity, and help pave the way for long-term security, stability, and broad-based economic development in Ukraine. The conclusion of an FTA with Ukraine is part of the Government’s pro-trade plan as outlined in the 2013 Global Markets Action Plan.

Canada and Ukraine enjoy positive bilateral relations with close, historic ties of friendship, forged through generations of Ukrainian migration to Canada. In December 1991, Canada became the first Western country to recognize Ukraine’s independence. This was followed by the establishment of diplomatic relations with Ukraine in January 1992. Canada is a strong supporter of a free and independent Ukraine, and remains engaged in assisting Ukrainians in achieving their goal of a democratic and prosperous society. Global Affairs Canada’s development assistance program in Ukraine aims to support sustainable development by increasing economic opportunities for Ukrainians in a strengthened democracy. Canada and Ukraine currently have a Foreign Investment Promotion and Protection Agreement (1995), a bilateral Convention for the Avoidance of Double Taxation (1996) and a bilateral Air Transport Agreement (1998).

2. The Environmental Assessment Process

FTA negotiations are subject to the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations. This process focuses on the likely economic effects of trade negotiations, as well as their likely environmental impacts in Canada. The assessment process consists of three phases: the Initial EA, the Draft EA and the Final EA. The middle phase, known as the Draft EA, is not undertaken when an FTA is not expected to result in significant environmental impacts in Canada. Accordingly, in the case of the CUFTA negotiations, a Draft EA was not carried out as the Initial EA anticipated only very minor environment impacts in Canada.

The primary purpose of the Initial EA is to identify the main environmental issues likely to arise as a result of a proposed agreement. This assessment focuses on potential economic and environmental impacts in Canada which would result from a Canada-Ukraine FTA, by exploring the links between the environment and increased market access for goods. This assessment considers the effects of new trade and investment in Canada that may result directly from an FTA, as well as potential impacts on the Canadian environment. As such, the Initial EA estimates possible environmental impacts using informed judgment based on, inter alia, potential changes in economic activity brought about as a result of an FTA, once implemented.

An Initial EA of the CUFTA negotiations was initiated relatively early in the negotiating process and completed in early 2015. An interdepartmental EA committee^{Footnote 1} was established with officials responsible for each negotiating area. This EA committee was established to draft and review the CUFTA Initial EA. The process was also open to other government departments and agencies, including provincial and territorial governments, the Environmental Assessment Advisory Group (EAAG) comprised of individuals from academia, business and non-governmental organizations (NGOs). Public input was also sought on the Initial EA by posting the document on the Global Affairs Canada website and inviting any comments from the public.

Canadian officials responsible for each negotiating area were made aware of the findings of the Initial EA, which served to inform the negotiations. This collaborative approach facilitated the development of a more comprehensive assessment.

This Final EA updates the findings of the Initial EA and builds on the previous analyses conducted on the potential environmental impacts of the CUFTA. It incorporates information gathered through consultations.

3. Conclusions of the Initial EA

The Initial EA concluded that a CUFTA would likely have a very minor environmental impact in Canada, because while the agreement will benefit Canadian exporters, its impact is likely to be very modest relative to Canada’s overall economic activity. Moreover, any negative environmental impacts will likely be offset, in part or in whole, by other aspects of the FTA that will yield positive environmental externalities. For further information, please see the Initial EA report.

4. Results of the Consultations Process

Following consultations with the provincial and territorial governments and   the EAAG, an Initial EA of the CUFTA negotiations was released on the DFATD website in February 2015. An overview of comments received during this initial process is provided below:

• Broad consensus that the CUFTA is likely to have a very limited environmental impact;
• Some concerns regarding the cumulative environmental effect of Canada’s broader trade expansion efforts;
• A suggestion to expand the scope of the EA to cover the regional and global environmental impacts of greater trade, notably with respect to air pollution; and
• Additional details were provided concerning specific provincial measures that mitigate environmental effects.

These comments were taken into account prior to concluding  CUFTA negotiations and were addressed, to the extent possible, within the scope of this Final EA. Additional comments were sought on an initial draft of the Final EA from provincial and territorial governments as well as the EAAG and were considered in finalizing this document.

5. Update to Initial Environmental Assessment Findings

As demonstrated through Canada’s concluded FTAs, Canada’s policy is to negotiate environment provisions which ensure that liberalised trade and the protection and conservation of the environment are mutually supportive. In keeping with Canada’s standard approach, the Environment chapter negotiated under the CUFTA includes provisions obliging the Parties to maintain high levels of environmental protection through the effective enforcement of environmental laws; does not waive or derogate from such laws to promote trade or investment; and ensures transparency and public participation in the making of such laws. It also establishes a framework for cooperation in areas of mutual interest.

Given Canada’s established environment oversight regime, the minimal projected expansion of trade is not predicted to stress the environment by, for example, causing an increase in production leading to increased pollution or other negative environmental externalities. On the contrary, the potential economic benefits of increased productivity and enhanced technology, especially in the sphere of environmental goods and intellectual property, could translate into the increased use and diffusion of clean technologies. As well, enhancing the protection of intellectual property rights may provide benefits in terms of innovation in clean technologies and their use in both Canada and Ukraine.

The areas examined in the Final Environmental Assessment are based on the final negotiated CUFTA text. The anticipated environmental implications of chapters are assessed and summarized in Section 5.1 and 5.2 below. Section 5.1 covers the area of Trade in Goods while the other chapters are covered in 5.2. As services and investment were not included in the CUFTA, they are not covered by this Final EA.

5.1 Trade in Goods

This section includes: (1) an overview of bilateral trade flows and anticipated areas of export growth as a result of liberalisation under the CUFTA; (2) identification of potential environmental impacts associated with growth in trade in goods and an assessment of the significance of these impacts; and (3) identification of mitigation and enhancement measures to address potential environmental impacts.

Overall, the liberalisation of trade in goods under an FTA is expected to bolster the Canada-Ukraine trade relationship, particularly in the sectors outlined below. However, the Canada-Ukraine trade relationship is very modest in the context of Canada’s global trade in goods. This would continue to be the case even if considerable growth in trade ensued as a result of the CUFTA. Accordingly, and given a range of existing Canadian mitigation and environmental enhancement measures, no meaningful or measurable environmental impacts for Canada are expected to result from increased trade with Ukraine as a result of CUFTA tariff elimination.

Anticipated Effects of the CUFTA in the area of Trade in Goods

The CUFTA is expected to establish commercially significant improvements in market access for goods, principally through tariff elimination. The largest trade gains are expected in sectors where Canadian merchandise exports currently face significant tariff barriers. The CUFTA is expected to bolster Canada’s current exports to Ukraine, particularly with respect to agricultural products, fish and seafood, and industrial products such as machinery and vehicles. Nevertheless, Canada’s current exports to Ukraine are modest relative to its global exports, and this would continue to be the case even if considerable export growth resulted from the CUFTA.

Beyond tariff elimination, the CUFTA includes provisions to facilitate increased cooperation with Ukraine to make trade more efficient, including through trade facilitating measures and customs procedures designed to provide certainty, transparency and effective origin verification procedures. It also includes rules of origin that are transparent, predictable and consistent in application, which will ensure that the benefits negotiated under the Agreement accrue to the Parties. Taken together, these measures contribute to further increasing bilateral trade between Canada and Ukraine.

Economic analysis undertaken by the Department projects that once fully implemented, the CUFTA will result in an increase of 19 percent ($64.9 million) in bilateral merchandise trade between the two countries, with Canadian exports to Ukraine increasing by $41.2 million. Expressed in in GDP terms, the CUFTA is projected to result in a very modest GDP gain of 0.0015 percent ($29.2 million) for Canada, and 0.0127 percent ($18.6 million) for Ukraine.

Canadian Merchandise Exports to Ukraine

Canada’s annual merchandise exports to Ukraine averaged $214.1 million from 2011 to 2013, before declining by over 3.8 percent in 2014 to $205.1 million, making Ukraine Canada’s 22nd-largest export destination that year^{Footnote 2}. As such, Canadian exports to Ukraine represented less than one percent of total Canadian global exports in 2014^{Footnote 3}. Even if Canadian exports to Ukraine were to undergo considerable growth in the years following the implementation of the CUFTA, this would have only a very modest effect on Canada’s overall trade and production levels.

Canada’s non-agricultural exports to Ukraine totalled $186.6 million in 2014, and included mineral fuels and oils (mainly coal), fish and seafood, pharmaceuticals and machinery. Canadian agricultural and agri-food exports to Ukraine totaled $19.2 million in 2014, and included meat, other animal products, animal fodder and oilseeds^{Footnote 4}.

In 2014, Ukraine had an average overall applied most favoured nation (MFN) tariff rate of 4.5 percent, an average applied MFN non-agricultural tariff of 3.8 percent, and an average applied MFN agricultural tariff of 9.2 percent^{Footnote 5}.

Upon entry into force of the Agreement, Ukraine will immediately eliminate tariffs on 86 percent of Canada’s current exports, with the balance to be phased out or subject to tariff reductions over periods of up to seven years. This includes elimination by Ukraine of tariffs on all Canadian exports of industrial products, fish and seafood, and the elimination of the vast majority of its agricultural tariffs. Key Canadian exports benefiting from either immediate or eventual duty-free access include beef, canola oil, processed foods, animal feed, frozen fish, caviar, certain iron and steel products, articles of plastics, and cosmetics. Tariffs will also be eliminated by Ukraine on fresh and chilled pork, and frozen pork will benefit from a duty-free tariff rate quota.

Tariff elimination in the context of an FTA is expected to further bolster the presence of Canadian exporters in the Ukrainian market, though Canada’s exports to Ukraine will continue to assume a modest share of Canada’s global exports. For example, Canada’s 2014 exports to Ukraine represented less than one percent of Canada’s global agricultural, fish and seafood, and industrial exports, respectively^{Footnote 6}. This suggests that the increased growth in Canadian exports to Ukraine arising from the CUFTA will continue to represent a very modest share of overall Canadian production and exports, and therefore have a very modest environmental impact in Canada.

Canadian Merchandise Imports from Ukraine

Ukraine is a relatively small supplier of Canadian imports from the world, representing the 99th-largest source of merchandise imports for Canada in 2014, and accounting for less than one percent of Canada’s global imports. Canada’s current imports from Ukraine totalled $99 million in 2014, down from an annual average of $133.2 million from 2011 to 2013^{Footnote 7}.

Upon entry into force of the Agreement, Canada will immediately eliminate tariffs on 99.9 percent of current imports from Ukraine. This includes elimination by Canada of tariffs on all industrial products, fish and seafood, and 99.9 percent of agricultural imports from Ukraine. Key products from Ukraine that will benefit from this duty-free access include sunflower oil, sugar and chocolate confectionery, baked goods, vodka, apparel, ceramics, iron and steel, and minerals.

Given that goods entering into the Canadian market from Ukraine already benefit from relatively low Canadian tariffs, the resulting increase in imports is expected to be relatively modest result.

Potential Environmental Impacts and Significance

In light of the relatively small bilateral trade relationship between Canada and Ukraine, environmental impacts resulting from the CUFTA are expected to be very limited. It is expected that any environmental impacts would be related to increased Canadian production due to increased demand for Canadian exports as a result of lower tariffs. In particular, due to their significant share of total Canadian exports to Ukraine and relatively high current Ukrainian tariff levels, Canada’s domestic fish, seafood and agricultural sectors are the areas where production could conceivably increase as a result of the CUFTA. Nevertheless, as outlined below, and given existing Canadian mitigation and environmental enhancement measures, minimal environmental impacts are anticipated from any potential increases in Canadian exports to Ukraine.

Environmental impacts in the agricultural sector occur largely as a result of changes in resource allocation decisions, such as cropping patterns. In 2014, trade in agricultural commodities with Ukraine accounted for a very small proportion (well under one percent in terms of value) of total agricultural exports from Canada^{Footnote 8}. Any increase in agricultural commodity trade between Canada and Ukraine from the reduction or elimination of tariffs is very unlikely to have a measurable impact on agricultural prices in Canada. As such, changes in resource allocations as a result of new prices are not expected. In these circumstances, any environmental impacts would be very small, and little or no change is expected in the overall environmental performance of the Canadian agricultural sector.

Fish and seafood products represented Canada’s second-largest non-agricultural export to Ukraine in 2014, behind industrial goods, totaling $25.0 million and representing 12.1 percent of Canadian exports^{Footnote 9}. An increase in fish and seafood product exports could, in principle, have environmental impacts, for example vis-à-vis the sustainable management of fish stocks. However, any such increases would be subject to Canada’s fish management systems at the federal, provincial and territorial levels of government. In 2014, exports to Ukraine accounted for less than one percent of Canada’s global exports of fish and seafood products^{Footnote 10}. Even if considerable export growth in this sector ensued as a result of an FTA, it would be expected to continue to constitute only a very small share of overall Canadian production and exports. Therefore, the environmental impacts resulting from any potential increases to trade in fish and seafood products are expected to be similarly limited.

For industrial products of interest that face relatively high Ukrainian tariffs (such as industrial machinery, plastics, consumer electronics, instruments, stones, ceramic and glass, chemicals, tires, light vehicles and other vehicles), increased exports as a result of an FTA could potentially have environmental impacts in Canada, such as air pollution, hazardous wastes, and greenhouse gas emissions resulting from production increases. However, Canada’s exports to Ukraine of these products are very limited with no single sector exports exceeding one percent of Canada’s global exports in 2014^{Footnote 11}. This suggests that even if considerable export growth ensued as a result of the CUFTA, exports to Ukraine would continue to constitute a small share of total Canadian exports and production, and any potential environmental impacts would be appropriately managed under current environmental policies, programs and management practices. As such, any environmental impact resulting from export expansion in these sectors is expected to be very limited.

Regarding the environmental implications of increased imports from Ukraine as a result of the CUFTA, as noted above, any realistic projection of increases in imports would represent a small fraction of Canadian global imports and domestic sales. The environmental impacts resulting from increased imports in the context of the CUFTA are therefore expected to be minimal or non-existent.

5.2 Estimated Environmental Implications of CUFTA Provisions

Preamble

The Preamble summarizes the overall intent of the Agreement and references the Parties’ ongoing commitment to sustainable development, the effective enforcement of environmental laws and cooperation on environmental matters.

By underscoring the Parties’ commitments to environmental stewardship, these provisions stand to have positive effects vis-à-vis the environment.

General Provisions and Definitions

This chapter establishes the free trade area; defines the FTA’s relationship to other agreements, including Multilateral Environmental Agreements (MEAs); delineates the coverage of obligations in the agreement; and establishes definitions for the FTA.

Where FTA provisions refer to multilateral environmental and conservation agreements, they serve to underscore the Parties’ commitments to environmental stewardship. This chapter may lead to positive environmental impacts by permitting certain MEAs, which include internally recognized standards for environmental protection and conservation, to supersede the FTA’s provisions in instances where conflicting provisions exist.

Administration of the Agreement

This chapter provides a framework for the overall management of the FTA and establishes a mechanism for the Parties to address any differences outside of formal dispute settlement mechanism. This chapter also governs amendments to the MEA list found in the General Provisions and Definitions chapter.

This chapter could have positive environmental impacts by permitting Multilateral Environmental Agreements, which provide internationally recognized standards for environmental protection and conservation, to supersede provisions of the FTA in instances where conflicting provisions exist.

Transparency

This chapter facilitates the administration and smooth operation of the Agreement by designating contact points in each Party to facilitate communication. It also reiterates the Parties’ commitment to transparency and due process regarding matters covered by the Agreement.

There are no expected environmental impacts as a result of this chapter.

Exceptions

This chapter sets out exceptions to the commitments taken by Parties to the FTA, including a general exception allowing FTA Parties to maintain their ability to adopt measures to protect human, animal or plant life, and measures relating to the conservation of exhaustible natural resources. By recognizing and protecting the right of each Party to regulate to protect the environment, this chapter is beneficial vis-à-vis the environment.

Rules of Origin

The purpose of rules of origin is to ensure that the preferential tariff benefits of the CUFTA flow only to goods qualifying as originating in the territory of either Canada or Ukraine. This chapter establishes rules of origin that are clear, as simple as possible, and leave little room for administrative discretion.

An assessment of production and consumption changes resulting from product-specific rules of origin is captured in the Trade in Goods section above (Section 5.1), along with the corresponding environmental impacts (any environmental impacts are expected to be at most minor).

Origin Procedures

This chapter ensures that the rules of origin are administered in a fair and transparent manner by the customs administrations and provides the trading community with the means by which to take advantage of the preferential tariff treatment afforded under the trade agreement.

There are no foreseen environmental impacts as a result of this chapter.

Trade Facilitation

This chapter reduces transaction costs by modernizing, simplifying, automating and standardizing trade procedures and border mechanisms.

To the extent that there are environmental impacts resulting from of this chapter, they are expected to be positive due to border mechanisms that involve less paper, simpler procedures and greater automation.

Technical Barriers to Trade (TBT)

This chapter builds on commitments made under the WTO Technical Barriers to Trade Agreement (“TBT Agreement”); promotes greater cooperation in the field of standards and technical regulations; facilitates the acceptance of conformity assessment procedures; and increases transparency, including through notifications and public participation in regulatory development processes. In addition, the TBT Chapter encourages each Party to use electronic means when co-operating with the other Party or fulfilling their transparency obligations, which should be positive from an environmental perspective.

While provisions reaffirming the Parties’ rights to take measures necessary to ensure the protection of human health, animal or plant life, and the environment are positive from an environmental perspective, they are unlikely to have a measurable impact on the environment.

Sanitary and Phytosanitary Measures

This chapter reaffirms commitments made under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and provides for the continued use of WTO dispute settlement procedures for any formal disputes that arise between the Parties regarding SPS measures.  In addition, the Parties have agreed to designate Contact Points to facilitate communication on SPS-related matters.  The chapter also includes provisions relating to SPS issue prevention and resolution whereby the Parties agree to work expeditiously to resolve issues. As provided in the WTO SPS Agreement, both Parties maintain the right to adopt SPS measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of the Agreement.  As also provided in the WTO SPS Agreement, both Parties are required to ensure that any SPS measures are applied only to the extent necessary to protect human, animal or plant life or health, are based on scientific principles, and are not maintained without scientific evidence except as otherwise provided for in the Agreement.  As the CUFTA SPS Chapter establishes no new substantive rights and obligations beyond what Canada has already agreed to under the existing WTO SPS Agreement, there are no foreseen environmental impacts as a result of Chapter.

E-commerce

This chapter ensures a predictable environment for the conduct of electronic commerce.

Some positive environmental impacts may result from this chapter to the extent that it facilitates increased trade electronically.

Competition Policy, Monopolies and State Enterprises

This chapter ensures that the benefits of trade and investment liberalisation between Canada and Ukraine are not undermined by anti-competitive business conduct, or through the designation or conduct of monopolies and state enterprises. As well, the Parties will safeguard their ability to delegate governmental authority to monopolies and state enterprises.

This chapter is unlikely to have a direct or measurable impact on the environment.

Government Procurement

This chapter provides Canadian and Ukrainian suppliers of goods and services with open, transparent and non-discriminatory market access to Canada’s and Ukraine’s respective federal government procurement markets.

Ukraine’s potentially increased participation in the Canadian government procurement market will not affect the relatively stable demand for goods and services from the Canadian government. Furthermore, Canada’s green procurement practices, including the Policy on Green Procurement, which seeks to reduce the environmental impacts of government operations and promote environmental stewardship by integrating environmental performance considerations in the procurement process, will continue to apply without regard to the origin of suppliers and service provides. Accordingly, any environmental impacts as a result of this chapter are likely to be negligible.

Intellectual Property

This chapter includes provisions on intellectual property that reaffirm the Parties’ commitments made under the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS Agreement”), as well as other international intellectual property agreements to which both countries are a party, and reaffirm the flexibilities in the TRIPS Agreement, including those relating to the protection of public health. It also contains cooperation provisions in areas of mutual interest.

As such, this chapter is not expected to have a direct or measurable impact on the environment.

Dispute Settlement

This chapter includes state-to-state dispute resolution procedures with Ukraine based on the dispute settlement provisions of the NAFTA, but has simplified and improved these provisions where possible. This chapter also includes a process for disputes with respect to measures to combat corruption in international trade.

No environmental impacts are expected as a result of this chapter.

Environment

This chapter includes commitments to high levels of environmental protection; the effective enforcement of domestic environmental laws; non-derogation from domestic environmental laws to encourage trade or investment; and public participation and engagement. The Environment chapter also includes provisions affirming commitments to Multilateral Environment Agreements (MEAs) that both Canada and Ukraine have ratified, as well as promoting the trade and investment in environmental goods and services. Furthermore, the Parties commit to respond, in a timely manner, to inquiries from the public on matters respecting the implementation of the Chapter.

Provisions of the Environment Chapter underscore the Parties’ commitment to pursue policies that promote sustainable development and sound environmental management. Consistent with Canada’s usual FTA approach, the provisions reinforce the mutual supportiveness of trade and environment policies, including through commitments to foster good environmental governance.

The Agreement establishes a Committee on the Environment responsible for implementing environment obligations and includes an environment chapter-specific dispute resolution process to address any questions regarding compliance, including, if necessary, review by an independent panel of experts whose recommendations would be made publicly available.

This chapter seeks to ensure that trade and environment conservation and protection are mutually supportive, and obliges the Parties to refrain from lowering environmental standards in order to gain a trade or an investment advantage. Provisions will also seek to ensure that the Parties maintain the ability to set their own environmental priorities, to establish their own domestic levels of environmental protection, and to adopt or modify relevant environmental laws and policies. Though difficult to quantify, this chapter stands to benefit Canada’s environment.

Labour

This chapter commits Canada and Ukraine to effectively enforce their domestic labour laws that must in turn reflect international labour standards, including those found in the International Labour Organization (ILO) 1998 Declaration on Fundamental Principles and Rights at Work; and minimum employment standards, prevention and compensation for occupational health and safety, and non-discrimination in respect to migrant workers. The chapter includes a dispute resolution mechanism which may result in an obligation for the non-compliant country to pay financial penalties.

No environmental impacts are expected as a result of this chapter.

6. Mitigation and Environmental Enhancement Measures

The Federal Sustainable Development Strategy (FSDS) is the government’s overall sustainable development strategy, which provides Canadians with a whole-of-government picture of federal goals, targets and specific actions to achieve environmental sustainability. The strategy’s objective is to make environmental decision making more transparent and accountable to Parliament.

Importantly, provincial and territorial governments share constitutional jurisdiction and responsibility for the environment. A selected overview of provincial and territorial initiatives can be found at the end of this section.

Agriculture: The Canadian agriculture industry operates under an elaborate system of risk assessments, financial incentives, federal/territorial, provincial and municipal regulations, and other initiatives that reduce the environmental risks of increased agricultural production. While only a very limited environmental impact is expected to result from increased agricultural exports to Ukraine because of the CUFTA, should there be any discernible environmental impacts, Agriculture and Agri-Food Canada (AAFC) has a number of programs in place intended to improve the environmental performance of the agriculture and agri-food sector. Environmentally sustainable agriculture is a key component of AAFC’s agricultural policy framework, Growing Forward 2 (GF2)^{Footnote 12}. Growing Forward's environmental initiative, with $3 billion in funding, focuses on innovation, competitiveness and market development to ensure Canadian producers and processors have the tools and resources they need to continue to innovate and capitalize on emerging market opportunities.

The Growing Forward framework agreement also features three broad federal programs (AgriInnovation, AgriCompetitiveness and AgriMarketing) with $1 billion under GF2 aimed at generating market-based economic growth in the agricultural sector. Through the Sustainable Science and Technology Advancement Initiative of the AgriInnovation program of GF2, AAFC continues to produce a suite of quantifiable agri-environmental performance indicators, including annual greenhouse gas emissions estimates from agricultural land, reported in Canada’s National Inventory Report to the United Nations Framework Convention on Climate Change.

Provincial and territorial governments also apply legislative and regulatory frameworks on the agricultural and agrifood industry with respect to the protection of the environment and the protection of soils and water in agricultural settings, especially with respect to subterranean water and the use of pesticides and fertilising residual matter.

Efforts related to the above initiatives and a series of other programs will help offset any negative environmental impact that may result from liberalised agricultural trade with Ukraine. In the event the environmental impacts as a result of the FTA are greater than expected, consideration will be given to expanding existing programs or creating new ones to deal with any negative effects.

Fish and Seafood: Any growth of fish and seafood exports to Ukraine as a result of an FTA will be subject to supply restraints that ensure that fish and seafood products are harvested at a sustainable level. The Government of Canada is committed to the conservation and sustainable development of Canada’s oceans through a variety of programs under the umbrella of the national Federal Sustainable Development Strategy.

Canada’s fish management systems and federal, provincial and territorial governments’ measures have been put into place to ensure the sustainability of Canada’s fisheries and the environmental integrity of its aquaculture operations so that any increased trade resulting from the CUFTA will have minimal environmental impact. Because there are effective environmental management systems and government measures in place, an increase in exports to Ukraine due to an FTA is not expected to result in a significant negative or positive impact on the sustainability of fish stocks, nor on Canada’s marine or freshwater environment.

Industrial Products: While only a very limited environmental impact is expected to result from increased industrial exports to Ukraine because of the CUFTA, a number of programs, policies and regulations are in place to mitigate potential environmental impacts arising from increased activity in the industrial sector, including air pollution, hazardous wastes, and greenhouse gas emissions resulting from production increases. Notably, the Canadian Environmental Protection Act and the Canadian Environmental Assessment Act set out a broad range of regulations, guidelines and codes of practice that mitigate the environmental effects of a range of activities associated with industrial production.

For metals and minerals, Canada has  a well-established environmental assessment process for all proposed resource development projects. The Metals and Minerals Policy of the Government of Canada: Partnerships for Sustainable Development provides a policy framework to ensure the continued use of Canada’s natural resource endowment within a sustainable development network. In addition, the Minerals and Metals Sector at Natural Resources Canada (NRCan) has developed activities and partnership aiming to identify and replicate expertise in a range of issues-areas related to sustainable development, notably the safe use of minerals and metals, life-cycle assessment, and product stewardship. If increased export activity does occur as a result of the CUFTA, federal, provincial and territorial laws and regulation on both mineral development and environmental assessment would help ensure that increased production would be carried out in an environmentally acceptable and responsible manner.

Overview of Monitoring in Canada: Along with federal, provincial and territorial legislation related to protecting the environment, Canada tracks its performance on key environmental sustainability issues including climate change and air quality, water quality and availability, and protecting nature as outlined in the FSDS using, inter alia, the Canadian Environmental Sustainability Indicators (CESI)^{Footnote 13}. These indicators are based on objective and comprehensive information and convey environmental trends in a straightforward and transparent manner, and provide valuable data and information for tracking Canada’s performance on key environmental sustainability issues. They ensure that international, national, regional, and local trends are readily accessible and transparently presented to all Canadians, and will continue to be used to track sustainability as the CUFTA is implemented.

Selected Provincial/Territorial Initiatives: British Columbia’s Environmental Management Act uses environmental management tools to protect human health and the quality of water, land and air.

In Manitoba, the Pesticide Regulation under the Environment Act regulates the application and storage of pesticides in the province. This regulation promotes the safe and appropriate use of pesticides in Manitoba’s environment.

In Quebec, the Environment Quality Act (EQA) is the main statute of general application for environmental protection. This act is the basis for Quebec’s environmental authorization regime and the environmental impact assessment and review procedure of certain projects (environmental assessment). Over 50 regulations were made pursuant to the EQA, including the Clean Air Regulation, the Regulation respecting the quality of drinking water and the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances. Besides the EQA, there is also the Pesticides Act and the associated Pesticides Management Code. For more information, please see the website of the Ministère du Développement durable, de l’Environnement et de la Lutte contre les changements climatiques du Québec and the list of laws and regulations for which it is responsible.

7. Conclusion

EAs are an effective mechanism to anticipate potential issues and to help protect the environment by improving overall policy coherence at the federal level, and by assisting decision-makers in understanding environmental implications of trade policy. This EA concludes that the CUFTA is expected to have very minor environmental impacts in Canada, including because the economic impact of the Agreement will be modest relative to Canada’s overall economic activity. This conclusion is consistent with the findings of the Initial EA.

Canada has a range of policies and programs in place to mitigate negative environmental impacts and enhance positive ones. The CUFTA does not compromise the environmental protection measures that Canada has implemented, nor does it constrain in any way Canada’s ability to put in place additional policies and programs in this area. Moreover, the CUFTA does not exempt foreign service providers and foreign investors from Canadian laws and regulations.

Comments on the Final Environmental Assessment of the CUFTA can be submitted by email, mail, or fax to:

E-mail: EAconsultationsEE@international.gc.ca
Mail: Canada-Ukraine FTA Negotiations - Environmental Assessment
Trade Policy and Negotiations Division (TPE)
Global Affairs Canada           
S7-169
125 Sussex Drive
Ottawa, ON,  K1A 0G2

Comments received will be circulated to the EA Secretariat to inform future EAs of trade negotiations and other related policy development and decision-making processes.