Minister of Small Business, Export Promotion and International Trade appearance before the Standing Committee on International Trade (CIIT) – Briefing material

2020-11-03

A) Issue Briefs
B) Asia
C) Europe
D) Africa
- Canada-Africa Commercial Relations
- Mining in Africa
E) Latin America
- Pacific Alliance Negotiations
- Mercosur Negotiations
F) North America
G) Middle East / Russia / Other
- Saudi Arabia – Export Controls and LAVs
- Turkey - Export Controls

A) Issue Briefs

World Trade Organization Reform

Trade creates wealth, jobs and prosperity. Our people, businesses and economy benefit from the stability, predictability, and access to international markets provided by Canada’s membership in the World Trade Organization (WTO).
Canada is committed to safeguarding the rules-based multilateral trading system—with the WTO at its core—and is at the forefront in providing global leadership on the urgent need to reform the WTO, including through the Ottawa Group.
Canada’s priorities include maintaining a binding and enforceable two-tier dispute settlement system, and achieving progress in ongoing negotiations to ensure that WTO rules address 21st century realities.

Supplementary messages

WTO DG process [REDACTED]:

Canada calls on all members of the WTO to work constructively together to complete the WTO Director General selection process as soon as possible.
Canada has the fullest confidence in the integrity of the process agreed to by the WTO Membership and will seek to support the facilitators of the process as they complete their important work.
It will be important to avoid delay and ensure a smooth transition given the urgent need for WTO reform and ongoing COVID-19 related recovery efforts.
Canada looks forward to working with the new Director General once in place. We are pleased that for the first time, the WTO will have a female DG.

Update

As a country that is highly dependent on international trade and a strong proponent of the multilateral trading system and the WTO, Canada is exercising global leadership on WTO reform. This includes ongoing leadership of the Ottawa Group – a group of 13 likeminded WTO members created in 2018 with the objective of supporting WTO reform efforts. The Group has been an effective sounding board on WTO reform issues and has positioned Canada to play a leading role in advocating for strengthening of the rules-based trading system. Since the inaugural meeting in October 2018, Ottawa Group Ministers and Vice Ministers have met 5 times each. Ministers most recently met on June 15, during which they endorsed a COVID-19 Joint Statement committing members to a six-point workplan with concrete action items related to transparency of COVID-19 trade measures; ensuring stable and predictable trade in agriculture; intensifying WTO e-commerce negotiations; examining how technology can help facilitate cross-border trade; exploring an initiative to liberalize trade in medical supplies; and increasing engagement with stakeholders.

Further, Canada is actively engaged in work to preserve the WTO dispute settlement system – which is key to Canadian interests – in the face of the United States blocking appointments to the Appellate Body, which has rendered the appeal mechanism for WTO dispute resolution inoperable since December 2019. On July 31, 2020, Canada and a group of WTO Members established a Multi-Party Interim Appeal-Arbitration Arrangement (MPIA) to hear disputes between its 24 participants.

Canada is also committed to concluding fisheries subsidies negotiations by December 2020. Work in areas such as services domestic regulation; e-commerce; Micro, Small and Medium-sized enterprises (MSMEs); and investment facilitation is also advancing. Some outcomes may be possible by the 12th WTO Ministerial Conference (date TBC).

On Wednesday October 28, Chair of the WTO General Council, Ambassador Walker, reported to the membership that WTO DG candidate Dr. Ngozi Okonjo-Iweala (Nigeria) is the candidate most likely to attract consensus, carrying large support by Members, including from all levels of development and from all geographic regions. He therefore recommended her appointment by the General Council as the next WTO DG for consideration at the special General Council meeting to be held on November 9, 2020. The United States intervened to deliver a strong statement of support for the other candidate that had progressed to the final round – Korean candidate Minister Yoo – firmly indicating it could not join consensus to appoint Dr. Okonjo-Iweala, [REDACTED]. The Korean candidate (Minister Yoo) has not withdrawn from the race. On November 9, there will be an emergency General Council meeting for the appointment of Nigeria’s candidate as Director General of the WTO. Given current dynamics, it is anticipated that the outcome of the November 9 meeting will be an impasse and a delay of the nomination of the future WTO Director General.

Supporting facts and figures

Current Ottawa Group members (13) are Australia, Brazil, Canada, Chile, the EU, Japan, Kenya, Korea, Mexico, New Zealand, Norway, Switzerland and Singapore.
Current MPIA participants (24) are Australia; Benin; Brazil; Canada; China; Chile; Colombia; Costa Rica; Ecuador; the EU; Guatemala; Hong Kong, China; Iceland; Macau, China; Mexico; Montenegro; New Zealand; Nicaragua; Norway; Pakistan; Singapore; Switzerland; Ukraine and Uruguay. (Ottawa Group members in bold).

Export Controls - General

Canada has one of the strongest export controls systems in the world, and respect for human rights is enshrined in our legislation.
Every export permit application is evaluated on a case-by-case basis to determine what the goods or technology will be used for, where they will be used and by whom, among other factors.
Canada became a State Party to the Arms Trade Treaty (ATT) on conventional arms on September 17, 2019 and the ATT assessment criteria are included in our Export and Import Permits Act.

Supplementary messages

All export permit applications for military and strategic items are reviewed against the ATT risk assessment criteria to determine whether the export would be used to commit or facilitate a serious violation of international humanitarian or human rights law, acts of terrorism or transnational organized crime, or serious acts of gender-based violence.
The Minister of Foreign Affairs must deny export permit applications for military items if there is a substantial risk that the proposed export would result in any of the negative consequences referred to in the ATT assessment criteria.

Update

On April 9, 2020 the Minister of Foreign Affairs announced the creation of an arms- length advisory panel of experts who will review best practices regarding arms exports by State Parties to the ATT to ensure that Canada’s system is as robust as possible.

Work on establishing the panel is on-going.

Further to the same announcement, Canada is also involved in multilateral discussions to strengthen international compliance with the ATT and working toward the establishment of an international inspection regime.

Supporting facts and figures

Canada implements the ATT risk assessment criteria under the Export and Import Permits Act instead of through regulation or policy.
By applying the ATT risk assessment criteria and the substantial risk test to all military and strategic items on the Export Control List, Canada exceeds its obligations under the ATT, which only require this assessment for full system conventional weapons.

Background

The principal objective of export controls is to ensure that controlled items are exported in a manner that is consistent with Canada’s foreign, defence and national security policies. These controls are not meant to unnecessarily hinder international trade, but to regulate and impose certain restrictions on exports in response to clear policy objectives.

Most strategic items are controlled for export further to Canada’s commitments to partner countries in the four main multilateral export control regimes: The Wassenaar Arrangement (military and dual-use items), The Nuclear Suppliers Group, The Missile Technology Control Regime, and The Australia Group (chemical and biological items).

Former Bill C-47, which came into force on September 1, 2019, amended the Export and Import Permits Act to create a requirement to assess exports of military items against the ATT criteria and to establish brokering controls, among other legislative amendments aimed at strengthening Canada’s export controls.

In 2017, the Government of Canada invested $13 million CAD over five years to allow Canada to implement the ATT’s obligations and to further strengthen the rigour and transparency of its export control regime.

Canada Commercial Consular Service

COVID-19 has resulted in export controls, border closures, and rapid changes to health and safety regulations in export markets, compounding the challenges of the ongoing global rise of protectionism in advanced and emerging markets alike.
The Canada Commercial Consular Service is a Mandate letter commitment that aims “to better support small- and medium- sized Canadian companies facing commercial or trade disputes”.
By launching this enhanced problem-solving service through the Trade Commissioner Service, Canada will provide much- needed support to new and existing SME exporters in an increasingly unpredictable international trading environment.

Supplementary messages

To re-establish previous trade patterns, and find new ones, companies of all sizes, especially SMEs, must be confident that potential commercial problems can be identified and resolved.
By showing how problems can be avoided, and helping to resolve those that emerge, this TCS service will give firms the confidence they need to be able to manage risk, continue to export and find new customers.
The TCS will also ensure businesses find “no wrong door” to the federal and provincial services Canadian businesses may require. We will refer them to the right place to get the right help.

Background

With COVID-19, demand for problem-solving support has increased by 47% between April and August 2020 compared with the same period in 2019.

During that period, support provided by the TCS centered around business travel restrictions, shipping delays, and inspection assistance.

Digital trade, including intellectual property, has taken on more importance since the beginning of the pandemic, and business may look for additional support in that regard.

A number of new and enhanced TCS services are currently in development that will further help Canadian business address or prevent the challenges they face.

Export Diversification Strategy

The COVID-19 pandemic has reaffirmed the importance of export diversification as a key strategy in helping Canada’s economic recovery.
The Export Diversification Strategy is helping Canadian businesses increase their resiliency and maximize their growth via economic opportunities abroad.
The economic impacts of the pandemic reinforce the need for Canada to further diversify its exports – including who exports, where they export and how they export.

Supplementary messages

I am mobilizing my entire trade portfolio, including the Trade Commissioner Service, Export Development Canada and the Canadian Commercial Corporation to support Canadian companies seeking export diversification opportunities.
The Strategy focuses on providing Canadian businesses with tools and resources to execute their export plans; and, enhancing the federal trade services that help them navigate international markets.
The Export Diversification Strategy helps Canadian businesses of diverse sizes and sectors maximize growth through economic opportunities abroad.

Update

The impacts of COVID-19 on Canada’s international trade are still evolving, and Canadian businesses are likely to experience continued unpredictability and unforeseen disruptions in international markets. As Canada’s trading partners each grapple with their own COVID-19 response, many Canadian exporters – and small to medium-size enterprises (SMEs) in particular – will require up-to-date market intelligence and advice to respond to challenges in existing or prospective export destinations. Taking advantage of opportunities through export diversification is key in not only helping Canadian companies increase their resiliency during times of uncertainty, but also in achieving future growth.

Supporting facts and figures

Trade represents nearly two-thirds of Canadian GDP.
More than one-in-six jobs in Canada, or nearly 3.3 million jobs, are related to international trade.
In total, Global Affairs Canada was allocated $289.5 million over five years (from 2019-20 to 2023-24) and $68.3 million ongoing for the Export Diversification Strategy. Of this total, $57.7 million is requested via the 2020- 21 Main Estimates.

Background

In the 2018 Fall Economic Statement, the Government announced the Export Diversification Strategy with a $1.1 billion investment over six years that includes a $289.5 million investment in Global Affairs Canada’s Trade Commissioner Service to help Canadian businesses access new markets.

Through the Export Diversification Strategy, Canada helps companies respond to new challenges they face abroad; find and develop opportunities in new markets, and secure existing ones, for high quality Canadian goods, services and technologies; assist exporters in going digital while supporting existing digital and e-commerce exporters; and mobilize a broader and more inclusive range of Canadian businesses to participate in international trade and the prosperity it generates.

Trade Commissioner Service – COVID-19 Response

During these unprecedented times, the Trade Commissioner Service (TCS) continues to help Canadian businesses grow globally by connecting them with its funding and support programs, international opportunities, and its network of Trade Commissioners in more than 160 cities worldwide.
The TCS has been active in Canada’s COVID-19 response by:
- helping to source critical personal protective equipment and vaccines to meet Canada’s needs;
- facilitating global supply chains on behalf of Canadian businesses; and,
- retooling and re-examining export support programs to assist Canadian business in building long-term resilience.

Supplementary messages

In the early days of the pandemic, the extensive TCS network contributed to sourcing critical personal protective equipment to help meet Canada’s immediate needs, and is now assisting with tracking vaccine development internationally.
As Canada built capacity, the TCS coordinated the development of a Canadian capabilities directory of Canadian companies active in the fight against COVID-19 to share their products and services with the world.
By retooling and re-examining programs and services, like CanExport funding, e-commerce support and virtual market entry, the TCS is adapting to better assist Canadians companies looking re-establish trade patterns or find new ones amidst COVID-19 challenges.

Supporting facts and figures

More than 500 COVID-19-related enquiries received.
164 Canadian companies with COVID-19 response capabilities promoted to international markets.
Vetted more than 4,000 international suppliers for Public Services and Procurement Canada, and identified 164 gold-standard foreign suppliers.
28 markets being tracked for international vaccine procurement and biomanufacturing developments.

Trade Commissioner Service – Engagement with Provinces and Territories

The Trade Commissioner Service (TCS) engages with Provinces and Territories on a regular basis, both informally and formally through specific consultation mechanisms on international trade policy and trade promotion.
Together with other Federal Government partners, the TCS works closely with its Provincial and Territorial counterparts to support Canada’s economic recovery through international trade, innovation and investment attraction.
In response to the COVID-19 crisis, the TCS has worked closely with Federal partners, Provinces, Territories and First Nations in support of international supply chain sourcing and troubleshooting to secure PPE, ventilators and test supplies.

Supplementary messages

Through its 160 offices in Canada and around the world, the TCS supports Canadian exporters at home and abroad. Federal, Provincial and regional partners take a “Team Canada” approach to international business development and advocacy work.
The TCS Regional Office Network, which includes 6 regional offices and 27 officers in satellite office locations across Canada, is well placed to work in partnership with their Provincial and Territorial counterparts to support Canadian businesses.
Provincial representatives abroad are co-located in 80 Canadian diplomatic missions and work closely with the TCS on the ground.
The TCS Network, across Canada, and around the world, works closely with the Business Development Bank of Canada (BDC), the Canadian Commercial Corporation (CCC) and Export Development Canada (EDC) – and in collaboration with and Provinces and Territories.

Update

Officials are working to enhance Federal and Provincial collaboration following the Federal-Provincial-Territorial (FPT) virtual roundtable of Ministers responsible for international trade hosted by Minister Ng on October 13, 2020. Additional FPT collaboration with the TCS includes the annual FPT meeting on Foreign Direct Investment which was held virtually on October 21, 2020, and co-hosted by Global Affairs Canada and British Columbia. Other meetings include the FPT Committee on Trade Policy (C-Trade), which took place on October 21-23, 2020; and the FPT CUSMA consultations committee, which occurred on October 27, 2020.

Supporting facts and figures

The TCS helps Canadian businesses to scale-up and export abroad through a network of over 1,000 Trade Commissioners in 160 offices in Canada and around the world.
The TCS works closely with Provinces and Territories to attract international students from a diverse range of source countries to study in institutions across the country. In 2019, international students in Canada contributed an estimated $23.5 billion to Canada’s GDP and supported almost 200,000 jobs in Canada.
The TCS works with Provinces and Territories on FTA promotion. Canada’s 14 FTAs give Canadian exporters priority access to two-thirds of the global economy and 1.5 billion customers, notably in North America with CUSMA, in Europe with CETA, and in the Asia-Pacific region with the CPTPP.
Canada is the only G7 country with comprehensive FTAs with all other G7 countries.
Provinces and Territories have expressed an interest in supporting inclusive trade. TCS support includes the development of initiatives geared to women, Indigenous, youth, visible minorities and LGBTQ2 entrepreneurs, including business delegations and information sessions on Canada’s FTAs.

Background

Federal, Provincial and Territorial (FPT) Collaboration in the International Context

COVID-19’s detrimental impact on Provincial and Territorial economies presents new challenges to trade diversification and expansion efforts. Economic recovery is a shared priority even while travel and border restrictions remain in place. Areas of greatest interest include investment promotion and attraction, promoting Canada as a study destination and access to international market intelligence.
The TCS’s Regional Offices work closely with the Provinces and Territories through structured fora. All Regional Offices take part in regional Federal Council meetings, which include the Regional Development Agencies (RDAs) who work more broadly with the provinces.
On October 14, 2020 GAC presented its PPE sourcing efforts of COVID-19 tests to the Logistics Advisory Committee (LAC) - a working group comprised of Federal, Provincial and Territorial health officials and Other Government Department representatives. In support of ISED’s and Provincial retooling efforts, the TCS has been providing assistance to a number of Canadian manufacturers on troubleshooting supply chain disruptions and sourcing critical inputs for domestic production of COVID-19 related supplies and equipment.

Investment in Canada

Foreign Direct Investment (FDI) is vital to Canada’s economic recovery.
The Trade Commissioner Service (TCS) adapted its service delivery methods due to COVID-19 and continues assisting current and potential investors.
FDI plays an important role in strengthening Canada’s domestic supply chains.

Supplementary messages

In collaboration with Global Affairs Canada, other federal departments, and with input from FDI partners, Invest in Canada (IIC) is currently developing Canada’s Investment Attraction Strategy.
As COVID-19 has destabilized the international investment landscape and created gaps in global supply chains, the TCS, along with IIC, are working to attract investments to fill these gaps.
FDI will play an important role in supporting Canada's economic recovery, as evidence from past economic crises has shown that foreign-owned affiliates show greater resilience during crises.

Update

COVID-19 halted the steady growth of FDI into Canada, and globally. However, interactions with existing and potential investors confirm that Canada continues to be a premier investment destination. The TCS and IIC have pivoted their service delivery methods to reach foreign investors by moving to virtual events where possible, organizing sector-specific webinars, organizing virtual meetings or site visits with investors, and working with partners to identify new ideas on how to promote Canada.

Supporting facts and figures

2019 actual FDI: $67.2 billion invested.
In fiscal year 2019-20, the TCS FDI network facilitated 131 wins generating $2.7B and creating 4,440 jobs. The TCS also supported 232 visits to Canada from potential investors, 850 FDI projects, and 4,010 outcalls.
Since April 1, 2020, preliminary numbers indicate the TCS has facilitated 25 FDI wins, representing a value of $550M and creating approximately 1,277 new jobs. It has also supported 17 investor visits, most of which were virtual due to travel restrictions.

Background

Global Affairs Canada and IIC share the mandate to increase FDI into Canada and work closely together to exchange information, support investors and coordinate with other partners to attract FDI. The TCS manages a network of 44 investment officers abroad, which identifies and advances FDI opportunities in key markets and sectors and is often the first point of contact for potential investors.

Export Development Canada (EDC) Current Issues

As Canada’s Export Credit Agency, Export Development Canada (EDC) provides services that are integral to the Government’s ability to support Canadian exporters through its provision of innovative financial solutions, facilitating over $100 billion in business for Canadian companies per year.
EDC is playing a critical role in Canada’s economic response to COVID-19 by providing emergency support and liquidity solutions to companies of all sizes and in all sectors of the Canadian economy through the Canada Emergency Business Account (CEBA) and Business Credit Availability Programs (BCAP).
EDC, as a core member of Canada’s trade portfolio, will continue to support Canadian businesses through the pandemic and ensure they are poised for a dynamic recovery.

Supplementary messages

Recognizing the ongoing economic impacts of the pandemic, the Government recently expanded the level of credit available under the CEBA program and extended the eligibility criteria to serve more Canadian companies.
To ensure its effectiveness during the COVID-19 pandemic, the Government has provided EDC with the legislative and financial capacity to help Canadian businesses in need of support.

Update

The Canada Emergency Business Account (CEBA) has delivered over $31 billion in emergency credit to over 774,000 Canadian businesses since April 2020. The Government recently announced an extension of the program to businesses using personal bank accounts as well as an expansion to the level of credit available to individual businesses from $40,000 to $60,000, of which $20,000 is forgivable upon timely repayment. CEBA will continue to ensure Canadian businesses receive the support they need to endure the pandemic and be well positioned for a dynamic recovery.

Supporting facts and figures

EDC is administering the Government’s Canada Emergency Business Account (CEBA) under the Canada Account and the Business Credit Availability Program (BCAP) under its corporate account.
Update Day of Committee Appearance [As at October 22, 2020, 774,000 small and medium-sized companies have been approved for CEBA support, totalling over $30.96 billion through more than 230 Canadian financial institutions.]

Background

EDC is Canada's export credit agency with a mandate to support and develop, directly or indirectly, Canada's export trade. In 2019, EDC facilitated over $102 billion in Canadian business exports through serving over 9,000 financial clients. The Crown corporation has both domestic and international operations, with 22 regional offices across Canada and 21 international representations in key markets. The day-to-day operations of EDC are at arm's length from the Government.

At the beginning of March 2020, you, with the concurrence of the Minister of Finance, provided EDC with increased capitalization and expanded domestic authorities to help support Canadian businesses endure the economic impacts of COVID-19 and increased the limit on Canada Account to ensure fiscal capacity for CEBA. This support has provided EDC with the ability to implement the BCAP program, temporarily broaden its risk profile, and administer the CEBA program on behalf of Government.

This expanded capacity is actively working to supporting Canadian businesses impacted by COVID-19.

EDC is working with officials from Global Affairs Canada, Finance Canada, Innovation, Science and Economic Development, and the Privy Council Office, in coordination with the Business Development Bank of Canada (BDC) and Canadian financial institutions, to ensure that Canadian businesses impacted by COVID-19 continue to receive the support they need across the economic spectrum.

Canadian Commercial Corporation (CCC) Current Issues

The Canadian Commercial Corporation is an important member of the international trade portfolio responsible for government-to-government contracting, including sales to the United States Department of Defense under the Defence Production Sharing Agreement.
An open and transparent recruitment campaign is underway to identify a suitable candidate for the position of President and CEO.
CCC has put in place a robust Responsible Business Conduct Framework to ensure that it’s due diligence assessments reflect Canada’s international human rights obligations.

Supplementary messages

In line with the Governor in Council appointment process, eight director vacancies on the CCC board were filled by July 2019.
Following Ministerial direction in September 2018, CCC has completed an important Update to its policies and procedures for due diligence to ensure that human rights, transparency, and responsible business conduct are integrated on a systematic basis for every transaction.

Background

On July 8, 2020, the Auditor General of Canada (OAG) tabled in Parliament the 2020 Spring Reports of the Auditor General of Canada to the Parliament of Canada, which included the Auditor General of Canada to the Board of Directors of the Canadian Commercial Corporation—Special Examination—2019. The OAG “found that the Corporation had well-managed systems and practices for both corporate management and operations, and noted areas that could be improved”, including that “the Corporation’s due diligence processes for transactions did not adequately consider human rights issues.”

The Minister of International Trade Diversification wrote to CCC on September 24, 2018, asking the Corporation to review its risk assessments and due diligence to ensure that Canada’s international human rights obligations were reflected in its corporate social responsibility objectives and procedures by the end of June 2019.

CCC has implemented an enhanced Responsible Business Conduct Framework informed by consultations with civil society stakeholders, as well as an Updated Code of Conduct and Business Ethics, and a new Human Rights Policy.

With respect to governance, the examination noted, “At the start of the period covered by the audit, all nine director positions had expired.” By the end of the examination period, the Minister had appointed five directors (the report erroneously states that six were appointed), including three who were reappointed to their positions. An additional three directors were appointed in July 2018, leaving one director with an expired term, who continues to serve until a replacement is named.

Senator Don Plett drew attention to delays in filling Governor in Council appointments through a Senate written question submitted on September 23, 2020, seeking information on the appointment process cited in the Auditor General’s 2019 special examination report of the CCC.

Ernie Briard, CCC’s Chief Financial Officer was appointed as interim President and CEO on October 26, 2020, for a period of six months or until a new President is appointed.

COVID-19 – Global Market Support for Medical Supplies

Global Affairs Canada continues to work with its international partners on maintaining strong global supply chains to ensure the continued flow of medical supplies.
The Trade Commissioner Service is supporting Canadian companies with global solutions for COVID-19, including access to international procurement opportunities.

Supplementary messages

Canada has been consistent in standing with like-minded international partners to support global trade and investment and maintain open supply chains during this health crisis.
Global Affairs Canada is committed to working to resolve disruptions to global supply chains to ensure the flow of vital medical supplies, including PPE, testing kits, vaccines and vaccine supplies to those in need both domestically as well as globally.
The Trade Commissioner Service (TCS) has been working to support Canadian companies that have capacity to meet domestic and international demand for medical supplies throughout the pandemic.

Supporting facts and figures

To date, the TCS has identified over 400 Canadian companies with solutions related to COVID-19. Of these companies, at least 60 produce PPE.
To date, 1,242 COVID-19 related services have been delivered by the TCS at regional offices and missions abroad to support Canadian organizations in their international activities.

Background

Assisting Canadian suppliers of COVID-19 solutions: In order to increase awareness of international opportunities, the TCS has developed a directory of Canadian companies that provide solutions to support the fight against COVID-19. The Directory is intended to be a tool for Trade Commissioners at post to match COVID-19- related opportunities with Canadian suppliers that have interest and capacity for internationalization.

Global supply chains: Canada depends heavily on imports of medical products and pharmaceutical inputs. Given our highly integrated supply chains, the current pandemic could impact Canadian production capacity. Elements most critical to Canada’s supply chains include facemasks, protective suits, hand sanitizers, ventilators, vaccine supplies, therapeutics and some pharmaceutical inputs. Canada will continue to require inputs from international markets to build finished products and to support companies with export capabilities of medical and pharmaceutical supplies.

COVID-19 – Global Market Support for Vaccine Supplies

The Trade Commissioner Service has been supporting lead departments in their negotiating efforts with leading vaccine candidates.
Canada has reached agreements with seven of the leading vaccines candidates, including Medicago (based in Canada), Pfizer, Moderna, Johnson & Johnson, Novavax, Sanofi and AstraZeneca.
Public Services and Procurement Canada is currently negotiating Advanced Purchase Agreements (APAs) to formalize these agreements. Negotiations are also on-going with Canadian and foreign companies providing COVID therapeutics.

Supplementary messages

Canada is engaging with partners on global vaccine development, therapeutics as well as supplies to ensure access to supplies and equipment needed for vaccine delivery (e.g. syringes, needles).
Canada is also exploring investments to increase bio-manufacturing capability as well as fill and finish capacity that could be leveraged to support any potential vaccine candidate; Canada is interested in exploring potential partnerships with like-minded governments.
The Trade Commissioner Service is supporting leading departments on vaccines by coordinating productive information exchanges with senior officials in foreign markets including Singapore, the EU and the UK.

Background

A whole of government approach is being used to research, develop, manufacture, procure and eventually deploy one or more vaccines to Canadians.

Canada is negotiating bilateral advance purchase agreements for promising international vaccines and securing mass vaccination equipment and primary packaging supplies from international vendors. This is being executed in line with public health objectives, with consideration for feasibility of vaccination, potential for domestic manufacturing, portfolio diversification, securing redundant supply, and domestic and international equity. Canada is considering donating any excess vaccine if more than one vaccine candidate is successful.

In support of domestic biomanufacturing ramp up, engagement is underway, including international partnership opportunities to secure production capacity or licensing potential to gain access to a vaccine.

COVID-19 - Supply Chains

International supply chains have held-up reasonably well during the global pandemic.
There is little evidence of large-scale reshoring of supply chains, and doing so would be expected to reduce competitiveness and raise costs with uncertain benefits.
Canada’s preferred approach is to increase the resiliency of supply chains through international cooperation and improved transparency.

Supplementary messages

Global Affairs Canada has developed an International Supply Chain Vulnerability Index. This index examines the potential vulnerability of supply as well as demand for more than 200 Canadian industries. An early version of this index was published as the special feature in the Department’s annual State of Trade report.

Background

The global pandemic has placed a new spotlight on global supply chains. At the onset of the pandemic there were concerns about the continued functioning of supply chains and the ability of Canadians to get essential foods and medicines. Shortages of Personal Protective Equipment (PPE) were mistakenly attributed to supply chain issues rather than the large and globally coordinated demand shock that it was.

Although there were some supply chain issues that required intervention by Ministers or senior officials and some quick policy adaptations, by and large international supply chains held up rather well during the global pandemic.

There has been talk of re-shoring of supply chains to increase the resilience of the domestic economy. Supply chains allow countries, regions within countries, and companies to specialize in what they do best while gaining inputs from and selling to global markets. Because of this, supply chains have been found to raise competitiveness and productivity, improve wages and lower prices for consumers.

Given these benefits of supply chains, companies will only take action to reconfigure supply chains if there is sufficient incentive to do so.

There is also doubt about the added resiliency of reshoring supply chains. While reshoring supply chains would shorten the chains and remove some foreign policy, transport and border risks, there is no guarantee of increased resiliency. The geographical dispersion of supply chains itself provides a form of resiliency. It is notable that some of the most important supply chain disruptions during the global pandemic were in meat packing which is largely domestic.

If there is questionable benefit from reshoring supply chains but likely significant cost, alternative approaches to increasing supply chain resilience may be more effective.

For an open economy like Canada, this largely means increasing the resiliency of the international environment and diversification. Updating trade infrastructure, not only physical but also trade facilitation infrastructure, and supporting the digitization of companies including those that facilitate trade would also promote resiliency.

Increasing visibility into supply chains is also an important contributor to resiliency. Many companies are also not aware of the risks in their supply chains and even sophisticated multinationals may not know their second or third tier suppliers.

Responsible Business Conduct

We expect Canadian companies abroad to abide by all relevant laws, to respect human rights, and to adopt best practices and internationally respected guidelines on Responsible Business Conduct (RBC).
Global Affairs uses a balanced approach to RBC, focusing on raising awareness, preventing and identifying problems before they escalate, and offering effective dispute resolution through the Canadian Ombudsperson for Responsible Enterprise (CORE) and the National Contact Point for RBC.

Supplementary messages

In establishing CORE, a full range of options was considered and a non- judicial mechanism was used because it is generally considered to be more accessible, faster and cost-effective. If a Canadian company does not act in good faith during a review, recommendations can be made to implement trade measures.

Update

Ms. Sheri Meyerhoffer was appointed as the Canadian Ombudsperson for Responsible Enterprise in April 2019. It is expected that her office will start reviewing cases in January, 2021. In addition to funding provided for CORE through Budget 2018, in January, 2019, then MINT, Minister Carr instructed the Department to provide funding for a total of six positions and approximately $1 million per year.

Supporting facts and figures

Budget 2018 announced an investment of $6.8 million over six years (starting in 2017-18) and $1.3 million on-going to bolster Canada’s commitment to responsible trade and investment and corporate accountability abroad.
The 2020-21 Main Estimates include an increase of $1.2 million to implement a strengthened Responsible Business Conduct Strategy.
In total (excluding PWGSC Accommodations and SSC Information Technology costs), Global Affairs Canada was allocated $5.6 million over five years (from 2019- 20 to 2023-24) and $1.2 million ongoing to implement a strengthened Responsible Business Conduct Strategy.
Global Affairs Canada received $1.0 million for 2019-20 via Supplementary Estimates (A) and the remainder via the 2020-21 Annual Reference Level Update (ARLU).

Background

Canada’s balanced approach to RBC includes both preventive measures and access to dispute resolution mechanisms through the Canadian Ombudsperson for Responsible Enterprise (CORE) and the National Contact Point (NCP) for responsible business conduct. A company that chooses not to engage meaningfully with either the CORE or NCP could face the withdrawal of enhanced trade advocacy support and future Export Development Canada financial support.

CanExport Funding Program

CanExport provides over $33 million a year to Canadian SMEs, innovators, associations and communities to help them diversify exports and expand their international footprint.
While support for travel-based activities has been temporarily suspended, CanExport recently Updated its guidelines to provide more flexible and generous funding, particularly as it relates to virtual activities.
Since the start of the pandemic, the CanExport SMEs program has provided over $20 million to more than 500 Canadian companies looking to diversify their export markets.

Supplementary messages

In recent conversations, CanExport recipients have shared with me how the program has enabled them to pivot away from traditional in-person sales strategies to digital platforms, with several companies successfully growing exports as a result.
For example, I recently spoke with 3F Waste Recovery, a Newfoundland and Labrador cleantech company, which recently used CanExport funding to obtain intellectual property protection and launch on several Asian e-commerce platforms.

Update

COVID-19 and the resulting travel restrictions have had a significant impact on the ability of CanExport clients to explore new markets. In response to these challenges, the program released new Updates on November 3, 2020, which provide more flexible and generous funding, particularly for virtual activities. Main changes include:

Tools to expand SME’s e-commerce presence and their ability to do market exploration virtually, including participation in online events;
Eligibility of online marketing expenses, such as Search Engine Optimization (SEO) and social media advertising;
Support for COVID-19 related market-specific trade regulations and barriers;
Eligibility for trading houses and export brokers of Canadian agri-food products;
A “concierge” service to help Indigenous and women-owned businesses take full advantage of the program.

Supporting facts and figures (since program inception in January 2016)

CanExport SMEs

Approved $107 million in funding for over 3,300 projects in 145 markets.
44% of clients report exporting to their market within a year of project completion.
Helped companies generate more than $600 million in new export revenue.

CanExport innovation

Approved $5.5 million in funding for over 460 projects.
Helped companies sign contracts and arrangements valued at over $44 million.

CanExport associations

Approved $18.8 million in funding for 84 Canadian national organisations, benefitting the export activities of 165,087 companies in 80 markets.
Two thirds of projects have resulted in foreign sales or contracts.

CanExport community investments

Approved $21.1 million in funding for over 820 projects in 161 Canadian communities.

Background

Established in 2016, the Trade Commissioner Service’s CanExport Program is composed of four sub-programs: CanExport SMEs, CanExport Associations, CanExport Innovation, and CanExport Community Investments. Funding for the program was increased by $100 million over six years in June 2018, as a response to US tariffs on Canadian steel and aluminum. The 2018 Fall Economic Statement provided an additional $26 million on an ongoing basis.

International Students

International education is a key driver of Canada’s prosperity, and international students make an important contribution to the Canadian economy.
GAC remains committed to the objectives outlined in the International Education Strategy and to facilitating stability in the international education sector in the COVID-19 recovery context.

Supplementary messages

The August 2019 International Education Strategy (IES) focuses on promoting Canada as a leading study destination, diversifying source countries for international students, facilitating outbound mobility by Canadian students, and streamlining immigration and visa processes.
To mitigate the impact of COVID-19 on Canada’s international education sector, GAC continues to organize promotional events such as virtual fairs, and actively engage with provinces/territories, and other education stakeholders.
Recent amendments to the Orders in Council facilitating the entry of international students into Canada came into effect on October 20, 2020 and were welcomed by education stakeholders.

Supporting facts and figures

Canada hosted 829,405 international students in 2019 on study permits of six months or longer. According to IRCC data, Canada’s international student population grew by 13 percent in 2019 compared to the previous year.
International students contributed an estimated $23.5 billion to the Canadian economy in 2019 and sustained close to 200,000 jobs for Canadians.
56 percent of Canada’s international students come from India and China. In 2019, the remaining top ten source countries included South Korea, France, Vietnam, the USA, Iran, Brazil, Nigeria, and Mexico.
Approximately 60 per cent of international students indicate an interest in becoming permanent residents of Canada.
Canada’s Trade Commissioner Service supports more than 800 education institution and business clients to recruit international students, export Canadian curricula and other educational goods and services, and promote technical, vocational and corporate training.

Background

In 2019, Canada launched a new International Education Strategy focused on diversifying the students who come to Canada and supporting economic growth.

The IES allocated $34 million to GAC over 5 years, with $6.4 million ongoing, for enhanced digital marketing of Canada’s education offer; to support exports of education services and products; and for new “Study in Canada Scholarships”.

The IES also allocated $95 million to ESDC for a 5 year Outbound Student Mobility Pilot to help better equip Canadian students for labour market participation. Delivery of this pilot has been significantly affected by the COVID-19 pandemic.

IRCC received IES funding of $19 million over 5 years for modernization of its online application processes.

The pandemic has severely impacted Canada’s international education sector, due to the limitations on cross-border travel and the consequent negative impact on institutions seeking to attract and retain international students.

GAC worked closely with federal, provincial and territorial counterparts to consider options to safely re-open borders to international students. Amendments to relevant Orders in Council came into force on October 20, 2020, to facilitate international students’ entry into Canada.

International students seeking to enter Canada must meet all eligibility requirements, and be destined to a designated learning institution that has a COVID-19 preparedness plan approved by its province or territory.

Business Economic Trade Recovery (BETR) Working Group

The Business Economic Trade Recovery Working Group – comprised of representatives from the TCS, BDC, EDC, CCC, IiC, and ISED’s Trade Accelerator Program - was established in August 2020 to foster greater collaboration and innovation within the trade portfolio and support pandemic recovery.
The Working Group will develop proposals to strengthen alignment, enable seamless service delivery, and foster a coherent and integrated business growth and exporter journey for Canadian businesses.

Supplementary messages

The Working Group has met 3 times since established on August 13, 2020.
After mapping the client journey against the service offerings available and identifying gaps, the Working Group has identified three sectors for early collaboration: Medtech, infrastructure in Asia, and agtech.
This work will focus on evolving business needs, both for near-term re- launch and recovery efforts, and for sustained growth in the longer-term.
There are opportunities for greater coordination, coherence, and complementarity across the portfolio, including our product offerings, service delivery, client referrals, and branding.
Overall, this important work will enhance Canada’s global competitiveness as an exporter and as a destination for FDI.

Background

The idea of establishing a working group to improve coordination was an outcome from a meeting between MINT and portfolio partners on July 13, 2020. Following this, the Business Economic Trade Recovery (BETR) Working Group was established on August 13, 2020 and comprises leadership of the trade portfolio (EDC, BDC, TCS, CCC, IiC, ISED TAP). The work of the committee is targeted to be client focussed, build upon already successful collaboration, target identified key areas of focus, and build a pipeline of short-, medium-, and long-term initiatives.

The initial deliverables from the committee were a mapping of the portfolio key services reflecting the exporter journey needs, a review of the portfolio products and barriers to service, and an ideation of collaborative initiatives.

The Working Group has identified medtech, infrastructure in Asia, and agtech for more focused collaboration. Proposals for collaboration, including defining key performance indicators and how we will define success, are being developed for each sector and will be presented and discussed at the next meeting, November 20, 2020.

B) Asia

CPTPP Implementation

Now, more than ever, the CPTPP demonstrates Canada’s leadership and commitment to open, inclusive, and rules-based trade.
Canada encourages ratification by remaining signatories, and supports expansion of the Agreement through an efficient accession process.
The CPTPP is key to Canada’s trade diversification strategy and a tool for post-COVID-19 economic recovery.

Supplementary messages

Responsive: Economies interest in joining the CPTPP

Canada welcomes the interest of any economy able to meet the Agreement’s high standard rules and market access commitments.
To date, there have been expressions of interest in acceding (U.K., Taiwan, Thailand, South Korea), but no formal requests.

If pressed on support for any economy

Canada supports expansion of the Agreement and we look forward to welcoming accession requests when they come in.
Decisions on accession will be made by consensus amongst all CPTPP Parties.

Supporting facts and figures

After one year of entry into force of the CPTPP:
- Japanese imports of previously dutiable products from Canada increased by 8% over the same period in 2018, whereas imports of already duty-free products decreased by 2.5% over the same period in 2018.
- Canadian exports to Japan of pork increased by 10.0%, beef by 65.1%, wheat by 5.4%, and canola oil by 91.4%.
- Canadian exports to Vietnam of cereals increased by 61.2%, food residuals and pet food by 128.2%, and meat by 230.7%.
- Total Canadian exports to Australia increased by 10.1%, with large increases in cereals by 37,871.1% ($191.2 million), machinery by 12.2%, electronics by 23.4%, and motor vehicles and parts by 23.3%.

Background

Ratification: The COVID-19 pandemic has further delayed ratification of CPTPP by Chile, Peru, Brunei and Malaysia. Chile’s CPTPP implementing legislation has been with the Senate for a year, where it must pass a simple majority vote by the full Senate; no date has been announced. Peru has faced ongoing political challenges, the timeline for ratification is unknown. Brunei continues to advance its domestic work on technical issues necessary for ratification. Malaysia’s timeline for ratification remains unknown.

CPTPP Accessions: With the CPTPP now in force, non-member economies are able to seek to join the Agreement, guided by a non-binding accession framework, and subject to negotiations on terms and conditions with the current CPTPP members. Accessions would be an opportunity for Canada to secure improved market access with new FTA partners. The U.K., Thailand, and Taiwan are the most likely economies to seek accession. The U.K. has publicly indicated that it intends to seek accession in 2021. Other economies, such as South Korea, have previously considered acceding and may do so in the future. To date, no economy has formally applied to accede.

CPTPP Promotion: The Government of Canada is conducting CPTPP-focused outreach to Canadian businesses to raise awareness of the opportunities created by the Agreement. In addition to conducting cross-Canada business-oriented events which have reached over 2,100 participants (mainly SMEs), the Trade Commissioner Service (TCS) continues to promote the CPTPP to Canadian businesses through social media campaigns and outreach with Canadian businesses associations. The TCS has also developed and/or Updated a number of informational tools, including the Canada Tariff Finder, the CPTPP website and CPTPP instructional videos to help SMEs and other potential exporters better understand and take advantage of the Agreement.

Canada-ASEAN FTA Negotiations

Canada is committed to deepening our trade and investment relationships in Southeast Asia.
A possible ASEAN-Canada FTA would benefit both sides and support post-COVID-19 economic recovery.
While working toward a possible FTA, we are also examining, in parallel, options to deepen our relationships with individual ASEAN member states.

Supplementary messages

Taken as a whole, ASEAN is Canada’s sixth largest trading partner.
Southeast Asia is a vibrant and growing region presenting vast opportunities for Canadians to diversify trade relationships and supply chains.

Supporting facts and figures

As a group, ASEAN represents the 5th largest economy in the world, with a combined GDP of $3.8 trillion.
Canada and ASEAN completed a Canada-ASEAN Joint Feasibility Study in 2017. According to this study, a potential agreement could increase Canadian exports to ASEAN by as much as $3.54 billion; ASEAN exports to Canada could increase by $6.38 billion.
The study estimates an increase in Canadian exports of pork and other meat products, chemical, rubber and plastic products, wood products, metal products and other machinery.

Background

Canada and ASEAN concluded exploratory discussions on a possible FTA in September 2019. At the ASEAN Economic Ministers (AEM)-Canada Consultations in August 2020, Ministers agreed to next steps towards a possible FTA, including tasking officials to initiate work in January 2021 on a reference paper to outline the scope of a possible agreement. The reference paper will be submitted for Ministers’ further consideration at the next AEM-Canada Consultations in 2021.

According to the Canada-ASEAN Joint Feasibility Study on a possible Canada-ASEAN FTA, a comprehensive FTA would deliver significant trade and economic benefits for all ASEAN member states and Canada. As part of this Study, Canadian modelling predicted a possible comprehensive agreement would increase Canada’s GDP by $3.37 billion and ASEAN’s GDP by $7.97 billion. Canada’s exports to ASEAN could increase by 13.3% ($3.54 billion) and ASEAN’s exports to Canada could increase by 15.5% ($6.38 billion).

In 2018, the Government conducted public consultations to seek the views of Canadians on a possible FTA with ASEAN. Overall, stakeholders expressed support for FTA exploratory discussions with ASEAN and highlighted significant opportunities to Canadians in the ASEAN market, notably with non-CPTPP economies (Indonesia, Philippines and Thailand), across a broad range of sectors, including agriculture, manufacturing and services. A small number of stakeholders, especially from the supply-managed agriculture sectors, are skeptical of the benefits of a possible Canada- ASEAN FTA.

China – Trade Relations and Market Access Issues

China is an important market for Canadian businesses and we see signs of resiliency in the commercial relationship.
Canada is concerned by China’s coercive diplomacy and weaponization of trade; requires reframing of approach.
Canada will advance its trade relationship with China within a broader trade diversification strategy and in the best interests of Canadians.

Supplementary messages

China-Canola

Canada is working to restore market access for Canadian canola seed.

China-COVID-19 import measure on food products

Responding to China’s COVID-19-related measures imposed on imported food products is one of the Government’s top market access priorities. Bilateral and multilateral efforts are underway to address the issue.

Responsive: MINA announcement on a potential Canada-China FTA

Conditions are not ripe for FTA discussions with China, but we continue to engage with China on trade and investment matters and to address market access issues.

Responsive: U.S.-China trade dispute and Phase One deal

Canada is monitoring the trade dispute between the U.S. and China and the implementation of the U.S.-China Phase One deal to understand the implications for Canadians and the global trading system.

Background

On September 18, Canada’s Minister of Foreign Affairs stated that conditions were no longer right for Canada and China to negotiate a free trade agreement, reflecting a shift in public messaging following the launch of exploratory discussions in 2016. In October, Prime Minister Trudeau said publicly that Canada will continue to stand up against China’s “coercive diplomacy” and human rights abuses in Hong Kong and Xinjiang.

China/Canola: Since March 2019, alleging discovery of pests, China suspended canola seed shipments from two major Canadian exporters, Richardson and Viterra, and increased inspection of all Canadian canola seed exports to China. Canada’s investigation concluded that the shipments met China’s import requirements. Beginning April 1, 2020, Customs China implemented a dockage level of less than 1% (from 2.5%) for Canadian canola seed shipments. Canada continues to engage with China, further to WTO consultations on October 28, 2019, and technical meetings in December 2019.

China/COVID-19: Since mid-June, 2020, China has imposed a series of COVID-19 related import measures on food products (affecting mainly meat, fish and seafood) from trading partners based on alleged concerns that food or food packaging may be a source or route of transmission of the virus. China’s measures have included testing of imported food products and suspension of imports from establishments where there have been outbreaks of COVID-19 among workers. Canada’s position, shared by most other trading partners, is that there is currently no evidence that food or food packaging is a likely source or route of transmission or route of transmission of the COVID-19.

U.S.–China trade dispute and Phase One deal: Trade tensions between China and the U.S. have escalated since 2018. The two countries have launched WTO dispute settlement cases against one another and levied tariffs on USD$546 billion of goods. The U.S.-China “Phase One” deal that entered into force February 14, 2020 requires China to purchase an additional $200 billion of U.S. goods and services in 2020 and 2021 over 2017 levels. Purchases under the “Phase One” agreement have so far been insufficient to meet the first year’s target. Despite this, U.S. officials have refrained from penalizing China for not meeting its purchasing commitments. Given the current wide- ranging impact of the COVID-19 pandemic, it is difficult to measure the impact that “Phase One” purchases are having on Canadian industry.

India – Market Access and Investment

India is a high-priority trading partner.
We continue to work with the Indian government to expand our trade and investment relationship to its full potential and create opportunities for Canadians.

Supplementary messages

Engagement with my Indian counterpart to regain unimpeded access for Canadian pulses is a high priority.
Canada remains interested in concluding an ambitious Comprehensive Economic Partnership Agreement (CEPA) and Foreign Investment Promotion and Protection Agreement (FIPA) with India.
The CEPA and FIPA would help create new opportunities and deepen economic relations.
There has been some momentum in the past year. My counterpart, Minister of Commerce and Industry Goyal, and I have discussed our shared goal of advancing the bilateral trade and investment relationship. Canadian and Indian officials have met twice to consider how to advance negotiations on the CEPA and the FIPA.
Two-way investment is estimated at around $65 billion, largely attributable to the rapid increase in Canadian portfolio investments in India’s infrastructure and real estate sectors.
The impact of this growth is not only positive for investors’ balance sheets, but it also generates revenue and jobs for our economies.

Supporting facts and figures

Two-way merchandise trade increased by 12.6% from 2018 to 2019, amounting to $10.1 billion in 2019.
Two-way services trade increased to $4 billion in 2019.
Two-way foreign direct investment (FDI) totalled $3.5 billion in 2019. Indian FDI in Canada totaled $1.0 billion and Canadian FDI in India totaled $2.5 billion.

Background

Pulses: India is the world’s largest pulse import market and, until September 2017, had been Canada’s largest pulse export market. However, responding to domestic pressures, India made commitments to self-sufficiency and increased domestic production. India continues to apply a number of measures on imported pulses including mandatory fumigation requirements, increases in import tariffs, quantitative restrictions on dry peas (de-facto banning imports of yellow peas) and, most recently, increased scrutiny for the presence of weed seeds, including a number of previously untested pests. Pulse exports to India from Canada have decreased significantly as a result of India’s restrictive measures, from $930 million in 2017 to $158 million in 2018 (an 83% decrease). Exports in 2019 rose to $422 million but are still well below 2017 levels. On July 28, 2020, Minister Ng raised the issue with India’s Minister of Commerce and Industry, [REDACTED].

Comprehensive Economic Partnership Agreement: Canada and India launched negotiations toward a Comprehensive Economic Partnership Agreement (CEPA) in November 2010. The tenth round of negotiations took place in 2017 in New Delhi, India. Several stocktaking meetings have taken place since then, including most recently on October 27, 2020.

Foreign Investment Promotion and Protection Agreement: Canada and India launched negotiations toward a FIPA in 2004. The most recent round of negotiations took place in 2017 in New Delhi, India.

Canadian Investment in India: Priority sectors for investment attraction from India include ICT, automotive, aerospace, infrastructure, financial services, and the oil & gas and extractive sectors. Canadian portfolio investments in India have grown substantially over the past five years and are estimated to exceed $60 billion. Canadian investors are active in India’s real estate, infrastructure, logistics, information technology, private equity, renewable energy sectors, and credit financing.

Australia Wine Dispute

On July 27, we announced the partial settlement of the Australia WTO dispute on measures related to the sale of wine in Canada. As part of the settlement, Australia agreed to withdraw its claims against the Provinces of Nova Scotia and Ontario, as well as against the Federal Government.
Canada’s objective throughout this process has been to deliver positive outcomes for the Canadian wine industry. The Government worked closely with provincial governments and industry to reach this outcome.
As part of this agreement, the Government of Canada agreed to repeal the federal excise duty exemption on wine as set out in subsection 135(2) of the Excise Act, 2001, by June 30, 2022.

Supplementary messages

The partial settlement reflects Canada’s strong commitment to the rules-based international trading system, which is incredibly important for our businesses during these challenging times.
The Canadian wine industry is a vibrant part of our economy. The Government of Canada is committed to supporting this important sector, creating good jobs for Canadians and promoting the sale of high-quality products. The Government of Canada is actively investigating options with a view to ensuring the long-term success of grape growers and wine makers while aligning with our international trade obligations.

Update

Canada and Australia advised the WTO Panel of the partial settlement reached and requested that the Panel refrain from making any findings or recommendations regarding the measures included in the settlement. The Government continues to explore support options that align with the Agriculture and Agri-Food Canada’s existing program suite, and Canada’s international trade obligations, while taking into account the current economic outlook.

Background

In January 2018, Australia initiated dispute settlement proceedings at the World Trade Organization (WTO) vis-a-vis wine measures maintained by the Government of Canada and the provinces of British Columbia, Ontario, Quebec, and Nova Scotia. At the federal level, the challenge targeted the federal excise duty exemption for wine produced in Canada entirely from Canadian agricultural content. At the provincial level, the challenge targeted a number of market access policies, mark-up, and tax measures applied by liquor boards. In April 2019, a settlement was reached between Australia and Canada in regards to the BC measure.

Canada worked in close collaboration with provincial governments to defend the remaining measures. However, understanding the high likelihood that the WTO Panel could rule against Canada, domestic grape growers and wine producers advocated that federal and provincial governments take mitigating action including exploring settlement options with Australia.

In response, Canada explored settlement options with Australia and reached an agreement regarding measures maintained by the federal government, Nova Scotia, and Ontario, thereby ceasing litigation regarding these measures.

C) Europe

CETA Ratification

All economically significant parts of CETA have been provisionally in force since September 2017, with the exception of certain provisions related to investment.
The Agreement will be fully implemented once it has been ratified by the national parliaments of all 27 EU Member States. This is expected to take several years. To date, 14 of 27 Member States have ratified CETA in national parliaments. The most recent was Luxembourg (May 2020).
Canada looks forward to the full implementation of the Agreement to ensure that our businesses can access all of CETA’s benefits.

Supplementary messages

All economically significant parts of CETA have been provisionally in force since September 2017. The exception is certain provisions relating to investment which fall under Member State competencies, including the investment dispute resolution mechanism between investors and states.
The process for ratification is internal to Member States and timelines are largely determined by domestic political conditions. There is no deadline for Member States to complete ratification.
Canada’s diplomatic missions throughout the EU actively promote CETA’s benefits, and build awareness of Canada’s strengths as a secure and reliable trading partner, including in sectors that are key to green and digital transitions.

Background

Cyprus: On July 31, the Cyprus House of Representatives (unicameral parliament) took an unexpected negative vote (18-37) on a government bill to ratify CETA. The Cypriot government has affirmed its commitment to ratify CETA and its intention to re-submit legislation following consultations with legislators.
Netherlands: Legislation is before the Dutch Senate, after passing the Dutch House of Representatives by a narrow margin in February 2020. The Dutch Senate Standing Committee for Foreign Affairs, Defense and Development Cooperation voted to continue study of the ratification bill into the late autumn.
7 Member States (Belgium, Germany, Greece, Ireland, Italy, Poland, and Slovenia) have not yet formally brought forward ratification legislation.
Ireland: The new coalition government has publicly stated that they intend to put forward a ratification bill to Ireland’s parliament “in due course”.
In several Member States that have not yet ratified CETA, prevailing domestic conditions would make the swift ratification of CETA unlikely at this time: factors include fragility of governing coalitions, a core of opponents within governing coalitions, or insufficient legislative support.
A negative vote on CETA ratification by a Member State parliament would not affect provisional application. The Member State government would need to take additional steps, including notifying the European Council of its “permanent and definitive” inability to ratify the Agreement.
The European Council voted to sign CETA on the basis of unanimity in October 2016.

CETA Implementation and Trade Irritants

CETA is highly important post-COVID-19 by supporting sustainable and inclusive economic recovery; agreements such as CETA offer an opportunity for Canadian businesses to expand to new markets.
I have, and will continue to, press my EU counterpart to remove non-tariff barriers on Canadian agriculture products and to implement the Conformity Assessment Protocol, among other issues.
Canada is committed to resolving CETA implementation issues that are of concern to Canadians.

Supplementary messages

CETA’s governance structure exists to raise market access concerns and to collaborate with the EU on areas of joint cooperation.
In March 2021, I will co-chair the second CETA Joint Committee with my EU counterpart, Valdis Dombrovskis - I will use this opportunity to push for EU action on Canada’s top implementation issues and non-tariff barriers.
To secure the greatest benefits for Canadians from CETA, we continue to partner with the EU in areas of joint interest; the EU’s renewed focus on the environment provides a great business opportunity for Canadian clean technology products and sustainable raw materials.

Update

CETA’s implementation continues with many Committee meetings and Dialogues taking place in the fall 2020. These meetings allow Parties to raise concerns relevant to stakeholders, to work for a resolution of such issues, and in some cases to sign Decisions or Recommendations implementing new areas of the Agreement. For example, Canada and the EU will soon take an important step by adopting four decisions on key elements of CETA’s Investment Chapter. These decisions build upon CETA’s innovative approach to dispute settlement and will further reinforce the impartiality of adjudicators, transparency of investment disputes, and ensure consistency in the interpretation of the Agreement.

Supporting facts and figures

Prior to the pandemic, Canada-EU trade grew by 21% compared to pre-CETA.
Exports of Canadian agri-food products are on the rise under CETA. Between 2018 and 2019, agri-food exports increased by 31.9% (from $ 2.6 billion to $ 3.5 billion).

Background

CETA is one of the most comprehensive and ambitious free-trade agreements that Canada and the EU have ever implemented. The EU is Canada’s second largest trading partner after the U.S., offering tremendous opportunities for Canadian businesses. A few irritants persist in the Canada-EU trade relationship. Canada is concerned about several outstanding commitments in CETA: including the EU’s delay in implementing the Conformity Assessment Protocol, the publishing of Temporary Entry information, and an early review of CETA’s Trade and Sustainable Development Chapters with a view to their “effective enforceability”. In addition, Canadian agricultural stakeholders have raised complaints with the EU’s non-tariff barriers on agricultural products (e.g. Italy’s COOL law, access for Canadian beef and pork, hazard based approach towards pesticides, long approval process for biotech products). The CETA Joint Committee (JC) chaired at the Ministerial level has been tentatively scheduled for March 2021. The JC offers a high-level platform to discuss CETA’s benefits and to raise the above irritants with the EU.

United Kingdom Trade Dialogue

Canada and the U.K. continue to engage in discussions about our post-transition relationship, and we are both seeking to avoid disruption for business.
We aim to reach an interim agreement with the U.K. that avoids disruption due to the U.K.’s departure from the EU and leads to the negotiation of a future new agreement that can best reflect our bilateral relationship.

Supplementary messages

Preparations for any new Canada-U.K. FTA negotiation would be done in accordance with established practice and policy requirements at the time.
Ahead of launching new FTA negotiations, officials would undertake broad public consultations with Canadians.

Update

To avoid a gap in preferential trade access into each other’s market, and as a continuation of Canadian efforts to mitigate the [REDACTED].

Supporting facts and figures

All Canada-EU agreements continue to apply to the U.K. during the current Brexit transition period, including the Canada-EU Comprehensive Economic and Trade Agreement (CETA).
Canada’s trade with the EU continues to be governed by the terms of CETA.
Canada-U.K. merchandise trade has averaged $27.4 billion annually since CETA came into effect in 2017, up nearly 8.2% compared to pre-CETA (2016).
Two-way merchandise trade with the U.K. amounted to $29 billion in 2019, making it Canada’s fifth largest trading partner after the U.S., China, Mexico and Japan. Nearly 70 percent of Canada’s exports to the U.K. is non-monetary gold.

Background

As a result of the U.K. decision in June 2016 to leave the EU, it will no longer be party to the Canada-EU CETA at the end of the Brexit transition period (December 31, 2020). Without a TTA in place on January 1, 2021, Canada-U.K. trade would return to a pre-CETA, Most-Favoured Nation basis.

Canada - Ukraine FTA Modernization

In 2019, PM Trudeau and Ukrainian President Zelenskyy announced their mutual commitment to expand and modernize the 2017 CUFTA.
The CUFTA reinforces Canada’s longstanding support for political and economic stability in Ukraine by promoting a transparent and rules-based business environment.
Modernization of the CUFTA would demonstrate the Government’s commitment to increasing and diversifying rules-based international trade, and would support Canada’s overall commitment to Ukraine and its domestic reform efforts.

Supplementary messages

The CUFTA is a comprehensive FTA but does not include obligations on services or investment. The CUFTA review clause commits the Parties to review the Agreement within two years of its entry into force with a view to expanding the FTA.
The Government of Canada conducted broad-based public consultations on CUFTA modernization. Overall, Canadians are supportive.
The Government intends to follow the new FTA transparency requirements, which includes tabling a notice of intent and negotiating objectives in advance of a first round of negotiations.

Supporting facts and figures

In 2019, Canada-Ukraine bilateral merchandise trade stood at nearly $299 million.
Upon entry-into-force of the CUFTA, Canada eliminated duties on 99.9% of imports from Ukraine. Similarly, Ukraine eliminated tariffs on 86% of Canada’s exports, with the balance of tariff concessions to be implemented over seven years (by 2024).
In 2019, top merchandise exports to Ukraine were fish and seafood ($48.7M), machinery ($22.8M), meat ($12.9M), vehicles ($12.4 million) and pharmaceutical products ($9.3 million).
In addition to ensuring preferential access for Canadian exporters, the CUFTA reinforces Canada’s broader engagement in support of political and economic stability in Ukraine through its domestic reform efforts.
Canadian investors also benefit from the 1995 Canada-Ukraine Foreign Investment Protection and Promotion Agreement (FIPA).

Background

The CUFTA is a comprehensive FTA, but does not include chapters on services and investment. The CUFTA contains a review clause (Article 19.2) that commits the Parties to review the Agreement within two years of its entry into force with a view to expanding the agreement to include trade in services and investment, as well as other areas by agreement of the Parties. In July 2019, PM Trudeau and Ukrainian President Zelenskyy announced a mutual commitment to expand and modernize the 2017 CUFTA. Public consultations to seek the views of Canadians were held in winter 2020 through a Canada Gazette notice. Global Affairs Canada (GAC) heard from 27 stakeholders representing industry, provinces and territories, civil society, individuals, and business associations. The majority of submissions were positive or neutral. An official report of the consultations was published on GAC’s website on May 20, 2020. The Government of Canada is a steadfast partner of Ukraine and has contributed to Ukraine’s wider bilateral peace and security objectives through financial, development, stabilization and security assistance. The modernization of the CUFTA would demonstrate the Government of Canada’s commitment to increasing and diversifying rules-based international trade, and would support Canada’s overall commitment to Ukraine and its domestic reform efforts. CUFTA modernization would help improve the business environment in Ukraine by strengthening trade rules and increasing transparency and certainty for Canadian stakeholders, including building on the existing obligations of the 1995 FIPA.

D) Africa

Canada-Africa Commercial Relations

Canada is seeking to increase commercial relations with Africa through our Trade Diversification Strategy.
I promoted this Strategy in February during a visit to Africa, attending the Mining Indaba conference in South Africa and leading a business trade mission to Kenya and Ethiopia.
Even through these challenging times, we are committed to strengthening our trade and investment relations, building on shared priorities of inclusive growth, and deepening the people-to- people ties.

Supplementary messages

Canada’s has played an important role to help advance the African Continental Free Trade Area (AfCFTA) negotiations – for example, through our support of the African Trade Policy Centre, which we have funded through the United Nations Economic Commission for Africa.
Canada is strengthening its trade links with Africa in its fight against COVID. The Trade Commissioner Service assisted the African Union’s launch of its own online PPE procurement portal, and Canadian companies were among the first to be registered.

Update

In February 2020 you completed a successful visit to South Africa, Kenya, and Ethiopia, where you emphasized the contribution of Canada’s mining, cleantech and infrastructure sectors, both large operators and innovative small and medium-sized enterprises, while promoting inclusive economic growth and poverty reduction, and respecting the highest environmental and human rights standards.

Efforts to continue to promote our trade and investment relationship with the continent have continued in the context of COVID. For example, you have engaged in numerous digital events with stakeholders, including joining leading African business executives in introducing the African Union online PPE procurement portal to Canadian companies and more recently to the Accelerating Africa conference organized by the Canada-Africa Chamber of Business.

Supporting facts and figures

In 2019, Canada’s merchandise trade with the countries of Africa totalled $9.7B.
In 2018, Canadian mining companies owned $26.0B in assets on the continent.
The department deploys 9 senior trade commissioners (up from 6 in 2018), 2 additional Canada-based trade commissioners and 36 locally-engaged trade commissioners serving 48 markets in sub-Saharan Africa.
Based on services provided by the trade commissioner service, the most important sectors are by order of importance, Information and Communication Technologies, Cleantech, Education, Mining, Infrastructure and Oil & Gas.
Canada has 9 foreign investment protection and promotion agreements in force on the continent: Egypt, Burkina Faso, Mali, Cote d’Ivoire, Guinea, Senegal, Cameroon, Benin and Tanzania.

Background

The African Continental Free Trade Area (AfCFTA) is an African Union (AU) initiative to create an Africa-wide free trade zone. The AfCFTA aims to create a policy framework for economic integration that supports goods and services trade, removes investment barriers, and encourages economic growth. The initiative currently includes 54 African Union members, with Eritrea the only AU member that has not joined discussions.

Mining in Africa

Canada’s well-earned reputation as a mining leader in Africa is based on innovation and good governance, as well as environmental and social responsibility.
We expect Canadian companies abroad to abide by all relevant laws, to respect human rights, and to adopt best practices and internationally respected guidelines on Responsible Business Conduct (RBC).
In line with Canada's Feminist International Assistance Policy, the Government of Canada is supporting developing countries in sustainably managing their natural resources and is advancing gender equality and women's rights in natural resource governance.

Supplementary messages

Our government will also continue to work with local governments in Africa, civil society, businesses and communities to support responsible trade and development.
The Government of Canada takes the security of Canadian companies and their employees abroad very seriously. We are in constant communication with local governments, and support any efforts to reinforce security and stability.

Update

Canadian mining companies responded quickly to the onset of COVID 19 in Africa with measures to protect the health of employees, contractors and communities while ensuring business continuity. In many instances Canadian mining companies contributed financially or in kind (through medical or personal protective equipment) to host countries’ efforts to combat COVID-19.

Supporting facts and figures

In 2018, Canadian mining companies owned $26.2B in assets on the continent with the most important holdings as follows: Barrick Gold (Tanzania), B2Gold (Mali) First Quantum Minerals (Zambia), IamGold (Burkina Faso), and Kinross Gold (Mauritania).

E) Latin America

Pacific Alliance Negotiations

Canada remains committed to obtaining Associated State status to the Pacific Alliance (PA), which requires the negotiation of a free trade agreement (FTA) with the four countries as a bloc.
FTA negotiations were initiated in 2017 and eight rounds of negotiations have taken place to date.
These negotiations are a strategic opportunity for Canada to diversify its trade, strengthen trade linkages with Latin America, and advance its inclusive approach to trade with important hemispheric partners.

Supplementary messages

Canada was the first Observer State to sign a Joint Declaration on a Partnership with the PA in 2016.
An FTA with the PA offers the possibility to modernize our existing trade agreements with these countries, improve market access, and seek outcomes in line with Canada’s inclusive approach to trade.
Such an agreement would also send a strong signal to the world on our belief in the benefits of free trade and the importance of a rules-based trading system at a time of growing protectionism.

Update

Eight rounds of negotiations have taken place to date, with the most recent held Nov. 21-23, 2019 in Lima, Peru. Good progress has been made in the negotiations. Following a pause in negotiations, discussions are ongoing regarding next steps.

Supporting facts and figures

The PA is a regional integration initiative created in 2011 by Chile, Colombia, Mexico, and Peru that seeks to establish the free movement of goods, services, capital and people between these countries.
Canada's total merchandise trade with these countries was more than $52 billion in 2019, accounting for more than 75% of Canada’s trade with Latin America.
Canada has funded more than $23 million in cooperation projects under the Canada-Pacific Alliance Joint Declaration on a Partnership.

Background

In June 2017, the PA invited Canada, Australia, New Zealand, and Singapore to become Associated States. Canada launched FTA negotiations with the PA in October 2017. Canada has existing FTAs with each of the PA countries and all except Colombia are also Parties to the CPTPP (Chile and Peru have yet to ratify). As a result, Canada already benefits from a high level of market access from its existing FTAs. Negotiations toward a Canada-PA FTA nevertheless provide an opportunity to modernize and streamline our existing FTAs, improve market access where possible, and secure outcomes that reflect our inclusive approach to trade (e.g. SMEs, gender, Indigenous peoples). Domestic consultations to seek the views of Canadians on a potential Canada-PA FTA were held in 2017.

Mercosur Negotiations

We recognize that the health of forests in the region is crucial to the well-being of people and the planet.
Our government is firmly committed to the principle that free and inclusive trade, and protecting the environment, should be mutually supportive.
Specifically, our government is committed to pursuing core environment provisions focused on maintaining high levels of environmental protection and governance.
Our government continues to reach out to business and industry organizations, Indigenous partners, labour unions and environmental groups to seek their feedback, including on environmental provisions.

Update

Since launching FTA negotiations with Mercosur in March 2018, seven rounds of negotiations have been held. Round 8 had been scheduled for March 2020 in Brazil, but was postponed due to COVID-19. In October 2020, Chief Negotiators agreed to a workplan for virtual engagement at the technical level in order to make progress in various areas, despite ongoing travel restrictions.

Supporting facts and figures

Mercosur is a South American trade bloc composed of Brazil, Argentina, Uruguay, and Paraguay with a combined GDP of over $3T and a population of 261M.
In 2019, Canada’s merchandise trade with Mercosur totalled $9 billion, with Canada’s exports valued at $2.6 billion and imports valued at $6.4 billion.
An FTA with Mercosur could enhance market access of Canadian exporters in several industrial sectors facing high tariffs, such as chemicals and plastics (35%), aluminum (20%), and information and telecommunications technology (35%).

Background

These negotiations provide an opportunity for Canada to promote an inclusive approach to trade and to advance broader social, labour and environmental priorities both at home and abroad while reinforcing the importance of a rules-based trading system at a time of growing protectionism. Environmental concerns stemming from the forest fires in Brazil’s Amazon region, coupled with human rights concerns related to Brazil’s treatment of Indigenous peoples and potential links to increased agricultural trade, have triggered greater public scrutiny of trade liberalization efforts with Brazil.

Several EU member states have expressed concern about these issues in the context of the ratification process for the EU-Mercosur FTA, and these concerns have been echoed by Canadian stakeholders, led by Greenpeace.

F) North America

CUSMA Implementation

Modernization of the NAFTA marks an important milestone in the evolution of our trade relationship with the United States and Mexico.
The new Agreement modernizes the North American partnership for 21st century trade, reduces red tape at the border, and provides enhanced predictability and stability for workers and businesses.
Canada is committed to supporting the effective implementation of the new Agreement, particularly in the context of post-pandemic economic recovery.

Supplementary messages

The new Agreement reinforces the strong economic ties between the three countries and enhances North American competitiveness.
Canada is engaged proactively to ensure the effective implementation of the automotive rules of origin to support a strong and competitive Canadian automotive sector.
The Parties have also begun standing up the committees created under the agreement and Canada is focussed on using these venues to ensure the smooth implementation of the Agreement, including those on Small and Medium sized enterprises and North American competiveness.

Update

Trilateral discussions are ongoing to finalize the French and Spanish versions of several documents adopted by the Free Trade Commission (FTC) on July 1, and of the rules of procedure for the Extraordinary Challenge Committee and the Special Committee. It is anticipated that another decision of the FTC would be needed to adopt these documents. More recently, the parties have been focussed on the implementation of the autos rules of origin and standing-up CUSMA committees, including on SMEs, Competitiveness, Customs and Trade Facilitation, Transportation Services, and Technical Barriers to Trade.

Supporting facts and figures

The CUSMA economic region is the biggest in the world, encompassing a US$22 trillion regional market of more than 480 million consumers.
In 2019, trilateral merchandise trade exceeded US$1.2 trillion - a four-fold increase since 1993.
In 2019, Canada-U.S. trade in goods and services totalled over US$721 billion.
The Business Roundtable notes that 7.8 million jobs in the U.S. are supported by trade with Canada – more than from any other single trading partner.
Mexico is Canada’s third largest trading partner (following the United States and China), while Canada is Mexico’s sixth largest trading partner (following the U.S., China, Japan, Germany, and South Korea).
Canada-Mexico two-way merchandise trade amounted to more than $44 billion in 2019, with top sectors including motor vehicles, machinery, electronics, and agricultural goods.

Background

The CUSMA entered into force on July 1, 2020 reinforcing the strong economic ties between the three countries and enhancing North American competitiveness.

Importantly, the new Agreement preserves and enhances the integrated and virtually tariff-free market in North America by reducing red tape and lessening the administrative burden on importers and exporters.

Softwood Lumber

Canada is actively defending the interests of our softwood lumber industry, including through litigation under NAFTA Chapter 19 and before the WTO.
Canada’s litigation successes are designed to build pressure on the United States to resolve the softwood lumber dispute.
Canada remains prepared to engage in meaningful negotiations to reach an agreement that is in the best interests of Canadian forestry workers.

Supplementary messages

We look forward to continuing our close collaboration with industry, provinces and territories and all stakeholders.
It is the Government’s view that the Log Export Permitting Process in British Columbia does not constitute a barrier to export as the majority of logs that are advertised are deemed “surplus” and are, therefore, eligible for export.

Update

Litigation: The most recent development in softwood lumber litigation was the U.S. appeal of the Final Report in Canada’s WTO countervailing duty (CVD) challenge on September 28, 2020. The report, released on August 24, is strongly in Canada’s favour and is a significant win. The United States appealed the report despite the lack of a functioning WTO Appellate Body (i.e. appealed the decision “into the void”). Even though the United States appealed the result, the Final Report will be useful for Canada’s arguments in our NAFTA challenge of U.S. countervailing duties. Canada expects that the NAFTA Chapter 19 CVD panel will be composed shortly. Litigation successes are an important component in building pressure on the United States to negotiate a new softwood lumber agreement.

Background

Canada’s softwood lumber industry employs over 218,000 Canadians, and is heavily dependent on exports. In 2019, Canada exported over $6 billion worth of softwood lumber to the United States. The United States is by far Canada’s largest export market, accounting for almost 75% of Canada’s total exports. While China is the second-largest market, only B.C. has substantial exports to China. The majority of Canadian softwood lumber exporters are subject to a combined 20.23% U.S. duty rate.

U.S. Trade Remedy Processes - Administrative Review (AR): In the absence of a negotiated agreement, the U.S. Department of Commerce conducts an annual review of AD and CVD duty orders. Preliminary results were issued for AR1 in February 2020. They indicated that the “all others” duty rate could fall to 8.21% from the current “all others” rate of 20.23%. Final results, which could vary from the preliminary results, are expected by the end of November 2020. Many companies are eager to have the final results released, hoping that the final rates will be lower than current duty rates.

State of the Softwood Lumber Sector: Lumber companies have been helped significantly by an unprecedented surge in lumber prices over the summer due to strong demand. The Framing Lumber Composite (FLC) price reached an historic peak of US$955 on September 18. Lumber prices have been on the decline since then, but remain well over historic levels. The FLC price as of October 23 was 685 US$/MBF (lowest point of the year was US$348 on April 10, 2020).

Negotiations: Canada’s position remains that a new softwood lumber agreement is in the best interests of both countries. However, given the U.S. political calendar and the current crisis, a window for negotiation under mutually acceptable terms is unlikely before 2021.

B.C. Log Exports Process: B.C.’s federal/provincial log export process (LEP) requiring logs to undergo a surplus test prior to export has long been criticized by some domestic log harvesters. Canada’s LEP is implicated in U.S. softwood lumber trade remedy proceedings. A domestic judicial review of MINA’s decision to deny certain export permits for ‘not-surplus’ logs is also underway. Canada is defending the policy on all fronts.

Canada-US Trade Remedy Issues

U.S. protectionist actions are disrupting supply chains and directly targeting numerous Canadian industries.
We will continue to defend Canadian industry against unjustified and unwarranted U.S. trade actions.

Supplementary messages

Aluminum: Pleased tariffs removed on October 27 and duties collected since September 1 will be refunded. If the U.S. re-imposes tariffs, we will immediately retaliate on a dollar-for-dollar basis.
Blueberries: Working closely with provinces and industry to defend Canadian interest and ensure the U.S. abides by CUSMA obligations.
Other Section 232: Participating in all investigations and will defend Canadians against unwarranted tariffs.

Update

Aluminum: On October 27, the United States formally removed its Section 232 aluminum tariffs against Canada, retroactive to September 1. U.S. Customs announced it would stop collecting tariffs and importers can expect refunds for duties paid since September. The United States may reimpose tariffs if Canadian shipments exceed their monthly volume expectations.

Steel: [REDACTED].

Blueberries: On September 1, USTR announced the Seasonal Produce Plan, which requests the U.S. International Trade Commission to launch a Section 201 global safeguard investigation on blueberries imports, as well as Section 332 fact-finding investigations on strawberries and bell pepper imports. Canada monitoring and in close contact with industry and affected provinces.

Other Section 232: The United States has other ongoing Section 232 investigations that directly target and affect Canadian industry, including electrical transformers, mobile cranes, and vanadium. Canada provided written comments to all these investigations. Announcements before U.S. election are unlikely.

Supporting facts and figures

Bilateral trade in aluminum products totalled $12.9 billion in 2019. Canada exports 81% of our primary aluminum to the United States.
Aluminum production employs about 10,000 Canadians, primarily in Quebec.
Bilateral trade in steel totalled $11.5 billion in 2019, contributing $3.8 billion to Canada’s GDP and employing over 25,000 workers, many in Ontario.
U.S. fresh blueberries imports totalled US$116 million in 2019 (94% from B.C.). Frozen blueberries imports totalled US$160 million (50% from B.C., 20% Quebec, 13% Nova Scotia).

Mexico Trade Challenges

Canada is concerned with the challenges Canadian investors are facing in Mexico, particularly in the mining and energy sectors.
Canada continues to closely monitor these issues and remains committed to engage with Mexico to discuss the current business climate.
Canada supports dialogue, in good faith, towards mutually agreeable resolutions to current challenges.

Supplementary messages

Energy Sector

Canada is concerned with recent changes to Mexico’s Energy Policy, particularly the $4 billion of investments by Canadian companies in renewable energy.
Challenges with permitting have led to delays and uncertainty for Canadian companies operating in the renewable energy sector, as well as in the development of pipelines.

Mining Sector

Canada is the largest foreign investor in Mexico’s mining industry, representing 60-70% of foreign mining companies operating in the country.
Canadian companies are faced with challenges such as illegal blockades, security, taxation and permitting issues.

Background

Mining Sector: Canadian companies are the largest foreign investors in Mexico’s mining sector. According to Natural Resources Canada, Canadian-controlled companies had CAD$20.1 billion in mining assets in Mexico in 2018. As such, Mexico remained the second largest recipient of Canadian mining assets abroad in 2018 (12% of Canadian mining assets abroad), after the United States (14%).

In addition to their contributions to economic growth and job creation, Canadian mining companies support sustainable local development and community well-being through programs for education, health care, and small business development. However, Canadian investors face longstanding challenges related to uncertain land access, unclear requirements for community engagement and consultation with Indigenous peoples, weak rule of law to protect their operations and personnel, difficult security environments in some regions, and taxation issues. In order to address the issues, the Government of Canada is making use of the working-level bilateral mechanisms put in place for collaboration with Mexico.

Mexico Energy Policy: Beginning in April 2020, the Mexican government, and its regulatory agencies, introduced a number of regulation and policy changes to favour state-owned generation, largely from fuel oil, over electricity produced by private companies, notably renewable energy. The changes could adversely impact approximately US$4.17 billion in Canadian investment. Additionally, media reports indicate that regulatory agencies have been instructed to not issue new permits to companies operating in renewable energy. Canadian investors have reported significant delays in permitting, and a lack of a communication from Mexican authorities, affecting Canadian investment in both renewable energy and oil and gas pipelines.

G) Middle East / Russia / Other

Saudi Arabia – Export Controls and LAVs

In November 2018, Canada announced a review of all arms exports to the Kingdom of Saudi Arabia (KSA).
Global Affairs Canada has carefully assessed whether military goods exported from Canada to Saudi Arabia would be used in a manner consistent with the Arms Trade Treaty and Canada’s domestic legislation, and has concluded that there is no substantial risk that they would be used inappropriately.
Accordingly, new permits to Saudi Arabia are being reviewed on a case-by-case basis.

Supplementary messages

A thorough assessment of the sale of Light Armoured Vehicles (LAVs) to Saudi Arabia has been conducted.
Experts from across the Government of Canada evaluate every export permit application on a case-by-case basis to determine what the goods or technology will be used for, where they will be used and by whom, among other factors.
Permits will not be issued where the Minister of Foreign Affairs determines there to be substantial risk that they could be used to commit or to facilitate serious violations of international humanitarian law, international human rights law, or serious acts of gender-based violence.

Update

The Minister of Foreign Affairs and the Minister of Finance announced the conclusion of the departmental review of export permits to Saudi Arabia and the improved terms of the Light Armoured Vehicle (LAV) contract on April 9, 2020.

Supporting facts and figures

No valid export permits to Saudi Arabia were suspended or cancelled.
In 2019, Saudi Arabia was the largest non-U.S. export destination for Canadian military goods, at approximately $2.864 billion (or 76% of the total value of non-U.S. military exports).
Ground vehicles and their components accounted for 75% of all controlled military exports from Canada in 2019 ($3.018 billion).
Allegations of LAVs being used in the conflict in Yemen are recurring but are not credible.

Background

The review covering November 2018 to December 2019 of all existing permits destined for KSA for items controlled under the EIPA including LAVs concluded that there is no substantial risk that these items would result in the negative consequences outlined in the ATT. However, in light of the KSA’s actions in Yemen there is a substantial risk that certain controlled items (such as bomber aircrafts) would be used to commit serious violations of International Humanitarian Law (IHL). No such items have been transferred to KSA from Canada.

Turkey - Export Controls

Following allegations made regarding the possible use of Canadian technology in the Nagorno-Karabakh military conflict, relevant export permits to Turkey have been suspended.
Canadian officials are currently investigating these allegations and the suspension will allow time to further assess the situation.
All permit applications for controlled items are reviewed under Canada's robust risk assessment framework, including against the Arms Trade Treaty criteria which are enshrined in Canada's Export and Import Permits Act.

Supplementary messages

Canada has one of the strongest export controls systems in the world, and respect for human rights is enshrined in our export controls legislation.
Canada will take appropriate action should credible evidence be found regarding the misuse of any controlled Canadian good or technology.
Canada will continue to carefully scrutinize all export permits and export permit applications for the export of controlled goods and technology to ensure that they are consistent with our legal obligations and the protection of human rights and international humanitarian laws.

Update

On October 5, 2020, Canada announced the suspension of export permits to Turkey relevant to the Nagorno-Karabakh conflict. This decision followed various allegations of the possible export to Azerbaijan of Turkish drones with Canadian components, and reports that these drones may have been used in combat operations. Canadian officials are currently investigating these allegations and the suspension will allow time to further assess the situation.

Supporting facts and figures

For the 2019 calendar year, Turkey was Canada's third largest non-U.S. export destination for Military Goods and Technology, receiving approximately $151.4 million in Canadian military exports - accounting for approximately 4.03% of the total value of non-U.S. military exports.
Since 2014, the largest exports to Turkey by subcategory of military items have consisted of "imaging or countermeasure equipment" (Export Control List; ECL 2-15) valued at $230,703,300; "fire control, and related alerting and warning equipment" (ECL 2-5) valued at $161,555,998; and "electronic equipment and military spacecraft" (ECL 2-11) valued at $55,049,592.

Background

Following Turkey's October 2019 military incursion into northeastern Syria, Canada put in place a temporary suspension on the issuance of all new export permits for controlled items destined to Turkey.

On April 16, 2020, Canada issued a Notice to Exporters and narrowed the scope of Canada's policy on exports of controlled items to Turkey. While restrictions continue to apply to Group 2 (military) exports to Turkey, Canada will consider on a case-by- case basis if there are exceptional circumstances, including but not limited to NATO cooperation programs, that might justify issuing an export permit for Group 2 (military) items. Exporters who were issued permits for the export of such items to Turkey prior to October 11, 2019 may continue to export against those permits during their period of validity.

Date modified:: 2023-01-18

Minister of Small Business, Export Promotion and International Trade appearance before the Standing Committee on International Trade (CIIT) – Briefing material

Table of contents

A) Issue Briefs

World Trade Organization Reform

Supplementary messages

Update

Supporting facts and figures

Export Controls - General

Supplementary messages

Update

Supporting facts and figures

Background

Canada Commercial Consular Service

Supplementary messages

Background

Export Diversification Strategy

Supplementary messages

Update

Supporting facts and figures

Background

Trade Commissioner Service – COVID-19 Response

Supplementary messages

Supporting facts and figures

Trade Commissioner Service – Engagement with Provinces and Territories

Supplementary messages

Update

Supporting facts and figures

Background

Investment in Canada

Supplementary messages

Update

Supporting facts and figures

Background

Export Development Canada (EDC) Current Issues

Supplementary messages

Update

Supporting facts and figures

Background

Canadian Commercial Corporation (CCC) Current Issues

Supplementary messages

Background

COVID-19 – Global Market Support for Medical Supplies

Supplementary messages

Supporting facts and figures

Background

COVID-19 – Global Market Support for Vaccine Supplies

Supplementary messages

Background

COVID-19 - Supply Chains

Supplementary messages

Background

Responsible Business Conduct

Supplementary messages

Update

Supporting facts and figures

Background

CanExport Funding Program

Supplementary messages

Update

Supporting facts and figures (since program inception in January 2016)

Background

International Students

Supplementary messages

Supporting facts and figures

Background

Business Economic Trade Recovery (BETR) Working Group

Supplementary messages

Background

B) Asia

CPTPP Implementation

Supplementary messages

Supporting facts and figures

Background

Canada-ASEAN FTA Negotiations

Supplementary messages

Supporting facts and figures

Background

China – Trade Relations and Market Access Issues

Supplementary messages

Background