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Minister of Export Promotion, International Trade and Economic Development appearance before the Senate Committee on Foreign Affairs and International Trade (AEFA) on Bill C-57, An Act to implement the 2023 CUFTA – Issue notes

February 29, 2024
Published: June 20, 2024

Table of Contents

Scenario note

Minister of Export Promotion, International Trade, and Economic Development

Appearance before the Senate Standing Committee on Foreign Affairs and International Trade (AEFA)

February 29, 11:30 a.m.-12:30 p.m. ET (8:30-9:30 p.m. Abu Dhabi Time)

Virtual Meeting (Zoom)

Context

Objective

Minister Mary Ng to provide opening remarks and field questions from Senators as part of the study of C-57, Modernized CUFTA Implementation Act

Logistics

Visibility: This meeting will be televised on ParlVu.

Technical Elements:

Departmental representatives:

Virtual:

In-Person:

Run of show:

Areas of possible lines of questioning:

Based on speeches delivered at Second Reading in the Senate, questions on the following topics can be expected:

Senate Committee Address - Opening Remarks

Implementation of the Modernized Canada-Ukraine Free Trade Agreement (CUFTA)

February 29, 2024

Good day, Mr. Chair and Honourable Senators.

It is always a pleasure to appear before you and support your important work – and I am especially pleased to be here to speak about an important and long-planned development in the Canada-Ukraine bilateral trade relationship, namely the modernization of the Canada-Ukraine Free Trade Agreement (CUFTA) and its mutually beneficial outcomes for both countries.

First, I would like to acknowledge that the lands on which we are gathered and where I am speaking to you today are part of the unceded traditional territory of the Anishinaabe Algonquin people.

Mr. Chair, Honourable Senators, as you know, Bill C-57, or An Act to implement the 2023 Free Trade Agreement between Canada and Ukraine, has passed Third reading at the House of Commons and is now in front of you for your consideration.

Honourable Senators, let me please reiterate that this modernized trade Agreement represents an historic milestone in the Canada-Ukraine commercial relationship and is a clear demonstration of Canada’s steadfast and unwavering support to Ukraine in the face of Russia’s illegal and unjustified invasion.

Canada and Ukraine have enjoyed close bilateral relations since 1991, when Canada became the first Western country to recognize Ukrainian independence. These bilateral relations are strengthened by shared values and strong people-to-people ties rooted in the Ukrainian-Canadian community of approximately 1.3 million people.

In recent years, our bilateral relationship has been marked by Canada’s support for Ukraine’s sovereignty, independence, and territorial integrity, both since Russia’s invasion of Crimea in 2014, and in more recently in response to Russia’s full-scale invasion in 2022.  

Since 2014, the Government of Canada has provided roughly $9.7 billion in multifaceted support, spanning diplomatic, humanitarian, military, and financial lines.

The modernized CUFTA is the latest demonstration of Canada’s unwavering support.

The original CUFTA, which entered into force in 2017, was comprehensive from a trade-in-goods perspective but did not include chapters on services, investment, inclusive trade, or other provisions that Canada now often seeks in its modern FTA model.

As a result, in July 2019, Ukrainian President Zelenskyy and Prime Minister Trudeau announced plans to modernize the Agreement to add these chapters.  

Following delays due to COVID-19, my Ukrainian counterpart, First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko, and I announced the launch of modernization negotiations in January 2022.

Sadly, less than one month later, Russia began its full-scale invasion of Ukraine, which forced a pause in discussions. Then in May 2022, Minister Svyrydenko conveyed to me her government’s readiness to initiate, and indeed expedite, negotiations to strengthen the bilateral relationship, and support Ukraine’s long-term economic and trade interests.

She further shared the value Ukraine places on its relations with Canada, particularly with respect to our firm recognition of and long-term confidence in Ukraine as a sovereign and independent partner.

In June 2022, Canadian and Ukrainian trade officials set to work, and despite several delays due to Russian attacks on Ukraine’s energy and communications infrastructure, our teams completed negotiations for a modern, high-standard FTA in April 2023.

The conclusion of negotiations was announced by Prime Minister Trudeau and Ukrainian Prime Minister Shmyhal on April 11, 2023, during a visit to Toronto.

Over the summer months, officials undertook mandatory preparations for the Agreement’s implementation, ratification and entry into force, including the completion of a legal review and translation of the treaty text into French and Ukrainian.

Recently, the landmark initiative came full circle: Prime Minister Trudeau and President Zelenskyy signed the final, modernized CUFTA in Ottawa last September, just over four years since President Zelenskyy and Prime Minister Trudeau first announced their intention to modernize the Agreement.

Honourable Senators, if I may, I would like to say a few words about this historic Agreement, which is a highly ambitious and comprehensive deal with commitments on par with those contained in some of Canada’s most state-of-the-art agreements such as the CUSMA and the CPTPP.

Canada and Ukraine have added 9 new dedicated chapters, including on cross-border trade in services, investment, financial services, telecommunications, and good regulatory practices.

The Agreement also includes new dedicated chapters on inclusive trade, including trade and gender, our first trade and Indigenous Peoples chapter in a concluded FTA, and trade and small and medium-sized enterprises, to ensure that the opportunities and benefits of the Agreement are widely shared.

We have also expanded and improved 9 chapters from the existing Agreement, including on rules of origin and origin procedures, digital trade, competition policy, designated monopolies and state-owned enterprises, labour, environment, and transparency, anti-corruption, and responsible business conduct.

Ultimately, the outcome of these chapters is a modern, ambitious, and fully comprehensive FTA that will underpin the Canadian-Ukrainian bilateral commercial relationship for years to come and will support Ukraine’s long-term recovery and trade interests.

In fact, by serving as a demonstration of Ukraine’s ability to adhere to ambitious commitments in a range of areas, our Ukrainian counterparts have affirmed the value this Agreement will have as a new model for its efforts to advance economic integration with other partners around the world.

Furthermore, this Agreement provides a strong bilateral legal framework to support and encourage Canadian firms to initiate and expand their operations in Ukraine, and for Canada to participate in Ukraine’s reconstruction and longer-term recovery.

In January, I participated in a tour of Western Canada, where I met with many Ukrainian-Canadians and spoke about the modernized CUFTA. It was clear to me that there is interest from the Canadian private sector to support Ukraine and with the modernized CUFTA, we are doing just that. By creating opportunities for these Canadian companies through trade, we are facilitating their contribution to Ukraine’s reconstruction.

As I announced when I tabled the modernized CUFTA and Bill C-57 in the House of Commons, I am also planning to lead a business mission to Ukraine. This mission will build on the momentum of the modernized CUFTA to create new connections between Canadian and Ukrainian businesses to build a stronger, better future for all.

Honourable Senators, I thank you again for your interest in this historic Agreement. I am pleased to be joined here today by the Canadian trade officials who helped to bring this initiative to life. With their support, I stand ready to discuss and respond to any questions raised by the Committee.

Thank you.

AEFA Members’ Biographies

Peter M. Boehm (Chair)
Independent Senators Group – Ontario 

Peter M. Boehm (Chair)

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

Ukraine: 

Peacekeeping: 

GAC ‘Fit For Purpose’:

Other interests

Indigenous Relations

Peter Harder (Vice-Chair)
Progressive Senate Group – Ontario

Peter Harder (Vice-Chair)

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

Humanitarian Aid:

Ukraine:

COVAX: 

GAC ‘Fit For Purpose’:

Gwen Boniface
Independent Senators Group – Ontario

Gwen Boniface

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit For Purpose’:

 Unfair Trade Practice:

Other interests

Defence & Security:

Mary Coyle
Independent Senators Group – Nova Scotia (Antigonish) 

Mary Coyle

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit For Purpose’:

Ukraine:

Seized Russian Assets:

Atrocities in Ukraine

Other interests

Marty Deacon
Independent Senators Group – Ontario (Waterloo Region)

Marty Deacon

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

Russia: 

GAC ‘Fit for Purpose’:

Seized Russian Assets:

Other interests

Afghanistan:

Mohamed-Iqbal Ravalia
Independent Senators Group – Newfoundland and Labrador 

Mohamed-Iqbal Ravalia

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit for Purpose’:

Humanitarian aid to Ukraine:

Space Industry and Cooperation: 

Vaccine Equity:

Yuen Pau Woo
Independent Senators Group – British Columbia 

Yuen Pau Woo

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit for Purpose’:

Anti-Dumping and Countervailing Duties:

Russia Invasion of Ukraine:

Russia Sanctions:

Amina Gerba
Progressive Senate Group – Quebec (Rigaud) 

Amina Gerba

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit For Purpose’:

Global Food Crisis: 

Trade Remedy System: SME

Bill S-217 (An Act respecting the repurposing of certain seized, frozen or sequestrated assets):

Stephen Greene
Canadian Senators Group – Nova Scotia (Halifax – The Citadel) 

Stephen Greene

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit For Purpose’:

UN Update:

Ukraine:

Free Trade Agreements:

David Richards
Canadian Senators Group – New Brunswick 

David Richards

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

Afghanistan: 

Russia:

Ukraine:

GAC ‘Fit for Purpose’:

Leo Housakos
Conservative Party of Canada – Quebec (Wellington) 

Leo Housakos

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit For Purpose’:

Sanction Regime:

Foreign Interference:

Afghanistan: 

Michael L. MacDonald
Conservative Party of Canada – Nova Scotia (Cape Breton) 

Michael L. MacDonald

Appointment to the senate

Professional background

Political and parliamentary roles

Committee membership

Recent points of interest

GAC ‘Fit for Purpose’:

UN – Ukraine:

China: 

Agriculture Producers:

The United Kingdom’s Accession to the CPTPP

Top Line Messages

Supplementary Messages

Responsives

Responsive: Will the government table legislation to ratify the United Kingdom’s accession?

Responsive: What happens if the United Kingdom Accession Protocol enters into force without Canada having ratified it?

Responsive: the meat sector opposes the United Kingdom’s accession to the CPTPP (“Say No To A Bad Deal” campaign)

Responsive: Canada’s position on other accession applicants (China, Taiwan, Ecuador, Costa Rica, Uruguay, Ukraine)

Responsive: Ukraine’s CPTPP accession application

Update

Following the signing of the United Kingdom Accession Protocol on July 16, CPTPP Parties and the United Kingdom are now undertaking their respective domestic ratification processes to bring the United Kingdom. Accession Protocol into force. The CPTPP United Kingdom Accession Protocol will enter into force under a “universal” approach, 60 days after the United Kingdom and all of the Parties have ratified the Protocol. In the event that not all Parties and the United Kingdom have ratified within a period of 15 months, the approach pivots to “critical mass”, and the Accession Protocol will enter into force 60 days after both the United Kingdom and at least six Parties to the CPTPP have ratified, for the United Kingdom and Parties that have ratified the Accession Protocol. Japan and Singapore are the only CPTPP Parties to have completed their domestic ratification processes to date. Timelines for Canada’s ratification of the Accession Protocol have yet to be determined.

If the United Kingdom Accession Protocol enters into force without Canada completing its domestic ratification process, the United Kingdom will become a Party to the CPTPP. The market access commitments within the Accession Protocol will only be applicable between the United Kingdom and those Parties who have ratified. In such a scenario, Canada would not be bound by the terms of the Accession Protocol as long as its domestic ratification process is not completed. If Canada were to complete its domestic ratification process after the Accession Protocol has entered into force, the Accession Protocol would enter into force for Canada 60 days after completing its ratification.

Supporting Facts and Figures

Background

On February 1, 2021, the United Kingdom became the first economy to submit its application to accede to the CPTPP. On June 1, 2021, Canada and its CPTPP partners agreed by consensus to start the process for the United Kingdom to join the CPTPP. Through an Accession Working Group established in September 2021, the United Kingdom worked with Parties to demonstrate that its regulatory regime complies with the rules of the Agreement. On March 30, 2023, CPTPP Parties and the United Kingdom announced the substantial conclusion of accession negotiations. At a signing ceremony on July 16, CPTPP Parties officially welcomed the United Kingdom as the Agreements 12th member, and first and only successful accession candidate.

Canadian beef and pork stakeholders (Canadian Cattle Association, Canadian Meat Council, National Cattle Feeder’s Association and Canadian Pork Council) oppose the United Kingdom’s accession to the CPTPP and launched the “Say No To A Bad Deal” campaign following the conclusion of the accession negotiations (the Canadian Pork Council joined the campaign on February 12, 2024). [REDACTED]

Canada-U.K. Free Trade Negotiations

Supplementary Messages 

Supporting Facts And Figures 

Background 

The Canada-United Kingdom Trade Continuity Agreement (TCA) entered into force on April 1, 2021. The agreement preserves the main benefits of the CETA, which no longer applied to the U.K. when it left the EU. Under the TCA, which does not expire, Canada and the U.K. committed to begin negotiations on a comprehensive bilateral FTA. Since negotiations were launched in March 2022, 8 rounds have been held. While Round 9 was scheduled for February 2024, on January 25, 2024, the U.K. paused our bilateral negotiations, citing Canada’s position on expiring TCA provisions related to cheese and rules of origin. Minister Ng has noted publicly and privately to U.K. Secretary of State for Business and Trade (SoS) Kemi Badenoch Canada’s disappointment with the U.K.’s decision and has affirmed that Canada remains prepared to restart negotiations. Should the U.K. return to the negotiating table, it is anticipated that negotiations would not conclude until after the U.K.’s general election (expected in Fall 2024).

In addition to bilateral negotiations, the U.K. and CPTPP Parties signed the CPTPP U.K. Accession Protocol on July 16, 2023. The U.K. and CPTPP Parties must now complete their respective domestic ratification processes to bring the Accession Protocol into force. A public consultation was held in March and April 2021 on both prospective negotiations. Canadians across a broad range of sectors indicated support for both initiatives to ensure a strong, more competitive economic relationship with the U.K.

In 2022, the United Kingdom was Canada’s third largest trading partner for combined goods and services, behind the United States and China. In 2022, Canada and the U.K. traded $46.5 billion in combined goods and services. Overall, Canada had a trade surplus with the U.K. in 2022 as Canada exported $27.3 billion in goods and services. The U.K. was Canada’s second largest trading partner for services in 2022 behind only the United States. 

Private Member’s Bill C-282: An Act to Amend the Department of Foreign Affairs, Trade and

Development Act (supply management) 

Supplementary Messages 

Update 

The Bill was introduced in the Senate at First Reading on June 21, 2023. To date, five debates (September 26, October 18 and 24, November 2 and 30, and February 8) have been held during Second Reading in the Senate. Second Reading debate will continue at a yet to be determined date. 

Supporting Facts And Figures 

Background 

PMB C-282 is a Bloc Québécois bill introduced by MP Luc Thériault (Montcalm). The Bill seeks to amend the Department of Foreign Affairs, Trade and Development Act such that the Minister of Foreign Affairs cannot, on behalf of the Government of Canada, make any new commitment in an international treaty that would have the effect of increasing tariff rate quota (TRQ) volumes or reducing over-quota tariff rates for dairy products, poultry or eggs (supply-managed goods). The Bill would apply to negotiations towards new free trade agreements (FTAs) or renegotiating existing FTAs.

Canada’s approach in its FTAs has been to seek the elimination of tariffs on the vast majority of goods, while seeking to exclude the most sensitive agriculture goods from tariff commitments, including products covered by supply management. New market access commitments for supply-managed products have been undertaken in only three FTAs: the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Canada-United States-Mexico Agreement (CUSMA). Such commitments were accepted only where it was deemed necessary to conclude trade agreements that were in Canada’s overall economic interests. While new access for supply-managed products was provided in those agreements, the integrity of the supply management system itself, including its three pillars (pricing, production, and import controls), was fully maintained.

Israel-Gaza Conflict

Top Line Messages

Supplementary Messages 

Update 

Israeli Military Operations in Rafah: In response to Israeli military operations in north and central Gaza, more than half of the population have fled to the southern city of Rafah, at the border with Egypt. Since most remaining Hamas fighters are also presumed to be hiding in Rafah, Israel considers military operations there as critical to eliminate Hamas. However, there are widespread concerns among the international community that military operations in Rafah would 1) significantly increase the number of casualties, 2) undermine the humanitarian effort with the departure of aid workers and reduced humanitarian crossings, and 3) push Gazans to seek refuge across the border in Egypt.

Supporting Facts and Figures 

Background 

Israel-Hamas Conflict: On October 7, Hamas launched an attack on Israel in which 1,139 people were killed and over 240 were taken hostage. In response, Israel launched a military campaign in the Gaza Strip with the stated objectives of eliminating Hamas and rescuing the hostages. More than four months of fighting have left more than 29,000 Palestinians dead and 90% population of Gaza food insecure.  

Canadian arms exports to Israel: Maintaining international peace and security and protecting human rights are central to Canada's foreign policy. Canada has one of the most rigorous export control systems in the world, harmonized with those of our allies and partners under the major export control regimes. Canada’s accession to the Arms Trade Treaty (ATT) in 2019 has further strengthened this approach. All permit applications for controlled items, including those destinated to Israel, are reviewed on a case-by-case basis as part of a robust risk assessment, including against ATT criteria, which have been enshrined in the Export and Import Permits Act (EIPA). Canada’s missions abroad are consulted as part of the export permit review process, considering the local and regional situation and associated security risks.

Ukrainian Legislative Process

Top Messages/Talking Points:

Differences Between Canadian and Ukrainian Legislative Processes

Steps Ukrainian Legislative Process

Broadly, there are three steps in Ukraine’s legislative process:

  1. An administrative or Cabinet stage
    • If pressed:
    • Preparation of a legislative and ratification package by Ukrainian Ministry of Foreign Affairs
    • Submission and approval of the legislative package to the Office of the President and/or Cabinet
  2. A parliamentary stage
    • If pressed:
    • Draft legislation is assigned to a parliamentary committee responsible for the subject matter of the bill.
    • The committee reviews the bill and can either adopt the bill and approve it for first reading, or reject it.
    • If adopted, it is sent for inclusion on the agenda of the plenary session of the Verkhovna Rada, where it is debated and voted on.
    • The bill can be passed as a whole at this stage, OR passed at first reading, after which it would repeat the committee stage and plenary session at a second reading, and can repeat again for a third reading – but third readings are rare.
    • Once passed as a whole, it is signed by the speaker of the Verkhovna Rada and sent to the office of the President.
  3. A signature, publication, and entry into force stage
    • If pressed:
    • Once the President receives the law, they can either sign and adopt the law or veto it.
    • Once signed, the law is published on the official newspaper of the Verkhovna Rada and enters into force upon publication (unless otherwise stipulated by the law).

Additional Sources:

Annex: Document Received from Canada’s Embassy in Kyiv

Law-making process in the Verkhovna Rada

Initiation/registration of a draft law

The right to a legislative initiative (to register a bill) belongs to:

Traditionally, in the Ukrainian parliament the overwhelming majority of the draft laws (up to 90%) are initiated by MPs.

After a draft is registered, there is 14-day period when an alternative draft on the same issue can be initiated.

Review by the responsible committee

Each draft law is assigned to a certain parliamentary committee responsible for the subject matter of this legal initiative. This committee becomes a leading responsible committee to consider and approve the draft for the plenary session.

Other relevant committees (for instance, Budgetary or European Integration Committee), as well as parliamentary Scientific and Expert Department and Legal Department can also review and provide their opinion on a draft.

The leading responsible committee reviews the bill and all the recommendations and has the power to either adopt the draft law and approve it for the first reading, or to reject it. 

Most stakeholder/citizen engagement (consultations, public hearings, round tables) happens on the level of committee work.

Inclusion in the plenary agenda

After the leading committee approves the draft for the first reading, it needs to be included into the agenda of the next plenary session.

Agenda for the plenary is set during the Conciliatory Board meetings - a meeting of the leadership of parliament and heads of factions/groups to discuss agenda for the plenary sessions and other organizational aspects of parliamentary work; usually convened before each plenary session.

Consideration during the plenary session

When the draft ends up on the agenda of a plenary session, it is debated and requires a simple majority of MPs (226) to be adopted, except for certain category of bills that require a constitutional majority (300).

Parliament can either pass the bill as a whole, or adopt it in the first reading only, returning it to the responsible committee for additional work before the second reading (same committee procedure). There is also a third reading option, but was hardly ever used in the history of Rada.

Speaker’s signature

The adopted bill shall be signed by the Speaker of the Verkhovna Rada.

President’s signature

The President either signs the adopted law or imposes veto. 

Publication of the law

The signed laws are published in the official newspaper of the Verkhovna Rada and on its website. A law enters into force from the time of its publication, unless another period for entry into force is stipulated in the text of the law.

Implementation of the law

After a law is adopted, Cabinet of Ministers (the executive branch) is responsible for developing necessary by-laws for its implementation.

Date Modified: