44th Parl. 1st Sess.
October 24, 2023 10:00AM
Mr. Speaker, it is always a pleasure to speak on behalf of the wonderful residents of my riding of Davenport.
Today I will be speaking to Bill C-57, an act to implement the 2023 Free Trade Agreement between Canada and Ukraine, but before I begin my formal written remarks, I want to take a few minutes to make a few comments.
First, I am happy the bill has been introduced in the House. I am also grateful to the Minister of Export Promotion, International Trade and Economic Development for her leadership and work. In a time of war, it is really important for us to be thinking about the Ukrainian economy, both today and tomorrow. Therefore, a huge thanks to her for this.
I am very grateful to my colleagues on the Canada-Ukraine Friendship Group for their focus and attention on this, particularly my colleague, the member for Etobicoke Centre.
I also want to express how grateful I am to a number of key stakeholders who have helped to shape this agreement, including the Ukrainian Canadian Congress, the Canada-Ukraine Chamber of Commerce, the Ukrainian Canadian Professional and Business Association of Toronto, the Ukrainian Canadian Social Services of Canada and the Ukrainian Canadian Bar Association. I thank all of them.
I also want to acknowledge the context in which we are living today, one in which we are introducing this modernized trade agreement.
As we all know, something that troubles us every day are the major wars under way in the world today. In February of 2022, Russia started the unprovoked and illegal brutal war in Ukraine, which continues today. More recently, on October 7, Hamas initiated a brutal and violent war against Israel, which, unfortunately, also continues today. Both are clear illustrations of an attack on our democracies using war and terrorism.
I put out statements to my constituents constantly to update them on what is happening. In my latest update on Friday, I said the following, “We are in a struggle to defend our values, our humanity, and to stand up against these attacks on democracy. There is no simple solution to the conflict, but the work to find a humanitarian path to end the violence should be driven by one basic principle, and that is the most basic value of all, to protect and cherish human life.”
Some will ask me why I am mentioning this during a speech on the modernization of the Canada-Ukraine Free Trade Agreement. It is because in a time of war, when we are fighting for our values, for democracy, for the right to continue to choose the way we live, real, everyday life continues. It is important to not only support the current economy in Ukraine but also the one it is trying to build after the war it is fighting eventually ends. I am really glad Canada is there.
I have one other aside. It is my privilege to currently serve as the chair of the Canadian NATO Parliamentary Association. At the international meetings where NATO parliamentarians assemble, we talk about rebuilding Ukraine after the war. We know that the work begins now. I am very proud that Canada is stepping up and very much playing its part.
It is a true honour for me to rise in the House today in support of legislation to implement the modernized Canada-Ukraine Free Trade Agreement, otherwise known as CUFTA.
As we all know, Canada and Ukraine have enjoyed very close bilateral relations since 1991, when Canada became the first western country to recognize Ukrainian independence, an issue that we are sadly still fighting for to this day. These bilateral relations are strengthened by shared values and warm people-to-people ties rooted in the Ukrainian Canadian community of nearly 1.3 million people. My family is very much part of this community.
Recently, the Canada-Ukraine bilateral relationship has been marked by Canada's steadfast support to Ukraine independence, sovereignty and territorial integrity in the face of protracted Russian aggression. Whether it was in 2014 when Russia illegally occupied Crimea or, today, following Russia's full-scale invasion in February 2022, Canada has stood steadfast beside our Ukrainian allies to support them as they fight for their independence, democracy and freedom.
As such, since the beginning of the conflict in February 2022, Canada has committed almost $9 billion in multi-faceted support to Ukraine, which includes $5 billion in financial assistance, including $4 billion in loans through the International Monetary Fund's administered account for Ukraine, as well as $500 million through a Canada-Ukraine sovereignty bond; over $2 billion in military assistance and defence, of which I know that our Minister of Defence has recently made an additional announcement; $352 million in humanitarian assistance, a lot of which goes to the Ukrainian Women's Fund, which is for much-necessary work in the country; $147 million in development assistance; $102 million in security and stabilization assistance; and $4.8 million in cultural protection.
Additionally, Canada has established new immigration measures for Ukrainians fleeing Russia's invasion, for which we have committed $1.2 billion.
Today we have yet another opportunity to demonstrate our continued support to Ukraine through other means, means that will not only offer assistance in the short term but will extend well beyond the current unfortunate situation and will form the basis on which Canada can support the reconstruction of Ukraine for years to come. I am, of course, referring to the modernized CUFTA, which is the reason I am addressing members today.
The original CUFTA entered into force in August 2017 and immediately eliminated tariffs on 99% of imports from Ukraine. Similarly, the 2017 CUFTA immediately eliminated tariffs on 86% of Canadian exports to Ukraine, with the balance of tariff concessions to be implemented over a seven-year period, or by January 1, 2024.
While reductions in coal supplies from Canada caused a slight drop in total trade following the 2017 CUFTA's entry into force, non-coal exports grew at a rapid pace and, in 2021, total bilateral trade reached its highest point ever at $447 million before dipping to $421 million in 2022 due to Russia's invasion.
In 2022, top Canadian exports to Ukraine included armoured vehicles, fish, medicine, motor vehicles and parts, and pet food. Top imports from Ukraine included fats and oils, iron and steel, electrical machinery, and processed foods. Canadian investment in Ukraine in 2022 amounted to $112 million.
While comprehensive from a trade-in-goods perspective, the 2017 CUFTA did not include chapters on trade in services or investment. These areas were left out of the agreement due to divergent approaches at the time. Rather, the CUFTA contained a clause committing Canada and Ukraine to review the agreement within two years of its entry into force, with a view to expanding it. The review clause specifically identified services and investment as potential additions, but did not restrict the parties from exploring other areas.
Pursuant to this review clause, in a visit to Ottawa in July 2019, our Prime Minister and the Ukrainian president, President Zelenskyy, announced their intention to modernize the CUFTA. Our federal government then held formal public consultations on the modernization of the CUFTA in the winter of 2020. Submissions supported the initiative as a means of strengthening the bilateral relationship, building on Canada's commercial engagement with Ukraine, and further promoting an open, inclusive and rules-based trading environment for our businesses and investors.
The Government of Canada also received positive feedback from the provinces and territories, several of which were particularly supportive of the potential inclusion of new or modernized chapters on cross-border trade in services, financial services, investment, digital trade and additional commitments to support small and medium-sized enterprises. All of these areas have been successfully included in the modernized CUFTA, as well as new chapters or provisions on trade and gender, trade and indigenous peoples, digital trade, transparency, labour and environment, among many other areas.
Following these internal consultations, and delays due to the COVID-19 pandemic, we know there was an announcement to launch the negotiations for a modernized CUFTA in January 2022.
Unfortunately, only weeks later, on February 24, 2022, Russia began its full-scale illegal invasion of Ukraine. This caused another delay in progress, with Canadian trade officials relaying to their Ukrainian counterparts that they stood ready to proceed with CUFTA modernization discussions in accordance with Ukraine's capacity and willingness to do so.
Negotiations started in June 2022 and, despite compressed timelines and difficult circumstances for our negotiating partner, they were highly constructive. Both sides demonstrated an eagerness to reach an ambitious and high-standard agreement that would be on par with Canada's most comprehensive trade agreements. This was done with the aim of facilitating increased trade between our two nations long into the future.
During a visit from the Prime Minister of Ukraine on April 11, 2023, he and our Prime Minister announced the conclusion of negotiations for the modernized CUFTA. Each committed to undertaking their respective domestic processes to facilitate its signature and entry into force as soon as possible.
During his most recent visit to Ottawa on September 22, 2023, President Zelenskyy and our Prime Minister signed the final modernized CUFTA text. This was a historic milestone in the Canadian-Ukrainian bilateral relationship, and it served as another clear demonstration of Canada's unwavering support for Ukraine's sovereignty, independence and territorial integrity. With the final agreement officially signed, both sides are now taking the next steps to bring the agreement into force as early as January 1, 2024. That is why we are here today.
If I may, I will say a few words about the modernized agreement and some of the benefits and opportunities it presents for Canadians and Ukrainians alike.
Substantive negotiations have resulted in a modernized CUFTA, which includes nine dedicated new chapters and upgrades to nine existing chapters from the 2017 CUFTA. I will begin with an overview of the new chapters that have been added.
First, the agreement includes a dedicated new chapter on cross-border trade in services, which puts both Ukrainian and Canadian service suppliers on a comparable footing vis-à-vis our main services trading partners. Additionally, this chapter includes provisions on the recognition of professional qualifications that would facilitate trade and professional services, which are strategically important for both parties in a knowledge-based and digital economy.
The parties have also added a new chapter on investment that would replace the Canada-Ukraine FIPA. It features modern drafting to ensure investment obligations operate as intended and provide necessary flexibility in key policy areas. The new chapter includes a modern dispute settlement mechanism that would help Canadian investors participate with more confidence during Ukraine's reconstruction and beyond.
The modernized CUFTA has a financial services chapter, which includes core obligations related to market access, national treatment and most-favoured nation treatment. It would also maintain flexibility for regulators to preserve the stability of their financial systems. The financial services chapter would support a predictable, stable and transparent investment environment for investors, and it would allow Ukraine a 10-year period to transition from its existing World Trade Organization commitments to those included in this agreement.
There is also a new chapter in telecommunications, which would promote competition and provide enhanced certainty for telecommunications service suppliers when operating in Canadian and Ukrainian markets. The chapter also includes commitments to ensure that regulators of the telecommunications sector would be independent, impartial and transparent.
The parties have also added a chapter on temporary entry for business persons, which would provide new access for Canadians and Canadian companies to do business, invest and work in highly skilled occupations on a temporary basis in Ukraine while providing Canadian employers with easier access to highly skilled Ukrainian workers.
New chapters on inclusive trade, including trade and gender, trade and small and medium-sized enterprises, and trade and indigenous peoples, seek to empower and create opportunities for these under-represented groups, increasing their participation in and expanding their benefits from the modernized CUFTA. Notably, the trade and indigenous peoples chapter is the first of its kind included by either party in a free trade agreement.
Lastly, there is a chapter on good regulatory practices. It demonstrates to current and future trading partners that Ukraine is able to take on commitments that support a regulatory environment conducive to trade.
In addition to the new chapters I have outlined, we have also agreed with Ukraine to update nine chapters from the existing agreement. This includes rules of origin and origin procedures, where Canada and Ukraine have agreed to activate an article from the 2017 CUFTA on cumulation of origin.
This would allow materials of any non-party with which both Canada and Ukraine have an existing free trade agreement, such as the European Union, to be taken into consideration by the exporter when determining whether a product qualifies as originating under CUFTA, which would make it easier for Canadian and Ukrainian businesses to participate in regional value chains. It reflects a shared desire to support trade among like-minded partners.
The new digital trade chapter aims to improve regulatory certainty for businesses seeking to engage in the digital economy in both markets, as well as those specifically looking to engage in cross-border digital trade between Canada and Ukraine. The modernized CUFTA also includes a stand-alone competition policy chapter, which would enhance both parties' objective for a fair, transparent, predictable and competitive business environment through enhanced obligations for procedural fairness, and the identification and protection of confidential information by authorities.
The monopolies and state enterprises chapter has been upgraded to include important definitions for state-owned enterprises and designated monopolies, and updated commitments on transparency and technical co-operation. In the modernized government procurement chapter, Canada and Ukraine have agreed to provisions clarifying that the parties are not prevented from undertaking policies and programs to support domestic initiatives, such as green and social procurement.
The modernized CUFTA also includes perhaps the most comprehensive and ambitious environment chapter ever achieved in a Canadian free trade agreement. The updated chapter seeks to promote robust, ambitious and transparent environmental governance, and for the first time, includes a dedicated article reaffirming the parties' commitment to addressing climate change.
There is also an updated labour chapter, which shows that Canada and Ukraine are committed to the highest labour rights standards. Fully subject to the dispute settlement mechanism of the agreement, the chapter commits Canada and Ukraine to implement, in their labour laws, the content of the core conventions of the International Labour Organization.
The transparency, anti-corruption and reasonable business conduct chapter promotes transparency and integrity among public officials, private sector and society, and it advances enforceability of anti-corruption laws. It includes a new section to encourage responsible business conduct.
These negotiated outcomes would not only position Canadian firms to better participate in the economic reconstruction of Ukraine, but also support Ukraine's trade policy interests globally. Our Ukrainian colleagues have already expressed to us the value of the modernized CUFTA as the model of a modern, comprehensive and high-standard agreement with prospective trading partners around the globe. Domestically, the modernized agreement would reinforce the regulatory framework of a more inclusive, predictable and transparent trading and investment environment, which would benefit Canadian workers, businesses and entrepreneurs.
While the war continues to hinder trade both globally and bilaterally between Canada and Ukraine, the benefits and opportunities our countries have secured through this FTA are varied and long term, and would support growth in our commercial relationship now and for years to come.
During President Zelenskyy's recent visit, he and Prime Minister Trudeau had the opportunity to participate in a business round table in Toronto. At this event, we heard from business leaders from across Canada about the scope of commercial trade and investment interests in Ukraine, the risks associated with doing business in Ukraine and how to overcome these risks to ensure the private sector in Canada is well-positioned to invest and support Ukrainian reconstruction. Indeed, Canadian reconstruction companies, such as Aecon, are already moving forward to form partnerships with Ukrainian companies and to aid reconstruction.
This agreement is not just about economic gains. It also represents a landmark in the Canada-Ukraine relationship and serves as another clear demonstration of Canada's unwavering support to Ukrainian sovereignty, independence and territorial integrity. We stand with Ukraine, and this agreement is another bond between us.
To that end, I urge all hon. members to support the legislative amendments contained in Bill C-57 and support this legislation.
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Madam Speaker, the member is absolutely right. I am concerned because with the Canada-Europe free trade deal that was signed, I do not think Canadian companies have been able to take full advantage of what is in the agreement.
When it comes to agricultural goods, we know that is a sore point with the United Kingdom. I remember that when I was in the United Kingdom travelling for a study by the parliamentary association, it was very difficult to find any Canadian meat products. Markets were very good at selling and showing off British products and products made in Wales or Scotland, but getting our agricultural goods into European continental and non-continental markets should be of great focus. The department should be facilitating this and encouraging our companies to provide goods and services there.
Part of that is about making sure that when we negotiate these agreements, all of the stakeholders in Canada are part of them. In this particular situation, as I mentioned, we are still going through the agreement and trying to find how these different groups work.
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