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Minister of International Trade, Export Promotion, Small Business and Economic Development appearance before the Standing Committee on International Trade (CIIT) on summer 2022 ministerial activities

2022-10-28

A. CIIT Committee Overview

Scenario Note

Meeting scenario

• Your in-person, two-hour appearance begins at 1:00 p.m. In addition to questions on your ministerial activities during the summer of 2022, committee members may take the opportunity to ask questions on a broad range of topics related to the international trade portfolio.
• The following officials are accompanying you in-person during the appearance and may be called upon to respond to questions.

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In-person

• Rob Stewart, Deputy Minister of International Trade
• Bruce Christie, Assistant Deputy Minister, Trade Policy and Negotiations
• Aaron Fowler, Associate Assistant Deputy Minister, Trade Policy and Negotiations
• Sarah Wilshaw, Chief Trade Commissioner or David Hutchison, Director General, Trade Portfolio Strategy and Coordination

Innovation, Science and Economic Development Canada

• Charles Vincent, Assistant Deputy Minister, Small Business and Marketplace Services

Committee context

• After your opening remarks of 5 minutes, the committee will move to rounds of questions. A one-hour appearance would allow for two complete rounds as follows:

First Round

• Conservative (6 minutes)
• Liberal (6 minutes)
• Bloc Québécois (6 minutes)
• NDP (6 minutes)

Second Round

• Conservative (5 minutes)
• Liberal (5 minutes)
• Bloc Québécois (two and a half (2.5) minutes)
• NDP (two and a half (2.5) minutes)
• Conservative (5 minutes)
• Liberal (5 minutes)
• Subsequent rounds of questioning would follow the order and timing of the second round.

Committee membership & interests

• For further information on committee membership, please see the committee bios included in this briefing binder.
• During the current 44-1 Parliament, the committee has studied:
  • potential trade impacts of the United States Inflation Reduction Act 2022 on certain firms and workers in Canada,
  • potential impacts of the ArriveCAN application on certain Canadian sectors,
  • trade opportunities for Canadian businesses in the Indo-Pacific and Canada’s exports of environmental and clean technology goods and services,
  • Canada’s exports of environmental and clean technology goods and services,
  • modernization of the Canada-Ukraine Free Trade Agreement (with the expansion on the study of the possible economic repercussions on countries standing in solidarity with Ukraine that could result from comprehensive sanctions on Russia, and measures Canada can take to improve trade with those nations while offsetting those effects), and,
  • Canada-United States relationship and its impacts on Canadian sectors.
• Committee members’ questions during previous committee meetings have focused on the following issues:
  • Conservative Members – trade opportunities with ASEAN countries, Russia- Ukraine crisis, impacts of the economic sanctions imposed on Russia,
  • Ukraine’s agriculture potential, European dependence on Russian gas, Canada’s LNG productions to meet European demands, clean tech, EDC and CCC investments in Ukraine, International Monetary Fund (IMF) and Ukraine, electric vehicles, battery production, microchip shortages, CUSMA (sourcing of up to 75% of lithium regionally tariff free), dairy TRQs critical minerals, net- zero emissions, access to the Black Sea, market diversification, foreign direct investments, supply chains, a softwood lumber agreement, forestry industry and the protection of woodland caribou, Build Back Better, and country–of – origin labelling (COOL).
  • Liberal Members – Electric vehicles, investments in labour reform, the inclusion of an environmental protection clause similar to CUSMA in the Canada-Indonesia and Canada-ASEAN FTAs and gender equity in trade, steel industry, critical minerals, battery manufacturing, Russia-Ukraine crisis and the impact on Ukrainian economy, Canada-US relations, a softwood lumber agreement, forestry industry, Most-Favoured-Nation Tariff Withdrawal Order (Russia), reducing Canada’s carbon footprint, CUFTA, European dependence on Russian gas, Trade Commissioner Service’s promotion of clean tech, CUSMA, and engagement with Indigenous peoples during trade negotiations.
  • Bloc Quebecois Member – Labour and environmental standards to address issues like child labour in the ASEAN FTA, Indonesian palm oil production and concerns for increased deforestation, product traceability, critical minerals, battery production, China’s dominance of world markets, Russia- Ukraine crisis, hydrocarbons market, European dependence on Russian gas, clean tech exports, impacts on Canadian companies resulting from the economic sanctions imposed on Russia, Most-Favoured-Nation Tariff Withdrawal Order (Russia), renewable energy, softwood lumber tariffs, and the Build Back Better.
  • NDP Member – state-owned enterprises, and the environmental concerns around the production of palm oil, rubber and pulp, inclusion of arms manufacturing in Canada-Indonesia and Canada-ASEAN FTAs Russia- Ukraine crisis, ingenuity and innovation regarding plastic disposal, exports of contaminants, clean tech, electric vehicles, battery manufacturing, dairy TRQs, Line 5, transboundary pipelines, and the Build Back Better.

Most recent appearances

• You have appeared before CIIT once during the 1^st session of the 44^th Parliament:
  • February 7, 2022, on Canada-United States relationship and its impacts on the electric vehicle, softwood lumber and other sectors.
• You appeared before CIIT six times during the 2^nd session of the 43^rd Parliament:
  • June 4, 2021, on countervailing and antidumping duties on imports of Canadian softwood lumber by the United States
  • April 26, 2021, on Main Estimates 2021-22: Vote 1 under Invest in Canada Hub
  • February 22, 2021, on Bill C-18, Canada-UK TCA Implementation Act
  • February 1, 2021, on EU vaccines
  • November 20, 2020, on the Canada-UK TCA
  • November 3, 2020, on Main Estimates 2020-21

Opening Remarks [PLACEHOLDER]

MINT remarks for CIIT on activities during summer
2022 October 28, 2022
6 minutes

Merci Madame la Présidente, and good afternoon to you, the vice-chairs, and all the other committee members both old and new.

It’s a pleasure to once again assist the committee in its important work, and to share with Canadians our government’s work in growing an inclusive economy through international trade.

*Pause*

This is a pivotal time for the future of the international rules-based trading system, and Canada’s role within it. Russia’s illegal and unjustified invasion of Ukraine remains a grave threat not just to world peace, but also to energy security, food security, and economic prosperity. It is also a direct challenge to the international rules-based order – an order that enables economic growth and good jobs for our workers.

That is why our government has taken decisive action against the Russian regime, including severe sanctions, expelling Russia from SWIFT, and being the first country to revoke Russia’s Most Favoured Nation status to reduce Canadian dollars flowing to Russia.

Canada is taking a leadership role in strengthening the rules-based international order – including through our work with the Ottawa Group at the WTO. At the WTO MC12 ministerial conference, Canada played a key role in condemning Russia and reaching historic multilateral agreements to advance vaccine equity, restoring the WTO’s dispute settlement mechanism, and to protect our oceans and fish stocks.

Both the pandemic and the war in Ukraine has demonstrated the need to not only diversify our supply chains, but to “friendshore” – to build our supply chains with allies and partners whom we can depend on. That is why as our government support Canadians through these challenging times by making life more affordable, we are also creating more jobs and opportunities by expanding trade with strategic partners.

In July in Vancouver, I hosted the United States Trade Representative Katherine Tai and former Mexican Secretary of the Economy Tatiana Clouthier for the CUSMA Free Trade Commission. Since our government negotiated CUSMA, trade with the United States increased by 17%, reaching a record-breaking $1 trillion dollars last year.

CUSMA now supports around 2 million Canadian jobs.

In August, Canadians saw the results of our Government’s advocacy and Team Canada approach, as President Biden signed the Inflation Reduction Act, affirming our two countries’ integrated auto supply chains.

Beyond North America, we are also expanding our commercial ties with the fast- growing Indo-Pacific region, building on the success of the CPTPP which already gives Canadian businesses access to half a billion customers.

These past few months, I have visited the region five times, and launched negotiations towards free trade agreements with India, a market of 1.4 billion customers; with Indonesia, a market of 275 million customers; and with the ten member ASEAN countries, that’s another over 600 million customers.

But we are going beyond trade agreements. In Singapore, we are establishing a Canadian trade gateway in Southeast Asia. A revolving door that will both support Canadian businesses and entrepreneurs to expand across the Indo-Pacific, and bring in investments and talent from Southeast Asia into Canada.

And last month, I joined the European Commission’s Executive Vice President to celebrate the 5th anniversary of CETA, which saw our trade with the European Union increase by 30% since the agreement came into force.

Of course, as you know we are negotiating a new ambitious and progressive trade agreement with the United Kingdom.

And I do mean progressive. Whether it’s through our high-standard trade agreements, or our new ambitious Responsible Business Conduct Strategy, we are expanding Canada’s global footprint and growing our economy in a way that benefits everyone.

*Pause*

As the Minister of Small Business, this includes ensuring that our small business owners and entrepreneurs get the support they need to grow their business internationally.

Through resources like the Trade Commissioner Service, our CanExport program, and the Trade Accelerator Program – our government is helping thousands of small businesses expand their global footprint.

With our government’s Women Entrepreneurship Strategy, we are investing $6 billion into supporting women entrepreneurs, such as through the Asia Pacific Foundation of Canada’s series of women-only trade missions to the Indo-Pacific.

We are also ensuring that Indigenous peoples benefit from trade, for they are the first traders, entrepreneurs, and innovators in the land we now call Canada. That is why Canada joined the Indigenous Peoples Economic and Trade Cooperation Arrangement, or IPETCA, which provides an avenue for Indigenous peoples to play a greater role in designing Canada’s trade and economic development policies.

And we are doing all this work not just because it’s the right thing to do, but because it’s the smart thing to do. When all Canadians can participate in and benefit from trade, they are growing our economy and creating good-paying jobs. And when we strengthen our friendship with historic allies and expand our relationship with new ones, we are building resilient supply chains that can weather future global upheavals.

The pandemic and Russia’s invasion of Ukraine has taught us all important lessons. We can no longer take our rules-based trading system for granted, and that is why Canada will continue to be a world leader in championing progressive, sustainable, and inclusive trade.

And of course, I cannot do this work along. I want to thank all of you for your hard work and contributions. You are a core component of Team Canada, and I look forward to continue working with you to deliver for Canadians.

Thank you. Merci. I’m happy to take your questions.

Members Biographies

Hon. Judy Sgro
(LPC—Humber River-Black Creek, ON)

Election to the house of commons

• First elected: 1999
• Re-elected: 2000, 2004, 2006, 2008, 2011, 2015, 2019, 2021

Professional background

• Municipal Politics: North York City Council (1987 – 1994); Toronto City Council (1994 – 1999); At the municipal level, Sgro focused on poverty and crime reduction.
• Immigration: Minister of Citizenship and Immigration (2003 – 2005)

Political and parliamentary roles

• Parliamentary Secretary: Minister of Public Works and Government Services (2003)
• Former Critic: National Revenue (2007); Human Resources and Skills Development (Labour) (2007 – 2008); National Revenue (2008 – 2009); Veterans Affairs (2009); Human Resources and Skills Development (Pensions) (2009 – 2013); Industry (Tourism) (2013 – 2014); Industry (2013 – 2015)

Committee membership

• Chair: Standing Committee on International Trade (2019 – Present); Liaison Committee (2015 – Present)
• Member: Standing Committee on International Trade (2019 – Present); Liaison Committee (2015 – Present)
• Former Chair: Standing Committee on Transport, Infrastructure and Communities (2015 – 2019); Standing Committee on Justice and Human Rights (2015 – 2019); Standing Committee on the Status of Women (2006 – 2007)
• Former Vice-Chair: Standing Committee on Industry, Science and Technology (2013 – 2015); (2019 – 2020); Standing Committee on the Status of Women (2011 – 2013); Standing Committee on Veterans Affairs (2009 – 2011); Liaison Committee (2007 – 2008); Standing Committee on Health (2001 – 2002)

Points of interest to GAC

Taiwan:

• During a House statement in June 2022, Ms. Sgro acknowledged the tremendous work of the Taipei Economic and Cultural Office in Canada, and she recognized the importance of the exploratory discussions on the Canada-Taiwan foreign investment promotion and protection arrangements.

Canada-U.S. relationship:

• Sgro understands the importance of the economic relationship between Canada and the United States and supports economic measures to strengthen this relationship.

Human rights: Iran, Russia

• In a statement to the House in September 2022, Ms. Sgro demonstrated her support for the people of Iran who took to the streets to protest against the government following the arrest and murder of a woman by the Iranian morality police.
• In March 2022, Ms. Sgro introduced to the House a petition to recognize that the Russian Federation has launched an unprovoked war against the people of Ukraine and that the Russian Federation has committed multiple war crimes against the people of Ukraine.

Other interests

Firearm:

• Ms. Sgro is a strong anti-gun advocate in Canada, and she regularly speaks out in the House to get guns off the street.

Kyle Seeback   
(CPC—DUFFERIN-CALEDON (ON)

Election to the house of commons

• First elected: 2011
• Re-elected: 2019, 2021

Professional background

• Studies: Bachelor of laws degree
• Law background : Associate Lawyer at Speigel Nichols Fox LLP (2000-2022); Associate Lawyer at Simmons Da Silva & Sinton LLP (2001-2012); Seeback Mediation (2019)

Political and parliamentary roles

• Critic: International Trade (2022-Present); Environment and Climate Change (2021-2022)
• Member: Canada-Italy Interparliamentary Group (2013); Canada-Africa Parliamentary Association (2011-2012); Canada-China Legislative Association (2011-2012); Canada-Europe Parliamentary Association (2011-2012); Canada-France Inerparliamentary Association (2011-2012); Canada-Japan Inter-parliamentary Group (2011-2012); Canadian NATO Parliamentary Association (2011-2012); Canadian Branch of the Commonwealth Parliamentary Association (2011-2012); Canada-United States Interparliamentary Association (2011-2012); Canada-United Kingdom Interparliamentary Association (2011-2012); Canadian Delegation to the Organization for Security and Co- operation in Europe Parliamentary Assembly (2011-2012)

Committee membership

• Vice-Chair: Standing Committee on International Trade (2022-present)
• Member: Special Committee on the Canada-People’s Republic of China Relationship (2022-present); Standing Committee on Environment and Sustainable Development (2022); Standing Committee on Citizenship and Immigration (2020-2022); Subcommittee on Agenda and Procedure (2021-2022, 2013); Standing Committee on Veterans Affairs (2020-2021); Special Committee on COVID-19 Pandemic (2020); Standing Committee on Aboriginal Affairs and Northern Development (2011-2015); Standing Committee on Justice and Human Rights (2011-2015)

Points of interest to GAC

Clean Technology:

• At ENVI meetings, Mr. Seeback has had particular interests in the investor environment around cleantech. He was also interested in energy security, energy transitions and moving towards net zero in Canada and around the world.

Other interests

Carbon Tax:

• On September 21st, 2022, during Adjournment Proceedings he was critical of the carbon tax, describing it as a failure due to increased emissions and unaffordability for Canadians.

Immigration and Citizenship:

• On May 3rd, 2022 at CIMM he voiced his concerns regarding the delays in citizenship applications.

C-242, Reuniting Families Act:

• He sponsored this Bill to amend the Immigration and Refugee Protection Act to allow a parent or grandparent who applies for a temporary resident visa as a visitor to purchase private health insurance outside Canada and to stay in Canada for a period of five years.

Simon-Pierre Savard-Tremblay
(BQ—Saint-Hyacinthe-Bagot, QC)

Election to the house of commons

• First elected: 2019
• Re-elected: 2021

Professional background

• Studies: Bachelor's degree in Political Sciences, a Master's degree in Sociology, and a PHD in Sociology and development
• Columnist: Columnist at Radio VM (2015 – 2019); Columnist at Le Mag (2017 – 2019); Columnist at Cogéco 106,9 Fm Mauricie (2016 – 2019); Columnist at La Vie Agricole (2017 – 2019)
• Blogger: Blogger at Le Journal de Montréal (2016 – 2019)

Political and parliamentary roles

• Critic: International trade, aerospace and cars (2019 – Present); Industry (2019 – Present)
• Parliament Association Member: Canadian NATO Parliamentary Association (2020 – Present); Canadian Delegation to the Organization for Security and Co-operation in Europe Parliamentary Assembly (2020 – Present); Canada-Germany Interparliamentary Group (2020 – Present); Canadian Group of the Inter-Parliamentary Union (2020 – Present); Canada-United Kingdom Inter-Parliamentary Association (2020 – Present); Canadian Section of ParlAmericas (2020 – Present); Canada-United States Inter-Parliamentary Group (2019 – Present); Canadian Branch of the Commonwealth Parliamentary Association (2020 – Present); Canadian Branch of the Assemblée parlementaire de la Francophonie (2020 – Present); Canada-Japan Inter-Parliamentary Group (2020 – Present); Canada-Italy Interparliamentary Group (2020 – Present); Canada-Israel Interparliamentary Group (2020 – Present); Canada-Africa Parliamentary Association (2020 – Present)

Committee membership

• Vice-Chair: Standing Committee on International Trade (2020 – Present)
• Member: Standing Committee on International Trade (2019 – Present)
• Former Vice-Chair: Committee on Economic Relationship between Canada and the United States (2020 – 2021)

Points of interest to GAC

Aerospace:

• Savard-Tremblay recognizes that Montreal is the third-largest aerospace hub in the world and he regularly promotes the interests of this industry at CIIT meetings.

Human Right:

• At a CIIT meeting in May 2022, Mr. Savard-Tremblay stated that Canada needed to tighten the rules through new agreements so that Canadian companies operating abroad are more respectful of human rights.

Dispute Settlement:

• When discussing free trade agreements, Mr. Savard-Tremblay is particularly interested in dispute settlement methods and does not hesitate to ask questions about them.

Environment:

• Mr. Savard-Tremblay considers the environmental impacts of Canada's trade agreements. For example, at an CIIT meeting in April 2022, he expressed concern that a free trade agreement with the Philippines would increase the import of palm oil, and thus increase the deforestation caused by this industry.

Supply Management:

• Mr. Savard-Tremblay reiterated several times in chambers and in committee the importance of protecting the supply management system.

Sanction on Russia:

• At a CIIT meeting in April 2022, Mr. Savard-Tremblay asked witnesses how Canada can compensate companies that are impacted by the sanctions against Russia so that they are not hurt as much as Russia must be.

Other interests

Quebec Sovereignty:

• He was heavily involved in the youth forum of the BQ and has been a frequent commentator in Quebec on economic and sovereignty-related issues. In his academic work, he is critical of neoliberalism and globalization.

Chandra Arya
(LPC—Nepean, ON)

Election to the house of commons

• First elected: 2015
• Re-elected: 2019, 2021

Professional background

• Studies: Bachelor’s degree in Engineering and a Master’s degree in Business Administration.
• Technology: Was an executive in the high-technology sector before entering in politics.
• Business: Served on the board of Invest Ottawa and as Chair of the Indo-Canada Ottawa Business Chamber.
• Non-Profit: Served on the board of the Unity Non-Profit Housing Corporation Ottawa and as Vice President of the Ottawa Community Immigrants Services Organization.

Political and parliamentary roles

• Member: Canada-Africa Parliamentary Association (2016 – Present); Canada-China Legislative Association (2015 – Present); Canada-Germany Interparliamentary Group (2018 – Present); Canada-Europe Parliamentary Association (2016 – Present); Canada-France Inter-Parliamentary Association (2019 – Present); Canada-Ireland Interparliamentary Group (2018 – Present); Canada-Israel Interparliamentary Group (2018 – Present); Canada-Italy Interparliamentary Group (2018 – Present); Canada-Japan Inter-Parliamentary Group (2016 – Present); Canadian NATO Parliamentary Association (2016 – Present); Canadian Branch of the Commonwealth Parliamentary Association (2016 – Present); Canada-United States Inter-Parliamentary Group (2016 – Present); Canadian Section of ParlAmericas (2017 – Present); Canada-United Kingdom Inter-Parliamentary Association (2016 – Present); Canadian Delegation to the Organization for Security and Co-operation in Europe Parliamentary Assembly (2016 – Present); Canadian Group of the Inter-Parliamentary Union (2016 – Present)

Committee membership

• Member: Standing Committee on International Trade (2020 – Present)

Points of interest to GAC

Export Market Diversification:

• At a CIIT meeting in May 2022, Mr. Arya stated that the Canadian Commercial Corporation must play an active role in promoting the exports of small and medium-sized enterprises to new markets, whether they are non-Western countries in Europe or countries in Africa and Asia.

Indo-Pacific Market:

• During a CIIT meeting in May 2022, Mr. Arya explained that India, Taiwan and the ASEAN countries are really important markets for the diversification of Canada's export markets.

Foreign direct investment:

• At recent ITIC meetings, Mr. Arya expressed interest in the evolution of Foreign Direct Investment in Canada since the pandemic.

Non-tariff barriers:

• At a CIIT meeting in May 2022, Mr. Arya questioned the witnesses on the main issues related to non-tariff barriers in the creation of new trade agreements in the context of the pandemic.

Other interests

State-sponsored disinformation:

• In a statement to the House in June 2022, Mr. Arya expressed concern about foreign threats to democracy, including state-sponsored disinformation, that have continued to grow amidst rising geopolitical tensions, a global pandemic and the rapid evolution of technology.

Critical Minerals:

• In a statement in the House of Commons in April 2022, Mr. Arya stated that it was critically important for Canada to develop and implement critical minerals and clean industrial strategies.

TONY BALDINELLI
CPC – NIAGARA FALLS (ON)

Election to the house of commons

• First elected: 2019
• Re-elected: 2021

Professional background

• Studies: Bachelor’s degree in Political Science and Government
• Consultant: Senior Consultant at Hill & Knowlton(1997 – 2001)
• Communication: Communications Manager at The Niagara Parks Commission (2001 – 2019)

Political and parliamentary roles

• Shadow Minister: Minister for Manufacturing and Export Promotion (2021 – Present)
• Special Advisor to the Leader on Tourism Recovery (2021 – Present)
• Member of the Executive: Canada-Italy Interparliamentary Group (2020 – Present)
• Member: Canada-Italy Interparliamentary Group (2020 – Present); Canadian NATO Parliamentary Association (2020 – Present); Canada-United States Inter-Parliamentary Group (2020 – Present); (2016 – 2017)

Committee membership

• Member: Standing Committee on International Trade (2022 – Present)
• Former Member: Standing Committee on Science and Research (2021 – 2022); Standing Committee on Industry, Science and Technology (2021); Standing Committee on Transport, Infrastructure and Communities (2020)

Points of interest to GAC

American Border :

• At a CIIT meeting in June 2022, Mr. Baldinelli criticized the wait times at the Canada-U.S. border, which he said was causing huge losses for the Canadian tourism industry.

Indo-Pacific Market:

• During a CIIT meeting in June 2022, Mr. Baldinelli asked the witnesses if there is a need to create something such as an Indo-Pacific diversification office to handle and look at issues like non-tariff barriers, particularly on the agricultural side.

Direct Foreign Investment:

• At a meeting in May 2022, Mr. Baldinelli asked several questions regarding ways to increase foreign direct investment in Canada.

Agriculture Sector:

• Typically at ITIC meetings, Mr. Baldinelli focuses on the impact of Canada's international trade and trade agreements on the agriculture industry.

Other interests

Human rights and Environment:

• In May 2022, Mr. Baldinelli introduced in the House a motion calling upon the House of Commons to adopt human rights and environmental due diligence legislation when dealing with foreign countries.

ArriveCAN:

• On several occasions in committee and in the House, Mr. Baldinelli has criticized the ArriveCAN application as being very detrimental to the tourism industry.

COLN CARRIE
CPC – OSHAWA (ON)

Election to the house of commons

• First elected: 2004
• Re-elected: 2006, 2008, 2011, 2015, 2019 and 2021

Professional background

• Studies: Bachelor of Kinesiology and Doctor of Chiropractic

Political and parliamentary roles

• Critic: Canada-U.S. Relations, and the Federal Economic Development Agency for Southern Ontario (2021), Canada-U.S. Relations (2019)
• Former Parliamentary Secretary: Environment (2013-2015); Health (2008-2013); Industry (2006-2008)
• Member: Canada-Africa Parliamentary Association (2021-Present); Canada-Europe Parliamentary Association (2007-Present); Canada-Japan Inter-parliamentary Group (2018-Present, 2010-2014, 2006-2007); Canadian NATO Parliamentary Association (2017-Present, 2010-2014); Canadian Branch of the Commonwealth Parliamentary Association (2017-Present, 2011-2014, 2008-2009); Canada-United States Inter-parliamentary Group (2004- present); Canada section of ParlAmericas (2018-present, 2011-2012); Canada-United Kingdom Inter-parliamentary Association (2017-present, 2010-2014); Canadian Delegation to the Organization for Security and Co-operation in Europe Parliamentary Assembly (2019-present, 2015-2018, 2009-2012); Canada-Ireland Interparliamentary Group (2021, 2010-2012, 2006-2007); Canada-Israel Interparliamentary Group (2021, 2016-2017, 2010-2012); Canada- China Legislative Association (2008-2018); Canada-France Inter-parliamentary Association (2010-2014); Canada- Germany Interparliamentary Group (2011-2012, 2005-2006); Canada-Italy Interparliamentary Group (2006-2012);

Committee membership

• Member: Standing Committee on International Trade (2022-present, 2017-2020); Standing Committee on Environment and Sustainable Development (2022, 2013-2015); Standing Joint Committee on the Library of Parliament (2021-2022); Standing Committee on Access to Information, Privacy and Ethics (2021); Standing Committee on Veterans Affairs (2020-2021); Special Committee on the COVID-19 Pandemic (2020); Standing Committee on Health (2016-2017, 2009-2013); Subcommittee on Agenda and Procedure of the Standing Committee on Environment and Sustainable development (2013-2014); Subcommittee on Agenda and Procedure of the Standing Committee on Health (2011-2013, 2004-2005); Subcommittee on Oil and Gas and Other Energy Prices (2008); Subcommittee on Agenda and Procedure of the Standing Committee on Industry, Science and Technology (2007-2008); and Standing Committee on Industry, Science and Technology (2006-2008).

Points of interest to GAC

Clean Technologies:

• At ENVI, he has often raised the topic of electric, zero-emissions vehicles, and charging stations (clean hydrogen).

Other interests

Bill C-461

• He introduced this Bill to advocate for new measures to stop the scourge of human trafficking by proposing to amend Canada's Criminal Code to clarify what constitutes exploitation for the purpose of establishing whether a person has committed the offence of trafficking in persons.

ANJU DHILLON
LPC – DORVAL-LACHINE-LASALLE (QC)

Election to the house of commons

• First elected: 2015
• Re-elected: 2019, 2021

Professional background

• Studies: Bachelor's degree in Political Science, a Bachelor's degree in Law and a Master's degree in Law.
• Law: Before politics, she worked as a caregiver and ran her own law practice.
• Politics: She sat on the Executive Council of the LaSalle-Emard Federal Liberal Electoral District Association in various positions such as Youth Vice-President, Vice-President Female, Secretary, and Policy Officer.

Political and parliamentary roles

• Parliamentary Secretary: Status of Women (2015 – 2017)

Committee membership

• Member: Standing Committee on International Trade (2021 – Present); Standing Committee on Justice and Human Rights (2021 – Present)

Points of interest to GAC

ASEAN Market:

• At an CIIT meeting in June 2022, Ms. Dhillon asked several questions about the social and economic situation of several ASEAN countries, including on human rights, in order to learn about their trade potential for Canada.

Global markets:

• Ms. Dhillon supports the idea of increasing access to global markets for all Canadian companies and ensuring that Canadian companies are able to compete in global markets.

Sanction against Russia:

• At an CIIT meeting in April 2022, Ms. Dhillon addressed the impact of economic sanctions against Russia on the Canadian economy and businesses.

Softwood Lumber:

• At an CIIT meeting in February 2022, Dhillon asked the witnesses how the government can best support the softwood lumber sector.

Other interests

Women & Gender-based Violence:

• Ms. Dhillon is a strong advocate for women`s rights, and a strong opponent of gender-based violence.

Immigration:

• Ms. Dhillon regularly encourages the government to adopt measures to facilitate immigration to Canada, particularly for people from regions where there are significant challenges to governance, equity, human rights and the rule of law.

RICHARD MARTEL
CPC – CHICOUTIMI-LE FJORD (QC)

Election to the house of commons

• First elected: 2018
• Re-elected: 2019, 2021

Professional background

• Hockey: Served as head coach in the Quebec Major Junior Hockey League (QMJHL) (1993 – 2017)

Political and parliamentary roles

• Shadow Minister: Sport; Economic Development Agency of Canada for the Regions of Quebec (2018 – 2020); National Defence (2018 – 2020)
• Quebec Political Lieutenant (2020 – 2021)

Committee membership

• Member: Standing Committee on International Trade (2021 – Present)
• Former Member: Standing Committee on National Defence (2018 – 2020)

Points of interest to GAC

Food Export:

• At a CIIT meeting in June 2022, Mr. Martel emphasized whether and how Canada can support its food exporters without harming the local Canadian market.

Manufacturing Sector:

• During a CIIT meeting in June 2022, Mr. Martel wanted to know how Canada is protecting its manufacturing sector in Asia-Pacific markets such as Vietnam.

Taiwan:

• At a CIIT meeting in June 2022, Mr. Martel showed interest in Taiwan's admission to the CPTPP and asked the witnesses what role Canada can play in protecting Taiwan's western interests.

Foreign Direct Investment:

• During a CIIT meeting in May 2022, Mr. Martel stated that if Canada wants to attract more foreign investment, it must offer winning conditions to businesses, such as fewer regulations, a better tax environment, and reduced delays and costs for new projects.

Critical Metals:

• At a CIIT meeting in May 2022, Mr. Martel stated that “Canada absolutely has to secure Canadian supply of critical metals in order to limit China's and Russia's hold over this market”.

Aluminum:

• Mr. Martel comes from an aluminium producing region, so he is very interested in the opportunity and impact of Canada's trade agreements on the aluminium sector.

Sanctions against Russia:

• At a CIIT meeting in April 2022, Mr. Martel asked to what extent are the sanctions and measures against Russia affecting Canada's economy and what are the steps that countries like Canada are taking to reduce the impact of those measure on trade and investment.

Softwood lumber:

• Mr. Martel is an advocate for the softwood lumber industry, in committee he regularly criticizes the government's lack of protection of this industry in its free trade agreements such as CUSMA.

Dairy:

• The dairy industry being very developed in his region, Mr. Martel regularly promotes the interests of this industry in committee.

BRIAN MASSE
NDP – WINDSOR WEST (ON)

Election to the house of commons

• First elected: 2002
• Re-elected: 2004, 2006, 2008, 2011, 2015, 2019, 2021

Professional background

• Studies: Bachelor's degree in Sociology and a Master's degree in Sociology
• HR Background: Employment Specialist at the Community Living Mississauga (1992 – 1995); Employment Specialist at the Association For Persons With Physical Disabilities now renamed A.L.S.O (1995 – 1998); Youth Coordinator at the Multicultural Council of Windsor & Essex County (1998 – 2002)

Political and parliamentary roles

• Critic: Foreign Affairs, Trade and Development (International Trade) (2021 – Present); Foreign Affairs, Trade and Development (Canada/US Border Relations) (2002 – Present); Industry (2021 – Present); Environment (Great Lakes) (2013 – Present); Industry (Auto Strategy) (2004 – 2011/2021 – Present)
• Vice-Chair: Canada-United States Inter-Parliamentary Group (2006 – Present); Canada-Europe Parliamentary Association (2011 – Present); Canadian NATO Parliamentary Association (2018 – Present); Canadian Section of ParlAmericas (2018 – Present); Canada-United Kingdom Inter-Parliamentary Association (2007 – Present); Canadian Delegation to the Organization for Security and Co-operation in Europe Parliamentary Assembly (2012 – Present)
• Former N.D.P. Caucus Chair (2019 – 2021)

Committee membership

• Member: Standing Committee on International Trade (2013 – 2015/2021 – Present); Standing Committee on Industry and Technology (2021 – Present)
• Former Vice Chair: Standing Committee on International Trade (2011 – 2013); Standing Committee on Industry, Science and Technology (2013 – 2019); Standing Joint Committee on Scrutiny of Regulations (2009 – 2011)

Points of interest to GAC

Container Shipments:

• At an CIIT meeting in June 2022, Mr. Masse showed interest in the costs and logistics of container shipments. According to him, the cost of containers and shipping operates like a cartel, which particularly affects medium and small businesses, thus hindering the possibility of trade expansion for Canada.

Canada-US relations: Buy American

• During a CIIT meeting in May 2022, Mr. Masse criticized the "Buy American" policy of the United States, which he believes is hurting many Canadian companies and sectors.

Environment & Labour:

• When discussing free trade agreements at CIIT meetings, Mr. Masse is mainly concerned about environmental issues and the use of child labour by partner countries.

Auto Industry:

• At a CIIT meeting in April 2022, Mr. Masse showed concern about the continuation of the erosion of the Canadian auto industry, especially during the transition to electric vehicle. He criticized that there is a lack of market access for Canadian-made vehicles in some countries such as South Korea.

Clean Tech:

• During a CIIT meeting in March 2022, Mr. Masse showed interest on Canada’s exports and imports of clean tech.

Other interests

Export of Plastic:

• Mr. Masse regularly criticizes the fact that Canada has a reputation of sending plastics and other contaminants overseas.

WILSON MIAO
LPC – RICHMON CENTRE (BC)

Election to the house of commons

• First elected: 2021

Professional background

• Studies: Bachelor's degree in Business Administration and International Business
• Business: Closing Sales Coordinator at Polygon Homes Ltd. (2014 – 2016); Director Of Communications & Marketing at Richmond Sentinel (2018 – 2021); Investment Advisor Hoovest Financial Inc. (2021 – Present)
• Health: Opulence Global Partner Lifestyle Advisor at Opulence Global (2011 – Present)

Political and parliamentary roles

• Parliamentary Secretary: Minister of Employment, Workforce Development & Disability Inclusion (2019 – Present)

Committee membership

• Member: Standing Committee on International Trade (2021 – Present); Standing Committee on Veterans Affairs (2021 – Present)

Points of interest to GAC

Philippines:

• At a CIIT meeting in June 2022, Mr. Miao underscored the fact that the Philippines is a very important trading partner and a key economic player in the Indo-Pacific region. He also argued that a MOU between Canada and the Philippines to establish a joint economic commission would be beneficial to Canadian small and medium-sized enterprises.

Pork Exports:

• During a CIIT meeting in June 2022, Mr. Miao asked the witnesses how Canada can best diversify its pork exports, specifically within the ASEAN region, and what sort of impact would a diversified market have on the Canadian pork industry.

Small and Medium Businesses:

• In general, during CIIT meetings, Mr. Miao advocates for the interests of small and medium-sized enterprises. He regularly asks questions about the impact of trade agreements on the activities of Canadian small and medium-sized enterprises.

Agri-food Exporters:

• At an CIIT meeting in May 2022, Mr. Miao asked what impact a free trade agreement with ASEAN countries would have on Canadian agri-food exporters.

Softwood Lumber:

• During a CIIT meeting in March 2022, Mr. Miao asked what have been the domestic impacts of the United States' current application of tariffs on certain Canadian softwood lumber products and how those impacts vary across provinces and communities.

Other interests

Diversity and Inclusion:

• Mr. Miao is a strong advocate for greater diversity and inclusion in federal institutions and in Canadian society.

TERRY SHEEHAN
LPC – SAULT STE. MARIE (ON)

Election to the house of commons

• First elected: 2015
• Re-elected: 2019, 2021

Professional background

• Private & Public Sectors: Prior to entering politics, Sheehan had a career in the private and public sectors in business, community, and economic development.
• Consultant: His last position prior to being elected as a Member of Parliament was as an employment and training consultant for the Ontario Minister of Training, Colleges, and Universities.

Political and parliamentary roles

• Parliamentary Secretary: Labour (Employment and Social Development) (2021 – Present); Economic Development and Official Languages (FedNor) (2019 – 2021)
• Co-Chair: Canada-Japan Inter-Parliamentary Group (2016 – Present)
• Member: Canada-Japan Inter-Parliamentary Group (2016 – Present)

Committee membership

• Member: Standing Committee on International Trade (2018 – Present); Standing Joint Committee on the Library of Parliament (2021 – Present)
• Former Member: Standing Committee on Industry, Science and Technology (2016 – Present)

Points of interest to GAC

Clean Tech:

• At a CIIT meeting in June 2022. Mr. Sheehan recognized the issues related to climate change for the ASEAN countries and asked the witnesses about opportunities for the Canadian clean technology industry in these markets.

Environment & Gender Equality:

• During a CIIT meeting in May 2022, Mr. Sheehan stated that through trade agreements Canada can elevate the environmental and the gender equality situation in particular areas of the world such as in the ASEAN region.

Softwood Lumber: US Duty Rate

• At a CIIT meting in March 2022, Mr. Sheehan stated that the United-States’ duty rate on softwood lumber are “unjust and unfair”, asking how this reality affects Canadian exporters, as well as their workers and the relevant communities.

Steel Industry:

• Having several steel companies in his riding, Mr. Sheehan pays particular attention to this industry. For example, at a CIIT meeting in February 2022, he asked several questions about environmental practices related to the use of coal in the steel industry in the United States and China.

Electric Vehicles:

• Mr. Sheehan sees the electric vehicle industry as a way to reduce Canada's carbon emissions. At CIIT meetings, he promotes greater collaboration between Canada and its trading partners in this industry.

Other interests

Indigenous Relation:

• In the House and in committee, Mr. Sheehan has repeatedly recognized the importance of government working with indigenous communities.

ARIF VIRANI
LPC – PARKDALE-HIGHPARK (ON)

Election to the house of commons

• First elected: 2015
• Re-elected: 2019, 2021

Professional background

• Studies: Bachelor's degree in Political Science and History and Bachelor's degree in Law
• Law: Associate at Fasken Martineau DuMoulin (2001 – 2003); Assistant Trial at Attorney United Nations (2009); Counsel, Constitutional Law at the Branch Ontario Ministry of the Attorney General (2003 – 2015)
• Human Rights: Programme Officer Commonwealth Human Rights Initiative (2008)

Political and parliamentary roles

• Parliamentary Secretary: Minister of International Trade, Export Promotion, Small Business and Economic Development (Foreign Affairs, Trade and Development/ Industry / Economic Development) (2021 – Present); Minister of Justice and Attorney General of Canada (2019 – 2021); Minister of Democratic Institutions (2019); Minister of Justice and Attorney General of Canada (2018 – 2019); Minister of Canadian Heritage (2017 – 2018); Minister of Immigration, Refugees and Citizenship (2015 – 2017)

Committee membership

• Vice-Chair: Special Joint Committee on the Declaration of Emergency (2022 – Present)
• Member: Standing Committee on International Trade (2021 – Present); Special Joint Committee on the Declaration of Emergency (2022 – Present)
• Former Member: Standing Committee on Justice and Human Rights (2020 – 2021)

Points of interest to GAC

Global Food Insecurity: Grain & Wheat

• At a CIIT meeting in June 2022, Mr. Virani asked about the global food insecurity situation and stated that Canada must play its role in supplying grain and wheat to the world.

Progressive Trade: ASEAN

• Mr. Virani places great emphasis on issues related to the environment, labour, trade and gender, trade and indigenous rights. At a CIIT meeting in May 2022, he asked what are the challenges on labour, on the environment, on trade and gender, and on trade and indigenous issues with respect to the various members of ASEAN.

Clean Tech:

• At a CIIT meeting in June 2022, Mr. Virani recognized the importance of the clean technology industry for Canada to promote environmental sustainability at home and abroad and asked which ASEAN countries are the most interesting for this industry.

Electric Vehicles:

• Regularly at CIIT meetings, Mr. Virani talks and asks questions about the electric vehicle industry in terms of tax credits, critical mineral exploitation in Canada to support this industry and commercial opportunities abroad.

Other interests

Indigenous Rights: Reconciliation

• Mr. Virani is an advocate for indigenous rights. He regularly asks about the government's efforts to advance reconciliation, including in the area of trade.

B. Trade Asia

CPTPP IMPLEMENTATION AND ACCESSIONS

• CPTPP members continue to work to ensure the smooth functioning and implementation of the Agreement.
• Members welcomed Malaysia’s ratification of the CPTPP on September 30, 2022.
• Canada supports the accession of economies willing and able to meet the CPTPP’s high standards and which have demonstrated a history of compliance with their existing trade

Supplementary messages

• CPTPP Parties continue to prioritize the accession process of the U.K. [REDACTED].
• Canada has not taken a position on any other accession applicant. In assessing applicants, Canada will always be guided by the best interests of Canadians.
• All applications will be duly considered and decisions will be made by consensus among the CPTPP Parties.

Update

You participated in the 6^th CPTPP Commission meeting in Singapore from October 7- 8, 2022 to discuss ongoing work on CPTPP implementation and accessions. As 2022 Commission chair, Singapore prioritized new accessions, regional economic recovery, and digital and green initiatives. Since CPTPP Parties’ decision to proceed with the U.K. accession process in June 2021, CPTPP members and the U.K. have engaged in multiple rounds of discussions, including in-person meetings in June, July, and October 2022. On September 30, Malaysia submitted its instrument of ratification to New Zealand as the CPTPP depositary. The Agreement will enter into force for Malaysia on November 29, 60 days after it submitted its notification. Malaysia will then become the 9^th Party to the CPTPP, with Brunei and Chile still yet to ratify.

Supporting facts and figures

• Three years after CPTPP entered into force, total merchandise trade between Canada and the ratified partners (includes Australia, Japan, New Zealand, Singapore and Vietnam; and excludes Mexico and Peru with which Canada has established trade agreements) grew almost 10% from $47.3 billion in 2018 to $52.1 billion in 2021.
• Total exports from Canada to these 5 CPTPP markets grew 8.3% between 2018 and 2021, and had outpaced the growth of Canada’s exports to the world over the same period.
• Once fully implemented by the original signatories, CPTPP will form a trading bloc representing over 500 million consumers and 13.5% of global GDP, providing Canada with preferential access to key markets across the Indo-Pacific.
• With the U.K., a fully implemented CPTPP would cover 16% of global GDP and include three G7 economies.

Background

In June 2021, CPTPP Parties agreed to establish an Accession Working Group with the U.K. In February 2022, Parties decided to advance to the market access phase of the U.K. accession process. Parties continue to work to ensure U.K. compliance with the high standard rules and market access ambitions of the Agreement throughout the accession process. There are no set timelines to complete the U.K. process. Members are taking the time required to get the process right for the benefit of future accessions.

China, Taiwan, Ecuador, and Costa Rica have submitted applications to join the CPTPP. Parties have yet to take a consensus decision on these applications and continue to discuss an approach for these and future applications. South Korea, the Philippines, Thailand, and Uruguay have publicly expressed interest in CPTPP accession, but have not applied.

CANADA-ASEAN FTA: OVERVIEW AND STATUS

• ASEAN is a dynamic and growing region presenting vast opportunities for Canadians to diversify trade relationships and supply chains.
• A Canada-ASEAN FTA would support Canada’s engagement in the Indo-Pacific and demonstrate our commitment to ASEAN’s centrality in this increasingly important part of the world.
• The first round of Canada-ASEAN FTA concluded virtually in August; a second round is planned for late November.

Supplementary messages

• An FTA would deliver significant opportunities to Canadians across a broad range of sectors, including agriculture, manufacturing and services.
• Supporting ASEAN centrality means recognising ASEAN’s essential leadership role in contributing to the Indo-Pacific region’s stability and prosperity.
• Round 1 of the Canada-ASEAN FTA negotiations concluded at the end of August.
• While Canada unequivocally condemns the military coup in Myanmar and the military’s use of force against peaceful protestors, continued engagement with ASEAN is important to us, including on discussions around a potential FTA.

Update

Round 1 of the Canada-ASEAN FTA negotiations concluded with the first Trade Negotiating Committee (TNC) Meeting between Chief Negotiators for Canada and all ASEAN members on August 29-31, 2022 in virtual format. All issue leads, organized in Subsidiary bodies, held fruitful introductory meetings with their counterparts. While no Subsidiary Bodies have been established on Labour, Inclusive Trade, and Environment, the TNC Meeting presented an opportunity for Canadian experts to present Canada's approach to all three issues.

Supporting facts and figures

• As a group, ASEAN represents Canada’s 4th largest merchandise trading partner.
• As a group, ASEAN represents the 5^th largest economy in the world, with a combined GDP of $4.58 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 US $2.67 billion; ASEAN exports to Canada could increase by US $4.81 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 machinery.
• Canada’s top trade partners in ASEAN by total merchandise trade in 2021 include Vietnam ($10.4b), Thailand ($4.9b), Malaysia ($4.8b), Indonesia ($4.2b), and Singapore ($2.2b).

Background

Canada and ASEAN have been exploring a possible FTA since 2017. At the ASEAN Economic Ministers (AEM)-Canada Consultations in November 2021, Ministers endorsed the joint Reference Paper, outlining negotiating areas for a potential Canada-ASEAN FTA, and agreed to proceed with negotiations. The 2022 AEM saw Ministers endorse the progress made during Round 1 of negotiations.

In 2018, the Government conducted public consultations to seek the views of Canadians on a possible FTA with ASEAN. Overall, stakeholders expressed support for a Canada-ASEAN FTA and highlighted significant opportunities for Canadians in the ASEAN market, notably with non-CPTPP economies (Indonesia, the 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, expressed concerns about the potential outcomes of a Canada- ASEAN FTA. Exploratory discussions were concluded in 2019.

Canada-India Trade Negotiations

• Since the relaunch of the Canada-India trade negotiations in March, four rounds of negotiations have taken place towards an Early Progress Trade Agreement (EPTA).
• Canada is pursuing an EPTA with the aim of securing benefits to stakeholders in the near term; negotiations will continue upon completion of the EPTA towards a more comprehensive trade agreement.
• An agreement with India would support Canada’s trade diversification and Indo-Pacific strategies and would deliver economic benefits to Canadians.

Supplementary messages

• India is the dominant power in South Asia, and an increasingly important player central to the concept of the Indo-Pacific.

Update

The fourth and most recent round of negotiations took place in Delhi on September 26-30. Good progress was made and negotiators will continue to advance discussions intersessionally. Round 5 is anticipated to take place in November in Ottawa.

Supporting facts and figures

• Minister Ng travelled to India and co-chaired the 5^th MDTI on March 11.
• In 2021, total Canada-India bilateral merchandise trade reached $9.0 billion.
• Merchandise exports to India were $3.0 billion in 2021, down 19.7% from 2020.
• Top exports: mineral fuels and oils, vegetables and wood pulp.
• Merchandise imports from India were $6.0 billion in 2021, up 20.2% from 2020.
• Top imports: precious stones/metals, pharmaceuticals and organic chemicals.
• Services exports to India were $4.4 billion in 2021, down 12.4% from 2020.
• Services imports from India were $2.4 billion in 2021, down 1.4% from 2020.
• In 2020, Canadian portfolio investment in India was $26.7 billion (0.9% of total portfolio investment abroad), and direct investment in India was $2.0 billion.
• In 2019, Indian direct investment in Canada was $2.64 ^{Footnote 1}

Background

As a result of the Ministerial Dialogue on Trade and Investment that took place in March 2022, Canada and India have agreed to pursue an EPTA in advance of a CEPA. While an interim agreement is a departure from Canada’s traditional approach, an early progress agreement would provide quick benefits for Canadians and be a step toward a comprehensive CEPA.

Further to the relaunch of negotiations by ministers in March 2022, officials held a first negotiating round the week of April 19. The second round of negotiations took place the week of May 30. The third round of negotiations was split across two sessions, with the first taking place on July 4-7, and the second taking place August 8-12. The fourth and most recent round of negotiations took place the week of September 26, in New Delhi. Minister Ng and her Indian counterpart, Minister Goyal, continue to meet regularly to discuss progress in the negotiations; their most recent discussion took place on October 5.

CANADA-INDONESIA CEPA: OVERVIEW AND STATUS

• Indonesia is the world’s 4th most populous country, a G20 economy, and offers vast untapped opportunities for Canadians.
• Canada is pursuing a comprehensive and ambitious trade agreement with Indonesia.
• The first and second rounds of CEPA negotiations took place in March and August respectively; a third round is scheduled for the week of October 31, 2022.

Supplementary messages

• Canada will seek to eliminate tariff and non-tariff barriers and create meaningful opportunities for key Canadian exporters, including in the agriculture and agri-food (e.g. meat, grains), advanced manufacturing, clean tech, natural resources, and services sectors.
• Canada-Indonesia CEPA and Canada-ASEAN FTA negotiations will proceed in parallel, although it is likely that negotiations for a Canada-Indonesia CEPA will conclude more quickly.

Update

The second round of Canada-Indonesia CEPA negotiations took place virtually from August 15-19, 2022. Substantive discussions took place across almost all areas of commercial and strategic importance to Canada, including goods, services, investment, labour, environment, and inclusive trade. The third round of negotiations is scheduled for October 31 to November 4, 2022 (virtually).

Supporting facts and figures

• Indonesia is Canada’s 24^th largest merchandise trading partner globally.
• Indonesia is Canada’s largest export market in Southeast Asia, with two-way bilateral merchandise trade of $4.2 billion in 2021.
• Canadian merchandise exports and imports were valued at $2.2 billion and $2.0 billion respectively.
• Canadian services exports to Indonesia totalled $186 million in 2020, while Canadian services imports from Indonesia reached $106 million in the same year.
• Indonesia is the 2^nd largest destination for Canadian direct investment in the region, with Canadian direct investment valued at $2.2 billion at the end of 2021.
• Indonesian direct investment in Canada totalled $111 million at the end of 2021.

Background

Canada and Indonesia launched CEPA negotiations on June 20, 2021. In accordance with the Policy on Tabling Treaties in Parliament, on June 21, 2021, the Government tabled in the House of Commons a Notice of Intent (NOI) to enter into trade negotiations with Indonesia. On November 24, 2021, the Government also tabled in Parliament Canada’s negotiating objectives for a Canada-Indonesia CEPA. Prior to the launch of negotiations, the Government conducted public consultations to seek the views of Canadians on a Canada-Indonesia CEPA from January 9 to February 23, 2021. A What We Heard report summarizing the views of Canadians was published on the ¶¶ÒùÊÓƵ website in May 2021. In parallel with public consultations, Canada and Indonesia held two sets of technical discussions in February and March 2021. Officials also conducted a GBA+ and an initial environmental assessment of a potential Canada-Indonesia CEPA, both of which were published online in August, 2022.

China Trade Market Access

• The Trade Commissioner Service is advising Canadian businesses about the evolving risks of China’s use of economic coercion and non-market practices, as well as the risks related to the deterioration of rights and freedoms in Hong Kong and the human rights abuses in Xinjiang.
  Additionally, China’s zero-COVID policy has negatively impacted the ability for Canadian companies and personnel to enter the market.

• Market access to China for agriculture, agri-food, and forestry products remains challenging and unpredictable.
• The reinstatement of meat establishments, as well as maintaining market access for all Canadian exports, remains a top priority for the Government of Canada.
• China will remain an important export market for some Canadian firms, but businesses need to be mindful of the risks and ensure they have mitigation strategies in place, including the diversification of markets and supply chains, to decrease exposure to sudden shifts in market access.
• The TCS is readily available to provide Canadian companies currently in or considering China with advice for navigating this complex market. This can include market briefings, policy and regulatory overview, B2B introductions, and providing lists of qualified third-party service providers, amongst other supports.

Supplementary messages

Commercial Relations

• Close cooperation and coordination with like-minded countries is crucial to addressing current challenges (i.e. non-market practices and trade restrictive measures) and problematic Chinese behaviours (i.e. human rights abuses, forced labour, economic coercion, and other national and economic security related issues).
• China is the leading trade partner for countries in the Indo-Pacific region. While there are numerous opportunities in the China market, there are considerable market access barriers and arbitrary restrictions in China that impede Canadian exporters. Maintaining access to Chinese supply chains, while looking at diversification opportunities in the broader Indo-Pacific will support Canadian interests.
• Canada will compete with and challenge China when and where our values and interests diverge, while cooperating where they are aligned.

China’s suspension of Canadian meat establishments due to COVID-19 measures

• In July 2022, China reinstated two previously suspended Canadian pork establishments resulting from its COVID-19 measures.
• Canada continues to engage China for the reinstatement of all remaining suspended establishments, but China’s process and timelines for lifting remaining suspensions remains unclear.
• Other trading partners are also facing similar problems on establishment suspensions.
• Canada is continuing to work with other exporting countries at the WTO in pressing China to provide a more timely, transparent and rules-based approach to establishment approvals.

Xinjiang
Xinjiang – Forced Labour and Supply Chains

• Canada has implemented specific measures in response to concerns about human rights violations and the forced labour of Uyghurs in Xinjiang. The Government of Canada expects all Canadian companies active abroad to abide by all relevant laws, to respect human rights, to adopt responsible business conduct (RBC) best practices and to conduct their activities in a responsible manner consistent with international guidelines on RBC.
• To address forced labour and supply chain concerns, ¶¶ÒùÊÓƵ has implemented measures that continue to raise awareness of the situation, raise costs to the Chinese government for continuing to contribute to such abuses, and to provide a better understanding of the associated risks for Canadian companies operating in the region.
• The Trade Commissioner Service is providing advice to Canadian businesses about the risks related to human rights abuses in Xinjiang and other parts of China.

• In January 2021 Canada announced a series of measures to address human rights abuses in Xinjiang.
  • Prohibition of imports of goods produced wholly or in part by forced labour;
  • Xinjiang Integrity Declaration for Canadian companies;
  • Business Advisory on Xinjiang-related entities;
  • Enhanced advice to Canadian businesses;
  • Export controls;
  • Increasing awareness for Responsible Business Conduct linked to Xinjiang;
  • A study on forced labour and supply chain risks.

Xinjiang – Import of Goods

• In July 2020, amendments to the Customs Tariff made it illegal to import products mined, manufactured or produced wholly or in part through forced labour.
• The legislative authority for border services officers to apply the prohibition of goods associated with forced labour is Customs Tariff item no. 9897.00.00 together with the Customs Act’s authority to determine tariff classification; this Customs Tariff prohibition has been in place since July 2020.
• Unlike the U.S. laws, the Customs Tariff does not provide the authority to deem goods as prohibited unless proven otherwise. CBSA officers are required to make tariff classification determinations on imported goods, on a case–by-case basis, based on the available information at the time of importation.
• Further questions on what the government is doing to stop goods made with forced labour from entering Canada should be directed to the CBSA and Public Safety.

Hong Kong

• Canada has strong interest in a stable and prosperous Hong Kong; we have strong people-to-people ties and Hong Kong is an important trade and investment partner for Canada.
• China’s imposition and implementation of the National Security Law (NSL) for Hong Kong erodes rights and freedoms and undermines international confidence in the integrity of public institutions under the “One Country, Two Systems” framework.
• To date, Canada has taken a number of steps in response to the NSL, including suspending the Canada-Hong Kong extradition agreement; treating export permit applications destined to Hong Kong in the same way as those destined for China; updating our travel advice and advisories for Hong Kong; and launching a new immigration initiative to encourage Hong Kong youth to choose Canada as a place to study, work, and settle.

Beef Exports and BSE

• Following Canada’s atypical BSE case in December 2021, China asked the Canadian Food Inspection Agency to stop issuing export certificates pending further information and analysis.
• CFIA has responded to all of China’s requests for information.
• China, however, has so far provided no indication when it will complete its analysis.
• Canada will continue to request China to allow for the resumption of trade as soon as possible

Lumber and Log Exports and Pinewoods Nematode

• Canadian wood exports to China are also facing new market access challenges resulting from Chinese sanitary and phytosanitary measures relating to pinewood nematodes introduced in December 2021.
• Canada is engaging with China to address this issue.

Supporting facts and figures

• From 2018 to 2021 Canada’s total merchandise trade with China grew by 11.2%, from $103.3 billion in 2018 to $114.8 billion in 2021. During this period, merchandise exports to China grew by 4%, from a value of $27.7 billion in 2018 to $28.8 billion in 2021, while imports from China increased by 13.9%, from $75.6 billion in 2018 to $86.0 billion in 2021. Canada’s trade deficit with China grew by 19.6%, from $47.9 billion in 2018 to $57.2 billion in 2021.
• In 2021, China was Canada’s second-largest trading partner overall and third largest merchandise export market, after the U.S. and the EU-27. During 2021, Canada’s merchandise trade with China grew by 12.8% year-over-year, from $101.8 billion in 2020 to $114.8 billion in 2021. Exports rose by 13.9%, from $25.3 billion in 2020 to $28.8 billion in 2021, while imports rose by 12.4%, from $76.5 billion in 2020 to $86.0 billion in 2021. Canada’s trade deficit with China grew by 11.8%, from $51.2 billion in 2020 to $57.2 billion in 2021.
• In 2021, China represented 11.2% of total Canadian agricultural and fish/seafood exports, and was Canada’s second largest export market for those products after the U.S.

Background

• China/COVID-19 import measures on agricultural products: Since the beginning of June 2020, China has imposed a series of COVID-19 related import measures on food products (affecting mainly pork and beef) from trading partners based on alleged concerns that food or food packaging may be a source or route of transmission of the virus. As a result of these measures, 10 Canadian meat establishment (8 pork, 2 beef) had been suspended from exporting to China. In July 2022, China finally removed the suspension of two Canadian pork establishments but China’s process and timelines for removing remaining suspensions remains unclear. Canada is continuing to engage with China on the reinstatement of remaining suspended establishments.
• Beef Exports and BSE: Since December 17, 2021, when CFIA announced a case of atypical BSE in Alberta, China has asked CFIA to stop issuing certificates for beef exports to China pending further analysis. China has submitted a series of requests for further information all of which have been responded to by CFIA. China has provided no indication as to when they will complete their analysis and to allow CFIA to resume issuing export certificates. In the meantime, Canadian beef exports to China remain suspended.
• Log and Lumber Exports and Pinewood Nematode: In December 2021, the General Administration of Customs China (GACC) introduced new sanitary and phytosanitary (SPS) measures to prevent pinewood nematodes from being introduced into China via pinewood log and lumber imports. This is limiting market access for Canadian woods exports and are already leading to a significant reduction in Canadian wood exports to China in 2022, with lumber exports down 24% year over year for the first two quarters of the year.

Europe

CETA Implementation and Trade Irritants

• CETA offers a competitive advantage for Canadian businesses seeking to expand to the European Union (EU).
• Canada continues to engage with the EU on issues raised by stakeholders and leverages CETA’s committees to ensure and advance effective implementation.
• I met with my EU counterpart in September to discuss opportunities to leverage CETA and deepen our collaboration.

Supplementary messages

• Despite the challenges brought on by the COVID-19 pandemic, CETA continued to work as intended: In 2021, Canada-EU bilateral merchandise trade reached $100 billion, 33.7% above pre-CETA levels in 2016.
• Canada continues to raise market access issues of concern to Canadian agricultural producers at regular meetings of the relevant CETA Committees and at the WTO.
• I met with EVP Dombrovskis in September on the margins of the G7 where we discussed the strength of the Canada-EU relationship and key areas of cooperation, including the Ottawa Group on WTO reform and economic coercion.
• We were pleased with the results of the CETA ratification vote in the Netherlands and look forward to more progress on this front with the remaining 11 non-ratified EU Member States.

Update

CETA’s governance structure is very active, with Committee meetings and dialogues taking place on an ongoing basis. These meetings allow the Parties to raise: implementation issues; matters relevant to stakeholders; to resolve technical issues; and in some cases to develop decisions or recommendations to implement or address new issues under the Agreement. CETA Committees have delivered. Canada and the EU finalized the first agreement on the recognition of professional qualifications, which once signed will make it easier for architects to provide services on both sides of the Atlantic.

Supporting facts and figures

• Utilization of CETA preferences continues to improve in both directions of trade – for Canadian exports to the EU, the utilization rate went from 52.0% in 2018 to 65.4% in 2021; and for the EU exports to Canada, the utilization rate increased from 38.4% in 2018 to 59.5% in 2021.
• CETA continues to offer opportunities to strengthen Canada's agriculture trade with the EU; Canada’s agriculture and seafood exports have increased by 30.9% from pre-CETA levels in 2016.

Background

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. For example, Canadian agricultural stakeholders have raised complaints, including with the EU’s non-tariff barriers; access for Canadian beef and pork; hazard- based approach with respect to pesticide approvals; long approval processes for biotech products; and expanded access for Canadian canola under the EU Renewable Energy Directive (RED II) for biofuels production. Canadian officials have also raised concerns with the EU’s proposed new regulation on deforestation-free products regarding trade in Canadian agricultural and forest products.

The EU has also raised concerns with certain elements of Canada’s implementation of CETA related to the administration of the tariff rate quotas for cheese, Canada’s approach to the enforcement of geographical indications (an outcome that was fully understood and agreed to by the EU during the CETA negotiations), as well as the sale and distribution of wine and spirits.

CANADA-UNITED KINGDOM FTA NEGOTIATIONS

• Canada and the U.K. continue to make progress in negotiations towards a new high-standard bilateral trade agreement tailored to the bilateral relationship.
• This is an opportunity to seek ambitious outcomes in a number of areas of mutual interest, including digital trade, gender, labour and environment.

Supplementary messages

• Negotiators have held three rounds of negotiations since my counterpart and I launched negotiations on March 24; round four is scheduled for the end of November.
• We are consulting widely with Canadians. Businesses across a broad range of sectors have indicated support for these negotiations.
• A new bilateral free trade agreement is an important opportunity to further deepen the Canada-U.K. relationship.

Update

Since the launch of negotiations on March 24, 2022, Canada and the U.K. have held three rounds of negotiations: the week of March 28 in London, the week of June 20 in Ottawa and the week of September 12 originally scheduled to be held in London but held virtually. Round 4 will be held the week of November 28 in Ottawa and Round 5 is scheduled for the week of March 20, 2023 in London.

Supporting facts and figures

• In 2021, the United Kingdom was Canada’s third largest trading partner for combined goods and services, behind the United States and China.
• In 2021, Canada-U.K. bilateral goods trade (balance of payments basis) was $28.2 billion: $18.2 billion in exports of goods, and $10 billion in imports of goods.
• The U.K. is Canada’s second-largest individual partner, after the United States, in bilateral services trade, direct investment, and science, technology and innovation partnerships.

Background

The Canada-United Kingdom Trade Continuity Agreement (TCA) entered into force on April 1, 2021. The agreement preserves the main benefits of the Canada-European Union Comprehensive Economic and Trade Agreement, which no longer applied to the United Kingdom when it left the EU. Under the terms of the agreement, Canada and the United Kingdom committed to begin new negotiations on a comprehensive bilateral FTA within a year of its entry into force, and to seek to complete negotiations within 3 years (by April 1, 2024).On March 24, 2022, Canada and the U.K. formally launched FTA negotiations. Negotiations are ongoing with negotiating rounds to be held every 10 to 12 weeks.

In addition to bilateral negotiations, the U.K. is also seeking to accede to the CPTPP. 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 United Kingdom. Canada will leverage opportunities in both initiatives to seek the best possible outcome for Canadians.

MODERNIZATION OF THE CANADA-UKRAINE FTA

• Canada and Ukraine launched negotiations for the modernization of the CUFTA on January 27, 2022.
• The Parties aim to conclude the modernized agreement as soon as possible over the coming months; specific timelines will in large part depend on the security situation in Ukraine.
• A high-standard outcome will help support Ukraine’s long- term economic recovery and international trade interests.

Supplementary messages

• Parties seek to add chapters on services, investment and inclusive trade, and update chapters on labour and environment, among other areas.
• Following its conclusion, the agreement will undergo legal review, translation, signature, and implementation, which we expect in early 2023.
• This process remains entirely virtual, with bilateral discussions and text sharing continuing on a regular basis.
• Ukraine agrees to this approach/timeline and remains a flexible partner.

Update

Chief Negotiators met in September to take stock of progress made to date and reaffirm their aim of concluding the agreement as early as the end of this calendar year. While ambitious, both Parties consider this timeline feasible. Canada continues to maintain a careful, calibrated approach to engagement in accordance with the conflict situation in Kyiv where most of its counterparts live and work.

Supporting facts and figures

• CUFTA entered into force in August 2017. It is a comprehensive agreement from a goods standpoint, but does not include chapters on services and investment.
• In 2021, Canada’s merchandise exports were $220 million (up 36.7% from 2020) and merchandise imports from Ukraine were $227 million (up 57.7% from 2020).
• While this was a record high for annual trade between Canada and Ukraine, the war has significantly and negatively affected bilateral trade and investment.
• In 2021, Canada’s top exports to Ukraine were fish and seafood ($58M), scientific and precision instruments ($48M), and motor vehicles and related parts ($30M).
• Canada’s top imports from Ukraine were iron and steel ($51M), electrical machinery/equipment ($26M), and fats and oils ($20M).
• In 2020, Canadian investment in Ukraine stood at $81 million.

Background

In July 2019, Prime Minister Trudeau and Ukrainian President Zelenskyy announced their intention to modernize the CUFTA. Following delays due to COVID-19, Ministers launched CUFTA modernization negotiations on January 27, 2022, though progress was paused due to the Russian invasion of February 24. In May, Ukraine officially requested expediting modernization discussions as a means of supporting its long- term trade and economic interests. Chief Negotiators Bruce Christie (ADM of Trade Policy and Negotiations) and Taras Kachka (Deputy Minister of Economy for Ukraine) most recently met on September 12, 2022 to take stock of the progress made and discuss what is required to achieve a high-standard agreement by the end of this calendar year. Trade officials continue to work closely with their Ukrainian counterparts to advance chapter conclusions throughout the fall.

CANADA-GERMANY TRADE AND INVESTMENT RELATIONS

• Germany is our largest export market in the European Union and our fifth largest trading partner globally.
• Chancellor Scholz’s visit to Canada in August delivered key agreements in the hydrogen, critical minerals, and science, technology and innovation sectors.
• We are working with Germany to enhance cooperation on shared priorities such as accelerating the transition toward a clean energy future, and securing sustainable global supply chains.

Supplementary messages

• We have just celebrated the 5^th anniversary of the Canada-EU Comprehensive Economic and Trade Agreement [CETA], which is the foundation for a privileged trading relationship with Germany.
• Since the application of CETA, Canadian goods exports to Germany have increased by more than 36 percent. Exports of ores, slag and ash have increased the most, followed by other sectors such as precious stones and metals, and mineral fuels and oils, which is helping Germany secure the raw materials it needs.
• With our significant renewable energy resources and technologies and wealth of critical minerals, Canada stands as a clean energy partner of choice for Germany to help meet its energy needs.
• Russia’s unjustified invasion of Ukraine demonstrates the importance to cooperate with trusted partners like Germany to build resilient supply chains.

Supporting facts and figures

• Two-way merchandise trade totalled $25.9 billion in 2021, up 9.5% from 2020.
• Germany is the seventh-largest foreign investor in Canada, and fourth among European countries. In 2021, the stock of German direct investment in Canada by ultimate investor country was valued at about $32 billion, while Canadian direct investment abroad reached $14.1 billion.
• In 2021, merchandise trade between Canada and Germany was over 16% above pre-CETA levels.

Background

Chancellor Scholz’s visit to Canada (August 21-23, 2022): Key outcomes of the visit included the signature of MOUs with German automotive manufacturers Volkswagen AG and Mercedes-Benz AG to advance collaboration across the automotive, battery, and critical minerals sectors; the signature of the Joint Declaration of Intent to establish a Canada-Germany Hydrogen Alliance with the aim of establishing a transatlantic supply corridor ready for export in 2025; and, the announcement of Canada’s becoming the Partner Host Country at Hannover Messe, one of the world’s largest industrial development and technology trade fairs, in 2025.

CETA: Germany is one of 11 EU countries that have yet to ratify CETA at the national level. A CETA ratification bill went through first reading in Germany’s lower chamber (Bundestag) in July 2022. The second and third readings have yet to be scheduled.

COMMERCIAL IMPACTS OF RUSSIA’S INVASION

• Russia’s invasion of Ukraine significantly disrupted our trade with both countries, as well as straining international supply chains and global investment.
• Canada will impose economic measures against Russia so long as its unacceptable aggression persists.
• While our measures do create some economic consequences for Canada, this is a necessary cost to support Ukraine and the rules-based international order.

Supplementary messages

• Since February 24, Canada has imposed sanctions on more than 1,400 individuals and entities, having a strong impact on Russia’s economy.
• Russia’s economy has declined, but the impact is more than financial. Young people are fleeing the country and the departure of western companies has cut Russia off from key technologies.

Supporting facts and figures

• By 2021, Canada’s remaining trade with Russia represented under 1% of Canada’s overall trade. Canada exported $656.7 million in merchandise to Russia in 2021, and imported $2.1 billion. The total book value of Canadian direct investment in Russia was $2.2 billion, with Russia’s direct investment in Canada reached $1.6 billion.
• In 2021, Canada’s merchandise exports to Ukraine totaled $219.2 million, while merchandise imports from Ukraine were $227.1 million – the first time since the Canada-Ukraine Free Trade Agreement (CUFTA) came into force in 2017 that annual bilateral trade ($446.3 million) exceeded $400 million. In 2021, the total book value of Canadian direct investment in Ukraine stood at $114 million.
• In March, Canada removed Russia’s and Belarus’ Most Favoured Nation status, imposing a 35% duty on virtually all imports from the countries; As well, Russian registered or owned vessels, are banned from Canadian ports or internal waters.
• Russia’s economy is set to contract by 4.5% in 2022 according to the World Bank, who forecast it to shrink another 3.6% in 2023. Its inflation is set to hit 11-13.0% in 2022 according to the Russian Central Bank.

Background

Canada has sanctioned senior members of the Russian government, military and oligarchs, including President Putin. We have also severely restricted Russia’s access to the global financial system, including by sanctioning the Central Bank, major Russian financial institutions, and supporting efforts to remove Russian Banks from the SWIFT system. We have imposed export controls, removed Russia’s and Belarus’s MFN status and have closed Canadian airspace to Russia and Belarus and have closed ports and internal waters to Russian vessels, as well as imposing an import ban on Russian oil products.

As part of a transatlantic task force, Canada is working to identify assets and close all possible financial avenues and loopholes. To that end, G7 Finance Ministers released a joint statement on March 17, 2022, outlining their commitment to take all available legal steps to find, restrain, freeze, seize, and, where appropriate, confiscate or forfeit the assets of individuals and entities that have been sanctioned in connection with Russia’s invasion of Ukraine.

Since the start of the crisis, Canada has imposed extensive sanctions against individuals and entities in Russia, Belarus and Ukraine, as well as implemented various other economic restrictions targeting the Russian defence and aerospace industries, inter alia. These steps were taken in close consultations with like-minded partners and build upon the sanctions Canada imposed following the 2014 Russian invasion of Crimea.

Following the invasion, international companies began pulling out of Russia and major Canadian companies also divested their Russian holdings, including Bombardier, McCain Foods, and Kinross Gold.

RUSSIAN FERTILISER EXPORTS

• Russia’s March 2022 export ban on ammonium nitrate to non- partner countries had implications for Canadian fertiliser importers, many of whom sourced their product from Russia.
• Though the ban is no longer in place, Russian fertiliser exports to Canada have dropped, with Canadian fertiliser buyers sourcing more from non-Russian suppliers.
• In March, Canada removed Russia’s Most Favoured Nation status, effectively adding 35% to virtually all Russian imports, including Russian fertiliser.

Supplementary messages

• Canada measures, including sanctions and exports bans, target Russia’s leaders and economy and are having a strong impact. None of these measures target food or fertiliser.
• In 2020, Ukraine exported a total of$4.61 billion USD of grain, the fifth largest global exporter, and is a major supplier to developing countries. Russia’s invasion of Ukraine is concentrated where 23% of Ukraine’s agricultural production occurs, having knock-on effects to global food security.
• Canada has allocated $615.5 million in humanitarian assistance in 2022 to support the resilience of agri-food systems. In the last two years, Canada has invested more than $1.5 billion in projects and organisations such as the African Development Bank to help increase food security.

Supporting facts and figures

• In 2021, Canada’s top import (21.4% of total imports) from Russia was fertilisers, amounting to $457.7M.
• Year-to-date, Canadian imports of fertilisers from Russia have increased by 13.7% in value, though this is likely indicative of an increase in price rather than volume.
• According to the Russian Association of Fertiliser Producers, in 2021 Russia produced 58.6 million tons of fertilisers (22% of world production).
• Russia exported 37.6 million tons (64% of mineral fertilisers produced in the country) in 2021. Globally, Russia ranks first in the export of nitrogen fertiliser.
• Russia’s exports of fertilisers in 2021 amounted to US$12.5 billion.
• From February 2 to April 2, 2022, Russia imposed a complete ban on the export of ammonium nitrate. On 26 March, the Russian government extended a ban on exports of ammonium nitrate to non-partner countries until May 1, 2022.

Background

Russia’s February 24^th invasion of Ukraine led Canada, alongside likeminded countries, to apply punitive economic measures to hold the country accountable. In March 2022, Canada removed Most Favoured Nation (MFN) status for Russia, thereby making virtually all imported Russian goods subject to a 35% duty rate, including fertiliser. Furthermore, a ban on Russian vessels entering into Canadian waters added additional complications to importers seeking to buy Russian fertiliser.

It has taken time to find alternate supply to replace imported volumes and, in the meantime, global fertiliser prices, already high before Russia’s invasion of Ukraine, have risen further since. Any fertiliser supply disruption can lead to increased farm level production costs and reduced yields affecting food security (i.e., Prince Edward Island’s agri-food sector has been particularly impacted by not only the loss of Russia fertiliser imports, $20.3 million in 2021 and difficulty to find alternatives due to unique aspects of island soil, but also how the invasion led to higher global fertiliser prices.)

To make nitrogen-based fertiliser, the largest group, the process starts by mixing nitrogen from the air with hydrogen from natural gas at high temperature and pressure to create ammonia. Besides exporting huge quantities of nitrogen, Russia (along with Belarus) is a major competitor to Canada in the global potash market, potash being another important fertiliser.

Some Canadian farm groups have advocated for the removal of the 35% tariff on Russian fertiliser (or refunding the amount collected) due to its effect this specific tariff has on some Canadian farmers. At the same time, according to Agriculture & Agri- food Canada, fertiliser importers are beginning to increase purchase volumes of nitrogen fertiliser from alternate suppliers (e.g., N. Africa, Middle East, the US) although global prices of the commodity have risen significantly since Russia’s invasion of Ukraine and resulting supply chain disruptions.

Latin America

CANADA-PACIFIC ALLIANCE RELATIONS

• The Pacific Alliance (PA) is comprised of some of Canada’s most important commercial partners in the hemisphere, accounting for more than 77% of Canada’s trade and investment in Latin America.
• This year marks the 10th Anniversary since Canada became an observer to the Pacific Alliance.
• Canada is working with Mexico, the current pro tempore president of the PA, to deepen economic engagement with the PA countries by taking advantage of Canada’s existing FTAs with the bloc and pursuing cooperation activities in areas of mutual interest.

Supplementary messages

• Canada is committed to expanding the Canada-PA trade relationship and continues to engage directly with Mexico as pro tempore President to achieve this goal.
• Canada has trade agreements with each of the PA members and all except Colombia are Parties to the CPTPP, though Chile has yet to ratify the agreement.

Update

While Canada-PA FTA negotiations were temporarily paused in June 2021, Canada is working with the Pacific Alliance to determine trade-related cooperation activities in areas of shared interest. Canada and the PA are also actively engaged through the 2016 Joint Declaration on a Partnership.

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.
• The PA counts 62 Observer countries, including Canada.
• The PA created the Associated State (member-minus) category in 2017 and Singapore became the first Associated State in 2022.
• Together, Chile, Colombia, Mexico, and Peru have a combined GDP of $2.5 trillion, an increasingly skilled workforce, and potential of 230 million consumers.
• Canadian direct investment abroad (CDIA) in Pacific Alliance countries was $65 billion in 2021, and Canada's total merchandise trade with these countries was $52.1 billion in 2021.
• Mexico currently holds the pro tempore presidency of the PA until November 25^th 2022.

Background

Canada launched FTA negotiations with the PA in October 2017. Deepening engagement with the PA through trade-related cooperation activities would allow Canada to strengthen its commercial and political linkages with like-minded countries in Latin America and align with Minister Ng’s mandate commitment to increase economic cooperation in the region.

Domestic consultations to seek the views of Canadians on a potential Canada-PA FTA were held in 2017. The CIIT also undertook a study on the potential FTA in 2018-19; a government response was presented to the House in July 2019.

ATIP PROTECTED BACKGROUND

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CANADA-MERCOSUR FTA NEGOTIATIONS

• Canada remains committed to negotiating an ambitious, comprehensive, and inclusive free trade agreement with Mercosur, with an environment chapter that is subject to an enforceable dispute settlement process.
• Canada is firmly committed to the principle that trade liberalization and environmental protection should be mutually supportive.
• Officials continue to engage on the timing of the next negotiating round.

Update

Since launching FTA negotiations with Mercosur in March 2018, seven rounds of negotiations have been held, the most recent in summer 2019 in Ottawa. No new rounds are scheduled. In the meantime, officials have been engaging virtually to advance technical discussions on non-contentious issues, and on the timing of Round 8.

Supporting facts and figures

• Mercosur is a South American trade bloc composed of Brazil, Argentina, Uruguay, and Paraguay with a combined real GDP of over $2.7T and a population of 271M in 2021.
• In 2021, Canada’s merchandise trade with Mercosur totalled $11.3 billion, with Canada’s exports valued at $2.7 billion and imports valued at $8.6 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

An FTA with Mercosur is an important opportunity for Canada to secure preferential access to Mercosur’s highly-protected market and gain a first mover advantage over key competitors including the US. The 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 and Pantanal regions, 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. The ratification of the EU-Mercosur FTA has been stalled due to concerns about these issues. Canadian stakeholders, led by Greenpeace, as well as Indigenous groups, have echoed these concerns.

Canada continues to raise its concerns bilaterally with Brazil on broader environment and Indigenous rights issues, and will continue to keep Canadian stakeholders and Indigenous representatives apprised.

North America

NORTH AMERICA LEADERS’ SUMMIT (NALS)

• The NALS is an opportunity to strengthen the North American partnership and demonstrate shared leadership in the hemisphere and the world.
• The next NALS will be an opportunity for our countries to continue our trilateral work on health security; competitiveness; climate change and environment; diversity; equity and inclusion; migration and development; and security.
• Canada looks forward to continued cooperation with the U.S. and Mexico as we approach NALS 2022 in Mexico.

Supplementary messages

• Strengthening our trilateral partnership is key to ensuring that North America remains the most competitive region in the world.
• Canada is committed to advance Racial Justice, Equality, Diversity and Inclusion principles in all aspects of this on-going work.

Update

Mexico has proposed to host NALS 2022 on December 13 in Mexico City, but there is some uncertainty around the U.S. President’s availability due to potential scheduling conflicts.

NALS 2022 will be an opportunity to showcase three of the world’s principal democracies cooperating successfully on issues related to health security; competitiveness; climate and environment; diversity; equity and inclusion; migration and development; and security. Importantly, NALS is also the impetus for Canada to further bilateral relations through high-level engagement.

The three countries seek to capitalize on momentum from the 2021 summit, and the North American Foreign Ministers’ Meeting (NAFMM) in June 2022, to consider the most pressing issues of the day. Canada is focused on leveraging trilateral cooperation to promote diversity, equity and inclusion in the region, as well as to advance climate and environment priorities.

The U.S. led the initial revival of NALS in 2021. For 2022, the U.S. has highlighted competitiveness issues, such as near-shoring, innovation and workforce development (in light of the “Inflation Reduction Act” and “Chips Act”), as well as climate, environment and migration as priorities.

Mexico has also prioritized migration, particularly addressing the root causes of irregular migration, including through regional development. Mexico’s theme for 2022 is “culture”, including Indigenous reconciliation; protection of cultural heritage; LGBTQ+ and youth engagement. Canada is well-positioned to support Mexico to highlight and advance a progressive agenda at NALS 2022.

Background

In November 2021, Leaders from Canada, the United States and Mexico met in Washington, D.C., for the first North American Leaders’ Summit (NALS) since Canada hosted in 2016. NALS 2021 marked a renewed commitment to the North American partnership. Following the 2016 summit in Canada, the NALS process entered a period of dormancy as first the U.S. and then the Mexican administrations changed hands and moved towards a stronger domestic focus.

However, the North American context has evolved again: CUSMA is two years old, COVID has highlighted the benefits of trilateral cooperation and supply chain cohesion, the U.S. Administration is eager to rebuild regional and global relationships, and all three countries have progressive social agendas.

BUY AMERICA

• Concerned by the expansion of Buy America requirements in U.S. infrastructure package.
• Actively engaging U.S. decision-makers to highlight the unique nature of our highly integrated Canada-U.S. supply chains.
• Continue to explore all avenues to ensure Canadian suppliers can take advantage of procurement opportunities in the U.S.

Supplementary messages

• Canada and the U.S. share the goal of stimulating job creation, however applying expanded Buy America requirements against Canada would do the exact opposite − increase costs, delay projects and negatively impact jobs on both sides of the border.
• Canada’s advocacy efforts are focused on finding a solution to mitigate the negative impacts of the expanded Buy America requirements for Canadian suppliers.
• Canadian officials have also been highlighting Canada’s Budget 2021 commitment to pursue reciprocal procurement policies.

Background

The US$1.2 trillion Infrastructure Investment and Jobs Act (IIJA) includes new Buy America requirements that will permanently apply to any infrastructure project undertaken with federal financial assistance. Canada is trying to influence the implementation of the expanded Buy America requirements to mitigate the negative impacts on Canadian suppliers and workers.

In an April 12 meeting with the Canadian embassy in Washington, the Director of the Made in America Office, Celeste Drake, signaled some willingness to consider potential accommodations for Canada under the IIJA’s Buy America requirements – the first sign of openness to Canadian concerns from the U.S. Administration. At the request of the Made in America Office, GAC submitted a comprehensive package on May 4 that included data on Canadian exports and supply chain integration. GAC is still awaiting a response from U.S. officials.

In addition, as part of its efforts to influence the implementation of the IIJA, Canada is moving ahead with its Budget 2021 commitment to pursue reciprocal procurement policies to ensure that goods and services are only procured from countries that grant Canadian businesses a similar level of market access. In March, GAC and Finance Canada launched a 60-day public consultation process seeking stakeholders’ views on potential approaches to implement such policies. GAC and Finance Canada are continuing technical work with the implicated departments, with the intent to brief on a recommendation and next steps in Winter 2023.

Canada’s Embassy in Washington and the network of consulates in the U.S. are using this initiative as an additional advocacy tool to highlight the potential adverse consequences for the U.S. if no carve-in is provided for Canada in the implementation of the IIJA’s Buy America requirements. Past advocacy efforts have made clear that American decision makers often respond best to Canada’s positions when U.S. interests are directly and clearly threatened.

CANADA-UNITED STATES RELATIONS

• Canada and the U.S. work closely to further strengthen our bilateral partnership, including our integrated supply chains, the management of our common border, and continental defence.
• We continue to work to safeguard our institutions, counter the rise of authoritarianism, and protect and expand democratic rights and freedoms worldwide in order to create a more secure, stable, and prosperous world for future generations.
• On February 23, 2022, Canada and the U.S. marked the first anniversary of the Roadmap for a Renewed U.S.-Canada Partnership with a joint statement reaffirming our commitment to working together in the interests of the collective security and prosperity of our citizens based on the principles of democracy, diversity and equity.

Update

You hosted United States Trade Representative Katherine Tai in Canada on May 5-6, 2022. You discussed steps being taken to strengthen trade between Canada and the U.S. to support inclusive job growth and prosperity. You also discussed Russia’s unprovoked and unjustifiable invasion of Ukraine and ways to further support Ukraine.

Supporting facts and figures

• Canada and the U.S. share one of the largest trading relationships in the world, with nearly $2.8 billion worth of goods and services crossing the border each day in 2021. That year, bilateral trade in goods and services was over $1 trillion and represented two thirds of Canada’s total trade with all countries. Canada was also the largest U.S. trading partner in goods and services.
• Canada-U.S. trade is built on long-standing binational supply chains, whereby roughly 79% of Canadian goods exports to the U.S. ‘feed’ American supply chains for final goods.
• According to a 2020 study commissioned by the Business Roundtable, an association of U.S. CEOs, trade with Canada supported 7.8 million U.S. jobs (2018 data), which works out to 3.9% of U.S. employment –more than from any other single trading partner.
• Canada is the #1 foreign source of energy for the U.S. In 2021, Canada supplied the U.S. with 57% of its crude oil imports, representing 19% of U.S. daily refinery crude intake. Canada’s crude oil export volume to the U.S. in 2021 averaged 3.7 million barrels per day (MMbpd), the highest annual level on record. Moreover, for the last three months of 2021 (October to December), the daily export average rose again by more than 100,000 barrels per day to reach 3.8 MMbpd. This increase was directly attributable to the Line 3 Replacement project becoming fully operational on October 1, 2021, when its volume doubled.
• In 2020, Canada supplied the U.S. with 99.8% of natural gas imports, 100% of electricity imports and 19.8 per cent of uranium purchases.The relationship is reciprocal, as the U.S. is Canada’s #1 source of foreign imported energy.
• In 2021, from a $164.7 billion two-way energy trade, Canada enjoyed a bilateral trade surplus in energy of $108.2 billion. Canada’s energy exports to the U.S., and especially crude oil transported by pipeline, are major drivers of Canada’s export growth. Over 90% of crude oil exports rely on the network of transboundary pipelines, with the balance by rail.
• Canada and the U.S. have committed to achieving net zero greenhouse gas emissions by 2050. Canada committed to a reduction of 40-45% below 2005 levels by 2030 and the U.S. to a reduction of 50-52% in the same timeframe.
• Canada’s diplomatic and commercial network in the United States includes the Embassy in Washington D.C., 12 consulates general, 3 trade offices and 14 Honorary Consuls. Alberta, Quebec, and Ontario also have representatives posted in the United States.

ROADMAP FOR A RENEWED U.S.-CANADA PARTNERSHIP

• In a Joint Statement on February 23, 2022, Prime Minister Trudeau and President Biden recommitted to the Roadmap for a Renewed U.S.-Canada Partnership.
• One year earlier, Canada and the U.S. had reaffirmed the special nature of the bilateral relationship. The Roadmap for a Renewed U.S.-Canada Partnership lays out an ambitious framework to build a greener, more prosperous future; grow our economies and strengthen the middle class; combat the global COVID-19 pandemic; create safer, more equitable communities; and stand together in the face of threats to democracy.
• We have made progress over the past year and laid the foundation to deepen our cooperation on climate change, on supporting the global pandemic response efforts, on enhancing cooperation on the Arctic, and on building the economies of the future, including through work to strengthen bilateral supply chains and cooperation on critical minerals.
• Much work remains to be done. Our two countries are stronger when we work together towards our shared objectives. We look forward to building on our enduring partnership in the years ahead.

Supporting facts and figures

Combating COVID-19: In May 2022, PM Trudeau announced an additional commitment of $732 million in 2022-23 to support efforts of the Access to COVID-19 Tools (ACT) Accelerator, bringing Canada’s total contribution to over $2 billion. In September 2022, the Canada-U.S. joint white paper on substance abuse during the COVID-19 pandemic was released.

Building Back Better: On June 9, PM Trudeau and President Biden released the Canada-U.S. Supply Chains Progress Report on the sidelines of the Summit of the Americas, and discussed making both countries’ supply chains and economies more resilient to external shocks, including through the work of the Canada-U.S. Supply Chains Working Group. Natural Resources Canada will publish Canada’s Critical Minerals Strategy in December 2022.

Accelerating Climate Ambitions: In June 2022, Canada signed a Memorandum of Cooperation (MOC) with the U.S. State of California concerning Climate Action and Nature Protection. The MOC commits Canada and California to work together on a number of areas, namely: clean transportation; clean technology and innovation; biodiversity conservation; climate change adaptation; and circular economy, including plastics management.

Advancing Diversity and Inclusion: Minister Lametti and U.S. Attorney General Garland pursued discussions on access to justice at the March 2022 Cross-Border Crime Forum Ministerial meeting, with a particular focus on addressing systemic racism and overrepresentation within the criminal justice system. A follow-up meeting in June focused on innovative data collection techniques.

Bolstering Security and Defence: In August 2021, Canada Border Services Agency and the Department of Homeland Security established a Cross-Border Firearms Task Force which has completed a Joint Threat Assessment and is now scoping projects to address some of the key threats identified therein.

Building Global Alliances: Defending democracy is at the heart of the U.S. and Canada’s commitment to stand with Ukraine in the face of Russia’s unprovoked invasion.

Background

On February 23, 2022, Canada and the U.S. marked the first anniversary of the Roadmap with a joint statement reaffirming the special nature of the bilateral relation and highlighting the progress made towards the goals of the Roadmap. The Roadmap outlines six pillars to advance our shared priorities: combating COVID-19; building back better; accelerating climate ambitions; advancing diversity and inclusion; bolstering security and defence; and building global alliances by working through multilateral organizations.

Prime Minister Trudeau met with President Biden on June 9 on the margins of the Summit of the Americas in Los Angeles. They discussed support for Ukraine and cooperation on sanctions; defence and security of NATO Allies and of North America; commitment to the President’s Americas Partnership for Economic Prosperity and the Los Angeles Declaration on Migration and Protection; Haiti; disinformation and democracy; Indo-Pacific, including relations with China and Canada’s 5G announcement; supply chain security and resilience; critical minerals; energy security; climate change; and trade, including U.S. softwood lumber duties.

MAIN ESTIMATES OCTOBER 2022 – U.S. TRADE ADVOCACY NOTE

• Promoting Canada’s trade interests in the United States is the highest advocacy priority of the Canadian diplomatic network in the United States.
• No two nations depend more on each other for their mutual prosperity and security than Canada and the United States.
• Canada will stand up for Canadian interests in the United States.

Supplementary messages

• The implementation of the Canada-U.S.-Mexico Agreement (CUSMA) underscores a renewed understanding on the importance of our mutual trading relationships.
• The vast majority of Canada-U.S. trade is irritant-free, guaranteeing the undisturbed flow of goods and services across our shared border.
• Guided by the Roadmap for a Renewed U.S.-Canada Partnership, in 2021, Canada-U.S. trade hit an all-time high, which is a testament to the strength of our close relationship, our shared values, and of CUSMA.
• There is ‘no one-size-fits-all’ approach to trade advocacy, emphasizing the need of a Team Canada approach in managing our most important relationship.

Update

Trade remains at the core of the Canada-U.S. partnership. The time and effort invested into growing and supporting it has significant positive impacts for Canadians: it stimulates our economy, creates jobs, and drives innovation in key sectors. Since CIIT last met, Canada’s diplomatic corps has been active in ensuring free flowing trade remains a top priority in the U.S. We continue to oppose protectionist legislation in the U.S., at both the state and federal level (e.g., deforestation-free government procurement legislation). Over the summer, we were successful in ensuring Canadian-assembled vehicles and batteries were eligible for the clean vehicle tax credits in the final Inflation Reduction Act.

Additionally, Canada continues to raise concerns about the expanded Buy America requirements in the Biden Administration’s signature infrastructure legislation. We continue to employ an advocacy strategy based on early, sustained, and proactive engagement.

Supporting facts and figures

• As of the end of September, Canadian diplomats in the U.S. held or facilitated 178 high-level meetings this year alone that addressed our trading relationship.
• The Canada-U.S.-Mexico Free Trade zone is the largest economic region in the world, encompassing a USD $22 trillion regional market of more than 480 million consumers.
• In 2021, bilateral trade in goods and services was USD $762.8 billion.
• Canada is a top three export market for all U.S. states, and number one in 31 states.
• Canada buys more goods from the U.S. than China, Japan, and India combined (in 2021, USD $364.5 billion).
• Our bilateral trade is almost perfectly reciprocal in terms of value.
• U.S. investment in Canada represents nearly half of all investments in Canada.
• There are over 5,500 Canadian-owned businesses in the U.S. with over 26,000 locations that provide nearly 900,000 jobs.

Background

As Canada and the U.S. continue to engage in post-pandemic economic recovery, growing and strengthening our trading relationship remains one of the highest priorities for Canada in the U.S. Founded on the stability and reliability provided by the Canada-U.S.-Mexico Agreement, Canada works closely with a range of allies to ensure the right message reaches the right people. Advocacy and engagement are important elements of Canada’s approach to trade in the U.S. Members of Congress and the federal Administration are often best placed to address Canadian concerns. Canada also engages with other influential stakeholders, such as business groups, labour groups, and think tanks. While these engagements are often undertaken below the ministerial level, they are a critical component of Canada’s overall advocacy in the U.S.

Last Updated: 2022-09-15 by NGA/Poirier

Canada-United States Trade Snapshot

This document is produced by the United States division (NGA) at ¶¶ÒùÊÓƵ in consultation with the Office of the Chief Economist. It is updated as most recent data becomes available.

Canada-U.S. Trade in Services

• 55.7% of Canada’s services exports went to the U.S. in Q2 of 2022
• 6.9% of U.S. services exports went to Canada in Q1 of 2022.
• 51.8% of Canada’s services imports were from the U.S. in Q2 of 2022
• 5.8% of U.S. services imports were from Canada in Q1 of 2022.

U.S. Goods & Services Exports – Q2 2022

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U.S. Goods & Services Exports – Q2 2022

• Canada: 13%
• Mexico: 12%
• China: 6%
• United Kingdom: 5%
• Japan: 4%
• All other countries: 60%

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U.S. Goods & Services Imports – Q2 2022

• Canada: 13%
• Mexico: 12%
• China: 14%
• Germany: 5%
• Japan: 5%
• All other countries: 51%

In 2021, goods exports from Canada to the U.S. represented 86.7 percent of goods and services exports from Canada to the U.S.

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Canadian Goods Exports – Year to Date 2022

• United States: 78%
• China: 3%
• South Korea: 1%
• Japan: 2%
• United Kingdom: 3%
• All other countries: 13%

The U.S.’ monthly share of Canada’s merchandise exports increased from 76.8% to 77.3% from June to July of 2022.

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Canadian Goods Imports – Year to Date 2022

• United States: 49%
• China: 13%
• Germany: 3%
• Japan: 2%
• Mexico: 6%
• All other countries: 27%

The U.S.’ monthly share of Canada’s merchandise imports increased from 62.1% to 63.7% from June to July of 2022.

Canada’s Merchandise Exports to the U.S.

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Canada`s Merchandise Exports to the U.S.
Canada`s Merchandise Exports to the U.S. by Province and Territory, Year to Date

• Ontario: 36%
• Alberta: 31%
• Quebec: 14%
• British Columbia: 6%
• Saskatchewan: 4.9%
• New Brunswick: 3%
• Manitoba: 2.5%
• Newfoundland & Labrador: 2%
• Prince Edward Island: <1%
• Yukon Territory: 0%
• Northwest Territories: 0%
• Nunavut: 0%

Province or Territory Share of Total Canadian Merchandise Exports to the U.S.

Top 10 U.S. Destination States for Canadian Merchandise Exports, Year to Date 2022

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Top 10 U.S. Destination States for Canadian Merchandise Exports, Year to Date 2022

• Illinois: 14.9%
• Michigan: 10.4%
• Texas: 7.0%
• California: 6.0%
• New York: 5.4%
• Washington: 5.1%
• Minnesota: 4.0%
• Ohio: 3.8%
• Pennsylvania: 3.5%
• Massachusetts: 3.2%

U.S. Economic Update
*Note: dollar amounts under this section are $USunless otherwise stated

Gross Domestic Product (GDP): Real GDP decreased at an annual rate of 1.5% in the first quarter of 2022. Current Dollar GDP increased at an annual rate of 6.5% in the first quarter to $24.4 trillion. The decrease in the first quarter real GDP was revised down 0.1 percentage point from last estimate, primarily reflecting downward revisions to private inventory investment and residential fixed investment, that were mostly offset by upward revisions to exports and personal consumption expenditures.

Labour Market and Demographics Trends: In August 2022, the total nonfarm payroll employment rose by 315,000 and the unemployment rose to 3.7%.

Consumer Price Index: The Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.1 percent in August on a seasonally adjusted basis after being unchanged in July. Over the last 12 months, the all items index increased 8.3 percent before seasonal adjustment.

U.S. International Trade in Goods and Services
*Note: dollar amounts under this section are $USunless otherwise stated

Balance of Trade: The U.S. monthly international trade deficit in July 2022 was $70.6 billion, which decreased by $10.2 billion since June 2022. July exports were $259.3 billion and July import were $329.9 billion.

Terms of Trade Index: The terms of trade (TOT) index measures the relative trade competitiveness between the U.S. and its trading partners by comparing the ratio of export prices to import prices. In August 2022, the U.S. TOT with Canada were 84.2, representing a monthly increase of 0,2%.

U.S. Trade and Economic Policy
*Note: dollar amounts under this section are $US unless otherwise stated

Inflation Reduction Act (IRA): Signed by President Biden on August 16, 2022, the IRA promises more than $400 billion to combat climate change and extend coverage of the Affordable Care Act. Under the IRA, Canadian-assembled vehicles and batteries, as well as critical minerals mined, processed or recycled in Canada, are eligible for the U.S. Clean Vehicle Credit (up to US $7,500) In addition, the IRA includes several tax incentives, loans, and grants for EV battery, clean fuel and clean energy industries designed to incentivize investment and production in the U.S.

CHIPS & Science Act: President Biden signed the CHIPS & Science Act, appropriating $280 billion to boost U.S. semiconductor manufacturing and scientific capabilities.

Trade Commissioner Service Presence

The Trade Commissioner Service is present in 16 Canadian missions in the United States, with a total of approximately 180 employees supporting international business development initiatives.

There are 4 Canadian Technology Accelerators (CTA) in the U.S.: Boston/Cambridge, New York City, San Francisco/Silicon Valley, and Los Angeles. The CTA program supports the international scale-up of high- growth, high-potential Canadian firms in the sectors of clean technology, life sciences, information and communication technologies, and arts and culture.

CANADA-U.S. BORDER

• Since the beginning of the pandemic, the Government of Canada has taken a layered approach to border management to protect the health and safety of Canadians.
• As the pandemic has continued to evolve, adjustments to border measures have been informed by the latest evidence, available data, operational considerations, and the epidemiological situation, both in Canada and internationally.
• As of October 1, 2022 all COVID-19 entry restrictions, as well as testing, quarantine, and isolation requirements have been removed for anyone entering Canada. Travellers will no longer be required to undergo health checks or wear masks to travel on planes and trains.
• The removal of border measures has been facilitated by a number of factors, including modelling that indicates that Canada has largely passed the peak of the Omicron BA.4 and BA.5 fuelled wave; Canada’s high vaccination rates; lower hospitalization and death rates; as well as the availability and use of vaccine boosters (including new bivalent formulation), rapid tests, and treatments for COVID-19.

Background

In response to the COVID-19 pandemic, Canada and the United States arranged on March 18, 2020, to temporarily restrict all non-essential travel across our common border, with a series of extensions.

Entering the U.S.: Since January 22, 2022, all inbound foreign travellers entering the U.S. at land or ferry Ports of Entry, including those travelling for essential reasons (such as truckers), are required to be fully vaccinated and provide proof of vaccination. This requirement was extended on April 21, 2022, and may be amended or rescinded at any time.

Entering Canada from the U.S.: Effective October 1, 2022, all COVID-19 entry restrictions have been removed. This means that all travellers, regardless of citizenship, will no longer have to:

• provide proof of vaccination;
• submit public health information through ArriveCAN;
• undergo pre- or on-arrival testing;
• carry out COVID-19-related quarantine or isolation;
• monitor and report if they develop signs or symptoms of COVID-19 upon arriving to Canada.

Transport Canada COVID-19 travel requirements have also been removed. Travellers will no longer be required to:

• undergo health checks for travel on air and rail; or
• wear masks on planes and trains.

Cruise measures have also been lifted, and travellers will no longer be required to have pre-board tests, be vaccinated, or use ArriveCAN. A set of guidelines will remain to protect passengers and crew, which will align with the approach used in the United States.

SOFTWOOD LUMBER

• Extremely disappointed by U.S. decision to maintain duties on Canadian softwood lumber; these duties are unwarranted and unjustified.
• Vigorously defending the interests of Canadian industry, including through litigation under Chapter 19 of NAFTA, Chapter 10 of CUSMA and before the WTO.
• Continue to believe that an agreement is in both countries’ best interests; raising this at all levels and at every opportunity with the U.S. administration.

Supplementary messages

• Canada remains ready to negotiate a mutually acceptable agreement as soon as the U.S. demonstrates a willingness to discuss meaningfully, a point that I reiterated repeatedly to Ambassador Tai in our meetings during the summer.
• I am also working closely with industry and provinces to coordinate and maintain a Team Canada approach on this file.

Background

Following the release of the final results of the third administrative reviews by the U.S. Department of Commerce (Commerce) in August, most Canadian companies are subject to a new combined duty rate of 8.59% on exports of certain softwood lumber products to the United States. Although this is a decrease from the previous combined rate of 17.91%, Canada maintains that any duties imposed on Canadian softwood lumber are unfair. As a result, on September 8, Canada launched legal challenges against the new U.S. duty rates under Chapter 10 of CUSMA.

Canada continues to work with long-time allies in the United States, such as homebuilder associations, to stress that U.S. duties are causing undue harm to U.S. consumers, as well as to Canadian producers and communities. U.S. homebuilders have been vocal about the need to find solutions to high lumber prices and have specifically called for an end to duties on Canadian lumber. A new softwood lumber agreement is in the best interests of both countries. Canada is prepared to re-engage in negotiations when the United States is ready to discuss realistic proposals that would be acceptable to Canadian industry. You raised Canada’s willingness to resolve the dispute with Ambassador Tai in recent meetings, including when you met at the CUSMA Free Trade Commission in July.

In the meantime, Canada is continuing to pursue legal challenges against U.S. duties at the WTO and through NAFTA/CUSMA dispute settlement. Under NAFTA Chapter 19, Canada is challenging Commerce’s initial countervailing (CVD) and anti-dumping (AD) determinations. Canada is also challenging Commerce’s determinations before the WTO. While the WTO AD panel found that the U.S. improperly calculated dumping margins, Canada appealed in June 2019 certain findings from the Panel that were inconsistent with past panel and Appellate Body reports. The Panel’s report on Canada’s CVD challenge was released in August 2020, with findings overwhelmingly in Canada’s favour, namely that U.S. CVD duties on Canadian softwood lumber are inconsistent with U.S. WTO obligations. However, the United States appealed the Panel’s report in September 2020. Timelines for both appeal proceedings are unclear due to the WTO Appellate Body’s lack of quorum.

Canada is also pursuing challenges of the final results of Commerce’s first, second and third Administrative Reviews under Chapter 10 of CUSMA. Administrative reviews are annual reviews that Commerce conducts of its AD and CVD orders and that lead to new duty rates. The fourth Administrative Reviews for 2021 were initiated by Commerce on March 9; preliminary and final results are most likely to be released in January and August 2023, respectively.

CUSMA IMPLEMENTATION AND CUSMA FREE TRADE COMMISSION

• The effective implementation of the CUSMA is crucial to the success of the North American partnership and post-pandemic economic recovery.
• Canada is committed to working with the U.S. and Mexico to effectively implement the Agreement, including by advocating for Canadian business interests and supporting labour reform efforts in Mexico.
• Canada successfully hosted the second Free Trade Commission meeting in Vancouver on July 7-8 which provided a good opportunity to discuss ways to maintain momentum on meeting our shared objectives and to work towards solving trilateral trade irritants.

Supplementary messages

• CUSMA preserves key elements of NAFTA, modernizes provisions to address 21st century trade challenges, reduces red tape at the border, and provides enhanced predictability and stability for workers and businesses across the integrated North American market.
• The new Agreement reinforces the strong economic ties between the three countries and enhances North American competitiveness.
• The parties are currently focused on the effective implementation of the agreement including through the work of CUSMA committees, such as those on Small and Medium-Sized Enterprises, Environment and North American Competitiveness, and preparing for a trade deputies check-in early next year.

Responsive – Mexico Labour Reform

• The effective implementation of Mexico’s labour reforms is crucial for levelling the playing field for workers in North America.
• Canada is allocating $27.5 million over four years to support Mexico’s labour reform efforts, including through support for capacity building projects and the establishment of an effective regime to monitor and support Mexico’s compliance with its USMCA commitments.

SUPPORTING FACTS AND FIGURES (Statistics in Canadian Dollars unless otherwise noted)

• The CUSMA economic region is the biggest in the world, encompassing a US$26.3 trillion regional market of almost 500 million consumers.
• In 2021, bilateral trade in goods and services with the U.S. was $1 trillion.
• In 2021, Canada was the largest U.S. destination for goods and services exports (14.3%), third largest source of imports (11.6%).
• Millions of U.S. jobs depend on trade and investment with Canada.
• In 2021, the top 3 Canadian merchandise exports to the United States were mineral fuels and oils, motor vehicles and parts, and machinery.
• In 2021, Mexico was Canada’s third largest trading partner (following the United States and China), while in the same year Canada was Mexico’s sixth largest trading partner (following the U.S., China, South Korea, Japan, and Germany).

Background

CUSMA Implementation: Following entry into force on July 1, 2020, the Parties have focused on the implementation of the autos rules of origin and the implementation efforts of CUSMA committees. Implementation is proceeding well, however bilateral irritants exist, including with respect to U.S. concerns on Canada’s dairy tariff rate quota practices and Canada’s concerns with the U.S. interpretation of certain CUSMA autos rules of origin provisions. Both countries also launched a consultation process regarding Mexico’s practices in the energy sector.

Mexico Labour Reform Support: Canada is devoting $27.5 million over 4 years, starting in April 2021, to support Mexican labour reform programming and establishing a monitoring and compliance regime. The U.S. has appropriated US$180 million for programming to support similar efforts in Mexico. Canadian and U.S. officials are engaged in regular discussions to coordinate efforts.

CUSMA AUTO RULES OF ORIGIN

• Our automotive industry remains concerned with U.S. interpretation of certain CUSMA automotive rules of origin.
• Parties are now addressing this issue through the CUSMA dispute settlement process.
• We look forward to results of the dispute settlement process in order to establish a common understanding on this issue.

Supplementary messages

• The CUSMA automotive rules of origin are critical to providing a stable and predictable trade environment for the North American auto industry in the long run.
• We are confident that the strengthened rules of origin for vehicles and automotive parts will create new opportunities for producers throughout North America.

Update

The panel hearing took place August 2-3 in Washington DC. Given the complexity of the case, and as permitted by the CUSMA, the panel has informed the Parties that it will delay the release of its initial and confidential report by 30 days until November 14. The release of the final report will also be delayed until the end of December/early January. The final report can be published by the Parties 15 days after its release.

Background

The U.S. is unilaterally interpreting the implementation of the regional value content requirements for core auto parts in a manner that is considered inconsistent with the CUSMA and results in a stricter application of the automotive rules of origin. On August 20, 2021, Mexico requested consultations under the CUSMA state-to-state dispute settlement process and, on August 26, 2021, Canada notified its intention to participate as a third party. The consultations took place on September 24, 2021. On January 6, 2022, Mexico requested the establishment of a dispute settlement panel, and Canada joined as a complainant on January 13. The Parties selected the final panelist of the 5-member panel on March 22.

U.S. CLEAN VEHICLE TAX CREDIT

• Pleased that Canadian-assembled vehicles and batteries, as well as critical minerals mined or processed in Canada, are eligible for the U.S. Clean Vehicle Credit.
• This is good news for Canadian workers, jobs and our manufacturing industry.
• It took a Team Canada approach to advocacy for us to get here, and we will continue to work closely with industry, workers, and the provinces to stand up for our auto sector.

Supplementary messages

• Encouraged that the outcome recognizes the unique North American trading relationship, our highly integrated supply chains, and that Canada is a secure and reliable supplier.
• Since the Prime Minister's meeting with President Biden last year in Washington D.C., we have been relentless in underscoring that the original proposal would have been harmful to both Canada and the United States.
• Canada and the United States must continue to work together to fight climate change, create jobs, increase North American competitiveness, and ensure resilient North American critical mineral and battery supply chains.

RESPONSIVE – If other production credits in the U.S. Inflation Reduction Act are raised

• I am aware of the production credits in the U.S. Inflation Reduction Act that seek to incentivize investment and production in the United States in certain key sectors for the future, such as EV batteries.
• Will continue to strongly support my Cabinet colleagues’ (ISED, NRCan) efforts to bring important automotive and clean energy investments to Canada.

Background

In November 2021, the U.S. House of Representatives passed the bill for the Build Back Better Act that contained discriminatory tax credits for purchases of electric vehicles in the United States that threated the viability of automotive production in Canada. The proposed credits were inconsistent with U.S. obligations under the CUSMA and the WTO.

The Inflation Reduction Act (IRA), signed into law by President Biden on August 16, includes new U.S. consumer tax credits towards the purchase of clean vehicles, called the “Clean Vehicle Credit” (CVC). Canadian-assembled vehicles and batteries, as well as critical minerals mined or processed in Canada, are now eligible for the CVC, which applies to clean vehicles including electric vehicles.

While the CVC extends eligibility for the tax credit to vehicles assembled in North America (including Mexico), other auto producing regions are excluded. The European Union, South Korea and Japan have publicly criticized the CVC, noting concern with domestic content and local assembly requirements and stressing that it is discriminatory and violates WTO rules. U.S. automakers have signalled that the CVC’s content requirements related to critical minerals and battery components will be difficult to meet.

The IRA includes other tax credit programs that seek to incentivize investment and production in the United States in certain sectors, such as EV batteries, clean energy and clean fuels. For example, the Advanced Manufacturing Production Credit (AMPC) is a production tax credit that seeks to incentivize the processing of critical minerals and battery production in the United States. ISED and NRCan, with the support of GAC and other federal departments, are advancing analysis on the potential impacts of U.S. credits on Canada’s competitiveness as an investment destination.

DAIRY TRQs

• The Government will work closely with dairy sector representatives and with provinces to ensure the best defense of Canada’s interests.
• Any potential next steps in the dispute process rest with the United States and New Zealand. However, should either party request the establishment of a Panel, Canada is fully prepared to defend its tariff rate quota policies.
• The Government will continue to stand up for Canada’s dairy industry, farmers and workers and the communities they support and will continue to preserve, protect and defend our supply management system.

Supplementary messages

• The CPTPP and CUSMA are separate and distinct agreements and any processes will unfold independently.

Update

CUSMA – 2022 Dairy TRQs Dispute

On May 25, 2022, the United States formally requested new consultations under the CUSMA Dispute Settlement chapter regarding Canada’s administration of its dairy TRQs. This new request covers measures that were not previously under litigation and follows Canada’s publication on May 16 of new CUSMA dairy TRQ policies to implement the 2021 Panel’s ruling in that dispute. On June 9, the United States and Canada engaged in virtual consultations regarding the U.S. concerns and the United States has been in a position to request the establishment of a dispute settlement panel since June 24.

CPTPP – Dairy TRQs Dispute

On June 22, 2022, Canada met with representatives of New Zealand (in-person) for consultations under the Dispute Settlement chapter of the Agreement regarding its concerns with Canada’s CPTPP dairy TRQ policies. New Zealand has been in a position to request the establishment of a dispute settlement panel since June 23.

Supporting facts and figures

• Canada remains a small player in the global dairy trade, representing less than 1% of global exports in 2021.
• Canada was the second largest export market for U.S. dairy in 2020 and has consistently been in the top three export markets for the U.S.

Background

CUSMA – 2021 Dairy TRQs Dispute

On May 25, 2021, the United States requested the establishment of a dispute settlement panel regarding Canada’s administration of its dairy TRQs under CUSMA. On December 20, 2021, the Panel delivered its final report to Canada and the United States. The Panel found against Canada on one of the four U.S. claims – namely, that Canada’s practice of reserving TRQ pools exclusively for the use of processors is inconsistent with CUSMA.

CPTPP – Dairy TRQs Dispute

On May 12, 2022, New Zealand requested consultations with Canada under the CPTPP dispute settlement chapter. In their request, New Zealand takes issue with how Canada administers its dairy TRQs under the Agreement. This follows a series of high-level representations made by New Zealand in the lead up to its request.

U.S. COUNTRY-OF-ORIGIN LABELLING (COOL)

• Previous mandatory country-of-origin labelling requirements had devastating economic impact on Canadian cattle and hog farmers.
• Canada will firmly oppose any new proposals from the U.S. to resurrect mandatory country-of-origin labelling for beef and pork.
• Minister Bibeau and I continue to work closely with Canadian stakeholders and allies across the U.S. to examine proposed measures to ensure they do not restrict or disrupt supply chains.

BACKGROUND/HISTORICAL ACTIONS

Mandatory COOL: In December 2015, the U.S. Congress passed legislation that repealed COOL requirements enacted in 2008 for beef and pork, which had had a significant negative impact on the Canadian cattle and hog industries. Canada successfully argued its case at the WTO, which found that the U.S. measure discriminated against imports of Canadian (and Mexican) livestock in practice and was in violation of U.S. international trade obligations. Canada was granted final authorization to retaliate up to $1.055 billion annually on U.S. exports to Canada.

Canada nominally retains these retaliatory rights. Despite this, there continues to be activity in the U.S. (i.e., in Congress, certain state legislatures) to attempt to introduce voluntary or mandatory COOL schemes that could restrict trade. Mandatory COOL remains a strong desire of some in the U.S. industry. Multiple actions have been taken since 2015, at both the federal and state levels, in an attempt to enact the same or similar requirements. In 2021, four Senators tabled a bill to reintroduce mandatory COOL, which would require the U.S. Trade Representative, in consultation with the U.S. Secretary of Agriculture, to develop a WTO-compliant means of reinstating mandatory COOL for beef within one year of enactment. A similar bill was introduced in the House by two Representatives in March 2022. These latest proposed bills are not expected to advance in Congress, but it signals the growing interest to look at changes related to COOL.

Voluntary Product of USA labelling: There has been a shift in focus over the past year to a voluntary “Product of USA” (vPUSA) label, which the United States considers more likely to be WTO-compliant, but which may still have negative impacts on Canadian exports of live animals and meat should the label prove popular in the marketplace. Last July, the USDA announced that it will be conducting a ‘top-to- bottom’ review of ‘Product of the USA’ meat labels; consultations with trading partners will be part of the review. As a first step in this regulatory process, the USDA has signaled its intent to gather U.S. consumer views on the ‘Product of USA’ label as it applies to beef and pork through a survey. The Government of Canada submitted comments to the public consultation on this proposed survey that, among other things, reminds the U.S. that any resulting measure must comply with U.S. international trade obligations and should not disrupt the integrated Canadian and U.S. meat and livestock supply chains. On September 27, 2022, Agriculture Secretary Vilsack announced that the consumer survey had been completed and that USDA will be reviewing the results until the end of 2022 to determine how and when the voluntary label can be used. Canadian officials continue to monitor the situation closely as concern remains that further attempts will be made in the U.S. to introduce a labelling scheme that could restrict trade.

ENERGY SECURITY: CANADA AND THE U.S.

• Canada’s energy sector is increasing hydrocarbon production by 300,000 barrels per day by the end of 2022.
• Most if not all of this increase will go to the U.S.
• Canada already supplies about 22% of U.S. daily crude oil refinery consumption, or 3.8 million barrels per day.

Supplementary messages

• Canada is the best energy choice for the U.S.: its closest neighbour and ally.
• Canadian energy is secure, affordable, available and sustainably produced.
• Canada’s increase in production responds to energy market and supply chain challenges following Russia’s invasion of Ukraine.
• New and expanded cross-border energy infrastructure strengthens the bilateral energy relationship, and energy security and supply chains.
• Over 100 oil and gas pipelines, and electricity transmission lines, cross the border.

Supporting facts and figures

• Canada is the U.S. #1 energy supplier, across crude oil, natural gas and electricity.
• In 2021, Canada exported to the U.S. record high volumes of crude oil (3.8 million barrels/day, or about 22% of U.S. daily refinery crude intake).
• Over 90% of these exports flow via cross-border pipeline infrastructure essential to the energy supply chain.

Background

In mid-March 2022, the U.S. made numerous direct, high-level requests to Canada to increase oil and natural gas production to compensate for lost imports, to calm energy markets and reassure that the supply chain was secure and functioning. The U.S. expressed concern on the impacts of the ban on imported Russian oil to the U.S. on the energy markets and prices at the pump,

On March 24, Minister Wilkinson announced that Canada’s energy sector would increase hydrocarbon production by 300,000 barrels per day by the end of 2022, with the intention of displacing Russian oil and gas without increasing emissions (200,000 barrels/day crude oil; 100,000 barrels/day natural gas).

Canada’s energy sector’s commitment amounts to a 5% increase in production. Most, if not all, of the 5% increase will directly benefit the U.S. by helping to balance the U.S. energy market in the short-term. Both countries will require at a minimum maintaining the existing cross-border pipeline infrastructure and/or increasing it, or the energy will not get to market or see a significant rise in rail traffic.

Before counting this increase, Canada already makes a major contribution to U.S. energy security. We are the U.S. #1 energy supplier. In 2021, Canada exported to the U.S. record high volumes of crude oil (3.8 million barrels/day, or about 22% of U.S. daily refinery crude intake). Over 90% of these exports flow via cross-border pipeline infrastructure essential to the energy supply chain.

Bilateral energy trade is a major driver of our overall bilateral trade and the trade balance with the U.S., with an outsize economic effect in many regions in Canada. In 2021, from a $149.6 billion two-way energy trade with the U.S., Canada enjoyed a bilateral trade surplus in energy of $108.2 billion.

TRANSBOUNDARY OIL AND GAS PIPELINES

• Integrated cross-border energy infrastructure plays a critical role in North American energy security and supply chains.
• Canada and the U.S. must work together to support infrastructure and exploit the benefits of our integrated grid of pipelines.
• Canada supplies 22% of U.S. daily crude oil consumption.

Supplementary messages

• We strongly support Canada’s energy sector. Crude oil exported in pipelines from western Canada is fundamentally important in our bilateral energy trade relationship.
• The economies of Canada and the U.S. will need fossil fuels over the next three decades. Canada’s fossil fuels are the most sustainably-produced available to the U.S.
• Canada’s Environmental, Social and Governance (ESG) record for oil production ranks third in the world, well ahead of any other supplier to the United States, which itself ranks sixth.
• Responsive/Keystone XL (KXL): The Prime Minister and other ministers, following the November 2020 election, pressed the incoming Biden Administration to recognize the KXL’s worth and not to cancel the project.

Supporting facts and figures

• Canada’s energy sector is the #1 foreign source of energy for the U.S., supporting both countries’ economic and energy security.
• Over 70 oil and gas pipelines cross the border, moving energy back and forth.
• In 2021, from a $149.6 billion two-way energy trade, Canada enjoyed a bilateral trade surplus in energy of $108.2 billion, driven by crude oil in pipelines.
• In 2021, Canada exported to the U.S., on average, 3.8 million barrels/day of crude oil. For crude oil, this represents about 22% of U.S. daily refinery crude intake and 61% of its imports.

Background

Maintaining transboundary oil and gas pipeline infrastructure supports exports, Western Canada’s energy sector, strengthens the bilateral energy relationship and supports North American energy and economic security. Canada has strongly supported new and expanded oil and gas transboundary pipelines.

No matter how successful we are at achieving net zero emissions by 2050 and de- carbonizing the economy, Canada and the U.S. will require significant amounts of fossil fuels over the next three decades. For the U.S., Canada is the best, most sustainable producer of this energy.

Crude oil exported through pipelines dominates our energy exports and drives Canada’s huge energy trade surplus ($108.2 billion in 2021), which in turn affects the health of our overall goods trade balance.

Keystone XL (KXL): On January 20, 2021, on his first day in office and fulfilling an election promise made in May 2020, President Biden canceled KXL’s Presidential permit, effectively terminating the project. The Prime Minister expressed his disappointment with the decision. Between the November 2020 election and the date Biden cancelled the project, the Prime Minister, other ministers and Ambassador Hillman intervened on numerous occasions with the incoming Administration to urge that Biden not to cancel the permit.

Since the cancellation, some elected officials in the U.S. have proposed reviving the project. The Administration has rejected the idea. TCE (KXL’s owner), in response to these initiatives, stated on March 8, 2022 that “The Keystone XL Pipeline Project was terminated and will not proceed.” Subsequently, both TCE and the province of Alberta have filed multi-billion dollar investor-state claims under NAFTA against the U.S. for the cancellation of KXL.

LINE 5 – STRAITS OF MACKINAC

• Line 5 is a critical part of Canada’s economic and energy infrastructure.
• Canada has strongly defended the continued operation of Line 5, twice invoking the Transit pipeline treaty’s dispute settlement mechanism.
• The Prime Minister, Minister of Foreign Affairs, other ministers and Ambassador Hillman have also raised Line 5 on numerous occasions, including at the White House.

Supplementary messages

• On October 4, 2021, Canada invoked the dispute settlement provision of the 1977 Transit pipelines treaty concerning Line 5 in the Straits of Mackinac in Michigan. On August 29, 2022, Canada invoked a second time concerning Line 5 on the Bad River Band Reservation in Wisconsin.
• In the Michigan situation, Canada has also intervened in support of Enbridge three times in U.S. (federal) District Court with amicus briefs in support of Line 5.
• In ongoing Treaty negotiations, Canada will work with the U.S. to search for solutions that keeps Line 5 open and operating safely.

Supporting facts and figures

• Line 5, operating since 1953, carries 540,000 barrels/per day of light crude oil and natural gas liquids coming from Alberta and Saskatchewan, supplying six refineries in Ontario and Quebec, and four refineries in Michigan, Ohio and Pennsylvania.
• The sections under the Straits of Mackinac (Michigan) and on the Bad River Band Reservation (Wisconsin), both objects of formal bilateral disputes under the 1977 Transit pipelines Treaty, have operated since 1953 without any spill or leak.

Background

On October 4, 2021, Canada invoked the dispute settlement mechanism of the Treaty over a 6 km section of Line 5 that crosses the bottomlands of the Straits of Mackinac. In November 2020, the Governor ordered Line 5 shut down, effective May 2021, but lacked court authority to do so. Canada supports a solution proposed by Enbridge, a tunnel bored deep underneath the Straits, and undergoing state and federal permitting reviews. Negotiations with the U.S. under the Treaty’s dispute mechanism are ongoing, with two formal sessions (December 2021 and February 2022), and a technical meeting on July 21, 2022. Two (federal) District Court decisions in Michigan/Enbridge litigation (November 2021 and August 2022) have ruled the issue belongs in the federal court jurisdiction, decisions favourable to Enbridge (and Canada). Canada has submitted three amicus briefs to the court in support of Enbridge in 2021 and 2022.

On August 29, 2022, Canada invoked the dispute settlement mechanism of the Treaty over a 19 km section that crosses the Bad River Band (BRB) Reservation. Treaty negotiations will begin soon. The BRB and Enbridge are involved in litigation in U.S. District Court. On September 7, the judge ruled Enbridge was in trespass on the Reservation, and that Enbridge should pay compensation to the BRB. However, he ruled that Line 5 should remain operational until a solution is found, e.g. a re-route of the line outside and around the Reservation proposed by Enbridge and supported by Canada. The re-route is undergoing state and federal permitting reviews. The precise conditions and timeline under which Enbridge must remove the pipeline from the Reservation will be determined by a trial that begins on October 24.

CLIMATE CHANGE AND BORDER CARBON ADJUSTMENT

• Committed to playing a key role in addressing climate change, including mitigating carbon leakage risks.
• Engaged with trading partners bilaterally and at the WTO to foster a constructive dialogue on trade and environment issues.
• Addressing trade and environmental sustainability issues requires coordinated global actions.

Supplementary messages

• Canada is an active participant in the WTO’s Committee on Trade and Environment, and is a co-convenor of the Trade and Environmental Sustainability Structured Discussions (TESSD), where we continue to advance opportunities to address trade and environmental sustainability issues.
• Currently assessing whether a border carbon adjustment (BCA) for Canada could mitigate carbon leakage while also encouraging other countries to step up and take effective action to reduce emissions.
• Also engaged with the European Union (EU) on its proposed Carbon Border Adjustment Mechanism (CBAM) to ensure that all of Canada’s carbon pricing systems are recognized and to minimize impacts on Canadian exporters.

Update

On August 31, Canada’s Ambassador to the EU sent a letter to key EU interoluctors, presenting Canada’s request for an amendment to the definition of “carbon price” in the proposed CBAM regulation text. The basis of this request is to seek legal certainty that all of Canada’s carbon pricing systems are recognized under the EU CBAM.

Background

In December 2021, Canada and other like-minded countries reaffirm their efforts to intensify work on environmental sustainable trade, including examining the nexus between trade and the environment through the TESSD. Launched in 2020, the TESSD, co-convened by Canada and Costa Rica, complements the existing work of the WTO Committee on Trade and Environment and other relevant committees. In February 2022, TESSD Members agreed to set up four working groups – i.e. on trade- related climate measures, environmental goods and services, circular economy and circularity, and subsidies.

Following up on Budget 2021 commitments, Finance Canada (supported by other departments) continues to assess the feasibility and potential design options of a domestic BCA. Initial consultations with provinces and territories as well as Canadian industry stakeholders and non-governmental organizations have been completed in January 2022. The views gathered during the consultations are informing next steps of the analysis.

On July 14, 2021, the European Commission released the proposed CBAM regulation that would impose a carbon charge on specific imported goods in the iron and steel, cement, fertilizer, and aluminium sectors. The EU CBAM is expected to be in place by January 1, 2023 beginning with a transition period where no carbon charge would be imposed, before full implementation on January 1, 2026. Canadian officials continue to engage with their counterparts as the proposed CBAM regulation undergoes the EU legislative process.

On October 31, 2021, the U.S. and EU announced negotiations for a Carbon-Based Sectoral Arrangement for Steel and Aluminum Trade, to be completed by 2024. The Arrangement will be open for other like-minded countries to participate; however, none have yet been invited. Canadian officials continue to closely monitor developments and to signal to U.S. and EU interlocutors Canada’s interest in participating in the Arrangement.

CLEAN ENERGY (HYDRO) EXPORTS

• Cross-border clean energy infrastructure plays a critical role in North American energy supply and security.
• Hydro exports to the U.S., via cross-border projects, help U.S. states meet emission targets and fight climate change.
• Pleased with New York’s approval of $3 billion project for Hydro-Quebec to supply New York City with clean electricity.

Supplementary messages (Responsive only, on NECEC)

• New England Clean Energy Connect (NECEC): We were pleased with the recent decision by the Maine Supreme Court that ruled unconstitutional the November 2022 referendum that blocked construction of NECEC.
• The Supreme Court send the case back to a lower court for final decision. We await this ruling.
• Canada and Quebec have worked together closely since 2013 to promote clean electricity exports to New England. We will continue to do so.

Supporting facts and figures

• Canada is the #1 foreign source of energy to the U.S. In 2020, Canada provided 93 per cent of U.S. electricity imports.
• Over 35 electricity transmission lines cross the border.
• In 2020, Canada exported to the U.S. clean renewable hydro worth nearly $3 billion, contributing to states and regions meeting emission reduction goals.
• This amounted to 67 Terawatt hours (TWh) [1 TWh = 1 trillion watts/hour]. This represents 2% of overall U.S. electricity consumption, or the equivalent of powering over 6 million U.S. homes.
• Hydro exports are concentrated in the Pacific Northwest, Minnesota, New England and New York. For example, Hydro Quebec provides Vermont with 25% of its electricity and about 12% for all of New England (six states).

Background

On April 14, New York State gave final approval to the Champlain-Hudson Power Express (CHPE) project, a 339-mile, 1250 MW buried transmission line from Quebec directly into New York City, with enough power to supply over one million homes. The project is a critical part of both New York City’s plans to reduce the present 85% reliance on fossil fuel-based electricity. CHPE is one of the largest investments in the State’s history, expected to create nearly $50 billion in economic benefits in the first 30 years of its operations – including over $17 billion in reduced electricity costs, and $1.4 billion in new tax revenues. 2,000 jobs are anticipated during the construction phase, which will begin by the end of 2022.

New England Clean Energy Connect (NECEC): On August 30, the Maine Supreme Court ruled unconstitutional the state’s November 2021 ballot initiative that passed and retroactively blocked construction of the NECEC, if the project proponents could demonstrate they had engaged in substantial construction on permits granted before the referendum. The Court opined they thought this was the situation, but remanded the case to the lower court for a determination. A decision is pending.

NECEC is a cross-border infrastructure project, which would provide clean, renewable, firm (24/7), low-cost power to Massachusetts, and some to Maine. Hydro-Quebec’s 20-year multibillion-dollar contract with Massachusetts represents a major addition to Canada’s clean electricity exports and helps Massachusetts and New England achieve emission reduction goals in the fight against climate change.

NECEC is a partnership of Hydro-Quebec and Central Maine Power. The 1200 MW line is located entirely within Maine, running 145 miles from the Quebec-Maine border to southern Maine, connecting from there to Massachusetts through the existing grid. The first section in Maine from the Quebec border, 53 miles long, represents a new corridor which requires clear cutting, and is the focus of local opposition. The rest of the corridor follows existing rights-of-way controlled by CMP.

CANADA-MEXICO BILATERAL RELATIONS

• Canada and Mexico are longstanding partners. Our bilateral relationship is broad and multi-faceted, bound together by deep bilateral ties between our people, civil societies, and businesses.
• We work closely with Mexico to further strengthen our bilateral partnership, including Indigenous Peoples empowerment, feminist foreign policies and building economies that support inclusive growth.
• Mexico is key to our North American partnership; together with the United States, we cooperate closely to ensure that North America remains the most competitive region in the world.

Update

Since President Andrés Manuel Lopez Obrador’s election in 2018, the Prime Minister met him at NALS 2021 and the two have spoken nine times. On April 5, 2022, the Prime Minister and Mexico’s President spoke about the conflict in Ukraine. The Prime Minister invited the President to participate in the ‘Stand Up for Ukraine’ campaign, to which he agreed. In June 2022, Minister Joly met Mexico’s Secretary of Foreign Affairs Ebrard at the North American Foreign Ministers Meeting on the margins of the Summit of the Americas. In July 2022, Minister Ng met with former Mexican Secretary of Economy Clouthier in Vancouver to commemorate the 2-year anniversary of CUSMA entry into force. Also in July 2022, ECCC Minister Guilbeault met his Mexican counterpart Secretary Albores at the Commission for Environmental Cooperation in Merida, Yucatan.

Supporting facts and figures

• With over 77 years of diplomatic relations, Canada and Mexico continue to work collaboratively to enhance bilateral relations, from North American competitiveness to global issues.
• Mexico represents one of Canada’s most important economic relationships, amounting to $41.6 billion in two-way merchandise trade in 2021.

Background

CUSMA Free Trade Commission

Canada hosted the CUSMA Free Trade Commission in a hybrid format meeting in Vancouver in July 2022. This annual meeting was an opportunity for Ministers responsible for trade from Canada, the United States and Mexico to receive updates from officials on the progress made on ongoing committee work, as well as for Ministers to provide direction going forward.

Mexico-Canada High Level Economic Dialogue (HLED)

The forum focuses on shared priorities (as opposed to irritants) such as the recovery from the pandemic, inclusive trade strategies, innovation, and the strengthening of regional and resilient supply chains. The dialogue has a mandate of enhancing collaboration between GAC, ISED, and Mexico’s Ministry of Economy. The first HLED meeting was held virtually on August 15 and discussions are underway regarding a second HLED as soon as this fall.

Canada-Mexico Partnership

In 2004, Canada and Mexico established the Canada-Mexico Partnership (CMP), a bilateral mechanism that brings together public and private stakeholders to develop concrete initiatives in a wide range of areas. The CMP is organized around nine working groups: agri-business; creativity and culture; energy; environment; foreign policy; forestry; human capital; mining; and trade, investment, and innovation. Canada will host the 18^th Annual meeting in November 2022.

Canada-Mexico Trade Snapshot

This document is produced by the Mexico and Trilateral Affairs Division (NGI) at ¶¶ÒùÊÓƵ in consultation with the Office of the Chief Economist. It is updated as most recent data becomes available.

Canada-Mexico trade in services

• 1.5% of Canada’s services exports went to Mexico in 2021
• 1.1% of Canada’s services imports were from Mexico in 2021

Mexican Goods Exports, 2021

Alternative text

• United States: 84%
• China: 2%
• Unknown (America): 3%
• Other Asia, N.E.S.: 2%
• Canada: 2%
• All other countries: 7%

Mexican Goods Imports, 2021

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Mexican Goods Imports, 2021

• United States: 46%
• China: 24%
• South Korea: 4%
• Japan: 4%
• Canada: 2%
• All other countries: 20%

Canadian Goods Exports, 2021

Canada merchandise exports from Mexico increased by 32.8% in 2021 over the same period in 2020.

Alternative text

Canadian Goods Exports, 2021

• United States: 76%
• China: 5%
• U.K.: 2%
• Japan: 2%
• Mexico: 1%
• All other countries: 14%

Canadian Goods Imports, 2021

Alternative text

Canadian Goods Imports, 2021

• United States: 49%
• China: 14%
• Germany: 3%
• Japan: 3%
• Mexico: 5%
• All other countries: 26%

Canada merchandise imports from Mexico increased by 11.4% in 2021 over the same period in 2020.

Trade Commissioner Service (TCS)

• Located in Monterrey, Guadalajara and Mexico City with 35 employees supporting international business development.
• Agriculture and Agri-Food Canada, Canadian Food Inspection Agency and Export Development Canada are co- located in the mission and work with the trade team.
• Ontario and Alberta are co-located at the Embassy, Québec has a Délégation Générale in Mexico City and Saskatchewan established a trade and investment office in Mexico City.

Canadian Goods Exports to Mexico by Province, 2021

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Canadian Goods Exports to Mexico by province, 2021

• ON: Motor vehicles & parts: 36%
• QC: Aluminum: 23%
• AB: Mineral fuels & oils: 18%
• SK: Oilseeds: 12%
• MB: Oilseeds: 8%
• BC: Paper products: 2%
• NS: Paper products: 1%
• NB: Vegetables & fruit: 0.5%
• NL: Paper products: <0.5%
• YT: Tools & cutlery: <0.5%
• PEI: Motor vehicles & parts: <0.5%
• NU: Tools & cutlery: <0.5%
• NT: Machinery: <0.5%

TRADE UPDATE

Canadian trade and investment with Mexico is steadily growing, with over $41.7 billion in two-way merchandise trade in 2021. Mexico is Canada's third largest single-country merchandise trading partner (after U.S. and China). Canada was Mexico's sixth-largest merchandise trading partner in 2021.

TRADE AGREEMENTS, ALLIANCES & MEMBERSHIPS

• Canada-United States-Mexico Agreement (CUSMA)
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• 13 free-trade agreements (FTAs) covering 50 countries.
• Pacific Alliance, WTO, APEC, OECD and Latin American Integration Agreement (ALADI).
• 32 Reciprocal Investment Promotion and Protection Agreements (RIPPAs).

COMMERCIAL OPPORTUNITIES

Education Sector: Mexico is a priority market and is the second largest source country of Latin American students going to Canada after Brazil. In 2020, Mexico was the 12th largest source of international students in Canada. Despite COVID-19 pandemic, the Mexican student market to Canada has grown by 24% over 2015-2020.

CanExport SMEs: In 2022-2023, Mexico has 3 activities and Canada (11), United States (8) and Colombia (1) have 20 activities targeting the Mexico that focus on education (3), transport, industrial machinery (6), consumer products, clean tech (4), ag machinery, natural resources (3), tourism, creative industries, infrastructure and aerospace.

Canadian Technology Accelerator: In September 2020, the Embassy of Canada in Mexico launched its first Canadian Technology Accelerator (CTA) cohort focusing on smart cities. Since then, a cohort on Ag Tech (Spring 2021), Smart Cities (Fall 2021) and a women lead Health IT cohort (Winter 2021) were hosted.

Mining: Mexico is one of the most important mining jurisdictions in the world, ranking in the top ten producing countries for 17 minerals such as silver, copper, zinc, lead and gold. Canada is an important investor in Mexico’s mining industry and represents more than 60% of the total mining and exploration companies in the country.

COMMERCIAL CHALLENGES

• Canadian investors have faced longstanding regulatory permitting, physical security, taxation, labour, rule of law, and insecure land access challenges which reduces the attractiveness of Mexico as an investment destination.
• Since March 2020, the Government of Mexico introduced regulations and legislation strengthening the state-owned utility CFE and weakened the private sector in energy generation, specifically renewable energies.

Mexico’s Real GDP Growth (%)

Alternative text

Mexico’s Real GDP Growth (%)

• 2017a: 2.1%
• 2018a: 2.2%
• 2019a: -0.2%
• 2020a: -8.2%
• 2021a: 4.8%
• 2022b: 1.9%
• 2023b: 2.6%

a: actual

b: EIU projected

Top 10 Canadian Goods Exports to Mexico by Type, 2021

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Top 10 Canadian Goods Exports to Mexico by type, 2021

• Motor vehicles & parts: 21.4%
• Electrical machinery: 6.6%
• Machinery: 9.6%
• Oilseeds: 18.5%
• Aluminum & related: 8.2%
• Mineral fuels & oil: 8.2%
• Meat: 9.6%
• Iron & steel: 6.5%
• Animal & vegetable fats/oils: 5.2%
• Plastics: 6.0%

Top 10 Mexican Goods Exports to Canada by Type, 2021

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Top 10 Mexican Goods Exports to Canada by type, 2021

• Motor vehicles & parts: 28.8%
• Electrical machinery: 18.2%
• Machinery: 17.8%
• Optical & precision instruments: 4.1%
• Fruit & nuts: 3.7%
• Vegetables & roots: 3.5%
• Furniture & lighting: 2.9%
• Iron & steel: 1.6%
• Aircraft, spacecraft & parts: 1.5%
• Plastics: 1.4%

CANADA-MEXICO HIGH LEVEL ECONOMIC DIALOGUE

• On August 15, 2022, together with Minister Champagne and Mexico’s former Secretary of Economy, I launched the Canada-Mexico High Level Economic Dialogue.
• The successful inaugural meetings featured discussions on how to strengthen trade, investment, inclusive growth and competitiveness by engaging constructively and collaboratively across a range of shared interests.
• I look forward to next steps, including an upcoming joint study on private sector partnerships and identification of opportunities for Canada and Mexican SME businesses led by women, Indigenous peoples, and other under-represented groups to participate in integrated regional supply chains.

Supplementary messages

• I was pleased with the first HLED meeting in August 2022, which represents an important new mechanism for Canada to engage with Mexico on issues of shared economic interest, particularly considering current global challenges.
• HLED is co-chaired by ¶¶ÒùÊÓƵ; Innovation, Science and Economic Development Canada; and Mexico’s Ministry of Economy.
• Canada is keen to work alongside Mexico to advance common goals and explore new areas for collaboration. Although HLED is intended to focus on shared priorities as opposed to irritants, together with Minister Champagne, I did reiterate Canada’s ongoing concern with the investment, business, and regulatory climate in Mexico.
• Dates for the second HLED are still being determined in consultation with Innovation, Science and Economic Development Canada along with Mexico.

Update

On October 6, 2022, Mexico’s Secretary of Economy, Tatiana Clouthier Carrillo, resigned. The Mexican President has announced the appointment of Raquel Buenrosto as the new Secretary.

Supporting facts and figures

• Two-way merchandise trade between Canada and Mexico was $41.7 billion in in 2021.
• Mexico is Canada's third largest single-country merchandise trading partner (after U.S. and China).
• Canada was Mexico's sixth-largest merchandise trading partner in 2021.
• Canadian direct investment in Mexico was $25 billion in 2021, which is Canada's ninth largest direct investment destination.
• Mexico has been identified as a priority market for Export Development Canada, which has operated a regional office in Mexico since 2000, providing extensive financial services related to Canadian exports and investments in the country.
• Canadian companies represent two-thirds of all the foreign investment in Mexico’s mining sector. The total stock of Canadian direct investment abroad in Mexico in 2020 was more than $28.8 billion.

Background

Mexico represents one of Canada’s most important economic relationships, amounting to $41.6 billion in two-way merchandise trade in 2021. That year, Mexico was Canada’s third largest merchandise trading partner after the U.S. and China. In addition, Canada was the third largest investor in Mexico at $25 billion in 2021.

Commercial relations continue to grow since the implementation of the Canada- United States-Mexico Agreement. CUSMA Implementation is proceeding well overall, but certain bilateral irritants exist (e.g., autos rules of origin for core parts, and electric vehicle tax credit).

Canada hosted the CUSMA Free Trade Commission (FTC) in a hybrid format meeting in Vancouver in July 2022. This annual meeting was an opportunity for Ministers responsible for trade from Canada, the United States and Mexico to receive updates from officials on the progress made on ongoing committee work, as well as for Ministers to provide direction going forward.

CANADA-MEXICO MINING ISSUES

• Mining is a key element of the Canada-Mexico commercial relationship, with Canadian companies representing the largest foreign investors in Mexico’s mining sector.
• Despite Canada’s successful investments in Mexico’s mining sector, Canadian investors face challenges related to the rule of law, regulatory framework, security, taxation, and insecure land access.
• The Canadian Trade Commissioner Service supports Canadian mining companies both large and small in navigating these challenges and continues to advocate for a stable and predictable operating and investment environment.

Supplementary messages

• Canadian companies operate in Mexico with the same level of commitment as they do in Canada with respect to the best practices of responsible business conduct.

Update

The Mexican federal government made changes to the Mining Law in April 2022, effectively nationalizing lithium and creating further uncertainty in the sector. On August 23, 2022, the Mexican government published a decree creating a new decentralized state company called Litio para Mexico, or LitioMx as it will be called. The Mexican Mining Chamber (CAMIMEX) has challenged the recent changes to the Mining Law in the tribunals on behalf of all its members and a group of opposition Senators are challenging the constitutionality of the changes.

Supporting facts and figures

• Canadian direct investment in Mexico was $25 billion in 2021, which is Canada's ninth largest direct investment destination.
• Mexico has been identified as a priority market for Export Development Canada, which has operated a regional office in Mexico since 2000, providing extensive financial services related to Canadian exports and investments in the country.
• Canadian companies represent two-thirds of all the foreign investment in Mexico’s mining sector.
• Currently, Canada’s investments in the mining sector in Mexico are worth around $8.9 billion.

Background

Canada is home to almost half of the world’s publicly listed mining and mineral exploration companies, with many of those having sizeable operations globally, including in Mexico.

Responsible Business Conduct

The Government of Canada expects Canadian companies operating abroad to abide by all relevant laws, to respect human rights in their operations, and to adopt best practices and internationally respected guidelines on responsible business conduct such as the UN Guiding Principles on Business and Human Rights and the Organization for Economic Co-operation and Development

(OECD) Guidelines for Multinational Enterprises. Responsible business conduct is at the nexus of many priorities for Canada such as the respect for human rights, taking action on climate change, inclusive trade, upholding the rights of Indigenous peoples and amplifying our feminist international assistance policy. In Canada, and in many of the jurisdictions where they operate, Canadian companies follow the Mining Association of Canada’s Towards Sustainable Mining (TSM) standard. This is the first mining sustainability standard in the world and is considered a global best practice. It includes a set of tools and indicators to drive performance and ensure that mining risks are managed responsibly.

Canadian companies operate in Mexico with the same level of commitment as they do in Canada with respect to the best practices of responsible business conduct. They contribute to economic growth and job creation, reducing poverty and promoting social inclusion. Canadian mining companies have played an important role in improving the social economic well-being of communities, including through investments in medical resources, road improvement and social support.

MEXICO ENERGY REFORM

• Canada remains concerned that our investors are facing undue difficulty in the Mexican market.
• Canada is also concerned about the impacts of Mexico’s proposed reforms on North American supply chains and climate change.
• Canada hopes that constructive dialogue with Mexico can lead to a mutually acceptable resolution.

Background

Energy is a heavily nationalised industry in Mexico. In 2013-14, Mexico carried out a series of reforms through the enactment of the Electricity Industry Law (LIE), which enabled private and foreign companies to participate as power generators in the electricity market. The LIE sought to incentivise investment in the development and expansion of Mexico’s national grid, as well as stimulate the country’s transition towards renewable energy.

Over the past two years, the AMLO administration has taken regulatory measures, decrees, and administrative actions to prioritise energy produced by the state-owned Federal Electricity Commission (CFE) over private companies. Legislative efforts in 2021 to undo liberalisation and bolster CFE have been stalled by the private sector seeking injunctions in Mexican courts. On April 17, 2022, an attempt to amend the Mexican constitution to implement the 2021 reforms failed to achieve the two-thirds majority required in congress.

With the status of the 2021 reforms subject to the judiciary’s determinations on injunctions, Mexico’s electricity industry is without a clear and stable legal framework. Although the reforms have been halted on paper, companies are reporting that the government continues to carry out administrative measures that are applying the objectives of its reforms in practice.

Impact on Canadian companies

US$4.1 billion in Canadian assets are at risk of not being able to fully operate, or of being constrained in their ability to continue to supply electricity to the national grid and consumers. Despite the government applying its measures under the guise of reliability and energy security, industry believes that Mexico’s actions could result in power shortages that could affect North American supply chains, in addition to hurdles to meet climate change objectives.

Canada has undertaken advocacy with Mexico to encourage the administration to resolve the challenges faced by Canadian companies. The issue has been raised at the leaders and ministerial levels, including between ministers for trade, foreign affairs, environment, natural resources, and industry.

CUSMA dispute settlement

Canada and the United States requested consultations under CUSMA Chapter 31 concerning Mexico’s energy reforms on July 20. Parties have held two rounds of consultations to date: August 23 (virtual) and September 28-29 (Mexico City). Although discussions have been constructive, Mexico has made clear it intends to continue to pursue its objectives of reforming the electricity industry. Canada and the United States are awaiting proposals from Mexico with respect to next steps.

C. World Trade Organization (WTO)

WORLD TRADE ORGANIZATION REFORM

• People, businesses and the 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 the rules-based multilateral trading system – with the WTO at its core – and is at the forefront in providing global leadership on WTO reform, including through the Ottawa Group.
• Canada’s reform priorities include safeguarding a binding and enforceable two-stage dispute settlement system, and ensuring that WTO rules address 21st century realities.

Supporting facts and figures

The Ottawa Group members (14) are Australia, Brazil, Canada, Chile, the EU, Japan, Kenya, Korea, Mexico, New Zealand, Norway, Switzerland, Singapore and United Kingdom.

Background

Canada is exercising global leadership on WTO reform. This includes leading the Ottawa Group – a group of 14 likeminded WTO members created in 2018 with the objective of supporting WTO reform efforts, such as to improve the efficiency and effectiveness of the WTO; safeguarding and strengthening the dispute settlement system; and reinvigorating the WTO’s negotiating function.

The Ottawa Group plays a key role in identifying to identify and developing ideas and proposals for WTO reform with the goal of identifying those that could garner broad support amongst the WTO membership. By virtue of its diverse and representative membership, the Ottawa Group is uniquely positioned to help deliver the pragmatic and creative leadership that the WTO requires.

At the WTO Twelfth Ministerial Conference (MC12), Members agreed to language on WTO reform in the outcome document, where they reaffirmed the foundational principles of the WTO and committed to an open and inclusive process to reform all its functions, from dispute settlement to negotiation to deliberation and monitoring. Members committed to having a well-functioning dispute settlement system accessible to all Members by 2024. Canada and partners in the Ottawa Group worked on a strong statement on WTO reform to reaffirm their commitment to move work forward on three pillars: transparency, negotiations and dispute settlement.

Aside from the Ottawa Group, Canada is active in WTO multilateral negotiations related to fisheries subsidies, and agriculture. Canada also actively participates in plurilateral negotiations to develop new rules on e-commerce, and investment facilitation for development. We are also working to ensure that the WTO reform work incorporates emerging issues, such as trade and gender, and trade and environmental sustainability.

WTO DISPUTE SETTLEMENT AND THE MULTI-PARTY INTERIM APPEAL-ARBITRATION ARRANGEMENT

• One of Canada’s top WTO priorities is to find a permanent multilateral solution to the Appellate Body impasse.
• We are in active discussions with our partners, including the United States, on reform options, and we are working to identify an agreed approach to resolving this issue.
• Canada and other WTO Members developed the Multi- Party Interim Appeal-Arbitration Arrangement (MPIA) as a dispute settlement procedure to be followed in disputes between participants until we find a permanent solution.

Supplementary messages

• Effective dispute settlement is critical to the implementation and effectiveness of the WTO agreements.
• Canada is committed to engaging with the U.S. and other WTO members in solution-oriented discussions.
• Fifty-one WTO members (including EU Member states) participate in the MPIA.

Update

While the U.S. has longstanding concerns over the Appellate Body (AB), USTR Katherine Tai has yet to shed light on the precise reforms that the U.S. will seek on dispute settlement (DS). In May 2022, the U.S. initiated an informal process at the technical level in Geneva. In this context, delegates discuss their interests in terms of DS as well as conceptual approaches to address these interests. The informal process is scheduled to be over by the end of 2022, at which time next steps will be considered.

Supporting facts and figures

• Canada has been a disputing party in 63 disputes (40 as complainant, respondent in 23) since the WTO’s creation in 1995.
• 51 WTO Members (including EU Member States) and representing all regions of the world, endorse the MPIA.
• 14 panel reports have been appealed into the void since the loss of quorum at the AB (11 December 2019).
  • The U.S. has appealed 4 panel reports into the void, including 1 in a dispute with Canada (United States – Countervailing Measures on Softwood Lumber from Canada, DS533).
  • 2 panel reports were appealed into the void by MPIA participants in disputes where the other party was not an MPIA participant.
• 4 panel reports were adopted since the impasse has materialized (Australia – A4 Copy Paper from Indonesia, DS529; US – Ripe Olives from Spain, DS577; Costa Rica – Avocadoes, DS524; and EU – Safeguards on Steel, DS595).
• 1 appeal-arbitration award was circulated in the context of an MPIA-like procedure between the EU and a non-MPIA participant (Turkey – Pharmaceutical products, DS583).

Background

A key objective for Canada is having a DS system that provides for timely enforcement of WTO rules. The AB impasse caused by the U.S.’ blockage of the appointment of AB members has prevented the WTO DS system from fully functioning since December 2019.

WTO 12^TH MINISTERIAL CONFERENCE (MC12) OUTCOMES

• MC12 represents the most significant WTO outcome package in years, and while we had hoped for more ambition, the outcomes create important paths forward.
• Most notably, we achieved a WTO agreement on fisheries subsidies, and outcomes on current and future pandemics, food insecurity and WTO reform.
• It will be important to maintain momentum, ensuring that we resolve those issues that remain outstanding and strive for greater ambition at MC13.

Background

The 12th Ministerial Conference (MC12) of the WTO took place from June 12-17, 2022, in Geneva. The WTO ministerial conference is the chief decision-making body of the WTO and generally takes place every 2 years (the last MC - MC11 - was held in December 2017)

The WTO DG and Ministers delivered on a package of multilateral outcomes that concentrated on a focused set of issues, important to the global commons and publics. These include:

• Outcome on the fisheries subsidies negotiations: a pared-down agreement to end subsidies to illegal, unreported and unregulated fishing; subsidies regarding the fishing of overfished stocks; and subsidies to fishing in the unregulated high seas. Includes a sunset clause to motivate members to continue negotiations on outstanding elements.
• WTO Response to the Pandemic: calls on relevant WTO bodies to continue or initiate work on lessons learned and challenges experienced during the COVID-19 pandemic, focusing on export restrictions, food security, intellectual property, regulatory cooperation, services, tariff classification, technology transfer, trade facilitation, and transparency.
• TRIPS waiver: eligible developing country WTO Members could authorize the manufacture and use of COVID-19 vaccine patents until 2027, with China voluntarily opting out.
• An agreement on the World Food Programme proposal and a statement on trade and food security.
• Extension of the moratorium on custom duties on electronic transmissions until MC13, or no later than March 2024.
• Declaration on Sanitary and Phytosanitary (SPS) Measures, responding to modern challenges and launching a work programme to examine issues that impact trade.
• MC12 Outcome Document with next steps on WTO reform.

A number of hurdles remain for the work in the lead up to the next Ministerial Conference (MC13, to take place in late 2023). Canada will continue to work with all WTO Members in ensuring the important work continues, implement outcomes agreed to, to deliver reforms on the ground, and come back to find other ways to foster trade cooperation.

INTELLECTUAL PROPERTY AND VACCINE EQUITY

• Canada has always been a strong advocate for vaccine equity, and has consistently supported a consensus-based solution on the TRIPS waiver.
• Canada was pleased to see the international community find a multilateral solution on this matter as part of the broader WTO response to COVID-19.
• Canada continues to support a range of near-term solutions to enhance immunization and access to COVID-19 medical countermeasures globally, including by supporting in-country delivery, demand and production. Canada is also addressing supply chain constraints and export restrictions as part of the WTO Response to the Pandemic.

Supplementary messages

• The TRIPS waiver reflects a compromise among the entire WTO membership, and is the result of a multilateral, consensus-based decision.
• Canada has approached these discussions in recognizing that the waiver is far from the only pathway to promote the equitable distribution of COVID-19 vaccines, diagnostics, and therapeutics.
• Canada continues to support the Access to COVID-19 Tools (ACT) Accelerator, committing $732 million through Budget 2022, in addition to over $1.3 billion in 2020-21. These investments aim to enhance COVID-19 countermeasure production, delivery, and system strengthening in low- and lower-middle income countries. Canada is also on track to deliver on its 200 million vaccine dose donation commitment.
• Canada remains committed to engaging constructively with all Members in the TRIPS Council, towards consensus-based solutions to any challenges experienced by Members.

Update

At the twelfth WTO Ministerial Conference on June 17 2022, Ministers agreed to a Ministerial Decision on the TRIPS Agreement (e.g. the TRIPS waiver). The TRIPS waiver enables eligible developing country Members to authorize the use of patent- protected subject matter of COVID-19 vaccines to address the pandemic, and includes clarifications regarding those Members’ commitments under the WTO TRIPS Agreement. The decision, which has a duration of five years, also commits WTO Members to consider whether to extend the scope of the decision beyond vaccines, to cover patents for the production and supply of COVID-19 diagnostics and therapeutics, with a Ministerial Decision deadline of December 17, 2022. The WTO TRIPS Council continues to discuss this issue in both formal and informal meetings between now and the December 17 deadline.

Supporting facts and figures

• As a non-eligible Member, the TRIPS waiver will have no legal effect for Canada, and will not require any changes to Canada’s domestic IP regime.
• Under the decision, eligible Members are defined as “all developing country Members”, with a clarification that “[d]eveloping country Members with existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of [the] Decision”; China has made a commitment to this effect.
• Canada also continues to support a range of near-term solutions in support of vaccine equity and access to other COVID-19 medical countermeasures:
  • Canada will donate the equivalent of 200 million vaccine doses by year end.
  • Canada has contributed approximately $625 million to enhance in-country vaccine demand, distribution, delivery and health system strengthening, including Canada’s $200 million signature Global Initiative for Vaccine Equity (CanGIVE).
  • To improve local vaccine manufacturing capacity in Africa, Canada has contributed $15 million in support of the efforts of the World Health Organization and Medicines Patent Pool to establish an mRNA technology transfer and manufacturing hub in South Africa.

D. Digital Trade Agreements

DIGITAL ECONOMY PARTNERSHIP AGREEMENT

• On August 24, the Digital Economy Partnership Agreement (DEPA) Parties announced the establishment of an Accession Working Group for Canada. Canada is now in a position to start formal negotiations with the DEPA Parties.
• The DEPA, involving Chile, New Zealand, and Singapore, is a novel trade policy instrument poised to support digitally enabled commerce, while also contributing to a broader dialogue on a range of technology issues of interest to both industry and consumers.
• The DEPA has the potential to help provide greater certainty and predictability for Canadian industry, especially SMEs, and focus on the Asia-Pacific is a key component for Canada’s trade diversification strategy.

Supplementary messages

• Canada welcomes the decision of the DEPA Parties to establish Canada’s Accession Working Group.
• As a Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Party, Canada is well equipped to move quickly through the DEPA accession process.
• Canada's potential accession to the DEPA would also further strengthen our bilateral services trade with the DEPA Parties, whom are all party to the CPTPP.
• The DEPA would encourage and support Canadian SMEs participation in platforms that link with international suppliers, buyers, and other potential business partners operating in these particular foreign markets.
• The DEPA has received broad support from Canadian industry, including those directly tied to the innovation economy, but also those from traditional sectors that are seizing the benefits of digital transformation.

Update

On May 9, 2022, Canada formally notified the DEPA Parties of our interest to accede to the Agreement. On May 22, 2022, Canada announced that it had submitted a formal request to launch negotiations for Canada’s accession to the DEPA. On August 24, 2022, the DEPA Parties established an Accession Working Group (AWG) for Canada. The AWG will be Chaired by New Zealand.

Supporting facts and figures

• The DEPA aligns with Canada’s international approach on e-commerce and digital trade. Canada is committed to encouraging e-commerce as a means of facilitating international trade. Canada’s approach in its FTAs and the WTO focuses on addressing impediments faced by consumers and businesses that trade in the electronic environment. The DEPA will help provide greater certainty and predictability for industry, especially SMEs, and focus on the Asia-Pacific is a key component to Canada diversification strategy.
• Between 2018 to 2020, Canada’s services exports to New Zealand, Singapore and Chile respectively were valued at an annual average of $232 million, $961 million and $255 million. In contrast, Canada’s services imports from New Zealand, Singapore and Chile respectively were valued at an annual average of $260 million, $2.207 billion and $140 million.
• The DEPA complements the ongoing WTO Joint Statement Initiative (JSI) on E- Commerce negotiations. Given that the WTO JSI on E-commerce will not be concluded before 2022, the DEPA can be seen as an important step towards a broader multilateral accord.
• New or enhanced commitments in the areas of logistics, electronic invoicing and payments could also provide greater certainty and predictability for Canadian exporters especially SMEs that are pursuing digital technology commercial opportunities abroad, such as Canadian firms who develop and sell digital solution to companies in global markets as well as Canadian businesses wishing to increase their e-commerce sales to international consumers.
• All DEPA Parties have domestically ratified the Agreement.

Background

The DEPA was signed between New Zealand, Singapore and Chile on June 12, 2020, and officially entered into force on January 7, 2021. The DEPA builds upon the existing trade agreement commitments that the DEPA Parties have included in their e- commerce chapters of FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The DEPA is a stand-alone, “open plurilateral” agreement to which other WTO Members are eligible to accede and addresses a range of emerging digital economy issues, including on artificial intelligence, digital identities and digital inclusion.

The DEPA Parties have been advocating for other countries to accede to the Agreement. South Korea officially notified New Zealand, which acts as the depository of the Agreement, of its intent to join the DEPA on September 13, 2021. As such, the process of Korea’s accession to the DEPA is now officially underway. In addition, on November 1, 2021, China applied to join the DEPA.

On December 9, 2020, Canada formally notified the DEPA Parties of its interest to commence exploratory discussions towards its potential accession to the Agreement via a letter of notification to New Zealand. Canada made a public announcement of its notification via ¶¶ÒùÊÓƵ social media channels on December 15 via Twitter and Facebook. All DEPA Parties publicly supported Canada’s request.

Canada engaged in its first exploratory discussion with the DEPA Parties on February 16 and second on April 20, 2021.

On March 19, 2021, the Government of Canada launched public consultations on Canada’s possible accession to the DEPA. The consultation period ended on May 3, 2021 with a positive response from Canadian stakeholders.

The DEPA Parties announced the establishment of China’s Accession Working Group on August 17, 2022. South Korea’s Accession Working Group was established earlier in the year and negotiations are ongoing.

DEVELOPING A MODEL CANADIAN DIGITAL AGREEMENT

• The Government is consulting Canadians on developing a model Canadian digital trade agreement (DTA) that would reflect our interests related to digital trade.
• The model DTA would be an instrument that allows Canada to negotiate bilateral agreements with other partner countries in the area of digital trade, separate from a comprehensive free trade agreement.
• It would build on the digital trade and electronic commerce chapters of Canada’s existing free trade agreements such CUSMA and the CPTPP, with the potential to address additional issues such as inclusive trade and emerging technologies.

Supplementary messages

• A growing number of countries have already concluded bilateral digital agreements such as the DEPA, the Korea-Singapore Digital Economy Agreement, and the UK-Singapore Digital Economy Agreement.
• As more countries look to launch such negotiations, Canada is well positioned to become an international leader in the area of digital trade.
• It could also be used to address gaps in Canada’s existing FTAs that do not contain robust digital trade provisions, and to engage with partners with which Canada does not have comprehensive FTAs.

Update

On July 15, 2022, the Government of Canada launched public consultations seeking views on the initiative to develop a model Canadian DTA. The consultation period was 60 days, ending on September 13, 2022. Thus far, a total of 15 written submissions have been received from stakeholders and partners, primarily from industry associations, but also from businesses, academia, and provinces.

Responses were supportive of the initiative, with stakeholders identifying general topics and specific provisions they would like to see included in a model DTA. A common theme among written submissions was the importance of including provisions that support the free flow of data across borders. Two stakeholders raised the treatment of cultural industries, seeking to ensure that a DTA should not limit Canada’s ability to impose measures on digital trade that favour Canadian cultural expression.

Background

Canada’s approach to digital trade has been to strike an appropriate balance between facilitating trade, while also ensuring Canada and other countries are able to continue to pursue legitimate public policy objectives. In line with this approach, the types of provisions that are being considered for inclusion in a model DTA fall under the following five categories: facilitating the use of e-commerce; addressing specific trade-related barriers to e-commerce; protection of online consumers; cooperation and promotion activities; and digital inclusion/development.

E. Trade Commissioner Service (TCS)

TRADE COMMISSIONER SERVICE OVERVIEW

• The Trade Commissioner Service (TCS) helps Canadian businesses and entrepreneurs identify, pursue, de-risk and secure business opportunities abroad.
• The TCS provides advice on international markets, regulatory issues, foreign investment, science, technology and innovation partnerships and responsible business conduct.
• The TCS is supporting Canada’s economic recovery in close collaboration with other federal, provincial and territorial trade and investment agencies.

Supplementary messages

• The TCS promotes inclusive trade and Canadian exporter diversity.
• The TCS helps exporters to solve problems and strengthen supply chains.
• The TCS promotes responsible business conduct abroad.

Supporting facts and figures

• In 2021-2022, the TCS facilitated over 1,000 commercial agreements (export contracts) with an estimated value of over $2.0 billion and over 110 foreign direct investments worth over $2.2 billion.
• In 2021-2022, the TCS provided more than 51,000 services to over 10,100 clients, achieving a 91.1% client satisfaction rate.
• 93% of TCS clients are small and medium-sized enterprises (SMEs).
• On average, TCS clients export 19.8% more in value and to 24.8% more markets compared to non-clients.

Background

The TCS: helps Canadian businesses to increase exports and diversify markets; facilitates foreign direct investment into Canada; helps establish research and innovation partnerships; and supports recruitment of international students.

The TCS is delivered by over 1500 employees within ¶¶ÒùÊÓƵ. Close to 1000, two-thirds of whom are local employees, work in more than 150 locations around the world. Across Canada, another 140 employees are located in six Regional Offices, with about 400 others in the National Capital Region.

The TCS helps Canadian companies grow internationally by providing business intelligence, facilitating introductions to international customers and partners, referring business and co-innovation opportunities, helping resolve problems, organizing events and programs (like our Canadian Technology Accelerators) to support and promote Canadian businesses in foreign markets, and providing funding through TCS programs. The TCS also facilitates partnerships between Canadian and foreign research organizations which will often lead to commercializable products and services.

The TCS works collaboratively with and is complemented by other federal and provincial trade and investment agencies including Export Development Canada, the Canadian Commercial Corporation, and Invest in Canada.

Canada has 15 agreements or arrangements to promote science, technology and innovation (STI) cooperation with key partners including the UK, the EU, France, Germany, Japan and South Korea. TCS free trade agreement (FTA) promotion efforts [REDACTED] CETA, CUSMA, and CPTPP.

CanExport provides more than $33 million per year to help Canadian SMEs diversify exports, associations pursue international business development activities; innovators develop R&D partnerships in foreign markets; and communities attract investment.

The TCS promotes inclusive trade and Canadian exporter diversity by supporting high-potential, high-growth companies and underrepresented groups through focused business delegations and other business development opportunities.

The TCS promotes Responsible Business Conduct abroad as a competitive advantage for Canadian businesses which helps them mitigate risks, improve competitiveness, and strengthen their brand.

Due to travel restrictions and local COVID protocols, the TCS pivoted to virtual trade missions and programs to help Canadian companies survive and recover from the economic effects of the pandemic. Over the past two years, Minister Ng has led virtual trade missions to France, South Korea, South Africa, Botswana, Senegal, and Côte d’Ivoire.

TCS SUPPORT FOR THE CLEANTECH SECTOR

• In FY2021-22, the Trade Commissioner Service (TCS) served 1,082 cleantech firms (967 SMEs), including 63 women-owned, 53 youth-owned and 5 Indigenous-owned.
• The TCS has helped these firms sell their products and services abroad, diversify their export markets and tap into growing pools of global climate finance.
• The Cleantech IBD Strategy, announced in Budget 2017 and renewed in 2021 with $4.3 million annual funding, strengthens the TCS network by providing dedicated cleantech and climate finance Trade Commissioners in key regional hubs abroad, and a Trade Commissioner in GOC’s Clean Growth Hub.
• Since the launch of the Strategy in 2018, the TCS has increased services to cleantech firms by 22% (from 4,364 in FY2017-18 to 5,315 in FY2021-22), generated 468 cleantech commercial deals while supporting the negotiation of another 1,265 with a total value of $1.28 billion in business value to date.

Supplementary messages

• Supporting the growth of Canadian cleantech firms requires close coordination with GOC partners, and the TCS actively collaborates with the Clean Growth Hub – CGH (including ISED, NRCan and ECCC) and Joint Account Management – JAM partners (BDC, EDC, and SDTC) to help cleantech firms access international markets.
• The climate finance Trade Commissioners help Canadian companies identify and access climate action funding sources to undertake climate adaptation and mitigation projects in developing countries.

Supporting facts and figures

• Facilitating commercial deals − The Cleantech IBD Strategy, announced in 2017 and renewed through Canada’s Enhanced Climate Plan, has helped to generate $1.28 billion in finalized business agreements by Canadian firms targeting international cleantech opportunities (April 2018 - October 2022).
• Advancing Export Diversification – The Cleantech IBD Strategy has successfully helped exporters diversify markets, accessing 56 new markets since 2018.

Background

Cleantech International Business Development (IBD) Strategy

• The TCS works with the CGH (including ISED, NRCan and ECCC) and Joint Account Management partners (BDC, EDC and SDTC) to identify and serve high potential cleantech firms to help them scale in international markets.
• In recent years, the TCS helped over 1,000 Canadian cleantech firms sell their products and services abroad. While the Cleantech IBD Strategy has successfully helped exporters diversify markets (generate commercial outcomes in an additional 56 countries compared with FY2017-18), the US remains the top export market where the TCS helped generate most successes for Canadian cleantech firms.

TCS Attracts Cleantech FDI

• TCS FDI key performance indicators in FY2021-22 included seven cleantech FDI wins from China, Japan, Germany, Italy, Spain, Israel and Singapore, seven foreign investor visits, and 314 cleantech outcalls. From FY2016-17 to FY2021-22, the TCS conducted 1,201 cleantech-focussed FDI outcalls, facilitated 51 FDI visits to Canada and 28 wins valued at $700+ million, creating 380 new jobs.

TCS Free Trade Agreements (FTA) Promotion for Cleantech

• Since FY2018-19, the TCS organized over 600 FTA-related events and webinars with over 12,750 participants globally, including events targeting cleantech SMEs. For example, in September 2022, the TCS organized a Canada-EU CETA Cleantech Virtual Business Workshop, attended by more than 250 Canadian and European participants to promote business opportunities.

Canadian Technology Accelerator (CTA) Program – Cleantech

• Since 2013, the CTA has supported 200+ Canadian cleantech firms to access global markets. In FY2022-23, the TCS is offering the following cleantech sector-focussed CTAs: a multi-city program in the U.S., a women-led business program in the U.S., and separate programs for India, the UK, and the ASEAN region.

CanExport Programs Support to Cleantech (since 2016)

• CanExport SMEs has approved over $11 million to 360+ projects to support Canadian cleantech companies in new foreign markets, and increase exports.
• CanExport Innovation has approved close to $1.3 million to 95 projects from Canadian cleantech innovators looking to establish foreign R&D partnerships for co-developing, validating or adapting a technology.
• CanExport Associations provided $3.5 million to 10 Canadian cleantech national trade associations to undertake IBD activities in 26 foreign markets.
• CanExport Community Investment disbursed over $31 million to 147 organizations across Canada, with Cleantech amongst the top three funded sectors for seven Canadian provinces in 2021.

Canadian International Innovation Program (CIIP) – Cleantech

• Since 2015, CIIP helped 29 Canadian SMEs to meet with 136 foreign organizations, resulting in 18 Canadian SMEs receiving $4.5 million for cleantech projects.

TRADE DIVERSIFICATION AND SUPPLY CHAINS

• Diversifying opportunities for Canadian exporters is key to Canada’s sustainable and inclusive economic growth.
• Canada’s trade success depends on secure, sustainable and resilient global supply chains.
• COVID-19 and Russia’s invasion of Ukraine have further highlighted the importance of trade diversification and secure global supply chains.

Supplementary messages

• Working with partners at the WTO, G7, G20 and other international fora to advance supply chain cooperation through rules-based trade.
• Engagement includes strengthened supply chain cooperation with the United States under the Roadmap for a Renewed Canada-U.S. Partnership.
• Working with like-minded international partners, including the EU, to secure diverse supply chains, such as those related to critical minerals that are the building blocks for the transition to a low-carbon economy.
• Committed to providing tools and conditions to enable Canadian businesses to establish strong and diverse supply and export relationships.

Background

The Government of Canada is committed to helping Canadian businesses diversify their exports and expand into international markets. With nearly two-thirds of Canada’s GDP linked to international trade, these efforts will help ensure a sustainable and inclusive economic future.

Secure global supply chains are critical to Canada’s trade diversification priorities and the transition to a low-carbon economy. Reducing single-market dependency by securing, expanding or finding alternate supplier networks and export destinations will help Canadian businesses avoid supply chain disruptions and strengthen their capacity to export to growing markets. Furthermore, advancing Canada’s leadership on critical minerals through its international partnerships will secure their respective supply chains and ensure Canada benefits from the economy of the future.

Several Ministers have been tasked through mandate letters to “strengthen and secure critical supply chains”. Coherent and comprehensive actions to achieve this mandate will include a domestic dimension (e.g. building domestic capacity, strengthening the enabling environment) and an international dimension (e.g. strengthening free and open trade, diversifying critical supply chains, establishing trusted partnerships, such as through the Canada-US Roadmap).

CANEXPORT FUNDING PROGRAM

• The CanExport program provides over $33M in grants and contributions every year to Canadian SMEs, innovators, national industry associations and communities to help them diversify exports, expand their international presence, as well as to attract and retain Foreign Direct Investment.
• Since the program’s launch in 2016, CanExport has approved over $239.4M in funding for over 6700 initiatives taking place in 154 foreign markets.
• CanExport received $35M over five years in Budget 2022 to support the protection of Canadian intellectual property in foreign markets.

Supplementary messages

• CanExport is undertaking a GBA+ review of the program, with a view to helping ensure equitable and inclusive outcomes of CanExport.
• The CanExport Community Investments program is currently open for applications until November 2, 2022, and the Associations program will be launching its call for applications on November 29, 2022.
• RESPONSIVE: The CanExport SME and Innovation programs are currently paused until further notice due to their increasing popularity and volume of applications, but we expect them to reopen early in the new year for applications with project start dates beginning after April 2023.

Update

The CanExport SME and Innovation programs are currently paused until further notice as projections suggest they will be at capacity by the end of the fiscal year. Efforts to increase participation levels have resulted in an almost 200% increase in the number of CanExport applications over the past 3 years. The Community Investments program is currently open until November 2 for applications with FDI initiatives for fiscal year 2023-24. The Associations program will open on November 29 for new fiscal year project applications.

SUPPORTING FACTS & FIGURES (since program inception-January 2016) CanExport SMEs

• $165M in approved funding for over 5,400 projects in 154 markets.
• 44% of clients report exporting to their market within a year of project completion.
• Helped companies generate more than $672M in new export revenue.

CanExport Innovation

• $6.7M in approved funding for more than 580 projects.
• Helped companies formalize over 170 R&D agreements with total reported value of $90.1M.
• From 2021-22 annual report (3-year-post-project questionnaire results): 19% of respondents indicated they established R&D partnership agreements that resulted in $5M commercial sales; 23% had ongoing R&D collaborative projects.

CanExport Associations

• $36.7M in approved funding in support of more than 115 national industry associations in 77 markets, benefitting the export activities of 195,742 companies.
• From 2021-22 annual report (3-year-post-project questionnaire results): 87% of respondents stated that relevant projects resulted in foreign sales or contracts.

CanExport Community Investments

• More than 1100 FDI initiatives supported from over 172 Canadian communities, for total funding approved of $31M.
• From 2021-22 annual report (3-year-post-project questionnaire results): 97% of the CanExport Community Investment funded activities resulted in attracting serious investment prospects to the community.

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 is provided on a cost-sharing basis with the recipient. Depending on the subprogram, CanExport can cover up to 50% or 75% of eligible expenses.

As the demand for CanExport funding exponentially increased over the past years, CanExport Associations and SMEs programs updated their cost sharing formula for funding from 75:25 to 50:50, thereby increasing the number of Canadian exporting businesses that can be supported through its funding offering.

CanExport launched a GBA+ review of the program (ongoing). The initiative’s objective is to identify potential barriers to program access and participation for exporters that have been traditionally underrepresented in international trade.

F. CORE/RBC

CANADIAN OMBUDSPERSON FOR RESPONSIBLE ENTERPRISE

• To enhance Canada’s approach to Responsible Business Conduct (RBC), this Government created the Canadian Ombudsperson for Responsible Enterprise (CORE) in 2018.
• The CORE is fully funded and became operational in March 2021.
• Dispute-resolution mechanisms, such as the CORE, serve as a vital component of Canada’s RBC Strategy.

Supplementary messages

• The CORE continues to examine new requests for admissible cases, while actively promoting Canada’s RBC expectations to Canadian companies and stakeholders.

Background

In 2018, the government announced the creation of the CORE to further strengthen Canada’s approach to RBC. The CORE’s mandate is outlined in an Order-in- Council (OIC) and states the following activities:

• promote the implementation of the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises;
• advise Canadian companies on their practices and policies with respect to RBC;
• review allegations of human rights abuses arising from the operations of Canadian companies abroad in the mining, oil and gas and garment sectors;
• offer informal mediation services; and,
• provide advice to the Minister on any matter relating to her mandate.

The CORE’s mandate is focused on alleged human rights abuses in targeted sectors (mining, oil and gas and garment) and has the ability to receive complaints and to undertake a review at its own initiative.

In March 2021, the CORE launched its online complaints portal. The CORE has reported that for the first quarter of 2022-2023, 15 new complaints were received (12 garment and 3 mining sector). The CORE has indicated that assessment of the admissibility of these complaints remains ongoing.

The National Contact Point (NCP), Canada’s other non-judicial dispute resolution mechanism, is mandated to promote the OECD Guidelines and facilitate dialogue and mediation for complaints made against Canadian companies in Canada and abroad, in all sectors and for a range of issues, pertaining to disclosure, labour, human rights, the environment, bribery, consumer interests, science and technology and competition.

RESPONSIBLE BUSINESS CONDUCT

• Canadian companies active abroad are expected to abide by all relevant laws, to respect human rights, and to adopt best practices and internationally respected guidelines on Responsible Business Conduct (RBC).
• A new RBC Strategy was released in April 2022. It applies to all Canadian companies active abroad – no matter their size, sector or scope.
• Canada’s balanced approached to RBC includes prevention, legislation in critical areas, and non-judicial dispute resolution mechanisms.

Background

Canada is committed to responsible business conduct (RBC). We expect Canadian companies active abroad to operate at the highest of standards: respecting human rights, operating lawfully and conducting activities in a manner consistent with international standards and Canadian values.

The new RBC Strategy for Canadian companies active abroad was launched on 28 April, 2022. It strengthens Canada’s balanced approach to RBC, which includes preventative measures, legislation in select areas, and access to non-judicial dispute resolution. It applies to all Canadian companies, no matter their size, sector or scope, and it introduces new tools (Risk Mitigation Tool, and Digital RBC Attestation, Canadian Due Diligence standard) and initiatives (RBC Champions network). It is supported by enablers to support Strategy delivery, including ongoing stakeholder engagement, a concrete action plan and a performance measurement framework.

In terms of prevention, the Government of Canada aims to provide clear guidance on measures that Canadian companies can take to mitigate risks in various markets as well as to raise awareness about tools available to support company efforts.

Further, the Government of Canada endorses and promotes RBC standards and guidelines including the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.

Canada has also adopted legislation addressing critical issues related to RBC, such as corruption, transparency and most recently, forced labour (through the July 2020 amendments to the Customs Tariff Act which made it illegal to import products manufactured wholly, or in part, through forced labour).

With respect to dispute resolution the Government of Canada provides two non- judicial dispute-resolution mechanisms:

• The National Contact Point (NCP) for RBC for the OECD Guidelines for Multinational Enterprises offers dispute resolution for a wide range of issues including disclosure, labour issues, human rights, environmental issues, and bribery. The NCP can address complaints directed towards the domestic and overseas operations of Canadian companies.
• The Canadian Ombudsperson for Responsible Enterprise (CORE) does so for alleged human rights abuses in the mining, oil and gas and garment sectors for Canadian companies operating abroad. The CORE can also undertake reviews at its own initiative.

G. Export Development Canada (EDC)

EXPORT DEVELOPMENT CANADA (EDC)

• Export Development Canada (EDC) is a Crown corporation mandated to support and develop Canada’s export trade.
• In 2021, EDC provided financial services to 14,769 Canadian companies, of which 10,325 were SMEs, and helped facilitate $111 billion in business.
• EDC works at arms-length from the government in managing financial transactions.

Supplementary messages

• The Minister of International Trade is accountable to Parliament for EDC and recommends approval of its annual corporate plan to the Treasury Board, with the Minister of Finance also approving its Borrowing Plan.
• EDC is expected to coordinate its activities with its federal partners, including the Trade Commissioner Service, Canadian Commercial Corporation, and the Business Development Bank of Canada.
• Prospective transactions are assessed through EDC’s own due diligence process, which considers both credit (i.e., financial) and non-credit risks (i.e., environmental, social, and governance).

Supporting facts and figures

• EDC increased its total number of customers served from 24,305 in 2020 to 29,800 in 2021, meeting its target range of 26,000-30,000 customers served in 2021.
• In 2021, EDC facilitated 10,325 transactions to SMEs, which included 4,060 transactions with micro customers; 4,780 transactions with small customers; and 1,485 transactions with medium-sized customers. This measure grew by 5% (9,849 transactions) compared to the previous year.
• In support of Women-owned and Women-led businesses, EDC served 1,901 clients, totalling $5.2 billion in cumulative business facilitated for these companies from 2018-2021.
• In support of Indigenous-owned and Indigenous-led businesses, EDC served 196 customers, totalling $383.5 million in business facilitated from 2020-2021 (an increase from 77 customers served and $119.3 million in business facilitated in 2020 alone).
• North America accounts for over 73% of EDC’s financial transactions facilitated. The European and Asia Pacific Regions are the second and third largest markets at approximately 12% each of business volume facilitated by EDC.

Background

Export Development Canada (EDC) is a Crown corporation and Canada’s export credit agency. The Export Development Act provides EDC with the mandate to support and develop, directly or indirectly, Canada’s export trade, and Canadian capacity to engage in that trade, and to respond to international business opportunities.

EDC provides a range of trade finance and risk management services, including short- term credit insurance, direct loans, loan guarantees, and bonding support. The day-to- day operations of EDC are at arm’s length from the Government. EDC is governed by a Chair and Board of Directors responsible for implementing the direction provided by the Minister of Small Business, Export Promotion and International Trade.

As a Crown corporation, EDC is required under the Financial Administration Act to report on its activities in order to receive approval for its strategic direction and borrowing authorities from the Minister of International Trade, the Minister of Finance, and the Treasury Board.

EDC is financially self-sustaining and has over 1,800 employees. The corporation is headquartered in Ottawa and has 21 regional offices across Canada, and 21 international representations (co-located with Canada’s missions). In 2021, EDC served 29,800 (14,769 financial and 18,301 knowledge) Canadian companies, and facilitated $111 billion in exports and investments.

CANADA ACCOUNT

• The Canada Account is a program used to finance Canadian exports that are deemed to be in the national interest, but that exceed the risk capacity of Export Development Canada.
• While Canada Account transactions are administered by EDC, the source of funds for transactions is the Consolidated Revenue Fund (CRF).
• All Canada Account transactions are reported in the Canada Account Annual Report, which is made public via tabling in Parliament on an annual basis. Any adjustments made to Canada Account transactions are also reported in the Public Accounts.

Supplementary messages

• Canada Account has been used to provide support to various aspects of the Canadian economy, including: General Motors and Chrysler in 2009, the Trans-Mountain Pipeline Expansion project in 2018, and the Canada Emergency Business Account (CEBA) in 2020.
• During COVID-19, the Government provided emergency support to companies of all sizes and in all sectors of the Canadian economy, including through CEBA which delivered over $49.2 billion in credit to over 898,000 Canadian businesses. The CEBA program ended in 2021.
• To further support Canadian businesses, the Government recently extended the repayment deadline for CEBA loans from December 31, 2022 to December 31, 2023.
• Restructuring of Canada Account transactions are a last resort and are rare. The Government occasionally forgives or writes-off amounts owing under a Canada Account loan to maximize recovery on a non-performing loan. This requires approval by the Minister for International Trade with the concurrence of the Minister of Finance.
• The Government is unable to provide details on specific transactions as it would disclose confidential information about a private company.

Supporting facts and figures

• In response to the COVID-19 pandemic, the Statutory Limit of the Canada Account was increased to $115 billion. The largest value of loans on the Canada Account is related to the CEBA.
• Other Canada Account transactions include: financing related to the Trans Mountain Pipeline, Merit Functional Foods Corporation, General Dynamics Land Systems, and Ecolomondo Corporation.
• EDC provides information to the public on Canada Account activities through transactional disclosure on its website on a quarterly basis.

Background

Canada Account was established in 1969 through section 23 of the Export Development Act. It is a program that is administered by Export Development Canada (EDC) and allows the Government to provide support to exporters when such support would otherwise exceed the financial or risk capacity of EDC on its Corporate Account. The source of funds for Canada Account transactions is the Consolidated Revenue Fund, and the risks are borne by the Government of Canada. Approval from the Prime Minister and the Minister of Finance is required for all Canada Account transactions. Following that approval, the Minister of International Trade, with the concurrence of the Minister of Finance, must approve an authorization for EDC to proceed with the transaction.

EXPORT DEVELOPMENT CANADA (EDC) SUPPORT FOR CARBON INTENSIVE INDUSTRIES

• EDC was the first export credit agency in the world to commit to reaching net-zero emissions by 2050, and the first export credit agency to become a supporter of the Task Force on Climate-related Financial Disclosures.
• EDC has reduced exposure to carbon intensive sectors by 40 per cent since 2018 and is now the largest clean technology financier in Canada, facilitating over $6.3 billion in business in 2021.
• To achieve its net-zero commitment, in July 2022, EDC set new science-based, sector-specific climate targets for its business portfolio, as well as several new sustainable financing objectives.

Supplementary messages

• I expect EDC to continue scaling up its support to the clean technology sector and investing in sustainable finance.
• EDC supports Canada’s commitment to end new direct public support for the international unabated fossil fuel energy sector by the end of 2022.
• EDC has a robust set of environmental, social, and governance policies, which guide its activities and support transactions. These policies are reviewed at three year intervals and are crafted with the support of stakeholder consultations.

Update

Since committing to net zero by 2050 in 2021, EDC has developed a science- based approach to setting its 2030 sector targets, beginning with two sectors representing a significant share of its financing portfolio and associated emissions: airlines and upstream oil and gas.

Supporting facts and figures

• By 2030, EDC aims to achieve a 37% reduction in emissions per passenger kilometre from its airlines financing portfolio, and a 15% reduction in its financing portfolio related to upstream oil and gas production, against 2020 baselines.
• EDC has set a target of $10 billion in cleantech business facilitated by 2025, and $500 million in sustainable transition financing loans by 2024.
• EDC is the largest clean technology financier in Canada. In 2021, EDC served 324 cleantech businesses and facilitated $6.3 billion in business for the sector.
• In 2021, EDC facilitated $13.6 billion in carbon intensive industries, a decrease of $5.4 billion from 2020 levels stemming from EDC’s climate commitments.

Background

In 2019, EDC adopted a Climate Change policy that commits to: 1) end support for new coal projects; 2) measure the carbon intensity of its lending portfolio and set targets for reduction of exposure to carbon intensive sectors; 3) increase transparency around climate-related risks; and, 4) integrate climate considerations, such as carbon intensity, into EDC’s risk assessment processes for transactions.

EDC’s first carbon intensity target, set in 2019, was to reduce its exposure to the most carbon intensive sectors by 15 per cent over five years against a December 31, 2018 baseline. It reached that goal in 2020, and in 2021, EDC set a 2023 target of reducing its financing support to the six most carbon intensive sectors by 40% below 2018 levels.

In 2021, in the context of G7 and COP26 meetings, Canada endorsed statements on ending new direct public support for the international unabated fossil fuel sector by the end of 2022, except in limited circumstances consistent with the goals of the Paris Agreement. The government is refining plans for the detailed implementation of these commitments, which will extend to supports provided by EDC.

CANADA EMERGENCY BUSINESS ACCOUNT

• EDC has played 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.
• EDC worked with Canadian financial institutions to quickly and effectively make capital available for small businesses through the Canada Emergency Business Account (CEBA).
• Since the beginning of the pandemic, over $49 billion in support has been provided to almost 900,000 Canadian small businesses through CEBA.

Supplementary messages

• CEBA closed to new applications on June 30, 2021.
• Recognizing the ongoing challenges faced by businesses, the repayment deadline for partial forgiveness of CEBA loans was extended by 12 months to offer greater repayment flexibility.
• The government expects that the vast majority of businesses that received CEBA loans will repay by the deadline (December 31, 2023), as businesses that repay by this date will benefit from partial loan forgiveness (up to $20,000).
• As with other COVID-19 emergency support programs, some businesses applied for and received funding early in the pandemic and have since been deemed ineligible.
• The government is actively taking steps to recover the funds that were provided to businesses that did not meet the eligibility criteria for the program.
• The Canada Revenue Agency (CRA) has been assigned to assist Export Development Canada, the administrator of the CEBA program, in collecting loans made under the CEBA program that are in default.
• The government will continue to work with businesses facing financial challenges as needed.

Update

On January 12, 2022, the Deputy Prime Minister and Minister for International Trade announced that the repayment deadline for CEBA loans to qualify for partial loan forgiveness was extended from December 31, 2022 to December 31, 2023 for all eligible borrowers in good standing.

On April 4, 2022, the CRA was assigned to assist Export Development Canada, the administrator of the CEBA program, in collecting loans made under the CEBA program that are in default.

Supporting facts and figures

• CEBA provided interest-free loans of up to $60,000 to small businesses and not- for-profits.
• Repayment on or before the new deadline of December 31, 2023, will result in loan forgiveness of up to a third of the value of the loans (up to $20,000).
• Outstanding loans would subsequently convert to two-year term loans with annual interest of 5 per cent commencing on January 1, 2024, with the loans fully due by December 31, 2025.

Background

The CEBA program was available to Canadian small businesses and not-for-profits from April 2020 to June 30, 2021 and supported upwards of 898,000 small businesses and not-for-profits totaling over $49 billion of financial support. EDC administers the CEBA program on behalf of the Government of Canada and works alongside more than 230 Canadian financial institutions to provide support to both exporting and non- exporting companies. The Program has been integral to helping Canadian small businesses and not-for-profits navigate the pandemic and remain resilient.

As a result of ongoing economic challenges faced by Canadian small businesses, the Government extended the CEBA repayment deadline by one year to December 31, 2023. On October 11, 2022, financial institutions began informing all CEBA clients of the new repayment date, terms, and forgiveness eligibility associated with their accounts.

H. Other

Section H: Note on Financial Technologies for MINTs’ Appearance at CIIT Meeting

• The Trade Commissioner Service (TCS) supports Canadian financial technology (fintech) companies access to international markets and procurement opportunities.
• In 2021, the TCS helped attract over $10 billion worth of fintech FDI into Canada.

Update

The Canadian fintech industry continues to demonstrate remarkable levels of investment in start-ups as well as later stage companies. Digital transformation, including digital payments and trans-border online trading, has developed at an accelerated pace due to the COVID-19 pandemic. In turn, this shift instigated further regulatory developments at the provincial and federal level, not only in the payments sector but also in the cryptocurrency and blockchain space. The Honourable Minister of Tourism and Associate Minister of Finance Randy Boissonnault is currently reviewing recommendations on how to further develop Canada’s open banking system contained in the final report issued by the 2021 Advisory Committee on open banking.

Supporting facts and figures

• During the 2021/2022 fiscal year, the Trade Commissioner Service (TCS) helped 32 high-value fintech companies access international markets.
• The TCS helped attract over $10 billion worth of fintech FDI into Canada in 2021 (latest available statistics).
• Eleven Canadian missions abroad focus on fintech. These include missions in global financial hubs such as New York, Hong Kong, Singapore and Silicon Valley.
• The Canadian Technology Accelerator program regards fintech as a growing sector. In 2021-22, the TCS hosted a fintech activity at its CTA in Taipei. This year, fintech events are planned for CTAs in Mexico, Hong Kong and New York.
• The TCS’ CanExport Association allocated $127,000 to technology associations with a focus on fintech for 2022-23.

Background

• Key technologies in fintech include: bank innovation, e-payments, remittances, wealth management, investment and asset management, online marketplace lending, crowdfunding and digital currencies.
• Canada has built a thriving fintech ecosystem, enabled by local financial services industry partnerships, incubators, accelerators and by a culture of collaboration between governments, academia and industry through which Canadian innovators are addressing an array of challenges.
• Canada’s trade and investment agreements with many parts of the world have proven important for facilitating capital flows and contributing to the success of Canada’s fintech industry. Examples of these agreements include: CUSMA, CETA, CPTPP as well as other FTAs that Canada has signed with ASEAN, countries in South America, MENA, Europe, Asia and Africa.

INDIGENOUS PEOPLES ECONOMIC AND TRADE COOPERATION ARRANGEMENT (IPECTA)

• Indigenous leaders joined me to celebrate Canada’s endorsement of IPETCA on June 23.
• The Arrangement advances Indigenous economic development in Canada, Australia, New Zealand and Chinese Taipei.
• We are working with Indigenous peoples to implement IPETCA and remove barriers to international trade for indigenous

Supplementary messages

• Implementation work is underway and we are aiming to have the first meeting of the IPETCA Partnership Council next year.
• Government officials and Indigenous representatives from Canada will be part of the Partnership Council.
• IPETCA is open for other economies to join.

Update

Now that the Arrangement has entered into effect, officials in the IPETCA economies are coordinating with the Indigenous peoples in their economies to form the Interim Body. The Interim Body will establish the governance structures of IPETCA, including the IPETCA Partnership Council, by March 2023. Following the establishment of the governance structures, cooperation activities will be developed and advanced in partnership with Indigenous representatives through the IPETCA Partnership Council. The objective will be to share knowledge, best practices and increase Indigenous peoples’ participation in the economy and trade. Another priority will be to promote the Arrangement among APEC economies and beyond to encourage them to join.

Background

Negotiations toward IPETCA were inspired by the Inclusive Trade Action Group (ITAG), comprised of Canada, Chile, and New Zealand, following the successful negotiation and signature of the Global Trade and Gender Arrangement (GTAGA) in August 2020. ITAG was prepared to enter into discussions toward a Global Trade and Indigenous Peoples Arrangement but New Zealand proposed to use its position as chair of APEC 2021 to include a broader set of APEC economies in the negotiation.

IPETCA is aligned with, and advances, Canada’s inclusive approach to trade that seeks to ensure that under-represented groups in trade, such as Indigenous Peoples, can benefit more from and participate in trade. IPETCA establishes a framework to facilitate cooperation among the economies in order to identify and remove barriers for Indigenous peoples’ economic empowerment and participation in trade. It does not create new rights but does complement the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and contributes to reconciliation, sustainable development, inclusive economic prosperity, and economic recovery from the COVID- 19 pandemic.

INCLUSIVE TRADE PROMOTION

• The Trade Commissioner Service (TCS) supports businesses owned or led by groups that are traditionally underrepresented in international trade such as women, Indigenous Peoples, members of the 2SLGBTQI+ community, Black and other racialized entrepreneurs, and youth.
• The TCS provides tailored programming to help underrepresented exporters to overcome challenges and reach international markets.
• TCS initiatives for underrepresented exporters include group- specific business delegations and trade missions, supplier diversity initiatives, accelerator programs, dedicated champions, and a CanExport concierge service.

Supplementary messages

• Canada is advancing an inclusive approach to trade that aims to ensure that the benefits and opportunities flowing from trade are more widely shared.
• TCS-led events for underrepresented exporters provide more inclusive access to market intelligence and networking opportunities for SMEs, including those entrepreneurs that identify as women, Indigenous Peoples, Black and other racialized groups, youth and members of the 2SLGBTQI+ community.

Update

Building on its experience of supporting women exporters to access global markets, the TCS now delivers an increasing number of targeted initiatives for all underrepresented exporters. This fiscal year the TCS is planning or supporting approximately 70 initiatives for underrepresented exporters in 32 different markets.

Supporting facts and figures

• Recent surveys have confirmed that businesses owned by women, Indigenous peoples, and Black entrepreneurs are still underrepresented in international trade.
• The likelihood for Canadian SMEs overall to export was 12.1%. In comparison, the likelihood to export for women-owned SMEs was 10.4%; Indigenous-owned SMEs was 7.2%; and Black-owned SMEs was 8.3%.

Background

The TCS has worked to address the specific challenges that women-owned businesses face through targeted programming, including business women’s trade missions to international markets.

The TCS also offers profile-raising speaking opportunities for women business leaders, providing them with opportunities to participate and gain traction in the economic sphere. Key events include Go for the Greens, a high-level business development conference in Orlando for women entrepreneurs seeking supplier diversity opportunities through exclusive access to companies, government agencies and non-profits. In addition, the Canadian Technology Accelerator program has implemented initiatives to promote greater participation of women entrepreneurs through dedicated cohorts and virtual or hybrid offerings.

Recognizing the distinct challenges facing groups traditionally underrepresented in trade, the TCS also provides tailored programming for export-ready firms owned by Indigenous Peoples, Black and other racialized entrepreneurs, youth and 2SLGBTQI+. This is in keeping with the Export Diversification Strategy, which seeks to not only diversify what and where we export, but who exports.

The TCS’ efforts in inclusive trade promotion complement other federal government initiatives that seek to support the growth of women-owned companies. For example, the Global Trade and Gender Arrangement (GTAGA) recognizes the importance of mutually supportive trade and gender policies, and seeks to increase women’s participation in trade as part of broader efforts to improve gender equality and women’s economic empowerment. This complements and builds on other work that the Government of Canada has undertaken to increase the meaningful participation of women in international trade, including through the development of Canada’s first-ever Women Entrepreneurship Strategy (WES). The WES was launched in 2018 and represents an over $6 billion approach to increasing women-owned businesses’ access to financing, talent, networks and expertise needed to start-up, scale-up and access new markets.

I. Additional Materials

LIST OF ONGOING TRADE AGREEMENT NEGOTIATIONS AND IN FORCE TRADE AGREEMENTS

ACTIVE BILATERAL/REGIONAL FTA NEGOTIATIONS AND MODERNISATION

NEGOTIATIONS (Total: 8; 7 Negotiations; 1 Modernisation)

• Canada-U.K. FTA (CUKFTA) Negotiations - Launched: March 2022; Round 4 November 2022
• Canada-Ukraine FTA (CUFTA) Modernisation Negotiations - Launched: January 2022; Recent engagement September 2022
• Association of Southeast Asian Nations (ASEAN) Negotiations: Canada-ASEAN FTA Negotiations – Launched: November 2021; Recent engagement March 2022
• Indonesia: Comprehensive Economic Partnership Agreement (CEPA) Negotiations – Launched: June 2021; Round 3 October 2022
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) UK Accession Negotiations – Launched: June 2021; Recent engagement October 2022
• MERCOSUR FTA Negotiations - Launched: March 2018; Recent engagement September 2022
• Canada-Pacific Alliance (PA) FTA Negotiations - Temporarily Paused: June 2021, Recent engagement September 2022 (on trade policy cooperation initiatives)
• India: Comprehensive Economic Partnership Agreement (CEPA) Negotiations - Launched: November 2010; Recent engagement October 2022 (On Early Progress Trade Agreement as step towards CEPA)

PROVISIONALLY APPLIED (Total: 1)

• Canada-EU Comprehensive Economic and Trade Agreement (CETA) – September 2017

AGREEMENTS IN FORCE (Total: 14)

• Canada-U.K. Trade Continuity Agreement (TCA) – April 2021
• Canada-United States-Mexico Agreement (CUSMA) – July 2020
• Canada-Israel FTA (CIFTA) – July 1997; Modernisation September 2019
• Canada-Chile FTA (CCFTA) – July 1997; Modernisation February 2019
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – December 2018
• Canada-Ukraine FTA (CUFTA) – August 2017 *Active modernisation discussions
• Canada-Korea FTA (CKFTA) – January 2015
• Canada-Honduras FTA (CHFTA) – October 2014
• Canada-Panama FTA (CPaFTA) – April 2013
• Canada-Jordan FTA (CJFTA) – October 2012
• Canada-Colombia FTA (CCoFTA) – August 2011
• Canada-Peru FTA (CPFTA) – August 2009
• Canada-European Free Trade Association FTA (CEFTA) – July 2009
• Canada-Costa Rica FTA (CCRFTA) – November 2002

ACTIVE MULTILATERAL INITATIVES (Total: 4)

• Joint Statement Initiative (JSI) on E-Commerce (Plurilateral) – Launched 2017; Meeting November 2022
• Joint Statement on Investment Facilitation for Development (Plurilateral) – Launched 2017; Meeting November 2022
• Agriculture Negotiations (Multilateral) – Launched 2000; Recent engagement June 2022
• Fisheries Subsidies Negotiations (Multilateral) – Launched 2001; Initial agreement reached June 2022; negotiations continue

PLURILATERAL (OUTSIDE OF WTO) (Total: 1)

• Digital Economy Partnership Agreement (DEPA) – Accession Working Group established August 2022

RECENTLY CONCLUDED PLURILATERAL & MULTILATERAL INITATIVES (Total: 4)

• Joint Statement on Services Domestic Regulation (Plurilateral) - December 2021
• Indigenous Peoples Economic and Trade Cooperation Arrangement (IPETCA) –December 2021
• Global Trade and Gender Arrangement (Plurilateral) – August 2020
• Inclusive Trade Action Group (Plurilateral) – March 2018

ACTIVE FIPA NEGOTIATIONS (Total: 4)

• Canada-Georgia Foreign Investment Promotion and Protection Agreement – Launched December 2021; Meeting November 2022
• Canada-Nigeria Foreign Investment Promotion and Protection Agreement – Launched February 2022
• Canada-United Arab Emirates Foreign Investment Promotion and Protection Agreement – Launched September 2022; Round 9 late 2022/ early 2023
• Canada-Qatar Foreign Investment Promotion and Protection Agreement – Launched September 2022; Meeting 2023

FIPA NEGOTIATIONS IN FORCE (Total: 38 *excluding Ecuador)

• Canada-Argentina Foreign Investment Promotion and Protection Agreement – April 1993
• Canada-Armenia Foreign Investment Promotion and Protection Agreement – March 1999
• Canada-Barbados Foreign Investment Promotion and Protection Agreement – January 1997
• Canada-Benin Foreign Investment Promotion and Protection Agreement – May 2014
• Canada-Burkina Faso Foreign Investment Promotion and Protection Agreement – October 2017
• Canada-Cameroon Foreign Investment Promotion and Protection Agreement – December 2016
• Canada-China Foreign Investment Promotion and Protection Agreement Negotiations – October 2014
• Canada-Costa Rica Foreign Investment Promotion and Protection Agreement – September 1999
• Canada-Côte d’Ivoire Foreign Investment Promotion and Protection Agreement – December 2015
• Canada-Croatia Foreign Investment Promotion and Protection Agreement – January 2001
• Canada-Czech Republic Foreign Investment Promotion and Protection Agreement – January 2012
• Canada-Ecuador Foreign Investment Promotion and Protection Agreement – June 1997 * On May 19, 2017 the Government of Canada received a notice by the Government of Ecuador terminating the Canada-Ecuador Foreign Investment Promotion and Protection Agreement (Canada-Ecuador FIPA).
• Canada-Egypt Foreign Investment Promotion and Protection Agreement – November 1997
• Canada-Guinea Foreign Investment Promotion and Protection Agreement – March 2017
• Canada-Hong Kong Foreign Investment Promotion and Protection Agreement – September 2016
• Canada-Hungary Foreign Investment Promotion and Protection Agreement – November 1993
• Canada-Jordan Foreign Investment Promotion and Protection Agreement – December 2009
• Canada-Kosovo Foreign Investment Promotion and Protection Agreement – December 2018
• Canada-Kuwait Foreign Investment Promotion and Protection Agreement – February 2014
• Canada-Latvia Foreign Investment Promotion and Protection Agreement – November 2011
• Canada-Lebanon Foreign Investment Promotion and Protection Agreement – June 1999
• Canada-Mali Foreign Investment Promotion and Protection Agreement – June 2016
• Canada-Moldova Foreign Investment Promotion and Protection Agreement – August 2019
• Canada-Mongolia Foreign Investment Promotion and Protection Agreement – February 2017
• Canada-Panama Foreign Investment Promotion and Protection Agreement – February 1998
• Canada-Peru Foreign Investment Promotion and Protection Agreement – June 2007
• Canada-Philippines Foreign Investment Promotion and Protection Agreement – November 1996
• Canada-Poland Foreign Investment Promotion and Protection Agreement – November 1990
• Canada-Romania Foreign Investment Promotion and Protection Agreement – November 2011
• Canada-Russian Federation Foreign Investment Promotion and Protection Agreement – June 1991
• Canada-Senegal Republic Foreign Investment Promotion and Protection Agreement – August 2016
• Canada-Serbia Republic Foreign Investment Promotion and Protection Agreement – April 2015
• Canada-Slovak Republic Foreign Investment Promotion and Protection Agreement – March 2012
• Canada-Tanzania Foreign Investment Promotion and Protection Agreement – December 2013
• Canada-Thailand Foreign Investment Promotion and Protection Agreement – September 1998
• Canada-Trinidad and Tobago Foreign Investment Promotion and Protection Agreement – July 1996
• Canada-Ukraine Foreign Investment Promotion and Protection Agreement – July 1995
• Canada-Uruguay Foreign Investment Promotion and Protection Agreement – June 1999
• Canada-Venezuela Foreign Investment Promotion and Protection Agreement – January 1998

LIST OF MINISTERIAL TRIPS AND DOMESTIC OUTREACH SUMMER 2022

• (In Canada) Incoming USTR Visit - May 5-6
• Visit to Southeast Asia (APEC MRT, Thailand and Singapore) - May 20-26, 2022
• OECD MCM (France) and Ottawa Group June - 9-10, 2022
• WTO 12th Ministerial Conference in Geneva - June 12-15, 2022
• (In Ottawa) Indigenous Peoples Economic and Trade Cooperation Arrangement Endorsement Ceremony - June 23, 2022
• (In Canada) Federal-Provincial-Territorial Meeting of Ministers Responsible for International Trade - June 30, 2022
• Vancouver Outreach – July 5-6, 2022
• CUSMA Free Trade Commission in Vancouver - July 7-8, 2022
• Halifax Outreach – July 27-30, 2022
• ASEAN-Canada Post Ministerial Conference and 29th ASEAN Regional Forum, Cambodia - August 3-5, 2022
• Winnipeg/BC Outreach – August 14-19, 2022
• (In Canada) Mexico-Canada High Level Economic Dialogue - August 15, 2022
• Ontario Tour (Toronto, Cambridge, Kitchener-Waterloo, Guelph, Windsor, Aurora, Markham) - August 22-26, 2022
• G7 Trade and Investment Ministers Meeting, Germany, September 14-15, 2022
• ASEAN Economic Ministers (AEM), Cambodia – September 17-18, 2022
• Visit to the Philippines, September 19-20, 2022
• G20 Trade, Investment and Industry Ministers Meeting, Indonesia - September 21-23, 2022
• CPTPP Commission Meeting, Singapore – October 7-8, 2022
• Travel to Jakarta, Indonesia – October 9-12, 2022

Canada-World Trade Fact Sheet

All figures are from a Canadian perspective (CAD, Statistics Canada Data)

TRADE RELATIONS IN THE INDO-PACIFIC

• The Indo-Pacific is a region of rising economic and strategic importance for Canada.
• Canada is committed to further diversifying its engagement and deepening trade and economic partnerships in the region.
• The development and launch of a new, integrated and whole- of-government regional strategy will contribute to this objective.
• L’Indo-Pacifique est une région d’importance stratégique et économique croissante pour le Canada.
• Le Canada est investi à diversifier davantage son engagement et à approfondir ses partenariats économiques et commerciaux dans la région.
• Le développement et le lancement d’une nouvelle stratégie régionale intégrée et pangouvernementale contribuera à cet objectif.

Supplementary messages

• As a Pacific-facing nation, we recognize the increasing importance of the Indo-Pacific to Canada’s prosperity and economic security.
• The Indo-Pacific is a critical hub for trade, investment, and production, with important supply chains originating and flowing through it.
• To ensure Canadians can benefit from these opportunities, the Government is working to negotiate new bilateral and regional FTAs, expand FIPAs, and strengthen economic linkages to the region.

Supporting facts and figures

• As of 2021, the Indo-Pacific includes four of Canada’s top 10 trading partners: China, Japan, Korea, and Vietnam.
• In 2021, the Indo-Pacific was the destination of 11.1% of Canadian exports.
• Canada’s merchandise trade with the Indo-Pacific has risen by 57% over the past decade (2012-2021).
• In 2021, China accounted for around 50% of Canada’s two-way merchandise trade with the Indo-Pacific.
• 39% of Canadian trade commissioners globally are stationed in the Indo- Pacific region, with more than half of these currently based in Greater China.
• Since the return of in-person meetings, Minister Ng has visited the region five times (in March, May, August, September, and October), with stops in India, Thailand, Singapore, Cambodia, the Philippines and Indonesia.

Background

The Indo-Pacific refers to the vast land and maritime arc between Northeast Asia and the Indian sub-continent, and the growing interdependence of the Pacific and the Indian Ocean regions. The region features a globally-unique combination of extraordinary dynamism and acute risk. Responsible for over half of global GHG emissions, the region will, by 2030, be home to two-thirds of the global middle class, and by 2040, is expected to account for over 50% of global GDP. In the coming decades, developments in the Indo-Pacific will have a greater impact than any other region on Canada’s security and prosperity. Canada has long- standing and expanding trade and economic engagement in the region. The commercial and economic ties with the region are anchored in two modern trade agreements (the CPTPP and Canada-Korea FTA), five investment agreements, and a range of functional and sectoral instruments (including ST&I and Air Transport Agreements). Moreover, since early 2021, Canada has launched new trade negotiations with ASEAN and Indonesia; re-launched CEPA negotiations with India (with an Early Progress Trade Agreement as an interim step); begun exploratory discussions with Taiwan towards a FIPA; requested to launch negotiations for Canada’s accession to the Digital Economy Partnership Agreement (DEPA); and endorsed the Indigenous Peoples Economic and Trade Cooperation Arrangement (IPETCA). In May 2022, Minister Ng also announced the creation of a new Joint Economic Committee (JEC) with the Philippines, building on last year’s announcement of a similar mechanism with Vietnam.

J. Transport-led note

Containerized Grain Transportation Factsheet

Context

• Prior to the relatively small harvest in 2021-22, containerized grain exports via the Ports of Prince Rupert, Vancouver and Montreal combined were increasing at approximately 1.1% per month since 2017.
• Lentils, peas, and soybeans are the primary grain types that are containerized.
• Top markets for Canadian containerized grains are China, Japan, Indonesia, India, and Pakistan.
• Container supply chain issues since the onset of the pandemic, including high North American import container freight rates, and high demand for the return of empties to Asia, have presented challenges for Canadian shippers to access empty containers.

Statistics and Trends

Figure 1 – Containerized Grain Monthly Export Trend via the Ports of Prince Rupert, Vancouver, and Montreal

Text version

Export of Grain in containers from January 2017 to May 2022

Includes unlicensed facilities operating from the ports of Prince Rupet, Vancouver, and Montreal. 

Trend line excludes months in the 2021-22 crop year which had unusually small harvest. 

Trend line parameters:

• intercept: 252170
• slope: 2300
• start: January, 2017
• end: July, 2021 

Source: calculated by Transport Canada based on data from the Canadian Grain Commission

Year	Month	Tonnes	Trend
2017	Jan	340,248	252,170
2017	Feb	262,972	254,470
2017	Mar	285,945	256,770
2017	Apr	269,856	259,070
2017	May	322,673	261,370
2017	Jun	248,611	263,670
2017	Jul	201,459	265,970
2017	Aug	157,045	268,270
2017	Sep	218,923	270,570
2017	Oct	272,883	272,870
2017	Nov	246,665	275,170
2017	Dec	258,823	277,470
2018	Jan	227,055	279,770
2018	Feb	223,425	282,070
2018	Mar	290,727	284,370
2018	Apr	327,315	286,670
2018	May	304,997	288,970
2018	Jun	293,474	291,270
2018	Jul	277,715	293,570
2018	Aug	246,738	295,870
2018	Sep	169,026	298,170
2018	Oct	278,501	300,470
2018	Nov	329,698	302,770
2018	Dec	324,413	305,070
2019	Jan	351,630	307,370
2019	Feb	346,419	309,670
2019	Mar	379,349	311,970
2019	Apr	376,355	314,270
2019	May	388,158	316,570
2019	Jun	383,866	318,870
2019	Jul	320,427	321,170
2019	Aug	274,803	323,470
2019	Sep	282,435	325,770
2019	Oct	292,528	328,070
2019	Nov	363,792	330,370
2019	Dec	342,178	332,670
2020	Jan	332,613	334,970
2020	Feb	375,405	337,270
2020	Mar	412,753	339,570
2020	Apr	461,571	341,870
2020	May	502,044	344,170
2020	Jun	448,091	346,470
2020	Jul		348,770
2020	Aug	228,056	351,070
2020	Sep	377,529	353,370
2020	Oct	429,241	355,670
2020	Nov	450,740	357,970
2020	Dec	440,386	360,270
2021	Jan	379,969	362,570
2021	Feb	279,807	364,870
2021	Mar	363,191	367,170
2021	Apr	333,510	369,470
2021	May	374,743	371,770
2021	Jun	187,155	374,070
2021	Jul	175,512	376,370
2021	Aug	151,232
2021	Sep	176,993
2021	Oct	218,672
2021	Nov	233,816
2021	Dec	183,234
2022	Jan	173,952
2022	Feb	163,213
2022	Mar	217,246
2022	Apr	206,935
2022	May	227,446

• In a typical month approximately 300K tonnes of grain is exported in containers (Canadian Grain Commission). A total of 3M tonnes of containerized grain was shipped through the ports of Prince Rupert, Vancouver, and Montreal combined in 2021.
  • China, Japan, Indonesia, India, and Pakistan are the top destinations of containerized grain, receiving 60% of all the grain exported in containers in 2021.
  • From January 2017 and May 2022 lentils, soybeans, and peas ranked first to third in terms of tonnes exported in containers. They accounted for 83% of all the grains exported in containers.
  • The unusually small 2021 crop significantly affected containerized grain exports in the 2021-22 crop year
• The Ports of Vancouver, Prince Rupert and Montreal are the primary export gateways for containerized grain. All three have off-dock container stuffing facilities, allowing them to unload bulk grain from trucks and trains, load the grain into containers, and load the containers on to vessels.
• In a typical year, approximately 40 million tonnes of grain are loaded into bulk cargo vessels. This is 10 times more grain than what gets loaded on to container vessels.

Figure 2 – Outbound Forest Products at the Port of Vancouver by Export Shipment Type

Outbound Cargo - Forest Products - Port of Vancouver 2021 (tonnes, share of total)

Source: Vancouver Fraser Port Authority, Transport Canada

Figure 3 – Containerized Export Commodities at the Port of Montreal

Port of Montreal Containerized Cargo 2021 (tonnes)

• Forest products are another major user of containers.
  • In 2021 the Ports of Vancouver and Montreal handled over 4.8M and 1.2M tonnes of forest products respectively in outbound in containers.
  • Lumber and woodpulp are the primary forest products being containerized
• Food products such as meat, fish, and poultry as well as metals, steels, and metallurgical products also rely of containers for export

Figure 4 – Comparison of Loaded vs Empty Export Containers at the Port of Vancouver

Text version

Port of Vancouver Export TEUs - Empty vs Laden. 

More empties than loaded containers are now being exported at the port of Vancouver. 

Rise in empty container exports at onset of the pandemic, as carriers prioritized returns of containers amidst high demand. 

Source: Vancouver Fraser Port Authority

Year	Month	Export Empty TEUs	Export Laden TEUs
2008	Jan	13,597	70,230
2008	Feb	16,347	86,567
2008	Mar	11,047	80,451
2008	Apr	13,647	84,739
2008	May	18,583	89,548
2008	Jun	16,684	81,948
2008	Jul	22,995	78,917
2008	Aug	30,403	77,031
2008	Sep	37,701	70,990
2008	Oct	42,885	68,314
2008	Nov	35,329	63,381
2008	Dec	23,118	63,349
2009	Jan	21,147	58,464
2009	Feb	13,036	65,526
2009	Mar	7,313	78,638
2009	Apr	5,358	79,707
2009	May	7,088	89,495
2009	Jun	4,381	84,396
2009	Jul	4,534	78,551
2009	Aug	8,202	78,854
2009	Sep	7,931	75,953
2009	Oct	10,252	75,155
2009	Nov	8,644	80,010
2009	Dec	6,315	80,662
2010	Jan	10,756	73,562
2010	Feb	10,093	64,515
2010	Mar	16,294	74,481
2010	Apr	17,892	77,563
2010	May	18,917	85,548
2010	Jun	31,509	70,992
2010	Jul	34,823	74,173
2010	Aug	39,130	73,806
2010	Sep	30,043	78,120
2010	Oct	32,075	92,754
2010	Nov	21,264	84,188
2010	Dec	13,649	91,219
2011	Jan	15,407	70,812
2011	Feb	15,988	76,197
2011	Mar	11,337	80,419
2011	Apr	11,942	91,450
2011	May	15,350	91,176
2011	Jun	18,093	91,269
2011	Jul	18,014	80,815
2011	Aug	22,045	72,120
2011	Sep	18,708	88,795
2011	Oct	12,584	85,023
2011	Nov	14,426	81,192
2011	Dec	12,803	90,458
2012	Jan	10,576	76,586
2012	Feb	8,233	85,202
2012	Mar	9,811	91,024
2012	Apr	9,177	94,381
2012	May	16,412	88,918
2012	Jun	14,923	83,237
2012	Jul	31,316	82,226
2012	Aug	26,448	84,968
2012	Sep	23,435	81,125
2012	Oct	27,080	92,770
2012	Nov	21,748	98,734
2012	Dec	13,871	89,653
2013	Jan	15,723	76,522
2013	Feb	11,316	86,491
2013	Mar	8,233	93,172
2013	Apr	12,488	93,398
2013	May	17,860	94,580
2013	Jun	22,503	88,405
2013	Jul	17,240	93,465
2013	Aug	17,278	105,419
2013	Sep	18,676	92,065
2013	Oct	19,878	105,767
2013	Nov	18,300	97,362
2013	Dec	12,372	98,974
2014	Jan	16,812	78,036
2014	Feb	8,736	85,877
2014	Mar	28,729	46,081
2014	Apr	21,164	91,670
2014	May	25,634	111,339
2014	Jun	28,813	99,759
2014	Jul	31,073	91,020
2014	Aug	33,592	90,203
2014	Sep	32,071	92,644
2014	Oct	34,476	93,719
2014	Nov	24,699	78,670
2014	Dec	24,748	86,660
2015	Jan	31,230	73,875
2015	Feb	29,835	85,300
2015	Mar	22,145	93,773
2015	Apr	28,756	99,496
2015	May	44,118	96,813
2015	Jun	36,142	89,382
2015	Jul	40,476	83,727
2015	Aug	50,321	81,779
2015	Sep	41,481	83,134
2015	Oct	40,878	91,298
2015	Nov	26,640	94,736
2015	Dec	15,566	92,720
2016	Jan	28,501	83,265
2016	Feb	25,559	85,202
2016	Mar	20,104	98,297
2016	Apr	21,158	91,149
2016	May	25,404	92,937
2016	Jun	20,472	89,789
2016	Jul	22,828	84,165
2016	Aug	32,304	93,293
2016	Sep	23,126	91,075
2016	Oct	19,321	101,110
2016	Nov	16,752	96,332
2016	Dec	19,233	94,074
2017	Jan	21,340	85,464
2017	Feb	24,479	94,027
2017	Mar	22,726	101,682
2017	Apr	26,492	91,570
2017	May	36,979	96,620
2017	Jun	41,731	91,015
2017	Jul	47,400	90,081
2017	Aug	47,209	85,380
2017	Sep	45,246	86,045
2017	Oct	43,931	91,564
2017	Nov	41,611	89,949
2017	Dec	38,188	98,249
2018	Jan	46,898	76,129
2018	Feb	29,963	80,766
2018	Mar	41,004	100,646
2018	Apr	31,313	93,122
2018	May	39,127	102,849
2018	Jun	41,105	99,577
2018	Jul	40,222	90,125
2018	Aug	49,052	87,210
2018	Sep	48,031	93,918
2018	Oct	41,645	100,620
2018	Nov	51,989	99,075
2018	Dec	35,443	95,555
2019	Jan	49,273	91,398
2019	Feb	35,004	92,869
2019	Mar	32,098	103,472
2019	Apr	45,523	97,394
2019	May	48,779	95,220
2019	Jun	44,408	101,715
2019	Jul	44,696	91,521
2019	Aug	55,588	92,120
2019	Sep	55,165	90,304
2019	Oct	48,019	87,362
2019	Nov	37,391	91,707
2019	Dec	40,076	86,892
2020	Jan	40,270	78,156
2020	Feb	26,157	84,918
2020	Mar	27,102	92,766
2020	Apr	31,706	91,942
2020	May	39,927	96,902
2020	Jun	46,482	83,970
2020	Jul	49,409	87,432
2020	Aug	54,752	77,353
2020	Sep	51,379	89,442
2020	Oct	73,960	89,933
2020	Nov	66,367	82,062
2020	Dec	62,746	88,192
2021	Jan	78,100	79,194
2021	Feb	59,131	74,109
2021	Mar	70,988	90,784
2021	Apr	79,183	85,768
2021	May	94,430	92,611
2021	Jun	73,870	76,484
2021	Jul	64,806	60,272
2021	Aug	76,936	77,438
2021	Sep	78,392	67,798
2021	Oct	83,397	69,185
2021	Nov	58,172	55,702
2021	Dec	59,502	49,084
2022	Jan	70,300	49,947
2022	Feb	64,029	53,058
2022	Mar	101,032	63,604
2022	Apr	84,911	62,110
2022	May	90,032	61,801
2022	Jun	96,581	54,951
2022	Jul	92,634	55,573
2022	Aug	94,317	59,156

• At the onset of the pandemic empty container exports began increasing
  • Currently more empties than loaded containers being exported at the port of Vancouver, a diversion from historical trends
  • This is primarily a result of ocean carriers prioritizing the return of empty containers to Asia to be re-filled with imports adversely affecting Canadian shippers’ ability to access empty containers to load grains, forest products, and other export commodities
• Transpacific Eastbound freight rates for containers are starting to decrease but are currently still +200% above pre-pandemic rates.
  • Recent trends show average rates for September from Shanghai to Vancouver and Shanghai to Los Angeles declining, down 19% and 26% respectively from the previous month

K. ISED-led notes

WOMEN ENTREPRENEURSHIP STRATEGY

QUESTION: How is the Government of Canada supporting women entrepreneurs?

KEY MESSAGES (83 words)

• The full and equal participation of women in the economy is essential to Canada’s competitiveness and prosperity. They exemplify strength and tenacity, and they are vital drivers of economic growth.
• The Government of Canada is investing up to $146.9 million over four years to strengthen the Women Entrepreneurship Strategy (WES).
• The WES represents over $6 billion in investments and commitments from almost 20 different federal departments, agencies and Crown corporations.
• This support will provide affordable financing while strengthening capacity within the entrepreneurship ecosystem.

Supplementary messages

• A second call under the Women Entrepreneurship Strategy (WES) Ecosystem Fund ($40 million) was launched on July 28, 2022, and closes on September 26, 2022. Recipients under the $25-million first call (closed in March 2022) will be announced shortly.
• The Inclusive Women Venture Capital Initiative ($15 million) will strengthen and build a more inclusive venture capital environment. Applications closed in June 2022. Successful applicants will be announced soon.
• Under the Women Entrepreneurship Loan Fund ($55 million), loans are available through Northumberland Community Futures Development Corporation, Coralus and the Women’s Enterprise Organizations of Canada. Other administrators will make loans available this year.

Background

Women Entrepreneurs in Canada

Women entrepreneurs own fewer than 17 percent of employer businesses, but account for 37 percent of all business if self-employed women are included. They are more likely to lead businesses that are young, small, in low-growth sectors, and underfinanced. These factors make it harder to access and secure financing.

The Women Entrepreneurship Strategy (WES) was launched in 2018 and represents a “whole-of- government” approach to increasing women-owned businesses’ access to the financing, talent, networks and expertise they need to start-up, scale up and access new markets. Overseen by Innovation, Science and Economic Development Canada (ISED), the WES represents over $6 billion in investments and commitments from almost 20 different federal departments, agencies and Crown corporations.

Despite recent gains made through the WES, women entrepreneurs continue to face persistent barriers which are stunting their growth, many of which were further exacerbated by the COVID-19 pandemic.

For example, women entrepreneurs tend to congregate in certain sectors (18% in retail and 10.5% in accommodation and food services), many of which were highly impacted by COVID-19 due to social distancing and mandatory closures.

Announced in the Speech from the Throne in September 2020, the government committed to accelerating the WES in the context of the Action Plan for Women in the Economy. Budget 2021 announced an investment of $146.9 million.

WES Programs and Initiatives

• WES Ecosystem Fund ($165 million): First announced in 2018, the Fund is designed to help not-for-profit, third-party organizations strengthen capacity within the entrepreneurship ecosystem and offer business supports such as training, mentorship and financial literacy for women entrepreneurs.Through Budget 2021, the Fund was renewed to further address ecosystem gaps.
  • In January 2022, the government launched a call for proposals allocating $25 million for new projects focused on responding to systemic barriers and gaps for diverse, intersectional and/or under-served women. Applications closed in March 2022.
  • On July 28, 2022, the government launched a second call for proposals allocating $40 million for business support projects focused on sectors and in areas of strength for women entrepreneurs (including in the care economy, retail and service sectors), as well as those which provide services to women entrepreneurs in rural, remote and northern areas of the country. Applications close on September 26, 2022.
• Women Entrepreneurship Loan Fund ($55 million): Under Budget 2021, the Loan Fund is providing loans of up to $50,000 to diverse women entrepreneurs through loan administrators. The government announced the selection of four loan administrators in March 2022.
• Inclusive Women Venture Capital Initiative ($15 million over three years): This initiative will fund projects to strengthen and build a more inclusive VC environment for Canadian women. The application period ended on June 20, 2022.
• Women Entrepreneurship Knowledge Hub ($8.6 million in 2018; an additional $5 million in 2021): Led by Toronto Metropolitan University, and supported by 10 regional hubs and a network of over 300 organizations, the hub serves as a one-stop source of knowledge, data and best practices.

BLACK ENTREPRENEURSHIP FUNDING

QUESTION: What funding is the Government of Canada providing to Black-led businesses?

KEY MESSAGES (195 words)

• Many Black entrepreneurs and business owners face systemic barriers and havebeen disproportionately affected by the COVID-19 pandemic.
• The Government of Canada is acting to address these barriers, create stronger economic opportunities for the Black Canadian business community, and build a more inclusive future for everyone.
• In September 2020, the Government of Canada created the first-ever Black Entrepreneurship Program (BEP) with an investment of up to $265 million.
• This includes an investment from the Business Development Bank of Canada (BDC) in the Black Entrepreneurship Loan Fund to support the next generation of Black Canadian entrepreneurs.

Supplementary messages

• Black entrepreneurs and business owners make invaluable contributions to Canada’s economy every day. For far too long, they have been confronted by barriers that have hindered their progress.
• As a result of the tremendous response to the call for concepts for the National Ecosystem Fund, Budget 2021 invested an additional $50 million over four years, starting in 2021-22, in this important program. The Regional Development Agencies selected 41 not-for-profit business organizations to deliver the National Ecosystem Fund, which represents nearly $95 million.
• The Loan Fund, now a total investment of $160 million, aims to provide loans of up to $250,000 to support Black business owners and entrepreneurs across Canada. The Loan Fund is administered by the Federation of African-Canadian Economics (FACE), in partnership with the Business Development Bank of Canada (BDC). The fund started accepting applications on May 31, 2021, and FACE has approved more than $22 million in loans since.
• On December 13, 2021, the Government of Canada announced that Carleton University and Dream Legacy Foundation would be responsible for managing the Black Entrepreneurship Knowledge Hub.

Background

On November 23, 2021, the Government of Canada’s Speech from the Throne stated: “This is the moment to rebuild for everyone. The government will continue to invest in the empowerment of Black and racialized Canadians, and Indigenous Peoples.”

The Black Entrepreneurship Program (BEP) is an investment of up to $265 million over four years, in partnership with the BDC, that will help address the systemic barriers that Black business owners and entrepreneurs face by providing them with targeted support and increased access to capital.

Originally announced in September 2020, the BEP is composed of three main components and providing funding as follows:

• Up to $100 million (including $50 million from Budget 2021) to develop and implement a new National Ecosystem Fund to support Black-led business organizations across the country. It will help Black business owners and entrepreneurs access funding and capital, mentorship, financial planning services, and business training.
• Up to $30 million (from ISED) for the new Black Entrepreneurship Loan Fund to provide loans of up to $250,000 to Black business owners and entrepreneurs. The Government of Canada is also partnering with the BDC ($130 million).
• Up to $5 million to create and sustain a new Black Entrepreneurship Knowledge Hub that will collect data on the state of Black entrepreneurship in Canada and help identify Black entrepreneurs’ barriers to success as well as opportunities for growth. The Hub will be run by Black-led community and business organizations, in partnership with educational institutions.

In addition to increasing funding available to Black entrepreneurs through the Black Entrepreneurship Loan Fund, the BEP will help Black business owners and entrepreneurs by strengthening business and mentorship supports in their communities through Black-led business organizations (National Ecosystem Fund) and by better capturing the experiences and challenges of doing business as a Black Canadian through the new Black Entrepreneurship Knowledge Hub.

The Loan Fund includes a pilot microloan program for Black entrepreneurs and business owners in British Columbia and Ontario seeking microloans of between $10,000 and $25,000. The pilot, delivered by FACE in partnership with credit unions Vancity and Alterna Savings, will help address a critical gap in the marketplace for Black businesses that need less financial support to start up and grow.

BUSINESS DEVELOPMENT BANK OF CANADA (BDC)

QUESTION: How is the Business Development Bank of Canada (BDC) supporting small and medium- sized businesses?

KEY MESSAGES (93 words)

• The Business Development Bank of Canada (BDC) is devoted to helping Canadian entrepreneurs across the country access the support they need to grow and prosper.
• This includes financial and advisory services such as the Black Entrepreneurship Loan Fund, the Indigenous Growth Fund, and the Women in Technology Venture Fund.
• During fiscal year 2021, the BDC approved $9 billion in new loans, and added more than 10,000 new clients.
• As part of the Canada Digital Adoption Program, the BDC will offer zero-interest loans to help small and medium enterprises with their digital transformation efforts.

Supplementary messages

BDC supplemental messages

• The Business Development Bank of Canada (BDC) is helping foster innovation in Canada by supporting the development of a vibrant and diverse business ecosystem.
• The BDC is investing $200 million through its Women in Technology Venture Fund, one of the largest of its kind for women business owners in the world. As of December 31, 2021, the BDC had authorized $102.5 million to support 39 clients.
• The BDC is investing $100 million in the Indigenous Growth Fund, which will increase access to financing for Indigenous-led businesses through the network of Aboriginal Financial Institutions.
• The BDC committed $130 million to the Black Entrepreneurship Loan Fund, which will provide financing of up to $250,000 for Black business owners and entrepreneurs.
• In 2021, the BDC invested in the new $10 million Black Innovation Fund, which is focused on investing in technology companies founded by Black entrepreneurs.
• The BDC will support the new Canada Digital Adoption Program (CDAP) by providing zero- interest loans to help Canadian businesses in their digital transformation.

COVID-19 support measures (closed)

• The Highly Affected Sectors Credit Availability Program (HASCAP), delivered by the BDC for government, provided low-interest loans of up to $1 million that are fully backed by the government. As of January 31, 2022, over 14,600 transactions had been authorized, totalling $3.23 billion. The application period for HASCAP closed on March 31, 2022.
• The BDC delivered targeted activities under the Business Credit Availability Program (BCAP) on behalf of the government, providing loans to businesses to help cover operating cash flow needs. As of December 31, 2021, loans totalling $1.29 billion were authorized to 736 companies. The application period for BCAP closed on December 31, 2021.
• The BDC extended working capital loans for up to $2 million with flexible terms for businesses and enhancing access to financing through its online financing platform. As of December 31, 2021, almost 20,200 transactions had been authorized, totalling $2.8 billion.
• The BDC also supported the venture capital (VC) ecosystem through its new VC Bridge Financing Program by matching financing rounds in eligible Canadian start-ups. As of December 31, 2021, the BDC had a portfolio of $162.5 million supporting 97 companies.

Background

Headquartered in Montreal, the BDC supports entrepreneurs operating across sectors by providing services from more than 110 business centres located across Canada. As of March 31, 2021, the BDC supported more than 72,000 Canadian entrepreneurs with $41.2 billion in committed capital.

The BDC supports Canadian entrepreneurs through three main business lines: BDC Financing, BDC Capital, and BDC Advisory Services. Offerings include term loans, working capital, equity investments, growth capital and advisory services to help SMEs scale up, improve productivity, innovate, and globalize.

To increase accessibility to financing, the BDC’s Small Business Loan makes available up to $100,000 quickly online.

The BDC actively supports Canada’s innovative companies, including early stage technology firms:

• Announced in Budget 2021, the renewed Venture Capital Catalyst Initiative (VCCI) will make available $450 million for national funds-of-funds, life sciences technologies, and an inclusive growth stream. Previous venture capital programs have invested $761 million in venture capital funds and fund managers. Selected managers have raised over $3 billion to help Canadian companies start-up and grow.
• The BDC is supporting the clean technology sector by extending $600 million in loans and investments to cleantech firms. As of March 31, 2022, BDC had authorized 72 transactions totalling $510 million.

LEGISLATIVE REVIEW OF THE BUSINESS DEVELOPMENT BANK OF CANADA ACT

QUESTION: What will the Government of Canada consider as part of the Legislative Review process of the Business Development Bank of Canada Act (BDC Act)?

KEY MESSAGES (87 words)

• The Government of Canada is committed to supporting Canadian entrepreneurs as the economy recovers from the COVID-19 pandemic.
• The Business Development Bank of Canada (BDC) is an integral part of the government’s services to entrepreneurs. It provides financial and advisory solutions to businesses across industries and regions.
• The Business Development Bank of Canada Act (BDC Act) requires the government to regularly conduct a review of the Act to ensure the BDC has the right tools to continue helping Canadian businesses.
• Plans for the launch of the BDC Act review are currently being developed.

Supplementary messages

• The launch of the current 10-year Legislative Review had initially been planned for Spring 2020 but was delayed so Business Development Bank of Canada (BDC) could focus on helping the Government of Canada deliver the COVID-19 Economic Response Plan.
• With COVID-19 economic response measures winding down, plans for the launch of the Legislative Review are currently being developed.
• The BDC has played an integral role in the government’s response to the pandemic. Lessons learned from the pandemic will be considered as part of the Legislative Review, to ensure that the BDC can be best positioned to continue addressing the evolving needs of Canadian entrepreneurs and small- and medium-sized enterprises (SMEs).

Background

Statutory Requirement

The Business Development Bank of Canada (BDC) Act, which came into force in July 1995, is required to be reviewed on a regular basis. After an initial review five years after the Act came into force, the Act is now reviewed every 10 years. The Review is led by the Designated Minister (currently the Minister of International Trade, Export Promotion, Small Business and Economic Development) in conjunction with the Minister of Finance. Within one year of the Review being launched, the Designated Minister must submit a final report to Parliament. The first Review (1995-2000) was conducted in 2000 and tabled in Parliament on June 20, 2001. The following Review (2000-2010) was completed by December 2014, and resulted in incremental changes to the BDC Act.

Business Development Bank of Canada (BDC) Overview

Headquartered in Montreal, the BDC has nearly 2600 employees working at over 110 BDC business centres located across Canada. The BDC plays an important role in supporting entrepreneurs, offering financing solutions and investment capital to companies, as well as a range of advisory services. The BDC’s services are focused on small- and medium-sized enterprises (SMEs) and are available to all entrepreneurs, operating in all sectors, across all regions, and at all business development stages.

DIVERSITY IN THE ECONOMY

QUESTION: What is the Government of Canada doing to encourage diversity in Canada’s economy?

KEY MESSAGES (75 words)

• Equity, diversity and inclusion are fundamental to the Canadian economy.
• Diverse and inclusive workplaces foster innovation, growth and adaptability by allowing different perspectives to be heard and the promotion of novel ideas to help all Canadians.
• Action is being taken to break down barriers to full economic participation with a comprehensive set of programs and policies, including the Black Entrepreneurship Program, the 50 – 30 Challenge and the Disaggregated Data Action Plan, announced in Budget 2021.

Background

Programs in place that seek to improve diversity and inclusion outcomes at ISED include, but are not limited to:

Investing in Entrepreneurs:

Women Entrepreneurship Strategy (WES) (Additional $146.9 million / four years allocated in Budget 2021) is a whole-of-government approach to help women grow their businesses through access to financing, talent, networks and expertise.

Black Entrepreneurship Program (Additional $51.7 million / four years allocated in Budget 2021) is an investment of up to $265 million, including an investment of $130 million from the Business Development Bank of Canada (BDC), to help address systemic barriers faced by Black business owners and entrepreneurs across the country.

Venture Capital Catalyst Initiative (VCCI) (Additional $450 million / five years allocated in Budget 2021) was launched in 2017, investing $279 million in four national funds-of-funds, which was leveraged to draw in an additional $900 million of public and private capital into the program. On May 18, 2022, a Call for Expressions of Interest was released to solicit proposals for a renewed VCCI, which will help increase the availability of capital for Canada’s high-potential innovative firms, including those in the life sciences sector and for entrepreneurs from underrepresented groups, such as women and racialized communities.

National Aboriginal Capital Corporations Association (NACCA) is a network of Aboriginal Financial Institutions (AFIs) across Canada, which are supported, in part, by the Government of Canada through the Aboriginal Entrepreneurship Program and the Indigenous Women’s Entrepreneurship Initiative.

AFIs provide non-repayable contributions and loans, amongst other business support services, to Indigenous-owned businesses (i.e. First Nations, Metis and Inuit communities). Additionally, NACCA has launched an Indigenous Growth Fund, with support from the BDC and other Government of Canada partners to help Indigenous small businesses attract investment and take on more ambitious projects.

BDC’s Indigenous Banking Unit provides financing and consulting services tailored to Indigenous entrepreneurs including Aboriginal Business Development Funds and Indigenous Entrepreneur Loans, which help Indigenous entrepreneurs finance their businesses by offering financing of up to $350,000 to: acquire fixed assets; finance franchise fees; cover start-up costs; start exporting; or replenish working capital.

The Strategic Innovation Fund (SIF) (Additional $7.25 billion allocated in Budget 2021) supports innovation projects in Canada, while also ensuring that the funded projects generate not only innovation and economic benefits, but also public benefits. Contribution agreements contain commitments by recipients to develop and implement gender and diversity plans that reflect the specific context of projects and companies.

Helping Corporations Improve Diversity:

The 50 – 30 Challenge encourages private and public sector organizations – including small and medium-sized enterprises, not-for-profits and academic institutions – to voluntarily take steps to increase gender parity (50%) and diverse representation (30%) on corporate boards and in senior management. As of August 23, 2022, 1,661 participating organizations of all sizes in both for-profit and non-profit sectors have signed up for the 50 – 30 Challenge.

ElevateIP ($90 million / four years allocated in Budget 2021) will help Business Accelerators and Incubators (BAIs) to provide the tools Canadian start-ups need to better protect, strategically manage and leverage their intellectual property. ElevateIP requires that recipients report against performance indicators and targets related to the participation of underrepresented groups.

Creating Opportunities for all Canadians:

Disaggregated Data Action Plan ($172 million, five years, $36.3 million ongoing allocated in Budget 2021) is a holistic, evidence-based approach to issues of systemic discrimination and inequities through strategic investments in data and data infrastructure and policy initiatives. Within the plan’s first year, Statistics Canada has funded research, released new disaggregated data, published gender diverse profiles, developed disaggregated population projections, and completed consultations with Indigenous and racialized communities.

CanCode (Additional $80 million / three years allocated in Budget 2021) aims to equip Canadian youth, with a focus on inclusion of underrepresented groups, with the skills they need to be prepared for further studies, including advanced digital skills and science, technology, engineering and math courses, leading to the jobs of the future.

Digital Skills for Youth (DS4Y) (Part of Youth Employment & Skills Strategy, $109.3 million allocated for 2022/23 in Budget 2021) connects under-employed post-secondary graduates with small to medium-sized businesses and not-for-profit organizations where they can gain meaningful work experience to help them transition to career-oriented employment.

Computers for Schools Intern (CFSI) (part of Youth Employment & Skills Strategy, $3.5M ongoing funding, additional $1.2M allocated for 2022-23 in Budget 2021) helps young Canadians of diverse backgrounds and genders gain work experience and develop a variety of advanced digital skills and important soft-skills such as project management, teamwork, and communications.

Digital Literacy Exchange Program (Additional $17.6 million / three years allocated in Budget 2022) supports initiatives that teach fundamental digital literacy skills and help Canadians, especially those from underrepresented groups, use digital technology and the Internet safely, securely and effectively.

Supporting Initiatives Across Government:

In addition, there are several initiatives led by other Governmental Departments that ISED is supporting as a part of work on Equity, Diversity and Inclusion including:

• The launch on August 28^th 2022 of the 2SLGBTQI+ Anti-Racism Strategy and Action Plan, led by Women and Gender Equality Canada. The Action Plan is intended as the start of a ongoing development of a whole of government approach to advance equity, protect hard-earned rights, while also tackling discrimination against 2SLGBTQI+ communities. ISED worked closely to ensure that existing initiatives, including the WES, BEP and the 50/30 program were included in the plan.
• The development of various whole of government initiatives to ensure all people in Canada live in a safer, stronger, and more inclusive and equitable future.

CANADA DIGITAL ADOPTION PROGRAM

QUESTION: How will the Canada Digital Adoption Program help small businesses?

KEY MESSAGES (86 words)

• For Canada’s businesses to thrive and reach customers in an increasingly digital world, they need the tools and resources to go digital.
• The Government of Canada created the Canada Digital Adoption Program, a $4 billion investment, to help up to 160,000 businesses thrive in the digital economy and create thousands of jobs for young Canadians.
• The program, launched in March 2022, provides grants, loans and expert advisory services to small and medium-sized businesses to support technology adoption so they can improve productivity and become more competitive.

Background

The Government of Canada announced the creation of the Canada Digital Adoption Program (CDAP) to help small and medium-sized enterprises (SMEs) adopt new digital technologies. This new program will help Canadian small businesses become more efficient, go digital, take advantage of e-commerce and become more competitive in Canada and abroad.

Through CDAP, the government is investing $1.4 billion over four years, to:

• work with organizations across Canada to provide access to skills, training, and advisory services for all businesses accessing this program;
• provide microgrants to smaller businesses to support costs associated with technology adoption;
• help larger businesses with the development and implementation of digital adoption strategies; and,
• create training and work opportunities for as many as 28,000 young people to help small and medium-sized businesses across Canada adopt new technology.

At the same time, the Business Development Bank of Canada (BDC) is making available $2.6 billion over four years in loans to help SMEs in finance technology adoption – bringing the government’s total commitment to help move SMEs into the digital age to $4 billion.

CDAP was launched on March 3, 2022, and consists of two grants:

Grow Your Business Online is designed to help customer-facing businesses digitize and take advantage of e-commerce opportunities. Eligible businesses will receive microgrants of up to $2,400 to help with the costs related to adopting digital technologies as well as support and advice from a network of e-commerce advisors. The department has partnered with local and regional service providers across Canada for the delivery of Grow Your Business Online services. Service providers will distribute the microgrants as well as hire, train, and deploy the e-commerce advisors. Most Grow Your Business Online service providers are now accepting grant applications from small businesses and are hiring e-commerce advisors.

Boost Your Business Technology helps SMEs that require more comprehensive support to adopt more complex technology. The grant enables SMEs to access expert advisory services for digital adoption planning and financing options needed to put these technologies in place. Eligible SMEs can receive a grant to develop the digital adoption plan covering up to 90% of the cost of the plan up to a maximum of $15,000.SMEs can also apply for a zero-interest loan of up to $100,000 from the BDC to help them implement their digital adoption plans. SMEs can also apply to receive a wage subsidy of up to $7,300 for a work placement to assist with their digital transformation. Placements under the Boost Your Business Technology grant are administered by Magnet, a third party intermediary, selected through a separate call for applications.

CDAP’s Boost Your Business Technology grant is delivered through the following support measures:

• Grants: for advisory services to develop the digital adoption plans for up to 90% of the cost of the plan to a maximum of $15,000.
• Digital Advisory Marketplace: on-line tool to assist SMEs find registered Digital Advisors that will work with them to develop tailored digital adoption plans.
• Digital Needs Assessment Tool: online tool for SMEs to assess their digital maturity with a benchmark compared to their industry.
• Youth Work Placements: SMEs can access a wage subsidy of up to $7,300 for a youth work placement to assist with their digital transformation.
• Zero interest loans: the Business Development Bank of Canada (BDC) administers and manages zero-interest loans of up to $100,000 to assist with their digital transformation.

It is expected that CDAP will help as many as 160,000 SMEs (90,000 through the Grow Your Business Online grant and 70,000 through the Boost Your Business Technology grant) adopt new digital technologies, and approximately 28,000 youth work placements could be offered to young Canadians (11,200 through the Grow your Business Online grant, and 16,800 through the Boost Your Business Technology grant) who will be hired and trained to work with Canadian SMEs to facilitate their digital transformation.

CANADA SMALL BUSINESS FINANCING PROGRAM

QUESTION: What changes were made to the Canada Small Business Financing Program (CSBFP)?

Key messages (83 words)

• Small businesses are the engine of the Canadian economy and their success will be critical in driving Canada’s economic recovery.
• Budget 2022 reiterated the Government of Canada’s commitment to enhance the Canada Small Business Financing Program (CSBFP), by increasing annual lending to small businesses by an estimated annual $560 million.
• Enhancements will also help more small businesses access the financing they need to start up and scale-up, and help those that have been hardest hit by the COVID-19 pandemic to recover and succeed.

Supplementary messages

• Delivered in partnership with financial institutions, these enhancements include:
  • Expanding loan eligibility to include the financing of intangible assets, like intellectual property, and working capital;
  • Increasing the maximum loan amount from $350,000 to $500,000 and government coverage period from 10 to 15 years for non-real property loans;
  • Enabling non-profits and charitable social enterprises to be eligible as borrowers; and,
  • A new line of credit option of up to $150,000 in financing.

Background

The Government of Canada recognizes the need for small and medium-sized enterprises (SMEs) to have access to financing, particularly to recover from the economic downturn resulting from COVID-19. The Canada Small Business Financing Program (CSBFP) is a longstanding statutory program that partners with private sector financial institutions to increase the availability of financing to small businesses so they can start up, grow and modernize. The increase in the amount of financing extended to small businesses is expected to ultimately stimulate economic activity and create jobs for Canadians.

Through Budget 2021 and 2022, the government outlined action to improve access to financing for small businesses by expanding the CSBFP. Previously, the program could only be used by for- profit small businesses and was limited to term loans for real property, equipment and leasehold improvements. In June 2021, the Budget Implementation Act made amendments to the Canada Small Business Financing Act to allow not-for-profit, charitable and religious enterprises as eligible businesses.

In July 2022, amendments to the Canada Small Business Financing Regulations came into force to:

• expand loan class eligibility to include the financing of intangible assets, like intellectual property, and working capital and increase maximum loan amounts from $350,000 to $500,000 and extend government coverage periods from 10 to 15 years for equipment and leasehold improvements; and,
• introduce a line of credit of up to $150,000 to provide small businesses with a flexible financing option to cover their ongoing working capital needs.

Financial institutions are currently working to implement the changes and most are expected to start offering the new program options by the end of 2022.

Together, these changes allow the CSBFP to better meet the financing needs of modern Canadian SMEs and are projected to increase annual financing by $560 million, supporting approximately 2,900 additional small businesses.

INDIGENOUS ECONOMIC DEVELOPMENT

QUESTION: How is the Government of Canada supporting Indigenous economic development?

Key messages (98 words)

• Indigenous entrepreneurs and businesses make important contributions to their communities and to the Canadian economy.
• That is why the Government of Canada is investing:
• $42 million over three years to expand the Aboriginal Entrepreneurship Program;
• $2.4 million in the Indigenous Tourism Association of Canada to help the Indigenous tourism industry rebuild and recover; and
• $22 million over three years to support the Indigenous Women’s Entrepreneurship Initiative through the National Aboriginal Capital Corporations Association.
• As Canada recovers from the COVID-19 pandemic, these investments will help Indigenous entrepreneurs start and grow businesses, create jobs, and generate prosperity.

Supplementary messages

• This spending will help Indigenous communities withstand the pressures of the pandemic, and ensure they are well-positioned for a quick recovery.
• As part of the Women Entrepreneurship Strategy (WES), the WES Ecosystem Fund has invested $100 million in not-for-profit organizations to strengthen capacity within the entrepreneurship ecosystem and close gaps in service for women entrepreneurs. A number of Indigenous organizations received funding including, the National Aboriginal Capital Corporations Association (NACCA), the Native Women's Association of Canada and Pauktuutit Inuit Women of Canada.
• NACCA has also been chosen to deliver microloans through the Women Entrepreneurship Load Fund, which will help Indigenous women access affordable financing, particularly for start-ups or sole proprietorships that experience more difficulty in accessing financing.
• Through the Canada Digital Adoption Program (CDAP), the government has partnered with the Canadian Council for Aboriginal Business (CCAB) to deliver the Grow Your Business Online grant to small businesses across the country. Eligible businesses will receive a micro-grant of up to $2,400 to help with the costs related to adopting e-commerce. They will also be supported by a network of e-commerce advisors.
• Indigenous communities are often in rural and remote areas and the success of Indigenous-led businesses, including tourism businesses, is critically important to local jobs and economies.
  • Budget 2022 provided $20 million over two years, starting in 2022-23, in support of a new Indigenous Tourism Fund to help the Indigenous tourism industry recover from the pandemic and position itself for long-term sustainable growth.
  • Budget 2022 also provided $4.8 million over two years, starting in 2022, to the Indigenous Tourism Association of Canada to support its operations, which continue to help the Indigenous tourism industry rebuild and recover from the pandemic.

Background

Supporting Indigenous economic development is a key priority for the government. The Aboriginal Entrepreneurship Program provides support for First Nations, Inuit, and Métis Nation entrepreneurs by lowering the cost of business financing, providing equity, and offering business support services. The program helps Indigenous entrepreneurs access affordable loans to start and grow their businesses.

Various programs are in place to help Indigenous entrepreneurs and businesses, such as:

• Indigenous Growth Fund: On April 14, 2021, NACCA launched its $150 million Indigenous Growth Fund alongside the Business Development Bank of Canada (BDC). It will help Indigenous small businesses attract investment and take on more ambitious projects.
• Regional Development Agencies (RDAs): Indigenous economic development is a fundamental aspect of RDA programming. The RDAs are also developing Regional Growth Strategies, which reflect their unique regional circumstances and context while aligning with the targets and goals of the Innovation and Skills Plan. This includes the adoption of a “whole-of- government’ approach to achieve outcomes in priority areas such as economic development and job creation for Indigenous peoples.
• Business Development Bank of Canada (BDC): has an Indigenous Banking Unit that provides financing and consulting services tailored to Indigenous entrepreneurs including Aboriginal Business Development Funds and Indigenous Entrepreneur Loans. The government will also provide $100 million for the Indigenous Growth Fund ($50 million from the Social Finance Fund and up to $50 million from the BDC) to support Indigenous entrepreneurs.
• Indigenous Skills and Employment Training Program: Budget 2018 invested $2 billion over five years, and $408.2 million per year ongoing, to support the creation of an Indigenous Skills and Employment Training Program that includes a stronger focus on training for higher-quality, better-paying jobs rather than rapid re-employment.
• The Business Reconciliation in Canada Guidebook: a resource aimed at non- Indigenous businesses, provides guidance on how businesses might engage in meaningful partnerships with Indigenous communities. It was developed in partnership with the Canadian Council for Aboriginal Business and responds directly to the Truth and Reconciliation Commission (Call to Action #92). To date, it is the major action by the government in this area.

SME SUPPORT DURING ECONOMIC RECOVERY

QUESTION: What is the Government of Canada doing to support small and medium-sized businesses during economic recovery?

Key messages (88 words)

• Small businesses are the backbone of the Canadian economy and the heart of communities across the country.
• The Government of Canada is focused on supporting jobs and small businesses to help ensure Canada makes a rapid and strong recovery.
• Budget 2022 included measures to build more resilient supply chains, cut taxes for Canada’s small businesses, and drive the creation and ensure the protection of Canadian intellectual property.
• The Canada Digital Adoption Program is helping Canadian small businesses grow online and enhance their business technologies to become more competitive.

Background

With COVID-19 support measures winding down, Budget 2022 made targeted investments to drive small business productivity and growth and help support Canada’s economic recovery and job creation. Measures include steps to build more resilient supply chains, cut taxes for Canada’s growing small businesses, support emission-intensive and trade-exposed small and medium-sized enterprises, promote diversity, enhance cybersecurity, and ensure the protection of Canadian intellectual property.

Budget 2022 measures to support small and medium-sized enterprises’ (SMEs) growth and innovation:

Cutting Taxes for Canada’s Growing Small Businesses

Budget 2022 gradually phases out access to the small business tax rate, with access to be fully phased out when taxable capital reaches $50 million, rather than at $15 million. This will allow more medium- sized businesses to benefit from the reduced rate, increase the amount of income that can be eligible for the reduced rate, and deliver an estimated $660 million in tax savings over the 2022-2023 to 2026- 2027 period that can be reinvested towards growing and creating jobs.

Returning Fuel Charge Proceeds to Small and Medium-Sized Enterprises

Budget 2022 provided up to $30 million over two years, starting in 2022-23, to Environment and Climate Change Canada to administer direct payments to support emission-intensive, trade-exposed small and medium-sized enterprises in those jurisdictions.

Strengthening Canada’s Trade Remedy

Budget 2022 provided $4.7 million over five years, starting in 2022-23, and $1.1 million ongoing, to the Canada Border Services Agency to create a Trade Remedy Counselling Unit that will assist companies, with a focus on small and medium-sized enterprises.

Building More Resilient and Efficient Supply Chains

Budget 2022 provided $603.2 million over five years to Transport Canada to help build more resilient and efficient supply chains in order to lower prices for Canadian, improve the ability of Canadian businesses to export goods, and deliver essential goods to communities.

Budget 2022 Sector-Specific Support Measures for SMEs:

Supporting Canada’s Performing Arts and Heritage Sectors

Budget 2022 provided an additional $50 million in 2022-23 to the Department of Canadian Heritage, the Canada Council for the Arts, and Telefilm Canada to compensate Canadian arts, culture, and heritage organizations for revenue losses due to public health restrictions and capacity limits.

Growing Canada’s Health-Focused Small and Medium-Sized Businesses

Budget 2022 provided $30 million over four years, starting in 2022-23, to build upon the success of the CAN Health Network, and expand it nationally to Quebec, the territories, and Indigenous communities.

Support for Canada’s Tourism Sector

Budget 2022 provided $20 million over two years, starting in 2022-23, in support of a new Indigenous Tourism Fund to help the Indigenous tourism industry recover from the pandemic and position itself for long-term, sustainable growth.

Budget 2022 also provided $4.8 million over two years, starting in 2022-23, to the Indigenous Tourism Association of Canada to support its operations, which continue to help the Indigenous tourism industry rebuild and recover from the pandemic.

Previously Announced Measures to Support SMEs

Reducing Credit Card Transaction Fees

Payment card transaction fees can increase the cost of doing business for small businesses. As announced in Budget 2021, the government is committed to lowering the cost of credit card fees in a way that benefits small businesses and protects existing reward points for consumers. To this end, the government will continue current consultations with stakeholders on solutions to lower the cost of fees for merchants.

Reducing Regulatory Burden

Budget 2021 announced several measures aimed at reducing unnecessary burden on businesses, including renewed funding for the External Advisory Committee on Regulatory Competitiveness, a third round of Targeted Regulatory Reviews focusing on how regulations can accelerate economic recovery, and the intent to table a second Annual Regulatory Modernization Bill to remove outdated or duplicative regulatory requirements (the Bill was introduced in Parliament on March 31, 2022).

Canada Digital Adoption Program (CDAP)

In Budget 2021, the government announced $4 billion for CDAP, which launched in March 2022 to help businesses move online, boost their e-commerce presence, and digitalize their businesses. CDAP consists of two streams of support for businesses: Stream 1, Grow Your Business Online; and, Stream 2, Boost Your Business Tech. Stream 1 will help SMEs take advantage of e-commerce opportunities; eligible businesses will receive micro-grants to help with the costs related to adopting digital technologies as well as support and advice from a network of e-commerce advisors. Stream 2 will help businesses with the development and implementation of digital adoption strategies.

Canada Small Business Financing Program

Budget 2021 and 2022 announced enhancements to the Canada Small Business Financing Program, increasing annual financing to small businesses by an estimated $560 million.

Women Entrepreneurship Strategy

In Budget 2021, the Government invested up to $146.9 million over four years to strengthen the Women Entrepreneurship Strategy to provide affordable financing, increase data, and strengthen capacity within the entrepreneurship ecosystem.

Black Entrepreneurship Program

In Budget 2021, the Government invested up to $51.7 million over four years for the Black Entrepreneurship Program to continue supporting Black entrepreneurs and owners of small and medium-sized businesses in Canada.

Small Business and Entrepreneurship Development Program (SBEDP)

In Budget 2021, the Government provided up to $101.4 million over five years for the SBEDP to help simplify and streamline the Government’s support programs, and to help equity deserving entrepreneurs access funding and capital, mentorship, financial planning services, and business training.

VENTURE CAPITAL CATALYST INITIATIVE

QUESTION: How is the Government of Canada supporting the development of Canadian venture capital?

Key messages (104 words)

• The Government of Canada is committed to creating a vibrant sustainable venture capital (VC) industry in Canada. The result will be improved access to capital for innovative early-stage companies that create well-paid middle-class jobs for Canadians.
• The Venture Capital Catalyst Initiative (VCCI) launched a Call for Expressions of Interest on May 18, 2022.
• This call will make up to $450 million available to support new VC fund investments, and is expected to raise over $1.5 billion when leveraged with other public and private investments.
• Enhancing diversity, equity and inclusion among fund managers, portfolio companies, and throughout the VC ecosystem is a key VCCI goal.

Supplementary messages

• This round focuses on three areas: $350 million for funds-of-funds; $50 million for Life Sciences; and $50 million for inclusive growth.
• Announced in Budget 2021, the renewed VCCI also includes modified provisions that will increase investments in promising Canadian startups operating in all regions of the country.

Background

The Government of Canada actively supports the development of Canadian venture capital (VC) through the Venture Capital Action Plan (VCAP) and Venture Capital Catalyst Initiative (VCCI). Both have the objective of increasing the amount of private sector capital in the Canadian VC market.

Introduced in Budget 2017 and expanded in the 2018 Fall Economic Update, the Government of Canada invested $371 million in four national funds-of-funds and eight venture capital fund managers under the previous VCCI.

The managers selected under the previous VCCI collectively raised more than $1.8 billion from public and private investors, increasing the availability of capital for promising start-ups. Taken together, previous federal VC programs, including the VCAP, have invested $761 million, resulting in a combined total of over $3 billion in capital raised to help Canadian companies start up and grow.

VCCI recipients are chosen through a rigorous selection process informed by a private sector selection committee of highly qualified industry experts. To date, all selected funds have reached final close and are actively investing in VC funds and companies.

The promotion of gender balance and diversity in the VC ecosystem was an important factor in the design of the VCCI. Support for VC funds that champion gender balance will not only help address existing imbalances but will also serve to strengthen Canada’s VC ecosystem as a whole.

The Business Development Bank of Canada (BDC) manages the VCCI on behalf of the Government.

The BDC is also Canada’s most active single VC investor, and is helping foster innovation in Canada by supporting the development of a vibrant VC ecosystem. It has a VC portfolio of over $2.4 billion.

BORDER MANAGEMENT AND THE ARRIVECAN APP

Proposed Response:

• The Government of Canada continues to be committed to protecting Canada’s borders and to helping travellers remain safe, which is paramount in the context of the global pandemic.
• Effective October 1^st, 2022, the public health measures at the border will be lifted, and submitting health information via ArriveCAN will no longer be mandatory.
• It is important to note that the current measures remain in force until 23:59:59 EDT on September 30^th, 2022.
• ArriveCAN will continue to be available to travellers to use on an optional basis to submit their customs and immigration declaration in advance of arrival to the Canada Border Services Agency (CBSA).
• The Advance CBSA Declaration feature, currently available to travellers arriving at the Toronto, Vancouver, and Montreal international airports, will expedite passage by reducing a travellers kiosk time by roughly one third.
• Advance Declaration will become available at Winnipeg, Halifax, Calgary, Edmonton, Québec City, Billy Bishop Toronto City and Ottawa international airports in the coming months.
• ArriveCAN and Advance Declaration were developed using privacy-first principles, and the CBSA has and will continue to respect the principles of the Privacy Act.
• Also, the web version of ArriveCAN and Advance Declaration offers travellers access to a platform that meets the Government of Canada's accessibility requirements.

Background:

In the face of the global COVID-19 pandemic, the Government of Canada has taken measures to close borders and drastically reduce international travel, in addition to many other heightened public safety measures. With the introduction of requirements for travellers to provide contact details and information on their plans for quarantine, the CBSA observed longer border processing times since modern tools were not used to collect and analyze information submitted by stakeholders.

Effective September 30 at 23:59:59 EDT, the Emergency Order will expire. The requirements of the order remain in force until expiry. After expiry, all travellers, regardless of citizenship, will no longer have to:

• submit public health information through the ArriveCAN app or website;
• provide proof of vaccination;
• undergo pre- or on-arrival testing;
• carry out COVID-19-related quarantine or isolation;
• monitor and report if they develop signs or symptoms of COVID-19 upon arriving to Canada.

Mandatory random testing (MRT) on arrival will no longer be required once the Emergency Order expires; however, PHAC is prepared to reintroduce MRT if the public health situation changes.

As a result of these changes, as of October 1, 2022, travellers will no longer be required to submit their public health information through ArriveCAN.

To support the administration and enforcement of the Quarantine Act and Emergency Order made under it, CBSA and PHAC developed ArriveCAN, an integrated digital solution that enables real-time collection of information prior to arrival at Canadian Ports of Entry (POE) for all incoming travellers. ArriveCAN enables travellers to provide their information digitally as required by law under the Quarantine Act, to support compliance and enforcement, as well as public health measures.

ArriveCAN first launched in April 2020 and is available as a mobile app on the Apple App and Google Play stores or by signing in online at Canada.ca/ArriveCAN.

In November 2020, it became mandatory for air travellers to submit their information digitally in advance (i.e., before boarding the aircraft to Canada) via ArriveCAN. In February 2021, use of ArriveCAN became mandatory in the other modes (e.g., land, marine).

Following the removal of public health requirements, ArriveCAN will continue to exist as an optional tool for travellers who want to save time at airports by providing their customs and immigration declaration in advance to the Canada Border Services Agency (CBSA).

The Advance CBSA Declaration feature within ArriveCAN is currently available for travellers who arrive at the Toronto, Vancouver, and Montreal international airports and will become available at Winnipeg, Halifax, Calgary, Edmonton, Québec City, Billy Bishop Toronto City and Ottawa international airports in the coming months.

Early usage data shows that using the optional Advance CBSA Declaration cuts the amount of time a traveller spends at a kiosk by roughly one third, and over 30% of travellers arriving at participating airports are already using it.

The CBSA will continue to make technology available at the border to speed up traveller entry and enhance the safety and security of Canadians. The CBSA is exploring other optional ArriveCAN features to provide travellers with easy access to information such as border wait times and other self-serve functions. This will be expanded for travellers by land so they can make use of available technology to expedite and facilitate their travel.

ArriveCAN has had consistently high ratings in the mobile app stores and as of September 2022 has been downloaded more than 18 million times. ArriveCAN has also been built with accessibility needs in mind.