Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue No. 24 - Evidence - Meeting of May 10, 2017
OTTAWA, Wednesday, May 10, 2017
The Standing Senate Committee on Foreign Affairs and International Trade, to which was referred Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures, met this day at 4:16 p.m. to give clause-by-clause consideration to the bill; and for the consideration of Bill C-31, An Act to implement the Free Trade Agreement between Canada and Ukraine.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Honourable senators, we are here to complete our examination of Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures.
If the committee agrees, we can now move to deal with the bill clause by clause. Is it agreed?
Hon. Senators: Agreed.
The Chair: If at any point a senator is not clear where we are in the process, please ask for clarification. I want to ensure that at all times we have the same understanding as we proceed.
In terms of the mechanics of the process, I wish to remind senators that when more than one amendment is proposed to be moved in a clause, amendments should be proposed in the order of the lines of a clause.
If a senator is opposed to an entire clause, I would remind you that in committee the proper process is not to move a motion to delete the entire clause but rather to vote against the clause as standing as part of the bill.
I would also remind senators that some amendments that are moved may have consequential effects on other parts of the bill. It would be useful to this process if a senator moving an amendment identified to the committee other clauses in this bill where this amendment could have an effect. Otherwise, it would be very difficult for members of the committee to remain consistent in their decision making.
If committee members ever have any questions about the process or the propriety of anything occurring, they can certainly raise a point of order. As chair, I will listen to the argument and decide when there has been sufficient discussion of a matter or order and make a ruling.
The committee is the ultimate master of its business within the bounds established by the Senate, and a ruling can be appealed to the full committee by asking whether the ruling shall be sustained.
As chair, I will do my utmost to ensure that all senators wishing to speak have the opportunity to do so. For this, however, I will depend upon your cooperation and ask all of to you consider other senators and to keep remarks to the point and as brief as possible.
Finally, I wish to remind honourable senators that if there is ever any uncertainty as to the results of a voice vote or show of hands, the most effective route is to request a roll call vote, which obviously provides unambiguous results.
Senators are aware that a tied vote negates the motion in question.
These are the preliminary comments to provide you with some background or to remind you of some of the issues in voting.
If there are no further questions, can we now proceed?
Hon. Senators: Agreed.
The Chair: Is it agreed that the committee proceed to clause-by-clause consideration of Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures?
Hon. Senators: Agreed.
The Chair: Is it agreed that the committee be allowed to group clauses when appropriate?
Hon. Senators: Agreed.
The Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause, 1 which contains the short title, stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clauses 2 to 10 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 11 to 20 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 21 to 30 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 31 to 40 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 41 to 50 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 51 to 60 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 61 to 70 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 71 to 80 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 81 to 90 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 91 to 100 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 101 to 110 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 111 to 120 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 121 to 130 carry?
Hon. Senators: Agreed.
The Chair: Shall clauses 131 to 138 carry?
Hon. Senators: Agreed.
The Chair: Shall Schedule 1 carry?
Hon. Senators: Agreed.
The Chair: Shall Schedule 2 carry?
Hon. Senators: Agreed.
The Chair: Shall Schedule 3 carry?
Hon. Senators: Agreed.
The Chair: Shall Schedule 4 carry?
Hon. Senators: Agreed.
The Chair: Shall Schedule 5 carry?
Hon. Senators: Agreed.
The Chair: Shall Schedule 6 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 1, which contains the short title, carry?
Hon. Senators: Agreed.
The Chair: Shall the title carry?
Hon. Senators: Agreed.
The Chair: Shall the bill carry?
Hon. Senators: Agreed.
The Chair: Does the committee wish to consider appending observations to the report?
Hon. Senators: Yes.
The Chair: We have heard from senators about observations. Previously, a document compiling what the members thought they might want in observations was circulated to the steering committee first on several occasions and then was circulated to the members.
We can go in camera to discuss those observations and any further observations, or do you wish to remain in open discussion? It's up to senators.
Hon. Senators: Open.
The Chair: Transparent, open. Thank you.
The observations are a compilation of all of the suggestions and recommendations that senators in this committee have made. Obviously, we have curtailed some of the longer ones, but the comments that senators wanted are in the document.
Is it the will of the group to accept the observations as circulated?
Senator Eaton: I think it's a shame that they are all lumped together. Maybe I just saw the draft presentation. If any ministerial person were to read it, it would be nice to highlight things. Maybe I would change the priorities. You put the shipping one at the very end, and I think that was a huge concern. It's one that I feel quite strongly about.
The Bulgaria-Romania one, it would be nice if they were more highlighted and more off the top. That's just my opinion.
The Chair: There are two schools of thought: Do you put your punch at the start or at the end? Here it's at the end. I think that one was very significant and that's why it is there.
On the visa, I know that it was of particular concern to many of us but certainly led by Senator Downe. We went through many drafts, many words. I thank Senator Downe. A lot of this wordsmithing is his.
Senator Eaton: It's plunked at the end. Don't you think people start reading and if it gets tedious —
Senator Downe: It's riveting.
Senator Eaton: I kept thinking, when are we going to get to the meat here?
The Chair: The important thing for us, in light of our trade agreement, is that we're going to follow up with the ministers on these issues. So they are here; they are on alert.
For new members, it has been the practice, and I am pleased that it is today, that the department officials who have been involved in this bill are here. They are here should you have any particular questions. But they are hearing you loud and clear right now about the observations, which they will get after we agree with them.
We've got a strategy that we will not let go of the issues that have been identified for us, and we will follow up asking ministers to respond.
Because of the way this bill is an omnibus one in some ways, when it covers so much of the CETA agreement, we will have to ask many ministers to reply to us.
Senator Eaton: When the ministers draw up the regulations, can they do anything with what we're suggesting in regulations?
The Chair: I think we'll be asking them to do so.
Senator Eaton: Thank you.
The Chair: That's the strong message. I know you've had to be away for some time, but we did say to the government officials that more and more it's going from acts into regulations, and that's been troublesome to us. That's why accountability has to be not just with acts of Parliament but regulations more and more. That's why we have in here that stakeholders and others, including us, need to know, pre-gazetting, what is going into regulations.
Senator Gold: I'm not suggesting any change here, but allow me an observation or two. I think it's very well done. I actually have a slightly different view as to what is most important, although I'm not suggesting a change.
I think the most important observations are the more general ones about process: 1, 2, 3, 4 and to some degree, 5, 6 and 9. There are also observations, allusions to intellectual property, shipping, as you mentioned, and also to the visa issues.
My slight concern is that we also heard a lot of representations from many other sectors — cheese comes to mind but there are many others — and more general concerns about impact. They are alluded to indirectly when we address the need for, properly so, attention to the equitable distribution of benefits and impact.
I'm a little worried that we might give the impression, which is not true, that we didn't fully consider everything.
That said, for the record, I want to share my understanding of a couple of key words in here. Again, I'm not suggesting we wordsmith it.
In observation 6, when we recommend that the Government of Canada assess and publicly report the impact CETA, I understand that to be impact in a very large sense — regional impact, impact on women, because there is legitimate concern about the disproportionate impact of some of the measures on women and so forth. I understand the impact to be that large; I don't need it to be more specified, and similarly with the equal distribution of the benefits.
Impact also includes, in my judgment, some of the undesirable or — perhaps that is the wrong word — some of the inevitable consequences of the implementation of the agreement, because there will be some sectors or individuals who may suffer, whereas others may gain.
With those observations, I am content to adopt this.
The Chair: You're absolutely right to condense it into observations because otherwise we're restating everyone's testimony. In observations, you condense it down to include it, but it's in the follow up that when we monitor and get a reply from the minister there will be some discussions to ensure they cover all of that.
It's paragraph 9 where the Government of Canada should continue to work on measures that enhance the equitable distribution of the benefits of the trade agreements for Canadians. It's implied that it covers all the points in our testimony. That's normally how it has worked.
You will then have a special obligation — since you've raised it here — to remind me in all of our exchanges with all of the people who have anything to do with it, that those are issues of importance and not to just generalize when we get into a dialogue of some sort.
I think it's important, but so many things are important. The observations are meant really to demand that the government to be very conscious. The trade agreement is one thing; we can't interfere with it. Bill C-30 requires amendments to make it workable, but to make it really workable is to have an implementation strategy and to listen to the people who can make the trade agreement work. That's the stakeholders, the Canadian public and parliamentarians. So that's the overarching thing that this is trying to do.
I appreciate trying to balance them all and I'm defending all the writers here. It was not my wording at all; it was the collective contribution of others to me. I'm trying to do justice to all of them. I think we've captured all of the concerns, perhaps not as strongly, but they are captured and it's our job now to make sure we follow up on them.
Senator Cordy: I would like to congratulate the steering committee and the writers because you've captured within the observations much of what we discussed and much of the witness testimony that we heard. You've actually been able to compress it to two pages instead of what could have been a 20-page document, I'm sure.
I did receive, after our meeting last week, a letter from one of the witnesses who appeared before us, and that is Marlene Usher, the CEO of the Port of Sydney. She presented testimony. She was quite concerned because of the special status that is given to the Port of Halifax and the Port of Montreal regarding single trip feeder services and felt that the smaller ports, like the Port of Sydney, would be disadvantaged, because two ports were in fact recognized.
I'm from Halifax, so I'm not being critical of this; I'm not saying "exclusion.'' I'm saying that she is suggesting that the Port of Sydney and smaller ports be included.
She suggested an amendment to Bill C-30. Well, that is not a possibility. We've passed the bill, and it's all or nothing in looking at a free trade bill because we didn't draft it.
But I'm wondering whether this suggestion of hers would be covered by observation number 7 where we speak about shipping, or should we look at the Coasting Trade Act, which is 92(2.4) and perhaps the Transport Committee could look at something like this. I would like to answer the concern that she has because they've put a lot of money into the Port of Sydney and certainly would like to be on an equal footing when it comes time for shipping.
The Chair: I can answer to my best recollection that we covered this. There were questions put by, I think, members from your region about why certain ports were covered and others weren't, and I think that was answered.
The more particular point was that there's a real concern that European ships coming into Canada have the same standards as Canadians have to adhere to. Part of the concern by some of the witnesses was that there are rules now to say that, not just on labour standards but other things. But because so many departments are involved, they're not always on top of it and it's usually the industry or the union or someone else that has to bring it forward.
So we have covered in this recommendation that we expect that the same standards would be adhered to. We give recommendations as to how that should be.
Part of the dialogue went further than Bill C-30 and CETA. It goes to the Coasting Trade Act. I think it's something that has not been studied well. Senator Dawson indicated that his committee is a good place for that study.
I would think any member is free, or this committee can consider it. We don't like to tell other committees what they should do. It's in the air here. The chair of that committee is here. It's a strong concern that we have, so it's not something that will be set aside. We're going to continue to monitor it to the best of our ability and work on it, but I think it goes a little further than what Bill C-30 and CETA are about. It's about the Coasting Trade Act.
Many emails that I received were personal emails to me, not for this committee, that covered the same kind of issue: "Isn't it time to look at this whole thing, shipping?''
Senator Cordy: Perhaps I can I have this discussion afterwards.
The Chair: Senator Dawson may wish to speak to that.
Senator Dawson: I have two comments. First, I agree with the quality of the redaction. I think everything that has to be included is included.
Remember, I asked a few times what you would like to be able to say in a few years if it doesn't work: We told you so? Well, those "we-told-you-so'' are in that document.
As far as the transportation issue is concerned, I totally agree with you that it has much more to do with transportation and the Minister of Transport and the port authorities than it does with the agreement. I've already offered to some of the witnesses who appeared, in particular last week, that if they have recommendations that they think can be brought up on modernization of some of the Transport Canada acts, I'm certainly willing to bring them up at our committee.
Also, we can bring them up through the Senate, and we can bring them directly to the minister's office if they make a particular request. I'm on the record as having offered, as a double member of Transport and Foreign Affairs, to see what we can do about it.
I think the way the deputy chair did the control of the writing is excellent, and I think we should go forward with the comments.
The Chair: Thank you.
Senator Cordy: I will forward this information to the Chair of Transport. Thank you very much, and thank you on behalf of the CEO of the Port of Sydney.
Senator Pratte: Not being a member of the committee, I just want to put on the record that each of the observations is okay, but I find the tone in general sounds to me very negative. Maybe it's not a reflection of the whole of the testimony that we had in the committee. Many witnesses were very favourable to the agreement. In the end, of course, we voted in favour of the agreement because we agree with it.
I want to highlight for the record the last sentence of the observations, which I think explains the vote of the committee and is very important, where the committee underscores that CETA is a model of more progressive FTAs and that bringing it into force is an important signal of Canada's commitment to openness and trade and investment. So it's the last sentence out of two pages, but I think it's extremely important.
The Chair: I should say that in all the years that I've been here, observations rarely laud the bills. We do that, as you pointed out, by voting for it, but the observations are to signal the difficulties that need to be monitored and paid attention to by the government. But we didn't feel that an amendment was warranted or available at this time, and so the government has some time to reflect.
We hope that our observations are taken seriously; otherwise, I think it would not be the way we want to work. Our job is to critique, to look at the bill, to signal. And it's not what we're thinking; it's what witnesses came to tell us. That's why it's there.
It's a bit like, I'm never told when I do well; I'm always told when I'm not doing so well, and I think this is the same kind of thing.
The bill is there and we like it. We think it's good, but it won't succeed if you don't pay attention to the things we've put here. So it's to help the government focus itself on the concerns we had from the people who came to see us.
Senator Pratte: Agreed.
Senator Downe: That's exactly the same point I was going to make. The positive part is passing the bill; these are the negatives, as Senator Pratte correctly spoke about and you as well. I won't repeat what you said, chair, but you captured it exactly.
To follow up on Senator Dawson's point, I only had input on the two or three issues I was concerned with. The major pen was held by the chair and others. I don't want to take unnecessary credit.
The Chair: I think Senator Dawson has been chair long enough to know that the role of the deputy is to keep the chair in line, so you did your job well.
Senator Dawson: My problem is that I've had 12 deputies in five years. They have become chairs of other committees and have dropped me.
The Chair: I can say we have had consistency in this committee.
Are we ready to accept the observations? Will someone move them? Senator Downe.
All those in favour of the observations to be attached?
Hon. Senators: Agreed.
Senator Cools: Let the record show it was unanimous.
The Chair: Unanimous, good.
It is agreed that I report this bill with observations?
Hon. Senators: Agreed.
The Chair: I think we've done our duty. Thank you.
I want to thank the government officials for being here to be ready to answer questions. Your presence is important because individual senators do have questions that need to be answered, so as not to hold up the bill any further. I thank the officials for being here.
Senators, we will go in camera now to deal with future business before we resume for the second panel. I will invite everyone who is not a senator or staff of a senator to leave at this point.
(The committee continued in camera.)
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(The committee resumed in public.)
The Chair: Honourable senators, we will now begin our examination of Bill C-31, An Act to implement the Free Trade Agreement between Canada and Ukraine.
As I have indicated to senators, we generally start with the minister, but in light of the flooding in his constituency, the minister is there, and we certainly understand that.
Since the free trade agreement is Canada-Ukraine, we thought we would start with a representative of the Government of Ukraine, and who better than the ambassador, Andrii Shevchenko, who is known to many of us. He is extremely active on the hill. He represents Ukraine in many facets. I must say he is one ambassador who reaches out across Canada and understands the complexity of our country.
It is good to have you here, ambassador. It is just good fortune, I think, that there is a delegation from the Parliament of Ukraine here in Canada at this time. That delegation has met with our Speaker in the Senate and the Canada-Ukraine Parliamentary Friendship Group and many other political entities in Canada, including sitting in on the House Standing Committee on Foreign Affairs and International Development.
I also want to welcome to this committee, from the Parliament of Ukraine, Her Excellency Oksana Syroid, Deputy Speaker of Parliament. I should say that there is a Canadian link and that's with the University of Ottawa, with a Master of Laws. There is more to the story. We are very pleased that you understand Canada and are here representing Ukraine at this time.
With Her Excellency is Lehor Soboliev, MP, Deputy Chair of the Samopomich faction — "faction'' means party — and Ivan Miroshnichenko, an MP from the same faction who has a duty in the agrarian area. Agriculture is very important to both Canada and Ukraine.
Welcome to all three of our guests.
I'm not going to give you the biography of the ambassador. He is well known to us and it would take up time. I think it is more important to address Bill C-31, An Act to implement the Free Trade Agreement between Canada and Ukraine.
Your Excellency, the floor is yours, after which there will be questions.
His Excellency Andrii Shevchenko, Ambassador, Embassy of Ukraine: Thank you, Madam Chair and senators.
Straight to the business: The total value of trade between Ukraine and Canada last year was around C$500 million. I think it's almost nothing. It's almost peanuts, if you think about the powerful Canadian economy and the 45-million- strong Ukrainian market. So the bill you are about to look at I think will help us fix that.
First, it's going to be good for Canadian and Ukrainian businesses. Even now, while we talk, Ukraine is number four in imports of Canadian seafood and fish. Even while we talk, major Canadian companies outsource software production to Ukrainian IT companies.
This bill and the proposed Canada-Ukraine free trade agreement will help to create more jobs and better opportunities for businesses.
In terms of tariffs, the Canada-Ukraine free trade agreement will allow us to eliminate up to 98 per cent of tariffs in the next seven years, 72 per cent right after the agreement is ratified and up to 98 per cent in the next seven years to come.
Second, this agreement will allow Canadian companies to participate in Ukrainian public procurement. We are a country that has a huge market of public procurement. Every day, approximately 4,000 tenders are announced in Ukraine and the procurement budget for this year is about C$15 billion. We strongly encourage Canadian companies to go into the Ukrainian public procurement tenders. We need that because it will bring us good technology, good business practices and help us fight corruption.
Finally, the free trade agreement provides major protection for e-commerce and intellectual rights, and IT is one of the major areas of cooperation between Ukraine and Canada. This market will specifically benefit a lot from this agreement.
Aside from that, I would just say that for my country, for Ukraine, this agreement will be a strong signal of support from Canada. You know quite well the situation in Ukraine. You know how badly we need this kind of support and solidarity. I think it will be a very powerful signal to our other partners in the West. It will be a strong signal that Ukraine is a good country to do business with, to make money in, to create jobs and to build a very strong partnership for the future.
This agreement has a long bipartisan story. It was negotiated under the previous government and signed last year in July during Prime Minister Trudeau's visit to Ukraine. I had a chance to accompany him to Ukraine during his visit, so I saw with my own eyes how much this was appreciated and how much excitement this very idea of a free trade agreement between Ukraine and Canada caused in Kiev and across the country.
On behalf of Ukraine, and in the presence of the Ukrainian parliamentary delegation, I would strongly encourage you to support the Canada-Ukraine free trade agreement, and I think we will remember this as our contribution in creating more opportunities for our two countries.
The Chair: I think it should be noted that your President has signed the agreement on your side. I happened to be in Ukraine coincidentally at that time.
You are in a position now to work towards the implementation of it should it pass here; is that correct?
Mr. Shevchenko: Absolutely.
Again, in the presence of the Ukrainian parliamentary delegation, I would like to thank all the people who have contributed to all the paperwork on the two sides of the ocean. The Ukrainian Parliament has completed the ratification process and the Ukrainian President has signed the agreement into law.
The Chair: Perhaps you can talk a little more about agriculture. We have been known as the breadbasket of the world and so have you on your side. What benefits do you think would come in the agricultural field? You mentioned IT services. I thought that's a valuable one. Perhaps you can talk about land reform that impacts agriculture.
Mr. Shevchenko: I would strongly encourage you to watch two major processes in the next couple of years in Ukraine. First is privatization. We are about to witness the final wave of privatization. Ukraine has 4,500 state-run enterprises. Historically, it has been a major source of corruption in Ukraine. We are quite sure that with proper privatization, the process will bring new technologies, new knowledge and a lot of progress into the country.
The second biggest avenue of reforms is the liberalization of farmland in Ukraine. I'm sure that once we proceed with this, it will create enormous opportunities for businesses.
We need new technologies and the knowledge that the agricultural sector in Canada has. We need your specialists, who could help us be more efficient in terms of agriculture, and it would really show extraordinary results. Even now, Ukraine is a leading country in terms of sunflower oil production and other things. I think we can do much more together.
The Chair: I recently noted that so many of your industries and your products and machinery, et cetera, are tied with Russia. In light of what has happened now in Ukraine with the intervention of Russia, you're looking to new places. I have looked at the aeronautics field where computers on, in fact, the largest plane in the world — a heavy-lift cargo plane— which is in Ukraine, that some of the technologies are still based in Russia and you are looking to others. I understand Canada may be one that has been looked at?
Mr. Shevchenko: First, I think aerospace is already becoming a major success story for Canada and Ukraine. Last year the first Ukrainian-built Antonov with a Canadian Pratt & Whitney engine was rolled out and we hope to see much more of that. Moreover, I think we will find a lot of new opportunities for cooperation in terms of aerospace between the countries.
We are very proud that the largest cargo planes on the planet are 100 per cent designed and produced in Ukraine. It's something we really cherish and we think it is something that Canada, with its vast territories, especially in the North, can strongly benefit from.
Just one example: The Antonov An-70 is a unique plane that can hold up to 20 tonnes of cargo and only needs quite short runways, so it can land in the distant communities of the Canadian North. We have plenty of examples of that nature.
I have had a chance to travel across Canada. Every time I try to explore opportunities for Ukrainian and Canadian businesses, whether in Saskatchewan or British Columbia, I'm very surprised how diverse those opportunities are. Last year Ukraine opened its market for Canadian beef and pork. I think you can find some good triple-A stuff in Ukrainian grocery stores now. For most of Ukrainians it would make a lot of sense because we pretty much consider ourselves a meat country, but this is the way cooperation and the 21st century works. I'm very excited about the new opportunities that we probably don't even see at the moment that this agreement can bring.
Senator Eaton: Welcome, Mr. Ambassador.
You are talking about public procurement and many opportunities. Does that include military hardware infrastructure? What would that include?
Mr. Shevchenko: Partially, yes. When it comes to defence and military, we actually hope it will see an ocean of opportunities while we proceed with the recently signed defence cooperation arrangement between Ukraine and Canada and including Ukraine to the Automatic Firearms Country Control List.
Going back to public procurement, we are talking about best opportunities. In Ukraine, it's not just the federal government and the local governments that do public procurement; it's also state-owned enterprises. Think about these 4,500 state-owned enterprises we still operate in Ukraine. They include railways, airports, basic infrastructure, so it's really a Pacific Ocean of opportunities for public procurement.
Senator Eaton: The World Bank ranked Ukraine 80 out of 190 countries in terms of ease of doing business in 2016. Ukraine placed behind Belarus, Russia, Turkey, South Africa. Do you have a comment on that?
Mr. Shevchenko: I do. I would like to see my country much higher on this list. On the other hand, we were way lower just two or three years ago. I think the progress is extraordinary. I have a personal feeling that this progress is not properly reflected yet in many of these ratings. We have passed very important pieces of legislation to open the market, to deregulate the market, and I really hope to see these numbers improve.
Also, it is a good reminder for us that there is a lot of work we still have to do. One of the strong spillover effects of the free trade agreement is that we hope it will help us to do reforms, to deregulate business and to fight corruption.
Imagine the situation when a Canadian company enters a tender in Kiev, Odessa and Lviv. It means new business practices and honest competition and that we will see many things change on the ground just because of the presence of Canadian companies.
Senator Woo: Good afternoon, Excellency; a very warm welcome to you and your parliamentary colleagues.
I want to ask you about the privatization of the 1,400 or so state-run enterprises. Is there anything in the proposed agreement that would give Canadian companies preferential access to the acquisition of SOEs that have been privatized in Ukraine?
Mr. Shevchenko: They will have equal access with the Ukrainian companies. We are proud that Ukraine has introduced this wonderful ProZorro electronic system, which is considered to be one the world's best software applications for public procurement.
What we are still working on is judicial reform, which will make sure that all the business interests and all the possible complications will be solved in a very fair way.
The answer to your question about whether Canadian companies will have any preferences, I would say yes, just like the Ukrainian companies.
Senator Woo: I understand it should be national treatment relative to Ukrainian first, but will Canadian companies have preferential access relative to other foreign bidders for the SOEs under the agreement?
Mr. Shevchenko: Yes, to many other countries. I think in this preferential situation it will be not just your companies but also the European companies. As you know, we have signed the comprehensive free-trade agreement with the EU, and I hope that quite soon Canada and the European Union will complete all the ratification procedures with the CETA, and good luck with that.
I think in a way we are expanding this space of good competition, of good business and of business opportunities. Yes, compared to other countries we don't have similar agreements with, this agreement is quite good in terms of public procurement. The same goes with our European agreement, and we will have to explore other treaties.
Senator Woo: I don't want to be too technical, and I understand if you don't have the details at your fingertips, but how are the preferences manifested in the agreement? Is it at a lower threshold? Are there restrictions on non-FTA countries to bid on these SOEs? In what way will Canada and other free trade partners of Ukraine have preferential access to bidding on the privatization of SOEs?
Mr. Shevchenko: My understanding, and I will have to do more homework on this, is that the most important benefit is information. To make sure that the interested Canadian companies would get it very quickly, in full scale, within 60 days after the ratification procedures, Ukraine and Canada will create a joint commission that will specifically explore how to make sure that businesses on both sides of the ocean will use all the benefits of the new rules.
Senator Gold: Excellency, welcome. I first visited your country 30 years ago in the last years of the Soviet Union. I remember being briefed on the latest five-year plan when I arrived in Kiev on an overnight train with a group of lawyers. I have visited many times since, though not recently. I was there many times in the 2000s, both in Kiev and in the countryside. My question is in a way informed by that, and it's a follow-up to a number of questions.
Given all the changes and challenges that your country has faced over the last 30 years, you have given us a snapshot of the changes that are in place. Could you elaborate on the progress you are making and the issues still to be addressed with regard to labour standards, environmental standards and, in particular, your legal system? These are obviously of concern to your citizens and to Canadians and Canadian businesses. Could you tell us more about what you have in mind?
Mr. Shevchenko: If I flew from, let's say, Montreal to Odessa, I would probably be surprised to see this quite real thing. When you walk down the street, you would see a really booming economy. You would see small- and mid-sized businesses being launched. You would see people full of energy. That's understandable because many Ukrainians finally feel we have the time where we can actually choose our own destiny with our own hands.
On the other hand, when you come home, you turn on the TV and you learn terrible news from the east or from Crimea. Both of them have been turned into tribal land, and obviously it's something that is painful for every Ukrainian.
So this represents what we are going through. We feel that it's the time of major opportunities. Actually, we are witnessing a wonderful workshop of nation-building when we have a chance to create this country the way we always wanted to. On the other hand, we have to fight this terrible war, which was brought into our territory, and we are thankful for your support and solidarity.
If you want to imagine Ukraine, think of the people. It's the country with the highest literacy rate in Europe. It's a country that every year produces 14,000 certified IT specialists and more than 100,000 certified engineers. It's a country that really feels that we are opening a new chapter of our history. I think once you go there, if you go there now, probably you will not hear more about these five-year plans, but you would find much new inspiration and new energy.
Finally, it's a country that has made a very clear choice toward the free world. About 80 per cent of the population supports the European choice. More than 60 per cent wants to see Ukraine as a NATO member. It's so different from what we've always seen in Ukraine, which was a flip-flop country for many years.
I think at this stage we are witnessing irreversible changes. I hope these changes will finally bring something good to my country.
Senator Gold: It's our hope, too.
If I may follow up, could you speak a little bit more about the work that still needs to be done, in your opinion, to improve the legal system so as to provide security both to your citizens and to investors?
Mr. Shevchenko: Thank you for your hints. If I were to choose three major fields, first would be our judiciary and law enforcement system, and there is a lot of work to do on those.
The Deputy Speaker of the Ukrainian Parliament, Ms. Syroid, is personally involved in the legal reform and the judiciary reform in Ukraine. We would love to see way more progress in Ukraine on this particular issue. We're working on that.
The second direction is the fight against corruption. If we boil down corruption to specific issues, there are three major avenues of corruption.
First is direct stealing from the state budget. We don't have that anymore.
Second is public procurement. We can see tremendous progress in that because of new legislature which opens all the paperwork.
Third is state-run enterprises. Once we are done with this new way of privatization, I think we will see fantastic progress in the fight against corruption.
Another avenue of reform is energy efficiency. For the first time in Ukraine history we have survived one year without Russian natural gas. We are really creating very new opportunities in the energy market. That's another reason why we would like to see Canadians in this business. It's something very new.
We would like to see more energy efficiency. We would like new sources of energy and use the best in new technologies that are available on the global market.
The Chair: Are there any other questions?
Ambassador, you have laid out some excellent reasons why the agreement should be proceeded with. You've given us some enthusiasm for the positive changes in Ukraine. There has always been some concern about whether the changes last. I think since the Maidan and the new Parliament you've shown not only a serious willingness to make the democratic reforms, you've actually started to implement them, and that's the important thing.
You're an excellent representative of your country.
I want to take the opportunity to say to Her Excellency and the rest of the delegation, it's a good opportunity for you to witness our Parliament and to be here on what is the first day of our study of Bill C-31, so you can take back to your Parliament our enthusiasm for continuing our study of this bill. Hopefully, we can enter a new chapter, an additional chapter of Canada assisting and working with Ukraine and particularly the people of Ukraine.
I underscore, of course, that some of the country is not free; it is under occupation, Crimea and the Donbass, and that concerns Canadians. I think they're aware of it.
I can echo many of the politicians of all stripes who have said that we will stand with you however long it takes. Please convey that message on behalf of this committee. Thank you for initiating our study here today.
(The committee adjourned.)