Honourable senators, I rise today to speak to Bill C-18, An Act to implement the Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland. Overall, I’m relieved that we have an agreement. Trade with the United Kingdom is vital for Canada. It is important for Canadian businesses and workers.

In 2018 and 2019, Canadian merchandise exports to the EU, including the United Kingdom, averaged $46.6 billion. In 2016, before Canada signed its Comprehensive Economic and Trade Agreement with the European Union, those exports to the EU totalled $40 billion. In other words, after CETA was signed, merchandise exports increased by 16.6%.

Britain’s share of those exports is critical. Total merchandise exports to Britain alone totalled $18 billion in 2018 and 2019, or about 38% of the total value of our exports to the EU.

The United Kingdom is the largest market in Europe for Canadian exports. Globally, it is the third largest destination for Canadian exports, and the U.K. is our second largest services trading partner. Last year, the value of service exports totalled $7.1 billion.

If one considers both exports and imports, two-way trade between Canada and the U.K. totals more than $29 billion. The U.K. ranks as Canada’s fifth most important trading partner. It is our fourth largest source of foreign direct investment, with a total value of $62.3 billion just in 2019.

Colleagues, I’m referencing these statistics for several reasons. First, we are living in turbulent times globally. Political tensions between the major powers are increasing. If we consider our political and trading relations with China and in East Asia, for example, greater uncertainty and trade disruptions seem probable. This means that it is likely that certain of our more stable trading partners will become more important for Canada going forward. These may be the stable markets that we will have to increasingly rely on. The United Kingdom is one of those stable markets. In my view, we should be paying considerably more attention to solidifying, broadening and deepening our access to this market.

As a country, we have placed considerable attention in the past several years on protecting and deepening our trade relations with the European Union. In many respect, the Comprehensive Economic and Trade Agreement between Canada and the European Union was a culmination of efforts undertaken by the former Conservative government to provide Canadians with greater opportunities in international markets.

What we need to recognize is that for Canada, the United Kingdom is the most important part of the European market. In terms of our exports to the EU, the U.K. alone constituted nearly 40% of our total exports to that trading bloc. That’s why, when the United Kingdom decided to leave the European Union in 2016, we should have immediately made it a top priority to conclude a new and separate bilateral trade agreement with that country. But we did not do that, colleagues. In my view, that was a major failure and I will speak more about that in my remarks going forward.

First, I do nevertheless want to reiterate why I believe this agreement is important. First and foremost, it is important because it preserves and extends the gains Canada was able to make in CETA to our bilateral trading relationship with the U.K. Under this agreement, 99% of Canadian products exported to the U.K. will become tariff-free. That is tremendously important. Our supply management products will also be protected on a similar basis as they are under CETA.

Canadian service suppliers will have priority access to the U.K. government procurement market. This market is estimated to be worth $118 billion annually. And CETA provisions with respect to dispute settlement, labour and the protection of the environment will be maintained, as they are in CETA.

In my view, all of these provisions are important, and I think considerable credit has to go to our trade negotiators.

However, I also believe that we got lucky. I say that because it’s clear that there was very much a last-minute scramble to get this agreement done. I believe the reason for that scramble was a complete lack of engagement by the current government in this negotiation. That is why the Trade Continuity Agreement with the U.K. has essentially only preserved what the Harper government negotiated with the EU in very different circumstances.

When minister Ng spoke in the House of Commons on this bill back in January, she said, “The last thing Canada and the United Kingdom would want to do is create any uncertainty for businesses and workers.”

But colleagues, unfortunately, the government did precisely that. I will remind colleagues that in September 2017, when the former prime minister Theresa May visited Canada, she said:

 . . . CETA should be swiftly transitioned to form a new bilateral arrangement between UK and Canada after Brexit. . . .

We want to ensure that when we leave the European Union, for businesses and people, that change is as smooth and orderly as possible.

But by then, Canada had already abandoned that agenda. Two months prior to Prime Minister May’s visit, Britain’s Secretary of State for International Trade, Liam Fox, confirmed to a British parliamentary committee that Canada was “hedging their bets.” Why were we doing that? Why was that the case? Evidently it was because neither Prime Minister Trudeau nor Minister Freeland liked the decision that the British people had taken on the referendum on Britain’s future in relations to the European Union. They didn’t like Brexit, so they waited before engaging in comprehensive trade negotiations to see where the internal British political debate would go.

That was a major mistake. Other countries were not waiting, colleagues. In that period, while Canada was dithering, countries and groups, including Colombia, Ecuador, Peru, the CARIFORUM countries, Chile, Côte d’Ivoire, Iceland, Norway, Israel, Japan, Jordan, as well as others, concluded their own trade agreements with the U.K.

All the while, Canada was on the sidelines. I would argue that Canadian businesses have been paying the price of uncertainty ever since. It’s no more different a mistake than we did during the North American free trade deal, when the U.S. offered to negotiate bilaterally with us and we refused. What did they do? They negotiated with Mexico and invited us to the party after the fact.

In approaching its negotiations with the United Kingdom in the way they did, the government ensured the outcome that we got. In fact, instead of being implemented in time for the end of 2020, as businesses required, the government’s delays ensured that this became impossible. We are very fortunate that just three days before Christmas, Canada and the U.K. were able to conclude an interim agreement to ensure continued preferential trade treatment for Canadian goods. I underline “interim.” This deal has been in limbo for no other reason than the government has taken a consistently sluggish approach to negotiating and implementing it. It is abundantly clear why this has happened. Quite simply, it is because neither the Prime Minister nor his senior ministers took trade continuity with the U.K. seriously. If they had, work on the trade agreement with the United Kingdom would have begun much earlier than it actually did. We would not, as Liam Fox said, have hedged our bets.

Recently, the Prime Minister even had the nerve to suggest it was the British who were dragging their feet in the negotiations. He put the blame for delays on them, saying that they lacked the capacity to negotiate a complex deal like the TCA with Canada. This is characteristically ham-fisted.

We have seen such approaches to foreign and trade policy consistently from this government and from this Prime Minister. We saw it first in India, where the Prime Minister has set back our relationships for decades. Then we saw it at the Trans-Pacific Partnership meetings in 2017, where both the Australians and Japanese were stunned at the Prime Minister’s performance, a performance which nearly sidelined Canada in the Trans-Pacific Partnership negotiations.

Most recently, we have witnessed it in our own national humiliation at the hands of the Chinese. This is the same government that has loudly proclaimed that Canada is back on the international stage. In reality, what we have actually seen is continuous bungling on the international stage and on foreign affairs issues.

With respect to our international trading relationship, I fear it is Canadian businesses and workers who are paying the price. A number of Canadian business organizations have criticized the government’s approach to the consultations that are so vital in the trade negotiation process.

With respect to Canada-U.K. negotiations, the House of Commons committee interim report notes that both the Lobster Council of Canada and the Canadian Labour Congress indicated that consultations have been inadequate. The Canadian Association of Importers and Exporters indicated that it was not consulted or made aware of the export-related requirements that would exist on January 1, 2021, had a Canada-U.K. agreement been ratified by then.

The government’s poor engagement on this file has undoubtedly contributed to the fact that problems around the non-tariff barriers that continue to affect the agriculture and agri-food industries remain unresolved in this agreement.

What concerns me now is this is the same government that, over the next three years, will lead us into the negotiations of the proposed comprehensive agreement between Canada and the U.K. Let’s see if they hit those targets. If those negotiations are to be successful in benefiting Canada, the government must adopt a new, more comprehensive approach.

When Mr. Matthew Poirier of the Canadian Manufacturers & Exporters association testified before the International Trade Committee of the House of Commons last month, he emphasized it was vital for Canada to have a clear strategy in place in order to both achieve success in our negotiations and also to effectively capitalize on international trade agreements like this one, once they are concluded.

That is not a new piece of advice. In fact, our own Senate Trade Committee has been calling for that very thing for several years. Yet we seem to be hearing the same concern about the absence of an effective implementation strategy again and again.

As Mr. Poirier explained, such a strategy is vital because there has been a notable decline in Canada’s value-added export performance. Specifically, Mr. Poirier said:

. . . manufacturing exports have been declining steadily for five years, even after we signed CETA. Canada can no longer afford to ignore the lost economic potential that the decline in value-added exports represents. It’s simply not sustainable.

Colleagues, I submit that if this country is going to be successful in reversing such trends, then the government is simply going to have to start to pay more attention to our trade relationships. We simply can no longer afford the eleventh-hour agreements, the inadequate consultations and the absence of public transparency that we have witnessed to date.

When the House of Commons International Trade Committee initially studied the agreement, it did so without access to the text of the agreement. Indeed, the report from the committee was due on the day the committee received the documents.

Colleagues, I submit that we in the Senate need to take a more active role in holding the government to account on these files because their handling of them impacts the livelihood of so many Canadians. The Standing Senate Committee on Foreign Affairs and International Trade can play a leading role in this regard. I would submit there is no more important role for that committee than to ensure that the well-being of Canadian businesses and workers are protected and advanced.

The government is now embarking upon new negotiations to conclude a comprehensive trade agreement with the United Kingdom. There is no sunset clause for these discussions, and I fear that the government may therefore approach those negotiations in the same cavalier fashion that they have approached these discussions.

We simply cannot permit that to happen. In a world that is becoming increasingly turbulent, deepening and broadening our relations with our most stable partners has never been more important. I ask all senators to join in a unified effort to ensure that we can contribute to securing the best possible future for Canadian businesses and workers in these pending negotiations.

Before I conclude, I also want to point out that I call upon all colleagues to support this bill and get it through as quickly as possible, because it is essential for the continued development of our economy and the well-being of Canadian workers. We as parliamentarians have to be vigilant and highlight to the government that Parliament has a role to play.

This is now two successive, vital trade agreements that we have been dealing with at the eleventh hour, both in the House of Commons and in the Senate, in large part because the government has not engaged early and prudently enough to get it done in a timely fashion. How many times over the last while, colleagues, have we said that we have to speed through the highway in legislation, both in terms of government spending and budgets, and now important trade agreements, without thorough review? If we start bypassing that thorough review, we’re shortchanging stakeholders and Canadians who want to come before their parliamentary committees and be heard.

Colleagues, I fully support this bill in terms of the content, but I do reluctantly support the process in which we are doing it. Thank you very much.

Senator Housakos, thank you for your presentation and speech. I think we all agree that Bill C-18 is an important bill.

In my previous life, it was a great source of pride for me to have worked with two different governments that worked on the CETA. It took many years, as you know. One government started it and another finished it.

One of the things that has occurred is that, with Brexit, the U.K. government was also involved in a long negotiation with the European Union, and it wasn’t clear in which direction it would go. Bearing that in mind, I would ask you whether it made sense to embark on negotiations — you listed a number of countries that have negotiated agreements, but they’re not of the same variety that CETA is. By amending CETA to form a continuity agreement with the U.K. — this, in fact, is a pretty deep agreement. We can get more comprehensive — and that’s the plan, as Canada forges ahead.

I’m wondering whether it would really have made sense to engage early on. I know there were discussions, but it was felt it was premature to go too public on that while the U.K. was still negotiating with the European Union.

Second, there’s divided opinion on sunset clauses. This came up in the NAFTA negotiations for the new NAFTA, as well, because it was seen that a sunset clause could also serve as a disincentive for extra investment and more trade.

I’m wondering if you have any views on those two particular points.

On your first point, Senator Boehm, I completely disagree. First and foremost, the negotiated process with CETA was far more complicated than this particular negotiation with the U.K. The negotiation with the U.K. already had a roadmap in place because of CETA, and many of the elements that were already currently active in place between Canada and the U.K. were simply ratified and extended in this particular deal. We didn’t reinvent the wheel with this particular continuity agreement; a lot of the elements, as I highlighted in my speech, already there in CETA were simply renegotiated between Canada and the U.K.

You’re absolutely right: CETA was complex because it was unprecedented. It was also complex because we were dealing, if I’m not mistaken, with 28 nations. So 28 nations were all involved and all had particular interests. There were ongoing multilateral and bilateral negotiations on CETA at various times, and that’s what complicated it. That’s not to mention the ratification process of getting it through all those various parliaments was also a complicated process.

Because as a parliamentarian I was engaged in some of these discussions regarding CETA with some of these countries bilaterally, the objectives of northern European nations and southern European nations, and their economic interests, were so diametrically opposed at times that it made the negotiations more complex and more complicated.

In the case of the U.K., there was a political will, for obvious reasons, because there was such a clear political willingness on the U.K. to negotiate with their top three or four trading partners in order to reassure their markets and economy that it would be business as usual. There was an incentive on the part of the U.K. to engage with Canada. I remember with a parliamentary committee, the Canada-United Kingdom Inter-Parliamentary Association, that many of us senators were on back in 2016 right after the Brexit vote in England. There was such an appetite with a Commonwealth cousin like Canada, which is such a vital trading partner for them, that all parliamentarians and government officials were open-minded about this.

We saw that in the visit from Prime Minister May when she came to Ottawa. She explicitly said that she wanted to start negotiations as soon as possible back in 2017.

The only people who put the brakes on this were our government. They didn’t put the brakes on it, really, for any other reason than not knowing what the outcome of the Brexit deal would be. There was a division of opinion in Global Affairs Canada as to which way it would go. If our government was certain that Brexit was going to be accomplished, as the referendum called upon in 2016 and as the political will in the U.K. showed there would be, we should have jumped on it right away. I believe it was a critical mistake, Senator Boehm.

Thank you, Senator Housakos. I think we are basically speaking about the same thing but maybe from different perspectives.

On sunsetting, you didn’t answer that part of my question, and that’s fine. But I just wanted to add that, if we were in normal times, we would have had an opportunity to study this bill in committee. I would have welcomed it. I would agree, also, with you that implementation is something that our committee could be looking at in the future, but I would be interested in your position on the sunset clause.

A sunset clause is essential in negotiations. I don’t believe it will have an impact in terms of putting any adverse pressure. If anything, it just creates benchmarks, and any time you negotiate, why would you need those benchmarks — at least from my experience in business. That’s my perspective on that.

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

(Motion agreed to and bill read second time.)