Canada-Indonesia Comprehensive Economic Partnership Agreement Implementation Bill

Moved second reading of Bill C-18, An Act to implement the Comprehensive Economic Partnership Agreement between Canada and Indonesia.

He said: Honourable senators, I rise today as the sponsor of Bill C-18, An Act to implement the Comprehensive Economic Partnership Agreement between Canada and Indonesia. This agreement marks a historic turning point in Canada’s engagement in the Indo-Pacific region and is part of the current government’s new trade diversification strategy.

The Canada-Indonesia Comprehensive Economic Partnership Agreement, or CEPA, comes at an opportune time for our country, our workers and our businesses. The world trading system is experiencing unprecedented upheavals. Protectionism is on the rise. Geopolitical tensions are reshaping supply chains and economic alliances. The pace of technological change is accelerating.

For too long, Canada’s trade has been mainly concentrated in a single market. Our relationship with the United States remains essential, but given the current climate of uncertainty, there is no doubt that Canada must diversify its trade and strengthen its economic resilience.

We need to build new bridges to dynamic markets and strengthen our partnerships with countries that share our desire to promote predictable, open and rules-based trade.

Trade is fundamental to Canada’s prosperity and resilience. It accounts for two thirds of our GDP, and one in five jobs in Canada is related to exports.

The current government has set an ambitious goal of doubling Canadian exports to non-U.S. markets over the next decade.

To achieve this goal of trade diversification, Canada must strengthen its ties with booming economies. The Indo-Pacific region is at the heart of this effort. The Indo-Pacific region is home to more than half of the world’s population and accounts for nearly 60% of world GDP, making it a driver of global economic growth. Its influence will only grow, which is why Canada’s economic engagement in this region is a strategic necessity.

It is in this context that I wish to speak to you about the Canada-Indonesia Comprehensive Economic Partnership Agreement Implementation Act, at a time when Canada needs to strengthen its ties with this region.

Indonesia stands out as one of the world’s leading emerging economies in the Indo-Pacific region. With a population exceeding 280 million, it ranks fourth among the world’s most populous countries, following China, India and the United States. I should also mention that Indonesia is the largest island nation in the world, as it is made up of more than 17,000 islands with a total area of over 1.9 million square kilometres. Java is the most populous island in the world and is home to over half the country’s population. In 2025, Jakarta, Indonesia’s capital, surpassed Tokyo to become the most populous city in the world, with 41 million residents, which is roughly equivalent to the entire population of Canada.

On the economic front, Indonesia is a member of the G20, with a GDP of close to $2 trillion, making it the largest economy in Southeast Asia. The latest forecasts indicate that Indonesia is on track to become one of the world’s five leading economies in the coming decades.

Indonesia’s value as a key partner extends beyond its robust economic growth. It’s an ambitious, unaligned, internationally influential nation. It plays a major role in the Association of Southeast Asian Nations, or ASEAN, and among the countries of the global south. Indonesia is also a member of the Asia-Pacific Economic Cooperation forum, or APEC.

Within the last few years, Indonesia has applied for membership in the Organisation for Economic Co-operation and Development, or OECD, as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

The relationship between Canada and Indonesia is based on the shared values of diversity, mutual respect and a commitment to inclusive, rules-based trade.

September 24, 2025, marked a turning point in relations between Canada and Indonesia when Indonesian President Subianto travelled to Ottawa to attend the signing of the Indonesia-Canada Comprehensive Economic Partnership Agreement.

It was the first official visit by an Indonesian president to Canada in 25 years.

Moreover, during that official visit, as co-chair of the Canada-ASEAN Interparliamentary Friendship Group, I had the privilege of co-chairing a round table here in Ottawa that was organized by the Canada-Indonesia Business Council, which brought together Canadian business people already involved in or keenly interested in Indonesia.

That visit underscores the importance of this agreement, which marks a significant milestone in bilateral relations between our countries, both economically and in political and strategic terms.

During his remarks, the Indonesian president spoke enthusiastically about the long-standing partnership between Canada and Indonesia. He described Canada as a responsible, mature, leading Western power that has always cared about the interests of developing nations. He highlighted Canada’s contributions to poverty reduction, health, agriculture and fisheries, and he praised our long-standing cooperation on peacekeeping efforts. The Indonesian president emphasized that the Canada-Indonesia Comprehensive Economic Partnership Agreement is a strategic agreement for Indonesia, reflecting years of hard work and mutual respect.

Honourable senators, the Canada-Indonesia Comprehensive Economic Partnership Agreement is a very important milestone for Indonesia, as it is the most ambitious trade agreement Indonesia has ever signed and its first with a North American country. It demonstrates the trust Indonesia has in Canada as a reliable partner.

Our trade relations with Indonesia have grown steadily over the years. Bilateral trade in goods and services between our two countries reached approximately $6.7 billion in 2024, including $3.2 billion in exports and $3.5 billion in imports. Statistics on bilateral trade with Indonesia are not yet available for 2025 for services, but they are available for goods. Canadian exports to Indonesia jumped by 29% last year to reach $3 billion, resulting in Canada recording a trade surplus of roughly $640 million.

Canada’s top goods exports to Indonesia are cereals, fertilizers, wood pulp, oilseeds, and machinery, equipment and mechanical appliances. Canada’s top goods imports from Indonesia, meanwhile, are electrical machinery and equipment, rubber, apparel, as well as precious metals and footwear. However, we know that the potential for growth is still enormous.

The Canada-Indonesia Comprehensive Economic Partnership Agreement will help unlock this full potential. It provides Canadian exporters with preferential access to Indonesia’s dynamic and rapidly growing market. Once it’s fully implemented, the Canada-Indonesia Comprehensive Economic Partnership Agreement is expected to increase trade by approximately $1.5 billion, a 25% increase over the value of our current trade. This agreement will help build a more resilient, diversified and inclusive Canadian economy, while advancing our strategic interests in a region that is at the heart of global economic growth.

Colleagues, the Comprehensive Economic Partnership Agreement, or CEPA, with Indonesia covers trade in goods and services, investment, labour, the environment and much more. It reflects Canada’s values and priorities, and it delivers tangible benefits for Canadians.

Allow me to highlight some of the key commercial benefits of this agreement for Canadians.

Let me begin with trade in goods. One of the most significant economic gains lies in improved market access for Canadian goods. When the agreement is fully implemented, Indonesia will eliminate or reduce — or provide permanent duty-free treatment — on over 85% of tariff lines, compared to 45% as we speak, representing 97% of Canadian exports to Indonesia.

In practical terms, that means meaningful commercial opportunities for businesses of all sizes from coast to coast to coast. Let me provide a handful of examples.

It means that canola farmers from Alberta, Saskatchewan or Manitoba will no longer face 5% tariffs on canola seed, oil and meal when exporting to Indonesia. Blueberry and cranberry farmers from Nova Scotia, B.C., New Brunswick and P.E.I. will no longer have to deal with 5% tariffs on these goods.

Potato farmers from P.E.I. — I think my colleague will be happy to hear this — in fact, would see the 20% tariff on chipping potatoes and the 5% tariff on frozen French fries eliminated. They will also see Indonesia issue import licences automatically for potatoes, providing stability and certainty on their exports.

Beef and pork farmers from Alberta, Saskatchewan and other provinces will no longer face 5% tariffs on beef and pork or 30% tariffs on most prepared and preserved beef and pork.

“Cleantech” companies from B.C., Alberta, Quebec and across Canada will no longer have to deal with the current 5% tariffs on wind turbines, water filtration equipment and so on. Aerospace manufacturers from Quebec and Ontario will also see the current 5% tariff eliminated on some products.

Fishers from all Atlantic provinces, Quebec and other provinces will no longer have 5% tariffs on lobsters, salmon and so on.

Honourable colleagues, these are just a few examples of the tariff-related benefits that the Canada-Indonesia CEPA will deliver, and there are more of them.

What is clear from these examples is that the impact of this agreement is wide-reaching. All regions of Canada, from coast to coast to coast, and all export-oriented industries will benefit from improved market access. This agreement ensures that Canadian exporters will face fewer barriers and lower costs when accessing one of the fastest-growing markets in the Indo-Pacific.

Beyond reducing tariffs, the CEPA will enhance market access for Canadian merchandise exporters by addressing non-tariff barriers through provisions on technical barriers to trade and sanitary and phytosanitary measures.

Provisions on technical barriers to trade take steps to reduce unnecessary regulatory burdens and improve transparency.

Together, these tariff reductions and non-tariff commitments create a more predictable, transparent and accessible environment for Canadian businesses operating in Indonesia. By lowering costs at the border and reducing regulatory obstacles behind the border, the CEPA ensures that Canadian exporters are more competitive and are better positioned to succeed in one of the fastest-growing and dynamic markets.

Colleagues, when Canadians think of trade agreements, they often think of eliminating tariffs on goods. This is indeed a central element, but trade agreements are much more than that. They are comprehensive and rigorous frameworks that encompass every aspect of modern trade, from goods and services to investment and more. As you know, Canada’s economy is highly reliant on international trade. Indonesia is a priority market for exporters, and this agreement opens up new opportunities and leverages businesses’ existing investments.

Some of our major Canadian financial institutions are already well established there. For example, Manulife, a Canadian multinational insurance and financial services company headquartered in Toronto, has had a presence in Indonesia since 1996. Manulife Wealth and Asset Management is now the largest asset manager in Indonesia. In September, Manulife further expanded its presence by acquiring the country’s fifth-largest asset manager. This acquisition underscores the strategic importance of Indonesia’s financial sector for Canadian companies.

Indeed, Indonesia’s financial services sector is one of the fastest-growing in the Indo-Pacific region, fuelled by rising household incomes, rapid urbanization and the widespread adoption of digital banking services. A tailored, stand-alone chapter on financial services was added to the Canada-Indonesia CEPA specifically to support companies such as Manulife.

This chapter guarantees essential protections and improves market access for Canadian financial service providers. It will improve access for banks, insurance companies and asset management companies through clearer commitments to fair competition and regulatory transparency.

Canadian companies will be able to offer financial products directly on the Indonesian market with greater certainty and confidence. Another of this agreement’s major advantages for financial service suppliers is the guarantee that benefits extended to established institutions will not be arbitrarily withdrawn.

This agreement between Canada and Indonesia contains a chapter on trade in services that is meant to improve transparency and predictability in a wide range of sectors.

Whether they are small start-ups or large corporations, Canadian service providers will benefit from commitments that simplify authorization and licensing procedures, enabling them to navigate the Indonesian regulatory environment. The Canada-Indonesia CEPA will also ensure non-discriminatory treatment by granting Canadian businesses the same rights and protections as their Indonesian counterparts.

This agreement contains a robust chapter on investment to further support Canadian businesses and investors. The last year for which we have statistics is 2024, when Indonesia was Canada’s third-largest destination for foreign direct investment in Southeast Asia. Canadian investment exceeded $5 billion that year, a 56% increase over the previous decade. At the same time, Indonesian investment in Canada grew to nearly $6 billion in 2024.

This chapter provides protections against expropriation without compensation, ensures non-discriminatory treatment and provides access to investor-state dispute settlement, an essential tool for legal certainty and investment stability. These protections reduce investment risks, make the business environment more predictable and encourage Canadian companies to expand their operations in Indonesia.

Allow me to highlight a few sectors that will benefit from the investment provisions of this agreement. First, there are new opportunities in the mining and energy sectors. Indonesia possesses some of the world’s largest mineral reserves. Canadian companies with expertise in mining, engineering services and mineral processing are well positioned to support Indonesia’s efforts in downstream processing and value-added industries, particularly in the areas of battery materials and green technologies. The Canada-Indonesia CEPA also provides a clear and predictable framework for Canadian mining and energy companies to invest and operate in Indonesia.

Colleagues, people often have to travel to do business abroad. This agreement facilitates the temporary admission of Canadian professionals by simplifying entry requirements and allowing executives and specialists to enter Indonesia for market expansion and investment activities.

This agreement aims to promote economic prosperity while safeguarding key social and environmental priorities. It includes labour and environmental commitments and ensures that trade supports people and the planet, rather than compromising them.

Regarding labour, the agreement requires Canada and Indonesia to uphold and protect internationally recognized labour rights in their respective domestic laws and to enforce these laws effectively. To promote fair competition, the agreement prohibits any weakening of labour codes to attract trade or investment. These commitments are supported by a dispute settlement mechanism, highlighting our determination to make trade beneficial for workers.

Regarding the environment, the CEPA includes exhaustive commitments that prevent any relaxing of environmental protections for trade purposes. It recognizes the critical connection between trade policies and climate change policies. It also addresses global environmental challenges, including plastic pollution, biodiversity loss and sustainable fisheries, forest and agriculture management. The agreement promotes responsible business conduct and provides for greater cooperation and consultation in addressing these environmental problems.

Lastly, the agreement recognizes the unique challenges that SMEs face in accessing international markets, and it commits Canada and Indonesia to working together to eliminate barriers, share information and foster cooperation. These combined efforts will ensure that more people in more communities and in our two nations reap the benefits of trade.

This agreement will deliver significant benefits as soon as it enters into force, but it is also designed to evolve over time to continue to meet the needs of Canadians in a rapidly changing global economy. Canada and Indonesia have also committed to reviewing the entire agreement within five years of its entry into force. This broader review will allow us to assess the overall effectiveness of the CEPA and deepen commitments over time, leading to further liberalization.

Canada will provide assistance to strengthen Indonesia’s capacity to implement this agreement effectively. This support will focus on strengthening institutional and technical capacity to help Indonesia meet its commitments and unlock the full potential of the CEPA. By supporting Indonesia’s implementation efforts, we are contributing to inclusive economic growth and poverty reduction in that country. We are also creating a more stable and predictable environment there for Canadian businesses to prosper.

In closing, honourable senators, the Canada-Indonesia Comprehensive Economic Partnership Agreement strikes me as a good agreement that has come along at the right time with the right partner. This agreement will create new opportunities for Canadian businesses of all sizes, from major exporters to SMEs. It will support middle-class jobs across the country in the agricultural, manufacturing, clean technology and service sectors. It will strengthen our ties with one of the largest and most dynamic regions in the world. It will also foster inclusive and sustainable growth by protecting labour rights in Canada and abroad and promoting Canadian values.

That is why, honourable senators, as the sponsor of this bill, I humbly ask you to support it.

Thank you. Meegwetch.