Copyright 2008, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Competition/International Trade, October 2008
Implications for the Canadian and International Trade and Investment Community
The Conservative Party (the Government) has proposed a number of measures to those interested in maintaining and expanding Canada's international trade and investment relations. Although the trade-related aspects of the Government's platform cannot be guaranteed to come to fruition in the same form as the Government has outlined as its intended agenda given the uncertainties associated with operating in a minority government, the Government has indicated that it will seek to increase trade and investment ties with emerging markets, eliminate trade barriers currently existing between various regions within Canada, and aim to introduce measures that will support various Canadian industries, including Canada's natural resources sector as well as the manufacturing sector, in becoming increasingly competitive on a global level. In other words, the Government has indicated that it will continue to be outward looking from a trade and investment perspective and focus on making Canadian companies more competitive in the global market.
Increasing Trade and Investment Ties with Emerging Markets
The Government intends to increase Canada's level of trade with emerging markets by:
- Maintaining its focus on negotiating FTAs and seeking their
approval in Parliament
- Continuing to aggressively pursue further bilateral and
regional free trade and economic agreements, which may include the
negotiation of a Canada-EU FTA as expected to be announced at an
upcoming Canada-EU Summit
- Opening trade offices in China, Mongolia, Mexico, Brazil and
India.
Breaking Down Trade Barriers Within Canada
The Government intends to reduce or eliminate trade barriers between the various regions within Canada by:
- Employing the Agreement on Internal Trade, an agreement between
the federal government and the provinces, to further eliminate
barriers that restrict trade, investment and labour mobility within
Canada by 2010
- By relying on the federal trade and commerce power, if
necessary, to strengthen the country's economic union.
Helping Canadian Businesses to become Globally Competitive
As part of the Government's initiative to increase the ability of Canadian businesses to compete in the global marketplace, the Government has indicated:
- A commitment to increase the ability of Canadian companies to
access investment opportunities abroad
- That it will work towards opening up two regulated sectors,
airlines and uranium mining, thereby attracting additional foreign
investment to Canada, provided that the proposed foreign
investments in these areas satisfy the national security test and
that reciprocal benefits are provided by Canada's trading
partners.
Support for Industry
As a means of providing support to various Canadian industries, the Government has indicated that it intends to:
- Continue to fund the aerospace and automotive industries in
Canada and ensure that these industries maintain their position on
the leading edge of technological advancement by maintaining the
C$900-million Strategic Aerospace and Defence Initiative and the
C$250-million Automotive Innovation Fund
- Further reduce or eliminate tariffs on a wide range of imported
machinery and equipment
- Support the forestry sector by extending additional funding to
facilitate marketing abroad and convert from fossil fuels to
biomass
- Modernize the administration of fisheries
- Extend the "super" flow-through share incentive for
mining
- Support Canada's agricultural industry, nationally and in
the context of international negotiations, by injecting a further
C$500-million over the next four years to fund an agricultural
flexibility program that will be designed to assist Canadian
farmers in dealing with the costs of production, promoting
innovation, addressing environmental issues and responding to
market challenges and opportunities
- Continue to support supply managed sectors (e.g., milk,
poultry, etc.) nationally and in international negotiations
- Decrease the cost of transportation by reducing federal taxes
on diesel and aviation fuel by half.
Other trade-related measures
These measures include:
- A prohibition on export of raw bitumen (unprocessed oil from
oil sands) to jurisdictions with more lenient greenhouse emissions
standards
- Reaffirming the Government's ban on the bulk transfer of
water and standing by the Government's position that NAFTA
cannot require such exports to be made
- Injecting the Canada Food Inspection Agency with C$160 million
towards the hiring of additional inspectors, the more accurate
tracking of imports and the introduction of improved safety
measures
- Implementing consumer product safety legislation, providing for
greater inspection and testing of food, toys and consumer
products.
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