Address to the Vancouver Board of Trade: It’s Time for Free and Open Trade in Canada

Speaking Points

The Honourable James Moore, PC, MP
Minister of Industry

Vancouver, British Columbia
September 5, 2014

Check Against Delivery


Thank you, Janet, for that warm introduction. And thank you to Iain Black and his team from the Vancouver Board of Trade for inviting me to join you today.

Economic Update

In 2011, after Canadians had elected three minority governments in a row, Prime Minister Harper went to Canadians and specifically asked them for a majority mandate so we could focus on one big task from which a number of benefits would also flow.

We asked for a majority mandate to focus on the economy to protect and improve the quality of life of Canadians.

That’s what we asked for.

Canadians offered us the opportunity of that mandate, and we have delivered.

We are continuing our focus on the great project of building a prosperous Canadian economy.

Despite continued global economic uncertainties, Canada’s economy is strong and steady, and it remains among the top performers of the G7 nations.

Canada is a leading global example of a tax-competitive economy.

In 2012, our government reduced Canada’s federal corporate income tax rate to 15 percent, bringing the combined provincial and federal rate to an average of 26 percent across Canada—26 percent.

This is well below the comparable rates of most other G7 countries, and it is more than 13 percentage points below that of the United States.

Across the board, our government has lowered taxes in every way in which government collects taxes: sales taxes, income taxes, taxes on small business, taxes on investment.

Taxes in Canada today are at the lowest point they have been in 55 years.

This spring, Canada’s Parliamentary Budget Officer reported that, since 2005, the tax relief we have implemented has put $30 billion back into the pockets of Canadian families, giving Canadians more power, influence and choice in how they want to live their lives.

We have lowered taxes, we have helped families, we have made our country more competitive and we have controlled government spending.

And we are on a path to balance the budget next year.

We are in this position because we have budgeted responsibly, we have kept program spending under control and we have grown the Canadian economy.

Among G7 countries, we are second only to the United States in growth during the recession and recovery.

All credit rating agencies have affirmed Canada’s AAA credit rating, and for the sixth consecutive year the World Economic Forum has declared our banking system to be the soundest in the world.

KPMG, in a recently released report, declared that Canada is the most tax-competitive country for business in the world.

Just last week, Burger King announced plans to join forces with Tim Hortons in a new venture to be headquartered in Canada. Evidence that our policies are working to attract investment.

Canada’s business investment record instills investor confidence, and Prime Minister Harper is indeed very proud of this record.

In a recent speech, Hillary Clinton asserted a fact when she said, “Canadian middle class incomes are now higher than in the United States. Canadians are working fewer hours for more pay, living longer on average and facing less income inequality.”

She’s right.

And we continue to push our free-enterprise, pro-growth policies that are working across Canada.

Since I spoke to you last, our government has continued to make important investments in British Columbia.

In May, I was pleased to join the Province of B.C. and the Union of B.C. Municipalities in announcing an agreement on federal gas tax funding for British Columbia’s local governments.

As a result of this new 10-year agreement, British Columbia will benefit from an estimated $2.76 billion in federal funding.

This funding will flow directly to communities to use for their infrastructure priorities.

And with this agreement, our government has also doubled the number of eligible projects, allowing communities to apply their gas tax funding to a wider variety of projects to meet their individual infrastructure priorities.

This agreement is an example of how our government is meeting its commitment to ensuring a seamless transition in 2014 to the funding programs under the New Building Canada Plan.

As you know, the New Building Canada Plan represents the largest long-term federal infrastructure commitment in our nation’s history—$53 billion over 10 years.

Let me repeat that—the biggest commitment that a federal government has ever made to support provincial, territorial and municipal infrastructure.

This is something that our government is very proud of.

Here in British Columbia, I look forward to the Province opening up the intake for the New Building Canada Plan so that our municipalities can begin applying for funding, creating jobs and growing our economy.

And some of that infrastructure money will be going to boosting Canada’s ability to continue expanding our trade with the world.

Canada is, has been, and always will be a trading nation.

Since 2006, our government has pursued an aggressive free trade agenda.

When Stephen Harper became Prime Minister of Canada in January 2006, Canada had free trade agreements with only five countries.

After years of hard work, Canada now has free trade agreements in force or being finalized with 43 countries around the world.

That’s 5 when we took office; 43 today.

Those 43 countries constitute half the global marketplace.

This includes the historic Canada–European Union Comprehensive Economic and Trade Agreement, creating access to 500 million new European customers for Canadian goods and services.

We have signed the Canada–Korea Free Trade Agreement—our first free trade agreement in the Asia-Pacific region. While South Korea has a geographic footprint that is roughly the size of New Brunswick, it is a 50 million person market.

And here in British Columbia, we will benefit greatly from the massive growth in Canadian trade to South Korea that will transit through Vancouver.

Our government tabled this legislation in Parliament during the last session, and we hope to have the agreement fully enacted by year’s end.

In addition to this, we’re expanding bilateral FTA negotiations with other key markets like Japan.

And we have put in place new and expanded air transport agreements covering almost 80 countries, improving Canada’s connectivity with our most important trading partners around the world.

And here in North America, we renewed our funding in this year’s budget to create a second crossing between Windsor and Detroit—the most important economic border crossing in the world—to expand our trade with the recovering U.S. economy.

On the trade side, it is no exaggeration to say that the Harper Government has been the most pro–free trade government in Canada’s history.

And what has the result been for Canada’s economy?

More than 1.1 million net new jobs have been created since we came out of the recession.

We have more than gained back all of the jobs lost during the recession, and this job growth has been realized in every region of Canada.

Better than that, we have outperformed all other G7 economies in job creation over the recovery.

And even better than that, the more than 1.1 million net new jobs created have typically been high-wage, full-time, private sector job gains:

  • full time—87 percent
  • high wage—71 percent
  • private sector—80 percent

And why do we do all this?

To build a stronger Canada, to improve our nation and to grow our economy.

So what’s next?

Internal Trade

I submit to you that it needs to be this: breaking down barriers between Canada’s provinces and territories and opening up the Canadian economy.

I believe the primary job of any government should be one of nation building—through policies and projects that build our economy and strengthen our country.

No doubt, our ambitious international trade expansion plan is working.

We are seeing some tangible results on the world stage.

However, trade within our own borders has not kept up with the success of our international trade agreements.

When Canada’s Agreement on Internal Trade was signed in 1994, Canada had free trade agreements with two countries: Mexico and the U.S.

Today, we have free trade agreements in force or being finalized with 43 countries around the world. 

And the sad reality is that foreigners currently have greater trade benefits in Canada than our fellow Canadians do.

We have too many barriers to commerce, trade, mobility and growth within Canada.

In July, I was in Kelowna to meet with the operators of the Gray Monk Estate Winery. This is one of the largest wineries in B.C. It ships its products to customers across the country.

Gray Monk is able to do this because B.C. is one of the few provinces in this country that permits its wineries to ship directly to their customers. Unfortunately, the majority of Canadian provinces and territories have barriers to interprovincial trade in place that prevent the direct delivery of wine.

This kind of challenge is not unique to the wine industry. Indeed, it’s an irritant faced by Canadian companies that provide all kinds of goods and services.

For example, try driving a transport truck across this country and you’ll soon discover what a problem this is.

Provinces have different rules on truck weights and dimensions, various requirements for tire sizes, and so on.

We are the second largest country on earth and we don’t have basic transportation standards synchronized across Canada.

This leads to firms focusing their economic growth plans south to the U.S. rather than east and west across Canada, thereby limiting our economic growth and economic integration.

Take Beau’s All Natural Brewing Company based in Vankleek Hill, Ontario.

Beau’s is an award-winning brewery located 20 km away from the Quebec border.

It can’t sell its product in Quebec, but it can sell freely in the United States.

As a result, Beau’s is expanding in New York State—and taking all of the associated Canadian jobs in manufacturing, trucking and retail with it.

And Canadian consumers are denied choice.

Canadian comedian Tom Green was recently on Jimmy Fallon, and he brought some Beau’s beer with him.

As a New Yorker, Jimmy Fallon will be able to buy this award-winning Canadian product, but Canadians who live 20 km from the factory are legally prohibited from buying it.

Another example, this one from the Dairy Processors Association of Canada: coffee creamers.

Provinces have different regulations on the sizes of coffee creamers.

So dairy producers have to make coffee creamers for a local economy or a regional economy or a provincial economy only.

And they won’t invest in the cost to package and ship creamers to other provinces.

So we get isolated local economies. Competition isn’t realized, which gets reflected in higher prices; firms don’t grow; opportunities are lost; and consumers are denied choice.

Barriers like these and many others are punishing businesses and consumers alike because companies are forced to pass along the costs to their customers.

So I am pleased to announce today that we have launched a request for proposals to engage Canada’s expertise in creating an Internal Trade Barriers Index. The index will play a key role in identifying measures that currently restrict trade. It will allow us to better identify priority areas and collectively focus our efforts to make real progress on eliminating internal trade barriers.

Canada needs a bold policy to break down barriers to trade within Canada.

Foreign firms operating in Canada should not have a systemic advantage over Canadian firms operating in Canada.

The opportunity to take action is here.

For the first time in 20 years, all of Canada’s provinces and territories—all of them—have expressed a willingness to aggressively pursue a new internal trade agreement for Canada.

Just last year, this was not the dynamic.

Today, it is.

As Canada’s Minister of Industry, I have made modernizing Canada’s Agreement on Internal Trade my top priority.

This problem cannot be allowed to continue.

And this is too important an opportunity for us to let slide by.

We are reaching out to businesses.

We are identifying irritants that we can address for immediate and tangible results.

Over the last eight months, I have engaged businesses, premiers, and provincial and territorial ministers across the country about the urgent need to open trade within Canada.

And as a result of this national dialogue, I was pleased to unveil last month our federal proposal to remove Canada’s internal trade barriers. It’s called One Canada, One National Economy: Modernizing Internal Trade in Canada.

This proposal outlines two paths to advance a modern internal trade framework. One involves making targeted reforms that address priority areas of concern—labour mobility and education credits, for example.

The other is more comprehensive: a complete redesign of the Agreement on Internal Trade to bring it in line with recent international trade agreements.

And following last week’s Council of the Federation meeting in Charlottetown, I was pleased to see premiers agree to make progress on our joint efforts for freer trade within Canada.

First, B.C. and Saskatchewan have agreed to move forward on liberalized trade of wine and spirits between the two provinces.

Second, B.C. and New Brunswick have signed a memorandum of understanding on labour mobility between their jurisdictions.

While limited in scope, this is all meaningful progress in the direction of economic liberalization.

More significantly was the news out of the Council of the Federation meeting that the provinces and territories agreed in principle to modernize and more broadly expand free trade in Canada.

Premiers agreed to undertake a comprehensive renewal of the outdated Agreement on Internal Trade.

This reflects the sentiment I heard from all the provinces and territories as I travelled across the country urging for this kind of commitment.

I am pleased to see a clear commitment to move forward.

As a signatory to the Agreement on Internal Trade, funding partner of the Internal Trade Secretariat and 2013 Chair of the Committee on Internal Trade, I look forward to working with Canada’s provinces and territories on this important file.

And to keep progress moving in the right direction, our government will be looking at additional measures that will contribute to greater free trade and economic growth in Canada.

As we approach Canada’s 150th anniversary, the time has come to build a true domestic market.

To move forward and build a stronger, more open Canada where small businesses can flourish within our own borders.

We want to strengthen our economic union and show the world that our confederation is solid.

This is the next step in building our nation.

By working together, we will achieve great things for Canada.

Thank you.

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