Submissions October 4, 2024

Beware of unintended consequences in proposed trade law changes

Goldy Hyder – President and Chief Executive Officer, Business Council of Canada

Canada’s Place in the World Economic Strategy International Trade

Submission to The Honourable Peter M. Boehm, P.C., Chair of the Senate Standing Committee on Foreign Affairs and International Trade regarding its consideration of Bill C-282 An Act to Amend the Department of Foreign Affairs Act.

Dear Senator,

Please accept this letter as the Business Council of Canada’s written submission in relation to the Senate Standing Committee on Foreign Affairs and International Trade’s ongoing consideration of Bill C-282 An Act to Amend the Department of Foreign Affairs Act. We are grateful to the Committee for this opportunity to offer our perspective.

Since its founding almost fifty years ago, the Council has advocated in support of sound public policy to strengthen Canada’s position as a trading nation. This includes the work the Council initiated which led to the successful negotiation of the original Canada-U.S. Free Trade Agreement as well as the North American Free Trade Agreement.

Consequently, the Council and its members hold steadfast to the principle that Canada should demonstrate extreme caution in considering any measures which might impede the free flow of goods and services. As Bill C-282 would impact cross-border commercial business operations, we have given the legislation our careful consideration.

Recognizing the intended effect of Bill C-282, the Council respectfully submits that the legislation, as drafted, might have serious and significant unintended consequences. Specifically, as currently worded, Bill C-282 could potentially cause Canada to abrogate certain commitments previously made under existing trade agreements.

If the Minister cannot make any commitment with respect to the tariff rate quota status quo, it could undermine the review of the Canada-U.S.-Mexico Agreement (CUSMA), the ratification of the Canada-EU Comprehensive and Trade Agreement (CETA) and accessions to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Tariff rate quota allocation has been an issue or irritant central to the implementation of the CUSMA, CETA, and CPTPP. If the Minister is prevented from making any commitments with respect to tariff rate quota, it could prevent Canada from fulfilling its obligations in a number of scenarios including the exercise of trade dispute resolution mechanisms.

Having followed the debates on Bill C-282 closely, both in the Senate of Canada and the House of Commons, we do not believe it was the intent of Parliamentarians to undermine existing trade agreements. Rather, our understanding is Bill C-282 was introduced in an effort to constrain the exercise of the Minister’s power in future trade negotiations.

Whether any Minister of International Trade should be restricted in terms of the future exercise of their powers is, as a matter of principle, something we would question irrespective of the nature of the specific goods or services involved. Here, however, we submit the Minister must not be prevented from implementing existing agreements.

Canadian businesses of every size and in every sector require certainty, stability and predictability when it comes to the laws, regulations, and trade agreements. If Bill C-282 is passed without clarifying amendments, it would introduce a disruptive degree of uncertainty regarding the future implementation of the CUSMA, CETA, and CPTPP.

Yours very truly,