Canada to see some ‘modest’ gains from trade deal with Europe: budget watchdog
Canada’s free-trade pact with Europe is poised to produce “modest’’ economic gains that work out to an average annual income boost of $220 per Canadian, the federal budget watchdog says in a new report.
The parliamentary budget officer released a study Tuesday that estimates the trade deal would have lifted Canada’s overall economic output in 2015 by 0.4 per cent or $7.9 billion, had it been implemented at the time.
Canadian exports of goods to the EU would have increased $4 billion, services would have been up $2.2 billion and investment would have grown by $3.1 billion, the analysis found.
But the report did put the overall projected improvement into perspective by noting that Canada boasts a $2-trillion economy.
“CETA will lead to some gains for Canada, but they will be modest,’’ the report said, referring to the deal’s full name: the Comprehensive Economic and Trade Agreement.
“The work outlined in this report projects a small, but positive, overall effect on Canada’s economy ... Starting from relatively low levels, exports of goods will increase by 9.3 per cent and services by 14 per cent.’’
The PBO based its analysis on 2015 because projecting into the future would have been more difficult. It was also the most recent year for which a complete set of economic data was available.
Sectors including transport and motor vehicles, some metals and wheat will likely grow more quickly, the budget office predicted.
On the other hand, it also said some Canadian sectors will likely see slower growth under the agreement, including textiles, some machinery and manufactured goods as well as some dairy and agricultural products.
Canada’s international trade minister was asked Tuesday whether Ottawa had done enough to compensate dairy farmers following the federal decision to open up part of the dairy sector to European producers.
The federal government has committed $350 million to help ease the negative effects of CETA on dairy farmers, but the industry association has argued it isn’t enough to offset the damage.
Francois-Philippe Champagne added that he recently met with Canadian milk and cheese producers. He said he reminded them of the new opportunities under CETA.
“We also obtained an opening in the European market, which is the biggest consumer market for food items,’’ said Champagne, who added he had yet to see the PBO report.
Minister of International Trade Francois-Philippe Champagne is shown in this file photo from last month asking a question during Question Period in the House of Commons in Ottawa.