Canada needs to move quickly on new deals, study suggests
OTTAWA — With the federal budget only weeks away, a new study is urging the government to quickly ratify trade agreements with Europe and Pacific nations and refocus efforts to grow so-called knowledge-based services.
“Going forward, trade can be a powerful antidote to the effects of the oil price shock and other domestic vulnerabilities, such as high consumer debt, by supporting growth in incomes,” said Daniel Schwanen, in a study released Thursday by the C.D. Howe Institute. “Canada is a nation of traders and Canadians understand that more open trade improves their standards of living. With expanded market access come increased opportunities for growth, and also more competition.”
The study, titled “At the Global Crossroads: Canada’s Trade Priorities for 2016,” argues the government needs to sign off on the Comprehensive Economic and Trade Agreement with the European Union — scheduled to come into effect sometime next year — and the Trans-Pacific Partnership, an agreement between Canada and 11 other Pacific Rim countries.
“These two agreements represent the most important means available to expand Canadian business into foreign markets,” Schwanen wrote.
“Canada currently ranks 18th in the world in terms of the total size of the markets our businesses have access to through high- quality agreements, beyond the basic access provided by WTO membership,” he said.
“If the CETA and TPP came into force, Canada would move into fourth place, catching up with countries such as Australia that are currently well ahead of us in expanding their trade links.”
While Schwanen, the Torontobased think-tank’s vice-president responsible for research, points out that Canada’s “recent international performance helped cushion the blow to our economy from lower commodity prices and capital spending,” more needs to be done.
In particular, he is urging Prime Minister Justin Trudeau to use his official visit next week to Washington to push for more bilateral trade with the United States — already Canada’s largest trading partner.
Trudeau will table the Liberal government’s first budget on March 22, a document expected to show a return to spending deficits — perhaps as large as $30 billion for fiscal 2016-17 alone — aimed at buffering Canada against recessionary pressures that followed the collapse of global energy prices.
Along with tax breaks for middle-class Canadians, the budget will earmark billions of dollars to fund infrastructure projects.