By Michael Darch
On 18 October, Canadian Prime Minister Stephen Harper and the European Commission President Jose Manual Borroso reached agreement in principle on the Comprehensive Economic Trade Agreement (CETA) between Canada and the European Union. The timing could not have been better for the Consider Canada City Alliance (CCCA), with an Italian delegation in Canada and a CCCA mission to Europe planned for late November.
The Italian Embassy in Canada in partnership with Confidustria, Italy’s largest business organization, and the Italian Trade Commission had brought over 40 companies and 70 representatives to Canada from 14-18 October to visit Montreal, Toronto, Calgary and Vancouver. This was the first Italian government mission to Canada in six years. They were seeking opportunities and partnerships in infrastructure, clean technology and oil and gas. Consider Canada was one of their Canadian partners, outlining the opportunities across Canada and in the four cities visited.
I was present in Montreal and encouraged by my conversations. I am very familiar with the Canadian advantage for foreign investment: world’s most stable financial system, highly skilled workforce, business friendly immigration laws, and political stability. But this was a business not a political mission. They wanted to see the money and the opportunity in Canada in the next decade is enormous. The Greater Halifax Partnership has identified over $115 billion in infrastructure projects in Atlantic Canada alone. Oil sands annual capital spending is $23 billion. The Federal government introduced a ten year $53 billion commitment to cost shared infrastructure projects in the 2013 Budget. This is expected to be matched by Provinces and Municipalities to create at least $150 billion in opportunity including roads, rapid transit, smart grids and bridge and sewer reconstruction. I did hear a statistic that Canada would have the fifth highest expenditure in the world on capital projects by 2020, a number that I am trying hard to confirm.
This is in stark contrast to Europe where projects have declined significantly since the global financial crisis. Opportunities exist in the developing countries, but political and financial risks are considerable. If European companies want to grow, welcome to Canada.
President Borroso’s comments on the CETA agreement reinforced this observation. "With this agreement we are also sending an important and positive signal around the world: to markets, to businesses, our trading partners and of course the millions of people across Europe, but also, I believe, across Canada, that we are looking for growth, for a renewed economic drive."
Canada is a trading nation, and has been throughout its history. According to World Bank figures, in 2012 exports accounted for 30% of the GDP in Canada, while the equivalent number for the United States was 14%. Foreign trade and investment allow Canadians to enjoy a standard and quality of life consistently rated among the best globally.
It is estimated that the agreement will raise Canadian GDP by $12 billion and create 80,000 new jobs annually. As Prime Minister Harper commented on the signing, “This trade agreement is an historic win for Canada. It represents thousands of new jobs for Canadians, and a half-billion new customers for Canadian businesses.”
The signing is also well timed for Consider Canada and the Invest in Canada bureau of the Department of Foreign Affairs, Trade and Development Canada who will partner for a three city European investment mission from 25-29 November. Investors in Madrid, Amsterdam and Milan will learn of the opportunities in Canada and CETA will make it easier for them to seize those opportunities and invest here.
Next steps, getting the agreement finalized and ratified by both parliaments and then for Canada, on to the Trans-Pacific Partnership.
Michael Darch is the founding President of the Consider Canada City Alliance.