Remarks by the Minister of Small Business, Export Promotion and International Trade at the Montreal Council on Foreign Relations on the importance of international trade for economic recovery
November 2, 2020 - Ottawa, Ontario
Check against delivery. This speech has been translated in accordance with the Government of Canada’s official languages policy and edited for posting and distribution in accordance with its communications policy.
Thank you Monique and Pierre, and good day everyone.
Thank you Monique for that kind introduction. And thank you for your remarkable work as Chair of the Industry Strategy Council. The expertise and advice, from you and the council will continue to be key to advancing Canada’s economic recovery.
It is my pleasure to speak to you all today at this online forum.
We only have a half hour together, so I am going to go straight to the heart of the matter.
That is the impact of the COVID-19 pandemic on global trade, and the role that international trade will play in Canada’s economic recovery.
The pandemic has clearly made trade harder.
As of this past month, 97 countries had responded to the pandemic by implementing more than 200 restrictions on cross-border trade.
Today, 159 of those restrictions remain in place.
For a trading country like Canada, restrictions hurt. International trade accounts for nearly two-thirds of our economy and supports some 3.3 million Canadian jobs, or one out of every six.
In Quebec, international exports of goods and services represent nearly 30% of Quebec's GDP and support a large number of well-paying jobs.
The resumption of trade is therefore essential both for the global economic recovery and for the renewed prosperity of Québec and Canada.
But I am not going to mince words. This is not going to be easy.
Let me lay out the broad strokes of how this government plans to renew both our trade and our role in the international community.
Canada was committed to trade long before COVID-19.
Because trade agreements work. Multilateral, rules-based trade, works.
Rules-based trade establishes stability and predictability in trade relationships.
It ensures balance and fairness.
It generates new opportunities for businesses. Most importantly, it helps our growth.
It supports and creates prosperity and well-paying jobs for Canadians.
We signed CETA in 2016 with the European Union. We brought into force the CPTPP with 10 Asia-Pacific partners in 2018. And who can forget that we negotiated a new NAFTA and it came into force earlier this year.
None of these negotiations were easy.
But the results are that Canada is the only G7 country holding a trade agreement with all other G7 partners.
Canadian companies have preferential access to 1.5 billion customers worldwide.
Canada helped build the rules-based international trade system, and we are always working to make it better and more equitable.
For example, Canada is a founding member of the Ottawa Group, which convenes 13 like-minded trading nations that are committed to modernizing the World Trade Organization.
In June, the Ottawa Group agreed to concrete actions to better adapt to far-reaching crises like the one we’re experiencing here in COVID-19, so that crucial goods such as food, medicine, and raw materials used in making PPE continue to flow into Canada and around the world.
I’ve been working with my partners from the G20, the WTO, APEC, and others, to ensure that supply chains stay open, businesses continue their work, and that goods and services flow, especially the essential ones. There is strength in numbers, and Canada builds coalitions.
Here at home, our government’s priority is to help homegrown businesses start up, scale up, access global markets, and succeed in a highly competitive global environment.
There are three pillars to our approach.
First, we accelerate our trade in knowledge-based and data-driven sectors.
Of course, we must continue to support our traditional trade sectors – like agriculture and agri-food from across the prairies and rural Canada, fisheries from our 3 coasts, natural resources and energy from Alberta, aluminum from the Saguenay, steel and auto making from Ontario, aerospace manufacturing from Quebec and forestry products from several regions.
Why do we do this? Because Canada is globally competitive in these sectors. Canada needs to retain and increase our share of tangible trade.
At the same time – long before the pandemic, economies around the world were shifting to the knowledge economy.
Montreal is a perfect example. It is the city with the highest concentration of technology jobs in Canada. It is a global hub for artificial intelligence, health technologies and other digital fields.
You have some great success stories here. Companies such as Lightspeed and Element AI have developed an enviable international footprint in a very short period of time.
Meanwhile, emerging sectors like agri-tech and clean tech are logical extensions of our traditional trade in food and natural resources. They represent enormous strategic, enormous opportunities and growth in a post-COVID global landscape. They will be at the forefront of a strong and sustainable economic recovery.
We are working to ensure the right supports are in place for Canadian businesses – including in the realm of digital trade and e-commerce – so they can turn innovative ideas into more made-in-Canada global success stories. Look at Shopify, for example – its market cap is now valued higher than a major Canadian bank. This is where the future is.
Next is the second pillar: the diversification of Canada’s trade.
COVID-19 cannot be used as an excuse to stop trading or to turn inward with protectionist policies. Instead, the solution to supply chain challenges lies in greater diversification.
We’ve all seen that over-reliance on a single supplier or customer is a critical risk for businesses and entire countries.
That’s why our ambitious export diversification strategy seeks to maximize opportunities for Canadians created by our existing trade agreements, while pursuing new ones.
As I mentioned, we’re working to diversify our trade sectors to include globally-relevant, technology-intensive industries: clean tech, health tech, advanced manufacturing, and digital sectors.
Diversifying trade is about more than just where we trade and what we trade.
It’s also about who trades. It’s about supporting and encouraging new exporters, whether they’re just starting out or have never exported before.
This will create more widespread opportunities across global markets. It will also bolster business resilience.
This brings me to the third pillar: inclusive trade.
Prime Minister Justin Trudeau argued years ago that the benefits of globalized trade have been too concentrated in the hands of a small proportion of society.
One way to address this challenge is to ensure that trade benefits everyone.
We want Canadian business owners of all sizes to think of themselves as traders from the outset of their ventures – while keeping their roots anchored in Canada.
This includes small business owners. It includes women entrepreneurs. It includes young entrepreneurs. It includes Indigenous entrepreneurs. That’s why we’ve made them integral to our most recent free trade agreements. So you see these provisions for preferential access in CETA, the CPTPP, and the new NAFTA.
And we plan on keeping them front-and-centre. Since 2011, frankly the percentage of Canadian small and medium-sized businesses who export goods and services has remained largely unchanged just under 12%.
So guess, what? We need to do better!
We need to give businesses the right tools and create the right conditions to help those numbers grow. Our economy and our country depends on it.
So, we’re going to take a Team Canada approach. The Team Canada approach has served us under this pandemic. And we are also going to take the Team Canada approach under the umbrella of Canada Trade. This is what I call our trade tool box, and all of these are in my mandate.
So, what some of the tools in this tool box? The Trade Commissioner Service network, Export Development Canada – EDC, the Business Development Bank of Canada, BDC, the Canadian Commercial Corporation, and Invest in Canada.
These organizations are all working together – along with our provincial and territorial partners – to help businesses and entrepreneurs succeed at home and abroad.
For all of us, the economic recovery from COVID-19 can’t come quickly enough.
But it will come.
We have the right global trade deals and rules in place to create the conditions for economic recovery and future success.
We have the right Team Canada tool box to help propel our businesses forward.
So when it comes to recovery, Canadian companies will be ready to take advantage of the new trade opportunities that emerge. And we’re going to work hard to make sure there’s lots of them.
Thank you for listening.
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