Speech Article from
Address by Minister Freeland to the Toronto Region Board of Trade on Canada's trade outlook
December 5, 2016 - Toronto, 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 very much for that very warm introduction; and thank you very much everyone for being here. I’m really pleased that everyone is here to engage in this conversation about trade.
I’d like to start by recognizing the Mississaugas of the New Credit First Nation on whose traditional lands this meeting is taking place.
I’m happy to speak to the Toronto Region Board of Trade for the first time as Canada’s International Trade Minister. This event provides us with the opportunity to talk about the challenges and the opportunities that Canada is facing in a world in which the geopolitics of trade are in flux as I think they probably haven’t been since the Second World War, maybe since the 1930’s.
It’s a challenging moment for the global economy. There’s a lot of financial and economic uncertainty and we are facing very powerful protectionist and nativist trends in many parts of the world. We’re also facing a pretty tough economic outlook for the whole world.
The OECD’s 2016 economic outlook said that, a decade after the financial crisis, “the global economy remains in a low growth trap with weak investment, trade, productivity and wage growth and rising inequality in some countries.” It’s a complicated moment.
What I’m going to argue is that this complex international environment presents tremendous opportunities for Canada. I think we are the country in the world the best positioned to navigate this complex space.
So I would also like to talk about some of the steps our government is taking to make this a reality. One of my favourite quotes is from Sir Wilfrid Laurier. He once famously noted that the 19th century was the century of the United States. He went on to add that he thought we would be able to claim that it is Canada that shall fill the 20th century.
I think we did pretty well in the 20th century. I really believe we have an opportunity to make the 21st century Canada’s century. It’s not just me saying it.
My old friends and colleagues at the Economist believe it too.
I would like to begin by explaining why I believe it is now so essential to have a progressive trade agenda, why we need one so much. The reality is—and it is a reality that can easily be forgotten in a friendly, preaching to the-converted room like this one—we are living in a profoundly protectionist period; I think probably the most protectionist climate internationally in my lifetime. We are seeing waves of protectionism and populism everywhere, notably in Italy, which held its referendum yesterday.
It really is important for us to understand and appreciate the extent to which there is in so much of the world a very, very powerful wave of protectionism, of populism and to think hard about how we navigate a universe which is dominated by those political trends, and also what we can do to fight them here at home.
I believe that this protectionist wave is part of a broader resentment of what you might call the open society. It is part of a broader desire, as you know, to build walls, to close borders, to look inward, to be hostile toward immigrants, to oppose trade.
It’s all connected. This is a really, really dangerous political trend and we are seeing it, by the way, on both the populist right and the populist left. I think it’s important to understand that this protectionist wave is part of something bigger. Ultimately I think the sentiment can trace its roots back to the sense a lot of people have that 21st century technology driven global capitalism isn’t working for them. There are vast numbers of middle class workers in the western industrialized world who are saying that it’s not working for them.
I’m worried about my job. I’m worried about my pension. I’m worried about where my kids are going to work. Our starting point should be with the recognition that this type of anxiety is very real and is expressing itself in a broader hostility to what I like to call the open society. It’s expressing itself in hostility towards immigrants and towards immigration.
It’s expressing itself in hostility towards trade. David Rosenberg wrote an interesting piece in the National Post newspaper today pointing out that the root cause is neither immigration, nor trade. The root cause is in fact the technology revolution. I think there is a lot of truth to that. However, the public political reaction today contrasts with the reaction of the luddites who were perhaps the 19th century’s version of today’s anti-globalization protesters. The luddites went out and broke the mechanical looms.
There aren’t a lot of people today who want to go out into the public square and break their smart phones. We therefore have a public anxiety looking for targets, and very often what we’re finding is there are two easy targets. One target is immigrants, people who look different. The other target is trade agreements.
I am so proud of Canada right now because I believe that among all industrialized nations of the world, perhaps Canada is alone in bucking this trend. Canada is standing up for the open society; and we are saying that we’re open to immigrants and to immigration. We welcome them and we’re open to trade. We’re out there getting trade deals done at a time when it’s very, very hard to do so.
Our government believes strongly we’re following the right policy. Even more importantly, I believe that our country as a whole believes this as well. I think there is very widespread support for what we might call the open society in Canada.
Here is what the Economist had to say, and I quote directly: “but for now, the world owes Canada gratitude for reminding it of what many people are in danger of forgetting, that tolerance and openness are wellsprings of security and prosperity not threats to them.”
That to me is a crucial point and it’s what I’d like to talk about a bit more. It is really my personal conviction and the conviction of our government. I believe in the open society because that is aligned with my values. I think the open society is the right thing to have. It’s the kind of society in which I want to be raising my kids. But the open society also is a key to jobs and growth for middle class Canadians.
Maintaining the open society will allow us to create tremendous economic opportunities for Canadians, and for all the companies represented in this room today. I think it’s important before I start talking about those opportunities to discuss why it is that we are able today to maintain support in Canada for the open society.
We can’t be too smug. I don’t think support for the open society has anything to do with the air we breathe in Canada. It’s not in our uniquely pure drinking water. It’s something that we have built as a society. The foundation of our public support is Canada’s middle class, which is optimistic and confident. All of us here and in government are working very hard to keep that middle class feeling that it has an equitable share in our economy.
In many respects, I really believe that what makes it possible for me to go out in the world and aggressively advance a trade agenda at a time when other countries are pulling back is our middle class tax cut as well as the Canada child benefit ,which effectively means that we have a guaranteed annual income for the country’s poorest children.
It is also the fact that we have boosted the CPP. It’s the fact that we have raised student grants. It’s the fact we’re investing $180 billion over the next 11 years in infrastructure for jobs and growth. This is the Toronto Board of Trade. I realize I’m speaking to the converted when it comes to the importance of trade, but it’s very important that we understand the links between our domestic economic agenda of inclusive prosperity, and our unique position as an open society.
Canadians really are special people. We really are and I think we should be proud of that. We should understand that gives us a set of real economic opportunities today. We should keep on investing in those things that we are investing in today which are making this broad public support for the open society possible in Canada.
Let me talk now about how we can benefit economically. We can use the open society as a platform for jobs and growth. One thing this public support for the open society has allowed us to do is to finalize trade deals. First, there’s CETA, our trade agreement with the EU. We’re not there yet. It still needs to be ratified by the European Parliament and I’m counting on European diplomats to be sure that happens. I’m counting on you guys. We’re confident of ratification here in Canada.
There’s one more hurdle but we’re nearly there. Let’s reflect for a minute on how astonishing it is in 2016 the year of Brexit, the year the president-elect of the United States has done a YouTube video saying one of his first jobs is to tear up the TPP, that we are actually getting done probably the deepest trade agreement in our history with an economic grouping of half a billion people.
That’s pretty good. We have NAFTA, of course. We have bilateral FTA’s. We launched exploratory talks in September with China towards an FTA with that country. We are in talks with India for an FTA, and this summer in Laos, we publicly announced with ASEAN that we are going to work on a feasibility study towards an FTA with ASEAN. Of course, all of this now makes Canada the best platform in the G7 for access to the global economy.
Once CETA is finalized, we will have free-trade agreements covering 55 percent of the world’s economy. What a great opportunity that presents to Canadian businesses to go out there and trade your hearts out; and what a magnet that makes our country for foreign investment. We’re a small country but from Canada you have access to the overwhelming majority of the world’s consumers. That is a tremendously important thing.
I want to talk a bit about the significance of getting CETA done, what message that sends to the world, as well as what it took to get there. We were able in the end to close the deal. I want to emphasize CETA still needs to be ratified by the European Parliament but we were able to get all 28 European member states to agree to sign CETA for two reasons.
One, we were able to make the case, based on who we are, that Canada is a progressive country with progressive values which would make a good partner for the EU. By the way, our diversity was an essential element there.
I want to thank the province of Quebec; the ties between francophone Europe and francophone Canada have been absolutely essential to our CETA negotiations.
We’re very lucky. When we say our diversity is our strength, it’s really true and it’s true not only in what means in terms of enriching our lives here in Canada. It’s true in making us stronger when it comes to our engagement with the global economy.
The second reason we were able to get CETA done is because our government worked very hard to complete the agreement.
One of the things we really need to understand in the global economy in this time as I said at the beginning of slow growth, in this time where there are so many forces pushing back against globalization, this is a time when that opportunity I described is definitely there but it’s not going to fall in our laps.
Today, there are so many forces working against globalization that the only way we can expand trade and create more jobs for the middle class is to seize the opportunities presented to us. That applies to governments, as well as to everyone else. As your Trade Minister, I am out there every day and I want to assure you I have my foot on the gas pedal. However, the effort has to come from everyone, not just governments. It is a whole of country effort.
There’s a window open for us and we have to push really, really hard to get through it and pull people in. That’s the second thing I want to talk to you about. We believe that now is a tremendous moment to go out and pitch Canada as the best place in the world for foreign investment. We are out there doing it now. I’m going to talk to you in a moment about the tools and the platforms we are building to do it even better.
There are a few people here who, like me, are former employees of Thomson-Reuters. One of the things I am most proud of is the fact that Thomson-Reuters has now brought their headquarters Toronto, thanks to a strong collaborative effort between the province of Ontario, the federal government, and the City of Toronto. Crucially they will be making Toronto and the Toronto-Waterloo corridor the hub for all of Thomson-Reuters global technology development. That’s 400 technology jobs right away, 1,500 going forward.
This is what the company said at the announcement. They said Canada is not only our home. It is home to an emerging ecosystem of world-class technology talent. Our move here is all about talent and access to that talent. Another great moment that we had in terms of telling the story to foreign investors was with GE.
I was at the announcement, the ground breaking ceremony in August where GE announced the company would be building one of their factories in Welland Ontario. That’s 220 new high skilled well paid high end manufacturing jobs; and again, this is about Canada’s openness to the global economy that brought those jobs here.
Jeffrey Immelt, GE’s Chairman of the Board and Chief Executive Officer, said in a speech a couple of months before that opening, that, and I quote: “countries with effective export banks like Canada will be more attractive for investment.” These are things that are good for Canadians and it’s our hard work and our tools which are getting the job done.
As someone who comes from the private sector, I also have a good understanding that if you want to get things done, then you need to focus on relationships and on concierge service to your top clients. The Government of Canada really does regard investors who we are talking to about coming to our country as our clients. They need concierge service. However, I’m sad to say as things stand, we’re not that well equipped to provide that concierge service.
Our share of global foreign direct investment declined from 2.4 percent in 2004 to 1.7 percent in 2014. That’s a big fall. That’s excluding natural resources. This decline should worry us. Other countries understand how valuable it is to have other people spend their money in their country and create jobs. They are out there working it. We have a British diplomat here. You guys are doing a pretty good job. You’re spending $483 million a year on it.
New Zealand spends $171 million, Australia $400 million a year on export and investment promotion. Canada spends just $170 million right now so we’re spending the same amount as New Zealand. I love New Zealand but we’re a lot bigger. I see the British nodding their heads. Watch out. We’re going to be out there fighting with you guys. We’re going to have more resources.
The Australians spend more than double what we spend, and again that’s for a smaller country. What I am announcing today is that our government is going to invest $218 million to create a new agency, the Invest in Canada Hub, which will be devoted to attracting investment to Canada. This is Canada’s marketing agency. It’s our concierge service for investors. Now we are going to have the resources to go out and talk about Canada’s fantastic story.
It’s great. I’m very excited about it. I’m tremendously excited about this. It’s a big deal for our country. This is going to translate into jobs and growth. The Invest in Canada Hub will be operational by this time next year. It is going to be headed by a CEO, with a team experienced in private sector sales and international investment.
In addition to marketing, account management and other staff directly employed at the Invest in Canada Hub, we’re going to be beefing up our trade commissioner team working directly on FDI.
One thing that we have learned in government is that what companies need is a seamless one window concierge service, something that can give them access to the whole of government. They don’t need to just talk to me and my officials. They need to know what Immigration is doing.
They need to know what Navdeep Bains in Innovation, Science and Economic Development is doing. They need to know what Jim Carr in Natural Resources is doing. We didn’t have a place you could go that would be your one window shop. The new Invest in Canada Hub will be that place. It’s going to be a national vision. There are so many people in this room who are working at the reginal level, at the city level, at the provincial level on attracting investment. The new Invest in Canada Hub will allow our provinces and territories, our municipal organizations to really work together to present that one window into the country. All of us together will able to do a better job of marketing Canada. I used to be a journalist so I believe that marketing is so important. I think sometimes as Canadians we can feel like we have a pretty good story and we don’t want to brag. There’s a lot of competition out there. It’s time for us with modesty, but also with real pride, to go out and say why Canada is the best place in the world to invest right now.
We are going to work really hard to deliver after care for our trade agreements. It’s another area where sometimes we haven’t done as good a job as we could. Going out and doing the deal is tremendously important. But as all of you in business know, it’s how you execute after you get that deal that matters. This Invest in Canada Hub is going to be a huge part of our effort to say we got that trade deal done. The Invest in Canada Hub will promote diversity and gender -- including gender.
Our government believes in building bridges, not walls. I think that is a tremendously powerful message for the world. It’s a tremendously powerful message for investors. I am committed, as is the whole of our government, to going out there and attracting new investments to Canada. I’m calling on everyone today to come help me do that. Thank you.
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