This project is funded by opportunities for the European ... · Exporters of EU Goods to Canada ......

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Market access

opportunities for

EU business in Canada

in the context of CETA

Expert Report

May 2018

MARKET ACCESS

SUPPORT FOR EU

BUSINESS IN CANADA

UNDER CETA

This project is funded by the European Union

Market Access Support for EU Business in Canada under CETA

(2016/EuropeAid/DH/SER/137-941)

Market access opportunities for EU

business in Canada in the context of CETA

Expert Report

May 2018

Prepared by: Borden Ladner Gervais LLP and Tereposky & DeRose LLP

This project is funded by the European Union

This project is financed by the European Union and executed by DEVELOPMENT Solutions Europe Ltd. & Borden Ladner Gervais LLP.

Any views expressed are those of the consultants and do not represent an official view of the European Union.

2016/EuropeAid/DH/SER/137-941

Market Access Study Report 12 March 2018

ii

TABLE OF CONTENTS

Market Access Support for EU Business in Canada under CETA .................................................. i

Table of Contents ............................................................................................................................ ii

List of Tables .................................................................................................................................. 1

Abbreviations .................................................................................................................................. 2

Report Layout ................................................................................................................................. 2

I. Summary, Conclusions, and Recommendations ..................................................................... 3

A. Identifying and Taking Advantage of Opportunities throughout Canada .......................... 4

Overview of the Canadian economy ............................................................................................ 5

1. Trade in Goods ................................................................................................................ 8

2. Government Procurement ............................................................................................. 12

3. Trade in Services........................................................................................................... 14

4. Temporary Entry and Stay of EU Individuals in Canada for Business Purposes ......... 16

5. Investment ..................................................................................................................... 17

B. Identifying and Taking Advantage of Opportunities in each Province and Territory ...... 18

C. Conclusions and Recommendations ................................................................................. 22

1. Exporters of EU Goods to Canada ................................................................................ 24

2. EU Enterprises Participating in Canadian Government Procurement Opportunities ... 25

3. EU Investors.................................................................................................................. 26

II. Trade in Goods ...................................................................................................................... 27



iii

A. Overview of Analysis ....................................................................................................... 28

B. Opportunities relating to Significant Reductions in Customs Duties ............................... 30

1. Overview of Opportunities ........................................................................................... 30

2. Product Category Studies .............................................................................................. 31

3. Reduced Customs Duty Opportunities by HS Section and Chapter ............................. 56

C. Opportunities and Challenges relating to the Cheese TRQs ............................................. 58

D. Taking Advantage of the Preferential Tariff Treatment Opportunities ............................ 61

1. Post-Entry Customs Enforcement ................................................................................. 61

2. Tariff Classification of Goods ...................................................................................... 62

5. Non-Resident Importer of Record ................................................................................ 65

6. Goods and Services Tax (GST) – Canada’s Value-Added Tax (VAT) ........................ 66

7. Access to the Cheese TRQs and the Origin Quotas ...................................................... 67

8. Regulatory Requirements, High Duties, and Other Considerations ............................. 68

III. Government Procurement ................................................................................................. 68

1. Comparison of Market Access Opportunities under the CETA and the CFTA ........... 69

2. The Impact of Canada’s Other Free Trade Agreements on CETA Procurement ......... 71

A. The Challenge of Quantifying Canadian Government Procurement Opportunities ......... 72

1. Statistics Collected on the Canadian Agreement on Internal Trade (AIT) ................... 73

2. OECD Procurement Data Calculation Methodology .................................................... 74

3. Municipal Government Procurement represents Significant Spending ........................ 77

B. The Current Challenge: Identifying Government Procurement Opportunities................. 78

C. Assessment of Government Procurement Opportunities .................................................. 82



iv

IV. Trade in Services............................................................................................................... 95

A. Cross-Border Trade in Services ........................................................................................ 95

B. Financial Services ............................................................................................................. 97

C. International Maritime Transport Services ..................................................................... 102

D. Telecommunications Services ........................................................................................ 106

V. Temporary Entry and Stay of EU Individuals for Business Purposes ................................ 118

A. Categories of Workers Covered under CETA Chapter 10 .............................................. 119

1. Short-Term Business Visitors – no work permit required; 90 days of entry and stay

within any 6-month period .................................................................................................. 120

2. Key Personnel ............................................................................................................. 122

3. Contractual Services Suppliers and Independent Professionals – LMIA-exempt work

permit required; entry and stay permitted for up to 12 months .......................................... 124

4. Canadian Reservations Applicable to Contractual Services Suppliers and Independent

Professionals ....................................................................................................................... 129

VI. Investment ....................................................................................................................... 131

Appendix 8 .................................................................................................................................. 132

Appendix 9 .................................................................................................................................. 155

Appendix 10 ................................................................................................................................ 171



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LIST OF TABLES

Table 1 Gross domestic product, expenditure-based, by province and territory .......................... 19

Table 2 Value of total imports into Canada from all countries, by province and territory ........... 20

Table 3 Value of total imports into Canada from the European Union, by province and territory

....................................................................................................................................................... 21

Table 4 Preparations of meat, fish, or crustaceans, molluscs or other aquatic invertebrates (HS

Chapter 16).................................................................................................................................... 33

Table 5 Preparations of cereals, flour, starch or milk, and pastry cooks’ products ...................... 33

Table 6 Miscellaneous edible preparations (Chapter 21) ............................................................. 34

Table 7 Processed agricultural products for which the CETA lowers tariffs for EU imports to rates

no less favourable than imports from the United States and Mexico ........................................... 35

Table 8 Processed agricultural products for which the CETA lowers tariffs for EU exporters to

rates more favourable than those applied to imports from Mexico .............................................. 37

Table 9 Imports of apparel and clothing goods into Canada (2015-2016) ................................... 39

Table 10 Imports of knitted sweaters, sweatshirts and waist-coats into Canada – HS Tariff Heading

61.10 (2016) .................................................................................................................................. 40

Table 11 Detail of imports from the European Union .................................................................. 41

Table 12 Preferential Tariff Opportunities for EU Producers of Apparel and Clothing Goods ... 42

Table 13 Clothing and Apparel products for which the CETA lowers tariffs for EU imports to rates

no less favourable than imports from the United States and Mexico ........................................... 45

Table 14 Imports into Canada of passenger motor cars powered by spark-ignition internal

combustion reciprocating engines with cylinder capacities 1,501-3,000 cc – HS Tariff Subheading

8703.23 (2016) .............................................................................................................................. 50



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Table 15 Imports into Canada of motor vehicles powered by internal combustion engines with

cylinder capacities 1,001-3,000 cc – HS Tariff Subheadings 8703.22, 23, 31, and 32 (2016) .... 52

Table 16 Progressive elimination of customs duties on Imports into Canada of EU motor vehicles

under HS Tariff Subheadings 8703.22, 23, 31, and 32 (2016) ..................................................... 52

Table 17 Imports into Canada of motor vehicles parts, components, and accessories – HS Tariff

Subheading 8707.10 and certain subheadings under Heading 87.08 (2016) ................................ 54

Table 18 Canada's CETA TRQ Committments ............................................................................ 58

Table 19 Canada's industrial cheese TRQ committments ............................................................ 59

Table 20 Imports into Canada of cheese and curd – HS Tariff Heading 04.06 (2016) ................ 59

Table 21 General government procurement estimates based on OECD national accounts data .. 75

Table 22 Frequency of sub-central government procurement opportunities posted on major online

portals (13 October 2017) ............................................................................................................. 79

Table 23 Government Procurement covered by the CETA .......................................................... 85

Table 24 Procurement value thresholds under the CETA, by entity and type of procurement .... 86

Table 25 Goods for Canadian government procurement covered by the CETA .......................... 90

Table 26 Canadian Sub-central level exceptions on procurement of goods ................................. 91

Table 27 Canadian government procurement of services covered by the CETA ......................... 93

Table 28 Purposes and activities for which short-term business visitors may temporarily enter and

stay in Canada (Article 10.9 and Annex 10-D)........................................................................... 120

Table 29 Goods of Section IV – Prepared Foodstuffs; Beverages, Spirits, and Vinegar, Tobacco

and Manufactured Tobacco Substitutes. ..................................................................................... 132

Table 30 Goods of Section IV – Prepared Foodstuffs; Beverages, Spirits, and Vinegar, Tobacco

and Manufactured Tobacco Substitutes. ..................................................................................... 134

Table 31 Goods of Section VI – Products of the Chemical or Allied Industries ........................ 134

Table 32 Goods of Section VII – Plastics and Articles Thereof; Rubber and Articles Thereof . 136



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Table 33 Goods of Section VIII – Raw Hides and Skins, Leather, Furskins and Articles Thereof;

Saddlery and Harness; Travel Goods, Handbags and Similar Containers; Articles of Animal Gut

..................................................................................................................................................... 137

Table 34 Goods of Section IX – Wood and Articles of Wood; Wood Charcoal; Cork and Articles

of Cork; Manufactures of Straw, of Esparto or of Other Plaiting Materials; Basketware and

Wickerwork................................................................................................................................. 137

Table 35 Goods of Section XI – Textiles and Textile Articles ................................................... 138

Table 36 Goods of Section XII – Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks,

Seat-sticks, Whips, Riding-crops and Parts Thereof; Prepared Feathers and Articles Made

Therewith; Artificial Flowers; Articles of Human Hair ............................................................. 142

Table 37 Goods of Section XIII – Articles of Stone, Plaster, Cement, Asbestos, Mica or Similar

Materials; Ceramic Products; Glass and Glassware ................................................................... 143

Table 38 Goods of Section XV – Base Metals and Articles of Base Metal ............................... 144

Table 39 Goods of Section XVI – Machinery and Mechanical Appliances; Electrical Equipment;

Parts Thereof; Sound Recorders and Reproducers, Television Image and Sound Recorders and

Reproducers, and Parts and Accessories of Such Articles .......................................................... 146

Table 40 Goods of Section XVII – Vehicles, Aircraft, Vessels and Associated Transport

Equipment ................................................................................................................................... 147

Table 41 Goods of Section XVIII – Optical, Photographic, Cinematographic, Measuring,

Checking, Precision, Medical or Surgical Instruments and Apparatus; Clocks and Watches;

Musical Instruments; Parts and Accessories Thereof ................................................................. 148

Table 42 Goods of Section XIX – Arms and Ammunition; Parts and Accessories Thereof ...... 149

Table 43 Goods of Section XX – Miscellaneous Manufactured Articles ................................... 150

Table 44 List of Canadian government entities covered under the CETA ................................. 155

Table 45 Notable areas of improved market access for EU SMEs under the CETA ................. 171



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ABBREVIATIONS

ACSS Automated Clearing

Settlement System

AIT Agreement on Internal Trade

CBSA Canada Border Services

Agency

CCMR Capital Markets Regulator

CETA Comprehensive Economic

and Trade Agreement

CFTA Canadian Free Trade

Agreement

CITT Canadian International Trade

Tribunal Act

EDI Electronic Data Interchange

EU European Union

GATS General Agreement on Trade

and Services

GDP Gross Domestic Product

GPA Agreement on Government

Procurement

GST Goods and Services Tax

HS Harmonized System

IMTS International Maritime

Transport Services

IRCC Immigration, Refugees and

Citizenship Canada

ITC Input Tax Credits

LMIA Labour Market Impact

Assessment

LVTS Large Value Transfer System

MFN Most-favoured-nation

MRAs Mutual Recognition

Agreements

NAFTA North American Free Trade

Agreement

NOC National Occupational

Classification

NRI Non Resident Importer

OECD Organisation for Economic

Cooperation and

Development

OEM Original Equipment

Manufacturer

PPS Prominent Payment System

PSD2 Payment Services Directive

SDR Special Drawing Rights

SIMA Special Import Measures Act

SMEs Small and Medium-sized

Enterprises

SNA System of National Accounts

SOE Settlement Optimization

Engine

SPA Single Point of Access

TRQs Tariff Rate Quotas

US United States (of America)

WTO World Trade Organisation



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REPORT LAYOUT

This report identifies features of the European Union-Canada Comprehensive Economic and Trade

Agreement (CETA) that create new and enhanced Canadian market access opportunities for

European Union (EU) businesses, including small and medium-sized enterprises (SMEs). These

opportunities relate primarily to the export of EU goods and services to Canada, but they also have

implications for investment opportunities in Canada. The full scope of these opportunities can only

be understood when assessed together with the steps necessary to take advantage of them.

Accordingly, this report also outlines the key considerations and actions that must be undertaken

by EU businesses in order to take advantage of the new market access opportunities.

First, the report provides an overview of the concrete opportunities arising with respect to trade in

goods further to Canada’s tariff elimination and quota commitments under the CETA. Second, the

report outlines the opportunities now available in Canadian government procurement, particularly

at the sub-federal levels of government, further to Canada’s guaranteed market access and non-

discrimination commitments. In addition, the report considers how the CETA affects opportunities

arising with respect to trade in services, including with respect to the provisions for the temporary

entry and stay of EU individuals for business purposes (often referred to as the “labour mobility”

provisions). In turn, these considerations inform an assessment of the implications for potential

new investment opportunities in Canada.

The objective is to provide practical and useful information to assist EU enterprises — including

SMEs in particular — in taking the first steps to identify and take advantage of potential new

business opportunities in Canadian markets under the CETA. It falls to each enterprise to assess

the relevance of potential opportunities to its own specific circumstances and business interests.

The backdrop to the new CETA opportunities is the well-established status quo under the World

Trade Organization (WTO) agreements and the body of other treaties ratified by the European

Union and Canada, which many CETA provisions expressly affirm, incorporate by reference,

modernize, formalize, or otherwise reinforce without necessarily creating new rights, obligations,

or prospects. Thus, while the CETA creates important new opportunities and provides some



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enhancements for existing opportunities (e.g., through the provisions for the temporary entry and

stay of individuals for business purposes), it more generally affirms the existing EU-Canada

market access characteristics, which otherwise remain relatively unchanged, as the guaranteed

minimum baseline for trade and investment going forward. The CETA also establishes a formal

bilateral framework for ongoing cooperation, dialogue, and negotiations that are intended to build

upon this foundation to further liberalize trade and investment between the European Union and

Canada in the future.

Finally, notwithstanding protectionist and anti-globalization trends elsewhere in the current global

environment, the European Union, the Government of Canada, and Canada’s provincial and

territorial governments all show strong commitments to the CETA and its success. This support

ensures predictability in the flow of EU-Canada trade and investment under the CETA, providing

certainty to EU traders, service suppliers, and investors, and further enhancing their market access

opportunities.

I. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

The CETA creates direct opportunities that are immediately apparent in relation to trade in goods

and services, including in the context of government procurement. It also enhances and facilitates

opportunities for direct investment in Canada. Trade in goods and/or services must be considered

together with investment when assessing opportunities under the CETA. This is because an

opportunity to trade in goods is often associated with an opportunity to trade in services, and vice

versa. Further, direct investment in a Canadian infrastructure may provide the best way for an EU

enterprise to leverage the maximum benefits of the preferential market access provided under the

CETA. An example is the supply of a good that requires installation and set-up services and/or

maintenance and repair services. The establishment of supply chains for the good and its associated

services can lead to investment in Canada based on those supply chains. In addition, the CETA

provisions for the temporary entry and stay of individuals for business purposes can support the

supply of such services, the establishment of such an investment, or both. Thus, the predictability

and certainty created by the CETA creates an environment that fosters further investment, both



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within and beyond the existing EU-Canada trade flows and supply chains, and synergies in the

supply of goods and services.

The market access opportunities that are generated or enhanced by the CETA are available to

small, medium, and large EU enterprises. Large enterprises generally have sophisticated ‘in-house’

resources to identify and take advantage of these opportunities, while SMEs have relatively little

time, personnel, or money available to fully understand how to access the opportunities.

Accordingly, this report goes beyond identifying opportunities for SMEs and addresses key

considerations necessary to take advantage of them. Moreover, as explained below, elements of

the CETA that do not themselves create direct opportunities (e.g., the provisions for the temporary

entry and stay of individuals for business purposes) may assist SMEs in taking advantage of the

market access opportunities created or affirmed under other CETA provisions.

This report does not examine the macro-economic impact of the CETA. Such an analysis has been

undertaken in other studies. Rather, this report focuses on identifying opportunities and

corresponding challenges relating to trade in goods and services under the CETA, including in the

context of government procurement, for the benefit of EU exporters and investors. As discussed

below, there is a multitude of opportunities and they are very significant when viewed on an

opportunity-by-opportunity basis. SMEs need to be aware of the specific opportunities that relate

to their business interests, and the considerations or challenges associated with taking advantage

of those opportunities.

A. Identifying and Taking Advantage of Opportunities throughout Canada

The opportunities created or enhanced by the CETA and identified in this report extend throughout

Canada to all of the provinces and territories. As discussed below, a rough approximation of the

relative overall magnitudes of opportunities in each the provinces and territories can be

extrapolated from their respective proportions of Canada’s gross domestic product (GDP).

For some market access opportunities, Canada’s geography may be relevant to assessing

competitiveness and profitability. For example, EU goods shipped across the Atlantic Ocean,

unloaded at a port in eastern Canada, and then distributed by rail or road transport throughout



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Canada (including to the westernmost provinces and territories) will incur a range of different

transportation costs depending on their final destination. While EU goods may be highly

competitive in the large markets of Ontario and Quebec, which are relatively close to the major

ports on the St. Lawrence River where trans-Atlantic cargos are ordinarily delivered, the same

goods may be less competitive in the western provinces of Alberta and British Columbia. The

structure and circumstances of an EU exporter’s business model in Canada, if any, will determine

whether and to what extent this factor is relevant. For other kinds of opportunities — e.g., cross-

border trade in services and intangible property — Canada’s geography will not be a relevant

factor.

Also, certain opportunities relating to cross-border trade in services, sub-central government

procurement, and investment may differ among the provinces and territories to the extent that there

are differences in the specific exclusions and reservations secured by each provincial and territorial

government, respectively, in the negotiated outcomes of the CETA. Again, whether or to what

extent these exclusions and reservations are relevant to the business interests of an EU enterprise

must be assessed on a case-by-case basis, taking into account all of the relevant circumstances.

Overview of the Canadian economy

Since 2010, the Canadian economy has been recovering well from the financial crisis and its real

GDP growth has averaged 2.6% annually until 2017. For 2018 and 2019, the projected annual

GDP growth is 2.1% and 1.9%, respectively. 1 The slower GDP growth is expected due to the

contraction in resources sector; on the other hand, the economic activity in other sectors is expected

to strengthen.2 The Canadian economy, rich in natural resources and mineral wealth, is diversified

with services and manufacturing sectors, which are significant contributors in the economy.3

1 OECD (2018), Real GDP forecast (indicator). doi: 10.1787/1f84150b-en (Accessed on 06 March 2018)

2 OECD Economic Surveys: Canada© OECD 2016

3 WTO Trade Policy Review 2015: Canada, Report by the Government



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According to UN data, agriculture accounts for 1.8% of GDP, while services comprises of 69.6%

and industry 28.6%.

Canada is the world’s leading nation in mining, extracting more than 60 types of minerals and

metals. Specifically, the country is the largest producer of potash and ranks among the top-five

producers of aluminium, nickel, cobalt and platinum metals. Moreover, the country accounts for

over 4% of global production of crude oil and natural gas, which positions Canada as the fifth-

largest producer in the world for both products. All-natural resource sectors contribute

significantly to Canada’s national and provincial economies, supporting close to 1.8 million jobs

in Canada.4

The national, provincial and territorial governments work closely together on shared priorities in

the areas of energy efficiency, oil and gas development, reliable electricity and technological

innovation in the primary sector of Canada’s economy.5 The Canadian Energy Strategy, finalized

in 2015, presents the main areas of focus in the energy sector: sustainability and conservation,

technology and innovation and delivering energy to people. Addressing climate change, social and

environmental responsibility, the Strategy aims to promote energy efficiency in the economy’s

transition to a lower carbon economy. 6 Additionally, the strategy for the extractive sector,

developed in 2014, projects that mining and energy sectors will remain the engine of Canada’s

economy.7

As one of the largest consumers of electricity in the world, Canada is committed to increase the

use of renewable energy. The relevant policies are developed by the federal government, which

focuses on tax incentive provisions, funding programs and creation of favourable regulatory

environment. A number of initiatives are implemented to support innovation and R&D in

renewable energy. Foreign investors in wind energy should seek the financial support from

4 Innovating for a Strong Canadian Energy and Mining Sector, Energy and Mines Ministers’ Conference, 2015 5 WTO Trade Policy Review2015: Canada, Report by the Secretariat 6 Canadian Energy Strategy, Canada’s Premiers 2015, Council of the Federation Secretariat 7 WTO Trade Policy Review: Canada, Report by the Government 2015



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organizations such as the Wind Energy Institute of Canada, the TechnoCentre éolien, the Wind

Engineering, Energy and Environment Institute and CanmetENERGY. As for solar energy

companies, the National Solar Test Facility, Solar Simulator-Environmental Chamber and ReMAP

(Refined Manufacturing Acceleration Process Network) are the leading organizations which

support businesses by developing solar energy solutions, testing new technologies and also support

research in this sector.8

The government of Canada has recently increased funding for the ICT sector, one of the priority

sectors in Canada. The funding is provided through federal granting councils as well as the

Industrial Research Assistance Program, the Institute for Quantum Computing, the

Microelectronics Innovation Centre, Canadian Network for the Advancement of Research,

Industry and Education and the Canadian Digital Media Network. The programs developed by

these institutions provide opportunities for foreign investors to start their innovative R&D

operations in Canada. Additionally, Canada is one of the most profitable markets for

communication firms with a highly educated ICT workforce, well-developed communications

infrastructure and a competitive cost environment.9

The Canadian market is also an attractive destination for investors in the R&D intensive

biotechnology and pharmaceuticals sector. With its well-established health-research networks and

biopharmaceutical clusters in several provinces, Canada provides an advantageous business

environment for pharmaceutical firms. As mentioned previously, the National Research and

Assistance Program provides direct assistance to SMEs aiming to establish their innovative

operations in Canada.10

8 Government of Canada “Invest in Canada “2017, available at www.international.gc.ca/investors-

investisseurs/assets/pdfs/download/vp-renewable_energy.pdf 9Government of Canada “Invest in Canada “2017, available at www.international.gc.ca/investors-

investisseurs/assets/pdfs/download/vp-data_and_communications.pdf 10 Government of Canada “Invest in Canada “2017 available at www.international.gc.ca/investors-

investisseurs/assets/pdfs/download/vp-biopharmaceuticals.pdf



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The strong demand for supplies and equipment in Canada‘s agricultural, mining, oil, gas,

construction and other sectors fosters growth in the machinery and equipment industries. Over the

years, Canada has developed a strong competitive advantage in the industry, being one of the top

machinery producers in the world. Manufacturers of the agricultural, automotive and aerospace

machinery and equipment benefit from a duty-free regime on all industrial manufacturing inputs.

Additionally, the Canadian presence ensures tariff free market access to the large North American

market as provided by the NAFTA. This also enables foreign investors to quickly achieve

economies of scale by joining the integrated Canadian and US value chains in the machinery

sector. 11

1. Trade in Goods

The opportunities for trade in goods

are reflected in: (i) the preferential

tariff treatment that reduces or

eliminates the customs duties on

imports into Canada of originating

EU goods; (ii) the tariff rate quota

(TRQ) for cheese imports into

Canada; and (iii) the CETA rules of

origin for certain goods. The third

source of opportunities — the CETA

rules of origin — is less obvious, but it can be an important factor for certain goods. In many cases,

the CETA preferential tariff treatment reduces the applicable rates of customs duty to levels that

are equivalent to those agreed in Canada’s other regional free trade agreements, such as the North

American Free Trade Agreement (NAFTA). In circumstances where the preferential tariff

11 Government of Canada “Invest in Canada “2017 available at http://international.gc.ca/investors-

investisseurs/assets/pdfs/download/vp-machinery_and_equipment.pdf



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treatment under the CETA matches that in other regional free trade agreements, the rules of origin

under the CETA are more liberal (i.e., easier to meet). This confers a competitive advantage on

EU exporters because their goods can compete in the Canadian market at lower production costs

than like goods imported from other countries. Whether a competitive advantage exists, and what

the magnitude of that advantage is, will depend on the particular circumstances of the goods at

issue, the other sources of imported goods that compete with EU goods in the Canadian market,

and the comparative rules of origin that apply to such goods. Such an analysis must be undertaken

on a case-by-case basis. To illustrate the analytical approach through which EU exporters may

assess whether the CETA rules of origin provide an additional competitive opportunity for their

goods, an example is provided in the context of clothing and apparel products.

On 21 September 2017, the application of the CETA resulted in the elimination of the customs

duties on almost all EU products to which customs duties had previously applied. In Canada’s

Harmonized System (HS) tariff schedule,12 customs duty at a rate of zero percent is designated by

the term “free”, denoting that a good may be imported on a duty-free basis. Under the CETA

preferential tariff treatment, customs duties at rates of 10 to 25 percent ad valorem were reduced

to zero percent for EU-origin goods classified under approximately 1,000 subheadings and tariff

items in Canada’s HS tariff schedule13 (i.e., a reduction of 10 to 25 percentage points). For EU

goods classified under approximately 2,000 other tariff subheadings or tariff items, customs duties

12Schedule to the Customs Tariff, S.C. 1997, c. 36, available online at http://www.cbsa-asfc.gc.ca/trade-

commerce/tariff-tarif/menu-eng.html.

13 The international Harmonized Commodity Description and Coding System, typically referred to as the

Harmonized System (HS), is used to classify products for trading purposes in a consistent manner. It organizes goods

into Chapters (2 digits), headings (4 digits), and subheadings (6 digits). Each country may further organize the goods

within a subheading into tariff items (8 digits) and tariff classifications (10 digits). Canada follows the HS in its

customs tariff schedule, available online at http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/menu-eng.html. It

should be noted that the eliminations of customs duties at the 6-digit subheading level will extend to all of the goods

classified within that subheading, i.e., at the 8-digit tariff item and the 10-digit tariff classification levels, respectively.

Thus, the elimination of customs duties at rates of 10-25 percent for 1,000 tariff subheadings or tariff items does not

mean that this change has affected 1,000 different products. Rather, the number of different products affected in this

range will be greater, as each tariff subheading and tariff item may encompass a number of different products. This is

also true for the elimination of customs duties at rates of 5-9.5 percent for 2,000 other tariff subheadings or tariff

items, and 1-4.5 percent for 600 other tariff subheadings and tariff items.



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at rates of 5 to 9.5 percent were reduced to “free” (i.e., a reduction of 5 to 9.5 percentage points).

For about 600 other tariff subheadings and items, customs duties at rates of 1 to 4.5 percent were

reduced to “free” (i.e., a reduction of 1 to 4.5 percentage points).

In current competitive circumstances, a customs duty reduction of between 5 and 25 percentage

points amounts to a substantial competitive advantage for imported goods. This preferential tariff

treatment under the CETA therefore provides a competitive opportunity for EU-origin goods. For

certain products, a reduction of between 1 and 4.5 percentage points could also be meaningful,

depending on the market circumstances.

Appendix 1 to this report is a spreadsheet that presents a detailed analysis, on a line-by-line basis,

of the CETA customs duty reductions in Canada’s HS tariff schedule. Section II.B of the report,

below, provides a summary of this data, organized into HS Chapters, headings, and subheadings,

for ease of reference. Since it is not practical to review the opportunities associated with every

single tariff item for which customs duties have been eliminated, the report presents studies of

three key categories of goods: (i) prepared and processed food products; (ii) apparel and clothing

goods; and (iii) automobiles (passenger cars) and automotive components. These studies illustrate

the opportunities available to EU exporters and serve as guidance for company-specific studies of

the opportunities generated by the CETA preferential tariff treatment of EU-origin goods.

The report also describes the opportunities available to EU exporters of cheese products for direct

consumption and industrial cheese products under the CETA TRQs (including the reallocation of

800 metric tonnes of Canada’s WTO TRQ to the European Union). The value of these

opportunities is substantial. Accessing the opportunities is complicated, however, by the fact that

access is determined by Canadian permit holders, who must have a history of cheese production

in Canada or participation in the Canadian cheese market. EU exporters, therefore, must seek out

supply arrangements with these permit holders in order to benefit from the TRQs.

EU exporters seeking to take advantage of the opportunities arising from the CETA customs duty

reductions or TRQs must be aware of requirements and issues relating to post-entry customs

enforcement, tariff classification, customs valuation, and the rules of origin. These are the



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administrative matters in which mistakes are most common. The correct application of the relevant

rules of origin can constitute a particularly high-risk issue, and therefore great care must be taken

to ensure compliance. There are ways for EU businesses to reduce the costs of exporting goods to

Canada while maintaining control over the importation of the goods. This can be accomplished,

for example, by acting not only as the exporter in the European Union, but also as the “non-resident

importer of record” in Canada. However, care must be taken to ensure that such transactions are

structured in a manner that permits a refund of the Goods and Services Tax (GST) (i.e., Canada’s

value-added tax), which is levied a rate of 5 percent ad valorem when the goods are imported into

Canada. If the GST payment is not recovered through a refund, the goods will be less competitive

in Canada by that amount.

Canadian regulatory requirements relating to trade in goods are similar to those in the European

Union. The importation of certain goods is prohibited (e.g., illegal goods, dangerous goods,

counterfeit goods that infringe trademarks), restricted or controlled (e.g., firearms, munitions,

certain chemicals), regulated (e.g., animals, plants, food, and pharmaceutical drugs), and subject

to technical regulations (e.g., food labelling requirements, electrical standards, building codes,

etc.). EU exporters should identify the relevant regulatory requirements in advance and determine

what is required to satisfy them.

EU exporters must confirm that the prohibitively high rates of customs duties that continue to

apply to about 130 tariff items relating to “over-access commitment” quantities of supply-managed

products in Canada (i.e., dairy products, poultry and poultry products, and eggs) will not be applied

to their goods. Further, certain undenatured ethyl alcohol is subject to significant excise duties

upon importation, and the importation of used motor vehicles is restricted. In addition, imports of

certain kinds of goods can be subject to high anti-dumping and countervailing duties under the



- 12 -

Special Import Measures Act (SIMA).14 EU exporters should determine in advance whether or to

what extent such duties or restrictions apply to their products.

2. Government Procurement

The CETA creates substantial

government procurement

opportunities in Canada for EU

exporters and service suppliers. It is

Canada’s first and only international

free trade agreement that guarantees

market access and non-

discriminatory treatment to non-

Canadian enterprises participating in public procurements at the sub-central levels of government

(i.e., provincial/territorial governments, municipal governments, and government entities). Thus,

EU enterprises have market access to sub-central government procurement opportunities to which

no other non-Canadian suppliers in the world have access. Given that most procurement in Canada

occurs at sub-central levels, this competitive advantage is meaningful and substantial.

Currently, comprehensive information that quantifies Canadian government procurement markets,

segregated by the different levels of government, does not exist. Section III of this report

summarizes the best available information. While there exists reasonably detailed data on

purchasing by the federal, provincial, and territorial governments up until 2012, detailed estimates

of procurement by municipal governments has not been undertaken. Further, there is significant

variance in the estimates of Canadian government spending in Canada prepared by different

sources using different methodologies. In part, this is the result of a lack of consistent

measurements of Canadian government procurements over time. Although this deficiency will be

14 Special Import Measures Act, R.S.C. 1985, c. S-14, available online at http://laws.justice.gc.ca/eng/acts/S-

15/index.html.



- 13 -

remedied going forward by the CETA’s reporting requirements,15 it currently precludes an

accurate assessment of the magnitude of procurement opportunities for EU exporters and service

suppliers.

Government procurement throughout Canada is growing. Thus, historic data from 2011-2012

understates the magnitude of the actual opportunities available to EU firms. In 2011-2012, total

procurement reported by the federal and provincial/territorial governments (excluding municipal

procurement) was over CA $28.3 billion. During the same period, four Canadian provinces each

spent in excess of CA $1 billion: Quebec (CA $4.9 billion, or 17.4% of total procurement), Alberta

(CA $4.6 billion, or 16.3% of total procurement), Ontario (CA $3.4 billion, or 12.2% of total

procurement), and British Columbia (CA $1.8 billion, or 6.3% of total procurement). Even though

this data is from 2011-12, it provides an estimate based on the best information available regarding

potential government spending in Canada.

The OECD estimates Canada’s total annual government procurement (federal, provincial and

territorial, and municipal) at CA $252 billion (2012) and CA $267 billion (2016). The difference

between these figures (which include municipalities) and the above figures (which do not)

indicates that most government procurement in Canada is conducted at the municipal level.

In terms of taking advantage of the CETA market access to Canadian government procurements,

the single greatest challenge currently facing EU enterprises is the identification of opportunities

offered by sub-central government entities in a timely manner. Canada has a transitional period

under the CETA of up to five years to develop and implement an electronic single point of access

(SPA) that covers all central and sub-central government procurements throughout Canada. In the

meantime, EU exporters and service suppliers will have to consult multiple procurement

information sources to identify opportunities. Fortunately, an online resource relating to the

Canadian Free Trade Agreement (CFTA) provides accessible links to all of the provincial and

15 CETA, Article 19.15 (Transparency of procurement information), available online at

http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-

texte/19.aspx?lang=eng).



- 14 -

territorial portals that publish government procurement opportunities, as well as most municipal

government portals.

As discussed in Section III.C, below, it will be important for EU enterprises, especially those first

entering the Canadian market, to understand the legal framework for government procurement in

Canada. In particular, this includes the procedures and extremely short limitation periods involved

when it is necessary to challenge a government procurement decision.

3. Trade in Services

Chapters 9 through 16 of the CETA cover

matters relating to EU-Canada trade in

services. Chapter 9 deals generally with

cross-border trade in services, which

includes the supply of services from within

the European Union to consumers in

Canada (but does not include the supply of

services by EU suppliers located in

Canada, which is facilitated under Chapter

10). Chapters 13, 14, and 15 deals specifically with trade (and investment) in financial services,

international maritime transport services, and telecommunications services, respectively. The

commitments set forth in these chapters must be read together with the reservations made by the

federal Government of Canada and each of the provincial and territorial governments in Annexes

I, II, and III of the CETA. Chapter 10, which provides for the temporary entry and stay of EU

individuals in Canada for business purposes, facilitates and enhances the market access

opportunities relating not only to trade in services, but also to investment, government

procurement, and trade in goods. Chapter 11 establishes a framework for the prospective

negotiation of mutual recognition agreements (MRAs) between the relevant authorities in the

European Union and Canada with respect to the qualifications of workers in certain regulated

professions. Chapter 12 disciplines domestic regulatory measures that impose requirements and



- 15 -

procedures on licences and qualifications relevant to trade in services and other economic activities

(e.g., investment). Chapter 16 (Electronic commerce) is relevant to the extent that trade in services

involves transactions of an electronic character (e.g., delivery of services or related intangible

items in an electronic format).

With the exception of certain concrete market access opportunities created under Chapter 14

(International maritime transport services),16 the negotiated outcomes in these chapters and

annexes generally maintain the status quo in Canada in terms of apparent market access

opportunities. Importantly, however, these outcomes serve to establish a minimum baseline of

guaranteed market access and non-discriminatory treatment for EU services imported into Canada.

This will provide increased certainty to EU services suppliers going forward and, in turn, this

certainty will support the export of EU services to consumers in Canada. In the long term, this

foundation will facilitate the growth and development of new opportunities, either through

unilateral liberalization or bilateral agreement under the CETA framework for ongoing discussions

and negotiations.

Importantly, market access opportunities relating to trade in services will be facilitated and

enhanced by the provisions in CETA Chapter 10, which provide for the temporary entry and stay

of EU individuals in Canada for business purposes. The practical impact of Chapter 10, particularly

for SMEs, is that it will help to make theoretical market access possibilities under the CETA into

actual, practical business opportunities in Canadian markets.

16 Subject to complex conditions and limitations, these new market access opportunities permit EU suppliers of

international maritime transport services to use non-Canadian-registered, non-duty-paid vessels to reposition their

own empty cargo containers and ancillary equipment between Canadian ports, perform certain ‘feeder’ transportation

services between the Ports of Halifax and Montreal, and supply certain dredging services. These opportunities are

discussed in detail in Section IV.C, below.



- 16 -

4. Temporary Entry and Stay of EU Individuals in Canada for Business Purposes

The negotiated outcomes of CETA

Chapter 10 provide increased work

force mobility and flexibility to EU

enterprises of all sizes – including

independent professionals – that

engage in business activities in

Canada. In turn, these benefits

support and enhance the cross-border

trade and investment opportunities

that existed for EU enterprises in

Canada prior to the CETA, as well as new market access opportunities that have been created by

other CETA outcomes. Individuals from the European Union who qualify under the CETA as “key

personnel”, “contractual services suppliers”, “independent professionals”, and “short-term

business visitors” are now accorded preferential treatment by the relevant Canadian authorities,

including Immigration, Refugees and Citizenship Canada (IRCC) and the Canada Border Services

Agency (CBSA). The practical effects include greater certainty for EU individuals travelling to

Canada for business purposes, and the reduction (or elimination) of both the administrative delays

and the costs relating to labour market impact assessment (LMIA) and work permit requirements.

For example, the temporary entry and stay commitments allow short-term business visitors and

key personnel from EU enterprises, including SMEs, to meet and network with potential Canadian

partners, investigate market opportunities in Canada, engage with business and legal consultants,

enter into agreements, and follow up on established business arrangements to address issues,

manage activities, and expand operations. In addition, certain kinds of contractual services

suppliers and independent professionals from the European Union are permitted to work in Canada

for extended periods of time (i.e., up to 12 months within any 24-month period). These outcomes

will facilitate the supply of services in Canada by EU suppliers, and further enable EU enterprises

to take advantage of government procurement opportunities and investment opportunities. These



- 17 -

commitments could therefore mean the difference between a theoretical market access possibility

under the CETA, and an actual business opportunity in Canada.

In particular, the capacity for EU individuals to enter into Canada and stay for extended periods of

time to undertake business activities, without being required to satisfy work permit or LMIA

requirements, will be very useful for SMEs looking to expand their business operations into

Canadian markets. SMEs often do not have the resources available to establish a physical presence

in Canada and must offer their goods and services without investing in permanent infrastructure.

Further, the elimination of certain administrative delays will allow EU enterprises to react more

promptly to market access opportunities in Canada and provide a higher level of service.

5. Investment

Chapter 8 of the CETA sets out

provisions that protect the

investments of EU investors in

Canada. While this chapter does not

open up specific new investment

opportunities in Canada, it

establishes a minimum baseline of

guaranteed market access, non-

discriminatory treatment, and

investment protection that provides

greater stability and certainty to EU investors. Like the CETA chapters relating to trade in services,

the provisions in this chapter must be read together with the reservations made by the federal

Government of Canada and each of the provincial and territorial governments in Annexes I and II.

As discussed above, trade in goods and services must be considered together with investment when

assessing opportunities under the CETA. Direct investment in a Canadian infrastructure may

provide the best way for an EU enterprise to leverage the maximum benefits of the preferential

market access accorded to its goods and services under the CETA. To the extent that the CETA



- 18 -

creates concrete market access opportunities relating to trade in a particular good, which may lead

in turn to associated services opportunities, this may create corresponding investment

opportunities (depending on all of the relevant circumstances and considerations). In this regard,

the establishment of a supply chain for a particular product and any associated services can lead

to investment in Canada on the basis of that supply chain. Regardless of the existence of such a

concrete market access opportunity, the overall certainty and stability provided by the CETA

provide an environment that fosters investment, both within and beyond the existing EU-Canada

trade flows and supply chains.

Finally, the NAFTA in its current form provides EU investments in Canada with access to the

large markets in the United States and integrated North American industries. For example, in the

context of trade in goods, an EU enterprise might invest in establishing a production facility in

Canada that produces finished goods using materials or inputs imported on a duty-free basis from

the European Union under the CETA preferential tariff. Provided that the applicable NAFTA rules

of origin are satisfied, the finished products could be exported to the United States on a duty-free

basis under the NAFTA preferential tariff. The assessment of whether, to what extent, and how

synergies between the CETA and the NAFTA can provide opportunities for EU investors must be

undertaken on a case-by-case basis, having regard to the specific circumstances of an investment.

B. Identifying and Taking Advantage of Opportunities in each Province and Territory

Most of the market access opportunities created by the CETA are available throughout Canada.

As a consequence, it is neither possible nor appropriate to isolate market access opportunities based

on each province and territory. However, the distribution, magnitude and frequency of the

opportunities between provinces and territories can be estimated.

At a very high level, the Gross Domestic Product (GDP) of each province and territory relative to

Canada’s total GDP provides an indicator of the distribution of the market access opportunities for

EU-Canada trade in goods, trade in services, and investment under the CETA, as this will identify

the intensity of overall commercial activity in the provincial/territorial market hubs. This



- 19 -

information is summarized in Table 1, below, together with the population levels in each province

and territory.

Table 1 Gross domestic product, expenditure-based, by province and territory

Province or Territory

Population in 20151 GDP in 20152

(in millions of Canadian dollars at current prices)

Share expressed as a percentage

Canada3 35,832,500 1,986,193 100.00%

Ontario 13,789,600 763,276 38.43%

Quebec 8,254,900 380,972 19.18%

Alberta 4,177,500 326,433 16.44%

British Columbia 4,694,700 249,981 12.59%

Saskatchewan 1,131,200 79,415 4.00%

Manitoba 1,295,400 65,862 3.32%

Nova Scotia 941,500 40,225 2.03%

New Brunswick 753,900 33,052 1.66%

Newfoundland and Labrador

528,800 30,100 1.52%

Prince Edward Island

146,800 6,186 0.31%

Northwest Territories 44,200 4,828 0.24%

Yukon 37,300 2,710 0.14%

Nunavut 36,600 2,447 0.12%

Outside Canada N/A 705 0.04%

1 Source: Statistics Canada, CANSIM, table 051-0001, available online at http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo02a-eng.htm. These values represent populations as of 1st July 2015. 2 Source: Statistics Canada, CANSIM, table 384-0038, available online at http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ15-eng.htm. 3 The source data provides the following note: “Canada totals in the provincial and territorial gross domestic product by income and by expenditure accounts (PTEA) do not correspond to the national gross domestic product by income and by expenditure accounts (IEA) estimates at certain times of the year. The IEA's annual revisions, released each spring, result in a discrepancy between the estimates. The PTEA are brought back in line when the IEA's annual revisions are incorporated.”



- 20 -

The data in Table 1 indicates that most of the market access opportunities created, enhanced, or

otherwise facilitated by the CETA will arise in the four provinces with the largest populations:

Ontario, Quebec, Alberta, and British Columbia.

For market access opportunities arising in relation to trade in goods from the European Union into

Canada, import statistics by province and territory are a helpful indicator of the market access

opportunities. Table 2, below, summarizes the total value of goods imported into Canadian

provinces and territories from all countries during the two calendar years preceding the entry into

force of the CETA, 2015 and 2016.

Table 2 Value of total imports into Canada from all countries, by province and territory


Imports in 2015 Imports in 2016

Value in Canadian

dollars

Percentage share

Value in Canadian dollars

Percentage share

Ontario 325,392,603,899 60.67% 333,663,590,720 62.56%

Quebec 78,571,527,045 14.65% 73,684,060,448 13.82%

British Columbia 48,836,984,742 9.10% 48,788,096,942 9.15%

Alberta 29,383,072,251 5.48% 25,036,435,280 4.69%

Manitoba 20,873,198,347 3.89% 19,843,380,198 3.72%

New Brunswick 10,584,093,490 1.97% 9,250,325,228 1.73%

Saskatchewan 10,388,954,056 1.94% 8,990,033,837 1.69%

Nova Scotia 8,291,101,504 1.55% 8,160,653,602 1.53%

Newfoundland and Labrador 3,776,854,499 0.70% 5,811,158,470 1.09%

Prince Edward Island 51,853,339 0.01% 66,284,911 0.01%

Yukon Territory 74,641,258 0.01% 59,390,386 0.01%

Nunavut 60,180,938 0.01% 3,761,597 0.001%

Northwest Territories 11,383,377 0.002% N/A N/A

Canada 536,296,448,745 100.0% 533,357,171,619 100.0%



- 21 -

Source: Industry Canada (Statistics Canada), Trade Data Online, available online at www.ic.gc.ca/eic/site/tdo-

dcd.nsf/eng/home, based on data compiled from Statistics Canada and the US Census Bureau

For comparison, Table 3 summarizes the total value of goods imported into the provinces and

territories from the European Union during the same two years.

Table 3 Value of total imports into Canada from the European Union, by province and territory


Imports in 2015 Imports in 2016

Value in Canadian

dollars

Percentage share


Percentage share

Ontario 29,239,196,653 5.45% 27,499,006,694 5.16%

Quebec 18,922,088,370 3.53% 19,615,637,366 3.68%

Nova Scotia 4,538,329,123 0.85% 5,359,537,751 1.01%

British Columbia 3,379,587,293 0.63% 3,326,878,815 0.62%

Alberta 2,780,000,052 0.52% 2,297,103,172 0.43%

Manitoba 1,157,774,329 0.22% 1,184,072,389 0.22%

Newfoundland and Labrador 323,420,855 0.06% 659,490,620 0.12%

Saskatchewan 619,912,016 0.12% 531,137,554 0.10%

New Brunswick 482,552,643 0.09% 444,189,637 0.08%

Prince Edward Island 6,948,407 0.001% 7,907,514 0.001%

Yukon Territory 3,993,771 0.001% 1,711,951 0.0003%

Nunavut 20,510,645 0.004% 600,473 0.0001%

Northwest Territories 82,620 0.00002% N/A N/A

EU Sub-total 61,474,396,777 11.463% 60,927,273,936 11.42%

All other countries sub-total

474,822,051,968 88.537%

472,429,897,683 88.58%

Total imports from all countries

536,296,448,745 100.0% 533,357,171,619 100.0%



- 22 -

Source: Industry Canada (Statistics Canada), Trade Data Online, available online at www.ic.gc.ca/eic/site/tdo-

dcd.nsf/eng/home, based on data compiled from Statistics Canada and the US Census Bureau

More detailed statistical data are available for EU-Canada trade in specific goods, specific

provinces and territories, and specific exporting EU member states. While it is not practical to

present these data in this report, they are publicly available and readily accessible using Industry

Canada’s Trade Data Online service.17

Sub-federal government procurement opportunities are specific to each province, territory, and

municipality. Estimates of the potential magnitudes of sub-federal procurement opportunities are

discussed in Part III, below.

As noted above, the most apparent challenge for EU enterprises in terms of taking advantage of

these opportunities will be identifying them in a timely manner. The timeframes for identifying a

procurement opportunity and preparing a bid for submission can be relatively short, requiring

vigilance and the capacity to respond quickly. Until an electronic single point of access is

implemented in Canada, EU exporters and service suppliers will need to consult multiple

procurement information sources to identify sub-federal opportunities. Sufficient resources will

need to be dedicated to this task. The CFTA online government procurement hub provides an

important ‘interim’ resource, as it consolidates links to all of the provincial and territorial portals

that publish government procurement opportunities, as well as most municipal government portals.

This should be the starting point for most EU entrants seeking to participate independently in

government procurement opportunities in Canada.

C. Conclusions and Recommendations

The CETA has changed the competitive landscape in Canada, creating new opportunities and

enhancing or otherwise facilitating existing opportunities for EU exporters of goods and services

17 Industry Canada (Statistics Canada), “Trade Data Online”, available online at www.ic.gc.ca/eic/site/tdo-

dcd.nsf/eng/home.



- 23 -

into Canada, EU services suppliers in Canada, and EU investors in Canada. This report provides a

detailed overview of these opportunities. However, given the fact-specific nature of the

opportunities created, enhanced, or otherwise facilitated under the CETA, it is important for

interested EU enterprises to undertake their own opportunity analysis, drawing guidance from this

report, and taking into account the provisions of the CETA applicable to the specific circumstances

of their business.

In order to take advantage of the market access opportunities arising under the CETA, it will be

necessary for EU enterprises to ensure that they satisfy any applicable conditions and

administrative requirements. The assessment of an opportunity should therefore include the

identification and consideration of all actions necessary to fully take advantage of it. In the context

of trade in goods, for example, taking advantage of a new market access opportunity arising from

preferential tariff treatment requires an EU exporter to ensure that their goods satisfy the

requirements set forth in the CETA Protocol on Rules of Origin and Origin Procedures, as

implemented into the domestic laws of Canada. This involves determining whether a good

produced in Canada or an EU Member State qualifies as “originating” (e.g., pursuant to the

applicable tariff shift rules and/or regional value content requirements that constitute “sufficient

production”), and ensuring that a declaration of origin is correctly made out and fully supported

by the appropriate documentation. If a declaration of CETA origin cannot be substantiated during

a customs audit, the CBSA may be require payment of the standard rates of duty on a retroactive

basis. This liability can extend to all cross-border shipments going back for a period of up to four

years, so it is essential for EU enterprises to ensure that their declarations of origin are accurate,

and their record-keeping is precise.

The principal actions that could give rise to problems like this, if not addressed correctly, are

discussed in this report. However, taking advantage of CETA market access opportunities, like all

commercial activities, care must be taken to ensure that all business and regulatory issues are

identified, considered, and addressed.



- 24 -

1. Exporters of EU Goods to Canada

A potential exporter of EU goods to Canada should classify its products under the Canadian HS

tariff schedule described above.18 This classification will determine the applicable rate of customs

duty under the CETA preferential tariff. A significant change in the applicable rate of customs

duty under the CETA preferential tariff may enhance the competitiveness and/or increase the

profitability of the exporter’s products in the Canadian market. Under these circumstances, the

exporter should assess whether or to what extent the CETA has resulted in a favourable change to

the competitive landscape in Canada, such that new market access opportunities are available to

supply Canadian purchasers or supply chains.

The analysis to identify such opportunities requires a comparison between the rate of customs duty

applicable to the EU goods under the CETA preferential tariff (designated by the term “CEUT” in

the Canadian HS tariff Schedule) with (i) the rate of customs duty previously applicable to the

same goods under the most-favoured-nation (MFN) tariff, and (ii) the rates of customs duty

applicable to like goods from the principal competing countries (e.g., the United States, China,

etc.).19 Where there is competition with imports from other countries (e.g., the rate of customs duty

under the CETA preferential tariff are equivalent to those under the NAFTA preferential tariff for

a particular product), the respective rules of origin should be compared. For example, by

comparing the applicable rules of origin under the NAFTA with the applicable rules of origin

under the CETA, an EU exporter can determine whether there are any differences that create a

production cost advantage for the EU goods.20

18 See Section I.A.1, above. See also Schedule to the Customs Tariff, S.C. 1997, c. 36, available online at

http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/menu-eng.html.

19 Information on competing imports of like goods is accessible using Industry Canada’s “Trade Data Online”

service, available online at https://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home. Information on the rates of customs

duties applicable to such imports is available from the current version of the Schedule to the Customs Tariff, S.C.

1997, c. 36, available online at http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/menu-eng.html.

20 The rules of origin for Canada’s various trade agreements are implemented into Canadian law as regulations

under the Customs Tariff, S.C. 1997, c. 36, available online at http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-

tarif/menu-eng.html.



- 25 -

In terms of identifying the principal competing countries whose exports currently supply the

Canadian market, guidance can be taken from the examples provided in section II.B.2.(b), below,

in the context of trade in clothing and apparel products.

The next step is to determine whether there are any barriers to exporting the goods to Canada.

Once it is determined that there is an opportunity that is not negated by barriers, the final step is to

undertake all actions necessary to comply with the applicable conditions and administrative

requirements necessary to facilitate the exports. This includes confirming the product

classification, confirming compliance with the applicable rules of origin, securing a declaration of

origin in accordance with the template provided in Annex 2 of the CETA Protocol on the Rules of

Origin and Origin Procedures, confirming that the necessary record-keeping and audit procedures

are in place to substantiate the declaration of origin, and establishing the internal procedures to

ensure prompt compliance with all applicable Canadian customs and taxation requirements.

2. EU Enterprises Participating in Canadian Government Procurement

Opportunities

EU exporters and service suppliers wishing to bid on Canadian government procurement

opportunities will first need to identify opportunities that are relevant to their business interests.

Monitoring options include the MERX online portal (www.merx.com), which lists federal

government procurement opportunities as well as some provincial government procurement

opportunities (as well as private procurement opportunities). Until Canada’s electronic single point

of access is implemented, the CFTA website provides accessible links to the provincial and

territorial portals, as well as most municipal government portals, that publish government

procurement opportunities (www.cfta-alec.ca/doing-business/). This will be an important resource

for EU firms for at least the next three to five years.

It is essential for EU enterprises, especially those first entering the Canadian market, to understand

the legal framework for Canadian procurement, including the complaint and dispute settlement

procedures, some of which have extremely short limitation periods.



- 26 -

3. EU Investors

It is not practicable to identify CETA market access opportunities for direct investment in Canada

on a general basis. This is because (i) the CETA does not create specific new market access

opportunities for direct investment in Canada, but rather supports, enhances, and facilitates the

opportunities that have previously been available to EU investors; and (ii) the circumstances under

which an investment opportunity arises are complex, involving not only the framework provided

by an international trade and investment agreement like the CETA, but also the contemporaneous

needs of a market or industry sector in Canada, and the capability of an investor to satisfy those

needs on a timely and sustainable basis with competitive products and/or services. It involves a

case-by-case assessment in which the specific circumstances of the investor constitute the most

important factors.

That said, the CETA provides greater certainty for EU investors seeking to enter the Canadian

market or expand their existing investments in the Canadian market, and greater flexibility with

respect to labour mobility. Together with the market access opportunities created or enhanced with

respect to trade in goods and services, the CETA may provide real advantages to EU investors in

the Canadian market.

In this regard, EU enterprises that have identified concrete opportunities relating to trade in goods

and/or services under the CETA should assess whether and to what extent investment in Canada

would maximize the benefits or open up further market access opportunities. In addition, EU

enterprises considering investment opportunities in Canada should take into account the CETA

provisions relating to the temporary entry and stay of EU individuals in Canada for business

purposes.

Finally, EU investors must ensure that they understand and act in accordance with all Canadian

laws and administrative requirements that are relevant to their investments in Canada.



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II. TRADE IN GOODS

Trade in goods in the context of this report concerns the exportation of goods from the European

Union to Canada. The opportunities for trade in goods are reflected in:

The preferential tariff treatment on imports into Canada — These competitive

opportunities are measured by comparing the preferential rate of customs duty under the

CETA Tariff (designated by the term “CEUT” in Canada’s HS tariff schedule) to the

standard rate of customs duty under the Most-Favoured-Nation (MFN) Tariff applicable to

EU-origin goods imported into Canada.

The tariff rate quota (TRQ) for cheese imports into Canada — These competitive

opportunities are measured by comparing the preferential rate of customs duty for the

within-quota (or “within access commitment”) volumes imported under the CETA to the

prohibitive rate of customs duty on over-quota (or “over access commitment”) volumes

imported under the Most-Favoured-Nation (MFN) Tariff.

The CETA rules of origin — These competitive opportunities are measured by the

application of the requirements of the CETA Protocol on the rules of origin and origin

procedures (the “Origin Protocol”) and, for limited quantities of certain products, the

special, liberalized requirements of the origin quotas under Annex 5-A of the Origin

Protocol.

The third source of opportunities — the CETA rules of origin — is less obvious than the first two,

but it can be important for certain goods. In many cases, the CETA preferential tariff treatment

reduces the applicable rates of customs duty to those found in Canada’s other regional free trade

agreements, such as the North American Free Trade Agreement (NAFTA). However, in

circumstances where the CETA preferential duties match those in Canada’s other agreements,

rules of origin that are more liberal under the CETA (i.e., easier to satisfy) than those under the

other agreements may confer a competitive advantage to EU exporters to the extent that they allow

the goods to be produced at comparatively lower costs. Thus, the questions of whether the CETA

confers a competitive advantage and, if so, the magnitude of that advantage depend upon the



- 28 -

circumstances of: (i) the EU goods at issue; (ii) the like goods exported from third countries that

compete with the EU goods for sale in the Canadian market; and (iii) the comparative rules of

origin that apply to the EU goods and the third-country goods, respectively. Such an analysis must

be undertaken on a case-by-case basis. We provide an example below in the context of clothing

and apparel products to illustrate the analytical approach that EU exporters can undertake to assess

whether the CETA rules of origin provide an additional competitive opportunity for their goods.

Taking advantage of the foregoing opportunities requires additional considerations. The key

considerations are discussed at the end of this section.

A. Overview of Analysis

The following analysis identifies the market access opportunities created under the CETA in

relation to trade in goods that originate in the European Union. Such opportunities arise as a result

of the progressive elimination or reduction of customs duties on EU goods imported into Canada

in accordance with the CETA preferential tariff and the opening of the TRQ for cheese. These

obligations entered into force on 21 September 2017.

Implementation of the CETA has eliminated the customs duties on almost all EU products to which

customs duties had previously applied. For some goods, the duties are being gradually phased out

over a period of four years (becoming duty “free” on 1 January 2020), or six years (becoming duty

free on 1 January 2022), or eight years (becoming duty free on 1 January 2024). Beginning on 21

September 2022, customs duties on imports of sugar will be phased out over a period of three

years, such that these goods may be imported free of customs duties as of 1 January 2024.21 These

changes do not automatically apply to goods that are shipped into Canada from the European

21 These phase-out periods, or “staging categories”, are set forth in paragraph 3 of CETA Annex 2-A, available

online at http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-

aecg/text-texte/02-A.aspx?lang=eng. Canada’s HS tariff schedule currently provides the applicable rates of customs

duty under the CETA preferential tariff (designated by the term “CEUT”), including the first phase of annual

reductions under the staging categories. See the Schedule to the Customs Tariff, S.C. 1997, c. 36, available online at

http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/menu-eng.html (see “Customs Tariff - 2017”, “T2017-5”,

effective date 21 September 2017).



- 29 -

Union. Rather, importers must proactively claim the CETA preferential tariff treatment by entering

tariff treatment code number “31” in field 14 of the Canada Customs Coding Form (B3), and

ensure that they have in their possession a valid origin declaration and, if required, any necessary

import permits.22

The applicable rates of customs duties under the CETA preferential tariff are specified in Canada’s

HS tariff schedule under the Customs Tariff (2017), where they are designated by the term

“CEUT”.23 Outside of the products that are specifically exempt from the elimination of customs

duties (e.g., Canada’s supply-managed products like dairy, poultry, and eggs),24 there are only two

tariff items that are not subject to either the immediate elimination of customs duties or the first-

stage reduction in a phase-out period. These two tariff items cover refined sugar, with and without

added flavouring and colouring matter (i.e., tariff item nos. 1701.91.90 and 1701.99.90). The

duties on these two items will be removed in three equal stages beginning on the fifth anniversary

of the date of entry into force of the CETA (i.e., 21 September 2022) and will be duty-free on 1

January 2024.25

22 See CBSA, Customs Notice 17-30, “Implementation of the Canada–European Union Comprehensive

Economic and Trade Agreement (CETA)” (14 September 2017), available online at www.cbsa-

asfc.gc.ca/publications/cn-ad/cn17-30-eng.html 2), available online at www.cbsa-asfc.gc.ca/publications/dm-

md/d17/d17-1-10-eng.html.

23 See T2017-5, Effective date: 2017-09-21 www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2017/menu-

eng.html.

24 Once the CETA’s tariff elimination staging periods are complete, the only prohibitive or restrictive tariffs

that will exist are those listed in staging category E in Canada’s tariff Schedule. These 130 tariff items relate to over-

access commitment tariffs on Canada’s supply managed products (i.e., dairy, poultry and eggs). A list of these tariff

items is provided in Appendix 1.

25 These two tariff items are subject to staging category “S”. Paragraph 3(e) of CETA Annex 2-A provides that

“duties on originating goods provided for in the items in staging category S in a Party's Schedule shall be removed in

three equal stages beginning on the fifth anniversary of the date of entry into force of this Agreement, and these goods

shall be duty-free, effective January 1 of year 8”.



- 30 -

B. Opportunities relating to Significant Reductions in Customs Duties

1. Overview of Opportunities

Appendix 1 is a spreadsheet that compares the rates of customs duties under the MFN Tariff to the

rates of customs duties under the CETA Tariff.26 It shows approximately 1,000 tariff subheadings

and tariff items (at the 6 to 10-digit levels) in Canada’s HS tariff schedule27 for which customs

duties at rates of 10 to 25 percent ad valorem were reduced to zero percent for EU-origin goods

(i.e., a reduction of 10 to 25 percentage points). It also shows approximately 2,000 other tariff

subheadings or tariff items for which customs duties at rates of 5 to 9.5 percent were reduced to

zero percent (i.e., a reduction of 5 to 9.5 percentage points). For about 600 other tariff subheadings

and tariff items, the spreadsheet shows that customs duties at rates of 1 to 4.5 percent were reduced

to zero percent (i.e., a reduction of 1 to 4.5 percentage points).28

In current competitive circumstances, a customs duty reduction of between 5 and 25 percentage

points amounts to a substantial competitive advantage and, therefore, a competitive opportunity

for originating EU goods. For certain products, duty reductions of between 1 and 4.5 percentage

points could also be meaningful, depending upon the relevant market circumstances.

26 This spreadsheet does not currently catalogue goods that are subject to progressive tariff elimination through

a phase-out period under CETA Staging Categories B, C, D, or S.

27 The international Harmonized Commodity Description and Coding System, typically referred to as the

Harmonized System (HS), is used to classify products for trading purposes in a consistent manner. It organizes goods

into Chapters (2 digits), headings (4 digits), and subheadings (6 digits). Each country may further organize the goods

within a subheading into tariff items (8 digits) and tariff classifications (10 digits). Canada follows the HS in its

customs tariff schedule, available online at www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/menu-eng.html. The

eliminations of customs duties at the 6-digit subheading level will extend to all of the goods classified within that

subheading, i.e., at the 8-digit tariff item and the 10-digit tariff classification levels, respectively. Thus, the elimination

of customs duties at rates of 10-25 percent for 1,000 tariff subheadings or tariff items does not mean that this change

has affected 1,000 different products. Rather, the number of different products affected in this range will be greater,

as each tariff subheading (6 digits) and tariff item (8 digits) may encompass a number of different products at the 10-

digit level. This is also true for the elimination of customs duties at rates of 5-9.5 percent for 2,000 other tariff

subheadings or tariff items, and 1-4.5 percent for 600 other tariff subheadings and tariff items. Thus, there is some

overlap, and this is shown in Appendix 1.

28 In Canada’s HS tariff schedule, customs duty at a rate of zero percent is designated by the term “free”,

denoting that a good may be imported on a duty-free basis.



- 31 -

Given the large number of market access opportunities created by the reduction or elimination of

customs duties under the CETA, it is not practical to review every single tariff item identified in

Appendix 1. Instead, three product category studies are provided below as examples of such

opportunities. They include assessments addressing the CETA rules of origin and origin quotas

(i.e., the product category study regarding clothing and apparel goods at section II.B.2.(b), below),

and the complexities involved in assessing whether or to what extent a duty reduction creates an

opportunity in the existing framework of Canadian customs laws (i.e., the product category study

with respect to automotive parts at section II.B.2.(c).(ii), below). These examples provide guidance

for the purposes of assessing other market access opportunities.

The product category studies are followed by an overview that summarizes the market access

opportunities identified in detail in the spreadsheet attached at Appendix 1. The information in the

overview is organized and presented by product categories (i.e., under the sections and chapters of

the HS tariff schedule). This approach makes the information much more manageable for the

purposes of assessing market access opportunities on a case-by-case basis. The objective is to

provide a streamlined and easy-to-use reference tool that will permit interested EU producers and

exporters, particularly SMEs, to make a preliminary determination of the CETA duty reductions

and eliminations that apply to their products.

2. Product Category Studies

The following product category studies outline the market access opportunities created under the

CETA for certain key categories of goods as a result of the progressive elimination or reduction of

customs duties. In order to provide an indication of the potential economic value of these

opportunities, each study includes statistical information regarding the value of the total import

market in Canada and the value of EU imports prior to the CETA. These studies provide examples

of the opportunity assessments that each producer, exporter, and importer of EU products should



- 32 -

undertake, starting with a review of the tariff treatment applicable to their products under the

Customs Tariff (2017).29

a) Prepared and processed food products

The CETA preferential tariff treatment creates significant opportunities for EU producers of

prepared and processed food products classified in HS Chapters 16, 19, and 21.30 Tariff reductions

on a large number of these products range from 1 to 14.5 percentage points, with many reductions

in the range of 4 to 10 percentage points.

Imports of these products into Canada are substantial, indicating significant potential opportunities

for EU products to the extent that the elimination or reduction of customs duties increases their

competitiveness and/or profitability in Canada. The proportions of EU goods supplying these

import markets has been relatively small prior to the CETA (e.g., 3 percent of total imports from

all countries under Chapter 16; 9 percent of total imports under Chapter 19; and 6% of total imports

under Chapter 21). However, this is likely to change following the elimination or reduction of

customs duties under the CETA, as producers, exporters, and importers of EU products move to

take advantage of the new competitive advantages and market access opportunities in Canada.

Tables 4, 5, and 6, below, summarize the statistical data relating to the value of Canada’s import

markets in 2016 for goods classified under HS Chapters 16, 19, and 21. This information provides

an indication of the potential value of the new market access opportunities for EU producers and

exporters of these goods, as well as EU enterprises that import these goods into Canada.

29 See the Schedule to the Customs Tariff, S.C. 1997, c. 36, available online at http://www.cbsa-asfc.gc.ca/trade-

commerce/tariff-tarif/menu-eng.html (see “Customs Tariff - 2017”, “T2017-5”, effective date 21 September 2017).

30 HS Chapter 16 covers preparations of meat, fish, or crustaceans, molluscs or other aquatic invertebrates. HS

Chapter 19 covers preparations of cereals, flour, starch or milk, and pastrycooks’ products. Chapter 21 covers other

“miscellaneous” edible preparations.



- 33 -

Table 4 Preparations of meat, fish, or crustaceans, molluscs or other aquatic invertebrates (HS Chapter 16)

EU member state 2016 EU member state 2016

Italy 20,896,064 Netherlands 194,365

Germany 8,036,899 Romania 53,786

Spain 5,701,698 Belgium 41,114

United Kingdom 2,976,312 Finland 40,237

France 2,749,335 Greece 38,928

Portugal 2,525,764 Estonia 27,472

Poland 2,306,545 Ireland 768

Sweden 1,706,833 Austria 215

Denmark 1,251,549 Czech Republic 201

Latvia 776,194 Lithuania 44

Croatia 679,871 EU sub-total 50,841,841

Hungary 606,691 All other countries 1,782,366,992

Slovenia 230,956 Total imports from all countries

1,833,208,833


Source: Industry Canada (Statistics Canada), “Trade Data Online”, available online at

https://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home

Table 5 Preparations of cereals, flour, starch or milk, and pastry cooks’ products


Italy 100,377,473 Finland 998,388

United Kingdom 57,665,915 Malta 746,932

Germany 45,708,778 Czech Republic 453,351

Belgium 32,665,975 Lithuania 259,064

France 32,534,550 Romania 245,521

Ireland 13,575,992 Cyprus 203,039

Spain 9,565,688 Slovakia 185,675

Poland 7,211,409 Hungary 182,757

Netherlands 7,088,071 Latvia 127,551

Greece 4,869,531 Slovenia 83,442

Bulgaria 4,209,143 Estonia 20,024



- 34 -


Denmark 4,164,357 Luxembourg 191

Austria 3,921,350 EU sub-total 336,149,033

Portugal 3,895,763 All other countries 3,469,829,681

Sweden 3,769,562 Total imports from all countries

3,805,978,714 Croatia 1,419,541




Table 6 Miscellaneous edible preparations (Chapter 21)


Germany 40,370,420 Portugal 1,237,829

Sweden 30,791,668 Lithuania 410,440

United Kingdom 30,335,067 Czech Republic 216,369

France 20,709,604 Slovenia 201,901

Italy 15,969,349 Romania 180,561

Belgium 12,947,043 Bulgaria 33,142

Poland 9,062,896 Finland 22,502

Estonia 8,866,699 Slovakia 15,283

Netherlands 8,830,126 Luxembourg 8,728

Denmark 6,694,560 Malta 8,654

Spain 6,333,907 Latvia 2,533

Hungary 3,218,172 Cyprus 289

Austria 2,303,367 EU sub-total 204,424,826

Greece 2,166,971 All other countries 3,280,029,918

Ireland 1,882,573 Total imports from all countries

3,484,454,744 Croatia 1,604,173






- 35 -

The elimination of significant customs duties will make imports of EU products considerably more

competitive and/or profitable in Canadian markets. As a consequence, the market share of EU

imports into Canada can be expected to increase. Given the extremely high level of competition in

food retail across Canada, the removal of even a small rate of duty on a food product (e.g., less

than 5 percent) is a meaningful competitive opportunity.

In this regard, it is noteworthy that the CETA reduces tariffs on a wide range of processed

agricultural products (PAPs) to levels enjoyed by Canada’s NAFTA partners of the United States

and Mexico. As highlighted in Table 7, the CETA will provide tariff rates on nearly all products

in tariff headings 16, 17, 19, 20 and 21 that are no less favourable than those afforded to the United

States and Mexico under NAFTA. While the CETA does not provide any tariff rates that are

preferential to those granted to the United States through NAFTA, several tariff rates afforded to

the EU under CETA will be lower than those enjoyed by Mexico. The tariff lines for which this is

the case can be found in Table 8. Overall, then, the CETA provides notable opportunities for the

EU to improve competitiveness within the Canadian market for PAPs vis-à-vis the United States

and Mexico.

Table 7 Processed agricultural products for which the CETA lowers tariffs for EU imports to rates no less

favourable than imports from the United States and Mexico

HS Code (4 digit)

Product HS Code (4 digit)

Product

1601 Sausages and similar products of meat, meat offal or blood; food preparations based on these products

2001 Vegetables, fruit, nuts and other edible parts of plants; prepared or preserved by vinegar or acetic acid

1602 Prepared or preserved meat, meat offal or blod

2002 Tomatoes; prepared or preserved otherwise than by vinegar or acetic acid

1603 Extracts and juices of meat, fish or crustaceans, molluscs or other aquatic invertebrates

2003 Mushrooms and truffles, prepared or preserved other than by vinegar or acetic acid

1604 Prepared or preserved fish; caviar and caviar substitutes

2004

Vegetables preparations n.e.c.; prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than products of heading no. 2006



- 36 -

HS Code (4 digit)


Product

1605 Crustaceans, molluscs and other aquatic invertebrates, prepared or preserved

2005

Vegetables preparations n.e.c; prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading no. 2006

1702

Sugars, including lactose, maltose, glucose or fructose in solid form; sugar syrups without added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; caramel

2006

Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glace or crystallised)

1703 Molasses; resulting from the extraction or refining of sugar

2007

Jams, fruit jellies, marmalades, fruit or nut puree and fruit or nut pastes, being cooked preparations; whether or not containing added sugar or other sweetening matter

1704 Sugar confectionery (including white chocolate), not containing cocoa

2008

Fruit, nuts and other edible parts of plants; prepared or preserved in ways n.e.c., whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included

1901

Malt extract; flour/groats/meal/starch/ malt extract products, no cocoa (or less than 40% by weight) and food preparations of goods of headings 04.01 to 04.04, no cocoa (or less than 5% by weight), weights calculated on a totally defatted basis, n.e.c

2009

Fruit juices (including grape must) and vegetable juices, unfermented, not containing added spirit; whether or not containing added sugar or other sweetening matter

1902

Pasta; whether or not cooked or stuffed with meat or other substance, or otherwise prepared, egg spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not prepared

2103

Sauces and preparations therefor; mixed condiments and mixed seasonings, mustard flour and meal and prepared mustard

1903 Tapioca and substitutes therefor prepared from starch; in the form of flakes, grains, pearls, siftings or similar forms

2104

Soups and broths and preparations therefor; homogenised composite food preparations

1904

Prepared foods obtained by swelling or roasting cereals or cereal products (e.g. corn flakes); cereals (other than maize corn)) in grain form or in the form of flakes or other worked grains (not flour and meal), pre-cooked or otherwise prepared, n.e.c.

2105 Ice cream and other edible ice; whether or not containing cocoa



- 37 -

HS Code (4 digit)


Product

1905

Bread, pastry, cakes, biscuits, other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets suitable for pharmaceutical use, sealing wafers, rice paper and similar products

2106 Food preparations not elsewhere specified or included

Source:

Table 8 Processed agricultural products for which the CETA lowers tariffs for EU exporters to rates more

favourable than those applied to imports from Mexico

HS Code Product EU Rate Mexico Rate

16010011 Sausages and similar products in cans or glass jars of poultry in heading 01.05

0 12.5

16010021 Sausages of fowls of the species Gallus domesticus, other than in cans or glass jars, other than spent fowl (within access commitment)

0 0.95 ¢/kg

16021010 Homogenised preparations of fowls of the species Gallus domesticus and turkeys, of heading 01.05

0 12.5

16023111 Homogenised preparations of turkeys, prepared meals specially defined mixtures

0 11

1602311110 Homogenised preparations of turkeys, prepared meals in cans or glass jars

0 12.5

16023211 Homogenised preparations of spent fowls, prepared meals

0 11

1602311120 Homogenised preparations of spent fowls, prepared meals specially defined mixtures

0 7.5

16023291 Homogenised preparations of spent fowls, in cans or glass jars

0 9.5

16023991 Homogenised preparations of ducks, geese or guinea fowls, in cans or glass jars

0 9.5

17011290 Other raw beet sugar 0 $24,69/tonne

17011390 Other cane sugar specified in subheading Note 2 of Chapter 17

0 $22.05/tonne

17029011 Other sugars containing reducing sugars after inversion not exceeding 65 by weight of the total syrup

0 $11.99/tonne

17029013 Other sugars containing reducing sugars after inversion exceeding 70 but not exceeding 71 by weight of the total syrup

0 $13.26/tonne



- 38 -

HS Code Product EU Rate Mexico Rate


0 $13.47/tonne


0 $13.69/tonne


0 $13.90/tonne


0 $14.11/tonne

17029018 Other sugars containing reducing sugars after inversion exceeding 75 by weight of the total syrup

0 $15.17/tonne

1901903 Ice cream mixes or ice milk mixes, 0 6.5

21050010 Flavoured ice and ice sherbets 0 9.5

21069021 Syrups derived from cane or beet sugar, containing, in the dry state, 90 or more by weight of sugar and no added flavouring matter

0 6

21069031 Milk, cream or butter substitutes, containing 50 or more by weight of dairy content, within access commitment

0 5

21069051 Egg preparations within access commitments 0 6.68¢/kg



- 39 -

b) Apparel and Clothing Goods

(i) Preferential Duty Opportunities


apparel and clothing products. Canada’s market for imports of apparel and clothing from all

countries is approximately CA $12.5 billion per year.31 Despite high tariffs of 17 to 18 percent,

imports from the European Union accounted for over 5 percent of the total value of imports into

Canada in 2016 ($651 million or EU €444 million32). Table 9, below, illustrates the European

Union’s share of the Canadian market for imported apparel and clothing in 2015 and 2016.

Table 9 Imports of apparel and clothing goods into Canada (2015-2016)

Source 2015 2016

Italy (incl. Vatican City State) 288,414,209 326,610,818

Portugal 45,787,512 66,666,216

Romania 58,542,659 61,662,913

France (incl. Monaco, French Antilles) 36,294,433 40,890,161

Bulgaria 25,599,811 32,790,017

United Kingdom 26,618,072 27,686,839

Germany 19,845,129 19,895,756

Spain 14,228,823 13,765,733

Poland 15,583,205 12,992,216

Hungary 9,914,251 10,826,553

Netherlands 7,840,617 5,738,422

Lithuania 5,766,395 5,401,119

Other EU member states 25,775,313 26,679,179

EU sub-total 580,210,429 651,605,942

All other countries 11,866,633,887 11,827,692,278

31 Source: Industry Canada (Statistics Canada), Trade Data Online, available online at

https://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home.

32 This figure uses an annual average exchange rate in 2016 of EU € 0.6825 per CA $1.00. Source: Canadian

Foreign Exchange Services, “Yearly Exchange Rates for Currencies”, available online at

http://www.canadianforex.ca/forex-tools/historical-rate-tools/yearly-average-rates.



- 40 -

Total imports from all countries 12,446,844,316 12,479,298,220

Industry: NAICS 315 (clothing manufacturing)




The CETA preferential tariff treatment eliminates the high rates of customs duties that previously

limited the competitiveness and, thus, the market share of EU apparel products in Canada. For

most apparel products that are manufactured in the European Union, this equates to a new

competitive advantage of 17-18% in the Canadian market, allowing EU producers and exporters

to compete at lower landed costs. Considering the total value of the Canadian market for imported

apparel products, this change in the competitive landscape will open up market access

opportunities for EU producers and exporters, allowing them to capture greater market shares.

As an example, CETA preferential tariff treatment allows all knitted sweaters, sweatshirts and

waistcoats produced in the European Union to be imported under tariff heading 61.10 on a duty-

free basis. This includes “jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or

crocheted” of wool, cashmere, cotton, man-made fibres, and other materials. Prior to the CETA,

customs duties applied to these goods at a rate of 18 percent. In 2016, the total market in Canada

for imports of these apparel products was an impressive CA $1.7 billion33 (i.e., 13.6 percent of all

imported apparel products in that year). Imports from the European Union accounted for only CA

$77.2 million, which was less than 5 per cent of the total imports from all countries. The duties

applicable to these imports would have been approximately CA $12.9 million. Table 10, below,

illustrates the Canadian market for these imports in 2016, while Table 11 provides a detailed

analysis of EU imports based on production material.

Table 10 Imports of knitted sweaters, sweatshirts and waist-coats into Canada – HS Tariff Heading 61.10 (2016)

Source 2016

Italy (incl. Vatican City State) 44,858,496





- 41 -

Portugal 13,031,126

Romania 4,182,902

United Kingdom 3,384,103

Bulgaria 3,222,081

France (incl. Monaco, French Antilles) 2,067,033

Germany 1,329,470

Ireland 1,324,528

Spain 537,431

Other EU member states 3,240,805

EU sub-total 77,177,975

All other countries 1,638,100,444

Total imports from all countries 1,715,278,419



Source: Industry Canada (Statistics Canada), Trade Data Online,

available online at https://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home

Table 11 Detail of imports from the European Union

Source 2016

HS 61.10 Knitted sweaters, sweatshirts and waist-coats

HS 6110.11 - Wool 22,549,835

HS 6110.12 - Cashmere 8,271,947

HS 6110.19 - Other fine animal hair not elsewhere specified

1,585,352

HS 6110.20 - Cotton 23,532,165

HS 6110.30 - Man-made fibres 17,471,348

HS 6110.90 - Textile not elsewhere specified 3,767,328


All other countries 1,638,100,444

Total imports from all Countries 1,715,278,419





- 42 -

Source: Industry Canada (Statistics Canada), Trade Data Online, available online at


These statistics indicate that there are major producers of knitted sweaters, sweatshirts and waist-

coats in Italy, Portugal, Romania, the United Kingdom, and other EU member states, but their

access opportunities in the Canadian market have been limited by the historic application of

customs duties at a rate of 18 percent. With the elimination of these duties on 21 September 2017,

the EU producers indicated above are now in a position to export their products to Canada on a

duty-free basis, allowing them to compete for a greater share of the Canadian market for these

goods.

Applying the analytical approach outlined above more broadly indicates that the preferential tariff

treatment secured under the CETA creates immediate apparent opportunities for all EU producers

of apparel and clothing products. Appendix n.08 at table 7 summarizes these opportunities for both

knitted/crocheted goods and woven goods imported under Chapters 61 and 62 of Canada’s HS

tariff schedule, respectively. The value of the total Canadian market for each category of imported

goods is provided (in Canadian dollars) as an indication of the magnitude of the competitive

opportunities available as a result of the elimination of customs duties under the CETA. The largest

market access opportunities in Canada, by value, include business attire (i.e., suits, ensembles,

jackets and blazers, dresses, skirts, and similar garments), t-shirts, and knitted sweaters, sweatshirts

and waist-coats.

Table 12 Preferential Tariff Opportunities for EU Producers of Apparel and Clothing Goods

HS Tariff Description Preferential

Tariff Treatment

Total Imports to Canada

(2016)

EU Imports to Canada (2016)

Chapter 61 Apparel and clothing products, knitted or crocheted

61.01 Men’s or boys’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles, knitted or crocheted

18% Free 120,545,758 1,802,255

61.02 Women’s or girls’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles, knitted or crocheted

18% Free 142,356,174 5,273,361



- 43 -


Tariff Treatment


(2016)


61.03 Men’s or boys’ suits, ensembles, jackets, blazers, trousers, breeches, shorts, knitted or crocheted

18% Free 207,528,869 6,093,049

61.04 Women’s or girls’ suits, ensembles, jackets, blazers, dresses, skirts, trousers, breeches, shorts, knitted or crocheted

18% Free 899,090,113 33,990,938

61.05 Men’s or boys’ shirts, knitted or crocheted

18% Free 197,686,919 5,156,363

61.06 Women’s or girls’ blouses, shirts, and shirt-blouses, knitted and crocheted

18% Free 133,000,000 5,332,000

61.07 Men’s and boys’ undergarments, night clothes, bathrobes, dressing gowns, and similar articles, knitted or crocheted

18% Free 189,814,735 921,411

61.08 Women’s or girls’ undergarments, night clothes, bathrobes, dressing gowns, and similar articles, knitted or crocheted

18% Free 375,575,131 2,976,774

61.09 T-shirts, singlets and other vests, knitted or crocheted

18% Free 902,874,000 33,711,000

61.10 Jerseys, pullovers, cardigans, waistcoats, and similar articles, knitted or crocheted

18% Free 1,715,278,419 77,177,975

61.12 Track suits, ski suits, and swimwear, knitted and crocheted

18% Free 119,721,086 2,991,578

61.14 Other garments, knitted or crocheted

18% Free 192,196,187 5,050,829

61.15 Tights, stockings, socks, and other hosiery, knitted or crocheted

18% Free 363,929,658 20,046,331

61.16 Gloves, mittens, and mitts, knitted or crocheted

16-18% Free

150,582,746 1,534,156

61.17 Clothing accessories, knitted or crocheted (e.g., scarves, belts)

12-18% Free

60,849,057 4,237,312

Chapter 62 Apparel and clothing products, woven (not knitted or crocheted)



- 44 -


Tariff Treatment


(2016)


62.01 Men’s or boys’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles

17-18% Free

368,900,086 30,131,304

62.02 Women’s or girls’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles

16-18% Free

488,661,158 45,512,912

62.03 Men’s or boys’ suits, ensembles, jackets, blazers, trousers, breeches, shorts

17-18% Free

1,091,784,865 89,774,924

62.04 Women’s or girls’ suits, ensembles, jackets, blazers, dresses, skirts, trousers, breeches, shorts

17-18% Free

1,440,504,959 100,237,809

62.05 Men’s or boys’ shirts 17-18% Free

450,064,365 26,759,315

62.06 Women’s or girls’ blouses, shirts, and shirt-blouses

16-18% Free

385,418,758 25,007,157

62.07 Men’s and boys’ singlets and other vests, undergarments, night clothes, bathrobes, dressing gowns, and similar articles

16-18% Free

31,241,134 418,415

62.08 Women’s or girls’ singlets and other vests, undergarments, night clothes, bathrobes, dressing gowns, and similar articles

16-18% Free

52,625,910 1,061,495

62.11 Track suits, ski suits, and swimwear 6-18% Free 340,091,644 14,984,759

62.12 Lingerie and similar articles, whether or not knitted or crocheted

18% Free 340,338,552 5,724,393

62.14 Clothing accessories, knitted or crocheted (e.g., scarves)

9-18% Free 91,126,085 26,883,526

62.15 Ties and cravats 16-18% Free

28,891,423 8,901,367

Chapter 42 Apparel and clothing products, of leather

42.03 Articles of apparel (e.g., coats, jackets, etc.), gloves, belts, and other clothing accessories

8-15.5% 226,524,264 34,153,395






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Importantly, the reductions in tariffs on clothing and apparel under the CETA result in rates for

EU exporters that are, in nearly all cases, no less favourable than those applied to Canada’s

NAFTA partners of the United States and Mexico. As observed in Table 2.7., the elimination of

tariffs on nearly all tariff lines within chapters 42, 61, 62 and 64 of the Harmonised System makes

imports of these products originating from the EU that meet the specified rules of origin subject to

the same tariff rates as similar products originating from the United States and Mexico. As such,

the CETA not only provides significant improvements in market access to EU manufacturers of

clothing and apparel, but also greatly enhances the industry’s competitiveness in the Canadian

market vis-à-vis the United States and Mexico.

Table 13 Clothing and Apparel products for which the CETA lowers tariffs for EU imports to rates no less

favourable than imports from the United States and Mexico

HS Code Product HS Code (4 digit)

Product

4202

Trunks; suit, camera, jewelry, cutlery cases; travel, tool, similar bags; wholly mainly covered by leather, composition leather, plastic sheeting, textile materials, vulcanised fibre, paperboard

6203

Suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear); men's or boys' (not knitted or crocheted)

420330 Belts and bandoliers 6204

Suits, ensembles, jackets, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear); women's or girls' (not knitted or crocheted)

6101

Coats; men’s or boys’ overcoats, car-coats, capes, cloaks, anoraks, ski-jackets, wind-cheaters, wind-jackets and similar articles; knitted or crocheted, other than those in heading no. 6103

6205 Shirts; men's or boys' (not knitted or crocheted)

6102

Coats; women’s or girls’ overcoats, car-coats, capes, cloaks, anoraks, ski-jackets; wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading no. 610

6206

Blouses, shirts and shirt-blouses; women's or girls' (not knitted or crocheted)

6103 Suits, ensembles, jackets, blazers, trousers, bib and brace overalls,

6207 Singlets and other vests, underpants, briefs, night-shirts, pyjamas,



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Product

breeches, shorts (not swimwear); men's or boys', knitted or crocheted

bathrobes, dressing gowns and similar articles; men's or boys' (not knitted or crocheted)

6104

Suits, ensembles, jackets, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (not swimwear), women's or girls', knitted or crocheted

6208

Singlets and other vests, slips, petticoats, briefs, panties, nightdresses, pyjamas, negligees, bathrobes, dressing gowns and similar articles; women's or girls' (not knitted or crocheted)

6105 Shirts; men's or boys', knitted or crocheted

6209 Garments and clothing accessories; babies' (not knitted or crocheted)

6106 Blouses, shirts and shirt-blouses; women's or girls', knitted or crocheted

6210 Garments made up of fabrics of heading no. 5602, 5603, 5903, 5906 or 5907 (not knitted or crocheted)

6107

Underpants, briefs, nightshirts, pyjamas, bathrobes, dressing gowns and similar articles; men's or boys', knitted or crocheted

6211 Track suits, swimwear and other garments (not knitted or crocheted)

6108

Slips, petticoats, briefs, panties, nightdresses, pyjamas, negligees, bathrobes, dressing gowns and similar articles; women's or girls', knitted or crocheted

6212

Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof; whether or not knitted or crocheted

6109 T-shirts, singlets and other vests; knitted or crocheted

6213 Handkerchiefs (not knitted or crocheted)

6110 Jerseys, pullovers, cardigans, waistcoats and similar articles; knitted or crocheted

6214 Shawls, scarves, mufflers, mantillas, veils and the like (not knitted or crocheted)

6111 Garments and clothing accessories, babies'; knitted or crocheted

6215 Ties, bow ties and cravats (not knitted or crocheted)

6112 Track suits, ski suits and swimwear; knitted or crocheted

6216 Gloves, mittens and mitts (not knitted or crocheted)

6113 Garments made up of knitted or crocheted fabrics of heading no. 5903, 5906 and 5907

6217

Clothing accessories n.e.c.; parts of garments or accessories other than those of heading no. 6212 (not knitted or crocheted)

6114 Garments; knitted or crocheted, n.e.c. in chapter 61

6401 Footwear; waterproof, with outer soles and uppers of rubber or plastics, (uppers not fixed to the sole



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Product

nor assembled by stitch, rivet, nail, screw, plug or similar)

6115

Hosiery; panty hose, tights, stockings, socks and other hosiery, including graduated compression hosiery (for example, stockings for varicose veins) and footwear without applied soles, knitted or crocheted

6402 Footwear; with outer soles and uppers of rubber or plastics (excluding waterproof footwear)

6116 Gloves, mittens and mitts; knitted or crocheted

6403 Footwear; with outer soles of rubber, plastics, leather or composition leather and uppers of leather

6117 Clothing accessories; made up, knitted or crocheted, knitted or crocheted parts of garments or of clothing accessories

6404 Footwear; with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials

6201

Overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, men's or boys', other than those of heading no. 6203 (not knitted or crocheted)

6405 Footwear; other footwear n.e.c. in chapter 64

6202

Coats; women's or girls' overcoats, carcoats, capes, cloaks, anoraks, ski-jackets, wind-cheaters, wind-jackets and similar articles, other than those of heading no. 6204 (not knitted or crocheted)

6406

Footwear; parts of footwear; removable in-soles, heel cushions and similar articles; gaiters, le.g.ings and similar articles, and parts thereof

(ii) Rule of Origin Opportunities

Additional opportunities are provided by the relatively liberal CETA rules of origin in comparison

to the rules of origin under Canada’s other regional trade agreements. This is illustrated by the

balance of competitive opportunities between the CETA and the NAFTA in respect of tariff

subheading 6101.20, which covers the following products:

Articles of apparel and clothing accessories, knitted or crocheted – Men’s or boys’

overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters,

wind-jackets and similar articles, knitted or crocheted, other than those of heading

61.03 – of cotton.



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Under both the CETA and the NAFTA, the preferential rate of customs duty applicable to imports

of these products is zero percent. This means that both US-origin goods and EU-origin goods can

be imported into Canada on a duty-free basis, provided that the respective rules of origin are

satisfied. However, the CETA has a more liberal and less costly rule of origin than the NAFTA.

Under Annex 5 of the CETA Origin Protocol, the applicable rule of origin provides that the

products of subheading 6101.20 must undergo the following “sufficient production” within the

European Union in order to be considered “originating” and, thus, eligible for the preferential tariff

treatment: “Knitting or crocheting and making-up (including cutting)”. It is therefore sufficient for

the products to be knitted/crocheted and made up in the European Union, even if all of the cotton

yarn used for this production is imported from a third country.

In contrast, the applicable NAFTA rule of origin requires the same kinds of products to be cut,

knit, and sewn, or otherwise assembled in a NAFTA country using only NAFTA-originating cotton

yarn.34 Thus, the CETA rule of origin for apparel products under tariff subheading 6101.20 confers

a competitive advantage on EU producers by allowing them to use non-originating yarn inputs

(i.e., yarn from any country in the world).

34 The NAFTA rule of origin is complex due to its express exclusions. While the rule requires a change to

subheading 6101.20 from “any other chapter”, the exclusions essentially narrow the only possibility to a change from

headings 52.01 (cotton, not carded or combed) or 52.03 (cotton, carded or combed). The rule reads as follows, with

elaboration added to the exclusions [in square brackets and bold font]:

A change to subheadings 6101.20 through 6101.30 from any other chapter, except from headings 51.06 through 51.13 [wool and

animal hair yarn], 52.04 through 52.12 [cotton thread, yarn and woven fabrics], 53.07 through 53.08 [certain yarn of jute,

other vegetable textile fibres, paper] or 53.10 through 53.11 [certain yarn of jute, other vegetable textile fibres, paper),

Chapter 54 [man-made filaments and textile materials] or headings 55.08 through 55.16 [sewing thread, yarn and woven

fabrics of synthetic staple fibres] or 60.01 through 60.06 [knitted or crocheted fabrics], provided that:

(a) the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA countries,

and

(b) the visible lining fabric listed in Note 1 to Chapter 61 satisfies the tariff change requirements provided therein.

In principle, a NAFTA-originating apparel product can be made from 100% non-originating cotton, but this is only

possible if: (i) the cotton is spun into yarn in a NAFTA country; (ii) that yarn is used to knit the apparel products in a

NAFTA country; and (iii) the production at each stage is accumulated in accordance with the accumulation provisions,

such that the cumulative transformation is from heading 52.01 (cotton, not carded or combed) or heading 52.03 (cotton,

carded or combed) to subheading 6101.20. See e.g., NAFTA Rules of Origin Regulations, SOR/94-14, ss. 14(1), 14(6)

(Example 2).



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(iii) Origin Quota Opportunities

In addition to the standard rules of origin under Annex 5, the CETA also provides highly

liberalized alternative rules of origin for limited quantities of certain textile and apparel goods

produced in the European Union and imported into Canada. These “origin quotas”, which are set

forth under Annex 5-A, provide additional market access opportunities for EU enterprises trading

in textile or apparel products.

For example, the standard rule of origin for goods classified under heading 61.10, including

“jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted”, requires the

goods to undergo “knitting or crocheting and making-up (including cutting)” within the European

Union in order to qualify as “originating” goods.35 In comparison, a more liberal rule applies under

the origin quota. Specifically, the origin quota permits 537,000 units of such goods to qualify as

“originating” and receive preferential tariff treatment if they undergo only the following

production in the European Union: “Cutting of fabric and making up; or … Knitting to shape for

products for which no sewing or other assembly is required”. Thus, a product imported under the

origin quota does not need to be knitted or crocheted in the European Union; the knitted/crocheted

fabric or components can be produced in any third country, provided that the product is ultimately

made up (i.e., assembled and sewn together) within the European Union. This reduces the

production costs of the goods eligible for duty-free treatment under the CETA and provides a

corresponding competitive advantage in the Canadian market that goes beyond the elimination of

the customs duties.

The origin quotas, including details regarding their coverage and the alternative rules of origin that

apply to them, are set forth in the following tables under Annex 5-A of the CETA Origin Protocol:

Table C.3 – Annual Quota Allocation for Textiles Exported from the European Union

to Canada; and

35 This is the same rule as that applicable to goods classified under tariff subheading 6101.20, as discussed

above in section II.B.2.(b).(ii).



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Table C.4 – Annual Quota Allocation for Apparel Exported from the European Union

to Canada.

c) Automobiles (passenger cars) and automotive components

One of the most important markets in Canada is the automobile market. This market is primarily

supplied by the integrated North American (NAFTA) motor vehicle industry, although imports

from outside the NAFTA region also play an important role. The progressive elimination of

customs duties under the CETA will generate competitive opportunities for EU producers that are

already established in the Canadian market, but may also provide openings for new EU entrants.

(i) Finished Passenger Motor Cars

Notwithstanding the application of customs duties at a rate of 6.1%, the top EU products imported

into Canada in 2016 (by total value) were passenger motor cars classified under tariff subheading

8703.23 (i.e., powered by spark-ignition internal combustion reciprocating engines with cylinder

capacities between 1,501 and 3,000 cubic centimeters (cc)).36 The vast majority of passenger motor

cars traded in Canada are classified under this HS tariff subheading.

The total value of the vehicles in this category that were imported into Canada from all countries

in 2016 was approximately $18.2 billion, of which imports from the European Union accounted

for $3.4 billion (18.7%). The majority of these EU imports were produced in Germany. Table 14,

below, outlines this information in more detail, indicating that imports from Germany compete at

comparable levels with imports from Japan and Mexico, while imports from Spain and Italy are

well within the top ten countries exporting to Canada.

Table 14 Imports into Canada of passenger motor cars powered by spark-ignition internal combustion

reciprocating engines with cylinder capacities 1,501-3,000 cc – HS Tariff Subheading 8703.23 (2016)

Source 2016

United States 7,337,789,675

36 Source: Industry Canada (Statistics Canada), “Trade Data Online”, available online at

https://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home (selecting “top 25 products (HS6 codes)” from the European

Union).



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Source 2016

Japan 2,842,015,504

Germany 2,695,884,948

Mexico 2,518,068,504

Korea, South 1,902,822,815

Slovakia 250,727,587

Hungary 135,797,044

Spain 117,972,715


South Africa 92,324,864


China 52,636,499

Other countries 42,977,068

EU sub-total 3,430,212,554

All other countries sub-total 14,748,950,653





Looking more broadly at the full range of passenger motor cars, including both spark-ignition

internal combustion reciprocating engines (i.e., gasoline) and compression-ignition internal

combustion piston engines (i.e., diesel), with cylinder capacities ranging from 1,001 through 3,000

cc, the total value of imports into Canada from all countries in 2016 was CA $19.9 billion, of

which imports from the European Union accounted for CA $3.8 billion (19.1%). Table 15 outlines

this information in more detail. This broader analysis indicates that that motor cars with smaller

engines (i.e., with a cylinder capacity equal to or less than 1,500 cc) or powered by diesel engines

account for relatively modest shares of the overall market for imported automobiles in Canada.



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Table 15 Imports into Canada of motor vehicles powered by internal combustion engines with cylinder

capacities 1,001-3,000 cc – HS Tariff Subheadings 8703.22, 23, 31, and 32 (2016)

Source 2016

Internal combustion engine (1,001-3,000 cc)


Mexico 3,151,636,053

Japan 2,929,757,632

Germany 2,819,135,581

Korea, South 2,068,146,711

Slovakia 250,727,587


Hungary 135,800,752

Spain 118,053,862



EU sub-total 3,801,336,667






The negotiated outcomes of the CETA require the customs duties on motor vehicles from the

European Union to be gradually phased out over a period of eight years in equal annual increments,

such that these products will be entitled to duty-free treatment on 1 January 2024. Unless Canada

elects unilaterally or agrees bilaterally to accelerate this staging process, the customs duties will

be reduced and eliminated pursuant to the following timetable:

Table 16 Progressive elimination of customs duties on Imports into Canada of EU motor vehicles under HS

Tariff Subheadings 8703.22, 23, 31, and 32 (2016)

Year Applicable rate of customs duty

Prior to 21 Sept 2017 6.1%

2017 (21 Sept to 31 Dec) 5.3%



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Year Applicable rate of customs duty

2018 (1 Jan to 31 Dec) 4.6%

2019 (1 Jan to 31 Dec) 3.8%

2020 (1 Jan to 31 Dec) 3.1%

2021 (1 Jan to 31 Dec) 2.3%

2022 (1 Jan to 31 Dec) 1.5%

2023 (1 Jan to 31 Dec) 0.8%

2024 (1 Jan) and going forward Free

As Canada’s NAFTA partners similarly enjoy duty-free status on these tariff lines, the EU will,

therefore, significantly enhance its competitiveness in Canada’s motor vehicles import market by

2024 vis-à-vis the United States and Mexico.

(ii) Automotive Parts, Components and Accessories

The immediate elimination of customs duties on imports into Canada of parts, components, and

accessories under HS heading 87.08 for passenger motor cars of heading 87.03 may also provide

market access opportunities for EU enterprises, particularly SMEs, that specialize in producing

after-market goods for the automotive maintenance, repair, and customization industries. These

goods include bumpers, safety seat belts, brake systems, gear boxes, axles, transmission systems,

wheels, suspension systems, radiators, silencers (mufflers) and exhaust systems, clutches, steering

wheels and columns, safety airbag systems, power train parts, and the parts and components of the

foregoing items. Prior to 21 September 2017, these goods were subject to customs duties at a rate

of 6%. Under the CETA, they may be imported into Canada on a duty-free basis, provided they

satisfy the applicable rules of origin.

The elimination of the customs duties on automotive parts, components, and accessories will not

create new market access opportunities to supply Canadian production plants with inputs for use

in the assembly of finished vehicles. This is because such opportunities have long existed

independent of the CETA. Under the special tariff classification code 9958.00.00, “parts,

accessories and articles” may be imported from any country on a duty-free basis “for use in the



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manufacture of original equipment parts for passenger automobiles, trucks or buses, or for use as

original equipment in the manufacture of such vehicles”.37 Importantly, this special treatment does

not extend to after-market goods that are offered as lower-cost alternatives to Original Equipment

Manufacturer (OEM) replacement parts by suppliers of maintenance and repair services.

Thus, the 6% advantage conferred under the CETA through the elimination of the customs duties

on automotive parts, components and accessories may help EU firms to compete with, e.g.,

Chinese companies for contracts supplying aftermarket goods to automotive services suppliers,

either directly or through Canadian importers/distributors.

It is not possible to disaggregate the import value statistics for the parts, components, and

accessories that have entered Canada for use as “original equipment” in motor vehicle production

and like goods that have been imported for use in the after-market maintenance, repair, and

customization industry. Further, it is not possible to disaggregate the import value statistics for

parts, components, and accessories of passenger motor cars from those of mass transit motor

vehicles (e.g., coaches and buses), utility motor vehicles (e.g., fire engines and concrete mixers),

and transport motor vehicles (lorries and trucks). That said, Table 17 summarizes the best

information publicly available in relation to the magnitude of the Canadian market for such goods.

Table 17 Imports into Canada of motor vehicles parts, components, and accessories – HS Tariff Subheading

8707.10 and certain subheadings under Heading 87.08 (2016)

Source 2016


Mexico 2,822,740,427

China 1,674,903,984

Japan 1,095,405,982

Korea, South 666,488,469

Germany 506,256,355

37 Customs Tariff, S.C. 1997, c. 36, Schedule, Chapter 99, available online at http://www.cbsa-asfc.gc.ca/trade-

commerce/tariff-tarif/menu-eng.html (for Chapter 99, see http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-

tarif/2017/01-99/ch99-2017-5-eng.pdf).



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Source 2016

Taiwan 219,845,380

Re-Imports (Canada) 208,299,652

India 187,281,059


Spain 68,138,894

Slovakia 65,741,051









While the total market in Canada for imported automotive parts is significantly greater in value

than the market for finished imported motor vehicles, much of this trade is dominated by NAFTA

imports relating to the integrated North American automotive industry. Most of this value is

incorporated into the production of motor vehicles in Canada for export to the United States and

other countries. Manufacturing inputs from non-NAFTA countries are already entitled to duty-free

treatment under the special tariff classification code 9958.00.00. Unfortunately, these data do not

provide a clear indication of the magnitude of the specific market sector in Canada for after-market

parts, components, and accessories. Nevertheless, with respect to EU’s competitive position vis-

à-vis the United States and Mexico, it is noteworthy that the elimination of duties on European

automotive parts under tariff heading 8708 will place EU imports on equal footing with respect to

Canada’s NAFTA partners in terms of the applied tariffs to which these goods are subject.



- 56 -

Considering, however, the value of the market in Canada for passenger automobiles,38 and the

preference among many consumers for after-market parts and components as alternatives to OEM

products for the purposes of maintenance and repair, it is likely that this market sector is not

insignificant. The preferential tariff treatment under the CETA may therefore represent real

opportunities, particularly for SMEs in the European Union that specialize in the supply of after-

market products. These opportunities may be of particular interest to producers of automotive

parts, components, and accessories in the EU countries listed in Table 17, above, as well as Austria,

France, Poland, the Czech Republic, and other EU member states that have exported such goods

to Canada prior to the CETA.39

3. Reduced Customs Duty Opportunities by HS Section and Chapter

The following presents the reduced duty opportunities by HS section along with data on total

imports into Canada and imports from the EU into Canada.

The following tables set out an overview of the market access opportunities created by the

elimination or reduction of customs duties for EU goods imported into Canada under the CETA.

It summarizes the detailed information provided in the Appendix 1 spreadsheet, organizing it by

product categories (i.e., under the sections and chapters of the HS tariff schedule) for ease of

reference.

In order to provide an indication of the potential economic value of these market access

opportunities, the following statistical data are provided for each product category: (i) the total

value of the goods imported into Canada from all countries in 2016; and (ii) the value of the goods

imported into Canada from the European Union in the same year. The former indicates the size of

38 According to statistics published by DesRothiers Automotive Consultants, year-to-date sales of light vehicles

in Canada as of September 2017 totalled over 1.5 million units. See Gerry Malloy, Canadian Auto Dealer, “September

sales set yet another record” (4 October 2017), available online at https://canadianautodealer.ca/2017/10/september-

sales-set-yet-another-record/.

39 See e.g., Appendix 7, which indicates that, in 2016, exports of automotive parts and components to Canada

from each of these EU countries were worth between CA $30.5 million and CA $15 million, respectively.



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the Canadian market for imported goods, which suggests the magnitude of the opportunities

available for EU goods under the new competitive conditions created by the CETA. The latter

indicates whether and to what extent there were trade flows of the goods from the European Union

into Canada in 2016, notwithstanding the rates of customs duties that applied before to the CETA.

This indicates the existence of EU enterprises engaged in the production and export/import of the

goods into Canada that stand to benefit immediately from the elimination or reduction in the

applicable rate of customs duty.

a) Goods of Section II – Vegetable Products

The CETA preferential tariff treatment creates significant opportunities for EU producers of frozen

fruits and nuts. Canada’s market for imports of frozen fruits and nuts from all countries is

approximately CA $311.5 million per year.40 Despite the application of high rates of customs

duties, i.e., at 6 to 12.5 percent, imports from the European Union accounted for over 3.3 percent

of the total value of imports into Canada in 2016 ($10.3 million or EU €7.04 million41).

Although there were significant reductions in the rates of customs duty applicable to other items

under Section II (Vegetable Products), the import markets for these goods in Canada is almost

non-existent. Therefore, these reductions do not create significant new opportunities for EU

businesses.

b) Goods of Section IV – Prepared Foods, Beverages, Spirits and Vinegar and

Tobacco Products


prepared/processed food products, beverages and spirits, and tobacco products. Canada’s import


www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home.

41 This figure uses an annual average exchange rate in 2016 of EU € 0.6825 per CA $1.00. Source: Canadian

Foreign Exchange Services, “Yearly Exchange Rates for Currencies”, available online at

www.canadianforex.ca/forex-tools/historical-rate-tools/yearly-average-rates.



- 58 -

markets for these goods is approximately CA $24 billion per year (from all countries).42 In 2016,

the European Union occupied almost 16% of this market, despite customs duty rates of up to 17%.

C. Opportunities and Challenges relating to the Cheese TRQs

Canada’s commitments under Annex 2-A of the CETA include TRQs for (i) cheese of all kinds

for direct consumption (i.e., fine cheeses for retail sale), and (ii) “industrial cheese” for use

exclusively by processed food producers (i.e., ingredients for secondary production). These TRQs

allow specific annual quantities of originating cheese and industrial cheese products from the

European Union to be imported into Canada on a duty-free basis. Canada’s commitments also

require a reallocation to the European Union of 800 metric tonnes out of Canada’s 20,411.9 metric

tonne WTO cheese TRQ, starting as of 21 September 2017.

Canada’s CETA cheese TRQ commitments will be phased in over a period of six increments

within five years, as follows:

Table 18 Canada's CETA TRQ Committments

Year Aggregate Annual Quantity (metric tonnes, net weight)

1 2017 745 (pro-rated from 2,667)*

2 2018 5,333

3 2019 8,000

4 2020 10,667

5 2021 13,333

6 (and each

subsequent year)

2022 and onward

16,000

* In accordance with paragraph 6 of CETA Annex 2-A, access in Year 1 (2017) is pro-rated to the period between 21 September and 31 December 2017.

Source: Global Affairs Canada, Notice to Importers, “Dairy – CETA Cheese Tariff Rate Quota (TRQ) (Items 141 to 157 on the Import Control List)”, Serial No. 904 (1 October 2017), available online at www.international.gc.ca/controls-controles/prod/agri/dairy-laitiers/notices-avis/904.aspx?lang=eng).





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Canada’s industrial cheese TRQ commitments are also phased in over the same period of time, as

follows:

Table 19 Canada's industrial cheese TRQ committments

Year Aggregate annual quantity (metric tonnes, net weight)

1 2017 79 (pro-rated from 283)*

2 2018 567

3 2019 850

4 2020 1,133

5 2021 1,417

6 (and each

subsequent year) 2022 and onward 1,700

* In accordance with paragraph 6 of CETA Annex 2-A, access in Year 1 (2017) is pro-rated to the period between 21 September and 31 December 2017.

Source: Global Affairs Canada, Notice to Importers, “Dairy – CETA Industrial Cheese Tariff Rate Quota (TRQ) (Items 141 to 157 on the Import Control List)”, Serial No. 905 (1 October 2017), available online at www.international.gc.ca/controls-controles/prod/agri/dairy-laitiers/notices-avis/905.aspx?lang=eng .

In 2016, a total of 25,155 metric tonnes of cheese was imported into Canada.43 The total value of

these imports from all countries was approximately CA $320 million, of which imports from the

European Union accounted for CA $182 million (more than double the value of imports from the

United States). Table 20, below, details the value of imports from the United States and the EU

member states, respectively.

Table 20 Imports into Canada of cheese and curd – HS Tariff Heading 04.06 (2016)

Source 2016

United States 86,858,335


43 TRQ Imports Summary Control, Year 2016, available online at https://www.eics-scei.gc.ca/report-

rapport/APRMT61C-C-16.htm.



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Source 2016

France (incl. Monaco, French Antilles) 53,603,628

Denmark 17,003,093


Netherlands 12,232,997

Greece 6,900,518

Germany 4,062,198

Spain 3,626,821

Ireland 2,894,808

Bulgaria 1,376,186

Portugal 992,040

Cyprus 501,847

Poland 201,590

Austria 152,154

Belgium 108,628

Sweden 36,587

Lithuania 41

Estonia 18


All other countries sub-total 138,131,205

Total imports from all countries 320,046,444


Source: Industry Canada (Statistics Canada), Trade Data Online, available online at www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home

Based on the total import values summarized in Table 20, the average value of cheese imported

into Canada in 2016 was CA $12,722.79 per metric tonne. Considering that the CETA TRQs open

up 745 metric tonnes of increased market access for EU cheeses for direct consumption and 79

metric tonnes of increased market access for “industrial cheese”, the total value of these market

access opportunities is approximately CA $10.5 million from 21 September to 31 December 2017,



- 61 -

growing to approximately CA $225.2 million in 2022 (assuming that the prices of cheese remain

stable at 2016 rates). The 800 metric tonne WTO cheese TRQ allocation adds a further $10.2

million per year.

Administrative and practical issues related to taking advantage of these market access

opportunities are discussed in the next section.

D. Taking Advantage of the Preferential Tariff Treatment Opportunities

This section addresses the principal steps that importers of EU products must undertake in terms

of customs administration in order to take advantage of the CETA market access opportunities

identified above. This includes a discussion of the common mistakes made by exporters and

importers that need to be avoided.44 It also describes related tax and other trade issues that need to

be considered.

1. Post-Entry Customs Enforcement

Specific requirements and procedures must be followed to take advantage of the market access

opportunities created under the CETA through the elimination or reduction of customs duties. It is

important for importers of goods from the European Union to ensure that they fully comply with

these requirements and procedures. Most of these matters must be addressed before to the

exportation of the goods (e.g., tariff classification of the goods, application of the rules of origin

to establish originating status, and valuation of the goods). Some matters, such as record-keeping

requirements, must be observed for a period following exportation. Failure to comply with the

applicable requirements and procedures will result in liability for unpaid duties and taxes, interest

charges, and possible penalties.

For the most part, Canada enforces the customs requirements and procedures relevant to

preferential duties on a post-entry basis. Records must be maintained for a period of six years

44 This section is written for the benefit of SMEs and new entrants to the Canadian market. Some of the content

may be common knowledge for large and sophisticated EU enterprises and others that are experienced in exporting to

Canadian markets.



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following the importation of commercial goods.45 Although customs audits generally look back in

time for a period of 12-24 months, they could in principle go back as far as six years. This means

that the mere fact that goods have cleared customs in Canada does not mean that the importation

meets all of the applicable requirements. Where errors have occurred (e.g., in any declaration of

origin, tariff classification, valuation, etc.), a contingent liability can exist for up to six years.

For an EU enterprise, the cost of fully complying with the applicable requirements and procedures

before exportation is substantially less than the costs of dealing with a finding of non-compliance

in a future customs audit and being required to correct the problem (including the payment of any

applicable duties) at that time. Moreover, failing a customs audit can result in additional scrutiny

of the enterprise’s importations and, thus, higher compliance costs in the future. Accordingly, it is

worthwhile for EU exporters to incur the costs of ensuring compliance prior to exportation of their

goods to Canada.

The following are the key areas relevant to preferential duty access that give rise to compliance

issues.

2. Tariff Classification of Goods

The starting point for the exportation of EU goods to Canada is to determine the tariff classification

of those goods in accordance with the classification rules in Canada’s HS tariff schedule.46 The

Harmonized System (HS) administered by the World Customs Organization (WCO) describes

approximately 5,000 commodity groups, each identified by a six-digit tariff code, and provides

specific rules to determine tariff

45 Imported Goods Records Regulations, SOR/86-1011, available online at

www.laws.justice.gc.ca/eng/regulations/SOR-86-1011/FullText.html.

46 Schedule to the Customs Tariff, S.C. 1997, c. 36, available online at www.cbsa-asfc.gc.ca/trade-

commerce/tariff-tarif/menu-eng.html. See also World Customs Organization, “What is the Harmonized System

(HS)?”, available online at www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-

system.aspx.



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f classification.47 Commodity groups are organized into chapters (2-digit code), headings with each

chapter (4-digit code), and subheadings within each heading (6-digit code). Canada’s HS tariff

schedule to the Customs Tariff, which sets out the applicable rates of customs duties, is based on

the HS administered by the WCO and, up to the six-digit level, it corresponds with that system.

However, Canada’s HS tariff schedule lists tariff items up to the 10-digit level. Specifically, it

further organizes goods into tariff items (8-digit code) and tariff classification numbers (10-digit

code). The 8-digit and 10-digit subcategories provide additional levels of detail within the 6-digit

HS categories. Information on which goods are covered at these additional digits is found in the

text of Canada’s HS tariff schedule.

Since tariff classification forms the basis for determining the applicable rules of origin and the

applicable rate of customs duty, it is essential that the classification determination is accurate. Care

should be taken when classifying goods. Unless the classification is obvious, it is worthwhile

consulting with a customs classification expert. Most established and reputable customs brokers

provide these services at a reasonable cost.

Customs tariff classification errors are common. They can be avoided by taking the necessary care

when undertaking the classification exercise.

3. Customs Valuation

Customs valuation — i.e., determining the value against which the applicable rate of customs duty

will be applied — is another common area of non-compliance. Detailed valuation rules and

procedures are established in Canada’s federal legislation, regulations, and administrative

guidelines.48 Care should be taken when determining the customs value of the goods, particularly

if related parties are involved in the transaction triggering the export of the goods to Canada. It is

worthwhile to consult with a customs valuation expert unless an EU exporter is familiar with the

47 Ibid.

48 These are summarized in the D-13 series of D Memorandum published by the Canada Border Services

Agency www.cbsa-asfc.gc.ca/publications/dm-md/d13-eng.html.



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nuances of customs valuation. Most established and reputable customs brokers provide these

services at a reasonable cost.

4. Rules of Origin

Rules of origin are, by far, the riskiest element of customs compliance when qualifying for a

preferential rate of customs duty under a trade agreement. It is common for exporters and

importers, even large and sophisticated multinational companies, to fail origin verification audits.

Non-compliance with the rules of origin is also generally the most expensive form of non-

compliance because it results in the withdrawal of the preferential tariff and the application of the

MFN Tariff on a retro-active basis. When a positive rate of customs duty applies under the MFN

Tariff, payment of the duties can be required for all shipments into Canada going back up to four

years. For goods with high rates of customs duties under the MFN Tariff (e.g., textiles and apparel),

a finding of non-compliance with the CETA rules of origin would be disastrous for an SME. For

this reason, extreme care must be taken to ensure compliance with the applicable rules and

procedural requirements.

To benefit from CETA preferential duties, goods produced in the European Union must meet the

origin requirements specified in the Origin Protocol. The Origin Protocol specifies the substantive

requirements to determine whether a good originates in the European Union. There are general

rules applicable to all products, product-specific rules, special rules for certain products (e.g.,

textiles and apparel) and procedural requirements. Product-specific rules are tied to the HS tariff

classifications of (i) the finished goods that are being exported, and (ii) the materials and parts or

components that go into the production of those goods as inputs. The rules are primarily based on

transformation requirements (e.g., a shift in tariff classification between the inputs used in

producing the product and the finished product itself). However, the rules also include value

content requirements (e.g., EU and/or Canadian content must account for a minimum percentage

of the ex-factory value or transaction value of the product, or non-CETA content must not exceed

a maximum allowable percentage).



- 65 -

Compliance with the applicable rules of origin is proven through a signed origin declaration.

Erroneous origin declarations are common, and care must be taken before signing one.

Unless an origin declaration relates to a primary agricultural good, and the exporter can prove with

certainty the good is grown in the European Union (e.g., the exporter received the agricultural

product directly from an EU farm), the best practice is to avoid signing an origin declaration unless

the signatory is the producer of the good and the necessary accounting and audit procedures are in

place to ensure the origin declaration can be fully substantiated and verified. It is not enough for

the good in question to meet the requirements of the applicable rule of origin. A complete audit

trail must exist to prove compliance for every shipment that has been exported to Canada. There

have been many instances where a manufactured good is wholly produced in a NAFTA facility,

but the importer has failed a NAFTA origin audit because the facility did not have the requisite

accounting and audit procedures in place to substantiate the declaration of origin for every product

that had been imported into Canada during the period of review.

Resellers of EU products who wish to export and claim the preferential duty face considerable risk

unless they have a signed origin declaration from the producer of the goods. It is a common mistake

for an exporter to sign a certificate of origin based simply on personal knowledge that the goods

in question were produced in the European Union, even if by a third party. In the North American

context, preferential tariff treatment has been denied for acknowledged North American goods

(e.g., motor vehicles) when the exporter/importer is unable to provide a certificate of origin signed

by the producer of the good. This has resulted in situations where producers control the certificates

of origin and, therefore, control access to the preferential duties. Resellers who are not working

with such producers may not be able to obtain valid certificates of origin and, therefore, may be

unable to claim the NAFTA preferential tariff treatment even on well-known products. A similar

situation will likely arise with respect to CETA preferential tariff treatment.

5. Non-Resident Importer of Record

EU exporters can ship goods to customers in Canada who act as the importers of record.

Alternatively, EU exporters can import goods into Canada without having a physical presence



- 66 -

(e.g., a permanent establishment) in Canada by registering and acting as a non-resident importer

(NRI) of record. NRIs are responsible for all import documentation and pay all duties and taxes

related to the goods.

Becoming an NRI is an advantage because it allows EU exporters to avoid the costs of a

commercial establishment in Canada while providing goods that have already cleared customs to

Canadian customers. Most established and reputable customs brokers can assist EU exporters in

setting up an NRI account with the Canada Border Services Agency, and can also assist in ensuring

compliance with all requirements, including record-keeping requirements. Care should be taken in

determining the tax implications of becoming an NRI, including payment of the Canadian goods

and service tax (GST).

6. Goods and Services Tax (GST) – Canada’s Value-Added Tax (VAT)

All goods and services imported into Canada are subject to the 5 percent ad valorem federal goods

and services tax (GST), unless they are specified as non-taxable importations. Normally, the

intended payor of this tax is the final consumer in Canada. The tax is collected by the seller and

remitted to the Government of Canada. To avoid multiple payments of the tax on goods transferred

between commercial entities before being sold to the final consumer, the GST paid during

intermediate transactions can be recovered through input tax credits (ITCs), provided that all

requirements to claim the ITC are met.

In structuring their transactions, EU exporters must ensure that either they or their Canadian

commercial customers can recover the GST paid or payable at the time of importation through

ITCs. If the GST paid on imported goods cannot be recovered in some way, it becomes a

transaction cost that reduces the profitability and/or competitiveness of the sale of the goods in the

Canadian market. As an example, if the CETA preferential tariff eliminates 5 percentage points of

customs duty, the inability to claim the ITC on the 5% GST will completely negate the advantage

conferred by the CETA.



- 67 -

It is a common practice in Canada for importers to claim ITCs for imported goods. Provided that

all requirements are complied with, the trade of goods into Canada by an EU exporter/importer

will not be adversely affected by the GST. Consultation with a tax consultant is recommended,

given the fact-specific nature of the ITC requirements, including the exclusions, exceptions, and

special conditions that might apply.

7. Access to the Cheese TRQs and the Origin Quotas

The three cheese TRQs (CETA-cheese, CETA-industrial cheese, and WTO-EU cheese re-

allocation) are administered through an import licensing system by the Trade Controls Bureau of

Global Affairs Canada.49 Applicants for import licenses for the two CETA TRQs must be Canadian

residents. In the case of the cheese quota, applicants must “be active in the Canadian cheese sector

regularly during the reference period and the allocation year” and, in the case of the industrial

cheese quota, must “be regularly active in the further processing of cheese during the reference

period and the allocation year”.50 The WTO-EU cheese allocation import licenses are available to

traditional import allocation holders on the basis of their historical import quota as adjusted, if

necessary, for any under-utilization.51 The application requirements and administrative procedures

are set out in notices issued by the Trade Controls Bureau.52

The combination of import licensing requirements, residency requirements, and historic

production and participation requirements prevents new entrant EU exporters from acquiring

49 Administration of the TRQs using import licensing is permitted under the CETA. See CETA Annex 2-A,

paragraphs 16 and 17.

50 Notice to Importers – Dairy - CETA Cheese Tariff Rate Quota (TRQ) (Items 141 to 157 on the Import Control

List), Serial No. 904, October 1, 2017 and in the Notice to Importers – Dairy - CETA Industrial Cheese Tariff Rate

Quota (TRQ) (Items 141 to 157 on the Import Control List), Serial No. 905, October 1, 2017. See:

www.international.gc.ca/controls-controles/prod/agri/dairy-laitiers/notices-avis/904.aspx?lang=eng and

www.international.gc.ca/controls-controles/prod/agri/dairy-laitiers/notices-avis/905.aspx?lang=eng

51 Notice to Importers - Dairy - World Trade Organization (WTO) Cheese Tariff Rate Quota (TRQ) (Items 141

to 157 on the Import Control List), Serial No.: 906, October 1, 2017. See: www.international.gc.ca/controls-

controles/prod/agri/dairy-laitiers/notices-avis/906.aspx?lang=eng

52 Ibid.



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licenses to access the TRQs. This access is controlled by the permit holders. EU exporters,

therefore, must seek out supply arrangements with the permit holders in order to benefit from the

TRQs. A list of the cheese quota holders for 2017 is included as Appendix 2.

8. Regulatory Requirements, High Duties, and Other Considerations

Canadian regulatory requirements are similar to those in the European Union. The importation of

certain goods is prohibited (e.g., illegal goods, trademark infringing goods, dangerous goods),

restricted or controlled (e.g., firearms, munitions, certain chemicals), regulated (e.g., animals,

plants, food and drugs), and subject to technical regulations (e.g., food labelling requirements,

electrical safety standards, building codes, etc.). EU exporters should identify in advance such

requirements and determine if they can be met or if they prevent exportation.

Prohibitively high duties remain on approximately 130 tariff items which relate to over-access

commitment tariffs on Canada’s supply managed products (i.e., dairy, poultry, and eggs). These

tariff items are included in Appendix 1. Certain undenatured ethyl alcohol is subject to significant

excise duties upon importation. Imports of used motor vehicles are restricted. Finally, imports of

specific goods can be subject to high anti-dumping and countervailing duties.53 EU exporters

should determine in advance whether such duties or restrictions apply to their products.

III. GOVERNMENT PROCUREMENT

Chapter 19 of the CETA requires Canadian authorities to treat EU suppliers of goods and services

in an open, transparent, and non-discriminatory manner when they participate in public

procurement opportunities for contracts above the applicable value thresholds (“covered

procurements”) that are not subject to express exclusions. Importantly, the CETA is Canada’s first

international free trade agreement that guarantees market access and non-discriminatory treatment

53 For a list of these goods and details on the duties, see http://www.cbsa-asfc.gc.ca/sima-lmsi/mif-mev-

eng.html. The currently listed goods relevant to the EU are: certain steel plate (Bulgaria, Czech Republic, Denmark,

Italy, Romania), concrete reinforcing bar (Portugal and Spain), copper tube (Greece), fabricated industrial steel

components (Spain), and refined sugar (EU).



- 69 -

in relation to supply contracts procured by sub-central governments (i.e., provincial/territorial and

municipal governments and government entities).

For over two decades, Canada has implemented various trade agreements that require federal

government procurement to be conducted in in an open, transparent, and non-discriminatory

manner. The CETA, however, represents the first international trade agreement in which Canada

has made market access and non-discrimination commitments covering procurement opportunities

at the provincial, territorial, and municipal levels of government. As a result, Chapter 19

significantly expands the market access opportunities for EU firms to supply their goods and

services to all levels of Canadian governments. In particular, it provides them with a competitive

advantage over prospective suppliers from third countries in sub-central government procurement

opportunities. While Canada has guaranteed market access and non-discriminatory treatment to

EU enterprises in covered procurements at the provincial/territorial and municipal levels of

government, it has not provided equivalent access to any other international actors.

1. Comparison of Market Access Opportunities under the CETA and the CFTA

Internally, the Canadian federal government and provincial/territorial governments entered into

the Agreement on Internal Trade (“AIT”) in July 1994. Chapter 5 of the AIT was intended to

ensure equal access to government procurements for all Canadian suppliers. The AIT did not,

however, guarantee to interprovincial suppliers the extent of market access that was accorded to

EU suppliers in the negotiated outcomes of the CETA. In particular, the AIT did not ensure access

to municipal government procurement opportunities for Canadian suppliers from other provinces

or territories.

On 1 July 2017, the AIT was replaced by the Canadian Free Trade Agreement (“CFTA”). The

CFTA substantially increases the rights of Canadian suppliers to access Canadian government

procurements at the federal, provincial/territorial, and municipal levels. While the monetary

thresholds and procurement exceptions vary between the CFTA and the CETA, the access to

government procurement ensured by these two agreements is significantly greater than the access

provided by Canada’s other free trade agreements with third countries. Effectively, EU suppliers



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(because of the CETA) and Canadian suppliers (because of the CFTA) have market access to sub-

central government procurement opportunities to which no other suppliers in the world have

access.

Attached as Appendix 3 is a comparison of the monetary thresholds and covered government

entities under the procurement chapters of the CETA and the CFTA, respectively. This comparison

indicates that the monetary thresholds applicable under the CETA are higher than the monetary

thresholds applicable under the CFTA. While this means that Canadian suppliers will have

guaranteed market access to certain low-value procurements that are not covered under the CETA,

this will not have a material impact on EU procurement opportunities for the following reasons.

First, the differences in the minimum contract value thresholds are not substantial enough to result

in a large tranche of meaningful procurement opportunities that are reserved only for Canadian

businesses. In this regard, we have not become aware of any governments in Canada attempting

to structure a procurement with the intention of including it within the scope of CFTA but

excluding it from the scope of the CETA. Moreover, the nature of certain government supply

contracts would make it difficult (if not impossible) to bring the contractual value below the

applicable CETA thresholds without giving rise to improper contract splitting.

Second, the minimum contract value thresholds set forth in the CETA are not so high that they

would apply only to the largest procurement opportunities. Rather, the thresholds are set low

enough that EU suppliers, including SMEs, will have guaranteed market access to many

meaningful opportunities. In our experience as legal counsel in public procurement matters, non-

Canadian suppliers are generally not inclined to invest the resources associated with participating

in a Canadian procurement process unless the resulting contract is sufficiently lucrative. It would

be rare for us to see a non-Canadian supplier take interest in a complex procurement below the

minimum contract value thresholds agreed in the CETA.

In short, we do not view the CETA procurement thresholds as a barrier to market access

opportunities. To the contrary, in our experience, the majority, if not the totality, of the publicly



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procured contracts that are of primary interest to EU companies will be valued above the applicable

thresholds.

Prior to the implementation of the CETA, EU enterprises seeking to supply goods or services to a

sub-central government in Canada would find it necessary, in most cases, to enter into a

partnership, joint venture, or sub-contract with a Canadian enterprise. One of the benefits of the

CETA market access and non-discrimination commitments under Chapter 19 is that EU businesses

will no longer need to enter into such arrangements with Canadian entities in order to participate

effectively in sub-central government procurements. Instead, EU suppliers will be in a position to

participate independently in tendering processes and, when successful, contract directly with the

provincial, territorial, or municipal government entity purchasing the supply of goods and/or

services.

2. The Impact of Canada’s Other Free Trade Agreements on CETA Procurement

Canada’s other international free trade agreements that address procurement include the North

American Free Trade Agreement (“NAFTA”), the WTO Agreement on Government Procurement

(“GPA”), the Canada-Chile Free Trade Agreement, the Canada-Costa Rica Free Trade

Agreement, the Canada-Peru Free Trade Agreement, the Canada-Colombia Free Trade

Agreement, and the Canada-Panama Free Trade Agreement. While all of these agreements

provide guaranteed market access to federal government procurement, none of them provide

guaranteed market access to sub-central government procurement.

However, the fact that trade agreements such as the NAFTA, the AIT, and the GPA have been

implemented and enforced in Canada for over two decades is an important factor in the market

access opportunities accorded to EU suppliers under the CETA. The implementation and

application of Canada’s obligations under its pre-CETA trade agreements have brought public

tendering and purchasing processes, at the federal and provincial/territorial levels, under specific

procurement disciplines that are similar to the Chapter 19 obligations imposed by the CETA.

Through the implementation and application of basic procurement principles, such as transparency

and non-discrimination, Canada’s other trade agreements have already done away with many of



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the discriminatory practices that were previously experienced in Canadian government

procurement.

Moreover, while Canada’s other trade agreements did not open up access to municipal government

procurement, many municipal governments have already implemented purchasing by-laws that are

consistent with the AIT (and more recently the CFTA). To this end, the procurement practices of

those municipalities will already be consistent with most, if not all, of the procurement obligations

imposed by CETA.

The NAFTA prompted the need for the AIT. The NAFTA went into effect on 1 July 1994, and the

AIT came into force just seven months later, on 1 July 2017. The proximity of the dates on which

these two landmark agreements entered into force is more than mere coincidence. At the time, the

negotiated outcomes of the NAFTA provided non-Canadian enterprises with a level of access to

federal government procurements that was unprecedented. Without the AIT, Canadian suppliers

would potentially have been at a competitive disadvantage to American and Mexican suppliers.

A similar timeline has been witnessed with the CFTA and the CETA. The CFTA entered into force

on 1 July 2017, just less than four months before the CETA entered into force on 21 September

2017. In May 2015, the Ontario Government published a presentation on government procurement,

which confirmed that one of the purposes of the re-negotiation of the AIT (now the CFTA) was to

ensure that Canadian suppliers would have guaranteed access to government procurement that

would be at least equal to that accorded to European suppliers under the CETA. Had the CFTA

not replaced the AIT, then EU suppliers would have gained guaranteed market access to sub-

central government procurements for which Canadian suppliers could have been excluded.

A. The Challenge of Quantifying Canadian Government Procurement Opportunities

Canadian governments at the federal, provincial/territorial and municipal levels are significant

purchasers of goods and services. Collectively, these Canadian markets represent very significant

opportunities for EU suppliers of goods and services. That said, a quantification of Canadian

government procurement markets, segregated by the different levels of government, does not yet

exist.



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The best available information on public spending in Canada is summarized below. While there

exists reasonably detailed data on purchasing by the federal, provincial, and territorial

governments up until 2012, detailed estimates of procurement by municipal governments has not

been undertaken. Further, there is significant variance in the estimates of Canadian government

spending in Canada prepared by different sources using different methodologies. In part, this is

the result of a lack of consistent measurements of Canadian government procurements over time.

In order to ensure better records and measurements going forward, both the CFTA and the CETA

include reporting requirements. While these provisions do not currently assist EU stakeholders to

understand the scope of market access opportunities in Canadian government procurement, the

comprehensive data collected over time from consistent reporting will provide insight into public

purchasing trends at all levels of government in Canada.

1. Statistics Collected on the Canadian Agreement on Internal Trade (AIT)

As discussed above, the predecessor to the CFTA was the AIT. Like the CFTA and the CETA, the

AIT required covered entities to submit reports on government spending. The AIT summaries of

government spending are available from 1995-1996 until 2011-2012. Attached as Appendix 4 is a

summary of AIT procurement data based on reports from 1995-1996 through 2011-2012. Attached

as appendix 5 is a summary of AIT reporting by party for the same period of time.

While these data indicate certain historic trends, they do not include municipal government

spending. Further, the minimum value thresholds were lower in the AIT than those set forth in the

CETA, and there are also differences between the exclusions and exceptions in the respective

agreements. Nevertheless, the government spending trends at the federal and provincial/territorial

levels, as shown by the AIT reporting data, provide an estimate of the market access opportunities

available under Canada’s CETA obligations.

In 1995-96, total procurement reported by the federal and provincial/territorial governments

totalled over CA $11.7 billion. This amount increased to over CA $28.3 billion by 2011-12. This

represents an increase of 140% in less than 20 years.



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Another trend that this data reveals is a shift from spending by the federal government to spending

by the provincial/territorial governments. In 1995-96, federal government spending represented

54.9% of total reported public procurement in Canada. However, by 2011-2012, federal

government spending represented just 34.3% of total reported public procurement. This reinforces

the importance of CETA’s guaranteed market access to provincial government procurements.

Moreover, the AIT data also shows that four provinces spent in excess of CA $1 billion in 2011-

12: Quebec (CA $4,907,142,769 or 17.4%), Alberta (CA $4,610,982,846 or 16.3%), Ontario (CA

$3,446,064,868 or 12.2%), and British Columbia (CA $1,774,176,388 or 6.3%). Even though this

data is from 2011-12, it provides an estimate of potential government spending throughout Canada.

2. OECD Procurement Data Calculation Methodology

While the AIT records provide some insight into the magnitude of the market opportunities relating

to Canadian federal and provincial/territorial government procurement, these data do not provide

any information regarding the magnitude of overall total government procurement, i.e., including

municipal government spending. The best evidence available on total government spending is

provided by the Organisation for Economic Co-operation and Development (OECD).

The OECD’s national accounts data are taken from its OECD Quarterly National Accounts.54 Each

OECD country maintains data based on its own system of national accounts. OECD member

nations currently populate their national accounts according to the System of National Accounts,

2008 (“2008 SNA”), “a statistical framework that provides a comprehensive, consistent, and

flexible set of macroeconomic accounts for policy-making, analysis and research purposes”.55 The

SNA 2008 was produced by the United Nations, the European Commission, the Organisation for

54 OECD, Quarterly National Accounts, available online at https://stats.oecd.org/Index.aspx?DataSetCode=

QNA.

55 United Nations, System of National Accounts 2008 – 2008 SNA (New York, 2009), available online at

https://unstats.un.org/unsd/nationalaccount/docs/SNA2008.pdf.



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Economic Co-operation and Development, the International Monetary Fund, and the World Bank

Group.

General procurement spending is estimated using data from the 2008 SNA. OECD defines general

procurement as follows:

Intermediate consumption means “goods and services purchased by governments for their own

use, such as accounting or information technology services”. Gross fixed capital formation entails

the “acquisition of capital excluding sales of fixed assets, such as building new roads”. Social

transfers in kind via market producers entail “purchases by general government of goods and

services produced by market producers and supplied to households”.56

The general government procurement figures include the procurement values for central, sub-

central, and local governments. The OECD does not, however, indicate on what basis it computes

central government procurement and sub-central government procurement as subsets of general

government procurement.

The most recent OECD data set for Canadian government procurement is summarized in Table

21, below.

Table 21 General government procurement estimates based on OECD national accounts data

2012 2013 2014 2015 2016

Indicator Unit

56 OECD.Stat, “Government at a Glance – 2015”, “Information – Concepts & Classifications”, available online

at https://stats.oecd.org/Index.aspx?DataSetCode=GOV_2015#. See also OECDiLibrary, “Government at a Glance

2017, 9. Public Procurement, Size of Public Procurement, Methodology and Definitions”, available online at

http://www.oecd-ilibrary.org/sites/gov_glance-2017-en/09/01/index.html?itemId=/content/chapter/gov_glance-

2017-59-en&mimeType=text/html.

intermediate consumption

General procurement = + gross fixed capital formation

+ social transfers in kind via market producers



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2012 2013 2014 2015 2016

General government procurement as share of total general government expenditures

Percentage

33.09% 32.53% 32.39% 32.71%

General government procurement as a percentage of GDP

Percentage

13.84% 13.34% 12.80% 13.44%

Gross domestic product, expenditure-based $

millions $1,822,808.0

0 $1,897,531

.00 $1,983,117

.00 $1,986,193

.00 $2,027,544.

00

General government procurement $ millions

$ millions

$252,276.63 $253,130.6

4 $253,838.9

8 $266,944.3

4

Central government procurement as a percentage of general government procurement, excluding social security funds

Percentage

12.54% 12.29% 9.65% 10.84%

Sub-central government procurement as a percentage of general government procurement, excluding social security funds

Percentage

87.46% 87.71% 90.35% 89.16%

Central government procurement as a percentage of general government procurement, excluding social security funds, current PPPs

$ millions

$31,635.49 $31,109.76 $24,495.46 $28,936.77



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2012 2013 2014 2015 2016

Sub-central government procurement as a percentage of general government procurement, excluding social security funds, current PPPs

$ millions

$220,641.14 $222,020.8

8 $229,343.5

1 $238,007.5

7

Central government procurement as a percentage of general government procurement

Percentage

12.43% 12.19% 9.56% 10.70%

Sub-central government procurement as a percentage of general government procurement

Percentage

86.65% 86.93% 89.45% 87.99%

Social security government procurement as a percentage of general government procurement

Percentage

0.92% 0.88% 0.99% 1.31%

The OECD estimates cover all government procurement. In light of the minimum value thresholds

and the exclusions set forth in CETA Chapter 19 and Canada’s market access schedule in Annex

19-A, the total value of the market access opportunities available to EU suppliers will be less than

the total value of Canadian government procurements in the OECD estimates. However, the OECD

estimates provide an approximate indication of the magnitude of the market access opportunities

created under the CETA.

3. Municipal Government Procurement represents Significant Spending

Collectively, municipal government spending throughout Canada is very significant. While no

detailed studies exist on the total value of municipal government procurements, a high-level



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estimate can be derived from the OECD estimates and the data collected pursuant to the AIT

reporting requirement.

For 2012, the OECD estimates that the total sub-central government spending in Canada was CA

$220,641,140,000. According to the data reported pursuant to the AIT for 2011-12, the total

provincial/territorial government procurement spending was CA $18,540,480,431. While the AIT

data do not include the procurements excluded from CETA coverage, they provide the best

available information on provincial/territorial government procurements. On this basis, total

municipal government procurement spending in 2012 would have represented approximately CA

$202 billion.

This estimate of the total value of all municipal public contracts throughout Canada indicates the

approximate magnitude of real opportunities for EU suppliers under CETA Chapter 19. As

discussed below, it also highlights the importance of developing an electronic, publicly accessible

single point of access for the publication and organization of all Canadian government

procurements.

B. The Current Challenge: Identifying Government Procurement Opportunities

In terms of taking advantage of the CETA market access to Canadian government procurements,

the single greatest challenge currently facing EU enterprises is the identification of opportunities

offered by sub-central government entities in a timely manner.

Currently, a Canada-wide electronic single point of access (“SPA”) that publishes a consolidated

and searchable list of all intended government procurement notices does not exist. Without an

SPA, many EU enterprises (especially SMEs) will have difficulty identifying all of the

opportunities throughout Canada that are relevant to their business interests.

Calculating the total number of procurement opportunities within a province or territory can be

challenging because, depending on the province or territory, there may be multiple sources where

intended government procurements are posted. These sources include online portals as well as



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print sources, such as newspapers. Moreover, while some provincial/territorial on-line portals

include municipal government procurement opportunities, others do not.

The frequency of new opportunities that are continuously being posted also poses a challenge.

Numerous procurement opportunities are published on a weekly basis across Canada, often with

short deadlines. Under the existing system, EU enterprises seeking to maintain up-to-date

information on government procurement opportunities will need to continually review multiple

portals. When a functional SPA is implemented, maintaining up-to-date information on

opportunities throughout Canada will be significantly easier for both EU and Canadian

stakeholders.

Table 22, below, provides an example of the government procurement opportunities published on

the primary provincial/territorial portals as of the date of this report. It also provides an indication

of the frequency at which such notices are published and turned over in sub-central jurisdictions.

This data is aggregated from the major provincial and territorial government procurement portals

and therefore does not capture all sub-central opportunities.

Table 22 Frequency of sub-central government procurement opportunities posted on major online portals (13

October 2017)

Province Total issued opportunities

Posted in the last 7 days

Source

Alberta 894 139 Alberta Government Alberta Purchasing Connection, available online at http://www.purchasingconnection.ca/

British Columbia 553 208 BC Bid, e-Procurement in British Columbia, available online at http://www.bcbid.gov.bc.ca/

Manitoba1 689 listed across Canada (89 listed by the Government of Manitoba)

133 posted in the last 7 days (45 posted by the Government of Manitoba)

MERX, Canadian public tenders, available online at http://www.merx.com/

New Brunswick 97 45 New Brunswick Opportunities Network (NBOB), available online at https://nbon-rpanb.gnb.ca/welcome?language=En



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Source

Newfoundland and Labrador

20 8 Newfoundland and Labrador Government Purchasing Agency, available online at http://www.gpa.gov.nl.ca/index.html

Northwest Territories

36 N/A Government of the Northwest Territories, Contract Event Opportunities, available online at https://contracts.fin.gov.nt.ca/psp/fsprod1/SUPPLIER/ERP/c/GNT_SS.GNT_LOGIN.GBL

Nova Scotia 146 51 Government of Nova Scotia, Procurement, Nova Scotia Tender Notices, available online at http://www.novascotia.ca/tenders/tenders/ns-tenders.aspx

Nunavut 11 2 Government of Nunavut, Requests for Tenders/Proposals, available online at http://www.nunavuttenders.ca/

Ontario 88 “current opportunities”, and

1029 “global opportunities”

N/A Ontario Tenders Portal, available online at https://ontariotenders.bravosolution.com/esop/nac-host/public/web/login.html


22 11 Prince Edward Island, Tenders, available online at https://www.princeedwardisland.ca/en/tenders

Quebec2 927

.

N/A Government of Quebec, SEAO (Le Système Électronique d’appel d’Offres du Gouvernement du Québec), available online at https://www.seao.ca/

Saskatchewan 148 52 Government of Saskatchewan, SaskTenders, available online at https://sasktenders.ca/content/public/Search.aspx

Yukon 14 3 Yukon Government, Department of Highways and Public Works, Procurement Support Centre, Tender Management System, available online at http://www.hpw.gov.yk.ca/csb/tender-management-system-tms.html; see also http://www.hpw.gov.yk.ca/csb/procurement.html



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Source

1 The Government of the Province of Manitoba posts all procurement opportunities on the MERX website. However, the MERX website is not a dedicated provincial portal. Rather, it hosts notices for procurement opportunities across Canada, including from the federal Government of Canada and other government entities. 2 The Government of the Province of Quebec lists its procurement opportunities in a format unlike any other province, which makes determining the total number of open contracts difficult. This should be addressed in the SPA, which is expected to index and present all procurement information from across Canada in a consistent manner.

Pursuant to CETA Article 19.6, Canada has a transitional period of up to five years to develop and

implement an electronic SPA that covers all central and sub-central government procurements

throughout Canada. The same requirement is contained in the CFTA. Specifically, Article 506(3)

of the CFTA states as follows:

The Parties recognize that the Government of Canada will be developing an

electronic Canada-wide single point of access (“SPA”) in accordance with

international obligations.

Consequently, this particular challenge will be resolved within five years. However, the question

remains how EU enterprises seeking to take advantage of new market access opportunities in

provincial/territorial and municipal government procurements should address and manage this

challenge in the meantime.

As indicated in Table 22, each of the provinces and territories publishes notices of intended

government procurement opportunities on a variety of different websites. Moreover, while some

provincial/territorial websites include municipal opportunities, others do not. For those that do not,

the municipal governments either publish opportunities on their own municipal websites or use

electronic tendering websites that provide notices of both public and private procurement

opportunities. An example of such a website is “MERX”.

Currently, the website for the CFTA provides accessible links to all of the provincial and territorial

portals that publish government procurement opportunities, as well as most municipal government

portals. While the CFTA’s resource does not replace the need for an electronic SPA, it is currently



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the best single resource available to assist EU companies in identifying sub-central government

procurement opportunities in Canada. This resource can be accessed online at https://www.cfta-

alec.ca/doing-business/. Clicking on any of the provinces or territories in the map of Canada (or,

alternatively, using the pull-down menu bar to select the province or territory of interest) leads to

a page that consolidates links to all of the online portals and government procurement resources

available, including for most municipal governments, with respect to that particular province or

territory.

C. Assessment of Government Procurement Opportunities

It will be important for EU enterprises, especially those first entering the Canadian market, to

understand the legal framework for Canadian procurement.

Under the common law of Canada, most procurements create two separate contracts, which are

referred to as “Contract A” and “Contract B”. Contract A is formed when a bidder submits a

proposal that is fully compliant with all of the terms and conditions of the government procurement

solicitation. Contract B, on the other hand, is the resulting contract awarded to the successful

proponent for the supply of goods and/or services.

The Supreme Court of Canada, the highest judicial authority in Canada, has imposed a “duty of

fairness” on all public procurements in which Contract A is formed. That duty imposes an

obligation on government purchasing authorities to treat all participants in the procurement process

equally and fairly. This means that no single bidder can be granted an unfair advantage over other

bidders. It has also been interpreted to mean that government purchasing authorities are not

permitted, at law, to grant Contract B to a non-compliant bidder (i.e., a participant whose proposal

does not satisfy the requirements of the solicitation).

Judicial decisions arising from procurement disputes, a large portion of which relates to the

meaning of the “duty of fairness”, has created a number of general procurement propositions in

Canada. Examples of the procurement issues that are commonly litigated



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include:

Disputes based on one or more of the issues identified above commonly arise in even the most

sophisticated Canadian procurements. To this end, it is advisable that EU enterprises familiarize

themselves with the general legal principles and rules applicable to government procurement

opportunities in Canada before to investing significant resources in the Canadian market.

At the federal level, most procurements are subject to the jurisdiction of the Canadian International

Trade Tribunal (“CITT”). The Canadian International Trade Tribunal Act,57 and the related

57 Canadian International Trade Tribunal Act, R.S.C. 1985, c. 47 (4th Supp.), available online at

http://laws.justice.gc.ca/eng/acts/C-18.3/index.html.

1. Whether the winning bidder submitted a technically compliant proposal;

2. Whether the standard of judicial review is “strict compliance” (i.e., the proposal is

compliant with every requirement identified in the solicitation) or “substantial

compliance” (the proposal is compliant with all material requirements). This issue

regularly arises when a bidder’s proposal contains a minor error or irregularity, but the

government purchasing authority nevertheless awards the contract to that proponent;

3. Whether the evaluators properly evaluated all of the proposals in accordance with the

terms and conditions of the solicitation;

4. Whether the evaluators introduced undisclosed evaluation criteria into the evaluation

process;

5. Whether the government purchasing authority permitted an improper “bid repair”, i.e.,

by allowing a bidder to supplement or ‘fix’ their non-compliant proposal through revised

or additional submissions after the bid closing date;

6. Whether the winning proposal was submitted after the bid closing period. In Canada,

proposals that are submitted after the time and date at which a bid period closes must,

as a general proposition, be rejected;

7. Whether evaluators ignored vital information contained in the proposal; and

8. Whether the government purchasing authority undertook improper “bid shopping” by

negotiating with two or more bidders after the submission of their respective proposals.



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Canadian International Trade Tribunal Procurement Inquiry Regulations,58 impose a limitation

period of 10 working days on bidders to commence procurement challenges from the date on which

they knew, or ought to have known, that the applicable provisions of a trade agreement were

breached. Although the provinces and territories have not yet formalized their respective dispute

settlement mechanisms for government procurement matters, we expect that most if not all such

administrative tribunals will operate with similarly short limitation periods. To this end, it is

essential that EU suppliers should act immediately when concerns of impropriety or unfairness

arise in government procurement opportunities. Failure to do so may preclude the EU supplier

from challenging the procurement.

How the CETA enhances market access for EU stakeholders in the Canadian public

procurement market?

As noted, Chapter 19 of the CETA significantly expands market access opportunities for EU firms

wishing to supply goods and services to the Canadian government. The following analysis

highlights specific areas of access made available to EU firms through the CETA, while providing

details on how to determine whether a procurement is covered under the Agreement.

58 Canadian International Trade Tribunal Procurement Inquiry Regulations, SOR/93-602, available online at

http://laws.justice.gc.ca/eng/regulations/SOR-93-602/index.html.



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First, in order to determine whether a procurement is open to EU firms, it is essential to confirm

that the value of the requisition meets the relevant threshold value. Table 24 highlights the

threshold for values of government procurement by type of entity and according to whether the

procurement is a good, service, or related to construction. Where the procurement meets or exceeds

these thresholds, it is open to EU firms provided it pertains to a covered good or service (Table 26,

Table 27 and Table 28) is being tendered by a covered government entity (Table 25), and is not

subject to any specific exceptions.

It should be noted that the Agreement expresses these values in Special Drawing Rights (SDR),

which are converted to Canadian dollars and published in a Treasury Board Contracting Policy

A government procurement is covered by the

CETA – and hence accessible

to EU firms – if these criteria are

met

The value of the procurement is

equal to or greater than the relevant

threshold (Table 1)

The contracting authority of the procurement is

covered (Table 2)

The good or service being procured is covered (Table 3, Table 4 &Table 5)

No specific exceptions are applicable or invoked (e.g.

national security)

Table 23 Government Procurement covered by the CETA



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Notice.59 The current value of these thresholds in Canadian dollars is reproduced in the table, but

it is advised that any interested EU firm consult the current conversion rate, which is required to

be reviewed every two years, commencing on 1 January 2018.

Table 24 Procurement value thresholds under the CETA, by entity and type of procurement

Entity Type of procurement

Threshold

SDR Canadian $

Federal government (including

departments and some Commissions

and Boards)60

Goods and services 130,000 CA $ 221,400

Construction services 5,000,000 CA $8,500,000

Federal Crown Corporation61



Sub-federal entities62

Goods and services63 200,000 CA $ 340,600


Public utilities and transportation64



Source: Chapter 19 of the CETA and its accompanying Annexes

Second, it is essential to determine whether the contracting authority requisitioning the

procurement is covered by the CETA and, therefore, bound by the above thresholds. Table 25

59 www.tbs-sct.gc.ca/pubs_pol/dcgpubs/ContPolNotices/2015/15-03-eng.asp

60 See Annex 19-1 of the CETA



63 For covered procuring entities listed in Annex 19-2, the thresholds are increased to SDR 355,000 (CA$

604,700) when procuring consulting services regarding matters of a confidential nature, the disclosure of which could

reasonably be expected to compromise government confidences, cause economic disruption or similarly be contrary

to public interest




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highlights the entities at the relevant levels of jurisdiction that are covered by the CETA. As

observed, the CETA provides for a wide range of procurement opportunities across entities at the

federal and sub-provincial level for procurements that the valuation thresholds outlined in Table

24.

If a procurement meets the specified valuation threshold and is being offered by a covered

government entity, the third step is to determine whether the specific good or service being

procured is covered under the CETA. As the following tables highlight, the Agreement makes

three broad distinctions according to (i) goods, (ii) services and (iii) construction services, with

the goods and services covered potentially differing according to whether the procuring entity is

at the federal or sub-provincial level.

With respect to goods, Table 26 identifies those procured by all levels of government which

European firms can seek to provide, with Table 4 highlighting specific sub-central exceptions on

procurement of goods. Importantly, goods pursuant to procurement from the following entities are

not covered by the CETA65:

- Department of National Defence

- Royal Canadian Mounted Police

- Department of Fisheries and Oceans for the Canadian Coast Guard

- Canadian Air Transport Security Authority

- Provincial and municipal police forces

- Any Procurement between subsidiaries or affiliates of the same entity, or between an entity

and any of it its subsidiaries or affiliates, or between an entity and a general, limited or

special partnership in which the entity has a majority of controlling interest

65 Across all goods and services, exceptions also pertain, inter alia, to: (i) procurement subject to the Northwest

Territories Business Incentive Policy; (ii) procurement subject to the Nunavummi Nangminiqaqtunik Ikajuuti Policy

(NNI Policy); (iii) procurement in relation to any measure maintained with respect to Aboriginal peoples, or to set

asides for aboriginal businesses; existing aboriginal or treaty rights or nay of the Aboriginal peoples of Canada

protected by Section 35 of the Constitution Act, 1982.

Further, Manitoba, Newfoundland and Labrador, New Brunswick, Nova Scotia, Northwest Territories, Nunavut,

Prince Edward Island or Yukon may derogate from the CETA provisions covering government procurement in order

to promote regional economic development, provided doing so does not grant undue support to monopolistic activities.

Any such derogation cannot be invoked more than 10 times per annum and cannot qualify for derogation if the

procurement is funded by the federal government.



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- Procurement of goods purchased for representational or promotional purposes outside the

province, in respect of Alberta, British Columbia, Newfoundland and Labrador, Nova

Scotia, Prince Edward Island, Quebec and Saskatchewan

The list of services for which European firms are able to bid is highlighted in Table 28. It should

be emphasised that the services covered are subject to Canada’s exclusions from and reservations

included in Chapters 8 (investment), 9 (Cross-border trade in services) and 13 (financial services)

of the CETA. Additional exceptions in the provision of services are listed in the accompany

footnote.66

66 Services covered under Chapter 19 are subject to the following exceptions:

All services related to goods purchased by: Department of National Defence; Royal Canadian Mounted Police;

Department of Fisheries and Oceans for the Canadian Coast Guard; Canadian Air Transport Security Authority; and

Provincial and municipal police forces not covered by Annex 19-4

Services procured in support of military forces located overseas

Instruments of monetary policy, exchange rates, public debt, reserve management or other policies involving

transactions in securities or other financial instruments, in particular transactions by the contracting authorities to raise

money or capital

Central bank services

Shipbuilding and repair, including related architectural and engineering services for central and sub-central entities in

British Columbia, Manitoba, Newfoundland and Labrador, New Brunswick, Nova Scotia, Prince Edward Island and

Quebec

Any Procurement between subsidiaries or affiliates of the same entity, or between an entity and any of it its subsidiaries

or affiliates, or between an entity and a general, limited or special partnership in which the entity has a majority of

controlling interest

Procurement of services purchased for representational or promotional purposes outside the province, in respect of

Alberta, British Columbia, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Quebec and

Saskatchewan

Procurement of services contracts, excluding construction services contracts, which grant to a supplier the right to

provide and exploit a service to the public as complete or partial consideration for the delivery of a service under a

procurement contract

Procurement for the acquisition, development, production or co-production of programme material by broadcasters

and contracts for broadcasting time.

Procurement with respect to cultural industries

Procurement in connection with activities in the fields of drinking water, energy, transport and the postal sector unless

covered by Section B of Annex 19-3

For Quebec, in particular, the following services are not covered by the CETA



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For the provision of construction services to government entities, the CETA covers all

construction services identified in Division 51 of the CPC, with some limitations on services which

grant temporary ownership or rights to control or operate the civil or building work resulting from

the contract. Additionally, some stipulations are placed on dredging services and dredging services

incidental to construction services, while procurements related to an international crossing

between Canada and another country are not covered. For Quebec, procurements awarded by

Hydro-Quebec reserve the right to adopt or maintain measures favouring local outsourcing in the

case of construction services, while construction services for the Manitoba Hydro Electric Board

are not covered.

These various federal and sub-federal exceptions notwithstanding, a review of the accompanying

tables on the covered goods and services reveals that the CETA opens up a wide range of

opportunities to European firms wishing to enter Canada’s government procurement market.

While these opportunities are present at all levels of government, it is again worth emphasising

that the CETA provides a degree of access to Canada’s sub-central procurement market that is not

matched by any other foreign country. As a result, European firms should find that they are

afforded a wide range of new opportunities, which should only improve as Canada consolidates

electronic platforms publishing tender notifications.

procurement from non-profit organisations with respect to urban planning, as well as resulting plans and specifications

preparation and works management, provided that the non-profit organisation respects, for its procurement, the

procuring entity’s obligations

Procurement by Hydro-Quebec of:

Computer and related services

Engineering design services for the construction of civil engineering works

Other engineering services

Procurement in relation to any measure adopted or maintained by Quebec with respect to cultural industries

For Manitoba, procurement of services by Manitoba Hydro Electric Board are not covered.



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Table 25 Goods for Canadian government procurement covered by the CETA

Type of good Exception

Railway equipment

Motor vehicles, trailers and cycles Buses, military trucks and trailers, and tracked combat, assault and tactical vehicles and wheeled combat, assault and tactical vehicles

Tractors

Vehicular equipment components

Tyres and tubes

Engine accessories

Mechanical power transmission equipment

Woodworking machinery and equipment

Metal working machinery

Service and trade equipment

Special industry machinery

Agricultural machinery and equipment

Construction, mining, excavating and highway maintenance equipment

Materials handling equipment

Rope, cable, chain and fittings

Refrigeration and air conditioning equipment

Firefighting, rescue and safety equipment Marine lifesaving and driving equipment; decontaminating and impregnating equipment

Pumps and compressors

Furnace, steam plant, drying equipment and nuclear reactors

Plumbing, heating and sanitation equipment

Water purification and sewage treatment equipment

Pipe, tubing, hose and fittings

Valves

Maintenance and repair shop equipment

Measuring tools

Hardware and abrasives

Prefabricated structures and scaffolding

Lumber, millwork, plywood and veneer

Construction and building materials

Electric wire and power and distribution equipment

Lighting fixtures and lamps

Alarm and signal systems Security detection systems related to security screening

Medical, dental and veterinary equipment and supplies

Instruments and laboratory equipment Automatic pilot mechanisms and airborne gyro components; physical properties testing and inspection related to security



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Type of good Exception

screening; hazard detecting instruments and apparatus

Photographic equipment

Chemicals and chemical products

Training aids and devices

General purpose automatic data processing equipment, software, supplies and support equipment

Automatic data processing equipment (ADPE) configurations

Furniture

Household and commercial furnishings and appliances

Food preparation and serving equipment

Office machines, text processing system and visible record equipment

Office supplies and devices

Books, maps and other publications Drawings and specifications

Musical instruments, phonographs and radios

Recreational and athletic equipment

Cleaning equipment and supplies

Brushes, paints, sealers and adhesives

Containers, packaging and packing supplies

Toiletries

Agricultural supplies Agricultural goods made in furtherance of agricultural support programmes or human feeding programmes

Live animals

Fuels, lubricants, oils and waxes

Non-metallic fabricated materials

Non-metallic crude materials

Ores, minerals and their primary products

miscellaneous


Table 26 Canadian Sub-central level exceptions on procurement of goods

Province Good Exception

Ontario & Quebec

Mass transit vehicles (street cars, buses, trolley busses, subway cars, passenger rail cars or locomotive for subway or rail system)

Procuring entities may require contractors to procure up to 25% of the contract value in Canada. “Value” refers to eligible costs in the procurement of mass transit vehicles for components, sub-components and raw materials produced in Canada, including labour or other related services such as after-sale and the maintenance services, as determined in the tender. It also includes all costs related to final



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assembly of the mass transit vehicle in Canada. It will be for the bidder to determine which part of the contract value will be fulfilled through the use of Canadian acquired value. Quebec may require that final assembly take place in Canada.


Construction materials Does not cover procurement of construction materials used for highway construction and maintenance.

Quebec Goods related to procurement by Hydro-Quebec

Does not cover goods of the following HS codes: 730820 – iron or steel; structures and parts thereof, towers and lattice masts 8406 – turbines; steam and other vapour turbines 8410 – turbines; hydraulic water wheels and regulators therefore 8426 – Derricks, cranes, including cable cranes, mobile lifting frames, straddle carriers and works trucks fitted with a crane 8504 – Electric transformers, static converters (e.g. rectifiers) and inductors 8535 – Electrical apparatus for switching, protecting electrical circuits, for making connections to or in electrical circuits; for a voltage exceeding 1000 volts 8536 – electrical apparatus for switching, protecting electrical circuits, for making connections to or in electrical circuits, for a voltage not exceeding 1000 volts; connectors for optical fibres, optical fibre bundles or cables 8537 – boards, panels, consoles, desks, cabinets, bases with apparatus of heading no. 8535, 8536 for electricity control and distribution (other than switching apparatus of heading no. 8517) 8544 – insulated wire, cable and other electric conductors, connector fitted or not; optical fibre cables of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 870510 – crane lorries 870520 – mobile drilling derricks 870590 – break-down lorries, road-sweepers, spraying lorries, mobile workshops, mobile radiological units and other special purpose vehicles n.e.c. in no. 8705 8707 – Bodies; (including cabs) for the motor vehicles of heading no. 8701 and 8705 8708 – motor vehicles; parts and accessories, of heading no. 8701 to 8705 871639 – trailers and semi-trailers; (other than tanker type)



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871640 – trailers and semi-trailers, n.e.c. in no. 8716.3

Manitoba Goods related to procurement by Manitoba Hydro Electric Board

Textiles – fire retardant clothing and other work apparel; Prefabricated buildings; Bridges, bridge sections, towers and lattice masts, or iron or steel; Steam turbines and other vapour turbines; hydraulic turbines and water wheels; gas turbines other than turbo-jets and turbo-propellers; Electrical transformers, static converters and inductors; Electricity distribution or control apparatus; Parts of electricity distribution or control apparatus; Co-axial cable and other co-axial electrical conductors; Other electric conductors, for a voltage exceeding 1000V; Gates; Woodpoles and crossarms; or Generators.


Table 27 Canadian government procurement of services covered by the CETA

Entities Service Exception

Central entities covered

Legal services (advisory services of foreign and international law only)

Accounting, auditing and book-keeping services

All Entities covered

Repair services of personal and household goods

Commercial courier services (including multi-modal)

Electronic data interchange (EDI)

Electronic mail

Enhanced/value-added facsimile services, including store and forward, store and retrieve

Code and protocol conversion

On-line information and database retrieval

Voice mail

Real estate services on a fee or contract basis

Consultancy services related to the installation of computer hardware

Software implementation services, including systems and software consulting services, systems and analysis, design, programming and maintenance services

Data processing services, including processing, tabulation and facilities management services

Online information and/or data processing (including transaction processing)

Database services



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Entities Service Exception

Maintenance and repair services of office machinery and equipment including computers

Other computer services

General management consulting services

Marketing management consulting services

Human resources management consulting services

Production management consulting services

Services related to management consulting Arbitration and conciliation services

Architectural services

Engineering services

Integrated engineering services Integrated engineering services for transportation infrastructure turnkey projects

Urban planning and landscape architectural services

Technical testing and analysis services including quality control and inspection

Except with reference to FSC 58 and transportation equipment

Building-cleaning services

Repair services incidental to metal products, machinery and equipment

Sewage and refuse disposal, sanitation and similar services




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IV. TRADE IN SERVICES

A. Cross-Border Trade in Services

Chapter 9 of the CETA sets forth broad market access and non-discrimination obligations with

respect to cross-border trade in services.67 However, these obligations are limited in scope by the

exclusions incorporated into the provisions of Chapter 968 and the reservations established in

Canada’s schedules to Annexes I and II.69 The reservations operate to preserve the rights of

Canadian governments, at both the federal and provincial/territorial levels, to maintain or adopt

certain trade-restrictive “non-conforming” measures that would otherwise be inconsistent with the

CETA market access and non-discrimination provisions. The exclusions and reservations also

serve to protect certain essential public services sectors from coverage under the CETA, such as

social services, healthcare services, and services relating to public education and Canadian

“cultural industries”, among others. This is consistent with the exclusions and reservations in

Canada’s other free trade agreements.

From a practical point of view, the negotiated outcomes in the CETA relating to trade in services

generally maintain the status quo in Canada, such that no new discrete opportunities for EU

services suppliers are immediately apparent under Chapter 9. The same is generally true with

respect to Canada’s obligations under CETA Chapters 13 and 15, as discussed below, which

specifically address trade and investment in the financial services and telecommunications sectors,

respectively.

In contrast, however, new market access opportunities are immediately apparent in the maritime

transport services sector covered under Chapter 14. A set of complex provisions in one of Canada’s

67 CETA, Articles 9.3 (National treatment), 9.5 (Most-favoured-nation treatment), and 9.6 (Market access).

68 See e.g., CETA, Articles 9.2 (specifically, paras. 9.2.2, 9.2.3, and 9.2.4), 9.4, and 9.7.

69 CETA Annex I (Reservations for existing measures and liberalisation commitments) provides lists of existing

non-conforming measures that the federal Government of Canada and the governments of the provinces and territories,

respectively, have reserved their rights to maintain. CETA Annex II (Reservations for future measures) provides lists

of industry sectors or activities for which the federal Government of Canada and the governments of the provinces

and territories, respectively, have reserved their rights to adopt or maintain future non-conforming measures.



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reservations has opened limited market access to certain “coasting trade” activities in Canada’s

internal waters. These new opportunities are discussed in section B, below.

Although the provisions in CETA Chapter 9, read together with the reservations in Annexes I and

II, do not substantially liberalize Canada’s services markets or otherwise introduce new market

access opportunities in protected sectors historically closed to cross-border trade, they do secure a

critically important outcome that will facilitate the growth and development of new opportunities

in the long term: a minimum baseline of guaranteed market access and non-discriminatory

treatment for EU services imported into Canada.

An important factor in this regard is the nature of the reservations as a “negative list”. This means

that the CETA market access and non-discrimination obligations will cover the supply of all EU

services, except to the extent that one or more reservations apply to limit or exclude such coverage.

This results in a transparent list of almost all Canadian barriers to trade in services, allowing such

barriers to be readily identified by EU services suppliers. If a barrier is encountered in the course

of trade that lies outside this list (e.g., de facto discriminatory effects caused by the application of

Canadian regulatory requirements in an arbitrary or unjustifiable manner), then that barrier can be

addressed or challenged under the CETA as contrary to Canada’s market access and non-

discrimination obligations.

The so-called “standstill” and “ratchet” mechanisms provided under Article 9.7 are also important

factors in establishing the minimum baseline described above. They prevent the existing non-

conforming measures listed in Canada’s Annex I reservations from being changed in any way that

makes them more trade-restrictive, while also protecting any future amendments that make them

less trade-restrictive from being undone or reversed. In this way, any future changes that make

such measures less trade-restrictive, thereby opening up expanded market access opportunities for

EU businesses, will permanently lift the minimum baseline protected under the CETA.

Thus, the provisions of Chapter 9 establish and preserve a minimum baseline of guaranteed market

access and non-discriminatory treatment, including any further gains realized through unilateral

liberalization or bilateral agreement, for the benefit of EU services suppliers. In doing so, Chapter



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9 provides certainty to EU enterprises, including SMEs, with respect to their access opportunities

in Canadian markets (provided, of course, that the Annex II reservations permitting Canadian

governments to adopt future non-conforming measures in specific services sectors are taken into

account). This certainty will support not only the export of EU services to recipients in Canada,

but it will also support EU investments in Canada.

Importantly, market access opportunities relating to trade in services will be facilitated and

enhanced by the provisions in CETA Chapter 10, which provide for the temporary entry and stay

of EU individuals in Canada for business purposes. The practical impact of Chapter 10, particularly

for SMEs, is that it will help to make the theoretical market access possibilities guaranteed under

Chapter 9 into actual, practical business opportunities in Canadian markets.

Since the CETA applies broadly to services and, with the exception of certain maritime transport

services, it does not open new market access opportunities, it is not feasible to identify specific,

concrete opportunities. However, the market for imported services in Canada is substantial. In

2016, Canada imported US $97.7 billion in services.70

Three services sectors are discussed below to illustrate the opportunities and challenges relating to

the supply of services in the Canadian market under the CETA.

B. Financial Services

As discussed above, the CETA provides a new foundation for EU-Canada trade in services, which

in turn provides certainty to EU enterprises seeking to export their services to recipients in Canada.

Like Chapter 9, Chapter 13 (Financial Services) does not create new market access opportunities

that are immediately apparent from the negotiated outcomes in the text of the CETA. Rather, the

provisions of Chapter 13 establish a minimum baseline of guaranteed market access and non-

discriminatory treatment for EU financial services suppliers and related EU investments in Canada,

subject to Canada’s reservations in Annex III. This foundation serves as a stable launch point for

70 OECD Data, Trade In Services, Exports/Imports: https://data.oecd.org/trade/trade-in-services.htm.



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the participation of EU financial services suppliers in the ongoing development and reform of the

Canadian financial services sector.

While the developments discussed below do not arise from the negotiated outcomes in the text of

the CETA, they illustrate the market opportunities available to EU financial services suppliers in

Canadian markets further to the context and stability created by the provisions of CETA Chapter

13, read together with the reservations in Annex III.

In the Budget 2017,71 the Government of Canada announced the establishment of an “Invest in

Canada Hub”, “a new federal body dedicated to attracting leading global firms to Canada”, to,

among other things, bring “fresh capital and new technologies” to the Canadian economy.72 The

budget also announced plans to create “Innovation Canada”, “a new platform led by Innovation,

Science and Economic Development Canada that will coordinate and simplify the support”

available to Canada’s innovators” and develop “economic growth strategies”, including one for

digital technologies.73 These initiatives should be of interest to EU financial services suppliers,

especially firms with fintech business strategies.

Reforms are being considered to the Canadian payments system. The Department of Finance

Canada, in a consultation paper entitled “A New Retail Payments Oversight Framework”,74 has

outlined various components of a new oversight functional framework for retail payments. The

Department has acknowledged that its traditional practice of regulating the “players”, as opposed

to the “playing field”, is no longer appropriate in a rapidly-changing retail payments space, with

71 Minister of Finance, Government of Canada, Budget 2017, available online at

www.budget.gc.ca/2017/home-accueil-en.html.

72 Minister of Finance, Budget 2017 (March 22, 2017), p. 92 (“Establishing an Invest in Canada Hub. As

announced in the 2016 Fall Economic Statement, the Government will take the necessary steps to create an Invest in

Canada Hub—a new federal body dedicated to attracting leading global firms to Canada to support middle class

prosperity by bringing good jobs, fresh capital and new technologies to our economy. More trade commissioners will

also be placed in strategic markets abroad to support this investment attraction. The Government has committed $218

million over five years to these efforts”), available online at www.budget.gc.ca/2017/docs/plan/budget-2017-en.pdf.

73 Minister of Finance, Budget 2017 (March 22, 2017), pp. 76-79.

74 Department of Finance Canada, A New Retail Payments Oversight Framework, available online at

www.fin.gc.ca/activty/consult/rpof-cspd-eng.asp.



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“evolving business models, activities and products”.75 The proposed regulatory framework would

“apply to any PSP [i.e., retail Payment Service Provider] when performing … payment functions

in the context of an electronic fund transfer ordered by an end-user (a person or entity that is not a

PSP or a financial intermediary)”.76 These reforms, which are expected to be completed in 2018,

will substantially clarify the market access opportunities for all PSPs, including EU-based PSPs.

Accordingly, it is expected that new opportunities to enter the Canadian market will emerge for

EU-based PSPs.

In this respect, Payments Canada issued a consultation document on 21 December 2017 titled

“Modernization Target State”,77 which provides greater detail on the scope of these reforms.

Payments Canada is proposing replacement of the current Large Value Transfer System (LVTS)

– which currently serves as Canada’s real-time electronic funds transfer system – with a new

system, Lynx. Lynx will be structured so as to provide a modernized high-value clearing and

settlement system which will be better aligned with the Bank of Canada’s risk-management

standards for systematically important payment systems. It is further calling for replacement of the

existing Automated Clearing Settlement System (ACSS), Canada’s core retail payment system,

with the Settlement Optimization Engine (SOE) in order to more effectively meet the Prominent

Payment System (PPS) Standards of same-day settlement, open risk-based access and credit risk

management. Payments Canada notes that the new system will also enable faster and more

convenient automated funds transfers. Payment Canada also proposes to introduce a new ‘always-

on’ payments infrastructure that will support immediate payments and could provide non-regulated

entities with direct access to payments clearing and settlement systems. This real-time

infrastructure is expected to also facilitate the development of overlay services.

75 Ibid.

76 Ibid.

77 Payments Canada, Modernization Target State (December 2017), available online at

www.payments.ca/sites/default/files/21-Dec-17/modernization_target_state_en_final.pdf.



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Reforms are also being considered to legislation regulating Canadian financial institutions that

may facilitate market access opportunities for EU financial services suppliers. In this regard, the

Department of Finance has released a paper entitled “Potential Policy Measures to Support a

Strong and Growing Economy: Positioning Canada's Financial Sector for the Future”.78 The paper

“launches the second stage of the renewal of Canada’s federal financial institutions statutes”.79

The Department is “consulting on potential policy measures that could lead to consideration of

legislation in Parliament prior to the statutory sunset date of March 29, 2019, or inform the

Department's longer-term approaches to the financial sector”.80 The paper “seeks views on whether

and how to implement potential policy measures, as well as on policy directions for future work”

under the following four themes: supporting a competitive and innovative sector; improving the

protection of bank consumers; modernizing the framework; and safeguarding a stable and resilient

sector.81 In addition, the Department indicates that it “will undertake targeted stakeholder

consultations on separate technical and consequential changes that could be made to the federal

financial institutions statutes to ensure they remain up to date and sound”.82

Taken together, the Department of Finance’s consultations on the four themes of supporting a

competitive and innovative sector, improving the protection of bank consumers, modernising the

framework, and safeguarding a stable and resilient sector and the underlying objectives thereto

stand to introduce notable reforms to Canada’s financial services sector. In support of a

competitive and innovative sector, the Department of Finance, for example, aims to introduce

measures that will, inter alia, clarify the Fintech rights of financial institutions, facilitate Fintech

78 Department of Finance Canada, Potential Policy Measures to Support a Strong and Growing Economy:

Positioning Canada's Financial Sector for the Future (August 11, 2017), available online at

https://www.fin.gc.ca/activty/consult/pssge-psefc-eng.asp and www.fin.gc.ca/activty/consult/pssge-psefc-eng.pdf

(PDF version).

79 Department of Finance Canada, Potential Policy Measures to Support a Strong and Growing Economy:

Positioning Canada's Financial Sector for the Future (August 11, 2017), p. 1 (Preface).

80 Ibid., p. 1.

81 Ibid., pp. 1, 5.

82 Ibid., p. 1.



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collaboration, improve regulatory transparency and coordination and streamline the framework for

bank entry and exit. Clarifying the Fintech rights of financial institutions, for example, will likely

lead to some easing of the restrictions that require the Minister’s consent in order to engage in

commercial, information and technology activities through the updating of statutory language that

clarifies and modernises the type of information and technology activities that federally regulated

financial institutions are permitted to undertake in-house. Similarly, revisions to statutory language

may be introduced that provides greater collaboration in Fintechs between new entrants and

incumbent financial institutions. In this regard, Finance Canada is seeking input on whether to

facilitate such collaboration by providing additional flexibility to make non-controlling

investments in Fintechs. Here, the Department of Finance is seeking to balance changes to the type

of technology activities financial institutions are permitted to engage in by ensuring that they are

sufficiently modernised and in line with emerging standard practices for the global industry, while

retaining the commitment to prohibit financial institutions from engaging in commercial activities

through the separation of core financial services from other commercial activities.

In addition, the Department indicates that it “also intends to examine the merits of open banking—

a framework under which consumers have the right to share their own banking information with

other financial service providers—and will seek the views of stakeholders”.83 The EU Payment

Services Directive (PSD2) is a leader in the concept of open banking, and Canadian policy makers

can learn from the experience of policy makers in the European Union on this topic. To the extent

that EU-based institutions have already taken steps to adapt to PSD2, they may have some

advantages relative to competitors, including Canadian institutions, in taking advantage of future

opportunities arising in Canadian markets.

Finance Canada has also expressed a desire to consider changes in the regulatory framework and

in improving the current interaction across federal, provincial and territorial authorities. To this

end, additional scope for change in Canada’s regulatory system may be presented through Co-

83 Ibid., p. 7.



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operative Capital Markets Regulator (CCMR) that is scheduled to come into effect in 2018. While

notable legal hurdles remain that may postpone the date by which this new body assumes oversight

powers, it is presumed that the CCMR will eventually bring together the regulators of British

Columbia, New Brunswick, Ontario, Prince Edward Island, Saskatchewan, Yukon as well as the

federal government in order to form a single national securities regulator. The establishment of a

national securities regulator could have notable effects on Canada’s securities sector by, among

other things, making securities regulation far more efficient and effective while improving investor

protections and lowering compliance costs for market participants.

C. International Maritime Transport Services

Chapter 14 of the CETA generally affirms Canada’s existing international obligations to the

European Union with respect to the supply of international maritime transport services (IMTS).

This includes well-established non-discrimination commitments to EU IMTS suppliers84 (i.e.,

national treatment and most-favoured-nation treatment) with respect to their access to and use of

Canadian ports and port services, customs services, maritime auxiliary services, and berths for

loading and unloading cargo, as well as commitments prohibiting cargo-sharing arrangements and

ensuring that EU IMTS suppliers may contract directly with road and rail transport services

suppliers for door-to-door or multimodal transport operations. There are no new market access

opportunities under these provisions, which instead serve to secure the status quo as the guaranteed

minimum baseline for EU IMTS suppliers going forward.

84 For the sake of simplicity, we use the term “EU IMTS suppliers” to describe both EU entities (i.e.,

corporations, trusts, partnerships, joint ventures, or other associations that are incorporated or formed in the territory

of the European Union) and third-country entities under EU control that use non-Canadian-registered vessels to supply

the services covered under CETA Chapter 14.



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However, complex exceptions to one of Canada’s reservations in Annex II of the CETA85 have

opened up unprecedented market access opportunities for EU IMTS suppliers in Canada’s

protected market for “coasting trade” and “marine cabotage”86 services.

As is the case in many countries, Canada’s domestic market for cabotage services is protected. In

particular, the Coasting Trade Act87 has historically prohibited vessels that are not registered in

Canada (and Canadian-registered vessels that are not fully duty-paid in Canada) from engaging in

coasting trade or cabotage activities without a licence. Thus, market access has been reserved, first

and foremost, for Canadian-registered vessels for which all applicable duties have been fully paid

(referred to simply as “Canadian vessels”). A licence is generally only issued to a non-Canadian-

registered vessel or a non-duty-paid vessel if no Canadian vessel is suitable and available to

provide a service or to perform an activity that is required in Canada. Such a licence is limited to

the supply of a specific service or the performance of a specific activity at a certain place in Canada

for a limited period of time.

Under the CETA, Canada has granted limited preferential market access to the European Union

with respect to certain coasting trade activities in Canada. In the text of the CETA, these market

access concessions are provided as exceptions to the reservations set forth under Canada’s

Reservation II-C-14 (paragraph 4) in Annex II. Those provisions have been fully implemented into

Canadian law as specific exceptions incorporated into the Coasting Trade Act to the general

prohibition and licensing requirements described above.

85 CETA, Reservation II-C-14 (measures relating to the investment in or supply of marine cabotage services),

para. 4.

86 The term “marine cabotage” is not defined under the CETA. In Canada, this term is customarily used and

understood to mean domestic transportation of passengers and cargo between ports within the territory of Canada and

related commercial services, such as the repositioning of empty cargo containers. The term “coasting trade” is used in

the English version of Canada’s legislation, equivalent to the French term “cabotage”. In common usage, the term

“cabotage” is generally used, rather than the term “coasting trade”. Ultimately, these terms are synonymous in Canada.

87 Coasting Trade Act, S.C. 1992, c. 31, available online at http://laws.justice.gc.ca/eng/acts/C-33.3/index.html.



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Briefly summarized,88 these market access opportunities are as follows:

An EU IMTS supplier may use a non-Canadian-registered vessel to carry its own “owned

or leased” empty containers, and any ancillary equipment that is permanently affixed to

such containers, between any ports throughout Canada, provided this activity is performed

“without consideration”.89 This will allow EU IMTS services suppliers to use the vessels

that are engaged in IMTS to and from Canada to reposition their own empty containers

between Canadian ports as needed, thereby saving on the costs of engaging Canadian

domestic transport services to reposition such containers, e.g., by rail. EU IMTS suppliers

who intend to engage in this activity with a non-Canadian vessel are required to submit a

Vessel Advance Notification Form to Transport Canada at least three business days before

to the entry of the vessel into Canada or the date on which the vessel undertakes the activity.

An EU IMTS supplier may engage in the following “feeder” transport activities, subject to

the applicable conditions and limitations:

(i) “Continual” feeder services: continuous transport of international cargo (i.e.,

goods in the process of being imported into Canada or goods destined for export

out of Canada to other countries) in either direction between the Ports of Halifax

and Montreal using only vessels that are registered on the first (domestic) registers

of EU Member States. EU IMTS suppliers who intend to engage in this activity

with a non-Canadian vessel are required to submit a Vessel Advance Notification

Form to Transport Canada at least twenty business days before to the entry of the

vessel into Canada or the date on which the vessel undertakes the activity.

(ii) “Single trip” feeder services: transport of international containerised cargo (i.e.,

goods in containers in the process of being imported into Canada or goods in

containers destined for export out of Canada to other countries) in either direction

between the Ports of Halifax and Montreal using only vessels that are registered on

either (i) the first (domestic) registers of EU Member States, or (ii) the second

(international) registers of EU Member States identified in Schedule 2 of the

Regulations Specifying Territories and Indicating International Registers.90 EU

88 The CETA market access exceptions for certain coasting trade or marine cabotage activities are discussed in

detail in the CETA Implementation in Canada – Study (Version 1), R1A3, in the “Market Access Support for EU

Business in Canada under CETA” Project (2016/EuropeAid/DH/SER/137-941).

89 It should be noted that if the EU IMTS supplier is an EU entity, it may use a vessel of any register for this

purpose. If the EU IMTS supplier is a third-country entity under European control, it may only use a vessel that is

registered under either (i) the first (domestic) register of an EU Member State, or (ii) the second (international) register

of an EU Member State that is set out in Schedule 2 of the Regulations Specifying Territories and Indicating

International Registers.

90 Once a vessel that is registered on the second registry of an EU Member State has completed a “single trip”

feeder service, it is not permitted to supply any further unlicensed feeder services between the ports of Halifax and



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IMTS suppliers who intend to engage in this activity with a non-Canadian vessel

are required to submit a Vessel Advance Notification Form to Transport Canada at

least ten business days before to the entry of the vessel into Canada or the date on

which the vessel undertakes the activity.

An EU IMTS supplier may use a non-Canadian-registered vessel to perform dredging

activities anywhere within the territory of Canada, provided that such activities are not

undertaken pursuant to an agreement with the federal Government of Canada (or any of

the federal government entities listed in Canada’s Annex 19-1 to Chapter 19 of the CETA).

Such federally-procured dredging services are covered under Chapter 19, however, subject

to specific conditions and requirements.91 EU IMTS suppliers who intend to engage in this

activity with a non-Canadian vessel are required to submit a Vessel Advance Notification

Form to Transport Canada at least twenty business days before to the entry of the vessel

into Canada or the date on which the vessel undertakes the activity.

These CETA outcomes constitute concrete market access opportunities for EU IMTS suppliers. In

order to take advantage of these opportunities, EU IMTS suppliers must comply with the

administrative procedures and requirements implemented by Transport Canada92 and administered

in partnership with the CBSA, including the submission of the relevant Vessel Advance

Montreal “until it departs from the exclusive economic zone of Canada or from the inland waters, as defined in

subsection 2(1) of the Customs Act, at a location where the inland waters are contiguous to the United States”. For

practical purposes, this means that the vessel must either travel more than 200 nautical miles beyond Canada’s coastal

baseline and return, or it must travel southwest to the Canada-US border in the St. Lawrence River, to the point just

south of the eastern tip of the Island of Cornwall (a round-trip distance of over 100 miles from the Port of Montreal).

91 A vessel used in the supply of such dredging services must be made or manufactured in Canada or the

European Union (or, alternatively, it must have been predominantly modified in Canada or the European Union and

owned by a person located in Canada or the European Union for at least one year before to the submission of the bid).

Further, the vessel must be registered in either Canada or an EU Member State. If it is registered in an EU Member

State, then it must obtain a licence under the Coasting Trade Act, although Transport Canada is required to grant such

a licence, subject only to the “applicable non-discretionary requirements”. Thus, Transport Canada will not undertake

the usual process of determining whether any Canadian vessel or Canadian-registered vessel is suitable and available

to supply the services before granting the licence to the EU-registered vessel.

92 See Transport Canada, “Coasting trade, foreign vessels and the Canada-European trade agreement”, available

online at www.tc.gc.ca/eng/policy/coasting-trade-foreign-vessels-canada-european-trade-agreement.html#changes.

https://www.tc.gc.ca/eng/policy/coasting-trade-foreign-vessels-canada-european-trade-agreement.html#changes



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Notification Forms,93 as well as all Canadian laws applicable to enterprises and vessels engaged

in the supply of coasting trade or marine cabotage services in Canada.94

D. Telecommunications Services

The negotiated outcomes in Chapter 15 of the CETA maintain the status quo in Canada, such that

no new concrete opportunities are immediately apparent in the Canadian market for

telecommunications services. Like Chapters 9 and 13, the provisions of Chapter 15 serve to

establish a minimum baseline for trade and investment in the telecommunications sector, although

the existing competitive landscape in Canada remains unchanged. In this regard, the provisions of

Chapter 15 are “subject to a Party’s right to restrict the supply of a service in accordance with its

reservations as set out in its Schedule to Annex I or II”.95 In particular, Reservation I-C-9 maintains

the existing measures that limit the opportunities for EU telecommunications services suppliers in

the Canadian market.

The existing telecommunications regime in Canada is already consistent with the provisions set

forth in Chapter 15 (subject to the applicable reservations), such that no legislative amendments

or regulatory changes were necessary to implement Canada’s obligations. This is largely because

the provisions of Chapter 15 affirm and reinforce Canada’s commitments under NAFTA Chapter

13 (Telecommunications), the Telecommunications Annex in the WTO General Agreement on

Trade in Services (“GATS”), and the “Reference Paper” of the GATS Negotiating Group on Basic

Telecommunications, which are already well established in Canadian law. Thus, Chapter 15 of

CETA affirms Canada’s existing international obligations to the European Union with respect to

the supply of telecommunications services, including the commitments to provide EU enterprises

93 See Transport Canada, “Advance notification of coasting trade for foreign vessels”, available online at

www.tc.gc.ca/eng/policy/advance-notification-coasting-trade-foreign-vessels.html.

94 See generally, Transport Canada, “Coasting trade in Canada”, available online at

www.tc.gc.ca/eng/policy/acf-acfs-menu-2215.htm#ceta.

95 CETA, Article 15.2.1.

https://www.tc.gc.ca/eng/policy/acf-acfs-menu-2215.htm#ceta



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with access to and use of public telecommunications networks or services on reasonable and non-

discriminatory terms and conditions.

However, the provisions of Chapter 15, read together with Reservation I-C-9 in particular, also

maintain the existing restrictions on foreign investment in Canada’s telecommunications sector.

Reservation I-C-9 provides that, except for the ownership or operation of international submarine

cables and satellites, foreign investment in a Canadian carrier is restricted to a maximum

cumulative total of 46.7% voting interest, based on 20% direct investment and 33.3% indirect

investment. Canada adopted a similar reservation in the “Reference Paper” of the GATS

Negotiating Group on Basic Telecommunications (see Supplement 3 to Canada’s Schedule of

Specific Commitments, 1997).96

For these reasons, an EU telecommunications services supplier is still only eligible to operate in

Canada if (under section 16 of the Telecommunications Act):

It is an entity incorporated, organized or continued under the laws of Canada or a province

and is Canadian-Owned and controlled (i.e., foreign direct investment must not exceed the

maximum percentage of voting shares described above);

It owns or operates only a transmission facility in the sectors of international submarine

cables, earth stations that provide telecommunications services by means of satellites, or

satellites; and

It has annual revenues from the provision of telecommunications services in Canada that

represent less than 10% of the total annual revenues, as determined by the CRTC, from the

provision of telecommunications services in Canada.97

96 See Supplement 3 to Canada’s Schedule of Specific Commitments, 1997, available online at

www.international.gc.ca/trade-agreements-accords-commerciaux/wto-omc/gats-agcs/commit-engage.aspx?lang=eng

and https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-

DP.aspx?language=E&CatalogueIdList=3671,34022,23146,20088,5079,22853,14218,24805&CurrentCatalogueIdIn

dex=2&FullTextSearch=.

97 Telecommunications Act, S.C. 1993, c. 38, s. 16, available online at http://laws.justice.gc.ca/eng/acts/T-

3.4/FullText.html.



- 2 -

These restrictions were in force before the implementation of CETA, and they continue under the

CETA pursuant to Reservation I-C-9. Thus, Chapter 15 does not create new market access

opportunities for EU businesses seeking to invest in Canada’s telecommunications services market



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Case Study

Market analysis of the decision not to enter the Canadian market by a major US telecommunications services supplier

In 2013, a number of American telecommunications corporations were considering entering Canada’s telecommunications market in the period of time leading up to the Government of Canada’s of Canada’s spectrum auction (i.e., a regulated process in which the federal government sells the rights to use designated bandwidths of the electromagnetic spectrum to industry stakeholders). In particular, several large and well-establish telecommunications companies, including Verizon Communications Inc. (Verizon), contemplated expanding their operations into Canada. However, Verizon ultimately decided against investing in the supply of services in the Canadian market.

While Verizon executives did not publicly reveal the reasons underpinning their final decision, there are indications that several key factors likely influenced their assessment.

First, reports indicate a perceived lack of certainty in the Canadian regulatory regime among new investors. In this regard, foreign investors and domestic entrants in 2013, namely Wind Mobile and Mobilicity, cited their dissatisfaction with Canada’s regulatory framework for telecommunications services. While the Government of Canada made public statements in support of increased competition in the Canadian market, critics observed that the government did not adequately enforce regulations capable of supporting new entrants. These companies complained that, as a result, they were unable to secure sufficient coverage or optimize their supply services, resulting in missed opportunities and suppressed growth.1 Verizon may have taken note of these complaints and the underlying factual circumstances.

Second, financial considerations likely factored into Verizon’s decision not to enter the Canadian market. In particular, Verizon had considered expansion into the Canadian market in two ways: first, it tabled offers to the two starts-ups mentioned above, Wind Mobile and Mobilicity, in bids collectively worth over CA $1 billion. Second, it considered launching a mobile virtual network operator program in Canada, leasing space from an existing carrier’s network in order to offer Canadians wireless services.1

While the first option would have enabled Verizon to enter the Canadian market (securing approximately 900,000 subscribers), it would involve the assumption of a significant amount of debt from one of the new entrants. Further, competition with the so-called “Big Three” incumbent telecommunications services suppliers (Telus, Rogers, and Bell), which collectively own 90% of the electromagnetic spectrum in Canada, posed a significant challenge. Leasing network access from one of the existing carriers would likely have been problematic, as it would have necessarily involved negotiating deals with Canadian incumbent suppliers unlikely to be favourable toward foreign competitors. The challenges faced by new entrants are exemplified by the experience of Wind Mobile. Although it was the top performer among the new entrants, it struggled to control only 2% of the market three years after its entry.1

Third, the “Big Three” Canadian incumbents conducted a coordinated campaign to pressure the Government of Canada in relation to the spectrum auction. While reports are inconclusive about the results of these lobbying efforts, reports indicate that the incumbents engaged with opposition members in an effort to dissuade the Government of Canada from seeking to attract a fourth major network operator.

Lastly, Verizon’s move may have been less a rejection of the Canadian market, and more a result of its focus on efforts to capture a share in a much larger market with its US $130 billion acquisition of Vodafone Group Plc on 2 September 2013. While the “Big Three” controlled 90% of Canada’s 26.9 million wireless subscribers, this was a relatively small market in global terms. Thus, investment in Canada’s difficult telecommunications sector may have been less compelling than investment in the much larger opportunities located in Europe and Asia.



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V. TEMPORARY ENTRY AND STAY OF EU INDIVIDUALS FOR BUSINESS PURPOSES

Chapter 10 of the CETA provides increased work force mobility and flexibility to EU enterprises

doing business (or seeking to do business) with Canada. In turn, these outcomes facilitate or

enhance Canadian market access opportunities under other CETA provisions. For example, the

temporary entry and stay commitments allow short-term business visitors or key personnel from

EU enterprises, including SMEs, to meet and network with potential Canadian partners, investigate

market opportunities in Canada, engage with business and legal consultants, enter into agreements,

and follow up on established business arrangements to address issues, manage activities, and

expand operations. This could be the difference between a theoretical market access possibility

under the CETA, and an actual business opportunity in Canada, by enabling efforts to: e.g.,

establish a joint-venture or partnership that facilitates access to high-value government

procurement opportunities in Canadian provinces and territories; marketing the supply of EU

services to prospective clients in Canada; or securing new customers in Canada for EU-origin

goods for which high rates of customs duties have been eliminated under Chapter 2.

The provisions of Chapter 10 are fully implemented in Canadian federal law. As work permits and

immigration matters fall exclusively within the jurisdiction of the federal Government of Canada,

the impact of Chapter 10 applies to opportunities arising throughout Canada, including in each of

the ten provinces and three territories.

Chapter 10 benefits EU enterprises of all sizes, including independent professionals, by lowering

barriers to trade in the form of entry and immigration requirements for certain kinds of EU workers.

This section of the Market Access Study Report will outline the mechanics of how EU enterprises

of all sizes can take advantage of the new rules implemented in Canada regarding the temporary

entry and stay of EU workers pursuant to the CETA.

Before the CETA, all citizens of the European Union would generally require a work permit to

work in Canada (with limited exceptions for certain types of workers and business visitors).98

98 Immigration and Refugee Protection Regulations, SOR/2002-227, 2. 8, s. 186 and 187; Immigration and

Refugee Protection Act, S.C. 2001, c. 27, s. 30.



- 119 -

Work permits were only issued if and when certain criteria were met, including a positive Labour

Market Impact Assessment (LMIA) by Employment and Social Development Canada (ESDC)

indicating that no qualified Canadian individual is available to fill the position at issue.99 In order

to obtain an LMIA, an EU enterprise seeking to employ an EU citizen to undertake work in Canada

would be required to apply to ESDC. The LMIA procedure is often a lengthy process that includes

market studies and advertising attempts in order to confirm that a Canadian individual cannot be

employed to fill the position.

Under the CETA, certain kinds of EU workers can now enter Canada without a work permit, while

others will require a work permit that is not conditioned on a positive LMIA requirement (i.e.,

“LMIA-exempt”). This is a considerable benefit for EU enterprises and EU workers in terms of

developing and exploiting business opportunities in Canada. It should be noted, however, that the

CETA does not provide labour mobility opportunities to all EU workers.

In order to assess whether, to what extent, and exactly how the preferential treatment accorded to

EU business persons, investors, professionals, and other workers under Chapter 10 will enhance

market access opportunities in Canada, it is important to understand the requirements, conditions,

and limitations of Canada’s obligations to allow temporary entry and stay in Canada for business

purposes.

A. Categories of Workers Covered under CETA Chapter 10

The provisions of CETA Chapter 10 do not provide labour mobility opportunities for all EU

workers. Rather, the negotiated outcomes of the CETA provide preferential treatment to certain

categories of EU workers, including: so-called “key personnel”, “contractual services suppliers”,

“independent professionals”, and “short-term business visitors”. The category of a worker, as

defined under the CETA, will determine whether or not a Canadian work permit will be required,

99 For more information on Labour Market Impact Assessments, see “Canadian Immigration Procedures for

Business People” in Doing Business in Canada: An Introduction to the Legal Aspects of Investing and Establishing a

Business in Canada, Borden Ladner Gervais LLP (2017), available online at http://blg.com/en/News-And-

Publications/Documents/Doing_Business_in_Canada.pdf.



- 120 -

as well as the maximum length of temporary entry and stay that will be permitted. The worker

categories are discussed in more detail below.

1. Short-Term Business Visitors – no work permit required; 90 days of entry and

stay within any 6-month period

Short-term business visitors from the European Union can enter Canada without a work permit.100

The maximum length of stay for short-term business visitors is 90 days within any six-month

period.101 Canada has committed under Article 10.9 of the CETA to allow temporary entry and

stay of short-term business visitors for each of the purposes/activities listed in Annex 10-D. These

permitted activities are summarized in Table 28, below:102

Table 28 Purposes and activities for which short-term business visitors may temporarily enter and stay in

Canada (Article 10.9 and Annex 10-D)

Business Activity

Definition

Meetings and consultations

Natural persons attending meetings or conferences or engaged in consultations with business associates.

Research and design

Technical, scientific and statistical researchers conducting independent research or research for an enterprise located in the territory of the other party.

Market Research

Market researchers and analysts conducting research or analysis for an enterprise located in the territory of the other party.

Training Seminars

Personnel of an enterprise who enter the territory of the other party to receive training in techniques and work practices who are employed by companies or organisations in that party, provided that the training received is confined to observation, familiarisation and classroom instruction only.

Trade fairs and exhibitions

Personnel attending a trade fair for the purpose of promoting their company or its products or services.

Sales Representatives of a supplier of services or goods taking orders or negotiating the sale of services or goods or entering into agreements to sell services or goods for






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Business Activity

Definition

that supplier, but not delivering goods or supplying services themselves. Short-term business visitors do not engage in making direct sales to the general public.

Purchasing Buyers purchasing goods or services for an enterprise, or management and supervisory personnel, engaging in a commercial transaction carried out in the territory of the other party.

After-sales or after-lease service

Installers, repair and maintenance personnel, and supervisors, possessing specialised knowledge essential to a seller's contractual obligation, performing services or training workers to perform services, pursuant to a warranty or other service contract incidental to the sale or lease of commercial or industrial equipment or machinery, including computer software, purchased or leased from an enterprise located outside the territory of the Party into which temporary entry is sought, throughout the duration of the warranty or service contract.

Commercial transactions

Management and supervisory personnel and financial services personnel (including insurers, bankers and investment brokers) engaging in a commercial transaction for an enterprise located in the territory of the other party.

Tourism personnel

Tour and travel agents, tour guides or tour operators attending or participating in conventions or accompanying a tour that has begun in the territory of the other party.

Translation and interpretation

Translators or interpreters performing services as employees of an enterprise located in the territory of the other party.

Short-term business visitors are prohibited from engaging in certain activities. Participating in one

of the activities outlined below would prevent an individual from qualifying as a short-term

business visitor: (a) engaging in selling a good or a service to the general public; (b) receiving

remuneration from a source located within Canada; and (c) suppling a service in the framework of

a contract concluded between an enterprise that has no commercial presence in Canada and a

consumer in Canada (except as provided in Annex 10-D, summarized in Table 28, above).103

103 CETA, Article 10.9.1(a)-(c).



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2. Key Personnel

Article 10.7 permits the temporary entry and stay of “Key Personnel”. Key personnel include

business visitors for investment purposes, investors, and intra-corporate transferees. The

definitions for of these types of workers are discussed in the sections below.

The CETA prohibits Canada from establishing limitations, such as economic needs tests or

numerical restrictions, on the number of total key personnel that will be permitted temporary entry.

The CETA also prohibits Canada from requiring work permits for business visitors for investment

purposes.104 Canada is able to continue to require work permits for investors and intra-corporate

transferees so long as they are LMIA-exempt (i.e., not subject to any numerical restrictions or

economic needs tests, such as the assessment of whether or not a qualified Canadian worker is

available to undertake the required services or activities).

a) Business Visitors for Investment Purposes – no work permit required; 90 days

of entry and stay permitted within any 6-month period

The CETA defines “business visitors for investment purposes” as natural persons working in a

managerial or specialist position who are responsible for setting up an enterprise, but who do not

engage in direct transactions with the general public and do not receive remuneration from a source

located within Canada.105 Business visitors for investment purposes are entitled to enter Canada

and stay for up to 90 days within any 6-month period without a work permit.

b) Investors – LMIA-exempt work permit required; entry and stay permitted for

a period of up to one year

“Investors” are defined in the CETA as “natural persons who establish, develop, or administer the

operation of an investment in a capacity that is supervisory or executive and to which those persons

or the enterprise employing those persons has committed, or is in the process of committing, a

substantial amount of capital”.106 Currently, EU investors are required to obtain an LMIA-exempt

104 CETA, Article 10.7.2 and 3.

105 CETA, Article 10.1, Definitions.

106 CETA, Article 10.1.



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work permit in order to work in Canada. Once the work permit is obtained, entry will be permitted

for one year, with possible extensions at the discretion of the federal department of Immigration,

Refugees, and Citizenship Canada (IRCC). For the purposes of requesting an extension to a valid

work permit, IRCC provides an administrative process involving an online application.107

c) Intra-Corporate Transferees – LMIA-exempt work permit required; entry

and stay permitted for up to three years or the duration of the contract,

whichever is less

The CETA also provides preferential treatment to certain intra-corporate transferees. However,

not all intra-corporate transferees will meet the definition set forth in the negotiated outcomes of

the CETA text. This definition is limited to natural persons who (a) have been employed by an EU

enterprise or have been partners in an EU enterprise for at least one year, (b) are temporarily

transferred to an enterprise in Canada (i.e., a subsidiary, branch, or head company of the EU

enterprise), and (c) meet the definition for “senior personnel”, “specialist”, or “graduate trainee”.

To qualify as “senior personnel” under the CETA, an individual must be working in a senior

position within an EU enterprise. His or her role must be primarily to direct the management of

the enterprise, or either the enterprise itself or a department or sub-division of the enterprise. An

individual with a lower level of authority may also meet the definition of “senior personnel” if he

or she has the ability to exercise a wide latitude in decision making, which may include having the

authority to personally recruit and dismiss personnel, or the authority to take other actions related

to “human resources” activities (such as authorizing the promotion or leave of personnel). Further,

he or she must (a) receive only general supervision or direction principally from higher level

executives, the board of directors, or stockholders of the business, or (b) supervise and control the

work of other supervisory, professional or managerial employees, and exercise discretionary

authority over day-to-day operations.108

107 See IRCC, “Can I apply to extend a work permit from inside Canada?”, available online at

www.cic.gc.ca/english/helpcentre/answer.asp?qnum=185&top=17; IRCC, “Application to Change Conditions or

Extend Your Stay in Canada as a Worker (from inside Canada)”, available online at

www.cic.gc.ca/english/information/applications/extend-worker.asp.




- 124 -

The CETA defines “specialists” as natural persons working within an enterprise who possess (a)

uncommon knowledge of the enterprise’s products or services, and its application in international

markets, or (b) an advanced level of expertise or knowledge of the enterprise’s processes and

procedures, such as its production, research equipment, techniques, or management. When

assessing the expertise or knowledge of a specialist, IRCC is required to consider unusual abilities

that are different from those generally found in a particular industry and that cannot be easily

transferred to another natural person in the short-term. Such abilities must be obtained through

specific academic qualifications or extensive experience with the enterprise.109

Intra-corporate transferees who are “senior personnel” and “specialists” need to apply for an

LMIA-exempt work permit. Once approved, they will be entitled to enter Canada and stay for up

to three years or the length of their contract, whichever is less, with a possible extension of up to

18 months at the discretion of IRCC.

An EU enterprise also benefits from the intra-corporate transferee provisions of the CETA if the

employee being transferred falls within the definition of “graduate trainee”. Graduate trainees are

natural persons who possess a university degree and are temporarily transferred to Canada for

career development purposes or to obtain training in business techniques and methods. Graduate

trainees will be required to apply for a LMIA-exempt work permit. Graduate trainees are entitled

to enter Canada and stay for up to three years or the duration of their contract, whichever is less.110

3. Contractual Services Suppliers and Independent Professionals – LMIA-exempt

work permit required; entry and stay permitted for up to 12 months

Annex 10-E of the CETA requires Canada and the EU to permit the supply of services in their

territory by contractual services suppliers and independent professionals for the sectors listed in

Annex 10-E, subject to the specified limitations.111 For Canada, the sectoral commitments apply



111 CETA, Annex 10-E.



- 125 -

to occupations listed under level “0” and “A” of Canada’s National Occupational Classification

(“NOC”) system.112 The complete list of reservations can be found in Annex 10-E.

Unless Canada has established a reservation in Annex 10-E with respect to a particular industry,

Canadian authorities cannot condition the temporary entry and stay of contractual services

suppliers or independent professionals entering Canada to provide services in that industry on

numerical restrictions or economic needs tests.113 Canada has also committed to allow independent

professionals to enter and stay in Canada for a cumulative period of not more than 12 months in

any 24 month period, or for the duration of the contract, whichever is less.114 A work permit will

still be required for contractual services suppliers and independent professionals.

a) Contractual Services Suppliers

Contractual services suppliers are defined as natural persons employed by an EU enterprise that

has no establishment (i.e., work place or premises) in Canada. 115 The work being supplied by the

EU enterprise must fall within one of the industries outlined in section 9 of Annex 10-E., and the

enterprise must have a bona fide contract (other than through an agency) to supply a service to a

recipient in Canada.116

112 Government of Canada, Canadian National Occupation Classification List, Available online:

http://www.cic.gc.ca/english/immigrate/skilled/noc.asp.



115 CETA, Article 10.1, Definitions.

116 CETA, Annex 10E, section 9 specifies the following industries: Legal advisory services in respect of public

international law and foreign law; Accounting and bookkeeping services; Taxation advisory services; Architectural

services and urban planning and landscape architectural services; Engineering services and integrated engineering

services; Medical and dental services; Veterinary services; Midwives services; Services provided by nurses,

physiotherapists and paramedical personnel; Computer and related services; Research and development services;

Advertising services; Market research and opinion polling; Management consulting services; Services related to

management consulting; Technical testing and analysis services; Related scientific and technical consulting services;

Mining; Maintenance and repair of vessels; Maintenance and repair of rail transport equipment; Maintenance and

repair of motor vehicles, motorcycles, snowmobiles and road transport equipment; Maintenance and repair of aircrafts

and parts thereof; Maintenance and repair of metal products, of (non-office) machinery, of (non-transport and non-

office) equipment and of personal and household goods; Translation and interpretation services; Telecommunication

services; Postal and courier services; Construction and related engineering services; site investigation work; Higher

education services; Services relating to agriculture, hunting and forestry; Environmental services; Insurance and



- 126 -

Under Article 10.8.1 of the CETA, an individual seeking entry as a contractual services supplier

must meet each of the conditions outlined in the checklist below117:

insurance related services advisory and consulting services; Other financial services advisory and consulting services;

Transport advisory and consulting services; Travel agencies and tour operators' services; Tourist guides services;

Manufacturing advisory and consulting services.




- 127 -

b) Independent Professionals

An “independent professional” is a natural person who is established as self-employed in the

European Union, but engaged to temporarily supply a service in Canada pursuant to a service

✓

✓

✓

✓

✓

✓

✓



- 128 -

contract that is no longer than 12 months in duration. The work being supplied by the independent

professional must be listed in one of the industries outlined in section 10 of Annex 10-E.118

✓

✓

✓

✓

✓

✓



- 129 -

Under Article 10.8.2 of the CETA, an individual seeking entry as an independent professional

must meet each of the conditions outlined in the checklist below:

4. Canadian Reservations Applicable to Contractual Services Suppliers and

Independent Professionals

Canada did not make any commitments regarding the following sectors for contractual services

suppliers or independent professionals, meaning that all EU workers entering Canada in these

sectors will require a positive LMIA and a work permit in order to enter Canada or stay for the

purpose of working in their professional fields: medical and dental services, veterinary services,

midwifery services, services provided by nurses, physiotherapy and paramedical services, and

higher education services.119

IRCC has published administrative guidance online regarding the implementation of the

Government of Canada’s commitments relating to contractual service suppliers and independent

professionals, as listed in CETA Annex 10-E, through the NOC 2011.120 A simplified version of

the information illustrating Canada’s reservations with respect to the temporary entry and stay of

contractual services suppliers and independent professionals is found at Appendix 6.

B. Opportunities for EU Enterprises

As outlined above, the negotiated outcomes of CETA Chapter 10 provide increased work force

mobility and flexibility to EU enterprises of all sizes – including independent professionals – that

engage in business activities in Canada. In turn, these benefits support and enhance the cross-

118 CETA, Annex 10-E, section 10 specifies the following industries: Legal advisory services in respect of

public international law and foreign law; Architectural services and urban planning and landscape architectural

services; Engineering services and integrated engineering services; Computer and related services; Research and

development services; Market research and opinion polling; Management consulting services; Services related to

management consulting; Mining; Translation and interpretation services; Telecommunication services; Postal and

courier services; Higher education services; Insurance related services advisory and consulting services; Other

financial services advisory and consulting services; Transport advisory and consulting services; Manufacturing

advisory and consulting services.

119 CETA, Annex 10-E.

120 IRCC, “National Occupational Classification Equivalents of Canada’s Commitments in the Canada-

European Union Free-Trade Agreement”, available online at http://www.cic.gc.ca/english/resources/tools/temp/

work/international/canada-eu/a10-e.asp.



- 130 -

border trade and investment opportunities that existed for EU enterprises in Canada prior to the

CETA as well as the new market access opportunities that have been created by other CETA

outcomes. Individuals from the European Union who qualify under the CETA as “key personnel”,

“contractual services suppliers”, “independent professionals”, and “short-term business visitors”

are now accorded preferential treatment by the relevant Canadian authorities, including IRCC and

CBSA. The practical effects include reduced costs and delays relating to LMIA and work permit

applications, and greater certainty for EU individuals travelling to Canada for business purposes

(e.g., developing an investment, establishing business relationships, or engaging in the supply of

a specific professional or contractual service).

Although Chapter 10, in isolation, does not necessarily create concrete market access opportunities

that were previously closed to EU enterprises, its implementation in Canada does facilitate and

enhance the opportunities for enterprises of all sizes under the CETA, including those under

Chapter 2 (National Treatment and Market Access for Goods), Chapter 8 (Investment), Chapter 9

(Cross Border Trade in Services), Chapter 13 (Financial Services), and Chapter 19 (Government

Procurement).

In particular, the capacity for EU individuals to enter into Canada and stay for extended periods of

time to undertake business activities, without being required to satisfy work permit or LMIA

requirements, will be very useful for SMEs looking to expand their business operations into

Canadian markets. SMEs often do not have the resources available to establish a physical presence

in Canada and must offer their goods and services without investing in permanent infrastructure.

Under these circumstances, SMEs may wish to take advantage of the short-term business visitor

rules outlined above.

While in Canada, short-term business visitors for the European Union are able to attend meetings

with potential business partners, conduct market research, and attend trade fairs or exhibitions to

market their products and services. These are inexpensive ways to make important business

connections, develop relationships, and establish customers, clients, and supply chains.

SMEs will also benefit from the limited sales and purchasing activities that are permitted for short-

term business visitors as well as the entry permitted after a sale is completed to provide ongoing



- 131 -

support. Sales representatives (for goods or services) are able to take orders or negotiate sales

agreements while in Canada as a short-term business visitor. Short-term business visitors are also

permitted to engage in certain services after a sale has been completed. For example, EU workers

are permitted to enter Canada as short-term business visitors to undertake installation and repair

services pursuant to a warranty or services contract related to the sale or lease of commercial or

industrial equipment, machinery, or computer software.

It is important to remember that if an EU worker has been granted temporary entry and stay in

Canada as a short-term business visitor under the CETA, he or she is prohibited from delivering

goods or supplying services to consumers in Canada. Also, they are not permitted to engage in

making direct sales to the general public and they are prohibited from receiving remuneration from

a source located within Canada. However, once a foothold has been established in Canada and

services contracts have been signed, the individual may be able to gain entry to Canada as an

investor, key personnel, or a contractual service supplier under an LMIA-exempt work permit.

VI. INVESTMENT

CETA Chapter 8 sets out provisions that protect investments of EU investors in Canada. The

Chapter does not, however, open up new investment opportunities in Canada that could be

highlighted in this report.

As discussed above, the CETA creates direct opportunities in respect of trade in goods and

services, including government procurement, that are immediately apparent. It also generates and

facilitates opportunities for direct investment in Canada. Trade in goods and services and

investment must be considered together when assessing opportunities because an opportunity to

trade goods is often associated with opportunities to trade in services and make investments to

leverage the maximum benefit from preferential market access. An example is the supply of a good

that requires installation and set-up services and/or maintenance and repair services. The

establishment of supply chains for the good and its associated services can lead to investment in

Canada based on those supply chains. The certainty and predictability created by the CETA creates

an environmental that fosters further investment both inside and outside of existing EU-Canada



- 132 -

trade flows and supply chains. Finally, the NAFTA in its current form provides EU investments in

Canada with access to the large US market.

APPENDIX 8

Table 29 Goods of Section IV – Prepared Foodstuffs; Beverages, Spirits, and Vinegar, Tobacco and

Manufactured Tobacco Substitutes.


tariff treatment

Total imports to Canada

(2016)

EU imports to Canada

(2016)

Chapter 16 Preparation of meat, fish or crustaceans, molluscs or other aquatic invertebrate

1602.49.10 Mixtures, in cans or glass jars, of other prepared or preserved meat, meat offal or blood

12.5% Free

327,466,006* 2,316,663*

1602.50.10 Prepared meals of bovine animals 11% Free

238,975,570* 381,384*

1602.90 Other prepared meals or mixtures, in cans or glass jars, of other prepared or preserved meat, meat offal or blood

11-12.5% Free

2,475,839* 154,768*

16.04 Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs

4.5-11% Free

315,937,637* 24,889,137*

Chapter 17 Sugars and sugar confectionery

1702.90.90 Other sugars, containing in the dry state 50% by weight of fructose

11% Free

38,199,330* 3,851,523*

17.03 Molasses resulting from the extraction of refining sugar

12.5% Free

44,595,790* 3,439,463*

17.04 Sugar confectionery (including white chocolate), not containing cocoa

9.5-10% Free

531,342,825* 87,160,678*

Chapter 19 Preparations of cereals, flour, starch or milk; pastrycooks' products

1902.20 Stuffed pasta, whether or not cooked or otherwise prepared

11% Free

96,418,632 6,435,120

Chapter 20 Preparations of vegetables, fruit, nuts or other parts of plants

20.02 Tomatoes prepared or preserved otherwise than by vinegar or acetic acid

11.5% Free

124,578,165 28,759,358

20.03 Mushrooms and truffles, prepared or preserved otherwise than by vinegar or acetic acid

17% Free

22,219,040* 1,225,108*

20.04 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen

6-17% Free

158,964,409* 3,880,981*



- 133 -


tariff treatment


(2016)


(2016)

20.05 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen,

6-14.5% Free

439,705,430* 86,087,008*

20.06 Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glacé or crystallised)

6-9.5% Free

8,882,626* 529,516*

20.07 Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, obtained by cooking

8.5-12.5% Free

129,984,354* 20,647,785*

20.08 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved

4-12.5% Free

712,497,288* 19,861,517*

20.09 Fruit juices (including grape must) and vegetable juices, unfermented and not containing added spirit

4-12.5% Free

352,499,429* 21,875,008*

Chapter 21 Miscellaneous edible preparations

21.03 Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard

3-12.5% Free

1,002,509,035* 47,003,213*

21.04 Soups and broths and preparations therefor; homogenized composite food preparations

6-11% Free

264,709,704 4,534,295

21.05 Ice cream and other edible ice, whether or not containing cocoa

6.5-9.5% Free

18,299,796* 1,712,569

21.06 Food preparations not elsewhere specified or included

5-11% Free

1,855,685,988* 109,070,076*

Chapter 22 Beverages, spirits and vinegar

2201.90 Other waters not containing added sugar or other sweetening matter nor flavoured; ice and snow

6.5% Free

17,284,863 399,935

22.02 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages

7.5-11% Free

390,184,149* 50,895,639*

2209.00 Vinegar and substitutes for vinegar obtained from acetic acid

9.5% Free

54,817,113 25,714,331

Chapter 23 Residues and waste from the food industries; prepared animal fodder

2309.90.20/99 Other preparations of a kind used in animal feeding

8-10.5% Free

54,817,113* 25,714,331*



- 134 -


tariff treatment


(2016)


(2016)

Chapter 24 Tobacco and manufactured tobacco substitutes

24.01 Unmanufactured tobacco; tobacco refuse 2.5-8% Free

73,105,290* 4,232,639*

24.02 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes

6.5-12.5% Free

61,221,085* 29,250,339*

24.03 Other manufactured tobacco and manufactured tobacco substitutes; "homogenized" or "reconstituted" tobacco; tobacco extracts and essences

4-13% Free

20,038,138* 812,222*

Table 30 Goods of Section IV – Prepared Foodstuffs; Beverages, Spirits, and Vinegar, Tobacco and

Manufactured Tobacco Substitutes.


tariff treatment


(2016)


(2016)

Chapter 27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes

2703.00 Peat (including peat litter), whether or not agglomerated

6.5% Free

18,958,597 1,282,178

2710.12.20 Lubricating oils put up in packings for retail sale

5% Free 9,938,419,788 2,719,720,280

2710.19.91 Lubricating oils put up in packings for retail sale, including for automobile, diesel or marine engines and automotive gear oils

5% Free 4,665,294,713 340,582,367

2710.20.10 Lubricating oils put up in packings for retail sale

5% Free 12,613,775 10,332,252

2711.12.10 Propane in containers ready for use 12.5% Free

83,363,947* 860*

2711.19.10 Other petroleum gases and other gaseous hydrocarbons in containers ready for use

12.5% Free

23,079,247* 58,492*

2712.10 Petroleum jelly 7% Free 16,835,731 214,497

Table 31 Goods of Section VI – Products of the Chemical or Allied Industries


tariff treatment


(2016)


(2016)

Chapter 28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes



- 135 -


tariff treatment


(2016)


(2016)

2852.90.10 Mercury albuminate; Nucleoproteids of mercury

6.5% Free

73,833,955* 4,907,354*

Chapter 32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks

32.08 Paints and varnishes based on synthetic polymers or chemically modified natural polymers, dispersed or dissolved in a non-aqueous medium; solutions

6.5% Free

719,158,926* 33,322,542*

32.09 Paints and varnishes (including enamels and lacquers) based on synthetic polymers or chemically modified natural polymers, dispersed or dissolved in an aqueous medium

6.5% Free

632,828,295 22,906,692

3210.00.00 Other paints and varnishes (including enamels, lacquers and distempers); prepared water pigments of a kind used for finishing leather

6.5% Free

31,434,999 3,914,968

3211.00.00 Prepared driers 6.5% Free

2,823,760 318,704

32.13 Artists', students' or signboard painters' colours, modifying tints, amusement colours and the like, in tablets, tubes, jars, bottles, pans or in similar forms or packings

6.5% Free

37,546,908 7,840,471

32.14 Glaziers' putty, grafting putty, resin cements, caulking compounds and other mastics; painters' fillings; non-refractory surfacing preparations for façades, indoor walls, floors, ceilings or the like

6.5% Free

408,387,722 32,539,992

Chapter 33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations

3303.00 Perfumes and toilet waters 6.5% Free

293,514,129 166,479,818

33.04 Beauty or make-up preparations and preparations for the care of the skin (other than medicaments); manicure or pedicure preparations

6.5% Free

1,906,830,467* 539,917,837*

33.05 Preparations for use on the hair 6.5% Free

688,099,145 77,775,566

33.06 Preparations for oral or dental hygiene, including denture fixative pastes and

6.5-8% Free

328,859,719 17,785,729



- 136 -


tariff treatment


(2016)


(2016)

powders; dental floss, in individual retail packages

33.07 Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorizers

6.5% Free

485,907,208 34,242,903

Chapter 38 Miscellaneous chemical products

3819.00 Hydraulic brake fluids and other prepared liquids for hydraulic transmission, not containing or containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals

6.5% Free

49,874,135 7,748,677

3820.00 Anti-freezing preparations and prepared de-icing fluids

6.5% Free

89,167,352 1,535,671

38.25 Residual products of the chemical or allied industries; municipal waste; sewage sludge; other waste

6.5-15.5% Free

11,730,877* 9956*

Table 32 Goods of Section VII – Plastics and Articles Thereof; Rubber and Articles Thereof


tariff treatment


(2016)


(2016)

Chapter 39 Plastics and articles thereof

39.18 Floor coverings of plastics in rolls or in the form of tiles; wall or ceiling coverings of plastics

6.5% Free

477,893,637 51,056,024

39.22 Baths, shower-baths, sinks, wash-basins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware, of plastics

6.5% Free

121,283,831 4,425,438

39.24 Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics

6.5% Free

905,555,307 37,492,557

39.25 Builders' ware of plastics, not elsewhere specified or included

6.5% Free

507,771,600 26,918,609

Chapter 40 Rubber and articles thereof

4011.10 New pneumatic tires, of rubber used on motor cars

7% Free 1,962,766,996 247,675,439



- 137 -


tariff treatment


(2016)


(2016)

4011.20 New pneumatic tires, of rubber used on buses or lorries

7% Free 1,128,405,451 132,410,487

4015.11 Surgical gloves, mittens and mitts 15.5% Free

28,734,231 136,668

4015.90 Other gloves, mittens and mitts 10-14% Free

4,799,881* 436,333*

40.16 Other articles of vulcanized rubber other than hard rubber

6.5-9.5% Free

1,253,305,308* 115,166,802*

Chapter 42 Apparel and clothing products, of leather

42.03 Articles of apparel (e.g., coats, jackets, etc.), gloves, belts, and other clothing accessories

8-15.5% 226,524,264 34,153,395

Value in Canadian Dollars

Source: Industry Canada (Statistics Canada), Trade Data Online, available online at https://www.ic.gc.ca/eic/site/tdo-

dcd.nsf/eng/home

Table 33 Goods of Section VIII – Raw Hides and Skins, Leather, Furskins and Articles Thereof; Saddlery and

Harness; Travel Goods, Handbags and Similar Containers; Articles of Animal Gut


tariff treatment


(2016)


(2016)

Chapter 43 Furskins and artificial fur; manufactures thereof

43.03 Articles of apparel, clothing accessories and other articles of furskin

8-15.5% Free

49,651,984 7,431,465

Table 34 Goods of Section IX – Wood and Articles of Wood; Wood Charcoal; Cork and Articles of Cork;

Manufactures of Straw, of Esparto or of Other Plaiting Materials; Basketware and Wickerwork


tariff treatment


(2016)


(2016)

Chapter 44 Wood and articles of wood; wood charcoal

44.19 Tableware and kitchenware, of wood 6% Free 48,127,406 3,035,074

44.20 Wood marquetry and inlaid wood; caskets and cases for jewellery or cutlery, and similar articles, of wood; statuettes and other ornaments, of wood; wooden articles of furniture

6-7% Free

66,075,356 2,734,485

44.21 Other articles of wood 6-9.5% Free

206,318,304* 10,629,538*



- 138 -

Chapter 46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork

4602.11

Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from goods of heading 46.01 made of bamboo

6.5-11% Free

5,280,872 29,640

4602.12 Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from goods of heading 46.01 made of rattan

4-11% Free

3,607,637* 47,211*

4602.19 Other basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from goods of heading 46.01

4-11% Free

16,474,036* 48,416*

4602.90 Baskets, trunks, travelling-bags and cases, shopping-bags, handbags and hatboxes

8-11% Free

12,220,795 54,118

Table 35 Goods of Section XI – Textiles and Textile Articles


tariff treatment


(2016)


(2016)

Chapter 52 Cotton

5204.20 Cotton sewing thread put up for retail sale 8% Free 165,497 1,075,166

Chapter 54 Man-made filaments; strip and the like of man-made textile materials

5406.00.10 Synthetic filament yarn 8% Free 3,301,862* 79,080*

Chapter 55 Man-made staple fibres

5511.10/20 Yarn (other than sewing thread) of man-made staple fibres, put up for retail sale.

8% Free 34,757,660 826,720

Chapter 56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof

5601.22.50 Articles of wadding, of man-made fibres 16% Free

13,981,579* 1,095,193*

5607.29.20/90 Other twine, cordage, ropes and cables, whether or not plaited or braided, made of sisal or other textile fibres of the genus

10% Free

1,710,734* 77,017*

5607.49.20/90 Other twine, cordage, ropes and cables, whether or not plaited or braided, made of polyethylene or polypropylene

10% Free

25,483,433* 3,964,741*



- 139 -


tariff treatment


(2016)


(2016)

5607.50.20/90 Twine, cordage, ropes and cables, whether or not plaited or braided, made of other synthetic fibres

10% Free

25,842,853* 3,570,941*

5607.90.20/90 Other twine, cordage, ropes and cables, whether or not plaited or braided

10% Free

10,367,312* 1,862,299*

5608.11.90 Other made up fishing nets of man-made textile materials

14% Free

13,251,571* 1,230,227*

5608.19.90 Other knotted netting of twine, cordage or rope; made up nets, of man-made textile materials

14% Free

15,369,836* 2,992,947*

5608.90.90 Other knotted netting of twine, cordage or rope; made up nets, of man-made textile materials

13% Free

5,525,851 1,434,508

5609.00 Articles of yarn, strip or the like, twine, cordage, rope or cables

14% Free

17,410,751 465,175

Chapter 57 Carpets and other textile floor coverings

57.01 Carpets and other textile floor coverings, knotted, whether or not made up

6.5-13% Free

37,013,830 113,586

57.02 Carpets and other textile floor coverings, woven, not tufted or flocked, including "Kelem", "Schumacks", "Karamanie" and similar hand-woven rugs

6.5-14% Free

122,761,323* 18,129,054*

57.03 Carpets and other textile floor coverings, tufted, whether or not made up

10-12.5% Free

760,865,508 14,370,406

57.04 Carpets and other textile floor coverings, of felt, not tufted or flocked, whether or not made up

112.5% Free

24,042,583 3,372,900

5705.00 Other carpets and other textile floor coverings, whether or not made up

12% Free

27,150,332 2,170,890

Chapter 59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use

5901.90.10 Prepared painting canvas 7% Free 16,628,562* 193,368*

59.04 Linoleum; floor coverings consisting of a coating or covering applied on a textile backing

7-18% Free

16,433,791 12,951,725

5905.00 Textile wall coverings 5-18% Free

4,913,082 1,621,798



- 140 -


tariff treatment


(2016)


(2016)

5907.00.29 Other painted canvas being theatrical scenery, studio back-cloths or the like

14% Free

17,519,033* 1,597,215*

5908.00.90 Other textile wicks, woven, plaited or knitted, for lamps, stoves, lighters, candles or the like; incandescent gas mantles and tubular knitted gas mantle fabric therefor

14% Free

1,806,788* 142,980*

5909.00.10 Fire hose 12% Free

9,570,034* 316,560*

Chapter 61 Apparel and clothing products, knitted or crocheted

61.01 Men’s or boys’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles, knitted or crocheted

18% Free

120,545,758 1,802,255

61.02 Women’s or girls’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles, knitted or crocheted

18% Free

142,356,174 5,273,361

61.03 Men’s or boys’ suits, ensembles, jackets, blazers, trousers, breeches, shorts, knitted or crocheted

18% Free

207,528,869 6,093,049

61.04 Women’s or girls’ suits, ensembles, jackets, blazers, dresses, skirts, trousers, breeches, shorts, knitted or crocheted

18% Free

899,090,113 33,990,938

61.05 Men’s or boys’ shirts, knitted or crocheted 18% Free

197,686,919 5,156,363

61.06 Women’s or girls’ blouses, shirts, and shirt-blouses, knitted and crocheted

18% Free

133,000,000 5,332,000

61.07 Men’s and boys’ undergarments, night clothes, bathrobes, dressing gowns, and similar articles, knitted or crocheted

18% Free

189,814,735 921,411

61.08 Women’s or girls’ undergarments, night clothes, bathrobes, dressing gowns, and similar articles, knitted or crocheted

18% Free

375,575,131 2,976,774

61.09 T-shirts, singlets and other vests, knitted or crocheted

18% Free

902,874,000 33,711,000

61.10 Jerseys, pullovers, cardigans, waistcoats, and similar articles, knitted or crocheted

18% Free

1,715,278,419 77,177,975

61.12 Track suits, ski suits, and swimwear, knitted and crocheted

18% Free

119,721,086 2,991,578

61.14 Other garments, knitted or crocheted 18% Free

192,196,187 5,050,829



- 141 -


tariff treatment


(2016)


(2016)

61.15 Tights, stockings, socks, and other hosiery, knitted or crocheted

18% Free

363,929,658 20,046,331

61.16 Gloves, mittens, and mitts, knitted or crocheted

16-18% Free

150,582,746 1,534,156

61.17 Clothing accessories, knitted or crocheted (e.g., scarves, belts)

12-18% Free

60,849,057 4,237,312

Chapter 62 Apparel and clothing products, woven (not knitted or crocheted)

62.01 Men’s or boys’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles

17-18% Free

368,900,086 30,131,304

62.02 Women’s or girls’ overcoats, anoraks, ski-jackets, wind-jackets, and similar articles

16-18% Free

488,661,158 45,512,912

62.03 Men’s or boys’ suits, ensembles, jackets, blazers, trousers, breeches, shorts

17-18% Free

1,091,784,865 89,774,924

62.04 Women’s or girls’ suits, ensembles, jackets, blazers, dresses, skirts, trousers, breeches, shorts

17-18% Free

1,440,504,959 100,237,809

62.05 Men’s or boys’ shirts 17-18% Free

450,064,365 26,759,315

62.06 Women’s or girls’ blouses, shirts, and shirt-blouses

16-18% Free

385,418,758 25,007,157

62.07 Men’s and boys’ singlets and other vests, undergarments, night clothes, bathrobes, dressing gowns, and similar articles

16-18% Free

31,241,134 418,415

62.08 Women’s or girls’ singlets and other vests, undergarments, night clothes, bathrobes, dressing gowns, and similar articles

16-18% Free

52,625,910 1,061,495

62.11 Track suits, ski suits, and swimwear 6-18% Free

340,091,644 14,984,759

62.12 Lingerie and similar articles, whether or not knitted or crocheted

18% Free

340,338,552 5,724,393

62.14 Clothing accessories, knitted or crocheted (e.g., scarves)

9-18% Free

91,126,085 26,883,526

62.15 Ties and cravats 16-18% Free

28,891,423 8,901,367

Chapter 63 Other made up textile articles; sets; worn clothing and worn textile articles; rags



- 142 -


tariff treatment


(2016)


(2016)

63.01 Blankets and travelling rugs 17-18% Free

109,405,277 4,117,716

63.02 Bed linen, table linen, toilet linen and kitchen linen

7.5-18% Free

634,104,582 24,660,015

63.03 Curtains (including drapes) and interior blinds; curtain or bed valances

17-18% Free

195,690,074 3,239,005

63.04 Other furnishing articles, excluding those of heading 94.04

15.5-18% Free

63,082,638 3,063,286

63.05 Sacks and bags, of a kind used for the packing of goods

5-18% Free

119,358,534 1,437,447

63.06 Tarpaulins, awnings and sunblinds; tents; sails for boats, sailboards or landcraft; camping goods

17-18% Free

102,411,506 2,232,327

63.07 Other made up articles, including dress pattern

7.5-18 Free

417,286,983* 14,783,723*

63.08 Sets consisting of woven fabric and yarn for making up into rugs, tapestries, embroidered table cloths or serviettes, or similar textile articles, put up in packings for retail sale

18% Free

1,205,961 39,320

6309.00.90 Other worn clothing and other worn articles

18% Free

55,522,322* *223,618

Table 36 Goods of Section XII – Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks, Seat-sticks,

Whips, Riding-crops and Parts Thereof; Prepared Feathers and Articles Made Therewith; Artificial Flowers;

Articles of Human Hair


tariff treatment


(2016)


(2016)

Chapter 64 Footwear, gaiters and the like; parts of such articles

64.01 Waterproof footwear with outer soles and uppers of rubber or of plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging or similar processes

20% Free

45,733,179* 8,312,942*

64.02 Other footwear with outer soles and uppers of rubber or plastics

16-18% Free

573,515,743* 13,439,320*

64.03 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather

11-18% Free

1,473,430,036* 324,989,652*



- 143 -


tariff treatment


(2016)


(2016)

64.04 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials

7.5-18% Free

784,132,642* 49,512,061*

64.05 Other footwear, including with uppers of leather or composition leather, of textile materials

18% Free

131,589,498* 6,662,856*

6406.90 Other parts of footwear; removable in-soles, heel cushions and similar articles; gaiters, leggings and similar articles, and parts thereof

5-10% Free

47,305,164* 4,340,711*

Chapter 65 Headgear and parts thereof

6504.00.90 Other hats and other headgear, plaited or made by assembling strips of any material

12.5% Free

10,923,606* 424,984*

6505.00 Hats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips); hair-nets of any material

12.5-15.5% Free

226,180,045* 6,681,191*

65.06 Other headgear, whether or not lined or trimmed

5-12.5% Free

157,629,380* 8,292,067*

Chapter 66 Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof

66.01 Umbrellas and sun umbrellas (including walking-stick umbrellas, garden umbrellas and similar umbrellas)

7-7.5% Free

83,337,178 967,622

6602.00.90 Other walking-sticks, seat-sticks, whips, riding-crops and the like

7% Free 5,158,633* 346,294*

Chapter 67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair

67.04 Wigs, false beards, eyebrows and eyelashes, switches and the like, of human or animal hair or of textile materials; articles of human hair

15.5% Free

56,975,065 1,490,254

Table 37 Goods of Section XIII – Articles of Stone, Plaster, Cement, Asbestos, Mica or Similar Materials;

Ceramic Products; Glass and Glassware


tariff treatment


(2016)


(2016)

Chapter 68 Articles of stone, plaster, cement, asbestos, mica or similar materials



- 144 -

68.02 Worked monumental or building stone (except slate) and articles thereof; mosaic cubes and the like, of natural stone (including slate); artificially coloured granules, chippings and powder, of natural stone (including slate)

3.5-8% Free

341,073,520* 71,920,796*

6803.00.90 Worked slate and articles of slate or of agglomerated slate

6.5% Free

8,146,351* 206,542

6807.10 Articles of asphalt or of similar material (for example, petroleum bitumen or coal tar pitch) in rolls

6.5% Free

80,770,594 6,593,281

68.09 Articles of plaster or of compositions based on plaster

6-6.5% Free

187,155,890* 824,431*

Chapter 69 Ceramic products

69.07 Ceramic flags and paving, hearth or wall tiles; ceramic mosaic cubes and the like; finishing ceramics

8% Free 93,747,737 65,779,099

Table 38 Goods of Section XV – Base Metals and Articles of Base Metal


tariff treatment


(2016)


(2016)

Chapter 73 Articles of iron or steel

7319.90 Other sewing needles, knitting needles, bodkins, crochet hooks, embroidery stilettos and similar articles, for use in the hand, of iron or steel; safety pins and other pins of iron or steel

7% Free 3,486,789 674,810

73.21 Stoves, ranges, grates, cookers, barbecues, braziers, gas-rings, plate warmers and similar non-electric domestic appliances, and parts thereof, of iron or steel

7-8% Free

530,509,235* 18,852,197*

73.22 Radiators for central heating, not electrically heated, and parts thereof, of iron or steel; air heaters and hot air distributors, not electrically heated, incorporating a motor-driven fan or blower, and parts thereof, of iron or steel

7-7.5% Free

406,790,807* 28,140,734*

73.23 Table, kitchen or other household articles and parts thereof, of iron or steel; iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel

6.5% Free

382,318,779 20,862,307



- 145 -


tariff treatment


(2016)


(2016)

73.24 Sanitary ware and parts thereof, of iron or steel

6.5-7% Free

119,498,627* 8,357,883*

Chapter 74 Copper and articles thereof

7419.99.20 Caskets or coffins 9.5% Free

57,355,349 6,256,816

Chapter 76 Aluminum and articles thereof

76.10 Aluminum structures and parts of structures; aluminum plates, rods, profiles, tubes and the like, prepared for use in structures

6.5% Free

405,611,712* 39,401,618*

76.12 Aluminum casks, drums, cans, boxes and similar containers for any material of a capacity not exceeding 300 litres

6.5% Free

313,372,166* 12,646,305*

76.15 Table, kitchen or other household articles and parts thereof, of aluminum; pot scourers and scouring or polishing pads, gloves and the like, of aluminum; sanitary ware and parts thereof, of aluminum

6.5% Free

215,724,702 11,798,117

Chapter 82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal

8201.60.90 Hedge shears and similar two-handed shears

11% Free

6,488,817* 337,711

8203.30 Metal cutting shears and similar tools 6.5-11% Free

10,253,459 1,065,984

82.11 Knives with cutting blades, serrated or not (including pruning knives), and blades therefor

3.5-11% Free

56,770,582* 6,967,389*

8213.00 Scissors, tailors' shears and similar shears, and blades therefor

3.5-11% Free

19,041,457 1,562,487

82.15 Spoons, forks, ladles, skimmers, cake-servers, fish-knives, butterknives, sugar tongs and similar kitchen or tableware

6.5-11% Free

69,504,203* 1,674,511*

Chapter 83 Miscellaneous articles of base metal

83.01 Padlocks and locks (key, combination or electrically operated), of base metal; clasps and frames with clasps, incorporating locks, of base metal; keys for any of the foregoing articles, of base metal

6.5% Free

236,753,765* 14,730,025*



- 146 -


tariff treatment


(2016)


(2016)

83.06 Bells, gongs and the like, non-electric, of base metal; statuettes and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal

5-6.5% Free

82,047,847* 2,645,736*

Table 39 Goods of Section XVI – Machinery and Mechanical Appliances; Electrical Equipment; Parts Thereof;

Sound Recorders and Reproducers, Television Image and Sound Recorders and Reproducers, and Parts and

Accessories of Such Articles


tariff treatment


(2016)


(2016)

Chapter 84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof

84.18 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps

6-8% Free

1,715,886,858* 58,572,198*

84.51 Machinery for washing, cleaning, wringing, drying, ironing, pressing (including fusing presses), bleaching, dyeing, dressing, finishing, coating or impregnating textile yarns, fabrics or made up textile articles and machines for applying the paste to the base fabric or other support used in the manufacture of floor coverings such as linoleum; machines for reeling, unreeling, folding, cutting or pinking textile fabrics

6-8% Free

47,678,377* 11,330,148*

Chapter 85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

85.06 Primary cells and primary batteries 7% Free 256,528,023* 16,072,999*

85.07 Electric accumulators, including separators therefor

7% Free 674,570,277* 41,073,531*

85.08 Vacuum cleaners 7.5-8% Free

366,605,031* 22,585,979*

85.16 Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electrothermic hair-dressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric smoothing irons; other electro-thermic appliances of a kind used

6-9% Free

1,377,565,865* 99,669,656*



- 147 -


tariff treatment


(2016)


(2016)

for domestic purposes; electric heating resistors

85.28 Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus

5-6% Free

1,670,429,242* 12,614,685*

85.39 Electric filament or discharge lamps, including sealed beam lamp units and ultra-violet or infra-red lamps; arc-lamps, light-emitting diode (LED) lamps

6-8% Free

280,420,359* 48,802,237*

Table 40 Goods of Section XVII – Vehicles, Aircraft, Vessels and Associated Transport Equipment


tariff treatment


(2016)


(2016)

Chapter 86 Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds

86.03 Self-propelled railway or tramway coaches, vans and trucks (cars)

8% Free 153,624,431 299,046

8604.00 Railway or tramway maintenance or service vehicles (for example, workshops, cranes, ballast tampers, trackliners, testing coaches and track inspection vehicles)

6% Free 75,168,982* 2,180,762*

86.06 Railway or tramway goods vans and wagons (freight cars), not self-propelled

11% Free

671,954,614 469,927

86.07 Parts of railway or tramway locomotives or rolling-stock

2.5-10% Free

535,352,298* 54,436,436*

Chapter 87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof

87.03 ** Motor cars and other motor vehicles principally designed for the transport of persons, including station wagons and racing cars

6.1% Free

920,546,802* 74,421,958*

**Tariff items nos. 8703.21.90 and 8703.90.00 are part of staging category C (“W2”). The duties on these goods will be removed in six equal stages beginning on September 21st, 2017 and will become duty-free effective on 1 January 2022.



- 148 -

**Tariff items nos.8703.22.00, 8703.23.00, 8703.24.00, 8703.31.00, 8703.32.00 and 8703.33.00 are part of staging category D (“W3). The duties on these goods will be removed in eight equal stages beginning on September 21st, 2017 and will become duty-free effective on 1 January 2024.

87.08 Parts and accessories of the motor vehicles

6-8.5% Free

27,223,916,930* 945,851,564*

8712.00 Bicycles and other cycles (including delivery tricycles), not motorized

13% Free

296,388,005 5,636,195

Chapter 89 Ships, boats and floating structures

89.03 Yachts and other vessels for pleasure or sports; rowing boats and canoes

9.5% Free

691,109,997* 31,134,665*

8907.90 Other floating structures (for example, tanks, coffer-dams, landing-stages, buoys and beacons)

6.5-15.5% Free

21,890,794* 1,072,871*

Table 41 Goods of Section XVIII – Optical, Photographic, Cinematographic, Measuring, Checking, Precision,

Medical or Surgical Instruments and Apparatus; Clocks and Watches; Musical Instruments; Parts and

Accessories Thereof


tariff treatment


(2016)


(2016)

Chapter 90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof

90.04 Spectacles, goggles and the like, corrective, protective or other

5% Free 488,734,338* 105,104,722*

9005.90 Parts and accessories (including mountings) of Binoculars, monoculars, other optical telescopes, and mountings therefor; other astronomical instruments and mountings therefor, but not including instruments for radio-astronomy

6% Free 6,782,322 474,689

90.06 Photographic (other than cinematographic) cameras; photographic flashlight apparatus and flashbulbs

3.5-6.5% Free

48,132,317* 13,407,359*

90.08 Image projectors, other than cinematographic; photographic (other than cinematographic) enlargers and reducers

5.5-7% Free

12,349,661 806.790

9017.10.20 Drafting tables 8.5% Free

774,488* 137,780*

Chapter 91 Clocks and watches and parts thereof

91.01 Wrist-watches, pocket-watches and other watches, including stopwatches, with case of precious metal or of metal clad with precious metal.

5% Free 140,233,298* 3,530,040*



- 149 -


tariff treatment


(2016)


(2016)

91.02 Wrist-watches, pocket-watches and other watches, including stopwatches

5% Free 415,156,694* 3,300,793*

91.03 Clocks with watch movements 11-14% Free

1,289,938 46,850

91.05 Other clocks 5-14% Free

39,260,963* 1,062,822*

9106.90.10 Parking meters 14% Free

6,942,744* 951,064*

Chapter 92 Musical instruments; parts and accessories of such articles

92.01 Pianos, including automatic pianos; harpsichords and other keyboard stringed instruments

7% Free 24,071,609* 4,298,433*

9202.90 Other string musical instruments, not played with a bow, such as harps and guitars

6% Free 37,827,934 1,251,856

9205.90 Wind musical instruments other than fairground organs and mechanical street organs

6-7% Free

15,849,100 1,784,201

92.07 Musical instruments, the sound of which is produced, or must be amplified, electrically (for example, organs, guitars, accordions)

6% Free 84,088,883* 2,333,846*

92.08 Musical boxes, fairground organs, mechanical street organs, mechanical singing birds, musical saws and other musical instruments not falling within any other heading of this Chapter; decoy calls of all kinds; whistles, call horns and other mouth-blown sound signalling instruments

6% Free 7,270,840 326,782

9209.99 Other parts (for example, mechanisms for musical boxes) and accessories (for example, cards, discs and rolls for mechanical instruments) of musical instruments; metronomes, tuning forks and pitch pipes of all kinds.

5-5.5% Free

16,875,297 2,459,722

Table 42 Goods of Section XIX – Arms and Ammunition; Parts and Accessories Thereof


tariff treatment


(2016)


(2016)

Chapter 93 Arms and ammunition; parts and accessories thereof



- 150 -


tariff treatment


(2016)


(2016)

93.01 Military weapons 7% Free 12,808,828* 5,877,431*

9303.30 Sporting, hunting or target-shooting rifles 3.5-7% Free

70,161,724 12,966,623

9304.00 Other arms (for example, spring, air or gas guns and pistols, truncheons)

3.5-7% Free

24,514,977 1,471,822

93.05 Parts and accessories of articles of headings 93.01 to 93.04

2-7.5% Free

80,454,670* 12,825,387*

93.06 Bombs, grenades, torpedoes, mines, missiles and similar munitions of war and parts thereof; cartridges and other ammunition and projectiles and parts thereof, including shot and cartridge wads

3.5-7% Free

231,036,576* 21,756,639*

9307.00 Swords, cutlasses, bayonets, lances and similar arms and parts thereof and scabbards and sheaths therefor

7% Free 2,612,236 248,230

Table 43 Goods of Section XX – Miscellaneous Manufactured Articles


tariff treatment


(2016)


(2016)

Chapter 94 Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings; illuminated signs, illuminated name-plates and the like; prefabricated buildings

94.01 Seats (other than those of heading 94.02), and parts thereof

6-9.5% Free

2,110,411,871* 138,119,952*

94.03 Other furniture and parts thereof 8-9.5% Free

2,436,842,713* 328,355,221*

94.04 Mattress supports; articles of bedding and similar furnishing fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics

8-15.5% Free

658,173,870 18,221,627

94.05 Lamps and lighting; illuminated signs, illuminated name-plates and the like, having a permanently fixed light source, and parts thereof

5-7% Free

1,893,785,939* 103,321,245*

94.06 Prefabricated buildings 4.5-15.5% Free

413,248,115* 9,956,424*

Chapter 95 Toys, games and sports requisites; parts and accessories thereof

95.07 Fishing rods, fish-hooks and other line fishing tackle; fish landing nets, butterfly

6.5-7% Free

57,723,853* 3,731,296*



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tariff treatment


(2016)


(2016)

nets and similar nets; decoy "birds" and similar hunting or shooting requisites

Chapter 96 Miscellaneous manufactured articles

96.03 Brooms, brushes, hand-operated mechanical floor sweepers, not motorized, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; squeegees

6.5-15.5% Free

383,230,919* 40,295,936*

96.04 Hand sieves and hand riddles. 6.5% Free

844,386 46,484

96.05 Travel sets for personal toilet, sewing or shoe or clothes cleaning.

6.5% Free

10,201,468 97,611

96.07 Slide fasteners and parts thereof 10-11.5% Free

15,666,097* 1,987,092*

96.08 Pens and stylos; pen-holders, pencil-holders and similar holders; parts of the foregoing articles

5-7% Free

186,752,173* 23,288,180*

96.09 Pencils, crayons, pencil leads, pastels, drawing charcoals, writing or drawing chalks and tailors' chalks

6-7% Free

70,031,377* 8,381,365*

96.11 Date, sealing or numbering stamps, and the like, including devices for printing or embossing labels, designed for operating in the hand; hand-operated composing sticks, and hand printing sets incorporating such composing stick

6.5% Free

11,698,321 2,725,910

96.12 Typewriter or similar ribbons, inked or otherwise prepared for giving impressions; ink-pads

8.5-15.5% Free

34,398,805* 2,510,625*

96.13 Cigarette lighters and other lighters, and parts thereof other than flints and wicks

6.5-9.5% Free

50,531,977* 18,078,600*

96.14 Smoking pipes (including pipe bowls) and cigar or cigarette holders, and parts thereof

6.5-7% Free

12,142,366* 462,846*

96.15 Combs, hair-slides and the like; hairpins, curling pins, curling grips, hair-curlers and the like and parts thereof

5.5-7% Free

37,968,472 841,269

96.16 Scent sprays and similar toilet sprays, and mounts and heads therefor; powder-

8.5-12% Free

66,840,047 2,603,422



- 152 -


tariff treatment


(2016)


(2016)

puffs and pads for the application of cosmetics or toilet preparations

96.17 Vacuum flasks and other vacuum vessels, complete with cases; parts thereof other than glass inners

7.5% Free

66,655,821 183,793

96.18 Tailors' dummies and other lay figures; automata and other animated displays used for shop window dressing

7.5-9% Free

20,962,586 2,969,700

96.19 Sanitary towels (pads) and tampons, napkins and napkin liners for babies and similar articles, of any material

7-18% Free

730,480,597* 15,325,739*

* For detailed information regarding the imports of the goods at issue, please refer to Appendix 1.


Source: Industry Canada (Statistics Canada), Trade Data Online, available online at www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home



- 155 -

APPENDIX 9

Table 44 List of Canadian government entities covered under the CETA

Federal entities Sub-provincial entities Other Entities

Province Entities covered Entities not covered Jurisdiction Entities covered and exceptions

Atlantic Canada

Opportunities Agency

Canada Border Services

Agency

Canada Emission

Reduction Incentives

Agency

Canada Employment

Insurance Commission

Federal All Federal Crown corporations

Exceptions:

Procurement in respect of the

intervention of activities of the

Canada Deposit Insurance

Corporation or its subsidiaries, or

procurements by any subsidiary

created in respect of such

intervention activities

Procurement by the Canada Lands

Company Limited or its subsidiaries

for the development of real property

for commercial sale or resale



- 156 -



Canada Industrial Relations

Board

Canada Revenue Agency

Canada School of Public

Service

Canadian Centre for

Occupational Health and

Safety

Canadian Environmental

Assessment Agency

Canadian Food Inspection

Agency

Alberta All:

1. Departments, ministries, agencies, boards,

councils, committees, commissions and similar

agencies

2. Regional, local, district or other forms of

municipal government

3. School boards and publicly-funded academic,

health and social service entities

Legislative Assembly


Office

Office of the Auditor

General

Office of the Chief

Electoral Officer

Office of the Ethics

Commissioner

Office of the

Information and

Privacy Commissioner

Alberta All:

Provincial Crown corporations

Provincial Government-owned

commercial enterprises

Other entities owned by the

Government of Alberta through

ownership interest

Corporations or entities owned or

controlled by a regional, local,

district or other form of municipal

government covered under Annex

19-2



- 157 -



Canadian Forces

Grievance Board

Canadian Grain

Commission

Canadian Human Rights

Commission

Canadian Human Rights

Tribunal

Canadian Institutes of

Health Research

Canadian

Intergovernmental

Conference Secretariat

Office of the

Ombudsman

British

Columbia

All:

1. Ministries, agencies, boards, councils,

committees, commissions and similar agencies of

government


and its independent

offices

British Columbia All:

Provincial Crown corporations,

Provincial Government-owned

commercial enterprises



- 158 -



Canadian International

Trade Tribunal

Canadian Northern

Economic Development

Agency

Canadian Nuclear Safety

Commission

Canadian Polar

Commission

Canadian Radio-television

and Telecommunications

Commission

Canadian Space Agency

2. Regional, local, district or other forms of

municipal government



Other entities owned by the

Government of British Columbia

through ownership interest

Corporations or entities owned or

controlled by one or more municipal

governments

Manitoba All:

1. Departments, boards, commissions,

committees and similar agencies of government

2. Municipalities, municipal organisations



Manitoba All:

Provincial Crown corporations,

Except:

Manitoba Public Insurance

Corporation

Venture Manitoba Tours Limited

New

Brunswick

The following departments, secretariats and

agencies:

Aboriginal Affairs Secretariat

New Brunswick The following Provincial Crown

corporations:

Kinds Landing Corporation



- 159 -



Canadian Transportation

Accident Investigation and

Safety Board

Canadian Transportation

Agency

Copyright Board

Correctional Service of

Canada

Courts Administration

Service

Department of Agriculture

and Agri-Food

Agriculture, Aquaculture and Fisheries

Ambulance New Brunswick Inc.

Aquarium and Marine Center of New Brunswick

Office of the Attorney General

Child and Youth Advocate

Education and Early Childhood Development

Efficiency New Brunswick

Elections New Brunswick

Energy and Mines

Environment and Local Government

Executive Council Office

Facilicorp NB Ltd.

Farm Products Commission

Finance

Forest Protection Limited

Health

Horizon Health Network (Regional Health

Authority)

New Brunswick Credit Union

Deposit Insurance Corporation

New Brunswick Highway

Corporation

New Brunswick Housing

Corporation

New Brunswick Liquor Corporation

New Brunswick Municipal Finance

Corporation

New Brunswick Research and

Productivity Council

Opportunities New Brunswick

Financial and Consumer Services

Commission

Regional Development Corporation

Service New Brunswick



- 160 -



Department of Canadian

Heritage

Department of Citizenship

and Immigration

Department of Employment

and Social Development

Department of Finance

Department of Fisheries

and Oceans

Department of Foreign

Affairs, Trade and

Development

Department of Health

Justice

Labour and Employment Board

Natural Resources

New Brunswick Arts Board

New Brunswick Emergency Measures

Organization

New Brunswick Energy & Utilities Board

New Brunswick Forest Products Commission

New Brunswick Health Council

New Brunswick Human Rights Commission

New Brunswick Insurance Board

New Brunswick Internal Services Agency

New Brunswick Lotteries Commission

New Brunswick Museum

New Brunswick Police Commission

New Brunswick Public Libraries

Office of Human Resources

Office of the Auditor General



- 161 -



Department of Indian Affairs

and Northern Development

Department of Industry

Department of Justice

Department of National

Defence

Department of Natural

Resources

Department of Public Safety

and Emergency

Preparedness

Office of the Commissioner of Official Languages

Office of the Comptroller

Office of the Consumer Advocate for Insurance

Office of the Leader of the Opposition

Office of the Lieutenant-Governor

Office of the Premier

Office of the Public Trustee

Ombudsman

Population Growth Secretariat

Post-Secondary Education, Training and Labour

Premier's Council on the Status of Disabled

Persons

Public Safety Vitalité (Regional Health Authority)

Senior and Healthy Aging Secretariat

Social Development

Government Services

Tourism, Heritage and Culture

Transportation



- 162 -



Department of Public Works

and Government Services

Department of the

Environment

Department of Transport

Department of Veterans

Affairs

Department of Western

Economic Diversification

Director of Soldier

Settlement

Director, The Veterans'

Land Act

Village Historique Acadien

Workplace Health, Safety and Compensation

Commission

All District Education Councils

The following universities:

Mount Allison University

St. Thomas' University

Université de Moncton

The University of New Brunswick

The following community colleges:

Collège communautaire du Nouveau-Brunswick

(CCNB)

New Brunswick Community College (NBCC)

The following Regional Solid Waste

Commissions:

Commission de gestion déchets de Kent

Commission de gestion des déchets solides de

la Péninsule acadienne

Commission des Déchets Solides / Nepisiguit-

Chaleur Solid Waste Commission



- 163 -



Economic Development

Agency of Canada for the

Regions of Quebec

Federal Economic

Development Agency for

Southern Ontario

Financial Consumer

Agency of Canada

Immigration and Refugee

Board

Indian Residential Schools

Truth and Reconciliation

Commission

Fredericton Region Solid Waste Commission

Fundy Region Solid Waste Commission

Kings County Region Solid Waste Commission

La Commission de gestion enviro ressources du

Nord-Ouest

Northumberland Solid Waste Commission

Restigouche Solid Waste Corporation

Southwest Solid Waste Commission

Valley Solid Waste Commission

Westmorland-Albert Solid Waste Corporation

The following Wastewater Commissions:

Fredericton Area Pollution Control Commission

Greater Moncton Sewerage Commission

The following Municipalities and Municipal

Organisations (excluding municipal energy

entities):

City of Bathurst

City of Campbellton



- 164 -



Library and Archives of

Canada

Military Police Complaints

Commission

National Battlefields

Commission

National Energy Board

National Farm Products

Council

National Film Board

Parole Board of Canada

National Research Council

of Canada

City of Dieppe

City of Edmundston

City of Fredericton

City of Miramichi

City of Moncton

City of Saint John

Newfound-

land and

Labrador

All:

1. Departments, boards, commissions




Legislative Assembly Newfound-land and

Labrador

All:

Provincial Crown Corporations

Except:

Nalcor Energy and its existing and

future subsidiaries and affiliates

(except Newfoundland and

Labrador Hydro)

Research & Development

Corporation of Newfoundland and

Labrador and all subsidiaries

thereof



- 165 -



Natural Sciences and

Engineering Research

Council

Northern Pipeline Agency

Office of Infrastructure of

Canada

Office of the Auditor

General

Office of the Chief Electoral

Officer

Office of the Commissioner

for Federal Judicial Affairs

Northwest

Territories

All:

1. Ministries, agencies

2. Municipalities



Legislative Assembly Northwest

Territories

All:

territorial Crown corporations

Nova

Scotia

All public-sector entities as defined in the Public

Procurement Act, except those listed in following

column

any listed

intergovernmental or

privatised

governmental unit if

the Province does not

own or control a

majority of it;

any entity listed or

described in Section A

of Annex 19-3,

whether as an

inclusion or exclusion;

Emergency Health

Services (a division of

Nova Scotia Any:

Entity designated as a government

business enterprise pursuant to the

Finance Act, S.N.S. 2010, c. 2 and

the Public Procurement Act, except

any listed intergovernmental or

privatised governmental unit under

the Provincial Finance Act if the

Province does not own or control a

majority of it.



- 166 -




of Lobbying


of Official Languages

Office of the

Communications Security

Establishment

Commissioner

Office of the Co-ordinator,

Status of Women

Office of the Correctional

Investigator of Canada

Office of the Director of

Public Prosecutions

the Department of

Health) in respect of

ground ambulance-

related procurement,

for Emergency Health

Care purposes;

Sydney Tar Ponds

Agency;

Nova Scotia Lands

Inc.; and

Harbourside

Commercial Park.

Nunavut All:

1. Ministries, agencies


Legislative Assembly Nunavut All:

Territorial Crown corporations



- 167 -



Office of the Governor

General's Secretary

Office of the Public Sector

Integrity Commissioner

Office of the Superintendent

of Financial Institutions

Office of the Information

Commissioner of Canada

Office of the Privacy

Commissioner of Canada

Parks Canada Agency



Ontario All:

1. Provincial ministries and classified agencies,

excluding those in the following column



3. Municipalities, excluding those in the following

column


Provincial energy

agencies

Provincial Agencies of

a commercial or

industrial nature,

Ontario Infrastructure

and Lands

Corporation

Municipal energy

entities

Ontario All:

Provincial and municipal

government-owned entities of a

commercial or industrial nature

Except:

Energy entities other than Hydro

One and Ontario Power Generation

Procurement for the production,

transmission and distribution of

renewable energy, other than

hydro-electricity.

Note:

Ontario Power Generation reserves

the right to accord a preference to

tenders that provide benefits to the

province, such as favouring local

sub-contracting, in the context of

procurements relating to the



- 168 -



Patented Medicine Prices

Review Board

Privy Council Office

Public Health Agency of

Canada

Public Service Commission

Public Service Labour

Relations and Employment

Board

Registrar of the Supreme

Court of Canada

Registry of the Competition

Tribunal

construction or maintenance of

nuclear facilities or related services.

Prince

Edward

Island

All:

1. Departments, agencies

2. Municipalities



Prince Edward

Island

All:


Except:

Innovation PEI

Quebec All:

1. Departments, governmental agencies

2. Para-public organisations

Quebec Government enterprises and legal

persons or other entities that are

owned or controlled by one or

several of these enterprises which

are not in competition with the

private sector

Saskatch-

ewan

All:

1. Ministries, agencies, Treasury Board Crown

corporations, boards, commissions

2. Municipalities



Saskatch-ewan All:


Corporations owned or controlled by

one or more municipal governments

Saskatchewan Liquor and Gaming

Authority



- 169 -



Registry of the Public

Servants Disclosure

Protection Tribunal

Registry of the Specific

Claims Tribunal

Royal Canadian Mounted

Police


Police External Review

Committee


Police Public Complaints

Commission

Yukon The following Departments:

Department of Community Services

Department of Economic Development

Department of Education

Department of Energy, Mine and Resources

Department of Environment

Department of Finance

Department of Health and Social Services

Department of Highways and Public Works

Department of Justice

Department of Tourism and Culture

Executive Council Office

Public Service Commission

Women's Directorate

French Language Services Directorate

The following Agencies:

Yukon Worker's Compensation Health & Safety

Board

Yukon All:

Government Corporations

Except:

Yukon Development Corporation



- 170 -



Security Intelligence

Review Committee

Shared Services Canada

Social Sciences and

Humanities Research

Council

Statistics Canada

Transportation Appeal

Tribunal of Canada

Treasury Board of Canada

Secretariat

Veterans Review and

Appeal Board




- 171 -

APPENDIX 10

Table 45 Notable areas of improved market access for EU SMEs under the CETA

Sector/industry Benefits

Cheese Despite prohibitive tariff rate quotas (TRQ), cheese exports from the EU into Canada were healthy prior to completion of the CETA as Canadian consumers have historically exhibited high demand for European brands. The CETA notably improves market access by raising allowances of cheese imports from the EU within the TRQ (16,000 metric tonnes for cheese for direct consumption and 1700 metric tonnes for ‘industrial cheese’ from 2022 onwards) while also lowering the applied tariffs therein. Specifically, the CETA allows for duty free entry of EU cheeses within separate TRQs for (i) cheese for direct consumption and (ii) ‘industrial cheese’ for processed food producers. The CETA also requires a further reallocation of 800 metric tonnes of cheeses from the EU to Canada’s existing WTO TRQ for cheese. Given the nature of cheese production within the EU and the types of products likely to see increases in exports, it is expected that this improved market access will overwhelmingly accrue to small- and medium-sized producers. Benefits can also be expected to arise from the CETA’s expanded protection of Geographical Indications, which have been afforded to a number of European brands.

Processed meat The CETA significantly lowers tariffs on a number of products relevant to European producers of processed meat. Several types of sausages and similar products see their rates drop from 12.5 percent to 0. Homogenised preparations of fowls similarly decrease from 12.5 percent to 0. Processed pork products, including hams and cuts thereof in cans or glass jars and shoulders and cuts thereof in cans or glass jars see tariffs decline from 9.5 percent to 0. Prepared meals of bovine have rates decrease from 11 percent to 0. Additional opportunities are likely to be presented by improved protection of Geographical Indications through the CETA, which has afforded such protection to a number of European meat products.

Preparations of cereals, flour, starch or milk or pastry cooks’ products

For products falling within Chapter 19 of the Harmonised System, tariffs for EU imports into Canada will be notably reduced under the CETA for a number of processed food and agricultural products. These reductions will present significant opportunities for small- and medium-sized producers across the European Union.

Alcoholic beverages

While existing tariffs were already at zero for most wine and spirits entering from the EU, the CETA is likely to improve market access for EU producers through its ability to ameliorate non-tariff barriers present in Canada that restricted market access. European small and medium-sized producers of wines, in particular, stand to benefit from this improved access through increased access to distribution channels, benefitting overall exports.

Clothing, apparel and footwear

Despite high tariffs of 17-18 percent on imports from the EU prior to the CETA, European imports were able to account for over 5 percent of Canada’s CA $12.5 billion import market for clothing and apparel. Reductions in tariffs from 12 to 18 percent to 0 for products listed in Chapters 61 and 62 of the Harmonised System should create a number of opportunities for small- and medium-sized manufacturers of clothing and apparel products within the EU that meet the



- 172 -

expressed rules of origin. Similar opportunities are afforded to EU manufacturers of footwear who will see tariffs decline from 5-20 percent to 0 as well as to EU manufacturers of luggage and handbags who will see tariffs decline from 7-10 percent to 0.

Automotive parts and accessories

The immediate elimination of customs duties on imports of European automotive parts, components and accessories under HS heading 87.08 for passenger motor vehicles of heading 87.03 may provide market access opportunities for SMEs that specialise in producing after-market goods for the automotive maintenance, repair and customisation industries. In particular, producers of such products as bumpers, safety seat belts, brake systems, gear boxes, axles, transmission systems, wheels, suspension systems, radiators, silencers (mufflers) and exhaust systems, clutches, steering wheels and columns, safety airbag systems, power train parts, and the parts and components of the foregoing items stand to benefit from improved market access opportunities.

Architectural and engineering services Environmental services

Small and medium sized enterprises providing architectural and engineering services as well as environmental services will likely benefit from significantly improved access to Canada’s government procurement market. Notably improved labour mobility for such professionals will also simplify the ability of European providers specialising in these services to access the wider Canadian market for such services and seek out new business opportunities.

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