Order Fixing September 1, 2019 as the Day on which that Act Comes into Force: SI/2019-77

Canada Gazette, Part II, Volume 153, Number 17

Registration

SI/2019-77 August 21, 2019

AN ACT TO AMEND THE CANADA-ISRAEL FREE TRADE AGREEMENT IMPLEMENTATION ACT AND TO MAKE RELATED AMENDMENTS TO OTHER ACTS

Order Fixing September 1, 2019 as the Day on which that Act Comes into Force

P.C. 2019-1114 July 26, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister for International Trade, pursuant to section 12 of An Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts, chapter 6 of the Statutes of Canada, 2019, fixes September 1, 2019 as the day on which that Act comes into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

This Order fixes the day on which the Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts comes into force as September 1, 2019.

Purpose

To facilitate implementation of the Protocol Amending the Free Trade Agreement between the Government of Canada and the Government of the State of Israel, done in Montréal on May 28, 2018.

Background

The Canada-Israel Free Trade Agreement (CIFTA) entered into force in 1997. In addition to ensuring preferential access for Canadian exports, the CIFTA reinforces Canada’s broader engagement with Israel. Canada and Israel have a strong, multifaceted bilateral relationship marked by close political, economic, social and cultural ties. The bilateral relationship is further reinforced by strong people-to-people ties between the two countries, with 35 000 Canadians living in Israel, many Canadians with family in Israel, and approximately 350 000 Jewish Canadians living in Canada.

Since the CIFTA entered into force, Canada-Israel bilateral merchandise trade has more than tripled to $1.9 billion in 2018. Key Canadian exports to Israel include: aircraft and parts, machinery, precious stones (mostly diamonds), electrical and electronic equipment, and paper. Top imports from Israel into Canada include electrical and electronic equipment, machinery, pharmaceutical products, precious stones and metals (particularly diamonds), and scientific and precision instruments.

In 1997, the CIFTA eliminated tariffs on all industrial products and some agricultural and fish and seafood products. Further tariff concessions were implemented in 2003 on additional agricultural and fish products.

In July 2015, the conclusion of negotiations toward an expanded and modernized CIFTA was announced. This included modernization of the institutional structures and dispute settlement provisions of the CIFTA, which are implemented through the Act. Over the course of 2017–2018, new chapters were also negotiated on trade and gender and small and medium-sized enterprises (SMEs), in addition to new provisions related to corporate social responsibility (CSR). The chapters on trade and gender and SMEs provide a framework to undertake cooperation activities on issues related to their respective areas: each establishes a bilateral committee under the free trade agreement to oversee cooperation activities and review the operation of the relevant chapter. The CSR article affirms the Parties’ commitment to encourage the use of voluntary CSR standards, with specific reference to the Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD).

The modernized CIFTA will improve market access for Canada’s agricultural, agri-food, and fish and seafood products. Once in force, nearly all current Canadian agricultural, agri-food, and fish and seafood exports will benefit from preferential market access into Israel, up from 90%, which will allow Canadian exporters to compete on a more level playing field with competitors from other countries, notably the United States and the European Union. In exchange, Canada agreed to provide incremental duty-free access for Israeli agriculture and agri-food imports, with the exception of over-quota tariffs on supply-managed products (dairy, poultry and eggs), which are excluded from any tariff reduction and from any tariff quota expansion or creation.

The Amending Agreement also includes new provisions to address non-tariff barriers and establishes mechanisms under which Canada and Israel can cooperate to discuss, prevent and resolve unjustified non-tariff barriers that may arise.

The first section of the Act makes amendments to the Canada-Israel Free Trade Agreement Implementation Act, updating definitions, the interpretation provisions of the Act and the purpose clause to account for the additional chapters and subject areas covered by the Amending Agreement. It also implements other changes resulting from the Amending Agreement, including the appointment of representatives to institutional bodies, the selection process for panellists for the purpose of dispute settlement panels, and the authorities for retaliation against the other Party in the event of a successful challenge under the dispute settlement mechanism.

The second section of the Act makes related amendments to other acts (for example, the Customs Tariff and Department of Employment and Social Development Act) in order to implement obligations under the Amending Agreement and provide for enforcement of monetary assessments under the Labour Chapter.

The third section of the Act, which is the authority for this Order, provides that the Act comes into force on a day to be fixed by order of the Governor in Council.

The Act and the Amending Agreement will come into force on the same day.

Implications

The Government of Canada will forego tariff revenue of approximately $2.9 million per year once the Amending Agreement is fully implemented.

The mandate letter for the Minister of International Trade Diversification highlighted the Government of Canada’s commitment to implement, expand and diversify Canada’s free trade agreements globally. In this regard, the modernized CIFTA strongly supports the government’s trade diversification strategy. The modernized CIFTA is also consistent with the Government of Canada’s foreign policy objectives for broader engagement in the Middle East, and Canada’s inclusive trade agenda.

The modernized CIFTA is not expected to result in significant negative differential gender impacts within Canada. While the agreement will benefit Canadian producers, processors and exporters, and their female and male workers, its overall economic impact will be modest relative to the size of the Canadian economy. The CIFTA modernization negotiations took into account trade-related gender considerations. For example, in the Labour Chapter, Canada and Israel reaffirm their commitment to eliminate discrimination in respect to employment and occupation that encompasses discrimination based on gender. The addition of the Trade and Gender Chapter, which provides a framework for the Parties to work together to address trade-related barriers and challenges faced by women, may help to offset any differential effects of the CIFTA, however minimal.

Consultation

Canadian industry and other stakeholders were broadly consulted before and during negotiations of the amendments to the CIFTA to gauge Canadians’ interests and priorities for the negotiations. In October 2011, a public consultation process was launched through the Canada Gazette and the Global Affairs Canada website, with a submission period from October 29 to December 30, 2011. The level of stakeholder interest was modest, and only a few private-sector stakeholders proactively expressed interest in CIFTA modernization. Global Affairs Canada and Agriculture and Agri-Food Canada also conducted targeted outreach with other industry stakeholders during negotiations. Additionally, in 2014, notice in the Canada Gazette was given of an environmental assessment to inform the negotiations, with a submission period from April 26 to May 26, 2014; input was received from two public stakeholders. Global Affairs Canada conducted further targeted consultations in 2017, including with the provinces and territories and key civil society organizations, on gender and other progressive elements; five responses were received.

Some civil society groups voiced concerns with respect to providing preferential treatment to goods produced in the Israeli settlements, while other groups welcomed the conclusion of negotiations.

Departmental contact

Mary-Catherine Speirs
Director
Trade Policy and Negotiations — Europe, Middle East and Africa Division
Global Affairs Canada
Telephone: 343‑203‑4087
Email: mary-catherine.speirs@international.gc.ca