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ARCHIVED - Canada's Performance Report 2008-09: The Government of Canada's Contribution


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4 - International Affairs

Context

The 2008-09 year was marked by an unstable global economy, ongoing conflicts in fragile states, and an international food crisis, all of which influenced Canada's engagement in international affairs. The growing interconnectedness of economies throughout the world and the growing strength of emerging economic powers introduced new challenges and opportunities for Canada.

Canada is focussed on strengthening its relations with the United States and securing American cooperation in countering shared security, defence, and environmental threats. Canada is also engaging with the Americas more broadly, particularly in the areas of diplomacy, development assistance, and the promotion of trade and investment.

Canada continues to make significant contributions to global security, notably in Afghanistan and in counter-piracy missions off the coast of the Horn of Africa. To fulfill these and other operations, the government has made it a priority to rebuild the Canadian Forces. Canada likewise plays an important role in reducing poverty in the world and is strengthening its aid effectiveness through an increased focus on core recipient countries and untying aid restrictions. 

This chapter includes information on the federal government contribution and expenditures in four outcome areas under International Affairs:

  • A safe and secure world through international cooperation
  • Global poverty reduction through sustainable development
  • A strong and mutually beneficial North American partnership
  • A prosperous Canada through global commerce

Expenditures in International Affairs

In 2008–09, a total of 18 federal organizations delivered $28.3 billion in programs and services contributing to Canada's international affairs.

Table 4 - Comparison of 2008-09 planned and actual spending by the Government of Canada for the International Affairs outcome areas ($ billions)
Outcome Area Main Estimates Planned Spending* Actual Spending
A safe and secure world through international cooperation $21.3 $21.6 $22.1
Global poverty reduction through sustainable development $3.5 $3.7 $4.1
A strong and mutually beneficial North American partnership $1.6 $1.6 $1.8
A prosperous Canada through global commerce $0.3 $0.4 $0.3
Total $26.7 $27.4 $28.3

* Planned spending is derived from departmental RPPs.
Note: Due to rounding, numbers may not sum exactly to totals.

Figure 4.1-Breakdown of actual spending in International Affairs ($28.3 billion) by outcome area for fiscal year 2008-09

Figure 4.1 - Text version

National Defence, the Canadian International Development Agency, and Foreign Affairs and International Trade Canada are the federal organizations with the largest expenditures in the International Affairs spending area.

A safe and secure world through international cooperation

Background

The Government of Canada and its international partners are working to promote peace, freedom, democratic governance, human rights, and the rule of law throughout the world. By supporting a peaceful and democratic world order, Canada reduces potential strain on its domestic economy and social order. Engagement in the world is also a strong basis for Canada's efforts to expand its global commercial footprint. 

Canada is engaged internationally in such areas as:

  • International diplomacy
  • Military, defence, and counter-terrorism operations
  • Peace support operations
  • Arms control and disarmament
  • Disaster risk reduction and response
  • Refugee protection
  • Border security
  • Combatting international crime, including illicit drug trafficking and piracy at sea
  • Support for human rights and democratic governance in fragile states
  • Promoting open markets through trade liberalization
Expenditures for a safe and secure world through international cooperation

In 2008–09, the following six federal organizations spent $22.1 billion in the outcome area of a safe and secure world through international cooperation:

  • Canadian Air Transport Security Authority
  • Citizenship and Immigration Canada
  • Foreign Affairs and International Trade Canada
  • Immigration and Refugee Board of Canada
  • National Defence
  • Public Prosecution Service of Canada

National Defence had the largest expenditures in this outcome area, spending approximately $19.2 billion in 2008–09 on defence-related initiatives to defend Canada and exercise our sovereignty, rebuild the Canadian Forces, and contribute to international peace, security, and stability.

Foreign Affairs and International Trade Canada spent approximately $2.2 billion to strengthen Canada's diplomatic and global commercial interests and provide better services to Canadians abroad.

The Canadian Air Transport Security Authority spent $427.8 million on the security functions ascribed to it under the Canadian Air Transport Security Authority Act, including assuring effective screening of persons and baggage.

Figure 4.2-Distribution of actual spending by federal organization in a safe and secure world through international cooperation, 2008-09

Figure 4.2 - Text version

The Government of Canada's contribution to a safe and secure world through international cooperation

Bringing stability to Afghanistan

The mission in Afghanistan remains the largest military operation undertaken by the Canadian Forces since the Korean War.

Following the release of the Independent Panel on Canada's Future Role in Afghanistan in 2008, a decision was reached that Canada should continue with its responsibility for security in Kandahar beyond February 2009—as long as three conditions were met. The conditions were that a force of 1,000 International Security Assistance Force soldiers be rotated into Kandahar no later than February 2009, that medium-lift helicopters and unmanned aerial vehicles be procured, and that the North Atlantic Treaty Organization (NATO) be notified that the Canadian Forces would rotate out no later than December 2011. The three conditions were all met. The first inflow of U.S. Forces personnel and equipment arrived in Kandahar in November 2008, enabling Canada to fulfill its commitment to help rebuild a free, democratic, and peaceful Afghanistan.

In 2008–09, the Canadian Forces focussed on expediting training for the Afghan National Security Forces to enable them to take lead responsibility for security in Kandahar and Afghanistan. As the Afghan National Security Forces gain capability, Canada's combat role will be significantly reduced. To strengthen local capacities over the past year, Canada and its NATO partners also provided the Afghan National Security Forces with language training and courses in professional development and leadership skills through the Military Training Assistance Program. In the fall of 2008, two Afghan officers received assistance for training in Ottawa in the train-the-trainer program. In 2008–09, four Afghan cadets made progress in their five-year training program at the Royal Military College of Canada—the same program used to train Canadian cadets.

At the same time, the Government of Canada ensured that its troops stationed in Kandahar obtained urgently needed equipment ahead of schedule and within or below budget. Equipment included six chartered helicopters and six Chinook D-model helicopters. The government also leased small ScanEagle unmanned aerial vehicles. The Canadian Forces received assistance in managing the threat of improvised explosive devices (IED), including simulation-based IED awareness training, new protective clothing, the use of mini robots for IED detection, and the acquisition and delivery of 58 new Expedient Route-Opening Capability vehicles for detection and disposal of explosive threats. The Canadian Forces also obtained armoured heavy logistics vehicles to replace some lightly protected vehicles and upgraded the protection of others.

Did you know?

More than 3,500 members of the Canadian Forces are currently deployed overseas on peace support or combat missions. On any given day, about 8,000 Canadian Forces members—one third of our deployable forces—are preparing for, engaged in, or returning from an overseas mission. Canada is engaged in 15 international missions in five regions, including one in the Caribbean, two in Europe, four in Africa, six in the Middle East, and two in Asia. These missions support operations undertaken in conjunction with a wide range of organizations, including the North Atlantic Treaty Organization, the United Nations, the European Union, and the African Union.

Source: National Defence

Enhancing peace and security in fragile states

The Government of Canada established the Stabilization and Reconstruction Task Force41 in 2005 to ensure timely, coordinated, and effective response to international crises, to plan and deliver coherent initiatives for conflict prevention and crisis response in fragile or transitioning states, and to manage the Global Peace and Security Fund42 (GPSF). The GPSF represents Canada's primary resource pool for delivering peace and security initiatives, with heavy involvement in such countries as Afghanistan, Haiti, Colombia, and Sudan.  

In 2008–09, $148.9 million went to the GPSF. Of this, the GPSF spent over $48 million in Sudan for peacebuilding and recovery. This included training and equipment for African countries fielding military or police to the joint United Nations-African Union Mission in Darfur as well as support for the implementation of the Comprehensive Peace Agreement. Over $42 million was spent on supporting security sector development in Afghanistan, including assisting the Afghan National Security Forces in Kandahar to ensure a more secure environment and the rule of law. Through the GPSF, Canada was able to respond quickly and effectively to the Sarposa prison break.

The GPSF spent over $15 million in Haiti to advance security system reform, which involved the deployment of approximately 100 Canadian police and eight corrections officers. The GPSF also dedicated $5 million to programming in Colombia, from which a contribution was made to demobilize 32,000 paramilitaries in accordance with the rules established by the peace process. As a result of Canada's work, and the efforts of a wide range of actors including the Colombian government, the number of union workers killed annually dropped from 250 in 2001 to 38 in 2008, and kidnappings decreased in 2008 by 87 per cent from 2002.

Combatting the proliferation of weapons

The Global Partnership against the Spread of Weapons and Materials of Mass Destruction 43 was launched in 2002 by the G8 under Canada's leadership. In 2008–09, Canada helped to fund 40 projects through this partnership. These projects succeeded in reintegrating 460 former weapons scientists from the former Soviet Union into the scientific community, de-fuelling two nuclear submarines, upgrading physical security at seven Russian nuclear facilities, procuring six special cargo trucks for the secure transportation of nuclear materials, supporting a chemical weapons destruction facility in Russia, and upgrading security at three biological facilities in the Kyrgyz Republic.

Canada's commitment to refugee protection

Canada's refugee system, led by Citizenship and Immigration Canada, invested $114.4 million in 2008–09 to protect refugees and other persons in need of protection, both in Canada and abroad. Operating one of the largest refugee resettlement programs in the world, Canada resettles 10,600 to 12,000 refugees every year, or one out of every 10 of the refugees resettled globally. In 2008, the Government of Canada resettled 7,295 government-assisted refugees and 3,512 refugees supported by private sponsors in Canada.

The Government of Canada continues to demonstrate its commitment to refugee protection by taking a leadership role in international forums and assisting the expansion of global protection capacity. In 2008, with sustained encouragement from Canada, the United Nations High Commissioner for Refugees (UNHCR) adopted as a priority the issue of refugees who have spent many years in exile without a durable solution. The UNHCR also devoted its December 2008 High Commissioner's Dialogue on Protection Challenges (a forum for informal discussion of global protection issues with member countries, academics, and civil society organizations) to finding solutions for refugees in protracted situations. Several countries have since announced their intention to establish resettlement programs, some of which have received technical support from Canada.

Citizenship and Immigration Canada also worked to expand protection capacity under the government's strategy for the Americas. Canada developed and co-sponsored an August 2008 workshop in Costa Rica to promote the exchange of best practices in refugee protection among a dozen countries in the Americas.

In addition to resettling refugees from abroad, Canada protects those who make well-founded asylum claims within Canada as well as their dependents abroad. Canada's asylum program has witnessed a steady increase in new refugee claimants in recent years. In 2008, the Government of Canada received almost 37,000 claims, or about one out of every 10 refugee claims made in industrialized countries globally. This makes Canada second only to the United States as the country receiving the most refugee claims. Canada welcomed a total of 11,053 people seeking asylum in 2008—6,994 persons were granted protection in Canada and 4,059 dependents abroad.

Did you know?

Her Majesty's Canadian Ship (HMCS) Ville de Québec successfully escorted freighters transporting humanitarian aid supplies for the United Nations World Food Programme (WFP) from Mombasa, Kenya, to Mogadishu, Somalia, and protected the freighters from acts of piracy at sea.

Approximately 36,200 metric tons of food aid was delivered to Mogadishu. The WFP estimates that the supply is enough to nourish about 181,500 Somali people for one year.

Source: National Defence

Performance context

To put its programs, expenditures, and performance in context, the Government of Canada is tracking key measures of long-term progress in the outcome area of a safe and secure world through international cooperation.

Performance Context - in the outcome area of a safe and secure world through international cooperation.
Trend Indicator Overview
No trend Armed conflicts

In recent years, there has not been a clear trend in the number of armed conflicts worldwide with the numbers remaining relatively stable. In 2008, there were 28 armed conflicts in 24 countries. This represents a slight decrease from 30 conflicts in 2007 and 29 conflicts in 2006.

Source: Ploughshares Armed Conflicts Report[44]

Global poverty reduction through sustainable development

Background

Canadians understand that the quality of life enjoyed in our country depends on improving the quality of life of people in developing countries. Our future is linked with the future of people around the world who are struggling with major development challenges. Increased wealth and commercial development in poor countries has the potential to provide Canada with new trading partners and thus stimulate our international trade activities. When people in developing countries become less marginalized economically, socially, and culturally, the prospects for a safer and more secure world are likewise enhanced. 

Programs in this outcome area assist developing countries in promoting and protecting democracy and human rights, building effective and accountable governance systems, improving levels of social and economic development, and managing the environment in a sustainable way.

Expenditures for global poverty reduction through sustainable development

In 2008–09, the following three federal organizations spent $4.1 billion in the global poverty reduction through sustainable development outcome area:

  • Canadian International Development Agency
  • Department of Finance Canada
  • International Development Research Centre

The Canadian International Development Agency spent approximately $3.6 billion, the largest expenditure for this outcome area, for programs that reduce poverty and support sustainable development in developing countries.

The Department of Finance Canada spent approximately $318.3 million on payments to international financial institutions and for debt relief in poor countries.

The International Development Research Centre spent approximately $171.2 million to support research into the problems facing developing regions of the world and to apply research findings to the economic and social advancement of those regions.

Figure 4.3-Distribution of actual spending by federal organization in global poverty reduction through sustainable development, 2008-09

Figure 4.3 - Text version

The Government of Canada's contribution to global poverty reduction through sustainable development

Making development assistance more effective

In 2008–09, Canada announced and implemented several initiatives designed to make Canadian aid more effective in reducing poverty. For example, in April 2008, Canada fully untied food aid,[45] enabling its partners to purchase goods in the open market and thereby reduce transportation costs and delays. Untying food aid increases aid efficiency and is vital for responding effectively during a crisis. In September 2008, Canada announced that it would untie all of its bilateral (country-to-country) assistance by March 2013.

In February 2009,Canada announced that it would focus 80 per cent of its bilateral assistance on 20 countries, selected on the basis of their real needs, their capacity to use aid effectively, and their alignment with Canadian foreign policy priorities. This approach ensures that Canadian assistance has the critical mass necessary to make a visible difference and achieve concrete results.

Doubling assistance to Africa

Canada has fulfilled its pledge to double assistance to Africa[46] by 2008–09, increasing its assistance to $2.1 billion from $1.05 billion in 2003–04. Combined with efforts and investments from many partners, including the African countries themselves, this increase in funding has resulted in a number of measurable improvements, such as the following:

  • a sharp reduction in mortality rates for children under five in Tanzania—from 147 deaths per 1,000 live births in 1999 to 91 in 2008 (the health intervention tools developed in Tanzania are now being adapted to Nigerian conditions through a major program supported by the Canadian International Development Agency and the International Development Research Centre);
  • all households in malaria-affected areas of Ethiopia now have access to anti-malarial bed nets, which has helped to cut the death rate from malaria in half since 2005; and
  • a remarkable increase in primary school enrolment in Mali, which is expected to reach 100 per cent by 2015 from 42 per cent in 1990.

The Government of Canada has also made important contributions to the development of indigenous research capacity in Africa. For example, the International Development Research Centre (IDRC) has awarded long-term core support to 24 promising African research institutes under the $90 million USD Think Tank Initiative. This multi-donor program, funded jointly by IDRC, the William and Flora Hewlett Foundation, and the Bill & Melinda Gates Foundation, is nurturing some of the best research institutes in the developing world. 

In addition, the first African Climate Change Fellowships were awarded to 48 researchers from 19 countries, thus widening the base of climate change expertise in Africa. The awards are funded by the Climate Change Adaptation in Africa research and capacity development program, a major partnership between IDRC and the United Kingdom's Department for International Development.

Did you know?

In 2008–09, the Department of Finance Canada contributed to a number of measures in support of debt management capacity building in low-income countries.

As a result of Canada's advocacy within the G7, the G20, the International Monetary Fund, and the World Bank on the importance of building debt management capacity, the World Bank initiated talks with Canada on establishing a new Debt Management Facility.

The Debt Management Facility, officially launched in November 2008, assesses debtor countries' current level of capacity, creates a technical assistance program to address any weaknesses highlighted in the assessment, and helps debtor countries formulate and implement a medium-term debt strategy.

Canada has played a strong leadership role in guiding the creation and implementation of the Debt Management Facility and will hold a seat on its Steering Committee for the next two years. This will enable the Government of Canada to address its priority issues, such as ensuring that countries benefiting from substantial debt relief have the means necessary to keep their debt at sustainable levels.

Source: Department of Finance Canada

Reconstruction and development of Afghanistan

Based on the review of the Independent Panel on Canada's Future Role in Afghanistan and a decision of the House of Commons, the Government of Canada announced in June 2008 its six priorities and three signature projects for Afghanistan.[47]

Several government departments, including Foreign Affairs and International Trade Canada, National Defence, and the Canadian International Development Agency, are involved in this whole-of-government effort to accomplish Canada's mandate between 2008 and 2011. Coherence and coordination among departments has improved through quarterly reporting to Parliament and the continuing work of the Cabinet Committee on Afghanistan and the Privy Council Office's Afghanistan Task Force.

The Independent Election Commission of Afghanistan led the electoral process for the 2009 presidential and provincial council elections for the first time since the fall of the Taliban. It is supported by international partners and Canadian whole-of-government assistance, which includes technical, financial, diplomatic, and security support at the national level and in Kandahar. In 2008–09, more than 4.4 million eligible voters registered to vote. Canada is working with partners to address the particular needs of women voters in Afghanistan through voter outreach and increased security at voter registration centres.

Although conflict within Afghanistan escalated during 2008–09, Canada continued to make clear progress in its mandate. For example, through Canadian International Development Agency support for the Ministry of Rural Rehabilitation and Development—a leader in national Afghan-led infrastructure development at the community level—more than 28,000 community-based projects have been completed to improve water supply and sanitation, irrigation, power, agriculture, and livelihoods. These projects contributed directly to improving access to markets, increasing agricultural production, and developing local economies in communities.

More than two thirds of communities in key districts of Kandahar province have now completed small-scale infrastructure projects, including the development and rehabilitation of more than 180 kilometres of irrigation systems, 170 kilometres of roads, and 30 kilometres of power lines.

The Canadian International Development Agency continued to assist the Microfinance Investment Support Facility (MISFA) for Afghanistan. MISFA is one of the world's largest microfinance programs supporting small businesses and economic livelihoods for people who would not otherwise have access to credit. Through MISFA, more than 12,000 savings and loans clients were served in 2008–09. To date, more than 440,000 savings and loans clients, of whom two thirds are women, had received loans across 23 provinces, including Kandahar.

A focus on the Americas

Canada continues to contribute to increasing prosperity, democratic governance, and security in the Americas, with an emphasis on the Caribbean region. Haiti, the poorest country in the Americas, is the second largest recipient of Canadian aid.

Canada provides support to Haiti through a whole-of-government approach that involves a number of federal departments and agencies, such as Foreign Affairs and International Trade Canada, the Canadian International Development Agency, the Royal Canadian Mounted Police, Correctional Service Canada, and National Defence.

In 2008–09, in addition to supporting job creation, agricultural training, and immunization, the Canadian International Development Agency and its partners provided 320,000 school children in 700 schools across the country with a nutritious meal every day the children attended school. More than 45,000 children accessed school through school subsidies. At the same time, over 212,000 members of 50 savings and credit unions were able to increase their access to financial services, including micro-credit loans, giving them a better opportunity to provide for their families. Canada also helped Haiti register more than 600,000 adults on its voters list, which now comprises over 92 per cent of the voting population—up from 60 per cent in 2005.

Canada is delivering on its commitment of $555 million to Haiti over five years (2006–11), with a program designed to meet the people's needs, reinforce governance in Haiti, foster stability, and improve security, access to basic services, and overall living conditions.

Responding generously to humanitarian crises

Canada—with the support of thousands of Canadians—provided critical humanitarian assistance[48] when tragedy struck in both Burma and China. In May 2008, a massive earthquake hit Sichuan Province in China . The Government of Canada pledged initial funding to help those affected in the immediate aftermath of the disaster and also announced it would match dollar for dollar the contributions of individual Canadians to eligible Canadian charitable organizations. By July 2008, Canadians had raised almost $30 million in support of relief efforts. The Canadian International Development Agency matched the funds as planned, providing a total of more than $31 million in assistance that included food, shelter, and clean drinking water for more than one million survivors.

Canadians also donated generously to help relieve the suffering of those affected by Cyclone Nargis in Burma. The Canadian International Development Agency again announced that it would match the contributions of individual Canadians to eligible Canadian charitable organizations, which totalled more than $11 million. Matching dollar for dollar, the government brought Canada's total contribution to almost $26 million in emergency assistance to the Burmese people. This helped the World Food Programme to provide 70,000 tonnes of food to feed over one million people in remote areas and World Vision to provide 8,000 temporary shelter kits to nearly 40,000 people. 

Performance context

To put its programs, expenditures, and performance in context, the Government of Canada is tracking key measures of long-term progress in the outcome area of global poverty reduction through sustainable development.

Performance Context - in the outcome area of global poverty reduction through sustainable development.
Trend Indicator Overview
No trend Official development assistance as a percentage of gross national income (GNI)

In 2007, the Government of Canada contributed 0.29% of its GNI to official development assistance, consistent with 2006 data but down from 0.34% in 2005.

Source: Organisation for Economic Co-operation and Development[49]

A strong and mutually beneficial North American partnership

Background

Increasingly, Canada is collaborating with its North American partners, the United States and Mexico, to improve the well-being and security of citizens across the continent. To meet these common goals, an ongoing dialogue has been established between the three countries. Canada's efforts in this outcome area touch on issues ranging from security and trade facilitation to transportation and the environment.

Expenditures for a strong and mutually beneficial North American partnership

In 2008–09, the following five federal organizations spent $1.8 billion in the outcome area of a strong and mutually beneficial North American partnership:

  • Canada Border Services Agency
  • Canadian Space Agency
  • International Joint Commission
  • NAFTA Secretariat, Canadian Section
  • Security Intelligence Review Committee

The Canada Border Services Agency—the largest contributor to this outcome area—spent approximately $1.6 billion on border management programs that ensure compliance with border-related legislation and regulations and enhance border security. Programs include the development of technologies that enable the detection of high-risk travellers and goods before their arrival at the border.

The Canadian Space Agency spent approximately $161.4 million for programs that supportspace-related scientific and technological developments and ensure that Canada remains a global player in space exploration.

The International Joint Commission is another federal organization that contributes to this outcome area. The Commission spent approximately $8.1 million on programs that prevent potential disputes or secure the prompt and effective resolution of disputes under the Boundary Waters Treaty and the Great Lakes Water Quality Agreement, safeguarding Canada–U.S. relations.

Figure 4.4-Distribution of actual spending by federal organization in a strong and mutually beneficial North American partnership, 2008-09

Figure 4.4 - Text version

The Government of Canada's contribution to a strong and mutually beneficial North American partnership

Strengthening trilateral cooperation on key issues

In 2008–09, the Government of Canada continued to promote North American collaboration on issues of common concern, such as defence, security, border management, trade, disaster risk management, regulatory authorities, and energy policy. 

In February 2009, Canada welcomed the President of the United States, Barack Obama, on his first international visit after taking office. The meeting between Prime Minister Harper and President Obama established bilateral priorities for stimulating economic recovery, addressing climate change and energy security, and strengthening international security.

Foreign Affairs and International Trade Canada promoted greater partnership with the United States and Mexico to enhance North American competitiveness through such measures as efficient trade corridors and gateways (e.g., Asia-Pacific, Atlantic, Ontario–Quebec, and Florida), and cost-effective cargo supply chains.

In keeping with Canada's strategy for the Americas, the Department also strengthened cooperation with North American partners on issues of common interest in the Americas, such as disaster risk management and building partnerships to support security and democracy in Haiti.

Cooperation with the United States on the Western Hemisphere Travel Initiative

The Canada Border Services Agency was designated as the lead Government of Canada agency to work with the United States on the smooth implementation of its Western Hemisphere Travel Initiative. The initiative derives from a U.S. law that requires all travellers, including Canadian and American citizens, to present a valid passport or other U.S.-approved secure document when entering the United States from within the Western Hemisphere.

While the new law applies only to people seeking entry into the United States, the Government of Canada has worked vigorously with the American government to ensure that legitimate trade and travel across our borders will not be disrupted as a result of the new document requirements.

In 2008–09, Canada worked with the United States to expand the number of approved secure documents (including the Enhanced Driver's License, the NEXUS card, and the Secure Certificate of Indian Status), obtain a secure document exemption for minors, and ensure that a critical mass of compliant documents were in circulation by the time the law was fully implemented. Following the Western Hemisphere Travel Initiative's implementation for air travel in 2007, the initiative was expanded for land and sea travel, and its implementation on June 1, 2009, had no major impacts at the border.

Did you know?

Following the official visit of United States President Obama to Canada shortly after his taking office in February 2009, Canada worked closely with the new United States administration on issues of shared concern, such as Arctic sovereignty, environmental protection, defence and security, and border issues.

Security consultations were also undertaken with Mexico, demonstrating increased cooperation on such issues as organized crime, illicit drugs, trafficking in firearms and persons, and money laundering. 

Source: Foreign Affairs and International Trade Canada

The North American Free Trade Agreement

Since its inception on January 1, 1994, the North American Free Trade Agreement (NAFTA) has helped to triple merchandise trade among the three North American countries to an estimated $1 trillion USD in 2008.

NAFTA has helped to develop a more competitive and integrated North American economy. It has offered consumers a greater variety of better quality and less expensive goods and services, encouraged Canadian businesses to increase investment throughout North America, and served to create millions of new jobs in all three countries. NAFTA is critical to maintaining North America's competitive edge in an increasingly complex, fast-paced, and connected global marketplace.

In June 2008, NAFTA Parties formally agreed to further liberalize the NAFTA rules of origin, for a package of goods representing over $140 billion USD in trilateral annual trade. 

In the last year, the Canadian Section of the NAFTA Secretariat administered a total of six dispute settlement cases. Of these six cases, three decisions were issued, and two cases remain active. The Canadian Section also played a lead role in developing a submission for changes to strengthen the rules of procedure for the settlement system. In maintaining an efficient NAFTA dispute settlement mechanism, the Canadian Section helped to provide stability and transparency for Canadian businesses and investors throughout 2008–09.

Performance context

To put its programs, expenditures, and performance in context, the Government of Canada is tracking key measures of long-term progress in the outcome area of a strong and mutually beneficial North American partnership.

Performance Context - in the outcome area of a strong and mutually beneficial North American partnership.
Trend Indicator Overview
Improving Performance Merchandise trade

In 2008, Canadian merchandise imports from the U.S. totalled $280.7 billion, accounting for 63.4% of all Canadian imports. This represents an increase of 4.1% from 2007 and a 5.9% increase from 2006. In 2008, Canadian merchandise exports to the U.S. totalled $369.9 billion, or 75.5% of all Canadian exports. This represents an increase of 4% from 2007 and a 3% increase from 2006.

Source: Statistics Canada[50]

A prosperous Canada through global commerce

Background

Creating new trade, investment, and innovation opportunities is critical to the success of Canadian business. Canada has reached its current level of prosperity, in part, as a result of international trade and investment.

The Government of Canada works to ensure the advancement of Canada's trade and investment position in the international marketplace. By expanding our market share among current trading partners and exploring potential opportunities with new partners, the federal government aims to build economic prosperity in Canada. Canada also leverages its participation in global commerce to engage new trading partners in dialogue on such issues as human rights and democratic governance.

Expenditures for a prosperous Canada through global commerce

In 2008–09, the following four federal organizations spent $0.3 billion in the outcome area of a prosperous Canada through global commerce:

  • Canada Mortgage and Housing Corporation
  • Canadian Commercial Corporation
  • Canadian Food Inspection Agency
  • Foreign Affairs and International Trade Canada

With expenditures of $267 million in 2008–09, Foreign Affairs and International Trade Canada spent the most in this outcome area to advance Canada's commercial interests internationally.

The Canadian Food Inspection Agency spent approximately $37.6 million to implement and enforce food safety and quality standards on all Canadian food exports to meet international requirements.

With expenditures of approximately $15.2 million in this outcome area, the Canadian Commercial Corporation assisted in bolstering international trade, especially in sensitive sectors such as defence and security, where government presence is clearly needed, and in emerging and developing country markets, where additional procurement capacities are required.

Figure 4.5-Distribution of actual spending by federal organization in a prosperous Canada through global commerce, 2008-09

Figure 4.5 - Text version

The Government of Canada's contribution to a prosperous Canada through global commerce

Global Commerce Strategy implementation

In Budget 2007, the Government of Canada committed to implementing the Global Commerce Strategy[51] to help Canadian companies meet the demands of an increasingly complex and competitive global economy and build greater prosperity for the future.

In 2008–09, Canada made significant progress under this strategy in securing access to international markets through bilateral negotiations. Free trade agreement negotiations were concluded with Jordan, Peru, and Colombia, negotiations were launched with Panama, and negotiators worked toward agreements with countries in Central America (Guatemala, Honduras, Nicaragua, and El Salvador), the Caribbean Community (CARICOM), South Korea, Singapore, and the Dominican Republic. Canada also concluded Foreign Investment Promotion and Protection Agreements with Kuwait and Madagascar and worked toward two new agreements with Bahrain and Tunisia.

In addition, seven air service agreements were reached, including an agreement covering 27 European Union countries. Air service agreements encourage the development of new and expanded international air services to benefit air carriers, airports, travellers, shippers, and the tourism and business sectors.

New financial tools have been designed for Canadian businesses to capitalize on global commerce opportunities. In 2008–09, Foreign Affairs and International Trade Canada collaborated with Industry Canada and the Canadian International Development Agency on the development of financial support programs for Canadian companies' international business activities. Programs include the Business Development Bank of Canada's Market Xpansion Loan™ and the Canadian International Development Agency's Industrial Cooperation Program.

Approximately 32 per cent of the loans requested in 2008–09 through the Market Xpansion Loan program were from companies that are active internationally, and a total of 217 loans were approved. Consultations on the renewal of the Canadian International Development Agency's Industrial Cooperation Program took place in 2008–09. Results are expected to lead to new financial tools in the future, aimed at providing financial support for responsible Canadian investment in developing countries.

An expanded Trade Commissioner Service abroad

In Budget 2008, the Government of Canada committed $89 million over two years to bolster and refocus Canada's diplomatic representation abroad. A transformation process was undertaken to reduce headquarters staff at Foreign Affairs and International Trade Canada and reinvest these resources in new positions abroad to boost Canada's commercial presence in rapidly expanding markets.

In 2008–09, new Trade Commissioner Service offices were opened in China, India, Mongolia, Mexico, and Brazil, and new personnel were added at other missions. The Trade Commissioner Service provided front-line support to over 11,000 companies from its network of domestic and international offices.

During the year, the Trade Commissioner Service also developed more innovative ways of serving the needs of Canadian clients. For example, it partnered with the Canadian Commercial Corporation and Export Development Canada to provide Canadian businesses with a single service delivery window for accessing infrastructure projects.

Did you know?

Canadian exporters have become steadily more diversified, expanding exports to a greater number of countries. From 2001 to 2006, the number of multi-country exporters has grown by almost 40 per cent, a growth concentrated in small and medium-sized enterprises (SME), i.e., enterprises with fewer than 200 employees.

The number of SMEs exporting to more than one destination increased 48 per cent from 7,046 in 2001 to 10,406 in 2006. During this period, the number of SMEs exporting to Asia and Europe increased significantly, by 56 per cent and 42 per cent respectively.

The Trade Commissioner Service increased the number of clients it served in Europe in 2008–09 by 29 per cent from 2006–07 as part of its Europe Market Plan. In five priority Asian markets (Japan, China, India, ASEAN, and South Korea) it increased its number of clients by a total of 16 per cent.

Source: Foreign Affairs and International Trade Canada

Boosting Canadian housing exports

Support to the housing industry enables Canadian companies to secure international business and diversify their share of housing export markets.

The Government of Canada, through the Canada Mortgage and Housing Corporation, is helping to increase Canadian housing exports by helping companies expand their markets and by bringing together Canadian clients and prospective foreign buyers.

While foreign markets experienced significant downturns, the Canada Mortgage and Housing Corporation's work with Canadian companies to export housing products and services continued to show results. In 2008, the Corporation helped facilitate key client sales of $129 million. At the same time, the stability of the Canadian housing financial system attracted increased attention amid the turmoil of world markets.

Performance context

To put its programs, expenditures, and performance in context, the Government of Canada is tracking key measures of long-term progress in the outcome area of a prosperous Canada through global commerce.

Performance Context - in the outcome area of a a prosperous Canada through global commerce.
Trend Indicator Overview
Improving performance Canada's investment position

Since 1986, Canadian direct investment abroad has grown more than tenfold, from $64.8 billion to $658.8 billion in 2008. This represents an increase of 28.0 per cent from 2007 and an increase of 24.0 per cent from 2006.

Since 1986, the level of foreign direct investment in Canada has increased by 452.2 per cent, from $96.1 billion to $530.7 billion in 2008. This is an increase of 5.5 per cent from 2007 and an increase of 21.2 per cent from 2006.

Source: Canada's International Investment Position[52]