Canada-Israel Free Trade Agreement Modernization Negotiations

Final Environmental Assessment Report - January 2016

1. Introduction

The Canada-Israel Free Trade Agreement (CIFTA) has been in force since January 1997. CIFTA eliminated all tariffs on industrial products, and on some agricultural and fish and seafood products. Subsequent amendments to CIFTA were brought into force on November 1, 2003 to implement further tariff reductions and elimination on some agricultural, fish and seafood products. Since CIFTA came into force, Canada-Israel bilateral merchandise trade has more than tripled, from $507 million in 1996 to $1.6 billion in 2014.

On July 21, 2015, Canada and Israel announced the conclusion of negotiations toward an expanded and modernized CIFTA, following four rounds of negotiations that began in January 2014. Four existing areas of the current CIFTA were modernized, namely market access for goods, rules of origin, institutional provisions, and dispute settlement.

In addition, seven new chapters have been added in the areas of trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, intellectual property, electronic commerce, labour and environment.

In the area of goods, the modernized CIFTA will provide expanded market access opportunities for agricultural, fish and seafood products through the reduction or elimination of Israeli tariffs on a range of dutiable products, and through duty-free access under tariff rate quotas for certain products.

The modernized CIFTA will open new market opportunities for Canadian business, and will deepen the bilateral commercial relationship with Israel. Canada currently has a bilateral Convention for the Avoidance of Double Taxation with Israel (1975) and a new bilateral Air Transport Agreement (2015).

2. The Environmental Assessment Process

FTA negotiations are subject to the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations. This process focuses on the likely economic effects of trade negotiations, as well as their anticipated environmental impacts in Canada. The assessment process consists of three phases: the Initial EA, the Draft EA and the Final EA. The middle phase, known as the Draft EA, is not undertaken in cases where the Initial EA indicates that the FTA is not expected to result in significant environmental impacts in Canada. In the case of the CIFTA modernization negotiations, a Draft EA was not carried out as the Initial EA anticipated only minor environment impacts in Canada.

The primary purpose of the Initial EA is to identify the main environmental issues likely to arise as a result of a proposed agreement. This assessment focuses on potential economic and environmental impacts in Canada which would result from an FTA by exploring the links between the environment and increased market access for goods. This assessment considers the effects of new trade and investment in Canada that may result directly from an FTA, as well as potential impacts on the Canadian environment. As such, the Initial EA estimates possible environmental impacts using informed judgment based on, inter alia, any potential changes in economic activity brought about as a result of an FTA, once implemented.

An Initial EA of the CIFTA modernization negotiations was published on February 10, 2015. An interdepartmental EA committee^{Footnote 1} was established with officials responsible for each negotiating area. This EA committee was established to draft and review the CIFTA Initial EA. The process was also open to other government departments and agencies, including provincial and territorial governments, as well as the Environmental Assessment Advisory Group (EAAG) comprised of individuals from academia, business and non-governmental organizations (NGOs). Public input was also sought on the Initial EA by publishing the document on the Global Affairs Canada website and inviting comments from the public. Canadian officials responsible for each negotiating area were made aware of the findings, which served to inform the negotiations. This collaborative approach facilitated the development of a comprehensive assessment.

This Final EA updates the findings of the Initial EA and builds on the previous analyses conducted on the potential environmental impacts of the modernized CIFTA. It incorporates information gathered through consultations.

3. Conclusions of the Initial EA

The Initial EA concluded that a modernized CIFTA would likely have very minor environmental impacts in Canada, because while the agreement will benefit Canadian producers, processors, and exporters, its impact will likely be very modest relative to Canada’s overall economic activity. Moreover, any negative environmental impacts will likely be offset, in part or in whole, by other aspects of the FTA that will yield positive externalities. For further information, please see the Initial EA report.

4. Results of the Consultations Process

An overview of comments received in response to the Initial EA of the CIFTA is provided below:

• Broad consensus that the CFTA is likely to have a very limited environmental impact;
• A suggestion to expand the scope of the EA to cover the regional and global environmental impacts of greater trade; and
• Additional details were provided concerning specific provincial measures that mitigate environmental effects.

These comments were taken into account during the CIFTA negotiations and were addressed, to the extent possible, in this Final EA. Additional comments were sought on this Final EA from the EAAG and provincial and territorial governments. These added comments further elaborated on the comments received in response to the Initial EA.

5. Update to Initial Environmental Assessment Findings

As demonstrated through Canada’s concluded EAs, Canada’s policy is to negotiate environment provisions that ensure liberalised trade and the protection and conservation of the environment are mutually supportive. In keeping with Canada’s standard approach, the Environment Chapter negotiated under the modernized CIFTA includes provisions obliging the parties to maintain high levels of environmental protection through the effective enforcement of environmental laws; does not waive or derogate from such laws to promote trade or investment; and ensures transparency and public participation in the making of such laws. It also establishes a framework for cooperation in areas of mutual interest.

Given Canada’s established environment oversight regime, the relatively minimal projected expansion of trade is not predicted to stress the environment by, for example, causing an increase in production leading to increased pollution or other negative environmental externalities. On the contrary, the potential economic benefits of increased productivity and enhanced technology, especially in the sphere of environmental goods and intellectual property, could translate into the increased use and diffusion of clean technologies. As well, enhancing the protection of intellectual property rights may provide benefits in terms of innovation in clean technologies and their use in both Canada and Israel.

The areas examined in the Final Environmental Assessment are based on the final negotiated CIFTA modernization text. The anticipated environmental implications of chapters are assessed and summarized in Section 5.1 and 5.2 below. Section 5.1 covers the area of Trade in Goods while other chapters are covered in 5.2. As services and investment were not included in the modernized CIFTA, they are not covered by this Final EA.

5.1 Trade in Goods

This section includes: (1) an overview of bilateral trade flows and anticipated areas of export growth as a result of liberalisation under the modernized CIFTA; (2) identification of potential environmental impacts associated with growth in trade in goods and an assessment of the significance of these impacts; and (3) identification of mitigation and enhancement measures to address potential environmental impacts.

Overall, the liberalisation of trade in goods under a modernized FTA is expected to bolster the Canada-Israel trade relationship, particularly in the sectors outlined below. However, the Canada-Israel trade relationship is modest in the context of Canada’s global trade in goods. This would continue to be the case even if considerable growth in trade ensued as a result of the modernized CIFTA. Accordingly, and given a range of existing Canadian mitigation and environmental enhancement measures, no meaningful or measurable environmental impacts for Canada are expected to result from increased trade with Israel as a result of tariff elimination in the modernized CIFTA.

Anticipated Effects of a Free Trade Agreement in the area of Trade in Goods

While the 1997 CIFTA eliminated tariffs on some agricultural and fish/seafood products, the modernized CIFTA goes much further by agreeing to tariff elimination or reductions on a large number of additional lines concerning agriculture, agri-food, and fish/seafood.

Under the modernized CIFTA, nearly 100% of current Canadian agricultural, and fish/seafood exports will benefit from some form of preferential market access in Israel, up from 90% at present. This will allow Canadian producers, processors, and exporters to capitalize on enhanced market access, and to solidify and expand Canada’s presence in the Israeli market.

The chapter concerning National Treatment and Market Access has been modernized to include several new elements, including on customs user fees, customs valuation, and the creation of a Committee on Trade in Goods, along with a sub-committee on Trade in Agricultural Goods.

Full details concerning Canadian agricultural, fish, and seafood goods benefitting from preferential access to Israel under the current CIFTA are accessible here.

Canadian Merchandise Exports to Israel

Canada’s annual merchandise exports to Israel totaled $449.8 million in 2014, making Israel Canada’s 42^nd-largest export destination that year^{Footnote 2}. As such, Canadian exports to Israel represented 0.09 percent of total Canadian global exports in 2014^{Footnote 3}. Even if Canadian exports to Israel were to considerably grow in the years following the implementation of the modernized CIFTA, this would have only a very modest effect on Canada’s overall trade and production levels.

Canada’s non-agricultural exports to Israel totalled $395.7 million in 2014, and included aircraft and aircraft parts, newsprint, antennas, and motor vehicles. Tariffs on industrial products were fully liberalised under the original CIFTA, so no further benefits will arise for these goods under the modernized agreement.

In 2014, Canada’s agricultural exports to Israel totalled $52.6 million. Top agricultural exports include wheat, corn, and lentils. In 2014, Canada’s fish/seafood exports to Israel totalled $1.5 million, with fish fats and oils, scallops, mussels, and lobsters as top exports.

The modernized CIFTA will improve market access for Canada’s high-quality agricultural, agri-food, and fish and seafood products, and will address specific Canadian export interests in the Israeli market. Based on recent trade flows under the current CIFTA, 90 percent of Canadian agricultural, agri-food, and fish and seafood exports benefit from some form of preferential market access in Israel while under the modernized CIFTA, close to 100 percent will benefit. Moreover for many products where market access has so far been hindered by tariffs, Canadian exporters will be able to compete on a level playing field in the Israeli market with competitors from other countries. Current dutiable Canadian exports that will benefit from a modernized FTA include chickpeas, canola oil, frozen potato products, processed fruits and vegetables, other processed foods, and animal feeds.

Tariff elimination in the context of the modernized agreement is expected to further bolster Canadian exports to the Israeli market, though Canada’s exports to Israel will continue to assume a modest share of Canada’s global exports. This suggests that the increased growth in Canadian exports to Israel arising from the modernized CIFTA will continue to represent a very modest share of overall Canadian production, and therefore have a very modest environmental impact in Canada.

Canadian Merchandise Imports from Israel

Israel is a relatively small supplier of Canada’s global imports, representing the 40^th-largest source of merchandise imports for Canada in 2014, and accounting for 0.22 percent of Canada’s global imports. Canada’s imports from Israel totalled $1.1 billion in 2014^{Footnote 4}.

Canada’s imports of agricultural products from Israel totalled $61.7 million in 2014, and included top imports such as mandarins, dates and various food preparations. Canada’s imports of fish and seafood from Israel totalled $2.8 million in 2014, with fish fats and oils, ornamental fish, and caviar as top imports.

Upon entry into force of the modernized CIFTA, Canada will immediately eliminate tariffs on additional fish and seafood, and agricultural imports from Israel. Key products from Israel that will benefit from this duty-free access include baked goods (pizza, quiches, pretzels, pastries and biscuits), wine, and miscellaneous frozen vegetables.

Given that goods entering into the Canadian market from Israel already benefit from relatively low Canadian tariffs, the resulting increase in imports is expected to be very modest.

Potential Environmental Impacts and Significance

Considering that tariffs on bilateral trade in industrial goods are already fully liberalised and supported by relatively liberal rules of origin, the modernized CIFTA is expected to bolster the Canada-Israel trade relationship only in the areas of agriculture and fish/seafood.

Although some trade growth is expected to result from the modernized CIFTA, the Canada-Israel bilateral trade relationship represents only a very small proportion (0.15%) of Canada’s overall global trade flows. Given the size of the trade relationship, and the existing Canadian mitigation and environmental enhancement measures, minimal environmental impacts are anticipated as a result of the increased trade flows with Israel achieved through a modernized CIFTA.

In 2014, industrial goods accounted for about 88% (or $395.7 million) of the total value of Canadian exports to Israel and about 94% (or $1,043.2 million) of Canadian imports from Israel. Canadian exports to Israel represent only 0.09% in 2014 of Canada’s overall global exports, and this figure is unlikely to change perceptibly as a result of a modernized CIFTA. Accordingly, any environmental impact resulting from export expansion is expected to be very limited and any potential environmental impacts would be appropriately managed under current environmental policies, programs and management practices.

With respect to imports, given that the large majority of goods imported from Israel already enter Canada duty-free, and considering that in 2014 only 0.22% of Canada’s overall merchandise imports originated from Israel, even considerable growth in imports from Israel as a result of the modernized CIFTA could be accommodated without in any way negatively impacting or otherwise compromising Canada’s environment.

Canada’s agricultural and agri-food sector is one of the most dynamic in the world. The sector employed close to 533,500 people in 2014, accounting for nearly 3 percent of Canada’s GDP. In the same year, Canada was the world’s fifth-largest exporter of agricultural and agri-food products. More than 40 percent of Canadians employed in the sector work in the processing segment of the industry, turning raw ingredients into processed foods, ready-to-eat meals, beverages, nutritional supplements, and a wide range of other products.

The Canadian agricultural and agri-food system (AAFS) is a complex and integrated supply chain that includes input and service suppliers, primary producers, food and beverage processors, food retailers and wholesalers, and foodservice providers.  Environmental impacts associated with agriculture in Canada are varied, and involve components of land and water availability, air and water quality, and a management regime of fertilizers and pesticides.  The Government of Canada makes considerable efforts to understand the impact of agriculture on the environment, to seek ways to reduce negative impacts, and to promote the sustainable use of natural resources. For example, Agriculture and Agri-Food Canada (AAFC) contributes to sustainability of the agriculture, agri-food and agri-based products sector through science and associated activities, designed to enhance agri-ecosystem productivity, health, and biodiversity.   AAFC activities extend across the value chain for food from farmers to processors, domestic and global markets, and consumers. AAFC invests in innovative research and development into new crop varieties, beneficial management practices and technologies that support sustainable agricultural production. Emerging economic opportunities, such as clean energy and consumer and market demand for environmental product attributes, are also supported. AAFC efforts help address agri-environmental challenges such as water quality and water use, developing resilience to a changing climate, and maintaining ecosystem health.

In addition to agricultural and agri-food products, Canada is also known for its fish and seafood exports. The sector contributed more than $2.3 billion to Canada’s GDP in 2014, and provided some 36,500 jobs to Canadians in everything from fishing to aquaculture. The industry is the economic mainstay of approximately 1,500 communities in rural and coastal Canada. Canada is the world’s seventh-largest exporter of fish and seafood, exporting some 60 percent, by value, of its fish and seafood production.

Fish and seafood products were a significant non-agricultural export to Israel in 2014, totaling $1.5 million and representing 0.14% of Canadian exports. Although an increase in fish and seafood product exports could, in principle, have environmental impacts, any such increases would be subject to Canada’s fish management systems at the federal, provincial and territorial levels of government. In 2014, exports to Israel accounted for less than 0.03% of Canada’s global exports of fish and seafood products. Even if considerable export growth in this sector ensued as a result of an FTA, it would be expected to continue to constitute only a very small share of overall Canadian production and exports. Therefore, the environmental impacts resulting from any potential increases to trade in fish and seafood products are expected to be similarly limited.

Good governance and regulatory frameworks, among other elements, are consistent principles that facilitate the achievement of sustainable development objectives. These can mitigate any potential environmental impacts that may result from increased exports to Israel of Canadian fish and seafood products.  Fishing, aquaculture, and related processing activities are regulated in Canada to ensure that resources are harvested at a sustainable level, including through the use of quotas or input controls for capture fisheries, and proper siting, management, and regulation for aquaculture. Measures such as these may be used to mitigate potential negative impacts.

The modernized CIFTA will improve market access for Canada’s agricultural, agri-food, and fish and seafood products, and will address specific Canadian export interests in the Israeli market. Under the modernized CIFTA, close to 100 percent of Canadian agricultural, agri-food, and fish and seafood exports will benefit from some form of preferential market access in Israel, up from 90 percent. While the preferential tariff treatment gained under the modernized CIFTA will benefit Canadian producers, processors, and exporters, the expected effects are modest and could be expected to have only very minor potential environmental impacts. This conclusion is reinforced by the fact that Canadian exports of fish and seafood to Israel are relatively limited ($1.5 million in 2014, which represent only 0.03% of Canada’s worldwide fish and seafood exports of almost $5 billion in 2014).

Positive impacts are also possible through increased collaboration on specific issues.  For example, illegal, unreported and unregulated (IUU) fishing is a major contributor to declining fish stocks and marine habitat destruction.  Globally, IUU fishing takes many forms both within nationally controlled waters and on the high seas. While it is not known with certainty how much IUU fishing is taking place, it is estimated that it accounts for approximately 30 per cent of all fishing activity worldwide.

5.2   Findings Related to Potential Provisions of a modernized Canada-Israel FTA

Preamble

The Preamble summarizes the overall intent of the Agreement and references the Parties’ ongoing commitment to sustainable development, the effective enforcement of environmental laws and cooperation on environmental matters.

By underscoring the Parties’ commitments to environmental stewardship, these provisions stand to have positive effects vis-à-vis the environment.

Initial Provisions and General Definitions

This chapter establishes the free trade area; defines the FTA’s relationship to other agreements, including Multilateral Environmental Agreements (MEAs); delineates the coverage of obligations in the agreement; and establishes definitions for the FTA.

Where FTA provisions refer to multilateral environmental and conservation agreements, they serve to underscore the Parties’ commitments to environmental stewardship. This chapter may lead to positive environmental impacts by permitting certain MEAs, which include internally recognized standards for environmental protection and conservation, to supersede the FTA’s provisions in instances where conflicting provisions exist.

Administration of the Agreement

This chapter provides a framework for the overall management of the FTA and establishes a mechanism for the resolution of disputes outside of the formal dispute settlement mechanism.

This chapter could have positive environmental impacts by permitting Multilateral Environmental Agreements, which provide internationally recognized standards for environmental protection and conservation, to supersede provisions of the FTA in instances where conflicting provisions exist.

Transparency 

This chapter seeks to facilitate the administration and smooth operation of the Agreement by designating contact points in each Party to facilitate communication. It also reiterates the Parties’ commitment to transparency and due process regarding matters covered by the Agreement.

There are no foreseen environmental impacts as a result of the modernization of this chapter.

Exceptions

This chapter sets out exceptions to the commitments of the FTA, including a general exception allowing that the FTA Parties maintain their ability to adopt measures to protect human, animal or plant life, and measures relating to the conservation of exhaustible natural resources. By recognizing and protecting the right of each Party to regulate to protect the environment, this chapter is beneficial vis-à-vis the environment.

Rules of Origin

The purpose of rules of origin is to ensure that the preferential tariff benefits of the modernized CIFTA flow only to goods qualifying as originating in the territory of either Canada or Israel. This chapter establishes rules of origin that are clear, as simple as possible, and leave little room for administrative discretion.

An assessment of production and consumption changes resulting from product-specific rules of origin is captured in the Trade in Goods section above (Section 5.1), along with their corresponding environmental impacts (any environmental impacts are expected to be at most minor).

Trade Facilitation

This chapter reduces transaction costs by modernizing, simplifying, automating and standardizing trade procedures and border mechanisms.

To the extent that there are environmental impacts resulting from of this chapter, they are expected to be positive due to border mechanisms that involve less paper, simpler procedures, and greater automation.

Technical Barriers to Trade (TBT)

This chapter builds on commitments made under the WTO Technical Barriers to Trade Agreement (“TBT Agreement”); promotes greater cooperation in the field of standards and technical regulations; facilitates the acceptance of conformity assessment procedures; and increases transparency, including through notifications and public participation in regulatory development processes. In addition, the TBT Chapter encourages each Party to use electronic means when co-operating with the other Party or fulfilling their transparency obligations, which should reduce the environmental impact of closer regulatory co-operation.

While provisions reaffirming the Parties’ rights to take measures necessary to ensure the protection of human health, animal or plant life, and the environment are positive from an environmental perspective, they are unlikely to have a measurable impact on the environment.

Sanitary and Phytosanitary Measures (SPS)

This chapter affirms the Parties’ rights and obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (“SPS Agreement”) and ensures that WTO dispute settlement procedures continue to govern any formal bilateral disputes that arise between the Parties regarding SPS measures. In addition, the chapter facilitates enhanced bilateral communication and collaboration on SPS trade-related matters with a view to avoiding SPS issues and resolving them expeditiously when they occur.

As provided in the WTO SPS Agreement, both Parties maintain the right to adopt SPS measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of the WTO SPS Agreement. The WTO SPS Agreement requires that both Parties ensure that any SPS measures are applied only to the extent necessary to protect human, animal or plant life or health, are based on scientific principles, and are not maintained without scientific evidence except as otherwise provided for in the Agreement. As the CIFTA SPS Chapter establishes no new rights and obligations on the application of SPS measures beyond what Canada has already agreed to under the existing WTO SPS Agreement, there are no foreseen environmental impacts expected as a result of this chapter.

Electronic Commerce

This chapter ensures a predictable environment for the conduct of electronic commerce.

Some positive environmental impacts may result from this chapter to the extent that it facilitates increased trade electronically.

Intellectual Property

This chapter includes provisions on intellectual property that reaffirm the Parties’ commitments made under the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS Agreement”), as well as other international intellectual property agreements to which both countries are a party, and reaffirm the flexibilities in the TRIPS Agreement, including those relating to the protection of public health. It also contains cooperation provisions in areas of mutual interest.

As such, this chapter is not expected to have a direct or measurable environmental impact.

Dispute Settlement

This chapter includes state-to-state dispute resolution procedures with Israel based on the dispute settlement provisions of the NAFTA, but simplified and improved where possible. There are no foreseen environmental impacts as a result of these commitments.

Environment

This chapter includes commitments to high levels of environmental protection; the effective enforcement of domestic environmental laws; non-derogation from domestic environmental laws to encourage trade or investment; and public participation and engagement. The Environment Chapter also includes provisions affirming commitments to Multilateral Environment Agreements (MEAs) that both Canada and Israel have ratified, as well as promoting the trade in environmental goods and services. Furthermore, the Parties commit to respond, in a timely manner, to inquiries from the public on matters respecting the implementation of the Chapter.

Provisions of the Environment Chapter underscore the Parties’ commitment to pursue policies that promote sustainable development and sound environmental management. Consistent with Canada’s usual FTA approach, the provisions reinforce the mutual supportiveness of trade and environment policies by including commitments to foster good environmental governance.

The Agreement establishes a Committee on the Environment responsible for implementing environment obligations and includes an environment chapter-specific dispute resolution process to address any questions regarding compliance, including, if necessary, review by an independent panel of experts whose recommendations would be made publicly available.

This chapter seeks to ensure that trade and environment conservation and protection are mutually supportive, and it obliges the Parties to refrain from lowering environmental standards in order to gain a trade or an investment advantage. Provisions also ensure that Parties maintain their ability to set their own environmental priorities, to establish their own domestic levels of environmental protection and to adopt or modify relevant environmental laws and policies. Though difficult to quantify, the commitments made in this chapter stand to benefit Canada’s environment.

Labour

This chapter commits Canada and Israel to effectively enforce their domestic labour laws that must in turn reflect international labour standards, including those found in the International Labour Organization (ILO) 1998 Declaration on Fundamental Principles and Rights at Work; and minimum employment standards, prevention and compensation for occupational health and safety, and non-discrimination in respect to migrant workers.

The chapter includes a dispute resolution mechanism which may result in the obligation for the non-compliant country to pay financial penalties.

There are no foreseen environmental impacts as a result of this chapter.

6. Mitigation and Environmental Enhancement Measures

The Federal Sustainable Development Strategy (FSDS) is the government’s overall sustainable development strategy, which provides Canadians with a whole-of-government picture of federal goals, targets and specific actions to achieve environmental sustainability. The strategy’s objective is to make environmental decision making more transparent and accountable to Parliament.

Importantly, provincial and territorial governments share constitutional jurisdiction and responsibility for the environment. A selected overview of provincial and territorial initiatives can be found at the end of this section.

Agriculture: The Canadian agricultural industry operates under an elaborate system of risk assessments, financial incentives, federal, provincial and municipal legislation and other initiatives that reduce the environmental risks of increasing agricultural production. Agricultural businesses are continually seeking ways to improve productivity, open new markets and manage risks to their operations. An increasingly important component to these farm business requirements is having access to scientific knowledge that helps the industry keep pace with pressure to merge sustainability considerations into production practices, and demonstrate results to their customers and end users. AAFC is an important contributor to agricultural research and development in Canada, especially in areas where other players do not have a strong motivation to invest.

AAFC, in collaboration with provincial and territorial partners, provides research and programming under the Growing Forward 2 policy framework to support environmentally sustainable agriculture and environmental farm plans, and increase the adoption of Beneficial Management Practices – practices that sustainably increase productivity and reduce farmer input costs and landscape-level impacts.  Growing Forward 2’s Agri-Innovation Program, with up to $698 million in funding over five years, focuses on research and development that enhances economic growth, productivity, competitiveness, adaptability and sustainability of the Canadian agriculture, agri-food and agri-based products sector and assists in capturing new opportunities for the sector in domestic and international markets. The Program includes a Research Accelerating Innovation stream that consolidates several agri-environmental science initiatives. This stream addresses emerging science-based requirements by generating and providing access to scientific knowledge that helps the industry reduce risks to production, keep pace with sustainability considerations, and improve productivity.

Fish/Seafood: Any growth of fish and seafood exports to Israel as a result of the modernized FTA will be subject to supply restraints that ensure that fish and seafood products are harvested at a sustainable level. The Government of Canada is committed to the conservation and sustainable development of Canada’s oceans through a range of programs under the umbrella of the Federal Sustainable Development Strategy.

Canada’s fish management systems and federal, provincial and territorial government measures have been put into place to ensure the sustainability of Canada’s fisheries and the environmental integrity of its aquaculture operations so that any increased trade resulting from an FTA will have minimal environmental impact. Because there are effective environmental management systems and government measures in place, an increase in Canadian exports to Israel due to an FTA is neither expected to result in a significant negative nor positive impact on the sustainability of fish stocks, nor on Canada’s marine or freshwater environment.

Overview of Monitoring in Canada: Along with federal, provincial and territorial legislation related to protecting the environment, Canada tracks its performance on key environmental sustainability issues including climate change and air quality, water quality and availability, and protecting nature as outlined in the Federal Sustainable Development Strategy using, inter alia, the Canadian Environmental Sustainability Indicators (CESI)^{Footnote 5}. These indicators are based on objective and comprehensive information and convey environmental trends in a straightforward and transparent manner, and provide valuable data and information for tracking Canada’s performance on key environmental sustainability issues. They ensure that international, national, regional, and local trends are readily accessible and transparently presented to all Canadians, and will continue to be used to track sustainability when the modernized CIFTA is implemented.

Selected Provincial/Territorial Initiatives: British Columbia’s Environmental Management Act uses environmental management tools to protect human health and the quality of water, land and air.

In Manitoba, the Pesticide Regulation under the Environment Act regulates the application and storage of pesticides in the province. This regulation promotes the safe and appropriate use of pesticides in Manitoba’s environment. The Pesticide Regulation can be found here.

In Quebec, the Environment Quality Act (EQA) is the main statute of general application for environmental protection. This act is the basis for Quebec’s environmental authorization regime and the environmental impact assessment and review procedure of certain projects (environmental assessment). Over 50 regulations were made pursuant to the EQA, including the Clean Air Regulation, the Regulation respecting the quality of drinking water and the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances. Besides the EQA, there is also the Pesticides Act and the associated Pesticides Management Code. For more information, please see the website of the Ministère du Développement durable, de l’Environnement et de la Lutte contre les changements climatiques du Québec and the list of laws and regulations for which it is responsible.

7. Conclusion

EAs are an effective mechanism to address potential problems and to protect the environment by improving overall policy coherence at the federal level and by assisting decision-makers in understanding environmental implications of trade policy. This EA concludes that the modernized CIFTA is expected to have very minor environmental impacts in Canada, including because the economic impact of the Agreement will be modest relative to Canada’s overall economic activity. This conclusion is consistent with the findings of the Initial EA.

Canada has a range of policies and programs in place to mitigate negative environmental impacts and enhance positive ones. The modernized CIFTA does not compromise the environmental protection measures that Canada has implemented, nor does it constrain in any way Canada’s ability to put in place additional policies and programs in this area. Moreover, the modernized CIFTA does not exempt foreign service providers and foreign investors from Canadian laws and regulations.

Comments on the Final Environmental Assessment of the CIFTA can be submitted by e-mail or mail to:

E-mail: EAconsultationsEE@international.gc.ca
Mail: Canada-Israel FTA Modernization Negotiations - Environmental Assessment
Trade Policy and Negotiations Division (TPE)        
Global Affairs Canada
S7-169
125 Sussex Drive
Ottawa, ON,  K1A 0G2

Comments received will be circulated to the EA Secretariat to inform future EAs of trade negotiations and other related policy development and decision-making processes.