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Summary of initial GBA Plus for Canada-United Kingdom Free Trade Agreement Negotiations

Table of contents

Introduction

The Government of Canada is committed to the advancement of an inclusive approach to trade, which seeks to ensure that the benefits and opportunities resulting from Free Trade Agreements (FTAs) are more widely shared, including among under-represented groups in Canada's economy and trade, such as women, small and medium-sized enterprises (SMEs), and Indigenous peoples. On March 24, 2022, Canada and the United Kingdom launched negotiations toward a possible Canada-United Kingdom Free Trade Agreement (Canada-U.K. FTA). Canada and the United Kingdom (UK) agreed to pursue an ambitious agreement, one that is inclusive and sustainable, and that will advance our climate goals, strengthen supply chains and help our businesses thrive by benefitting from digital trade. Canada highlighted that the negotiations are an opportunity to make sure everyone benefits from trade, including women, racialized communities, Indigenous peoples and other traditionally underrepresented groups. In this context, Gender-based Analysis Plus (GBA Plus) is an analytical tool used by the Government of Canada to support the development of gender responsive and inclusive policies, programs, and other initiatives. GBA Plus is a process for understanding who is impacted by the issues we seek to address and how we might tailor initiatives to meet diverse needs and particularly those of people most impacted by anticipating and mitigating barriers to accessing or benefitting from government actions.  GBA Plus guides reflection and action by providing insights on how various identity factors work together and intersect with systems and structures of power to shape peoples' experiences and outcomes. The government has committed to conduct a comprehensive quantitative and qualitative chapter-by-chapter GBA Plus process to inform negotiations of a Canada-U.K. FTA.

This summary of the initial GBA Plus conducted on negotiations for a bilateral FTA with the U.K. is being published in order to seek stakeholder feedback on the differentiated effects of anticipated provisions on men and women in Canada, and on any other intersecting identity, where possible, with SMEs and Indigenous peoples as priority considerations.

In the meantime, the GBA Plus is contributing to a better understanding of the potential effects and opportunities of a potential FTA on all people in Canada—workers, producers, business owners, entrepreneurs, and, where possible, consumers. In this regard, the GBA Plus will inform negotiations with the U.K. and help identify opportunities for Canada to pursue new gender-responsive and inclusive trade provisions across a Canada-U.K. FTA, as well as relevant potential domestic policy responses if an effect or opportunity cannot be addressed through the agreement.

This initial GBA Plus is complementary to and advances Canada's Feminist Foreign Policy and Feminist International Assistance Policy. It also helps further progress on Goal 6 of the government's Gender Results Framework—gender equality around the world—in order to achieve a more peaceful, inclusive, rules-based and prosperous world by pursuing a feminist international approach to all policies and programs, including trade.

The comprehensive chapter-by-chapter GBA Plus process was developed to inform the ongoing negotiations toward a Canada-U.K. FTA and builds on the mandatory GBA Plus process that is required to seek Cabinet authority to engage in FTA negotiations, which Global Affairs Canada (GAC) has implemented consistently since 2016.

Background

On April 1, 2021, the Canada-U.K. Trade Continuity Agreement (TCA) entered into force, providing continuity, predictability and stability for trade between Canada and the U.K. until a new bilateral trade agreement enters into force. The TCA preserves the main benefits of the Canada-European Union (EU) CETA, which no longer applied to the United Kingdom as of January 1, 2021, as a consequence of the United Kingdom leaving the EU. The TCA did not transfer over from CETA the inclusive trade recommendations on Trade and Gender, SMEs or Climate Change. Under the terms of the agreement, Canada and the U.K. committed to begin negotiations towards a new comprehensive bilateral FTA within a year of the TCA's entry into force, and to seek to complete the negotiations within 3 years. The Government of Canada is committed to negotiating an ambitious, modern and comprehensive FTA that best reflects Canada's inclusive approach to trade and the Canada-U.K. bilateral trade relationship. In that sense, the Government of Canada is committed to advancing an inclusive approach to trade through a potential agreement, in recognition that trade policies need to respond and contribute meaningfully to overall domestic economic, social and environmental policy priorities.

Process

In January 2018, the Trade Policy and Negotiations Branch at Global Affairs Canada appointed a gender focal point and established a GBA Plus action plan, the implementation of which positioned the department to deliver on Canada's inclusive approach to trade and other government priorities.

The initial GBA Plus for the Canada-U.K. FTA negotiations was initiated using a custom-designed guidance questionnaireFootnote 1 and other supporting materials that guided lead negotiators for each chapter in their analysis. Public consultations on the potential new agreement were launched on March 12, 2021, followed shortly after on March 13, 2021, by the Notice of Intent to conduct impact assessments, including this GBA Plus. The Gender and Trade Advisory Group expert advisory group was also consulted and their comments were integrated in the analysis. Furthermore, the GBA Plus was updated and revised based on feedback received from gender equality experts and the Government of Canada's gender focal point network across relevant departments. This summary is based on the fully reviewed initial GBA Plus.

Stakeholder consultations: What we heard

From March 12 to April 27, 2021, Global Affairs Canada (GAC) conducted public consultations on priorities for bilateral free trade agreement negotiations with the U.K. and for the U.K. potentially joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

A new, comprehensive bilateral agreement tailored to the Canada-U.K. relationship would seek to benefit all Canadians, from industry and businesses (including SMEs) to workers and consumers. Similarly, should the U.K. join an agreement such as the CPTPP, Canada would seek for this to meaningfully contribute to our overall priorities for an inclusive, sustainable future that generates growth and creates jobs.

Since March 12, 2021, GAC has received 144 written submissions from Canadians across the country covering a broad range of sectors. The Government received the views of 62 business associations and individual businesses, 7 provinces and territories, Indigenous organizations, 69 individuals, and national labour organizations.

In addition, the Government engaged directly with stakeholders and partners, including SMEs, women and women-owned businesses, Indigenous groups, SMEs, business associations, and provinces and territories.

Overall, stakeholders across a broad range of sectors indicated support for bilateral FTA negotiations with the U.K., and the U.K. joining the CPTPP. They overwhelmingly cited an interest in building on historical ties, shared values and strong trade and investment linkages to increase economic opportunity for Canadians. Stakeholders generally view the negotiation of a bilateral trade agreement and the U.K. joining the CPTPP as opportunities to ensure a strong, more competitive bilateral economic relationship and to contribute to sustainable and inclusive growth, supply chain resiliency and a strong economic recovery post-COVID.

Stakeholders highlighted that a possible FTA could address existing barriers for Canadian firms, including tariff and non-tariff barriers. We heard that the bilateral FTA should be ambitious, modern and inclusive, and advance the participation of SMEs, women and Indigenous-owned businesses in international trade through dedicated outcomes and collaborative mechanisms. Several stakeholders recommended that a new agreement address emerging issues, such as digital trade rules, resilient supply chains, trade in new products, and increased cooperation on climate change. It was also viewed as an opportunity to facilitate the movement of professionals, streamline customs procedures, and enhance regulatory cooperation.

Stakeholders from supply-managed sectors (i.e. dairy, poultry, eggs) insisted that Canada refrain from any further market access concessions and ensure that any access be included within already-negotiated access volumes of existing agreements.

Data sources for initial GBA Plus

A variety of data and research sources were used in conducting the GBA Plus for each chapter. Data publications from Statistics Canada include:

Other sources include:

Economic impact assessment

Canada's long-term prosperity and economic recovery from the COVID-19 pandemic depend on open, rules-based trade, diversified supply chains, and secure market access. The negotiation of comprehensive FTAs that reflect Canada's inclusive approach to trade supports the Government of Canada's objective to secure preferential market access for Canadian businesses, large and small; diversify trade and reduce Canada's reliance on single markets; position Canada as an attractive destination for foreign investment; and advance Canada's interests abroad.

The U.K. is Canada's most important commercial partner in Europe and our third-largest trading partner for combined goods and services. Two-way merchandise trade in 2021 reached $24.1 billion. The U.K. is an important source of foreign direct investment (FDI) for Canada, ranking third after the United States and the Netherlands. There are more than 950 U.K. affiliates that have a presence in Canada and that contribute to the Canadian economy. The U.K. is Canada's second most important destination for investment abroad. More than 1100 U.K. firms are owned or controlled by Canadian interests. Canada and the U.K. also have strong partnerships in science, technology and innovation, notably the 2017 Memorandum of Understanding (MoU) on Science, Technology, and Innovation, which has promoted research cooperation on a number of emerging areas of technology.

Canada and the U.K. have enjoyed preferential access to each other's market since the provisional application of the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA) began on September 21, 2017. As a result of the U.K. decision to leave the EU, and as a matter of international law, the U.K. ceased to be a party to CETA on January 1, 2021. However, the TCA entered into force on April 1, 2021 and is a transitional agreement that substantively replicates CETA, providing Canadians with stable preferential access to the U.K. market. Under the terms of the agreement, Canada and the U.K. committed to begin new negotiations toward a comprehensive bilateral FTA within a year of its entry into force (by April 1, 2022), and to seek to complete negotiations within 3 years (by April 1, 2024). In addition, the Government conducted an Economic Impact Assessment of the TCA in December 2020, underlying the continued preferential access to the U.K. market provided by the interim agreement and the high standards for consumers, workers and the environment.

Negotiation of a new bilateral FTA is expected to allow Canada and the U.K. to both preserve and improve on the TCA market access outcomes for both goods and services, and secure outcomes tailored to the bilateral trade relationship. Given the comprehensive nature of the TCA market access outcome, a comprehensive bilateral FTA is not expected to provide substantial new economic benefits that can be quantitatively modelled. Instead, it is expected to ensure continuity for traders and improve outcomes, including on issues related to inclusive trade, environment and labour.

Chapter-by-chapter GBA Plus

The initial GBA Plus also includes a chapter-by-chapter analysis for 33 issue areas (chapters or provisions) to be discussed during the Canada-U.K. FTA negotiations. For the purposes of this report, the analysis has been broken down into 4 groups of related chapters as outlined below.

Group 1: Goods

Chapters in the first group are related to goods and include National Treatment and Market Access for Goods, Rules of Origin, Origin Procedures, Customs and Trade Facilitation, Sanitary and Phyto-sanitary Measures, Technical Barriers to Trade, Good Regulatory Practices, and Trade Remedies. For more information on the purpose of each of these chapters, please see Annex F.

Broadly, the purpose of goods-related chapters is to benefit Canadian exporters, producers and consumers by eliminating trade restrictions and establishing clear and predictable rules for trade in goods across all sectors of the economy, including manufactured goods, agricultural, agri-food, fish and seafood, forestry products and industrial goods. The chapters aim to facilitate trade in goods and cover areas such as tariff and non-tariff barriers and trade facilitation measures. Trade between Canada and the U.K. is currently subject to the obligations in the TCA. The TCA retains the elimination of 98% of tariffs on Canadian exports to the U.K. on entry into force, and the elimination of an additional 1% of tariffs on Canadian exports to the U.K. by January 1, 2024, when the TCA is fully implemented—which will bring the elimination of tariffs on Canadian exports to 99%.

SMEs, because of their size, stand to benefit more from such a cost reduction on a relative basis as fixed costs account for a higher proportion of their expenditures as compared to large enterprises. Businesses owned by women, Indigenous peoples and members of other underrepresented groups stand to benefit to a greater extent as those businesses tend to be smaller in size and may not have the same resources as larger firms to address challenges when operating across borders.

The GBA Plus also found that there are opportunities to seek a gender-responsive and inclusive trade provision in at least one chapter in this group, but we need to have a willing partner to secure a negotiated outcome. Canada is considering how to improve gender responsiveness in the area of Technical Barriers to Trade obligations. Both Canada and the U.K. are signatories of the UNECE Declaration on Gender Responsive Standards, indicating a common understanding for the need to address gender in standardization. Increased cooperation on standards through the TBT Chapter may lead to mutually positive outcomes for both Parties.

In summary, the chapters in Group 1 should result in positive effects for women, Indigenous peoples and other under-represented groups in the Canadian economy—as workers, business owners and producers as well as consumers.

Group 2: Services, investment and government procurement

The second group of chapters includes Cross Border Trade in Services (CBTS), Development of Administration of Measures (DAM), Temporary Entry (TE), Telecommunications, Electronic Commerce, Financial Services, Investment, State-Owned Enterprises, Competition Policy, Intellectual Property (IP), Science, Technology and Innovation (ST&I), and Government Procurement (GP). For more information on the purpose of each of these chapters, please see Annex F.

Broadly, the purpose of these chapters is to help Canadian suppliers, services providers and investors secure market access and to ensure that the regulatory systems of the Parties are predictable and transparent. These chapters, particularly those relating to IP, CBTS and TE, also serve to advance the knowledge economy, which is dependent on services, particularly scientific and technical services and other professional services. In addition, the GP chapter seeks assurances that procuring entities from Canada and the UK will treat goods, services and suppliers of the other party in the same manner as domestic goods, services and suppliers.

In general, these chapters are expected to have benefits for SMEs and business owners from under-represented groups as they enhance the predictability and security of existing market access into the U.K. market. In addition, these chapters should provide for improved access to information for companies doing business across borders. This is especially valuable for SMEs, including those owned by women and other under-represented groups that may be limited in their ability to gather the information they need to grow their businesses internationally.

The findings of the initial GBA Plus conducted on these chapters revealed opportunities to pursue gender-responsive and inclusive provisions, pending a willing partner to secure these negotiated outcomes. For example:

Group 3: Inclusive trade

The third group of Chapters or provisions includes Environment, Labour, Trade and Gender, Trade and Indigenous Peoples, Small and Medium-sized Enterprises (SMEs). For more information on the purpose of each of these chapters, please see Annex F.

The chapters in this group are also expected to integrate gender-responsive and inclusive provisions, which are expected to benefit under-represented groups in particular.

Environment chapter: Canada would seek to ensure that the Environment chapter reflects Canada's recent FTAs with respect to GBA Plus related provisions to recognize that positive environmental outcomes for under-represented groups, such as women and Indigenous peoples, are key to ensuring sustainability, equality, and high levels of environmental protection. In Canada, improved environmental protection from environment chapters in FTAs, complemented by anti-discrimination provisions in labour chapters, could improve the level of participation and conditions of both women and Indigenous peoples within sectors such as clean technology, sustainable energy, forestry and agriculture, fisheries, and environmental goods and services (EGS).

Labour chapter: The GBA Plus analysis findings reveal that women and other vulnerable groups in the workplace—including migrant workers and LGBTQ2+ individuals—encountered challenges related to the gender wage gap; discrimination on the basis of gender identity and expression; sexual orientation; and gender-based harassment, bullying and violence. Canada's recent FTA labour chapters generally contain comprehensive commitments, including the elimination of gender-based discrimination (e.g., CUSMA Article 23.9), more explicit provisions against forced or compulsory labour (e.g., CPTPP Article 19.6, CUSMA Article 23.6), and a commitment to ratify and implement ILO fundamental conventions. There is an opportunity to include inclusive and ambitious labour obligations, pending a willing partner in the U.K. to secure these negotiated outcomes.

Gender, SMEs and Indigenous Peoples chapters: Canada's newer inclusive trade chapters for Trade and Gender, SMEs, and Trade and Indigenous Peoples are cooperation-based and all have the objective of advancing gender equality, women's economic empowerment and inclusivity at their heart. These chapters are consistent with and advance Canada's inclusive approach to trade, which seeks to ensure that the benefits and opportunities from trade are more widely shared, including among traditionally under-represented groups in the economy and trade, such as women, SMEs and Indigenous peoples, and others such as persons with disabilities, youth, LGBTQ2+ persons, and newcomers to Canada.

Canada has achieved Trade and Gender chapters with Chile and Israel, as well as a Trade and Gender Recommendation with the European Union (EU) under the CETA. Canada continues to pursue dedicated provisions on trade and gender in ongoing negotiations, including with Indonesia, Mercosur and Pacific Alliance. The Trade and Gender chapter:

Canada has also achieved SME chapters in its FTAs with Israel (CIFTA), CPTPP, CUSMA, and an SME Recommendation with the EU under CETA. Canada continues to pursue dedicated provisions on SMEs in ongoing negotiations, including with Indonesia, Mercosur and Pacific Alliance. The SME chapter:

Canada is pursuing a Trade and Indigenous Peoples chapter in a bilateral agreement with the U.K. Provisions on Trade and Indigenous Peoples do not seek to create any new rights for Indigenous peoples, but rather acknowledge and recognize the unique barriers and challenges that Indigenous peoples face when seeking to participate in or benefit from international trade. A chapter or provisions would seek to commit the Parties to:

The Trade and Indigenous Chapter that Canada would seek with the U.K. would also seek to build on the innovative elements achieved in the new international Indigenous Peoples Economic and Trade Cooperation Arrangement (IPETCA) that Canada endorsed in December 2021 and which includes the participation at this time of Australia, New Zealand and Taiwan. IPETCA entered into effect on March 23, 2022.

The GBA Plus conducted on these chapters identified many barriers that women and other under-represented groups encounter when seeking to share in the benefits and opportunities of trade, including: less access to financing (including trade financing and venture capital); unequal responsibility for unpaid care work; limited access to networks, mentors and global-value chains; lack of digital and other skills and supportive infrastructure; and explicit, as well as implicit, discrimination. Therefore, new provisions in each of these chapters will be sought to address these barriers to the extent possible, including in a proposed co-operation activities article that will provide a non-exhaustive and illustrative list of activities for governments to implement, in partnership with stakeholders such as business and experts. A positive outcome on these efforts will depend on a willing negotiating partner.

In summary, the chapters or provisions in Group 3 should result in improved participation in the economy and access to the benefits of trade for women, Indigenous peoples, MSMEs, and other under-represented groups in the Canadian economy.

Group 4: Institutional and Dispute Settlement Chapters

Chapters included in the fourth group are the Preamble, the five institutional chapters (Initial Provisions and General Definitions; Institutional and Administrative Provisions; Exceptions and General Provisions; Final provisions), Transparency, Anti-Corruption, Corporate Social Responsibility (CSR) and Responsible Business Conduct (RBC), and the Dispute Settlement chapter. For more information on the purpose of each of these chapters, please see Annex F.

The GBA Plus conducted on the Dispute Settlement chapter found that there is a lack of gender parity and diversity among panelists in international trade dispute settlement proceedings. In line with the Government of Canada's inclusive approach to trade, Canada is working to address the lack of gender parity and diversity among panelists in international dispute settlement proceedings. At the WTO, Canada adheres to a policy on the selection of woman panelists in an effort to ensure that at least one woman panelist is selected during the panel composition process in WTO disputes involving Canada; the goal is to improve the gender balance of panels adjudicating these disputes. This policy is also being applied to State-to-State dispute settlement proceedings under Canada's FTAs. For this reason, in the context of the Canada-U.K. FTA negotiations, Canada has developed an inclusivity and gender-responsive provision that would require the Parties to make efforts to increase diversity in panel appointments generally and specifically through the increased representation of women. The promotion of greater diversity on panels would not only take into consideration diversity regarding gender but could also take into account diversity with regard to ethnicity, race, age, and geographic representation, for example.

Although the Preamble and the institutional chapters are largely administrative in nature, a GBA Plus found that there were opportunities to make these chapters more gender responsive and inclusive. For example, provisions could be sought: on gender equality,  on the rights of Indigenous peoples and SMEs in the Preamble that would inform the overall interpretation of the final agreement; to preserve Canada's ability to adopt measures to protect the rights of Indigenous peoples in Canada; and to refer to specific carve-outs for cultural industries under relevant chapters of the agreement to preserve Canada's ability to adopt measures to protect cultural industries (which is an industry that is particularly inclusive of women, Indigenous peoples and youth as workers and entrepreneurs). These provisions, if the U.K. were to agree to them all, would have positive effects on women and other under-represented groups.

In summary, the chapters in Group 4, while mostly administrative in nature, do present opportunities to further enhance and strengthen their gender responsiveness and inclusivity. Therefore, Canada will seek important provisions to that end and work with the U.K. to ensure that they recognize the value of these provisions and can agree to them.

Indigenous focus

The United Nations Declaration on the Rights of Indigenous Peoples (the "Declaration") affirms the human rights of Indigenous peoples and provides a road map to advance reconciliation, including economic reconciliation. Canada fully endorsed the Declaration in 2016. On June 21, 2021, United Nations Declaration on the Rights of Indigenous Peoples Act received Royal Assent and immediately came into force. The Act creates a lasting framework to advance the implementation of the Declaration at the federal level.  In keeping with the Act, the Government of Canada will work in cooperation with Indigenous peoples to take measures necessary to ensure federal laws are consistent with the Declaration, and to develop an action plan to achieve the objectives of the Declaration. 

Additionally, Global Affairs Canada is committed to working in partnership with Indigenous peoples, including through its trade-focused Indigenous Working Group, to enhance the ability of Indigenous peoples and Indigenous businesses to benefit from the opportunities created by international trade and investment.

Canada's inclusive approach to trade seeks to ensure that Indigenous peoples can benefit from the opportunities that flow from international trade and investment. Canada's approach recognizes the deep historical and cultural connections that trade has for Indigenous peoples, and the important role it plays in support of their economic empowerment and development. Canada acknowledges the unique barriers and challenges that Indigenous businesses face when seeking to participate in and benefit from international trade. In developing provisions for a Canada-United Kingdom FTA, Canada will look for ways to help address these issues.

For example:

  • In the Investment chapter, Canada will seek to put forward elements of its new model Foreign Investment Promotion and Protection Agreement (FIPA), including inclusive trade elements, in negotiations with the United Kingdom. These provisions aim, among other things, to ensure that Indigenous peoples will be able to benefit from the agreement, and that each party will encourage investors or enterprises operating within its territory to meaningfully engage with Indigenous peoples. Canada will also seek a reservation that would allow the government to adopt or maintain measures that confer rights or preferences to Indigenous peoples.
  • In the Government Procurement chapter, Canada will seek to maintain its flexibility to carry out set-aside programs, such as the Procurement Strategy for Indigenous Business, and to fulfil its constitutionally protected legal obligations under Comprehensive Land Claims Agreements (CLCAs) by excluding any measures adopted or maintained with respect to Indigenous peoples.
  • In the Environment chapter, Canada typically seeks to exclude Indigenous harvesting of natural resources from the definition of environmental laws to reflect the constitutionally protected rights of Indigenous peoples. Canada's approach also encourages parties to recognize the importance of traditional knowledge of Indigenous peoples, which contributes to the conservation and sustainable use of biological diversity. The Environment chapter also typically seeks to ensure that the parties acknowledge the importance of the marine fisheries and sustainable forest management on the development and livelihood of communities, including Indigenous peoples and their communities. These provisions are based on the recognition that positive environmental outcomes for Indigenous peoples are key to ensuring sustainability, equality, and high levels of environmental protection.
  • In the Intellectual Property (IP) chapter, Canada wants to increase IP awareness and understanding, namely by increasing access to information, particularly in regard to options for using IP protection in respect of traditional knowledge and traditional cultural expressions of Indigenous peoples. In this regard, the IP Chapter could seek to foster cooperation between the Parties in respect of IP education and public awareness programs, particularly with respect to under-represented groups.

The inclusive trade chapters are also expected to benefit Indigenous peoples:

  • In a Trade and Gender chapter, Canada will aim to enhance the ability of Indigenous women-owned businesses to fully access and benefit from the opportunities created by a Canada-United Kingdom FTA.  
  • In an SME chapter, Canada will propose a provision that calls on parties to strengthen their collaboration on activities to promote SMEs owned by Indigenous peoples. This includes committing parties to make information on trading opportunities and entrepreneurship education programs accessible to Indigenous peoples.
  • In a Trade and Indigenous Peoples chapter, Canada will seek to acknowledge the importance of enhancing the ability of Indigenous peoples and Indigenous businesses to benefit from the opportunities created by international trade and to reaffirm important existing Indigenous-specific international instruments, such as the United Nations Declaration on the Rights of Indigenous Peoples (UN Declaration) and the Sustainable Development Goals (SDGs) of the United Nations 2030 Agenda. Canada will also seek to advance cooperation activities to identify and remove barriers to Indigenous economic development and participation in trade and investment.

Institutional Chapters

  • Preamble: The preamble will provide Canada an opportunity to reflect a shared understanding of the indirect and direct effects, as well as opportunities, that a bilateral trade agreement may have on Indigenous peoples.
  • Exceptions and General Provisions: Canada would propose an Indigenous Peoples Rights Exception. The objective of the proposal would be to provide greater certainty that the future bilateral trade agreement will not prevent Canada from adopting or maintaining measures to fulfill Aboriginal or treaty rights. This exception would be to preserve Canada's flexibility to protect the rights of Aboriginal peoples as noted in section 35 of the Constitution.
  • Responsible Business Conduct (RBC): Canada will seek provisions to encourage enterprises to incorporate internationally recognized RBC principles and standards into their business practices. These provisions would promote the rights and protection of Indigenous peoples, among other issues.

By conducting a GBA Plus on a Canada-United Kingdom FTA, Canada can help ensure Indigenous peoples' economic empowerment and participation in trade. Canada will seek provisions to spotlight trade and Indigenous peoples' issues internationally, helping to achieve an inclusive free trade agreement with the United Kingdom, and advancing inclusive growth in Canada.

Domestic laws, policies, programs

Canada recognizes that domestic and trade policies need to be coherent and complementary. Canada has many domestic laws, policies and programs already in place to support gender equality and economic empowerment for traditionally under-represented groups. These laws, policies and programs will serve to mitigate any potential negative effects of FTAs, including a potential Canada-UK FTA. Similarly, positive opportunities granted by FTAs can be leveraged by these existing programs and policies. More information on Canada's domestic gender equality laws can be found at the following link: Federal gender equality laws in Canada (international.gc.ca).

Women's Economic Empowerment Programming in Canada

Canada's Trade Commissioner Service (TCS), part of Global Affairs Canada, organizes and executes women-focused business delegations and trade missions to new markets and prominent global trade shows and events, including those focused on providing opportunities for women-owned businesses through supplier diversity programs.

The Government of Canada's Women Entrepreneurship Strategy (WES) is more than $6 billion investment aimed at increasing women-owned businesses' access to the financing, talent, networks and expertise they need to start up, scale up, and reach new markets. Under the WES, and through its over 20-year-old Business Women in International Trade (BWIT) initiative, the TCS received an additional $2 million per year to enhance export support services to women entrepreneurs. This funding helped establish a cadre of officers at TCS regional offices whose role is to support women-owned and women-led businesses.

The TCS network of offices in over 160 locations around the world, and six Regional Offices across Canada, helps Canadian companies including underrepresented groups (women, Indigenous Peoples, visible minorities, youth and members of the LGBTQ2+ community) navigate the complexities of international markets, and make better business decisions for their international expansion.

The TCS' CanExport program provides financial support to Canadian SMEs, innovators, associations and communities to help them diversify exports and expand their international footprint. In line with Canada's Export Diversification Strategy, the CanExport program seeks not only to diversify where Canada exports, but also to achieve trade that is more inclusive for all Canadians. To this end, CanExport's new dedicated Concierge Service for women and Indigenous entrepreneurs encourages applicants from those under-represented groups in international trade to access its funding. The TCS Regional Offices deliver the Concierge Service by providing application guidance in an effort to make the CanExport program more accessible. CanExport also provides special considerations during the assessment of proposals to applicants from underrepresented groups in international trade (women, Indigenous peoples, visible minorities, LGBTQ2+ and youth).

Canadian companies that work with the TCS earn 19.8% more in value, export to 24.8% more markets, and export 11.2% more product varieties than companies that don't work with the TCS.

The TCS is committed to offering business opportunities to underrepresented exporters, including women entrepreneurs, through funding and support programs that support their growth in global markets, and including through Canada's suite of 15 ratified FTAs with 49 countries. FTAs ratified by Canada connect Canadian businesses to 1.5 billion of customers worldwide and provide them with preferred access to diverse markets all over the world.

Conclusion

The Government of Canada has made the achievement of gender equality and supporting the empowerment of women and girls a priority for domestic and international policies, including trade policies. Furthermore, Government of Canada is committed to the advancement of an inclusive approach to trade, which seeks to ensure that the benefits and opportunities resulting from FTAs are more widely shared, including among SMEs, and under-represented groups in Canada's economy and trade, such as women, Indigenous peoples, visible minorities, LGBTQ2+ and youth. Conducting a GBA Plus of all policies and programs is an important tool to help deliver on these goals. It is important to recognize, however, that all FTAs are a negotiated outcome and Canada may not achieve all of its goals in the negotiation of an FTA with the U.K., including goals that benefit women and diverse populations in Canada.

The initial GBA Plus demonstrates that while not all chapters of a Canada-U.K. FTA may not have direct impacts on improving inclusive outcomes, there are clear opportunities in other areas of the Agreement to increase gender-related benefits. For example, the sought outcomes in the environment and labour chapters and the addition of chapters and obligations on trade and gender, SMEs and trade and Indigenous peoples could improve the level of participation in trade and employment conditions for women, Indigenous peoples and other traditionally under-represented groups. In order to achieve these results, it will be important for the cooperation activities geared to advancing gender equality, women's economic empowerment and inclusivity be implemented effectively with demonstrated value-added and positive results over time.

There are limitations of applying GBA Plus to FTA negotiations that are important to recognize as well. For example, trade policy may not have the solution for all GBA Plus findings. In some cases, gaps and barriers identified by the GBA Plus are related to domestic policies and regulations that need to be addressed through other government mechanisms.

Applying the GBA Plus process to the negotiations of an FTA offers the opportunity to reflect on past practices and identify where a more inclusive lens can be applied to specific measures and provisions. The GBA Plus exercise offers a tool to ensure a more gender-responsive and inclusive agreement is reached.

Next steps

Following publication of the Summary of the Initial GBA Plus for negotiations for a Bilateral Free-Trade Agreement with the U.K., Global Affairs Canada will undertake these next steps:

  1. Receive stakeholder feedback on this summary of the initial GBA Plus until October 5, 2022. Stakeholders can provide comments on questions below or any other issue. Stakeholders are invited to submit their comments online via email to consultations@international.gc.ca.
  2. Publish a What We Heard Report in the stakeholder consultations on this summary of the initial GBA Plus of the Canada-UK FTA negotiations.
  3. Inform trade negotiators of comments received and integrate comments into the GBA Plus to inform ongoing negotiations.
  4. Officials will continue to update and renew the GBA Plus of each chapter as negotiations proceed and as new data and evidence come to light.

Once the FTA negotiations are concluded and a Canada-U.K. FTA is signed, Global Affairs Canada will conduct the final GBA Plus on the agreement and publish a summary online to inform how any risks or opportunities will be addressed in domestic policy responses or activities implemented by committees established under the trade agreement.

Questions for stakeholders

  1. Based on the summary of the initial GBA Plus, what gaps do you see in the analysis and what risks does this pose?
  2. What other provisions could be included in a bilateral agreement with the U.K. in order to advance gender and diversity-related issues?
  3. From your point of view, what are the effects and opportunities for under-represented groups in Canada of the proposed agreement?
  4. Are there unintended negative effects of trade due to a bilateral FTA with the U.K. on women or other vulnerable groups that you would like to highlight? In your view, what can be done to promote further positive effects and what could be done to help mitigate negative effects?

Annex A – Background on GBA Plus

GBA Plus is an analytical process used by the Government of Canada to support the development of responsive and inclusive initiatives. It provides a systematic process for understanding who is impacted by the issues we seek to address and serves to inform government actions so they better address diverse needs and help to eliminate barriers that limit the benefits derived from initiatives.  GBA Plus is based on the idea that greater equality is a goal to achieve across government decision-making and actions. It involves considering factors related to biological (sex) and socio-cultural (gender) in addition to other factors related to age, disability, education, ethnicity, economic status, geography, language, race, religion, sexual orientation, etc. It leads to a better understanding on how identity factors intersect with one another as well as with various systems of inequality and discrimination.

GBA Plus helps challenge assumptions and puts the lived experiences of diverse peoples at the forefront of decision-making. It does this by prompting reflection on potential differential impacts or barriers and by informing the design and implementation of initiatives so that they tackle inequalities.  GBA Plus is about putting people at the heart of decision-making and ensuring that government actions do not exacerbate or perpetuate inequalities.

To learn more about GBA Plus, Women and Gender Equality Canada provides a free online course and several short videos.

GBA Plus in trade agreements

When GBA Plus is applied to trade agreements, it provides evidence and insights that can help inform negotiators and policymakers of the best ways to address gender and inclusivity considerations. This can help in the identification of potential risks and opportunities created through the application of an FTA. The end goal is to mitigate potentially negative impacts, enhance positive opportunities, and to ensure that all Canadians benefit from trade.  Essentially, GBA Plus helps develop more gender- and inclusivity-responsive trade policies and related measures.  GBA Plus is changing the way we do trade policy in Canada.

A critical factor in conducting a quality GBA Plus is collecting and assessing disaggregated data. This data provides the evidence-base for understanding the effects of policies, including trade policies, on population groups. For Canada, data comes from Statistics Canada's Census, Labour Force Survey and other surveys such as Women in Canada, as well as through stakeholder consultations. Global Affairs Canada's Office of the Chief Economist uses this data for economic models that help highlight the effects of FTAs on gender and other sub-groups in the population.

GBA Plus increases attention to the diversity and multiplicity of identity and social factors that intersect and contribute to shaping how diverse groups of Canadians are impacted by government initiatives, including trade agreements. GBA Plus puts people at the heart of policy development and helps deliver on innovation as it encourages officials to think outside of the box. GBA Plus will help ensure that Canada's FTAs are more gender responsive and inclusive so all members of Canadian society can reap the benefits of free trade and continued economic growth.

GBA Plus will also help Canada deliver on the United Nations 2030 Agenda for Sustainable Development Goals, including Goal 5 on gender equality.

Annex B – Background on Canada's inclusive approach to trade

As part of the Government of Canada's trade diversification strategy, we are pursuing an inclusive approach to trade that seeks to ensure that more Canadians have access to the benefits and opportunities that flow from international trade and investment. This includes those Canadians who have traditionally been underrepresented in international trade and investment, including women, small and medium-sized enterprises (SMEs) and Indigenous peoples. This means seeking trade policies that are sustainable, transparent and inclusive.

Why is an inclusive approach to trade important?

Trade liberalization has been a significant stimulus to economic growth and prosperity around the world, including in Canada. However, the Government of Canada is aware that criticism of international trade and globalization has led to protectionist movements and a retreat from the international rules-based order, a system that has provided unparalleled prosperity to Canada and others for decades.

In response, we are committed to creating opportunities for more Canadians to engage in and benefit from trade, while at the same time advancing broader economic, social, labour and environmental priorities.

We have also talked to a diverse range of Canadians to hear their views on trade.

Although, overall, Canadians support trade, many have also expressed concerns. Some of these include:

Responding to global concerns, as well as to input received from Canadians through our consultations, we continue to work on making trade accessible and beneficial to more Canadians. Our approach reflects and promotes domestic and international policy priorities that support economic growth that benefits everyone and maintains confidence in an open, rules-based trading system.

How we're making sure our trade and investment agreements benefit everyone

The government's efforts to date can be divided into three areas:

1) Putting more Canadians at the heart of our trade policy-making agenda

To better align Canadian trade policy priorities with the interests of all Canadians, we are:

2) Expanding access to the benefits of trade for more Canadians through inclusive trade content in trade agreements

To date, we have:

3) Working with our international partners:

Annex C – List of other government departments, agencies, or crown corporations that lead, co-lead or provide support to Global Affairs Canada on FTA negotiations with the U.K.

With the support of:

Annex D – Questions to guide GBA Plus of trade negotiations

Below is a list of questions designed to aid trade negotiators in conducting GBA Plus to assess the effects and opportunities on people in Canada of the Canada-U.K. FTA trade negotiations throughout the negotiating process.  

A key first step in analysis is considering what assumptions might influence analysis. For example, assumptions around a trade chapter being gender blind or gender neutral; that all are affected in the same way by the chapter's provisions; that various individuals and groups of women, men and gender-diverse people have equal access to its benefits.  A key first step in GBA Plus is being open-minded and recognizing assumptions that may impede effective analysis as it is generally viewed that no policy or program is absolutely neutral in term of gender and diversity impacts. 

Questions:

  1. What is the purpose of the Chapter?  What are its intended effects?
  2. Is there any evidence of explicit or implicit discrimination against particular groups of people in the chapter?
  3. Are there any gaps in data in identifying differences and inequalities?
  4. Does the Chapter include any provisions that could impact on gender or inclusivity in a positive/intended or negative/unintended way?
  5. What are the top industries/sectors/goods/services that are potentially affected by the Chapter?
  6. What is the level of gender or diversity participation in those sectors across Canada in terms of jobs, business ownership, consumption? (Provide any data or evidence to support your analysis)
  7. What are the potential risks in terms of gender or inclusivity effects? How could you mitigate them in a trade policy provision in the chapter? 
  8. What are the potential opportunities or positive effects of the Chapter in terms of gender or inclusivity effects? How could you realize this opportunity through enhanced provisions in the chapter?
  9. How are you factoring considerations around gender and inclusivity into provisions in the chapter? Consider both direct impacts (e.g., primary industry or regions affected) and indirect impacts (e.g., secondary industries or regions affected).
  10. Does the Chapter include/are you planning to include any specific gender or inclusivity provisions?  If so, what are they? If not, could you consider developing a new innovative inclusive or gender responsive provision to address an issue or a risk that you foresee?
  11. What are the policy options/recommendations that you can develop to advance gender equality and inclusivity outcomes in the Chapter and the FTA?  Would you recommend domestic actions such as the development or redesign of a policy or program potentially lead by another government department?  What are the data gaps that you encountered?

Systems at GAC to support trade negotiators in conducting GBA Plus of FTAs:

The Trade Negotiations Branch at GAC has developed systems to support trade negotiators in conducting GBA Plus of trade agreement chapters.  These include:

Annex E – Background on FTA partner market for Canadian goods, services, and investment

Strengthening trade and investment ties with important markets is key to ensuring inclusive economic recovery and sustainable prosperity for Canadian businesses, workers and families. By pursuing bilateral free trade negotiations with the United Kingdom, the Government of Canada will expand and strengthen trade ties with one of Canada's most important trading partners. In 2021, the U.K. was Canada's third largest individual country trading partner for combined goods and services, behind only the U.S. and China.

Canada and the United Kingdom share a broad and extensive relationship, built on shared history and values and strong economic ties. Following the U.K.'s departure from the European Union (EU) on Jan. 31, 2020, Canada maintained stability and market access for Canadian businesses by concluding an interim Trade Continuity Agreement that substantively replicates the provisions of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). The TCA provides Canadian exporters with continued preferential access to the U.K. market and includes the elimination of 98% of tariffs on Canadian exports to the U.K. (carried over from CETA) on entry into force, and the elimination of an additional 1% of tariffs on Canadian exports to the U.K. by January 1, 2024 which will bring the elimination of tariffs on Canadian exports to 99%. Canada will seek to negotiate a new FTA that preserves Canada's preferential market access currently provided under the TCA and provides additional commercially meaningful market access.

The U.K. is a diverse and sophisticated economy and remains a global hub for firms across a range of sectors, including the headquarters of 22 Fortune Global 500 companies. London is a global center for financial services, presenting opportunities for Canadian capabilities in financial services and related technologies. Canadian education services are also increasingly attractive, and there are opportunities in the U.K.'s green building market due to a stronger focus on higher energy efficiency standards.

Canada has had a merchandise trade surplus with the U.K. since 2007, principally on the strength of resources and commodities exports. Canada's top merchandise exports to the U.K. include metals and minerals, crude oil, machinery and equipment, and aircraft and parts, followed by wood and electronics.

The U.K. is also the second largest destination, after the United States, for Canadian direct investment abroad. The stock of Canadian FDI in the U.K. was valued at $127.7 billion in 2021. Over 55% of Canadian Direct Investment stock in the U.K. is in two sectors: finance and insurance, and information and cultural industries.

Annex F – Background on FTA chapters

Free trade agreements (FTAs) are binding treaties between countries that open markets to businesses by addressing trade barriers, such as tariffs and non-tariff barriers. These agreements:

The term "FTA" may seem to imply complete free trade between countries involved in the agreement; however, FTAs do not automatically eliminate all tariffs (customs duties imposed on imported goods) and other barriers to trade. For example, some products may be free of tariffs and quotas, but others may not be. Tariffs may also be eliminated over a period of time. Beyond tariffs, FTAs seek to prevent and address non-tariff barriers, such as those arising from health, safety, and environmental regulations, while preserving the right to regulate in the public interest.

Many of Canada's FTAs also go beyond trade in goods to cover services. The services sector accounts for 75% of Canadian jobs and 78% of the country's GDP. In addition, over 18% of Canada's total trade is in services, including:

List of FTA chapters

National Treatment and Market Access for Goods – A National Treatment and Market Access for goods (NTMA) chapter establishes clear and predictable rules on a range of issues affecting trade in goods, such as elimination of customs duties and import and export restrictions, among others. The chapter also enshrines the foundational World Trade Organization principle of "national treatment," which ensures that a country treats imported goods no less favourably than it treats domestically produced goods. Tariff schedules, which are often appendices to the NTMA chapter, set out each country's obligations to eliminate customs duties (i.e., tariffs) within specified time frames. Canada's FTAs typically involve elimination of all customs duties, except on a limited number of highly sensitive products.

Trade Remedies – The purpose of the Trade Remedies chapter is to reaffirm WTO rights and obligations for anti-dumping, countervailing and global safeguard measures under the relevant WTO Agreements.

Rules of Origin – The Rules of Origin provisions set out the general requirements under which a good may be considered originating in the territory of the Parties to the Agreement and therefore eligible for preferential tariff treatment. These provisions are intended to benefit Canadian importers, exporters, producers and consumers by establishing a predictable rules-based environment for trade in goods. The economic impact of these provisions is dependent on the extent to which market access increases as a result of tariff reduction.

Origin Procedures – The Origin Procedures provisions establish the procedures used to administer the rules of origin and set out obligations for importers, exporters, and the customs authorities. The procedures clarify the processes and obligations required for importers and exporters to take advantage of the reduced or free rates of duty and provide the customs authorities with an applicable methodology to ensure that only qualifying goods receive preferential tariff treatment under the FTA. Furthermore, one of Canada's main objectives is to ensure that the rules of origin are administered in a fair and transparent manner by the customs administrations and provide the trade community a facilitative means in which to take advantage of the preferential tariff treatment afforded under the FTA.

Customs and Trade Facilitation – The Customs and Trade Facilitation chapter seeks to facilitate the movement of Canadian exports into FTA Partner markets by establishing obligations that seek to modernize, simplify and standardize trade-related customs procedures, while safeguarding and providing certainty around Canada's ability to administer or introduce new measures that ensure or enhance trader compliance with Canada's trade-related laws, regulations or procedural requirements. Such measures include those that seek to ensure the safety and security of Canada and its citizens through the proper reporting and accounting declaration of goods and payment of duties, taxes, fees and charges by traders.

Sanitary and Phytosanitary Measures – The Sanitary and Phyto-sanitary (SPS) Measures provisions maintain each party's right to take measures necessary to protect against risks to food safety, human, animal or plant life or health, while ensuring that such measures are science-based, transparent and do not create unnecessary and unjustifiable SPS trade restrictions.

Technical Barriers to Trade – The Technical Barriers to Trade (TBT) chapter builds on the existing WTO World Trade Organization Technical Barriers to Trade Agreement's provisions in the areas of transparency, conformity assessment, and joint cooperation. A TBT is a non-tariff barrier to trade - such as a technical regulation, standard or conformity assessment procedure - that sets out specific technical or other requirements for products to be exported or imported to a certain country. Examples of Technical Barriers to Trade include testing or certification procedures. 

Regulatory Cooperation and Good Regulatory Practices – The focus of this chapter is to promote enhanced transparency and good regulatory practices, with a view to improving governance and predictability while taking into account the legitimate policy objectives of each country. The Chapter includes commitments on mechanisms to facilitate inter-agency coordination; obligations involving the implementation of good regulatory practices (such as conducting GBA Plus on regulations, as mandated by Treasury Board Secretary directive); and obligations concerning cooperation with other parties and interested persons of other parties.

Investment – The Investment provisions protect investors from discriminatory or arbitrary treatment in their host country.

Cross-border Trade in Services – The Cross-Border Trade in Services provisions set out the rules regarding the treatment of service suppliers in partner countries.

Development and Administration of Measures / Domestic Regulation – Builds on the recently concluded WTO Joint Statement Initiative on Services Domestic Regulation and sets out disciplines on measures related to an authorization to supply a service.

Financial Services – The Financial Services (FS) chapter provides protections for investments in financial institutions, establishes a framework for regulatory transparency and includes a dispute settlement framework tailored to the financial sector. The scope of the FS chapter only applies to measures relating to: financial institutions; investors and investments in financial institutions: and cross border trade in financial services.

Temporary Entry for Business Persons – Describes the labour mobility provisions that support the facilitated movement of highly skilled business persons between partner countries.

Telecommunications – The Telecommunications provisions enhance regulatory certainty for telecommunications service suppliers.

Digital Trade (Electronic Commerce) – These provisions help facilitate the use of e-commerce by consumers and businesses, in recognition of the growing digitalization of trade and its impact on the economy.

Intellectual Property – The Intellectual Property (IP) provisions include standards for the protection and enforcement of IP rights to which each Party's national laws must conform.

Government Procurement – The Government Procurement provisions help to ensure that suppliers of goods, services and construction services are treated in an open, transparent and non-discriminatory manner when competing for government procurement opportunities in partner markets.

Competition policy – The purpose of the Competition Policy chapter is to promote open and competitive markets, and help ensure that the benefits of trade liberalization are not offset by anti-competitive business conduct. The proposed competition policy provisions require that the parties adopt or maintain measures to proscribe anti-competitive business conduct, and include specific commitments for transparency and procedural fairness.

State-owned Enterprises and Designated Monopolies – These provisions seek to ensure that private firms can fairly compete with enterprises owned or controlled by a government. Such provisions ensure that state-owned enterprises act in accordance with commercial considerations, except when performing a public mandate.

Labour – The Labour provisions commit parties to effectively enforce their domestic labour laws which should in turn embody and provide protection  for internationally recognized labour rights and principles, including those set out in the International Labour Organization's Fundamental Conventions.

Environment – The Environment provisions ensure that parties effectively enforce their environmental laws and do not lower environmental standards to promote trade or attract investment. It also includes commitments that support efforts to address global environmental challenges, such as climate change, conservation of biological diversity, illegal wildlife trade and fishing, invasive alien species, and promoting trade in environmental goods and services.

Science, Technology and Innovation – The Science, Technology and Innovation chapter includes disciplines to facilitate cooperation, trade, and investment in areas related to commercial science, technology and innovation activities.

Small and Medium-sized Enterprises – Small and Medium-sized Enterprises provisions support the growth and development of micro, small and medium-sized enterprises by enhancing their ability to participate in and benefit from the opportunities created by an FTA, through identifying and removing barriers to participation, and facilitating cooperation activities and information sharing.

Trade and Gender – The main objective of the Trade and Gender chapter is to advance women's economic empowerment and gender equality by removing barriers to participation in trade. It also facilitates cooperation activities and information sharing.

Trade and Indigenous Peoples – The Trade and Indigenous Peoples provisions seek to remove barriers to participation in trade and enhance the ability of Indigenous peoples and businesses to benefit from the opportunities created by an FTA. The chapter also facilitates cooperation activities and information sharing.

Dispute Settlement – The Dispute Settlement provides for fair, transparent, efficient and effectives means of resolving disputes relating to the agreement that arise between the Parties, including consultations and compulsory and binding dispute settlement.

Institutional Chapters

  1. Preamble – The preamble is not a chapter, but an introduction on the purpose of the Free Trade Agreement (FTA). The preamble reflects the intentions of the parties and the scope of the FTA and has interpretive value should a dispute arise.
  2. Initial Provisions and General Definitions – The first part of the Initial Provisions and General Definitions chapter explains how the FTA respects WTO commitments and how it links with existing agreements.  The second part includes definitions of terms used in more than one chapter.
  3. Transparency and Anti Corruption – Facilitates a transparent and predictable environment for trade and investment by promoting transparency and anti-corruption.
  4. Responsible Business Conduct (RBC) – includes dedicated provisions to encourage parties to encourage enterprises to uptake and implement RBC in their business practices informed by and complementary to existing global RBC standards.
  5. Administrative and Institutional Provisions – This chapter establishes the structure of the bodies that will be charged with the governance and the implementation of the FTA.
  6. Exceptions and General Provisions – The Exceptions and General Provisions chapter includes exceptions of which some may be applicable to the entire agreement while others only apply to certain chapters. Exceptions are designed to ensure Parties maintain the right to take action in the public interest.
  7. Final Provisions – This chapter provides the legal language needed to bring the FTA into force. It also includes provisions for amendments to the text and process for termination, should one of the Parties wish to withdraw from the agreement.  

Annex G – Background on the Trade and Gender Nexus

Trade liberalization has been a significant stimulus to economic growth and prosperity around the world, including in Canada. However, trade affects people differently, based on a wide range of factors, including gender. In this context, the link between trade and gender is an important issue for trade policy-makers to consider as they negotiate free trade agreements (FTAs).

Incorporating gender perspectives into macroeconomic policy, including trade policy, is key to pursuing inclusive and sustainable economic development and to achieving outcomes that are fairer and more beneficial for all. Studies have shown that women-owned businesses contribute $150 billion to the Canadian economy and employ over 1.5 million peopleFootnote 2. Advancing women's equality in Canada could add $150 billion to the GDP by 2026 Footnote 3. To ensure that the benefits of free trade can be maximized and widely shared, it is important, therefore, for Canada to consider gender-related issues when developing trade policy and negotiating FTAs.

Canada's approach to trade and gender is also consistent with the Government of Canada's broader commitment to advancing gender equality and women's economic empowerment and complements its efforts to advance gender equality both at home and abroad.

Trade and gender and the impact on workers

Trade can impact women and men differently, whether as workers or entrepreneurs or, more generally, as members of society.

For example, in Canada, women are overrepresented in lower-growth and lower-wage industries, such as retail trade, and in non-tradeable services, such as accommodation and food services. In comparison, men dominate highly traded sectors, such as manufacturing and resource extraction.

Women, in contrast, account for a larger share of the workforce in service and knowledge-based sectors, such as financial services, e-commerce and telecommunications, which are expanding and in which Canada has a comparative advantage.

Therefore, trade policies can have different effects on women and men as workers, depending on the sector in which they are employed and whether that sector is likely to expand or contract as a result of an FTA. Because of this, trade policies need to take gender-related factors into account during FTA assessments and negotiations to understand the risks and opportunities on particular demographics in the economy.

Trade and gender and the impact on business owners

In terms of representation in international trade, Canadian women are under-represented: in 2019, woman-owned SMEs represented less than one in six businesses (16%) and represented only 11% of exporting SMEs. While woman entrepreneurs are typically more educated than their male counterparts, businesses owned by women tend to be smaller than businesses owned by men and operate in sectors with low export intensity. Although the difference varies by industry, according to the Business Development Bank of Canada (BDC), women-owned SMEs participate less in export-intensive industries even though they have more management experience than men-owned SMEs.

Research has identified the following likely primary factors explaining female under-participation in exporting:

Increasing the number of women-owned business exporters is important for a variety of reasons. Evidence shows that SMEs that export, compared to those that don't, have the following important characteristics:

Therefore, increasing the number of women-owned SMEs that export has important socio-economic benefits for both society in general and the businesses themselves.

Trade and gender and the impact beyond workers and businesses

In addition to having effects on women as workers and as business owners, free trade can impact women in other ways, as members of society.

For instance, trade can impact women and men differently as consumers, particularly with regard to changes in the prices of imported goods. As women typically earn less than men, the reduction in the prices of goods could have, in relative terms, a more positive impact on their lives than on the lives of men in equivalent circumstances, by freeing up a higher percentage of their disposable incomes.

Given that FTAs reduce tariffs on imported products, government revenues may be negatively impacted, which could lead to reductions in government-funded services and programs. This is particularly the case in emerging markets, where the share of government revenue that comes from tariffs can be larger than in more open economies and could affect women more than men because, evidence suggests, women benefit more from these services.

At the same time, however, FTAs also increase economic prosperity and GDP through business development and expansion, job creation and increased exports. Therefore, what governments lose in revenue as the result of FTA tariff reductions may be counterbalanced by increases in tax revenue. 

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