Canada WT/TPR/S/179/Rev.1 
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IV. TRADE POLICIES BY SECTOR 
(1) OVERVIEW  
1. Canada is a highly competitive producer of many agricultural commodities, and among the 
world's largest exporters of agri-food products.  As measured by the OECD, overall government 
support has increased since Canada's last Review in 2003, mainly due to increased ad hoc payments 
linked to sanitary and weather problems.  However,  support remains below the OECD average, and is 
less trade distorting than in most other OECD countries.  Moreover, the Agricultural Policy 
Framework, introduced in 2003 to position Canada as  the world leader in food safety and quality, 
innovation, and environmentally responsible agriculture  production, is being re developed to make it 
more responsive and to provide a foundation for profitability throughout the sector. 
2. Canada provides significant assistance to s upply-managed products (which cover dairy 
products, chicken, turkey, eggs, and broiler hatc hing eggs), including through the use of high out-of-
quota tariffs (frequently exceeding 200%).  In-quota vol umes are, in some cases, small, reserved to 
certain countries, or available to prefer ential partners at reduced tariff rates. 
3. In some provinces, agricultural producer boards regulate the marketing of certain agricultural 
products, including by setting prices.  The Canadian Wheat Board (CWB), a state-trading enterprise, 
has a monopoly on sales for export and for domes tic human consumption of wheat and barley 
produced in Western Canada.  A task force establishe d by the Minister of Agriculture and Agri-Food 
and Minister for the CWB recommended a staged elimination of the CWB's monopoly.  During the 
review period, Canada adopted legislative amendmen ts to comply with a WTO panel decision on the 
WTO compatibility of two measures affecting grain im ports.  Canada also reached a mutually agreed 
solution with two WTO Members in disputes relating to Canada's export subsidies for dairy products. 
4. Canada is a major producer and exporter of mi nerals and energy.  Mining and energy have 
attracted substantial investment during the peri od under review, in large part due to increased 
commodity prices.  The industry, both at the mi ning and processing levels has benefited from fiscal 
incentives offered both by federal and provincial gov ernments.  In several provinces and territories, 
tax incentives are available only for processing minera ls originating in mines located within the 
respective province or territory.  Mining in Canada is subject to government approval, which in some 
cases may be linked to the use of local labour, goods, and services.  Foreign investment restrictions 
remain in uranium mining.  Provincial governments pl ay a predominant role in the electricity sector.  
In most provinces, provincial crown corporations pr ovide most of the generation, transmission, and 
distribution of energy, while in some, reta il and wholesale competition has been introduced. 
5. Ontario and Quebec are the main centres of ma nufacturing activity in Canada.  Both the 
Federal Government and some provi nces have continued to provide or  have introduced strategies or 
incentives to assist certain sectors over the review period.  These include assistance to the aircraft, 
textiles, shipbuilding, and automo tive sectors.  However, the manufacturing sector has continued to 
lose importance in terms of its relative contributio n to value added and employment, as resources 
have been attracted into primary activities and the services sector. 
6. There have been no major regulatory changes to  Canada's telecommunication, broadcasting, 
financial or transportation services.  In telecomm unications, a government-appointed panel of experts 
recommended regulatory reform be undertaken to  better respond to the changing technological 
environment, with an increasing role for market forces.  Facilities-based common carriers providing 
telecommunications services in Canada must be Canadian-owned and controlled.  Canadian WT/TPR/S/179/Rev.1 Trade Policy Review 
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broadcasting legislation limits foreign content in  a number of areas to ensure Canadians have 
minimum levels of access to Canadian cultural content. 
7. Canada's financial sector is well developed an d diversified, and has performed well.  The 
banking sector is open to foreign competition, but ownership restrictions apply on domestic and 
foreign banks.  Insurance companies must be licen sed in each province where they do business, which 
may complicate market access for foreign suppliers. 
8. In maritime transport, cabotage remains rese rved for Canadian-flag ships, although access to 
foreign ships is allowed when suitable Canadian-register ed ships are not available.  In the air transport 
sector, competition has increased with the growth of  low-cost airlines.  However, foreign-owned 
airlines may not provide cabotage services and foreign ownership of Canadian airlines is limited to 
25% of voting shares supplemented by a flexible de-facto control examination.  The Competition 
Bureau is of the view that the Governme nt should reconsider these airline policies. 
9. Virtually all professions are regulated at the provincial/territorial level and increasing efforts 
are being made to facilitate the mobility of pr ofessions among provinces and territories.  While 
citizenship and residency requirements continue to  apply in some cases, some barriers have been 
removed. 
(2) AGRICULTURE  
(i) Introduction 
10. Canada's agri-food sector, which encompass es unprocessed, semi-and fully processed farm 
products, and certain services to agriculture, accounted  for 8.1% of GDP in 2004.  Canada is among 
the world's largest exporters of agri-food prod ucts.  In 2005, total agri-food exports were 
Can$26.2 billion.1  The main exports consist of grains a nd oilseeds, with 20.3% of total agri-food 
exports;  the second largest category was red meats, with 18%.  Imports of agri-food products were 
Can$21.1 billion in 2005.  The main import categor ies were fruits and vege tables, which represented 
28.1% of the total, followed by beverages (12.5% of total agri-food imports), and grains and oilseeds 
(10.7% of total agri-food imports). 
11. The Federal Government and pr ovincial governments share jurisd iction over agriculture.  In 
June 2002, the federal, provincial, and territorial  governments signed the Framework Agreement on 
Agricultural and Agri-Food Policy for the Twenty -First Century (known as the Agricultural Policy 
Framework) to enhance the prof itability of the agri-food sector.2  Programmes and services under the 
Agricultural Policy Framework are grouped into on e of the following categories:  business risk 
management (encompassing farm income support programmes), food safety and food quality, science 
and innovation, environment, a nd renewal (i.e., advisory and sk ills development services).  The 
implementation of the Agricultural Policy Framewor k in each province and territory is governed by 
bilateral agreements with the Fede ral Government.  Most of these agreements expire in 2008.  The 
Federal Government allocated Can$5.2 billion over fi ve years to implement the Agricultural Policy 
Framework.  As at early 2007, Agriculture and Agri-Food Canada was holding consultations with 
stakeholders on future policies necessary to "tra nsform the Framework to make it more responsive 
and provide an enduring foundation for pr ofitability throughout the value chain".3 
                                                      
1 Agriculture and Agri-Food Canada (2006a).  These data differ from the data presented in Chapter I 
due to differences in classification. 
2 Article 2.2.1., Agricultural Policy Framework. 
3 Agriculture and Agri-Food Canada (2006d). Canada WT/TPR/S/179/Rev.1 
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12. Federal and provincial governmen t expenditure in support of the agri-food sector amounted to 
Can$7.4 billion in 2004/05, up from Ca n$6 billion in 2001/02 (Chart IV.1).4  These data reflect 
expenditure of federal departments such as Agri culture and Agri-Food Cana da, Health Canada, and 
Transport Canada and provincial ministries.  They  include expenditure resulting from the operation of 
agricultural programmes, capital expenditure, and expenditure under the programmes themselves.  
Programme expenditure accounted for 71% of total government expenditure in support of agri-food in 
2004/05. 
01,0002,0003,0004,0005,0006,0007,0008,0009,000
1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/060102030Chart IV.1
Government expenditure in support of agri-food, 1996-06 
Can$ million
   a           Estimate.
  Source:  WTO Secretariat, based on data in Agriculture and Agri-Food Canada ( 2006), Farm Income, Financial Conditions
                 and Government Assistance Data Book , April.  Viewed at:  http://www.agr.gc.ca/.%
  Total expenditure as a share of agri-food GDP
(right-hand scale)Provincial ex penditure
Federal expenditure
a
 
13. Federal government expenditure  in support of agri-food amounted to Can$4.3 billion in 
2004/05, 18% more than the average for the previous  five years.  In 2003/04, expenditure reached 
Can$5.4 billion, the highest level in 12 years;  the sharp increase in 2003/04 largely reflects the Government's response to drought and to the disco very of BSE in Canada, which resulted in the 
temporary loss of several export markets.
5  Provincial government expenditures in support of agri-
food amounted to Can$3 billion in 2004/05, 14% more th an the average for the pr evious five years.  
Agriculture and Agri-Food Canada projects governme nt support to agri-food to remain high in 
2005/06, as governments continue to "support the farm sector in its efforts to recover from recent 
crises and to cope with un favourable market conditions".6  Preliminary estimates predict federal and 
provincial government support for 2005/06 to reach Can$7.7 billion. 
                                                      
4 Agriculture and Agri-Food Canada (2006b). 
5 Agriculture and Agri-Food Canada (2006b). 
6 Agriculture and Agri-Food Canada (2006b). WT/TPR/S/179/Rev.1 Trade Policy Review 
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14. The OECD Producer Support Estimate (PSE) is a broader measure of support that includes 
government payments to producers and price suppor t.  The PSE for Canada was Can$7.4 billion in 
20047;  as a share of gross farm receipts, was 21%, compared with 16% in 2001.  The average for all 
OECD countries was 30% during 2003-05.  The OE CD projects that Canada's PSE will remain 
unchanged in 2005.  The most heavily supported co mmodities, as measured by the average share of 
the PSEs in gross receipts for 2002-04, are milk (58%), beef and veal (21%), and wheat (17%).8  The 
share in the PSE of payments based on historical  entitlements or farm income, which the OECD 
considers less production and trade distorting than ma rket price support or output and input payments, 
is one of the highest among OECD countries.  Th is points to Canada's substantial progress in 
reforming its agricultural policies.  However, the OE CD has noted that the level of support in Canada 
has trended upward in the last decade.9  The authorities indicate that this is due to increased ad hoc 
payments linked to sanitary and weather problems. 
(ii) Border and related measures 
15. The average MFN applied tariff for agriculture (WTO definition) was 22.4% in 2006.10  This 
is close to six times the protection afforded to  non-agricultural products (Chapter III(2)(iv)). 
16. As part of its WTO commitments, Canada ma intains 21 tariff quotas, mostly on imports of 
goods subject to the supply management system  (i.e. dairy products, poultry, and eggs) 
(Table AIV.1).  The simple average out-of-quota  MFN tariff in 2006 was 129.1%;  the in-quota 
average was 3.1%.  For a handful of products, Cana da specified in-quota and out-of-quota rates of 
duty but no quota volumes in its Uruguay Round schedule of commitm ents.  The Canadian authorities 
note that the products affected sometimes enter Canada at the in-quota rate, for example when 
temporary domestic shortages occur, or when the imported products are destined for re-export.11  
Canada's latest WTO notification on tariff quotas covers 2002-05.12 
17. Five of Canada's 21 tariff quotas include reserv ed access at the in-quota rate in favour of 
Australia, the European Union and New Zealand.  In addition, the entire quota for fluid milk is 
reserved for personal cross-border purchases, in practice from the United States.  The United States 
expressed concern in the WTO Committee on Agricultu re about the extent to which the tariff quota 
for fluid milk provides "real market access", give n the lack of data on personal cross-border milk 
purchases.13 
18. In general, Canada does not grant preferentia l access under free-trade agreements to out-of-
quota imports of products subject to WTO tariff quota commitments.  Exceptions include wheat and 
barley from Chile, Costa Rica, Mexico, and the Unit ed States;  margarine fro m Chile, Costa Rica, and 
Mexico;  and beef from Chile, Mexico, and the United  States.  All of these products can be imported 
duty-free in unlimited quantities under the respective agreement. 
19. For several products subject to WTO tariff quot a commitments, rather  than establishing 
additional tariff quotas, Canada grants preferential access under free trade agreements to the same in-
quota volumes specified in its WTO tariff quota commi tments.  In these cases, in-quota imports may 
                                                      
7 OECD (2006a). 
8 OECD (2005a). 
9 OECD (2005a). 
10 This includes the ad valorem  equivalents of non- ad valorem  rates.  For products subject to tariff 
quotas, only out-of-quota tariff rates were used to calculate the average. 
11 WTO (2003). 
12 WTO document G/AG/N/CAN/63, 20 October 2006. 
13 WTO document G/AG/R/46, 11 July 2006. Canada WT/TPR/S/179/Rev.1 
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be sourced from preferential pa rtners at rates of duty lower than the corresponding WTO in-quota 
rates, or from other WTO Members at the in-quot a rates established in Canada's WTO Schedule of 
Commitments. 
20. For a subset of products subject to WTO tariff quota commitments (mainly chicken, turkey, 
eggs and egg products, bro iler hatching eggs, and chicks), Cana da's preferential trade agreements 
establish tariff quotas with in-quota volumes define d as a share of domestic production in a base year, 
rather than in absolute terms as is the case under Canada's WTO commit ments.  Therefore, the levels 
of in-quota volumes under preferential agreements vary  from year to year, and may be lower or higher 
than the levels in Canada's WTO commitments.  In  these cases, the Minister of International Trade 
will generally set in-quota volumes (which can be f illed with both preferential and non-preferential 
imports) at the level that is highest.  According to the Canadian authorities, this has resulted in a de 
facto expansion of the in-quota volumes specified  in Canada's WTO commitments for chicken and 
broiler hatching eggs and chicks since 1995, as th e in-quota volume under preferential agreements has 
exceeded the level in Canada's WTO commitments. 
21. Most tariff quotas were filled during 2005.  The main exceptions were for wheat, barley, and 
to a lesser extent, beef and veal, and marg arine.  The fill rates of the quotas for 
concentrated/condensed milk and cream and "other  dairy" have been falling since 2003.  The 
authorities indicate that these low fill rates are due to low demand for these products in Canada, and 
that the low fill rates for wheat and barley re flect the competitiveness of domestic producers. 
22. There have been no major changes in tariff-quota administration since Canada's last Review.  
The Minister of International Trade is responsible for allocating the quotas.14  Tariff quotas are 
administered in a variety of methods, including first-come, first-served;  historical import performance;  and market share.  Access conditions  are specified in several Allocation Method Orders 
issued under the Export and Import Permits Act.  Some tariff quotas, including for dry whey are allocated only to downstream processors;  hatchi ng eggs and chicks are allocated to federally 
registered hatcheries on the basis of market share;  and the entire tariff quota for butter is allocated to 
the Canadian Dairy Commission (see section (iii) below). 
23. A permit system is used to administer access to tariff quotas.
15  In general, permits are issued 
by Foreign Affairs and International Trade Canada to applicants that meet the requirements and pay 
the applicable fee. 
24. Canada has reserved the right to apply additi onal tariffs on over-quota imports of products 
subject to tariff quotas, either if their import prices drop below a trigger price or if quantities exceed a 
given threshold, in accordance with the special safeguard provisions of the WTO Agreement on 
Agriculture.  In March 2006, Canada notified the WT O that it had not applied any special safeguards 
between 2003 and 2005.16 
25. Imports of fruit and vegetables must meet the re quirements for quality, labelling, packaging, 
and health and safety defined in the Fresh Fruit an d Vegetable Regulations.  Imported apples, onions, 
and potatoes must be accompanied by an inspection certificate issued by the Canadian Food Inspection Agency (CFIA) stating that they meet th ese requirements.  Canada also accepts certificates 
                                                     
 
14 Section 6.2(2), Export and Import Permits Act. 
15 See Canada's latest response to the Questionn aire on Import Licensing Procedures, contained in 
WTO document G/LIC/N/3/CAN/4, 18 January 2002. 
16 WTO documents G/AG/N/CAN/59, 2 March 2006, and G/AG/N/CAN/51, 31 October 2003.  For 
products subject to tariff quotas administered on a marketing year basis (wheat and wheat products, barley and barley products, butter, cream, and dry whey) the la test notification covers the period until July 2005. WT/TPR/S/179/Rev.1 Trade Policy Review 
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issued by the U.S. Department of Agriculture fo r apples, onions, and potatoes from the United States, 
and by the New Zealand Ministry of Agriculture and Forestry for apples from New Zealand.  An 
inspection certificate issued by the CFIA is also necessary for interprovincial sales of apples, potatoes, 
and blueberries from certain producing provinces.  Products that do not meet the quality, labelling, 
and packaging requirements may be imported (or shi pped interprovincially) provided that there is a 
domestic shortage, and an exemp tion is obtained from the CFIA.17  The CFIA has published 
guidelines for requesting such exemptions.18 
26. The Licensing and Arbitration Regulations, which establish rules for dealers marketing fresh 
produce, prohibit sales on consignment of imported fr esh fruit and vegetables;  interprovincial sales 
on consignment are also prohibited.  Members of  the Dispute Resolution Corporation (DRC) are 
exempt from these prohibitions.  Approximately 80% of produce dealers in Canada are members of the DRC. 
27. In July 2003, a WTO panel was established to examine the WTO compatibility of the 
Canadian Wheat Board's activities and of a number of  measures affecting grain imports into Canada 
(see also section (v) below).  The panel report was issued in April 2004.
19  Regarding measures 
affecting grain imports, the panel found that the requirement on elevator operators to obtain 
authorization from the Canadian Grain Commission to receive foreign grain or to mix it with domestic grain, and the statutory cap on revenue earned by railway companies from the transport of Western 
Canadian grain were inconsiste nt with Canada's WTO national treatment obligations.  Canada 
amended the Canada Grain Act and th e Canada Transport Act in May 2005.
20  As a result, the railway 
revenue cap was extended to imported grain, and the authorization requirements relating to the 
treatment of foreign grain in elevators were abolis hed.  A new regulation requiring elevator operators 
to report to the Canadian Grain Commission the origin of all grain in their elevators entered into force 
in August 2005.21 
(iii) Domestic programmes 
28. Canada's latest WTO notificati on on domestic support covers 2001.22  According to this 
notification, the Current Total Aggregate Measure ment of Support (AMS) was Can$2.8 billion.  This 
is well below Canada's applicable WTO ceiling of  Can$4.3 billion, but some three times the amounts 
notified for 1999 and 2000 (Can$939 m illion and Can$848 million, respectively).23  According to 
Canada, the AMS increase between 2000 and 2001 w as due to higher expenditures under provincial 
programmes and under crop insurance following a drought in Western Canada.  Around 
Can$1.7 billion of domestic support provided in 20 01 was classified as "green box", and was not 
subject to reduction commitments in the WTO. 
29. In the context of Canada's notification, Members posed questions on the increase in non-
product-specific AMS, and the exclusion of some pr oduction of butter and skim  milk powder destined 
for further processing in the calculation of price support.24  Issues raised in the context of Canada's 
notification on domestic support for 2000 included th e functions of the Prairie Farm Rehabilitation 
                                                      
17 Section 2.2(2), Fresh Fruit and Vegetable Regulations. 
18 CFIA (2002). 
19 WTO document WT/DS276/R, 6 April 2004. 
20 Bill C-40, 19 May 2005. 
21 Canada Grain Regulations, Section 6.1 and Form 14 of Schedule 4;  see also WTO document 
WT/DS276/20/Add.3, 19 August 2005. 
22 WTO document G/AG/N/CAN/60, 18 April 2006. 
23 WTO documents G/AG/N/CAN/49, 22 November  2002, and G/AG/N/CAN/53, 13 May 2005. 
24 WTO document G/AG/R/46, 11 July 2006. Canada WT/TPR/S/179/Rev.1 
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Administration, the factors underlying increases in  support for soybeans and pork, the establishment 
of producer prices for poultry and egg, and the prices  of butter and skim milk powder produced with 
certain classes of milk.25 
30. Price support is one of the main instruments to implement the supply management system, 
which is in place for dairy, pou ltry, and eggs.  Every two mont hs the Canadian Milk Supply 
Management Committee (CMSMC) sets an industria l milk production target for Canada, known as 
Market Sharing Quota.  The CMSMC is resp onsible for dairy policy and supervising the 
implementation of the National Milk Marketing Pl an, a federal-provincial agreement that governs 
milk supply management.  The CMSMC applies the terms of the National Milk Marketing Plan to 
establish the provincial shares of the Market Sharing Quota.  Each province allocates its share of the 
Market Sharing Quota to producers according to its own policies. 
31. Provincial marketing boards and agencies set the price at which they purchase milk from 
producers and sell it to domestic processors;  prices are set in accordance with the end use.  These 
prices are generally based on annual support prices for butter and skim milk powder established by 
the Canadian Dairy Commission (CDC), a federal pub lic corporation established in 1966.  Provincial 
marketing boards and agencies do not set the prices of milk for the production of confectionery 
products (Class 5(c)), or of cheese and other dairy pr oducts used as ingredients for further processing 
in domestic and export markets (Classes 5(a) and (b));   according to Canada, prices for milk classes 
5(a)-(c) reflect U.S. and/or world prices.26  The CMSMC sets the price of  milk for export within 
Canada's WTO commitments on export subsidies (Cl ass 5(d)).  A new harmonized milk classification 
system was adopted in February 2005.27 
32. In 2004, New Zealand sought clarification in the WTO Committee on Agriculture on various 
aspects of Canada's dairy policies.  Canada was asked  about a proposal to reduce CDC stocks of skim 
milk powder by selling them at a significant disc ount to domestic processors of milk protein 
concentrate.28  It was also asked about the price of a class of milk introduced in 2005 for the 
manufacture of rennet casein and milk protein con centrate (Class 4(a)1 milk), and its effects on 
trade.29  Canada provided details on both issues. 
33. Prices for poultry are negotiated between provi ncial poultry producer boards and processors 
based on a cost of production formula.  For eggs, each  provincial egg board sets the price that grading 
stations pay to producers. 
34. There are two main income support programme s under the Agricultural Policy Framework;  
the Canadian Agricultural Income Stabilization (C AIS) programme, and Production Insurance.  The 
costs of both programmes are shared between the fe deral and provincial govern ments.  Additionally, 
Canada supports agri-food through government guarant ees and exceptional payments. 
35. The CAIS programme was launched in December 2003.  It is an income stabilization and 
disaster assistance programme that replaced the Net Income Stabilization Account and the Canadian 
Farm Income Program.  Payments under the CA IS programme are triggered when producers' 
"production margins" drop below their "reference ma rgins".  The production margin is calculated by 
subtracting allowable expenses (those related direct ly to the production of agricultural commodities, 
including feed costs, fertilizer, and pesticides) from allowable income in a year.  The reference margin 
                                                      
25 WTO document G/AG/R/43, 2 September 2005. 
26 WTO document G/AG/R/43, 2 September 2005. 
27 Canadian Dairy Commission (2005). 
28 WTO document G/AG/R/41, 17 February 2005. 
29 WTO documents G/AG/R/42, 25 May 2005, and G/AG/R/43, 2 September 2005. WT/TPR/S/179/Rev.1 Trade Policy Review 
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is the average production margin of the previous five  years, excluding the highest and lowest values.  
The calculation method for the base (reference) margin  for eligibility ensures that long-term market 
trends are incorporated into production decisions.  The authorities indicate that the calculation method 
also provides a stable and predictable basis of support. 
36. Under CAIS, producers may choose minimum,  medium, or maximu m coverage.  Under 
minimum coverage, the producer's production margin  would be returned to 70% of the reference 
margin;  under medium coverage, it would be return ed to 85% of the reference margin;  and under 
maximum coverage, to 100%.  A CAIS  participation fee, introduced in 2006, depends on the level of 
coverage selected.  The fee is 0.45% of the refe rence margin for maximum coverage;  0.3825% for 
medium coverage, and 0.315% for minimum coverage.  Prior to 2006, CAIS participants had to set 
aside in a special account a share of their refere nce margins (22% for par ticipants with maximum 
coverage).  CAIS participants are also  subject to a Can$55 administrative fee. 
37. Federal and provincial government payments  under the CAIS programme are determined 
following a tier system.  If the production margin is negative, CAIS pays producers Can$0.60 for every Can$1 needed to restore their production ma rgin to zero (tier 4).  Producers are therefore 
responsible for 40% of the loss.  If the production marg in in a year is 70% of the reference margin or 
less, but positive, the Government pays Can$0.80 for every Can$1 needed to restore the production 
margin to 70% of the reference margin (tier 3), w ith producers responsible for 20% of the loss.  If the 
production margin is 85% of the reference margin or  less, but more than 70%, the Government pays 
Can$0.70 for every Can$1 needed to restore the pr oduction margin to 85% of the reference margin 
(tier 2), with producers responsible for 30% of the loss.  For smaller declines in the production 
margin, the Government pays Can$0.50 for every Can$1 needed to restore the production margin to 
100% of the reference margin (tier 1), with producer s responsible for 50% of the loss.  Total payments 
under CAIS are capped at the lower of 70% of  the total loss or Can$3 million per producer.  
Producers of supply-managed commodities are eligible for CAIS payments provided that their production margins fall by more than 30%. 
38. Payments under the CAIS programme amount ed to around Can$3.6 billion for the period 
between January 2003 and November 2006.  Around 57% of farms in Canada participated in the 
CAIS programme in 2004, the latest year for which data are available.
30  The Federal Government 
announced Can$900 million to implement retroactiv ely changes to the method of calculating 
inventory values under the CAIS programme.31  The federal and provincial Governments are taking 
steps towards replacing the CAIS programme with  separate catastrophic disaster assistance and 
income stabilization schemes.32 
39. Production Insurance was introduced in April 2003 to replace the Crop Insurance Program.  
Under Production Insurance, producers can in sure against production losses caused by natural 
hazards.  The insurance is delivered by provincial public corporations or agriculture departments.  
Premiums are partly subsidized, with the Federal Government cove ring about 60% of the Government 
share of premiums and administrative costs.  The Federal Government also has reinsurance 
arrangements with five provinces (Alberta, Manitoba, New Brunswick, Nova Scotia, and 
                                                      
30 Nimpagaritse (2006). 
31 Agriculture and Agri-Food Canada online informat ion, "Minister Strahl Announces Can$950 Million 
for Farmers", 18 May 2006.  Viewed at:  http://w ww.agr.gc.ca/cb/index_e.php?s1=n&s2=2006&page=n60518b. 
32 Agriculture and Agri-Food Canada online information, "Minister's Column:  Canada's 
New Government Reaffirms Commitment to Replace CAIS" (undated).  Viewed at:  http://www.agr.gc.ca/cb/ 
min/pr-im_e.php?s1=col-chro&s2=2006&page=c0830. Canada WT/TPR/S/179/Rev.1 
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Saskatchewan).33  The Federal Government provides reinsurance to the provincial Production 
Insurance funds.  Government expenditure under Production Insu rance was Can$498 million in crop 
year 2005/06, Can$544 million in crop year 2004/05 , and Can$595 million in crop year 2003/04. 
40. Canada also maintains several government gua rantee programmes.  Under the Agricultural 
Marketing Programs Act (AMPA), and the Adva nce Payments Program (APP), the Federal 
Government guarantees cash advances provided by participating producer organizations to their 
producers.34  The Federal Government also pays the interest on a portion of such cash advances.  As a 
result of amendments to the AMPA in June 2006, the amount covered by the APP guarantee was 
raised to Can$400,000 per producer, an d the interest-free advance to Can$100,000.35  In addition, the 
Spring Credit Advance Program (SCAP) was consolid ated with the APP.  Total payments amounted 
to Can$22.7 million under the APP between 2003/ 04 and 2005/06 under the APP;  and to 
Can$11.7 million under the SCAP.  Other programm es providing government guarantees include the 
Price Pooling Program and the Farm Improvement  and Marketing Cooperatives Loans Act (FIMCLA) 
programme, which was scheduled to expire in March 2006 but has been extended pending 
consultations with stakeholders.36  Between 2003/04 and 2005/06 total payments under the FIMCLA 
programme amounted to Can$4.8 million;  no paymen ts were made under the Price Pooling Program. 
41. Exceptional payments complement ongoing progr amme payments.  The Transitional Industry 
Support Program (TISP) provided Ca n$680 million to producers of cattle  and other ruminants in 2004 
following the discovery of BSE in Canada.37  This amount was delivered as a direct per head payment 
based on cattle and other ruminant inventory in December 2003.  An additional Can$250 million was 
provided under the TISP as general payments based on historical revenue to producers of most 
commodities.  In March 2005, Agriculture and Agri-Food Canada announced close to Can$1 billion 
in assistance, mostly to producers of grains, oilseeds, cattle, and ruminants.38  This would be delivered 
through the Farm Income Payment Program as direct payments (Ca n$155 million) and general 
payments (Can$841 million).  As at November 2006, producers of grains and oilseeds had received 
around Can$744 million through the Grains and Oilseeds Payment Program (GOPP).  GOPP 
payments are based on net eligible sales during the period 2000-04.  A total of Can$755 million is 
available under GOPP. 
42. Under the Agricultural Products Marketing Act (APMA), the Federal Government may grant 
provincial entities, including boards and agencies, au thority to "regulate the marketing of [any] 
agricultural product in interprovincial and export trade".39  This authority is granted through a federal 
Order upon request by the province.  It allows provi ncial entities to apply to interprovincial and export 
trade the powers they have with respect to the regul ation of marketing activities within a province.  In 
some cases, these powers include the authority to set production quotas and prices.40  The APMA also 
                                                      
33 Agriculture and Agri-Food Canada online information, "Production Insurance", July 2006.  Viewed 
at:  http://www.agr.gc.ca/index_e.php?s1=prod&page=pi-ap. 
34 Part I, Agricultural Marketing Programs Act. 
35 An Act to amend the Agricultural Marketing Programs Act, 22 June 2006. 
36 The Price Pooling Program was authorized by the Agricultural Marketing Programs Act;  the Farm 
Improvement and Marketing Cooperative Loans Program was authorized by the Farm Improvement and 
Marketing Cooperatives Loans Act.  Agriculture and Ag ri-Food Canada online information, "Update:  FIMCLA 
Consultations",  July 2006.  Viewed at:  http://www.agr.gc.ca/nmp/fimcla/index.html. 
37 OECD (2005a). 
38 Agriculture and Agri-Food Canada online information, "Government of Canada Announces 
$1 billion for Canadian Farmers to Ease Cash-Flow Pressures, Set Stage For Transforming Industry", 
29 March 2005.  Viewed at:  http://www.agr.gc .ca/cb/index_e.php?s1=n &s2=2005&page=n50329a. 
39 Section 2(1). 
40 See, for example:  Marketing of Agricultural Produ cts Act of Alberta;  Natural Products Marketing 
(British Columbia) Act;  Farm Products Marketing Act of Manitoba;  Natural Products Act of New Brunswick;  WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 96 
 
 
grants provincial entities the power to set levies on the interprovincial movement or export of 
agricultural goods.41 
43. A provincial entity that is granted power to re gulate the marketing of agricultural products in 
interprovincial and export trade under an APMA delegation order, enacts regulations or other 
instruments specifying how that power is exerci sed.  Provincial boards and agencies have enacted 
marketing regulations with respect to:  storage and transportation;  grading and quality;  revenue 
pooling;  maintenance of books, records, and marketi ng information;  registration of farms;  licensing 
of producers, wholesalers, processors, and truckers;  and price setting.  There are 81 delegation orders 
in nine provinces under the APMA (October 2006), c overing a wide range of products, including 
mushrooms, potatoes, wheat, apples, asparagus, be ans, berries, flue-cured tobacco, grapes, onions, 
soya beans, pork, maple syrup, pulses, flax, and supply managed products. 
(iv) Export subsidies 
44. Canada scheduled export s ubsidy reduction commitments under the WTO Agreement on 
Agriculture for 11 product groups comprising cereals, oilseeds, dairy products, and vegetables.  The 
final bound ceiling since 2000 on export subsid y outlays for these commodities is Can$422 million 
per year.  Canada's latest WTO notifi cation on export subsidies covers 2004/05.42  Total outlays for 
export subsidies in 2004/05 amounted to Can$93.9 million,  roughly 9% more than one year earlier.  
The commodities that received expor t subsidies included butter, skim milk powder, cheese, and other 
milk products. 
45. In May 2003, Canada, New Zealand, and the Un ited States informed th e WTO that they had 
reached mutually agreed solutions in the disputes concerning Canada's measures affecting exports of 
dairy products.43  In this context, Canada confirmed that nine provinces had eliminated their 
commercial export milk (CEM) programmes, and that the federal CEM programme would be 
eliminated by August 2003. 
46. Canada deregulated milk for export processing (o ther than milk class 5(d)) by introducing the 
CEM category in 2000.  Under contracts conclude d in advance of production, Canadian producers 
could sell unlimited quantities of CEM to domestic  processors for export processing, on terms and 
conditions freely negotiated be tween producers and processors.44  The WTO found that the CEM 
scheme and the continued operation of Special Milk Class 5(d) (see above) constituted export 
subsidies in excess of sche duled quantity commitments. 
(v) State-trading enterprises 
47. Canada's two main state-trading enterprises in the agriculture sector are the Canadian Wheat 
Board (CWB) and the Canadian Dairy Commission (CDC). 
48. The CWB was established under the Canadian Wheat Board Act of 1935.  It acts on behalf of 
about 69,000 producers of wheat and barley in Western Canada and e xports around 16.5 million 
                                                                                                                                                                     
Farm Products Marketing Act of Ontario;  and Loi sur la mise en marché des produits agricoles, alimentaires et 
de la pêche . 
41 Section 2(2), Agricultural Products Marketing Act. 
42 WTO document G/AG/N/CAN/62, 2 May 2006. 
43 WTO documents WT/DS113/33, 15 May 2003, and WT/DS103/33, 15 May 2003.  For an overview 
of these disputes see WTO (2003). 
44 WTO (2003). Canada WT/TPR/S/179/Rev.1 
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tonnes of wheat and barley to some 70 countries every year.45  The CWB has about 20% of the world 
market share in wheat, 65% in durum wheat, 30%  in malting barley, and 15% in feed barley.46 
49. In September 2006, the Minister of Agriculture and Agri-Food announced the creation of a 
task force to recommend options "on the way forw ard in implementing marketing choice for western 
wheat and barley".47  The task force issued its report in Oc tober 2006.  The task force recommended a 
four-phase transition from a CWB with monopoly powe rs to "an environment where farmers may sell 
their wheat or barley to any buyer, including a transformed Wheat Board (CWB II)".48 
50. The CWB has the exclusive right to sell wheat and barley produced in Western Canada for 
export and for domestic human consumption.49  According to Canada's latest notification on state-
trading enterprises, the CWB sells wheat a nd barley for export according to commercial 
considerations such as price, quality, availability,  marketability, and transportation.  The volume of 
grain exported by the CWB is "primarily" a func tion of supply, less domestic use and inventory 
adjustments, but the CWB may defer sales "if market conditions warrant".50  The Canadian Wheat 
Board Act authorizes the CWB to "fix ... quotas of each kind of grain, or any grade or quality thereof, 
that may be delivered by producers to elevators or railway cars ...".51  The Canadian authorities 
indicate that, in practice, the CWB establishes deliver y contracts with farmers in order to coordinate 
the delivery of CWB grain into the handling system  in light of market conditions.  Also the CWB 
does not establish production quotas, but sometimes limits the amount of grain to be accepted for 
delivery, as this is dependent on sales. 
51. The proceeds received by the CWB from grain sales are deposited into  one of four "pool" 
accounts maintained for each grain category (wh eat, durum wheat, feed barley, and designated 
barley).  Pooling ensures that each producer receive s the same payment for grain of a certain quality 
delivered to the CWB, regardless of when sales by individual producers take place during the year.  
Under the pooling system, producers receive an initial payment at the time of delivery to a grain elevator, based on average prices estimated by th e CWB.  The initial payment, which usually amounts 
to 65% of the CWB estimated average price, is guaranteed by the Federal Government.  Therefore, 
there could be direct financial transfers from the Government when the pool accounts register a 
deficit.  The last time this occurred was in 2002/ 03, when the wheat pool incurred a deficit amounting 
to Can$85 million.
52  The Government also gua rantees the CWB's borrowings. 
52. The CWB has two export credit programmes, the Credit Grain Sales Program (CGSP) and the 
Agri-Food Credit Facility (ACF).  The CGSP is ava ilable to buyers that can provide a sovereign 
guarantee of repayment, and the ACF is available to private buyers.  Under the CGSP, the Federal 
Government guarantees repayment to the CWB of the pr incipal and interest of credits granted.  The 
CGSP has not been used since 2001/02.  Under th e ACF, the Federal Government guarantees a 
declining percentage of the credit receivables b ased on the repayment period, with the CWB assuming 
                                                      
45 CWB online information, "CWB General Brochure ".  Viewed at:  http://www.cwb.ca/public/en/ 
publications/index.jsp. 
46 CWB online information, "About Us:  Myths and Facts – Frequently Asked Questions".  Viewed at:  
http://www.cwb.ca/public/en/about/myths_facts/faqs.jsp. 
47 Agriculture and Agri-Food Canada online informa tion, "Minister Strahl Announces Task Force on 
Implementing Marketing Choice for Wheat and Barley", 19 September 2006.  Viewed at:  http://www.agr.gc. 
ca/cb/index_e.php?s1=n&s2=2006&page=n60919c. 
48 Agriculture and Agri-Food Canada (2006c). 
49 Canadian Wheat Board Act, Sections 5, 7(1), 24, 32, and 45. 
50 WTO document G/STR/N/4/CAN, 5 November 2002. 
51 Canada Wheat Board Act, Section 28. 
52 Alberta Agriculture, Food and Rural Development (2006). WT/TPR/S/179/Rev.1 Trade Policy Review 
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the risk that is not guaranteed.  Credit sales under the ACF amounted to between 3% and 4% of total 
sales during 2002/03 and 2003/04.  On behalf of th e Government of Canada, the CWB administers the 
cash advance programmes for wheat, durum, and barl ey producers in Western Canada (section (iii) 
above).  Cash advances under these progra mmes totalled Can$650 million in 2004/05 and 
Can$706 million in 2003/04. 
53. In March 2003, a WTO panel was established to  examine the WTO compatibility of a number 
of measures affecting trade in grains, including  the CWB's export regime.  The panel report was 
issued in April 2004.53  The United States appealed several of the panel's findings.  In August 2004, 
the WTO Appellate Body issued its report.54  The Appellate Body upheld the panel's finding that the 
CWB "export regime" resulted in sales that were neither inconsistent with the non-discrimination 
principle in the GATT 1994, nor contrary to commercial considerations. 
54. The CDC has the power to "purchase any dairy product and package, process, store, ship, 
insure, import, export or sell or otherwise di spose of any dairy product purchased by it".55  The CDC 
chairs the CMSMC, which sets the target for i ndustrial milk production in  Canada (section (iii) 
above). 
(3) MINING AND ENERGY  
(i) Introduction 
55. Canada has an abundant minera l and energy base and is a major exporter of minerals, metals 
and energy;  the United States is its predominant export market.  In 2005, the value of Canadian 
exports of ores and other minerals was US$7.3 b illion, around double the value of exports in 2002 
(US$3.7 billion).56  Canada produces over 60 minerals and metals .  It is the world's largest producer of 
uranium and potash, and a major producer of alum inium, cadmium, chrysotile asbestos, cobalt, 
copper, gold, gypsum, magnesium, molybdenum, nickel, platinum group metals, salt, titanium 
concentrate, and zinc.57  One of Canada's newest mining industries is diamonds;  according to Natural 
Resources Canada, by 2004, Canada ranked as the world's third largest diamond producer by value.58 
56. In 2005, Canada produced an estimated 2.5 million barrels of crude oil a day59, of which some 
65% were exported.60  In the same year, over 98% of Ca nada's crude exports, at a value of 
US$35 billion, were destined for the U.S. market.61  Western Canada, particularly Alberta, is the 
source of most petroleum production.  Proven reser ves of crude oil are among the world's largest;  
they are estimated at nearly 178 billion barre ls (in 2005), the major source being oil sands 
(174 billion barrels).  Canada is also a large importe r of crude oil, principally from Norway, Algeria, 
                                                      
53 WTO document WT/DS276/R, 6 April 2004. 
54 WTO document WT/DS276/AB/R, 30 August 2004. 
55 Section 9(1), Canadian Dairy Commission Act. 
56 Comtrade data. 
57 For detailed information on individual minerals, see Natural Resources Canada Mineral and Metal 
Commodity Reviews.  Viewed at:  h ttp://www.nrcan.gc.ca/mms /cmy/com_e.html. 
58 Natural Resources Canada online information.  Viewed at:  http://www.nrcan-rncan.gc.ca./mms/ 
diam/index_e.htm. 
59 Canadian Association of Petroleum Producers on line information.  Viewed at:  http://www.capp. 
ca/raw.asp?x=1&dt=NTV&e=PDF&dn=103586. 
60 Statistics Canada (2006a). 
61 Comtrade. Canada WT/TPR/S/179/Rev.1 
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the United Kingdom, and the United States (in 2005).  The value of imports in 2005 was around 
US$23.5 billion.62 
57. Between 1996 and 2004, Can$24 billion in new oil sands investment projects in Alberta had 
been approved, and an additional Can$6 2 billion in investments were under study.63  According to the 
Canadian Association of Petroleum Producers, fore ign interests held close to 50% of Canada's 
petroleum production in 2005. 
58. The Government of Canada sold its remain ing 19% shares in Petro-Canada in 2004, 
concluding a privatization process set in train in the early 1990s.  The gross proceeds of the sale totalled Can$3.2 billion, constituting the largest  equity offering in Canadian history.
64  F o r e i g n  
ownership in Petro-Canada is no longer subject to  a 25% limit of voting shares as this was dropped in 
2001, however, individual ownership restrictions  apply to both residents and non-residents.65 
59. Together with  a consortium of private sector companies, the Government of Canada retains 
an 8.5% interest in the Hibernia offshore oil fiel d, through the Canada Hibernia Holding Corporation, 
a subsidiary of the Canada Development Investme nt Corporation, a crown corporation.  SOQUEM 
Inc., a wholly owned subsidiary of la Société Générale de Financement du Québec, undertakes 
exploration, development, and mining activities throughout the province of Quebec. 
60. Canada is the world's third la rgest producer of natural gas.66  All of Canada's exports of 
natural gas, some 63% of its marketable production  valued at just over US$32 billion, are to the 
United States.67  In 2005, Canada's imports of natural gas,  all of which came from the United States, 
amounted to US$3.2 billion.68  Canadian gas prices are determined in the larger North American 
market.69 
61. According to the authorities, neither the Fede ral Government nor any provincial/territorial 
government has a stake in any company involved in the exploration, production or processing of natural gas in Canada.  All pipelines within Ca nada are privately owned and operated with the 
exception of the natural gas transmission system w ithin Saskatchewan, which is owned and operated 
by the crown corporation TransGas Limited.
70  Sixteen utilities companies have a regulated monopoly 
over the distribution of gas;  all are privately owned except for two crown corporations, SaskEnergy 
in Sasktachewan and Manitoba Hydro.71  Gas prices have been deregulated since 1985.72 
62. In 2004, electricity generation in Canada wa s 576 net terawatt-hours:  58% of electricity 
generated was from hydro power, 17% from coal, 15%  from nuclear, and 10% from oil, gas and other 
                                                      
62 Comtrade. 
63 IEA (2004). 
64 Department of Finance online information.  Vi ewed at:  http://www.fin.g c.ca/news04/data/04-056_ 
1e.html. 
65 No individual or related group of individuals is permitted to own more than 20% of the outstanding 
shares in Petro-Canada. 
66 Government of Canada online information.  Vi ewed at:  http://www.inves tincanada.gc.ca/director. 
aspx?tabid=946. 
67 Natural Resources Canada online information.  Vi ewed at:  http://www.nrcan.gc.ca/statistics/energy/ 
default.html. 
68 Comtrade. 
69 IEA (2004), p. 8.  Viewed at:  http://www.iea.org/textbase/nppdf/free/2004/canada.pdf#search=' 
energy%20policies%20iea%20c ountries%20canada%202004'. 
70 IEA (2004), p. 95. 
71 IEA (2004), p. 98. 
72 IEA (2004), p. 102. WT/TPR/S/179/Rev.1 Trade Policy Review 
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sources.  All exports of electricity, valued at some US$2,618.3 million73, were to the United States in 
2005;  in value terms they were over two and a half- times the value of electricity imports, all from the 
United States.  Challenges faced by the electricity  industry include enhancing the reliability of 
electricity supply between the United States and Canada given the strong links between the two 
markets, and in the wake of the August 2003 grid failure;  as well as developing a Canadian domestic 
electricity market.74 
63. Since 2003, the Canadian government has conti nued to fund the development of renewable 
fuels, including through funding provided by Sustainable Development Technology Canada75, the 
Wind Power Production Initiative (Can$1,180 million over 20 years, from 2001)76, the Renewable 
Power Production Incentive (Can$886  million over 15 years, from 2005)77, the Ethanol Expansion 
Program (Can$100 million over 3 years, from 2003)78, and the Canadian Transportation Fuel Cell 
Alliance (Can$33 million).79  The Federal Government has also contributed funding (Can$1.1 million) 
towards the construction of a hydrogen highway  to be built between Vancouver and Whistler, 
British Colombia, which is projected to be completed by 2010.80 
(ii) Institutional and legal framework 
64. The provinces own and manage the natural r esources within their jurisdiction, and are 
empowered to regulate exploration for non-renewable resources as well as development, conservation 
and management of natural resources and sites a nd facilities for electricity generation.  Although the 
Yukon does not own resources like provinces, it neve rtheless manages and delivers programmes in 
the same way as provinces.  Provinces may also raise taxes, provided these do not discriminate 
between production exported to another part of  Canada and production that remains within the 
province.81  Some comprehensive land claim agreemen ts and settlements assign both surface and 
mineral rights to certain Inuit and Firs t Nation organizations or corporations. 
65. The Federal Government's most recent policy objectives for the minerals and metals the 
sector (excluding uranium) are in th e 1996 Minerals and Metals Policy.82  The Federal Government is 
responsible for the national policy framework, which includes international trade and transport.  It 
also regulates all aspects of uranium production, tr ansportation and distribution.  It has responsibility 
for trans-boundary environmental impacts as well as polices of national interest, which include:  
economic development;  energy security;  and federal energy science and technology.83  The Federal 
                                                      
73 Comtrade. 
74 IEA (2004), p. 257. 
75 Sustainable Development Technology Canada onlin e information.  Viewed at:  http://www.sdtc.ca. 
76 Natural Resources Canada online information.  Vi ewed at:  http://www.canren.gc.ca/programs/index. 
asp?CaId=107&PgId=622.  Can$260 million over 15 years was assigned to the WPI by the 2001 budget and this 
was supplemented by Can$920 million over 15 years in the 2005 budget. 
77 Natural Resources Canada online information.  Vi ewed at:  http://news.gc.ca/cfmx/view/en/index.jsp 
?articleid=167949. 
78 Office of Energy Efficiency onlin e information.  Viewed at:  h ttp://oee.nrcan.gc.ca /transportation/ 
fuels/ethanol/eep.cfm?attr=8. 
79 Natural Resources Canada online information.  Viewed at:  http://www.nrcan.gc.ca/es/etb/ctfca/ 
index_e.html. 
80 Natural Resources Canada online information.  Viewed at:  http://www.nrcan-rncan.gc.ca/media/ 
newsreleases/2004/200413_e.htm. 
81 The Canadian Constitution, Article 92A and the Sixth Schedule. 
82 Natural Resource Canada online information.  Viewed at:  http://www.nrcan.gc.ca/mms/policy/ 
policy_e.htm. 
83 Natural Resources Canada online information.  Viewed at:  http://www.nrcan-rncan.gc.ca/media/ 
archives/newsreleases/2003/200363a_e.htm. Canada WT/TPR/S/179/Rev.1 
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Government (through Indian and Northern Affairs Canada, INAC) is responsible for the management 
of land use, water and mineral resources and the administration of mining lands in the Northwest 
Territories and Nunavut.  The Government collects all mineral royalties generated on Crown land.  
INAC's mineral administration and resource manage ment responsibilities were devolved to the Yukon 
in 2003. 
66. Natural Resources Canada is the Federal Mini stry mandated to ensure the responsible 
development and use of Canada’s natural resources.  Nuclear power is regulated by the independent 
Canadian Nuclear Safety Commission.84  Natural Resources Canada is responsible for the Export and 
Import of Rough Diamonds Act, which is the legal instrument for im plementing the Kimberly Process 
in Canada (Chapter III(2)(vi) and (Chapter III(3)(iii)). 
67. The National Energy Board (NEB), an inde pendent federal agency, regulates:  the 
construction, operation, and mainte nance of interprovincial and in ternational pipelines;  pipeline 
traffic, tolls, and tariffs under its jurisdiction;  the construction and opera tion of international and 
designated interprovincial power lines;  the export and import of natural gas;  the export of oil and 
electricity;  and frontier oil and gas activities.  The NEB may grant long-term export licences for up to 
25 years for oil and gas and 30 years for electricity  only after due consideration has been given to 
meeting the long-term requirements of Canadians.85  The function of long-term export licensing is to 
ensure a level playing field between Canadian and foreign consumers with re gard to consumption of 
Canada's oil resources, rather than being a conservation mechanism.86  The NEB may also regulate 
export prices for oil and gas, and may exempt NAFTA countries and Costa Rica and Chile from such 
export prices.87  According to the authorities, this author ity has rarely been used and requires action 
by the Federal Government. 
68. Cooperation between federal, pr ovincial and territorial governments on energy issues takes 
place formally through the Council of Energy Minist ers and on mining, minerals and metals issues 
through the Mines' Ministers Conference. Both bo dies meet annually.  Agreement has yet to be 
reached on the energy chapter of the Agreement on Inte rnal Trade, which is the responsibility of trade 
ministers. 
69. Foreign investment in the mining and energy sect ors is governed by the horizontal rules in the 
Investment Canada Act.  Under the Non Resident  Ownership Policy in the Uranium Mining Sector, 
foreign ownership of a uranium mining pr operty is limited to  49% (Chapter II). 
70. Under the Canada Oil and Gas Operations Act,  applications for authorization to perform 
activities related to oil and gas in certain geographic areas defined in the Act must be accompanied by 
"a plan ... for the employment of Canadians and fo r providing Canadian manufacturers, consultants, 
contractors and service companies with a full and fair  opportunity to participate on a competitive basis 
in the supply of goods and services" related to the oil and gas project.88 
71. Provisions are contained in the Canada-Nova Scotia Offshore Petroleum Resources Accord 
Implementation Act, and the Cana da-Newfoundland Atlantic Accord  Implementation Act, whereby 
first consideration must be given to services provi ded, and goods manufactured within the respective 
provinces, as long as such goods and services are competitive in terms of fair market price, quality, 
                                                      
84 Nuclear Safety Commission online information.   Viewed at:  http://www.cnsc-ccsn.gc.ca. 
85 National Energy Board Act, Part VI.  Viewed  at:  http://laws.justice.gc.ca/en/N-7/text.html. 
86 IEA (2004), p. 88. 
87 National Energy Board Act, Part IV.  Viewed  at:  http://laws.justice.gc.ca/en/N-7/text.html. 
88 Canada Oil and Gas Operations Act (Section 5(2 )).  Viewed at:  http://laws.justice.gc.ca/en/O-
7/text.html. WT/TPR/S/179/Rev.1 Trade Policy Review 
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and delivery.  According to the authorities, in Ne wfoundland and Labrador, c onsideration is given to 
employment and the purchase of local goods and services, in the approval process for petroleum projects.  In Nova Scotia, petroleum exploration right-holders in acquiring goods and services relating 
to the exercise of their rights are required to make  all reasonable attempts to use local labour, goods, 
and services.
89  In addition, the federal and most provi ncial/territorial governme nts have implemented 
tax incentives to support manufacturing and processing th at may be of benefit to companies operating 
in the mining and energy sectors.  These tend to take  the form of either corporate income tax credits 
on manufacturing and processing profits, or tax credits  for investments related to manufacturing and 
processing.  In most provinces and territories,  tax incentives are available only for processing 
minerals originating in mines located wi thin the respective province or territory.90 
72. The federal and the provincial/territorial govern ments collect corporate income taxes from the 
resource sector (Chapter III).  In addition, pr ovincial/territorial governments collect taxes and 
royalties.  In 2004, provinces and territories raised Can$12.5 billion in royalties.91 
73. The Federal Government, through the Investme nt Tax Credit for Exploration introduced in 
2000, and certain provinces (British Colombia, Man itoba, Ontario, and Saskatchewan) provide tax 
incentives to promote mineral exploration (excludi ng hydrocarbons and coal), which, according to 
industry sources, appear to have made a positive cont ribution to a strong level of exploration activity 
since 2000.92  The Investment Tax Credit for Exploration expired at the end of December 2005, but 
was reintroduced for 11 months effective May 2006. 
74. Electricity generation and internal transportation falls within the jurisdiction of the provinces 
and Yukon.  In most provin ces and Yukon, crown corporati ons, owned by the provincial 
governments, provide most energy generation, transm ission, and distribution.  Electricity prices are 
also regulated at the provincial level and, according to the IEA, Canada's retail electricity prices are 
among the lowest among its member countries.93  In some provinces, competition is being introduced.  
By 2003, retail competition had been introduced in  Alberta and Ontario, and wholesale competition 
had been introduced in Alberta, British Colombia , Manitoba, Ontario, Saskatchewan, and Quebec.94 
75. Over the period under review, investment incen tives were provided by the Government of 
Alberta with respect  to oil sands development. 
76. In May 2004, the Government of Canada intr oduced a trial five-year moratorium on duties 
imposed on the temporary importation of mobile offshore drilling units.95 
                                                      
89 Petroleum Resources Regulations of Nova Scotia, Sections 20 & 21.  Viewed at:  
http://www.gov.ns.ca/JUST/re gulations/regs/pr6193.htm. 
90 Natural Resources Canada.  Viewed at:  http://www.nrcan.gc.ca/miningtax/fen_1.htm. 
91 The authorities note that while offshore oil and gas is constitutionally under federal jurisdiction, 
royalty payments are transferred to Newfoundland and Nova Scotia. 
92 Mines Ministers' Conference 2006, "Taxation Issues for the Mining Industry", August 2006.  Viewed 
at:  http://www.nrcan.gc.ca/miningtax/2006_igwg_report_on_tax_e.pdf. 
93 IEA (2004), p. 137. 
94 IEA (2004) Table 20;  and information provided by the Canadian authorities. 
95 Natural Resources Canada Press Release of May 4,  2004.  Viewed at:  http://www.nrcan-rncan.gc.ca/ 
media/newsreleases/2004/200421_e.htm. Canada WT/TPR/S/179/Rev.1 
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(4) MANUFACTURING  
77. The share of manufacturing in GDP was 16.5% in 2005, down from 17.5% in 2002.96  In the 
same year, the manufacturing sector contributed 13.7% to total employment (14.9% in 2002)97, 
continuing a gradual decline that began in 2000.98  In terms of the value of shipments, just over half of 
Canada's total manufacturing is located in Ontario, and nearly a quarter is centred in Quebec99, 
however, the highest growth in manufacturing sh ipments in 2004 and 2005 was in Alberta and 
Saskatchewan, as a result of gain s in resource-based industries.100  Exports of manufactured goods 
have been affected by a strengthened Canadian dollar.101 
78. In 2005, exports by the manufacturing sector totalled US$206 billion.  The main exports were 
automotive products, chemicals, and semi-manufactured products.  During the same year imports of 
manufactured goods reached US$248 billion.  Intra-indus try trade is considerable, the major imports 
are automotive products, chemicals, office machin es and telecommunications equipment, and other 
non-electrical machinery. 
79. The average MFN tariff for the manufacturing sector (ISIC) is 6.5%, which corresponds also 
to the overall average tariff (see Table AIII.1).102  As outlined in Chapter III(2)(vii), manufacturing 
industries have also received border protection through anti-dumping and countervailing measures, 
many of which have been applied with respect to imports of steel.103  As at mid 2006, four safeguard 
investigations conducted between  2002 and 2005 concerning certain steel products, bicycles, and 
barbeques had not resulted in the app lication of any safeguard measures. 
80. During the period under review, the federal a nd provincial governments have continued to 
implement or have introduced strategies or incen tives to support certain manufacturing industries (see 
below).  In addition a number of provinces/terr itories offer manufacturing-related tax credits 
(Table AIII.5). 
(i) Aircraft 
81. The Canadian aerospace and defence sector, whic h includes aircraft construction, is highly 
export-orientated;  84% of the sector's revenues were  from exports in 2004.  The value of aircraft 
production in Canada was Can$6.8 billi on in 2005.  The sector has bene fited from a number of federal 
government initiatives including:  the Scientific Re search and Experimental Development Program;  
Technology Partnerships Canada (which expires on 31 December 2006) (Chapter III(4)(ii));  industry 
infrastructure development;  sales financi ng through the Regional Aircraft Credit Facility104 (which 
                                                      
96 Statistics Canada online information, "Gross domestic product at basic prices by industry".  Viewed 
at:  http://www. statcan.ca. 
97 Statistics Canada online information, Employment by Industry.  Viewed at:  http://www.statcan.ca. 
98 Statistics Canada online information, CANSIM ta ble 282-0094, viewed at:  http://www.statcan.ca. 
99 Statistics Canada online information, "Manufacturing shipments, by subsector, by province and 
territory".  Viewed at:  http://www.statcan.ca. 
100 Statistics Canada (2006b). 
101 Statistics Canada (2005a). 
102 WTO Secretariat calculations. 
103 For manufactured products subject to anti-dumping measures (as at 30 June 2006) see WTO 
document G/ADP/N/145/CAN, 1 September 2006. 
104 As reported by the authorities, the Regional Aircraft Credit Facility (RACF) was established to 
provide financing assistance, lease or loan guarantees, for the sale of Canadian-built fixed-wing commercial aircraft to Canadian air carriers. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 104 
 
 
expires in March 2008) and Export Development Ca nada;  and access to U.S. Department of Defence 
procurement through the Defence Pr oduction/Defence Sharing Arrangements.105 
82. In April 2005, the Federal Government and industry launched the Canadian Aerospace 
Partnership (CAP) to enhance the global compet itiveness of Canada's aerospace industry, and 
subsequently endorsed a National Aerospace Defence Strategic Framew ork, which presents a 20-year 
vision to guide future government policy and prog ramme decisions as well as to present a basis for 
collaboration among stakeholders.106  The new Government, which took office in February 2006, is 
considering all options for the way forward. 
83. In 2006, the Government of Quebec launche d The Quebec Aeronautical Development 
Strategy, which outlines the Government’s measures to  assist the Quebec aeronautical industry.  
Assistance is focused in five key areas, to suppor t:  prime contractors and equipment manufacturers;  
the development of Quebec small and medium-sized  enterprises;  the maintenance of a pool of 
qualified workers;  innovation and productivity;  and a strengthened partne rship with the Federal 
Government.  Forms of support, inter  alia, include financial assistance (including loans, support to 
finance sales, share capital);  foreign trade missions and participation in major air shows;  support for 
educational institutions, and promotion of the fo reign researcher and expert visa programme;  and 
fiscal measures to support pre-competitive research.107 
(ii) Textiles and clothing 
84. In 2005, textiles and clothing contributed Can$4.8 billion to GDP, down from Can$6 billion 
in 2002;  the decline was larger  in clothing than in textiles.108  In 2005, Quebec accounted for just over 
half of Canada's total textiles and clothing shipment s, and Ontario accounted for just under one third.  
Employment in the textile industry, the more capital- intensive side of the industry, has been relatively 
stable, however, there have been considerable job losses in the more labour-intensive clothing sector, 
with employment falling from 94,000 in 2002 to 71,000 in 2004.109 
85. The bulk of Canadian exports of clothing are to the United States110, and in this connection, 
the NAFTA allows specified quota amounts (the tari ff preference level) of non-originating clothing 
and textiles products to be traded among partners duty free.  Utilization rates of tariff preferences 
level to the United States have been decreasi ng during the review pe riod in all categories 
(Table IV.1).  As at the time of Canada's prev ious review, the quotas have hardly been used for 
exports to Mexico. 
                                                      
105 Industry Canada online information.  Viewed at: http://strategis.ic.gc.ca/epic/internet/inad-
ad.nsf/vwapj/aerospace-e-PDF.p df/$file/aerospace-e-PDF.pdf. 
106 Industry Canada online information.  Viewed at: http://strategis.ic.gc.ca/epic/internet/inad-
ad.nsf/en/ad03860e.html. 
107 Développement Économique Innovation et Exportation Québec online information.  Viewed at:  
http://www.mdeie.gouv.qc.ca/page/web/portail/en/mini stere/service.prt?svcid= PAGE_GENERIQUE_CATEGO
RIES56&iddoc=75193. 
108 Statistics Canada online information, "Gross Do mestic Product by Industry".  Viewed at:  
http://www.statcan.ca/cgi-bin/downpub /listpub.cgi?catno=15-001-XIE2006008. 
109 Statistics Canada (2005b). 
110 Bloskie (2005). Canada WT/TPR/S/179/Rev.1 
 Page 105 
 
 
Table IV.1 
Utilization rates of the NAFTA tariff preference level for exports to the United States, 2002-05 
(Per cent) 
Product description 2002 2003 2004 2005 
Wool apparel 100 100 98 91 
Wool suits MB 49 53 50 51 
Cotton or man-made apparel 87 82 80 64 
From imported fabric .. 60 56 38 
From imported yarn .. 39 40 37 
Cotton or man-made fibre fabr ics and made-up goods 86 77 63 50 
Woven fabrics 100 100 99 78 
Knit fabrics 40 33 18 14 
Quilts and other goods of sub heading 9404.90 .. 0 0 0 
Cotton or man-made fibre spun yarns 26 25 26 22 
 
.. Not available. 
 
Source:  Foreign Affairs and International Trade Canada  (http ://www.dfait-maeci.g c.ca/eicb/te xtile/textiles-en.asp). 
86. Since 2003, new Federal Government initiatives ha ve been developed to provide support to 
the Canadian textiles and clothing industry to be mo re internationally competitive and to adjust to the 
impact of trade liberalization resulting from the elimination of tariffs on imports from LDCs in 
2003111, final bound reductions in 2004 (Chapter III(2 )(iv)(b)), and the removal of quotas under the 
final phase of the ATC in December 2004. 
87. The Canadian Apparel and Textiles Industries Program (CATIP), which began operations in 
January 2003 with funding of Can$33 million, targeted  projects designed to help apparel and textile 
companies and their industry associations to:  apply new technologies to improve productivity;  
strengthen marketing strategies;  identify high- potential niche markets;  develop e-business 
capabilities;  and diversify products.  All of the f unding was disbursed, to over 400 projects, and the 
programme has been brought to a close. 
88. In 2004, the Government initiated a new th ree-year programme, the Textile Production 
Efficiency Component (CANtex) with initial funding  of Can$26.7 million.  This was supplemented by 
additional funding of Can$50 million in December  2004, and extended until  2010.  In September 
2006, however, funding was cut by Can$24.9 million as a result of a government spending review.  
The programme has two components:  the "produ ctivity component" assists companies in improving 
their production efficiencies;  and the "transform ative component" is for manufacturing companies 
diversifying from lower into higher value-added te xtile products targeted at growth niche markets.112 
89. A number of tariff remission schemes pertaining to imports of textiles and clothing are in 
operation;  many were renewed during the review period (Chapter III(2)(iv)).113 
90. Stemming from the 2005-06 Budget, the Governme nt of Quebec, made adjustments to an 
existing design tax credit (of 15% or up to 30% fo r small and medium-sized enterprises (SMEs) for 
wages or fees paid to in-house or consultant fashi on designers, employed by corporations producing at 
                                                      
111 According to Statistics Canada, Bangladesh is th e only LDC that engages in substantial textiles and 
clothing trade with Canada.  Imports from Banglad esh amounted to Can$165.2 million in 2000, and had 
increased to Can$480 million by 2004  (Statistics Canada 2005b). 
112 Industry Canada online information.  Viewed at:  http://strategis.ic.gc.ca/epic/internet/inctp-
ptc.nsf/en/Home. 
113 Canada Gazette online informa tion.  Viewed at:  http://canad agazette.gc.ca/part II/2005/20050112/ 
html/sor09-e.html;  and Canada Border Services Agency online information.  Viewed at:  http://www.cbsa-asfc. 
gc.ca/menu/D8-e.html. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 106 
 
 
least 20% of their manufacturing in Quebec.  The sc ope of the tax credit was adjusted to broaden the 
scope of eligible corporations as well as to recognize the work of patternmakers and assistant 
designers in the clothing and textiles sector.114 
(iii) Shipbuilding 
91. Cruise ships, tankers, tugs, and drilling and platfo rm ships (12 lines under HS 89) are some of 
a handful of manufactured goods that are not bound in Canada’s tariff schedule (Chapter III(2)(iv)).  
At the time of Canada’s trade policy review in  2000, the authorities noted that this was the only 
instrument to protect the small Canadian shipbuilding industry.115  Applied tariffs in the shipbuilding 
sector, range from zero up to 25%. 
92. In 2001, the Federal Government announced a new policy framework for the shipbuilding and 
industrial marine sector, focused on enhancing th e sector's opportunities as well as its growth and 
innovation, supplementing existing policy measures.116  This stemmed from earlier concerns 
expressed by the Canadian ship-building community to the Federal Government regarding a lack of 
investment and innovation, business practices that were detrimental to productivity, a lack of financial 
support, and the limits of the federal procuremen t budget.  The shipbuilding industry experienced a 
significant decline in both value added and employment during the 1990s.117 
93. One of the of the main elements of the polic y framework for the shipbuilding and industrial 
marine sector has been the Structured Financing Facility (SFF), which offered financial assistance to 
buyers and lessees of Canadian built ships.  Financial support through the programme had three 
components:  (i) non-repayable contributions of up to 15% of the purchase price of a new Canadian-
built vessel;  (ii) government credit insurance for part  of the loan or lease to acquire Canadian-built 
vessels;  and (iii) non-repayable contributions toward s private loan or lease insurance within certain 
limits.118  Total support under the three components could not exceed 15% of the purchase price.  
Since 2002, over thirty projects have been funded or funding is under way, with contributions to 
individual projects ranging from Can$41,636 to Can$11,103,450.119  The programme is scheduled to 
expire in 2007.120 
94. The Government of Quebec offers a refundable tax credit for the construction of vessels as 
well as a reduction of tax on capital on the ac quisition of vessels made entirely in Quebec.121 
                                                      
114 Additional Information on the Budgetary Measures (2005-2006), April 21, 2005 (page 47).  Viewed 
at:  http://www.budget.finan ces.gouv.qc.ca/budget/2005-2006/en/pdf/Add itionalInfoMeasures.pdf.  The design 
tax credit also applies to industrial design activities. 
115 WTO document WT/TPR/M/78, 5 February 2001. 
116 As noted by the Minister of Industry, these policy measures included:  a 25% tariff for several 
classes of vessels, accelerated tax write-offs for owner-operators;  and a Buy Canada policy for competitive 
federal procurements.  Viewed at:  http://strategis.i c.gc.ca/epic/internet/insim-cnmi.nsf/en/uv00038e.html. 
117 Industry Canada online information.  Viewed at:  http://strategis.ic.gc.ca/epic/internet/insim-cnmi. 
nsf/en/uv00038e.html. 
118 Industry Canada online information.  Viewed at:  http://strategis.ic.gc.ca/epic/internet/insim-cnmi. 
nsf/en/uv00003e.html. 
119 Industry Canada online information.  Viewed at:  http://strategis.ic.gc.ca/epic/internet/insim-cnmi. 
nsf/en/uv00033e.html. 
120 WTO document G/SCM/N/123/CAN, 1 August 2005. 
121 MDEIE Québec online information.  Viewed at:  http://www.mdeie.gouv.qc.ca/page/web/portail/en/ 
nav/programmes.html?&iddoc=44888. Canada WT/TPR/S/179/Rev.1 
 Page 107 
 
 
(iv) Automotive industry 
95. The automotive industry (including parts and equipment) is Canada's largest manufacturing 
activity, contributing Can$22 billion to GDP in 20 05, and representing 12.4% of manufacturing GDP 
(Can$20 billion, or 11.8% of manufacturing GDP, in 2002).122  Exports to the United States account 
for 97.7% of the industry's exports.123  Large investments announced by some major companies have 
generated a positive outlook for the industry.124 
96. In 2001, following WTO dispute settlement pro ceedings launched by the European Union and 
Japan, the Auto Pact agreement between th e United States and Canada was dismantled.125  The Auto 
Pact had been in place since 1965, and had created  a single North American manufacturing market.  
The Pact had eliminated tariffs between the two c ountries on cars, trucks, buses, tyres, and automotive 
parts, and included the use of certain local-content measures.126 
97. The authorities indicate that vehicles sold at the retail level in countries other than Canada and 
the United States do not comply with the Canada Mo tor Vehicle Safety Act, cannot be altered to 
comply, and therefore cannot be imported into Cana da.  Vehicles sold at the retail level in the 
United States may be eligible for importati on because they fall under the NAFTA provisions 
(Annex 300-A) and are manufactured to near identical  safety standards (and can be modified to meet 
Canadian requirements).  Under NAFTA, imports of ve hicles sold at the retail level in Mexico are to 
be phased in between 1 Janua ry 2009 and 1 January 2019.127  Such used vehicles permanently 
imported into Canada will have to c onform, or be made to conform, to all applicable Canadian safety 
standards. 
98. In 2004, the auto industry accounted for close to  47% of Ontario's international merchandise 
exports.128  In April 2004, the Government of Ontario,  launched an Automotive Investment Strategy, 
in partnership with industry;  funding totalli ng Can$500 million was targeted at advanced-skills 
training for workers, improved environmental a nd energy technologies, public infrastructure, and 
investments in research and innovation.129 
(5) TELECOMMUNICATION AND BROADCASTING SERVICES  
(i) Introduction 
99. Since Canada's previous Review, there have  been no major regulatory changes to its 
telecommunication or broadcasting services.  Accord ing to a panel of experts appointed by the 
Minister of Industry, while Canada's telecommuni cations policy and regulatory framework have been 
                                                      
122 The two main activities (NAICS definition) in value terms have been:  motor vehicle manufacturing 
(Can$7.677 billion in 2002, and Can$8.750 billion in 2005);  and motor vehicle parts manufacturing 
(Can$9.818 billion in 2002 and Can$10.396 billion in 2005). 
123 Industry Canada (2005). 
124 Statistics Canada (2006b). 
125 For a summary of the dispute, see:  WTO online information.  Viewed at:  http://www.wto.org/ 
english/tratop_e/dispu_e/cases_e/ds142_e.htm. 
126 For background on the Auto Pact, see:  Government of Canada online information.  Viewed at:  
http://canadianeconomy.gc.ca/english/economy/1965 canada_us_auto_pact.html. 
127 CBSA Memorandum D-9-1-11.  Vi ewed at:  http://www.cbsa-asfc .gc.ca/E/pub/cm/d9-1-11/d9-1-
11-e.html. 
128 Ministry of Finance Ontario online information.  Viewed at:  http://www.fin.gov.on.ca/english/ 
budget/bud04/pdf/papers_all.pdf. 
129 Government of Ontario online information.  Viewed at:  http://www.premier.gov.on. ca/news/ 
Product.asp?ProductID=401. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 108 
 
 
effective in promoting competition and achieving soci al objectives, regulatory reform is needed in 
order to better respond to the changing technological environment.130  As an initial response to the 
Panel’s recommendations, the Government of Canada h as issued a policy direction to the regulator to 
rely on market forces to the maximum extent feasible.131 
100. Total telecommunication services revenues (excl uding broadcasting) were Can$34.5 billion in 
2005, an increase of 3.5% over the previous year;  most  of this increase is due to the revenue growth 
of broadband internet and wireless services.  Wireless services are the largest sector in the Canadian telecommunications market, representing 32% of the i ndustry's revenues in 2005.  In the majority of 
the subsectors there are one or two large incumbents operating.
132  The level of competition in the 
industry has increased steadily. The incumbent's reve nue market share (excluding out-of-territory 
operations where they are reported as "competitive ca rriers") was at 65% for 2005, down from 70% in 
2003.  Competitors’ 2005 revenue market shares we re 19% for facility-based competitors, 11% for 
ILEC out-of-territory operati ons, and 5% for resellers. 
101. At end of 2004, 96% of house holds in Canada had wireline te lephone services.  The average 
annual growth rate of wireless telecommunica tion services subscribers was 12% over the period 
2001-05;  the total number of subscribers reached  approximately 17.0 million in 2005, a penetration 
rate of 52 per 100 inhabitants.133  In 2005, 89% of households were located within areas served by 
cable broadcasting distribution undertakings (BDUs)  capable of providing both broadband and 
broadcasting services.  However, from June 2003 to  June 2006, Canada fell from second to ninth 
place in terms of broadband pene tration rates among OECD countries.134 
(ii) Institutional and legal framework 
102. Canada's commitments on telecommunication servi ces attached to the Fourth Protocol of the 
GATS cover most services.135  Canada's list of specific commitments excludes services regulated 
under the Broadcasting Act136, which include telecom service s supplied for transmission of 
programmes to direct reception by the public (i.e. direct to home (DTH) and direct broadcast satellite 
(DBS) television services).  Canada bound its ex isting foreign ownership restrictions in 
telecommunications (see below);  it committed to  remove traffic routing restrictions for all 
international and satellite services, aimed inter alia , at preventing Canadian traffic from being routed 
via the United States.137  There are no restrictions to enhanced or value-added services. 
103. Canada's revised conditional offer on services pr oposes to remove remaining restrictions to 
market access on basic telecoms servi ces under the cross-border mode of supply.138 
                                                      
130 Telecommunications Policy Review Panel online information.  Viewed at:  http://www. 
telecomreview.ca/epic/internet/intprp-gecrt.nsf/en/ Home. 
131 Industry Canada online information.  View ed at: http://www.ic.gc.ca/cmb/welcomeic.nsf. 
132 CRTC (2006). 
133 CRTC (2006). 
134 Industry Canada (2006) and OECD (2005c). 
135 WTO document, GATS/SC/16/Suppl.3, 11 April 1997. 
136 The Broadcasting Act defines broadcasting as any transmission of programmes, whether or not 
encrypted, by radio waves or other means of teleco mmunication for reception by the public by means of 
broadcasting receiving apparatus, but does not include any such transmi ssion of programme made solely for 
performance or display in  a public place.  The Broadcasting Act  also states that the CRTC shall regulate and 
supervise all aspects of the Canadian broadcasting system. 
137 WTO document WT/TPR/S/112/Rev.1, 19 March 2003, Chapter IV(5). 
138 WTO document TN/S/O/CAN/Rev.1, 22 May 2005. Canada WT/TPR/S/179/Rev.1 
 Page 109 
 
 
(a) Telecommunications 
104. Industry Canada is responsible for telecomm unications policy and for spectrum policy and 
management.  It also has responsibility for the licen sing of international submarine cables, as well as 
for the licensing for use of spectrum under the Radiocommunication Act. 
105. The Canadian Radio-television and Teleco mmunications Commission (CRTC) is an 
independent, regulating public authority with quasi-judicial powers.139  The Telecommunications Act 
(1993) gives the CRTC regulatory and enfo rcement powers in the telecom sectors .  The CRTC is also 
responsible, in collaboration with the Competition Bureau, for ensuring major suppliers do not engage 
in anti-competitive practices;  in a merger asse ssment, both entities play a role, with the CRTC 
focusing , among other things , on foreign ownership requirements. 
106. The CRTC Interconnection Steering Committee (CISC) assists in the development of 
interconnection standards and arra ngements, and of guidelines for CRTC's other regulatory activities.  
The CISC consists of a number of working groups  composed of representatives from the CRTC, from 
industry and the general public. 
107. All telecom facilities-based common carriers must  be Canadian-owned and controlled, and 
incorporated under federal or provincial laws.140  Canada's current regulatory regime on foreign 
ownership is identical to its GATS commitments.  It  limits foreign direct investment in facilities-
based service providers to a combined maximum of 46.7% of voting shares, based on 20% direct ownership, and 26.7% indirect ownership.
141  In addition, not less than 80% of the members of the 
board of directors must be Canadian.  These provi sions do not apply to the ownership and operation 
of: international submarine cables, mobile a nd fixed satellite systems;  and resellers of 
telecommunication services, where 100%  foreign investment is allowed.142  In the context of Canada's 
previous Review, several WTO Members asked about  prospects for liberalizing these limitations on 
foreign ownership and control.143  According to the authorities, Canada is examining the potential 
benefits and implications of increasing foreign i nvestment in the Canadian telecom industry.  
However, no decision to amend the existing regime has been made (as at end 2006). 
108. Resellers and facilities-based providers of lo cal and long-distance telecommunication services 
only need to register with the CRT C, while a licence is required for in ternational service providers.  In 
order to provide local telephone service a company n eeds to register with the CRTC as a competitive 
local exchange carrier (CLEC). 
109. Spectrum licences for wireless operations are granted by Industry Canada, which has 
favoured the use of auctions subject to the payment of one-time fees.144  Industry Canada determines 
the terms and conditions of the licence, and it may consider the use of policy provisions such as spectrum aggregation limits to foster competition.   Licences for international submarine cables, 
satellites, and satellite earth stations are also granted by Industry Canada. 
                                                     
 
139 Canadian Radio-television and Telecommunications Commission Act.  Viewed at: http://laws. 
Table 20, justice.gc.ca/en/c-22/227307.html. 
140 Telecommunications Act (1993) and Canadian Telecommunications Common Carrier Ownership 
Regulations (1994).  Viewed at:  http://laws .justice.gc.ca/en/t-3.4/ sor-94-667/179048.html. 
141 The 26.7% indirect ownership is the result of a 33.3% stake in a holding company that holds the 
remaining 80% of the operating company.   
142 Telecommunications Act (1993) and Canadian Telecommunications Common Carrier Ownership 
Regulations (1994). 
143 WTO document WT/TPR/M/112/Add.1, 16 June 2003. 
144 There is no obligation for Industry Canada to use the auction mechanism. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 110 
 
 
110. Licences for the provision of basic international telecommunications services (BITS) are 
granted by the CRTC.  In 2005, the CRTC introdu ced changes to the BITS licences, such as a new 
streamlined application form, longer terms (ten inst ead of five years), and the elimination of most 
filing requirements designed to detect anti-comp etitive conduct.  Unless an anti-competitive conduct 
affects the Canadian market, the CRTC does not regulate international settlement arrangements.145 
111. The CRTC requires the incumbent local exchange  carriers (ILECs) to provide competitors 
with unbundled access to essen tial facilities – including access to local loops – under mandated 
pricing.  The CRTC also requires ILECs to provide interconnection to competitive carriers.146  I n  
order to ensure non-discriminatory terms and conditions , ILECs are also required to file tariffs with 
the CRTC for interconnection and for other services where the ILEC is dominant.  CRTC mandates 
the equal sharing of costs for the establishment of interconnecting trunks in each pre-determined 
interconnecting region, and adopts a "bill-and-keep" approach to compensation of calls termination.147  
Fixed to mobile termination rates are not imposed nor published.148 
112. The CRTC encourages market participants to ma ke use of alternative methods for resolving 
interconnection disputes, including bilateral negotiations, third-party mediation or staff-assisted 
dispute resolution.149  A more formal dispute mechanism, available through the CRTC, provides for 
the CRTC to issue a decision or determine that a further public process is required.  The CRTC established an expedited process for dispute resolution for telecommunications in 2004
150, and for 
broadcasting in 2005. 
113. Canada has signed international agreements w ith Argentina and Mexico that provide for 
coordination in the provision of satellite services151, as well as terrestrial radiocommunications 
agreements and arrangements with Denmark, France , and the United States on the coordination and 
use of radio frequencies.152 
114. Voice over Internet Protocol (VoIP) services are regulated by the CRTC only when they are 
provided and used as a local telephone service.  In or der to prevent ILECs' abuse of market power, the 
CRTC requires ILECs to file tariffs for VoIP services that are dependant upon access to the service 
provider’s own network.  The ILECs are also  restrained from promoting the service to former 
customers in accordance with all existing regulatory requirements.  However, VoIP services that are 
available for use with any high-speed Internet c onnection, as well as services provided by CLECs and 
resellers , are not subject to economic regulation.  Computer-to-computer (peer-to-peer) VoIP services 
are not subject to regulation. 
115. Local number portability (LNP) has been implem ented in Canada's major centres, and ILECs 
are required to provide LNP in smaller centres upon request by the CLECs.153  In 2005, the CRTC 
                                                      
145 Telecom Decision CRTC 98-17, 1998. 
146 Telecom Decision CRTC 97-8, 1997. 
147 Under the bill-and-keep mechanism, originating carriers do not have to compensate terminating 
carriers for the costs of completing calls.  The CRTC also  allows for mutual compensation, where appropriate. 
148 Telecom Decision CRTC 97-8, 1997;  Telecom Decision CRTC 2004-96, 2004;  and Telecom 
Decision CRTC 2006-35, 2006. 
149 Online information.  Viewed at:  http://www.tbs-sct.gc.ca/rma/dpr1/04-05/CRTC-CRTC/CRTC-
CRTCd4503_e.asp. 
150 Online information.  Viewed at:  http://www.crtc .gc.ca/archive/ENG/Circulars/2004/ct2004-2.htm. 
151 Online information.  Viewed at: http://strategis.ic.gc.ca/epic/internet/insmt- gst.nsf/en/h _sf06101 
e.html.  
152 Online information Viewed at:  http://strategis.i c.gc.ca/epic/internet/insmt-gst.nsf/en/h_sf01361 
e.html. 
153 Telecom Decision CRTC 97-08, 1997. Canada WT/TPR/S/179/Rev.1 
 Page 111 
 
 
issued a decision requiring all Canadian wireless telephone companies to implement wireless number 
portability in most of Canada by 14 March 2007.154  The wireless number portability plans have also 
included inter-modal (wireless-to-wirelin e and wireline-to-wireless) portability . Carrier pre-selection 
for long-distance and international calls has also been implemented.155 
(b) Broadcasting 
116. Under various statutes, broadcasting licences may not be granted to companies that are not 
Canadian owned and controlled according to the sa me share and board restrictions applied to 
telecommunication companies (see above), and inco rporated under Canada's  federal and provincial 
laws as well as other measures.156  Under current rules, foreign ownership of broadcasting 
programming undertakings (BPUs) a nd broadcasting distribution undert akings (BDUs) is limited in 
Canada to 20% of an operating company and 33.3% of a holding company.  This means that in the broadcasting, cable or DTH business, combined direct (20%) and indirect (26.7%
157) ownership can 
reach 46.7%.  For regulatory purposes, internet service providers (ISPs) are considered telecommunication companies. 
117. Pursuant to the Broadcasting Act, the CRTC es tablished a system to regulate the amount of 
Canadian content broadcast in Canada.  Among other measures, the CRTC requires that private 
television stations and networks a nd ethnic TV stations achieve a yearly Canadian content level of 
60% overall measured during the day, and 50% meas ured during the evening broadcast period.  The 
Canadian Broadcasting Corporation (CBC) must ensu re that at least 60% of its overall schedule, 
measured during the day, is Canadian.  Requireme nts for pay-tv, specialty and pay-per-view services 
vary and are set out in licensing conditions. 
118. The CRTC also requires that all radio stations ensure 35% of their popular musical selections 
are Canadian each week.  French-language radio stati ons must ensure that at least 65% of the popular 
vocal music selections they broadcast each week  are in French.  Satellite subscription radio 
undertakings must, if certain subscription threshol ds have been met, distribute a minimum of ten 
original Canadian-produced channels or contribu te a minimum of 6% of gross revenues to the 
development of Canadian talent.  Also, these undertakings must distribute a minimum of four French-
language original Canadian-produced channels.  A minimum of 85% of the musical selections 
broadcast on all Canadian-produced channels must be Canadian, and a minimum of 65% of all popular vocal musical selections broadcast on ea ch French-language channel must be French-
language selections.
158 
119. The Government of Canada has revised its satellite-use policy to accommodate broadcasting 
services to the Canadian public.  As of September 2005, Canadian “digital broadcasting subscription 
radio services”, in exceptional circumstances, wher e no Canadian satellite facilities are available to 
accommodate specialized delivery of a digital subscription radio service, may use foreign satellites to 
transmit their services to Canadian homes to provide specialized Canadian programming services.  
Additionally, Canadian programming services may use foreign satellites to distribute their signal to 
terrestrial distribution service headends.  Howeve r, programming undertakings must use Canadian 
satellites to distribute their signals directly to  homes via a Canadian DTH service.  Foreign 
                                                      
154 Telecom Decision CRTC 05-72, 2005. 
155 Telecom Decision CRTC 92-12, 1992. 
156 Broadcasting Act, Radiocommunication Act, Radiocommunication Regulations, and Direction to 
the CRTC (Ineligibility of Non-Canadians). 
157 Obtained by multiplying 33.3% and 80%. 
158 CRTC decisions 2006-37 and 2006-38. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 112 
 
 
programming services, in order to be distributed, mu st be approved by the CRTC and "listed" on the 
list of Eligible Satellite Services. 
120. CRTC rules determine that broadcasting distribution undertakings, such as cable companies 
and DTH satellite services, must give priority to  the carriage of Canadian television signals.159 
(6) FINANCIAL SERVICES  
(i) Introduction 
121. Although the number of banks operating in Cana da remained virtually unchanged during the 
review period, the composition of the banking sector  changed slightly (Table IV.2).  While the 
number of domestic banks increased from 16 to 21 between March 2003 and March 2006, the number 
of subsidiaries of foreign banks fell from 32 to 26.  There were three more foreign bank branches in 
March 2006 than three years earlier.  All domestic banks were privately owned. 
Table IV.2 
Financial institutions operating in Canada, 2003 and 2006a 
 2003b 2006b 
 Number of 
institutions  Assetsc 
(Can$ million)  Number of 
institutions  Assetsc 
(Can$ million) 
Banks     
Domestic 16 1,645,618 21 1,905,673 
Foreign subsidiaries 32 85,425 26 109,446 
Foreign branches 21 25,916 24 37,078 
Trust and loan companies     
Bank-owned 30 197,912 30 203,298 
Other 34 9,720 38 16,829 
Cooperative credit associationsd 7 11,983 7 14,931 
Life insurance companies     
Canadian-incorporated 42 325,091 45 361,997 
Foreign branches 55 27,986 53 18,429 
Fraternal benefit societies     
Canadian-incorporated 13 6,201 12 5,838 
Foreign branches 10 1,035 9 1,523 
Property and casualty insurance companies     
Canadian-incorporated 89 48,068 93 65,825e 
Foreign branches 102 21,163 96 24,838e 
Pension plans 1,205 90,656 1,304 116,576 
 
a Covers only federally regulated companies, including ins titutions in the process of li quidation or termination and 
 institutions limited to servicing existing business. 
b March. 
c Total assets of the industries regulated by OSFI are not the simple sum of the figures above.  The figures for entities that report 
on a consolidated basis include subsidiaries whose asse ts may also be included in a different category. 
d Covers only the national and six of the provincial credit union associations, which ar e trade associations and central financ e 
facilities for credit unions.  These coopera tive credit associations only  offer services to the credit union system, and not to  the 
public. 
e December 2005. 
 
Source: WTO Secretariat, based on OSFI (various years) Annual Reports . 
122. Total banking sector assets were around Can$2.24 tr illion in September 2006.  The six largest 
banks (all of them domestic banks) accounted for 93 % of total banking assets as at end-2005, roughly 
                                                      
159 Canadian Radio-television and Telecommunications Commission, online information.  Viewed at:  
http://www.crtc.gc.ca/eng/INFO_SHT/b311.htm. Canada WT/TPR/S/179/Rev.1 
 Page 113 
 
 
the same share as reported in Canada's last Review .  Banks represent the la rgest portion of financial 
sector assets, with 56% of the total held in Canada in 2005. 
123. The Canadian authorities consider that high a ggregate bank capital and credit quality provide 
banks with a comfortable financial buffer.160  They see some limited credit risks from a combination 
of high energy prices, exchange rate appreciati on, and competition from Asia, which place significant 
financial stress on sectors accounting for approximately 12% of corporate debt. 
124. The life and health insurance subsector, in cluding federally and provincially regulated 
companies, comprised 105 companies in November 2006, down from 120 in 2000.  Of the 99 companies that were federally registered, 53 we re branches of foreign companies.  The three 
largest companies accounted for 63% of the domestic market in 2004. 
125. There were some 215 private property and casua lty insurance companies in November 2006.  
Of these, 187 were registered federally, including 95 branches of foreign companies.  The five largest 
companies accounted for around 35% of property an d casualty net premiums written in Canada in 
2004. 
126. Canada's banks and life and health insurers are significant participants in foreign markets.  
Approximately 30% of 2005 bank earnings were generated outside  Canada, and around 54% of the 
life and health insurance subsector's 2004 premium income was from foreign sources. 
127. The federal and the provincial governments share jurisdiction over financial services.  While 
banking falls exclusively under fede ral jurisdiction, credit unions, mutual funds, and securities firms 
are regulated largely by the provin ces.  Insurance and trust and loan companies are regulated at both 
the federal and provincial levels. 
128. The Department of Finance develops regul ations governing banks and other federally 
regulated financial institutions.  The Office of th e Superintendent of Financial Institutions (OSFI) 
supervises federally regulated financial institutions and provides input for the development of federal 
regulations.  Three provinces (New Brunswick, On tario, and Manitoba) rely on OSFI for the 
prudential supervision of provincia lly chartered insurance companies on their behalf.  Under these 
agreements, OSFI supervises provincially charte red life insurance companies and provincially 
chartered property and casualty insurance companies.  Provincial authorities regulate the market conduct of all insurance companies operating in their jurisdiction. 
129. Canada's main federal financ ial legislation includes the Bank Act, the Trust and Loan 
Companies Act, the Insurance Co mpanies Act, and the Cooperativ e Credit Associations Act.  
Canada's financial legislation is subject to review  every five years.  New financial legislation was 
adopted as a result of the 2001 review.
161  In the context of the most recent review, legislation was 
introduced to Parliament in November 2006.162 
(ii) Banking services 
130. Canada's GATS market access and national treatment commitments are undertaken in 
accordance with the Understanding on Commitments on Financial Services.163  In the context of the 
post-Uruguay Round negotiations on fina ncial services, Canada revised the commitments it had made 
                                                      
160 International Monetary Fund (2006) and Bank of Canada (2006a). 
161 WTO (2003). 
162 See Department of Finance Canada (2006a). 
163 WTO document GATS/SC/16/Suppl.4/Rev.1, 6 June 2000. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 114 
 
 
in 1995 by allowing foreign banks to branch direc tly into Canada, and by eliminating a requirement 
for foreign bank subsidiaries to obtain Ministerial appr oval to open more than one branch in Canada.  
Canada has tabled a revised offer on servi ces in the context of the Doha negotiations.164  It has also 
co-sponsored a paper on financial services liberaliza tion and coordinated a pl urilateral request on 
financial services.  The revised offer largely reflect s the legislative and regulatory framework applied 
to the banking sector as at mid 2006. 
131. There have been no major legislative changes affecting market access in the banking sector 
since Canada's last Review.  In the context of  the 2006 review of financial legislation, the 
Government proposes to eliminate the requirement for the Minister of Finance to approve the entry of 
"near banks".  Near banks are foreign entities that  provide banking-type services such as consumer 
loans, but are not regulated as, or like, banks in their home jurisdiction.165  The authorities indicate 
that, in addition, the legislative review has identif ied several technical changes that will streamline the 
foreign bank entry framework, for example by allo wing foreign banks to:  invest in mutual fund 
management entities and in closed-end funds;  hold temporary investments in non-permitted entities;  
and to engage directly in specialized financing entities. 
132. IMF staff have expressed concern about the lack of progress in addressing regulatory issues 
related to bank mergers.166  The authorities also note that bank mergers are not a priority for the 
Government.  The OECD has noted that uncertainty about the criteria that the Minister of Finance 
might apply in approving a bank merger makes it difficult for possible mergers to be explored.167  It 
also points out that restrictions on bank owners hip might be hampering bank efficiency gains and 
market expansion (see below).  The Canadian aut horities indicate that Canada's size-based ownership 
regime does not distinguish between foreign and domes tic investors, and that its purpose is to enhance 
the safety and soundness of the largest financial ins titutions, where concerns regarding the impact of 
failure on depositors, policyholders, and the wide r economy are greatest, while also providing the 
flexibility to encourage market entry. 
133. Although there is no limitation on cross-border supply or consumption abroad of banking 
services, foreign financial services providers must establish a commercial presence to solicit business 
in Canada. 
134. There are no statutory restrictions on foreign ownership of banks.  However, banks with 
equity of Can$5 billion or more (so- called large banks) must be "widely held", that is, not more than 
20% of the bank's voting shares or 30% of its non-vo ting shares can be acquired by a single person, 
regardless of nationality.168  Additionally, there is a prohibition against any single person (Canadian or 
foreign) acquiring control of a large bank.  Ther e are certain limited exceptions on the control 
prohibition, including for entities such as a widely  held regulated bank-holding company or for a 
foreign bank that controls a Canadian bank subs idiary that has grown through the Can$5 billion 
threshold.  The Guidelines Respecting Control in Fact (Bank Act) set out the policy objectives and 
factors that the Minister of Finance would consid er in assessing whether an application to acquire 
more than 10% of the shares of a large bank cont ravenes the control prohibition.  The Canadian 
authorities indicate that there have been no applicati ons to acquire more than 10% of the shares of a 
large bank since 2002. 
                                                      
164 WTO document TN/S/O/CAN/Rev.1, 23 May 2005. 
165 Department of Finance Canada (2006a). 
166 IMF (2006). 
167 OECD (2006b). 
168 Bank Act, Section 374(1). Canada WT/TPR/S/179/Rev.1 
 Page 115 
 
 
135. Banks with equity of Can$1 billion or more, but less than Can$5 billion (medium banks) are 
allowed to be closely held.  However, at least 35%  of voting shares of a medium bank must be listed 
and posted for trading on a recognized  exchange and be widely held.169  The approval of the Minister 
of Finance is required for any single person (Canadian or foreign) to own more than 10% of the shares 
of a medium or small bank (i.e. equity of less than Can$1 billion).170  In the context of the 2006 
review of financial legislation, the Government proposes to increase the equity threshold for large 
banks to Can$8 billion, and fo r small banks to Can$2 billion.171 
136. A foreign bank may establish and operate a subsidiary, a full-service branch, a lending 
branch, or a representative office in Canada.  A fore ign bank is allowed to operate concurrently a full-
service and a lending branch.  Although lending branch es may lend in Canada, they are not permitted 
to take any deposits.  Full-service branches may take deposits of Can$150,000 or more.  Certain 
exceptions are contained in the Prescribed De posits (Authorized Forei gn Banks) Regulations.  
Deposits in full-service branches are not covered by  deposit insurance (see below).  There are no 
statutory restrictions on the number of banks (domes tic or foreign) that can establish and operate in 
Canada.  There are no restrictions on the number of offices that foreign bank subsidiaries or branches 
can open in Canada. 
137. Subsidiaries of foreign banks are allowed to  provide the same services as domestic banks.  
Banks may not offer auto-lease financing.172  They cannot directly offe r insurance services, except 
certain credit-related insura nce, nor deal in securities.173  Foreign bank branches are subject to the 
same restrictions.174 
138. Canada allows widely held banks to organize under a holding company structure.  Banks or 
bank holding companies may hold as subsidiaries other financial services firms (e.g., insurance 
companies and investment dealers), financial ag ents (e.g., portfolio management and payroll 
administration firms), ancillary services firms, and other firms specified in legislation, including information service firms and real property brokerage firms.
175 
139. To establish and operate in Canada, a domestic bank and a subsidiary of a foreign bank must 
obtain a letter patent of incorporation and an Order to Commence and Carry on Business.176  Letters 
patent of incorporation are issued by the Minister of Finance upon recommendation of the Superintendent of Financial Ins titutions.  Orders to Commence and Carry on Business are issued by 
the Superintendent.  A single application is suffici ent to obtain both documents;  applications are 
administered by OSFI;  the application fee fo r letters patent of in corporation is Can$32,000.
177 
140. Under the Bank Act, the Minister of Finance is entitled to take into account all relevant 
matters in determining whether to is sue letters patent of incorporation.178  The Bank Act contains an 
                                                      
169 Bank Act, Section 385(1). 
170 Bank Act, Section 377.1. 
171 Department of Finance Canada (2006a). 
172 Bank Act, Section 417. 
173 Insurance Business (Banks and Bank Holding Companies) Regulations and Securities Dealing 
Restrictions (Banks) Regulations. 
174 Insurance Business (Authorized Foreign Banks) Re gulations and Securities Dealing Restrictions 
(Authorized Foreign Banks) Regulations. 
175 Bank Act, Part IX. 
176 Bank Act, Section 22 and section 48(1). 
177 Regulations Amending the Charges for Services Provided by the Office of the Superintendent of 
Financial Institutions Regulations 2002. 
178 Bank Act, Section 27. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 116 
 
 
illustrative list of such relevant matters.179  One of the items on the list is "the best interest of the 
financial system in Canada".  The Superintendent  issues Orders to Commence and Carry on Business 
if satisfied that the bank complies with a ll relevant requirements of the Bank Act. 
141. OSFI has published the criteria that an appli cant must meet to incorporate and operate a 
bank.180  No distinction is made betw een domestic banks and subsidiaries of foreign banks, except that 
applications from foreign banks must include informat ion on the extent to which the bank is subject to 
consolidated supervision and regul ation in its home jurisdiction.  Additionally, foreign banks must 
provide a statement by an official from their home  jurisdiction indicating that they are in good 
standing, and that the home jurisdiction is aware of  the bank's intention to establish a subsidiary in 
Canada.  For applicants that are part of a corporat e group, the Superintendent considers the extent to 
which the affiliates of the group are supervised by  OSFI, agencies in other Basel Accord signatories, 
and agencies that have concluded an MOU on regu latory cooperation and supervision with OSFI.  
According to the Canadian authorities, Canada  has 17 active MOUs with foreign regulatory 
authorities.181  As part of the evaluation of an appli cation, OSFI may conduct an on-site review. 
142. Orders to Commence and Carry on Business remain in force indefinitely unless the 
Superintendent determines otherwise.  Domestic ba nks and subsidiaries of foreign banks must publish 
a notice indicating their intention to apply for letters patent of incorporation.  There is no statutory 
time limit for assessing applications.  OSFI's initial a ssessment of an application takes an average of 
three months.182  An additional two months are normally required to fulfil the public notification 
requirement.  Banks do not need additional licences to  establish and operate in particular provinces.  
There were 16 new bank entry applications betw een 2003 and October 2006;  two of them were 
withdrawn. 
143. Foreign bank branches must obtain an Order Perm itting the Establishment of a Branch, which 
is issued by the Minister of Finance upon recommendation of the Superintendent.183  In addition, they 
must obtain an Order to Commence and Carry on Business.184  OSFI has published the criteria and 
information requirements that must be fulfilled to establish and operate a foreign bank branch.185  
Foreign bank branches applying for an Order Perm itting the Establishment of a Branch are also 
subject to a public notice requirement.  The appli cation fee for an Order Permitting the Establishment 
of a Branch is Can$32,000.186  Bank branches do not need additiona l licences to establish and operate 
in particular provinces.  There were nine appli cations for the establishment of foreign bank branches 
between 2003 and October 2006;  none was withdrawn. 
                                                      
179 Bank Act, Section 27. 
180 OSFI (2004b). 
181 British Virgin Islands Financial Services Co mmission (banking), Cayman Islands Monetary 
Authority (banking), China Banking Regulatory Commission (banking), Financial System Superintendency of 
El Salvador (banking), France's Commission Bancaire (banking), Germany's BaFin (banking and insurance), 
Hong Kong Monetary Authority (banking), Hong Kong Insurance Authority (insurance), Mexico's National Banking and Securities Commission (banking ), Superintendency of Banks of th e Republic of Panama (banking), 
U.K. Financial Services Authority (banking and insurance), U.S. Federal Reserve Board Office of the 
Comptroller of the Currency and Federal Deposit Insurance Corporation (banking), Illinois Department of 
Financial and Professional Regulation (banking and in surance), Massachusetts Department of Insurance 
(insurance), State of New York Banking Department (banking), State of North Carolina Office of the Commissioner of Banks (banking), and U.S. Office of the Thrift Supervision (banking and insurance). 
182 OSFI (2004b). 
183 Bank Act, Section 524(1). 
184 Bank Act, Section 534(1). 
185 OSFI (2002a). 
186 Regulations Amending the Charges for Services Provided by the Office of the Superintendent of 
Financial Institutions Regulations 2002. Canada WT/TPR/S/179/Rev.1 
 Page 117 
 
 
144. To establish a full-service branch in Canada , a foreign bank must have a minimum of 
Can$5 billion in world-wide assets.187  Foreign bank branches must maintain a capital equivalency 
deposit with an OSFI-approved fina ncial institution.  For full-service branches, the amount of the 
deposit is set at Can$5 million;  it must be maintained at that level, or at 5% of the branch's Canadian 
liabilities, whichever is greater.  For lending branches, the deposit is Can$100,000.188  The 
Superintendent may require a foreign bank branch  to maintain additional assets with an OSFI-
approved financial institution if necessary to pr otect depositors and creditors.  The minimum 
regulatory capital required to establish a domestic bank or a subsidiary of a foreign bank is 
Can$5 million.189  At least half of the directors of a forei gn bank subsidiary, and at  least two-thirds of 
the directors of any other bank must reside in Ca nada at the time of each director's election or 
appointment.190 
145. OSFI supervision is in accordance with its Supervisory Framework of 1999, supplemented by 
its Supervisory Framework Rating Assessment Criteria of 2002.191  According to OSFI, Canadian 
banks are well advanced in their efforts to impl ement Basel II, but "ongoing work is required, 
particularly on qualifying for the more comple x Advanced Internal Ratings-Based approach to 
calculating capital".192  Banks may determine interest rates freely.  Bank service fees are not subject to 
official controls. 
146. The Canada Deposit Insurance Corporation (CDIC)  insures eligible deposits at its member 
institutions.  All banks taking de posits of less than Can$150,000 mu st be members of the Canada 
Deposit Insurance Corporation (CDIC).  Banks ta king only deposits of Can$150,000 or more may opt 
out of CDIC.  Full-service branches of foreign bank s are not eligible for CDIC membership.  The 
maximum basic coverage available for eligible deposits held at a single member institution is 
Can$100,000 per depositor.  Prior to 2005, the ma ximum coverage was Can$60,000.  Membership 
fees vary depending on members' capital adequacy, ne t impaired assets, and other prudential factors. 
147. OSFI has published a guideline identifying the policies and procedures that banks must put in 
place to comply with statutory requirements to combat money laundering and terrorist financing.193  
The Financial Transactions and Reports Analysis  Centre of Canada (FINTRAC), a federal 
Government agency created in July 2000, coll ects, analyses, and assesses information related to 
money laundering and terrorist financ ing activities.  FINTRAC also ensures that banks comply with 
the record-keeping, reporting, and customer iden tification requirements of the Proceeds of Crime 
(Money Laundering) and Terrorist Financing Act. 
(iii) Insurance services 
148. Under Canada's GATS commitments, commercial presence is required to offer insurance, 
reinsurance, and retrocession services, except fo r marine insurance.  A foreign company may 
incorporate as a separately capitalized subsidiary, or a branch;  it may also acquire an existing 
Canadian enterprise, subject to notification and pr ior government review.  A number of restrictions, 
including residency and nationality requirements re lating to broking and agency services have also 
been listed in Canada's GATS Schedule.  In genera l, Canada's revised services offer does not contain 
any new commitments in insurance.194 
                                                      
187 OSFI (2002a). 
188 Bank Act, Section 534(3). 
189 Bank Act, Section 52(1). 
190 Bank Act, Section 159(2). 
191 OSFI (2002b). 
192 OSFI (2006). 
193 OSFI (2004a). 
194 WTO document TN/S/O/CAN/Rev.1, 23 May 2005. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 118 
 
 
149. There have been no major legislative changes a ffecting market access in the insurance sector 
since Canada's last Review.  In the context of  the 2006 review of financial legislation, the 
Government proposes to allow providers of marine insurance to register at the federal level, a 
possibility that is already available to providers of all other insurance services.195 
150. Under the Insurance Companies Act, foreign in corporated insurance co mpanies cannot insure 
risks in Canada unless the Superintendent issues an authorizing order.196  The Insurance Companies 
Act lists the information that must accompany an application for an order197;  the Superintendent is 
entitled to request additional information.  Th e application process involves a public notice 
requirement.  The foreign company must appoint a Canadian resident as its chief agent;  it must 
appoint an actuary and an auditor, and must have vested in trust assets having a prescribed value.  
Under the Act, the Superintendent must publish in the Canada Gazette  a quarterly list of foreign 
insurance companies authorized to carry on business in Canada. 
151. Under Part I of the Excise Tax Act, an excise tax of 10% is applicable  on premiums paid to 
non-established direct non-life insurers (except mari ne insurers) on risks within Canada, unless such 
insurance is deemed not to be available in Canada. 
152. There are no statutory restrictions on foreign ownership of federally registered insurance 
companies.  A person (Canadian or foreign) must ob tain the approval of the Minister of Finance to 
acquire more than 10% of any class of shares of a federally regulated insurance company.198  At least 
35% of the voting shares of federally registered in surance companies with equity of Can$1 billion or 
more must be listed and posted for trading on an OSFI recognized exchange and be widely held.  
Mutual life insurance companies that had equity in excess of Can$5 billion prior to their conversion 
into life insurance companies with common shares (demutualization) in 1999-00 must be widely held.  
In addition, there is a prohibition against any single  person (Canadian or foreign) acquiring control of 
such an insurance company, w ith some exceptions.  The Guidelines Respecting Control in Fact 
(Insurance Companies Act) set out the policy objec tives and factors that the Minister of Finance 
would consider in assessing whether an application to acquire more than 10% of the shares of a 
demutualized insurance company would contravene  the control prohibition.  Two companies are 
subject to these rules. 
153. The requirement in Quebec's "Loi sur les assu rances" obliging non-residents of Canada to 
obtain ministerial approval to acquire more than  30% of the voting shar es of a Quebec chartered 
insurance company was repealed in December 2002. 
154. Foreign companies may establish and operate in Canada through a subsidiary.  There are no 
restrictions on the number of insurance companie s that can establish in Canada, except in areas 
subject to a public monopoly, (i.e. motor vehicl e insurance in British Columbia, Manitoba, and 
Saskatchewan, and in Quebec, motor vehicle insuran ce with respect to personal injury and death.  
Subsidiaries of foreign companies may offer the same services as domestic firms). 
155. Foreign insurance firms may incorporate their Cana dian subsidiary at the federal level or at 
the provincial level.  To incorporate federally a nd start operations, domestic insurance companies and 
subsidiaries of foreign insurance companies must a pply for letters patent of incorporation and an 
Order to Commence and Carry on Business in a process analogous to establishing a bank.199  OSFI 
                                                      
195 Department of Finance Canada (2006a). 
196 Section 573(1). 
197 Section 579(1). 
198 Insurance Companies Act, Section 407(1). 
199 Insurance Companies Act, Sections 22 and 52. Canada WT/TPR/S/179/Rev.1 
 Page 119 
 
 
has published the criteria and information requirement s that must be fulfilled to establish and operate 
an insurance company at the federal level.200  The information requirements largely mirror the criteria 
and information requirements for banks.  The applica tion fee for letters patent of incorporation is 
Can$32,000.201  The minimum capital requirement for federally incorporated insurance companies 
(domestic or foreign) is Can$5 million.202  At least half of the directors of a foreign-owned insurance 
subsidiary must be Canadian residents;  for domestic  insurance companies, at least two thirds of the 
directors must reside in Canada.203  There have been 14 applications for letters patent of incorporation 
since 2003, two of which were withdrawn. 
156. Insurance companies must be licensed in each  province where they do business.  The 
Canadian authorities have indicated that the licen sing requirements across provinces are very similar 
in practice, and that provincial efforts are under way to identify areas where harmonization can be 
promoted.204 
157. Provinces maintain responsibility for regulati on relating to the terms and conditions of 
insurance contracts, rates, and standards of co mpetence and behaviour of insurance agents and 
brokers.  The authorities indicated that all provi nces except Quebec have adopted the Uniform Life 
Insurance Act, a model law governing insurance contr acts and beneficiary rights in the life and health 
insurance sector;  they also noted that Quebec' s regulations in this area are very similar. 
158. In general, only automobile insurance rates are subject to official controls. 
(7) MARITIME TRANSPORT  
159. In value terms, maritime cargo represented 12.5% of the value of Canada's total international 
trade in 2005;  in volume terms, the share reached 39.7% (including trade with the United States).  
Excluding trade with the United States, maritime cargo represented 45.2% of the value of Canada's trade (exports and imports) in 2005, and 83.2% of the volume.
205 
160. By the end of 2005, the Canadian merchant fleet , defined as self-propelled vessels of at least 
1,000 gross tons flying the Canadian flag, consis ted of 184 ships and 2.4 million gross tons.  The 
majority of this fleet serves the domestic (cabotag e) market, while most of the Canadian-controlled 
international fleet operates under foreign flags and em ploys foreign officers and crews.  According to 
the authorities 109 ships are controlled by Canadian sh ipping but registered under foreign flags.  Dry 
bulk carriers, although declining in importance, constitu te the central part of the Canadian merchant 
fleet;  they accounted for 46% of tonnage and 33% of vessels in 2005.206  In eastern Canada domestic 
cargo is dominated by crude oil shipments and petr oleum products.  In western Canada transport of 
forest products by tug and barge is the primary activity.  Within the Great Lakes and the St. Lawrence 
region, water transport is related mainly to cargo movements of iron ore, coal, limestone, salt, grain, 
tanker products and other types of bulk. 
                                                      
200 OSFI (2004c). 
201 Regulations Amending the Charges for Services Provided by the Office of the Superintendent of 
Financial Institutions Regulations 2002. 
202 Insurance Companies Act, Section 57(1). 
203 Insurance Companies Act, Section 167(2). 
204 WTO document WT/TPR/M/112/Add.1, 16 June 2003. 
205 Transport Canada online information.  Viewed  at:  http://www.tc.gc.ca/pol/en/Report/anre2005 
/add/taba22.htm. 
206 Transport Canada online information.  Viewed  at:  http://www.tc.gc.ca/pol/en/Report/anre2005/ 
8D_e.htm. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 120 
 
 
161. The Federal Government has exclusive comp etence for inter-provincial/territorial and 
international transport.  Transport Canada is re sponsible for setting maritime transport policies, 
regulations, and standards, while implementation and enforcement is mainly in the hands of the 
Canadian Transportation Agency.  In 2003, legi slative and regulatory responsibilities relating to 
pleasure craft safety, marine navigation services, pollution prevention and response, and navigable 
waters were transferred from Fisheries and Oceans Canada to Transport Canada.207 
162. During the period under review, Canada modifi ed its maritime transport legislation to 
supplement the more significant changes implemente d in earlier years.  The Canada Shipping Act 
(CSA), the principal legislation governing the op eration of Canadian flag vessels and of foreign 
vessels in waters under Canada's jurisdiction, was amended in 2001.  The CSA received Royal Assent 
in November 2001 but the amended act will not enter into force un til supporting regulation has been 
developed, which according to the authorities will be completed by early 2007.208  T h e  M a r i n e  
Liability Act of 2001 consolidated in a single statute all marine liability regimes, including compensation for pollution damage.
209 
163. The Coasting Trade Act reserves certain commercial maritime activities to duty-paid, 
Canadian-registered ships in Canadian waters, including activities related to the exploration, 
exploitation, and transportation of  non-living natural resources in the waters above the continental 
shelf.  These activities include the transportation of goods or passengers by ship between points in the 
territory of Canada or above the continental shel f of Canada, and any othe r marine activity of a 
commercial nature in the territory of Canada and the waters above the continental shelf.  Foreign ships 
may perform these activities where no Canadian register ed duty-paid ship is available or suitable to 
carry out the activity and where the activity entails the carriage of passengers, an identical or similar 
marine service is not available.  Canada does not have reservations for the transportation of 
government cargo. 
164. To register a ship in Canada, the owner must be a Canadian citizen, permanent resident or a 
corporation incorporated under federal or provincia l laws of Canada (regardless of the origin of 
capital).  However, foreign corporations may also regi ster a ship in Canada, if the ship is not already 
registered in another country, and if one of the fo llowing is acting with respect to all matters relating 
to the ship:  (i) a subsidiary of the foreign corpora tion that is incorporated in Canada, (ii) an employee 
or director in Canada of a branch office of a corpor ation that is carrying business in Canada, or (iii) a 
ship management company incorporated under the federal or provinc ial laws of Canada.210  
Notwithstanding the above, the Minister of Transport may direct the registrar to refuse to register a 
vessel built outside Canada.211  The authorities note that this provision was not used during the period 
under review. 
165. A Canadian-registered ship must be operated by  Canadian officers and a Canadian crew, hold 
Canadian certificates, and comply with Canadian saf ety standards.  The pertinent regulations are the 
Crewing Regulations and the Mari ne Certification Regulations. 
166. The 1987 Shipping Conference Exemption Act, which exempts certain conference practices 
from the provisions of the Competition Act, was ame nded in 2001 to inject greater competition into 
                                                      
207 Transport Canada online information.  Viewed  at:  http://www.tc.gc.ca/aboutus/whatwedo.htm. 
208 Transport Canada online information.  Viewed at:  http://www.tc.gc.ca/mediaroom/backgrounders/ 
b05-M005e.htm. 
209 Transport Canada online information.  View ed at:  http://www.tc.gc.ca/acts-regulations/ 
GENERAL/m/mla/act/mla. html. 
210 Canada Shipping Act, 2001, Part 2.  
211 Canada Shipping Act, 2001, Article 50. Canada WT/TPR/S/179/Rev.1 
 Page 121 
 
 
liner shipping conference operations.212  The new provisions allow individual conference lines to offer 
a rate of services different from those published as part of the conference tariff;  shorten from 15 to 5 days the period to notify other members of its inte ntion to take independent rate action;  and give 
individual conference members the right to  negotiate confidential services contracts.
213  There are no 
requirements for non-conference liner companies to  be licensed or to file documents with the 
Government of Canada. 
167. The Canada Marine Act (CMA) of 1998 permitte d the transfer of the management and 
operation of 19 major ports to non-profit corporations  (Canada Port Authorities) and the St. Lawrence 
Seaway to a not-for-profit corporation (St. Lawrence Seaway Management Corporation).  Former Bill 
C-61, an Act to amend the Canada Marine Ac t and Other Acts, proposed to modify the port 
authorities' access to funding;  however, the Bill di ed on the Order Paper in Parliament in late 2005.  
The authorities indicate that Transport Canada is  continuing to assess potential amendments to the 
CMA, with the objective of Bill C-61 remaining valid. 
168. At end November 2006, Transport Cana da had transferred, deproclaimed214, or terminated its 
interest at 466 of the 549 sites identified at the begi nning of the Port Divestiture Program in 1996.  As 
at that date, 83 ports remained under the responsib ility of Transport Canada, with the Government 
intending additional divestitures to further increase the efficiency of the port system.215  Canada has 
adopted the IMO's International Ship and Port Fac ilities Security Code and has put into operation two 
other initiatives to ensure greater security  of maritime transport (Chapter III(2)(i)).216 
169. There are three categories of ports:  (i) Canada port authorities (CPAs), (ii) regional/local 
ports, and (iii) remote ports.217  CPAs consist of publicly accountable boards of directors, nominated 
by user groups and various levels of government , that independently manage 19 ports considered 
critical to Canada's domestic and international trad e.  These ports continue to be owned by Transport 
Canada but are financially self-sufficient.  CPAs ma y engage in lease contracts with third parties, 
including foreign firms, for the provision of services within the limits of the port.  In 2005, for example, by acquiring Britain's P&O Group, Dubai Ports assumed, inter alia , a lease contract with the 
Vancouver Port Authority.
218 
170. A review of the Canada Transportation Ac t conducted in 2001 produced recommendations, 
including on maritime transport.219 
                                                      
212 Shipping Conferences Exemption Act 1987.  Vi ewed at:  http://www.tc.gc.ca/acts-regulations/ 
GENERAL/s/scea/act/scea.html. 
213 WTO document S/CSS/W/106, 4 October 2001. 
214 To revoke the designation of a port as a public facility. 
215 Transport Canada online information.  Viewed  at:  http://www.tc.gc.ca/mediaroom/releases/nat/ 
2006/06-h093e.htm. 
216 DFAIT online information.  Viewed at:  http ://www.international.gc.ca/internationalcrime/menu-
en.asp. 
217 Regional and local ports are ports smaller than CPA ports, and serve regional economic and tourism 
needs;  remote ports serve the transport needs of isolated communities.  Transport Canada online information.  
Viewed at: http://www.tc.gc.ca/mediar oom/releases/nat/2006/06-h093e.htm. 
218 Vancouver Board of Trade online information.   Viewed at: http://www.boardoftrade.com. 
219 As part of this review, the review panel issued, inter alia , the following recommendations 
concerning maritime transport:  marine services to be commercialized when possible;  the Government should commit to the elimination of the liner conference exemptions from competition law;  the Government should 
pursue negotiations, at least with NAFTA partners, to el iminate cabotage restrictions;  and borrowing limits in 
the letters patent of CPAs should be removed.  Canada  Transportation Act Review online information viewed at:  
http://www.reviewcta-examenltc.gc.ca/index.htm. WT/TPR/S/179/Rev.1 Trade Policy Review 
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171. Canada participated in the post-Uruguay Rou nd negotiations on maritime transport services 
where it made commitments on maritime auxiliary  services and additional commitments on access 
to/use of port services and multi-modal transport services.220  In its revised offer on services in the 
context of the DDA negotiations, Canada has conditi onally offered to:  add four new port services to 
its additional commitments (pilotage;  navigation ai ds;  shore-based operational services essential to 
ship operations, including communications, water, and electrical supplies;  and anchorage, berth, and 
berthing services);  make commitments with respect to international maritime transport;  and to 
improve its commitments in maritime agency services.221 
172. Under the NAFTA, Canada and Mexico agreed no t to introduce more restrictive measures 
other than those already in place at the time of the signing of the agreement.222  Canada has an 
agreement with China to strengthen cooperation in maritime transport.223  Canada has not negotiated 
any other bilateral maritime agreements. 
(8) AIR TRANSPORT  
(i) Introduction 
173. Aviation is Canada's third largest commercial tr ansport sector, behind truck and rail transport.  
In 2005, it contributed 0.4% to GDP.224  Total passenger traffic has incr eased steadily in recent years, 
rising from 54.4 million passengers in 2002 to 63.7 million in 2005 (45% domes tic, 31% transborder, 
and 24% international).225  In 2004, air cargo transport accounted for 0.4% of total cargo by volume 
and 5.7% by value of Canada's trad e (imports and exports) with the United States.  The value of cargo 
shipped by air for all other internationa l destinations was 22.6% of all trade.226 
174. Following the Government's divestiture of its ass ets in Air Canada in the 1980s, all Canadian 
airlines are privately owned.  The Air Canada "family" remains Canada's largest airline business227, 
however, its dominance, particularly over the sc heduled domestic market (including transborder 
flights) has decreased since 2000, particularly due to  the growing share of Westjet, Canada's second 
largest airline as well as other regional carriers (Table IV.3). 
175. There has been restructuring within the airlin e industry over the period under review.  In 
April 2003, Air Canada filed for bankruptcy pr otection and underwent a period of internal 
restructuring.  It emerged from bankruptcy protec tion in September 2004.  Jetsgo filed for bankruptcy 
in 2005, having failed to restructure its opera tions, and its airline's operator certificate was 
subsequently cancelled.228  In 2001, allegations that Air Ca nada had engaged in anti-competitive 
practices against low cost carrier s WestJet and CanJet in 2000 and 2001, led to a case being filed by 
                                                      
220 WTO document S/L/34, 20 September 1996. 
221 WTO document TN/S/O/CAN/Rev.1, 22 May 2005. 
222 Transport Canada online information.  Viewed at:  http://www.transport-canada.org/pol/en/acf/tcg5/ 
menu.htm. 
223 Canada Treaty Information online informati on.  Viewed at:  http ://www.treaty-accord.gc.ca/ 
ViewTreaty.asp?Treaty_ ID=101585.  
224 Transport Canada (2005). 
225 Transport Canada (2005).  Transborder passenger flights refer to flights between Canada and the 
United States. 
226 Transport Canada (2005), Addendum. 
227 Air Canada mainline has become a wholly owned subsidiary controlled by ACE Aviation 
Holdings Inc., a holding company with publicly traded shares.  Several previously internal divisions of Air 
Canada (e.g. technical services, ground  handling, cargo) and subs idiaries (e.g. Air Canada Jazz) have been spun 
off as limited partnerships created under Quebec law and are controlled by ACE. 
228 Transport Canada (2005). Canada WT/TPR/S/179/Rev.1 
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the Competition Bureau with the Competition Tribunal.   This litigation was terminated by the Bureau 
in 2004, because of the signifi cant changes that had occurred in the industry since 2001 (see below). 
Table IV.3 
Domestic market share of the main Canadian  airlines (offered seat kilometres), 2001-06 
(Per cent) 
Carrier December 
2001 December 
2002 December 
2003 December 
2004 December 
2005 December 
2006 
Air Canada family 78.3 67.2 59.9 52.4 60.5 60.6 
Westjet 15.0 19.9 24.6 29.4 30.2 32.3 
Jetsgo 0.0 2.3 6.0 8.6 0.0 0.0 
Canjet 0.0 1.9 2.1 3.0 2.7 0.0 
Other 6.7 8.7 7.4 6.6 6.6 7.1 
 
Source:  Transport Canada, (2002-05) Transportation in Canada:   Annual Reports, 2002-2005 and preliminary 2006 data 
 supplied by Transport Canada. 
176. Canada has 26 principal airports, called nationa l airport system (NAS) airports, which are 
considered essential to the national transportation infr astructure, as well as a large number of regional 
and local airports.  NAS airports handle around 95%  of Canada's scheduled  air passenger and cargo 
traffic. 
177. The Federal Government has retained ownershi p of 23 of the 26 NAS airports, however, it 
has transferred operational and management respons ibility for 22 of them to not-for-profit Airport 
authorities under 60 year leases.229  Airport authorities finance themselves through charges levied on 
passengers and aircraft operators as well as through debt. 
(ii) Institutional and regulatory framework 
178. Economic regulation of the air industry is ca rried out under the Canada Transportation Act 
(CTA) of 1996 and Canada's bilatera l air agreements, both of which are administered by the Canadian 
Transportation Agency.  The Canadian Transpor tation Agency has responsibility for granting, 
suspending, and revoking licences;  reviewi ng prices and responding to complaints about 
unreasonable fares on routes on which there is no, or very limited, competition;  and addressing 
complaints about conditions of carriage for domestic services. 
179. Transport Canada regulates air transportation safety as well as the use of computer reservation 
systems (CRSS) for the marketing and sale of commer cial air services.  Regulations in the case of the 
latter were amended in 2004 to permit  market forces to discipline previously regulated matters.  For 
example, airlines are no longer required to partic ipate in all CRSS operating in Canada, permitting 
them to decided how to distribute and sell their air services.230 
180. The authorities note that there is no economic fram ework legislation for airports in Canada.  
Other than general legislation on safety and security , airport authorities are subject to the provisions 
of their lease, the corporate legislation under which they were incorporated231, and the provisions of 
the Airport Transfer (Miscellaneous Matters) Act,  which largely addresses matters related to the 
transfer of the airports.  Operational matters are addressed by the Aeronautics Act and the Canadian 
Aviation regulations. 
                                                      
229 This stemmed from the 1994 National Airports  Policy, which promoted commercialization of 
federally owned airports.  Of the four remaining NAS airports, three territorial NAS airports are owned and 
operated by territorial governments, an d Kelowna International Airport is operated by the City of Kelowna. 
230 Transport Canada (2004b). 
231 The majority of airports are incorporated under fe deral legislation.  However, some are incorporated 
under provincial legislation. WT/TPR/S/179/Rev.1 Trade Policy Review 
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181. In June 2006, the Minister of Transport intr oduced the "Canada Airports Act" Bill, which 
proposes to provide a disclosure and accountability framework232, and a new corporate governance 
regime for Canada's airport authorities, as well as disclosure requirements for other large (above 
300,000 passengers) or significant (territorial cap ital) airports.  The Bill proposes a fee regime, 
including charging principles in line with intern ational standards;  c onsultation and disclosure 
requirements;  an appeal process for the eight largest airports in Canada;  and a more basic fee regime 
for other airports that would be  subject to the Act.  The Bill also proposes that the Federal 
Government would have authority to audit the business affairs of airport authorities and issue 
directions or orders regarding issues such as e quitable access measures and allocation of slots to 
airlines.  At end 2006, the Bill was awai ting second reading in the House of Commons. 
182. The air transport market between Canada and ot her countries is governed by over 70 bilateral 
agreements and arrangements.233  This includes three new agreements signed since 2003, with 
Algeria, Viet Nam, and Guyana.  Over the same pe riod, a number of existing agreements were further 
liberalized, including changes to Canada's 1995 agreement with the United States which were 
negotiated in November 2005.  When this agreemen t comes into force, the provisions will bring the 
1995 agreement into conformity with the U.S. Open  Skies model, the most significant amendments 
involving unlimited 5th freedom rights for passenger and all cargo traffic and 7th freedom rights for 
stand-alone cargo services.234  The authorities note that these provisions are consistent with Canada's 
new international air policy, the Blue Sky Policy (see below). 
183. With respect to first and second freedoms, Cana da applies the Chicago Convention, Article 5 
for non-scheduled flights and a bilateral regime fo r scheduled flights, through which it applies the 
IASTA principles on a reciprocal basis.  Canada w ithdrew from the International Air Services Transit 
Agreement (IASTA) in the 1980s and according to the authorities does not intend to rejoin at this 
time. 
184. Under the CTA, only Canadians are eligible fo r a licence to provide domestic flights, and 
foreign ownership of Canadian airlin es is limited to 25% of voting shares.235  The Canadian 
Transportation Agency is afforded some flexibility in its examination of foreign investment as part of 
its determination of Canadian control.  For exampl e, a number of Canadian airlines have implemented 
a variable voting share structure that enables forei gn equity investment in the air enterprise beyond the 
25% limit, while ensuring that voting interests and control continue to rest with Canadians.236  
Approval by Industry Canada under the Investment Ca nada Act is required for the direct acquisition 
                                                      
232 Bill C-20.  Viewed at:  http://www2.parl.gc.ca/content/hoc/Bills/391/Government/C-20/C-20_1/C-
20_1.PDF. 
233 Canadian Transportation Agency online informa tion.  Viewed at:  http://www.cta-otc.gc.ca/air-
aerien/agreements/main_e.html.  The listing on this website is not fully up to date. 
234 Transport Canada (2005).  Other potential benefits of the amended agreement noted, include:  
greater access for Canadian passenger an d cargo carriers to the U.S. market as a platform from which to serve 
third countries; increased pricing flexibility for Canadian an d U.S. carriers;  more options for Canadian airports 
to attract U.S. carriers;  and lower prices for consumers.   See also Transport Canada press release of November 
11 2005 "Flying the Open Skies".  Viewed at:  http ://www.tc.gc.ca/mediaroom/releases/nat/2005/05-h225e.htm. 
235 The CTA definition is:  "Canadian citizen or a permanent resident, a government in Canada or an 
agent of such a government or an entity incorporated under the laws of Canada or a province, that is controlled in fact by Canadians and of which at least 75%, or such lesser percentage as the Governor in Council may by 
regulation specify, of the voting interest s are owned and controlled by Canadians". 
236 Variable voting shares are reserved for non-Canadian investors and carry one vote per share, unless 
the total number of variable voting shares exceeds 25% of  all outstanding voting shares, or the total number of 
votes cast at a shareholders' meeting exceeds 25% – in th is case, votes attached to each variable voting share 
would be decreased proportionately so that voting rights of non-Canadians are limited at all times to 25% of the total number of votes cast. Canada WT/TPR/S/179/Rev.1 
 Page 125 
 
 
of any company with assets of over Can$5 million that provides transportation services, and for 
indirect acquisitions of companies with assets over Can$50 million (Chapter II(4)). The establishment of a new Canadian transportation business is subject to notification but not to review.  There are no 
individual ownership restrictions on any Canadian airlines. 
185. With respect to international routes, almost  all of Canada's bilateral arrangements and 
agreements contain a provision that allows either party to deny servi ces if the airline is not nationally 
owned and controlled.  As a result of a multiple designation policy
237 introduced in 2002, Canadian 
carriers may apply to operate scheduled interna tional air services to any international market. 
Previously, more than one carrier could only serve non-U.S. markets where one-way scheduled 
passenger trips exceeded 300,000 passengers per year.238  The authorities indicate that, as a result, 
more Canadian carriers now provide services on interna tional routes.  In 2005, 25 U.S. airlines, and 
43 foreign airlines provided service between Cana da and various intern ational destinations.239 
186. Canada has concluded agreements or techni cal arrangements recognizing certification of 
providers doing repair, overhaul, a nd maintenance work on Canadian aircraft and components and/or 
manufacturing in:  Austria;  Brazil;  the European Union240;  France;  Germany;  Hong Kong, China;  
Israel;  the Netherlands;  Singapore;  th e United Kingdom;  and the United States. 
187. NavCanada, operates Canada's air navigation system as a private not-for-profit monopoly and 
funds itself through debt and charges levied on carriers.241  As provided for in the Civil Air 
Navigation Services Commercialization Act these charges, inter alia , must not discriminate between 
domestic and international flights nor between Canadian or foreign air carriers, and must not be 
higher than necessary to meet the company's current and future financial requirements.  NavCanada is 
under the control of its Board of Directors, which is  appointed by the users, employee unions, and the 
Government.  The Government's ro le is limited to safety regulator, and adjudicating appeals against 
NavCanada's user charges as set out in the Act. 
188. In the wake of the 2001 terrorist attacks on the United States, Canada introduced an enhanced 
air travel security system.  This is funded by charges levied on flight tickets.242  T h e  F e d e r a l  
Government also provides short-term indemnifica tion (120 days renewable) for third-party war and 
terrorism liabilities for providers of essential aviation services in Canada.243 
189. Airline-specific provisions exist within Canada's  Competition Act, as a result of the merger of 
Air Canada and Canadian Airlines in 1999, and c oncerns about potential abuse of Air Canada's 
dominant market position.  In 2003, an interim ru ling in the case filed by the Competition Bureau 
concerning allegations that Air Canada had engaged in anti-competitive practices against low cost 
                                                      
237 The 2002 multiple designations policy facilitates both the designation of all Canadian carriers 
wishing to operate scheduled services  in international markets and the allocation of rights in cases where 
designations are limited and/or unused under bilateral agreements. 
238 Transport Canada online information.  Viewed  at:  http://www.tc.gc.ca/mediaroom/releases/nat/ 
2002/02_h051e.htm. 
239 Transport Canada (2005). 
240 The authorities are in the final stages of completing a new Canada/Europe Bilateral Aviation Safety 
agreement (November 2006). 
241 These include:  air traffic services, comm unity aerodrome radio services, aeronautical 
telecommunications, information services, and air traffic control. 
242 The charge is applicable to flights between the 89 airports in Canada at which the Canadian Air 
Transport Security Authority delivers the enhanced air travel security system.  Effective 1 March 2005, the 
charge is further reduced to Can$4.95 for one-way dome stic travel, Can$8.42 for transborder travel and Can$17 
for other international air travel.  See http://www .cra-arc.gc.ca/E/pub/et/ atscrates/README.html. 
243 Transport Canada (2004b). WT/TPR/S/179/Rev.1 Trade Policy Review 
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carriers (see above) found that the company had "ope rated or increased capacity at fares that did not 
cover the avoidable costs of providing the service".  This jurisprudence has provided clarification as 
to the kinds of conduct by a dominant carrier that  could trigger enforcement action by the Bureau.  
Stemming from this litigation, the Commissioner of Competition set out in an open letter to the 
industry in 2004 the approach the Bureau would be taking in its future enforcement of the 
Competition Act with respect to the airline sector.244 
190. At the request of the Transport Minister in  2004, the Standing Committee on Transportation 
was asked to review how Canada should modernize its approach to  the economic regulation of air 
transport245, and provided the Standing Committee w ith a guidance document to assist its 
deliberations.  The guidance document outlined a numbe r of issues for consideration, which included:  
reducing ownership and control limita tions for Canadian air carriers;  permitting cabotage;  further 
liberalization with the United States;  liberalizati on of charter policies;  introducing domestic service 
ownership and control, and market integration issu es into international negotiations;  and whether to 
pursue a multilateral or a plurilateral approach to further air liberalization.246 
191. Not connected to the review above, in N ovember 2006, the Minister of Transport, 
Infrastructure and Communities announced a new intern ational air policy (called Blue Sky).  The new 
policy calls for a liberalized approach to Canada's bilateral air transportation negotiations.  It proposes 
to pursue further liberalization of Canada's air tran sportation agreements and, as a primary objective, 
seek to negotiate Open Skies agreem ents when deemed in the country' s overall interest.  At the same 
time the Minister announced that the Federal Government had decided to expand the Cargo 
Transhipment Program to allow more airports to a pply to be designated under it.  The Foreign Carrier 
Access Program is under review (November 2006).247 
192. Canada's air transport commitments under GA TS are limited to aircraft repair and 
maintenance services, and computer reservation syst ems.  Canada has not bound consumption abroad 
of repair and maintenance services,  thus retaining the possibility of  requiring carriers to use domestic 
repair providers and maintenance facilities.248  All maintenance and repa ir operations on Canadian-
registered aircraft must be performed by approved organizations.249  Aircraft maintenance and repair 
services have been listed as MFN exemptions unde r Article II of the GATS.  The sale and marketing 
of air transport services have also been listed as an MFN exemption, as these services can be included 
                                                      
244 Competition Bureau news release, 23 Septembe r 2004.  Viewed at:  http://www.competitionbureau. 
gc.ca/internet/index. cfm?itemID=247&lg=e. 
245 Speaking notes for Transport Minister Jean-C Lapierre at the Standing Committee on Transport, 
Ottawa, Ontario, 4 November 2004.  Viewed at:  http://www.tc.gc.ca/mediar oom/speeches/2004/2004-11-
04.htm. 
246 Transport Canada (2004a).  The Standing Committee on Transportation review was never concluded 
due to a change in government. 
247 Under the Foreign Carrier Access Program, a foreign government may apply for one of its carriers 
to operate a total of two weekly scheduled services from the foreign country to one or more points in Canada of 
its choice, other than Toronto, if it has no air transport agreement with Canada and if no Canadian carrier is 
interested in the foreign market in question.  These pr ovisions were intended to facilitate foreign carrier access 
to Canada where no air transport ag reement was in place and to provide Ca nadian communities more direct and 
convenient routings by foreign carriers willing to offer such service. 
248 WTO document GATS/SC/16, 15 April 1994. 
249 The authorities note that "appr oved" means approved in accordan ce with either the Canadian 
Aviation Regulations, or the regulations of a foreign state that is a party to an agreement or technical 
arrangement with Canada.  In the absence of an agreement/arrangement, such maintenance can be performed 
only by a foreign organization under contract to a Canadian organization, with the Canadian organization providing the necessary oversight to ensure compliance with the applicable regulations. Canada WT/TPR/S/179/Rev.1 
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in bilateral agreements.250  Canada has not made any furthe r conditional offers on air transport 
services in its revised services offer submitted in May 2005.251 
(9) PROFESSIONAL SERVICES  
(i) Legal services 
193. Legal services in Canada are provided by lawy ers, notaries (in Quebec), and foreign legal 
consultants.  In December 2005, the 11 provincia l and 3 territorial law societies of Canada had 
approximately 98,000 member lawyers and notaries.252 
194. The legal profession in Canada is self-regulati ng.  Authority is dele gated to provincial law 
societies by provincial legislation, on the basis that  their mandate is to regulate their members in the 
public interest.253  The Federation of Law Societies of Canada  (FLSC) is an umbrella organization for 
these societies, but is not a regulatory body itself.  The FLSC works on regulatory issues concerning legal services and to facilitate the consultations of the Canadian Government with the sector.
254  The 
Canadian Bar Association (CBA) also participat es actively in consultations with the Canadian 
Government on issues relevant to international trade in legal services.255 
195. To practice law in Canada requirements include admission to one of the law societies, each 
setting its own rules, ethical standards and codes of practice.  In the provinces of Ontario (until 
May 2007) and Alberta, members of a law societ y are required to be permanent residents in 
Canada.256  Lawyers from different provinces and territo ries may exercise mobility across provinces 
provided they meet the requirements of the lega l profession’s National Mobility Agreement or the 
Territorial Mobility Agreement.  The National Mobi lity Agreement sets common principles to govern 
the temporary and permanent (transfer) mobility of lawyers among common law provinces (Quebec is 
the only non-common-law province).  Nine provin ces (British Columbia, Alberta, Saskatchewan, 
Manitoba, Ontario, Nova Scotia, Newfoundland, New Brunswick, and Prince Edward Island) have 
fully implemented the National Mobility Agreement;   Quebec has signed but not yet implemented it 
(November 2006).  The Territorial Mobility Agreemen ts adopts the transfer provisions of the National 
Mobility Agreement;  it was signed by the three te rritories and the provinces in November 2006;  it 
lasts for five years. 
196. Internationally trained individuals may have th eir legal credentials evaluated by the National 
Committee on Accreditation, a standing committee of the FLSC, or by the equivalent accreditation 
body of Quebec, for admission to one of the Canadi an law societies.  The Committee also evaluates 
qualifications from Quebec for the purpose of entr y into the bars of the common law provinces. 
                                                      
250 WTO document GATS/EL/16, 15 April 1994. 
251 WTO document TN/S/O/CAN/Rev.1, 22 May 2005. 
252 Most of the references to provi nces apply also to territories.  The membership figures denote all 
members of law societies including th ose in private practice, government, education, and business, as well as 
inactive members.  Lawyers may belong to more than one law society and, accordin gly, there may be some 
duplication in the statistics (information from the Federation of Law Societies of Canada). 
253 In 11 provinces and territories the governing body that regulates lawyers is known as a law society.  
In Nova Scotia the regulator is called the Barristers’ So ciety.  The province of Quebec has two regulators:  the 
Barreau du Québec  regulates lawyers, and the Chambre des notaires du Québec  regulates notaries. 
254 Federation of Law Societies of Canada online in formation.  Viewed at:  http://www.flsc.ca/en/ 
committees/wto.asp. 
255 The CBA represents and provides a voice on behalf of the legal profession, and has approximately 
37,000 members (CBA online information.  Viewed at http:/www.cba.org/ CBA/about/main/). 
256 In Ontario there will be no requirement to be either  a Canadian citizen or a permanent resident as of 
May 2007. WT/TPR/S/179/Rev.1 Trade Policy Review 
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197. Foreign lawyers may be licensed as foreign lega l consultants to provide legal advice only on 
the law they are permitted to practise in their home jurisdiction.  Nine law societies have adopted 
rules governing the issuance of permits/licences fo r foreign legal consultants.  The province of 
Quebec and the territories of Northwest, Yukon, and Nunavut have not yet adopted rules enabling 
foreign lawyers to act as foreign legal consultants.  Local presence is not required in nine provinces;  
except Ontario, which imposes a residency requirement. 
198. Under the GATS, Canada made commitments  to bind regimes in existence as at 
December 1994 for legal services provided by fo reign legal consultants in the provinces of 
British Columbia, Ontario and Saskatchewan.257  When establishing in Canada, foreign legal 
consultants must take the form of a sole proprie torship or partnership.  Canada did not undertake 
commitments regarding other legal services.  As spec ified in its horizontal commitments, foreign legal 
consultants may enter Canada temporarily with a pr e-arranged service contract and stay up to 90 days 
or the time necessary to complete the service contract, whichever is less.  They must meet the minimum education requirements (baccalaureate degree) and obtain the appropriate provincial 
licence.
258 
199. In the NAFTA context, representatives of the le gal professions of Canada, the United States, 
and Mexico signed an accord in June 1998 that w ould allow lawyers from any NAFTA country to act 
as a foreign legal consultant or form partnerships  with lawyers or law firms of another member 
country.  As at end 2006, this accord had not been implemented.259 
200. International law firms are allowe d to establish an office in any Canadian province or territory 
to provide foreign legal consultant services, provide d that the lawyers have a permit to practice as 
foreign legal consultants.  The province of Quebec and the territories of Northwest, Yukon and Nunavut have not yet adopted rules enabling foreig n lawyers to act as foreign legal consultants. 
(ii) Accounting services 
201. There are three main professional accountancy ti tles in Canada:  Chartered Accountant (CA), 
Certified Management Accountant (CMA), and Cer tified General Accountant (CGA).  At end 2005, 
there were some 72,000 CAs, 37,000 CMAs, and 42,000 CGAs.
260  Each title is regulated and 
protected by provincial legislation under a provincial body, and is represented at the national level by 
its respective national professional body.261  To provide accountancy services as a CA, CMA or CGA, 
it is necessary to be a member of, or licensed by , one of the registered professional bodies in the 
province where the practice is to take place. 
202. In some provinces and territories certain accoun ting services (such as public accounting) are 
unregulated, while in others a licence is requi red.  When regulated, each accounting service is 
organized in a specific manner at the provincial or te rritorial level, hence there are differences among 
provinces regarding which accounting professiona ls (CA/CMA/CGA) may undertake specific 
accountancy services.262 
                                                      
257 WTO document GATS/SC/16, 15 April 1994. 
258 WTO document GATS/SC/16/Suppl.2, 28 July 1995. 
259 Online information.  Viewed at:  h ttp://www.flsc.ca/en/committees/nafta.asp. 
260 Online information.  Viewed at:  http://www.cga-online.org; h ttp://www.cica.ca;  and http://www. 
cma-canada.org. 
261 The Canadian Institute of Chartered Accountants  (CICA), the Society of Management Accountants 
of Canada (SMAC), and the Certified General Accountants Association of Canada (CGA Canada). 
262 Accounting services cover statutory audit, audit of mergers, pub lic sector audit, insolvency service, 
accounting, tax advice, consulting, and others. Canada WT/TPR/S/179/Rev.1 
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203. Under the GATS, Canada made commitments on accounting, auditing, and book-keeping 
services.  Commercial presence must take the form of a sole existing proprietorship or partnership.  Specifically on auditing services, Canada bound its commitments to provincial measures.  For 
instance, accreditation of those who intend to pr ovide auditing services across the border could be 
restricted by citizenship requirements in the pr ovinces of Manitoba and Quebec or by permanent 
residency requirements in the provinces of Alberta a nd Ontario.  In order to provide auditing services, 
a commercial presence requirement exists for some provinces under Canada’s GATS commitments.
263  
Commercial presence must take the form of a sole  proprietorship or partne rship, and in various 
provinces the office must be under the management of a resident.264 
204. Most citizenship/residency requirements for the accreditation of auditors have been removed 
from provincial regulations. 
205. A mutual recognition agreement (MRA) of CA  qualifications was signed in 2002 by the 
accounting professions of Canada, Mexico, and Un ited States. The three Governments issued a 
statement encouraging their respec tive competent authorities to implement the agreement in a manner 
consistent with NAFTA.265  Additional MRAs for CA qualificati ons have been signed by CICA with 
professional accounting bodies in England and Wales;  Scotland;  Ireland;  South Africa;  
New Zealand;  Australia;  Hong Kong, China;  Belg ium;  France;  Mexico;  and the United States.  
CMA Canada has established MRAs with two pr ofessional accounting associations in the United 
Kingdom.266  In December 2006, CGA-Canada signed a global MRA with the international 
accountancy body, the Association of Chartered Ce rtified Accountants (ACCA).  CGA-Canada has 
also signed Memoranda of Understanding with several professional accountancy bodies world-wide. 
(iii) Architectural and engineering services 
206. In 2004, the total operating revenues of archit ectural firms amounted to Can$1.9 billion;  in 
2006, there were 8,191 registered architects in Canada.267  The total operating revenues of the 
engineering services industry amounted to approxima tely Can$12 billion in 2005, and there were 
approximately 165,000 registered engineers. 
207. The professions of architect and engineer are individually regulated at the 
provincial/territorial level and a licence is required for the provision of either service.  Licences are 
issued by the respective provincial association of architects and engineers, whose requirements vary between provinces/territories.  A licence is valid only for that specific jurisdic tion.  However, in the 
engineering profession, a mobility agreement among provinces/territories, called the Inter-Association 
Mobility Agreement, allows engineers licensed in one  jurisdiction in Canada to obtain a full licence in 
another jurisdiction.
  The provincial/territorial associations of architects have agreed to and executed a 
reciprocity agreement, which provides portability across Canada through sta ndard credentials amongst 
the provinces.268  The Committee of Canadian Architectur al Councils (CCAC) and the Canadian 
                                                      
263 In the provinces of  Saskatchewan, Newfoundland, Nova Scotia, Manitoba, and Ontario. 
264 In the provinces of Saskatchewan, British Columb ia, Ontario, Nova Scotia, Quebec, Prince Edward 
Island, Newfoundland, and Alberta. 
265 DFAIT online information.  View ed at:  http://www.dfa it-maeci.gc.ca/nafta-alen a/statement-en.asp. 
266 The two U.K. professional accoun ting associations are:  the Char tered Institute of Management 
Accountants and the Chartered Institute of Public Finance and Accountancy. 
267 Some of the 8,191 architects are registered in more than one juri sdiction so the actual number will 
be less:  there are about 6,712 resident registered architects, and 1,479 non-res ident architects (information 
provided by the Royal Architectural Institute of Canada (RAIC)). 
268 Information provided by the Royal Architectural Institute of Canada. WT/TPR/S/179/Rev.1 Trade Policy Review 
Page 130 
 
 
Council of Professional Engineers (CCPE) are the respective national bodies that coordinate the 
provincial/territorial associations on regulatory matters, including licensing. 
208. Foreign architects wishing to obtain a licen ce must have their academic qualifications 
certified by the accrediting body, the Canadian Architectural Certification Board (CACB).  Foreign 
architects may also apply for a temporary licence to practice in collaboration with a registered 
architect of the given province.  Licences are for one specific project and must be renewed after one year.  There are no residency requirements to obtain an architectural licence. 
209. Foreign engineers wishing to obtain a licen ce must have their academic and experience 
qualifications assessed by the relevant provincial e ngineering association.  Temporary licences are not 
linked to a specific project, but are for one-year  and renewable, except in Quebec where the 
temporary licence is project-specific.  To practice under a permanent licence, citizenship or permanent 
residency is required in Alberta, British Columb ia, New Brunswick, Ontario, and Saskatchewan.
269 
210. Under its GATS commitments, Canada requires foreign architects to establish a commercial 
presence in the form of a sole proprietorship or pa rtnership.  Residency requirements are listed in 
Canada’s GATS commitments for architects in four provinces for both cross-border supply and 
presence of natural persons.270  Canada imposes no limitations on th e legal form of establishment or 
ownership of an engineering firm by foreigners;  residency, citizenship and/or commercial presence 
requirements affect market access in eight provinces.271  Canada allows foreign architects and 
engineers to enter the country temporarily and stay  up to 90 days or the time necessary to complete 
the contract, whichever is less. 
211. Several mutual recognition agreements (MRAs) , signed by the different regulatory bodies 
cover the architecture and engineering professi ons.  An agreement under NAFTA exists for 
engineers.272  The Canadian Council for Professional Engineers has also negotiated MRAs with 
professional engineering bodies in France (La Commission des Titres d'Ingénieur) and Hong Kong, China (Hong Kong Institute of Engineers). 
212. For architects, a Canada-United States In ter-recognition Agreement signed between the 
Committee of Canadian Architectural Councils  (CCAC) and the U.S. National Council of 
Architectural Registration Boards (NCARB) grants reci procity to 55 jurisdictions in the United States 
and 11 jurisdictions in Canada.  In October 2005, the CCAC also signed a Tri-National Mutual 
Recognition Agreement for International Practice wi th the United States and Mexico, which provides 
for the recognition of credentials between the three countries.
273 
                                                      
269 Accreditation of engineers in Saskatchewan only requires ordinary residency. 
270 Residency requirement in Nova Scotia, New Brunswick, and Newfoundland;  and citizenship 
requirement in Quebec. 
271 Residency requirement in Alberta, British Columb ia, Nova Scotia, New Brunswick, Newfoundland, 
and Ontario;  citizenship requiremen t in Quebec;  and requirement for a commercial presence in Manitoba.  
Additionally, Saskatchewan limits national treatment for engineers by a temporary residency requirement. 
272 This agreement has been ratified by Mexico, Texas (United States), and by all Canadian 
jurisdictions except Ontario and Quebec. 
273 In Canada, the agreement has been ratified by British Columbia, Alberta, Nova Scotia, Prince 
Edward Island, Newfoundland, and the Northwest Territories (November 2006). Canada WT/TPR/S/179/Rev.1 
 Page 131 
 
 
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