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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. Canada has a quite diversified economy, with services as the main sector.  Most services are 
regulated at both federal and sub-fe deral levels;  only banks are under exclusive federal jurisdiction.  
Despite the fragmented regulatory framework, the Ca nadian financial system remained remarkably 
stabile amid the global credit turmoil;  some of th e extraordinary financing facilities put in place in 
response to the crisis were not drawn upon.  Am endments introduced to the federal regime on 
financial services include the creation of a bridge bank framework;  the extension of the option of 
federal incorporation to cooperative credit institu tions and marine insurance providers;  and the 
raising of the equity thresholds that trigger "widely held" and "publicly held" requirements.  
2. The federal regime on insurance services has b een clarified to apply to business operations 
that insurers carry out in Canada;  while insurers  are free also to insure risks from an overseas head 
office or branch, the assets they are required to ho ld in Canada can only cover liabilities related to 
their Canadian business.  As of 1 January 2010, foreign insurers of marine risks require prior 
authorization from the Office of the Superintendent of Financial Institutions to "insure in Canada". 
3. At the sub-federal level, insurers may be s ubject to licensing requirements or be excluded 
from some types of insurance that are subject to a public monopoly, even if they are not "insuring in 
Canada".  Several categories of insurance are compul sory at the federal level, including certain types 
of marine, mortgage, aviation, nuclear, environmen tal and surety insurance;  numerous types of 
insurance are also compulsory at the provincia l/territorial level (e.g., automobile, surety).  
Requirements in this regard vary by jurisdiction. 
4. In the telecommunications sector, Canada has el iminated foreign investment restrictions on 
satellite carriers and has initiated consultations on its remaining FDI restrictions on facilities-based 
telecom carriers intended to foster more competitio n.  The Government has also set aside radio 
spectrum for new market entrants to stimulate competition in the market for mobile telephone 
services.  Canada's broadcasting regime remains unchanged with regard to the existing foreign 
investment restrictions, and the quota system for Canadian broadcasting content.  Canada Post's 
exclusive privileges has been reduced by openi ng outbound international mail to competition. 
5. In air transport, all Canadian airlines, including Air Canada, are privately owned.  A 
maximum foreign ownership threshold in Canadian  airlines of 25% remains in place, although as a 
result of legislative amendments this may be rai sed to 49%.  Only Canadian airlines may provide 
domestic services.  Under its 2006 Blue Sky Polic y, the Federal Government is pursing new air 
services agreements and expanding existing ones;  the most comprehensive agreement was signed 
with the European Union in 2009.  Most of the Ca nada's largest airports are government owned but 
managed under concession agreements by private not for profit, non-share capital institutions;  
regional airports are largely owned and manage d by municipalities or territorial governments. 
6. Since the last Review of Canada, the Gove rnment has taken steps to strengthen the 
competitiveness of maritime transport, notably through investments in port infrastructure and by 
removing a 25% tariff on imported vessels.  However, restrictive cabotage rules remain in place;  this 
impedes the efficiency of the Canadian maritime industry. 
7. Since its last TPR, Canada has introduced a new agricultural policy framework (Growing 
Forward), a major component of which is a suite of new or modified "business risk management" 
measures (AgriStability, AgriInvest, AgriInsurance, and AgriRecovery) aimed at partially 
compensating producers for revenue or income lo sses arising from low commodity prices, increased Canada WT/TPR/S/246 
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production cost, reduced production, or natural disast ers.  The supply management systems for dairy 
and poultry products and the Canadian Wheat Board's "single desk" selling system remain unchanged.  
Overall, Canadian producers have become less  dependent on government support as a source of 
revenue;  however, this reflects mainly higher world market prices for agricultural commodities.  
Most Canadian assistance to agricultural producers h as been provided in the form of market price 
support for supply-managed commodities through tariff protection (including tariff quotas) and other 
measures.  New restrictions and requirements affecting imports of cheese have given rise to trade concerns by some WTO Members.  The Federal G overnment is committed to  modernizing Canada’s 
outdated system of fisheries management. 
8. Canada has streamlined the federal regulatory process for large natural resource projects by 
creating the Major Projects Management Office and the Northern Project Management Office.  The 
Federal Government has launched a number of new or successor programmes in support of renewable 
energies.  Measures include price and tax incentiv es, minimum renewable fuel content rules, and 
support for research and development.   Some provi ncial governments also support the generation of 
renewable energy, including Ontario, whose Feed-i n Tariff (FIT) programme for renewable energy 
includes local-content requirements.  This matte r is the subject of WTO dispute settlement 
procedures. 
9. The Canadian manufacturing sector continued to decline during the review period, reflecting, 
amongst other factors, the long-term structural transformation towards a more services-oriented 
economy but also enhanced global competition, the appreciation of the Canadian dollar, and the 
impact of the global financial and economic crisis.  The Government has adopted a range of measures 
to improve the manufacturing sector's productivity growth and competitiveness, including tariff and tax reductions, other stimulus me asures, industry-specific incentives for R&D (for example, for the 
automotive and aerospace industries), and impr ovements to the business environment through the 
streamlining of regulation and reducing the admini strative burden.  Canada has launched a major 
unilateral initiative to eliminate the applied MFN tariffs on manufacturing inputs, machinery, and 
equipment aimed at improving the sector's productivity growth and competitiveness.  
(2) A
GRICULTURE AND FISHERIES  
10. The agriculture and agri-food sector plays an im portant role in the Canadian economy.   
Primary agriculture contributed 1.7% of GDP and 1.8% of employment,  while the agriculture and agri-food sector contributed 8.2% of GDP  and 12.6% of employment in 2009.
1  The food, beverage 
and tobacco processing industry has overtaken the automotive industry as Canada's largest 
manufacturing subsector.2  Canada is a net-exporter of agricu lture and agri-food products and one of 
the leading exporters of wheat, coarse grains, o ilseeds (and related products ), pork, beef, and live 
cattle.3  In 2009, it was the fourth-largest exporter a nd sixth-largest importer of agricultural products, 
counting the EU as one.4 
                                                      
1 The agriculture and agri-food sector encompasses primary agriculture;  farm input and service 
supplier industries;  food, beverage an d tobacco processing;  wholesale, di stribution and retail food industries; 
and food service (AAFC online information, "Overview of the Canadian Agriculture and Agri-Food System 
2011".  Viewed at:  http://www4. agr.gc.ca/AAFC-AAC/display-affiche r.do?id= 1295963199087&lang=eng). 
2 Statistics Canada (2010), p. 302. 
3 WTO document G/AG/N/CAN/76 dated 2 March 2009. 
4 WTO (2010), International Trade Statistics 20 10.  Viewed at:  http ://www.wto.org/english/ 
res_e/statis_e/its2010_e/its2010_e.pdf, Table II.15, p. 51. WT/TPR/S/246 Trade Policy Review 
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(i) Border measures 
11. Canada's applied MFN tariffs on agricultural pr oducts (WTO definition) averaged 22.5% in 
2010, almost unchanged compared to 2006 (Table III.1).5  Tariff protection remains highest for dairy 
products (averaging 237.3%), followed by an imals and animal products (averaging 52.8%) 
(Table AIII.1).  The peak AVE remains at  532.2% (HS 350211 – dried egg albumin).   
12. There has been little change to Canada's tariff quot a regime for agricultural products.  Most of 
the 21 tariff quotas subject to WTO commitments are for supply-managed products (i.e. dairy 
products;  chicken, turkey, eggs  and related products; and bro iler hatching eggs and chicks).6 
13. A new tariff quota for milk protein concentrates was established in September 2009 as a result 
of the modification of Canada's concessions un der Article XXVIII of the GATT (Chapter III(2)(iv)).7  
Milk protein substances with a milk protein content of less than 85% by weight are subject to a reduced in-quota tariff of 3% (6% at the time of Ca nada's previous review);  and a tariff quota regime 
has been introduced for milk protein substances with a milk protein content of 85% or more with an 
in-quota tariff of zero. 
14. About 41% of the applied MFN in-quota tariffs for agricultural products (totalling 152 tariff 
lines) are non- ad valorem .  The ad valorem  equivalents range from 0.3% to 8.6% (for products where 
import data were available to calculate the AVEs) (Table AIV.1). 
15. All imports within tariff quotas are subject to an applicable tariff that varies depending on the 
origin of the imports.  The applicable tariff may be the MFN rate or a preferential rate, as in the case 
of imports originating from the United States, Me xico, Australia, New Zealand, Chile, Israel, and 
most developing country suppliers  under Canada's General Preferen tial Tariff (GPT).  Canada does 
not place any restrictions on the extent to which WTO tariff quotas may be filled by preferential (in-quota) imports.  For a subset of products subject to WTO tariff-quota commitments (mainly chicken, 
turkey, eggs and related products , broiler hatching eggs, and ch icks), Canada established under 
bilateral agreements with the United States (including the Canada-U.S. FTA, subsequently 
incorporated into the NAFTA), tariff quotas with in-quota volumes defined as a share of domestic 
production, rather than in absolute terms as is the case under Canada's WTO commitments.
8  
Therefore, the levels of in-quota volumes under pref erential 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 filled with both preferential 
and non-preferential imports) at the level that is hi ghest.  For example, in the case of chicken and 
broiler hatching eggs and chicks, Canada’s preferential commitments exceed those made in the WTO.  
                                                      
5 No additional duties were levied under the sp ecial safeguard (SSG) provisions in 2007-08 
(WTO document G/AG/N/CAN/76 dated 2 March 2009). 
6 In addition, Canada maintains a tariff quota of 2,970 tonnes of frozen pork from the European Union 
as a temporary retaliatory measure in the dispute settlement case concerning Canadian beef produced from cattle 
using growth hormones (European Union Surtax Order).  WTO document G/LIC/N/3/CAN/8, 16 October 2009. 
7 This follows a Canadian Federal Court of Appeal ruling that found that milk protein concentrates of 
over 85% should be pl aced in Chapter 35, which had pr eviously been classified in Chapter 4 of Canada's tariff 
schedule. The classification change meant that imports of milk protein concentrates of over 85% would be 
subject to an MFN tariff of 6.5% rather than a ta riff quota with an out-of-quota tariff of 270%. 
8 WTO document G/LIC/N/3/CAN/8, 16 October 2009. Canada WT/TPR/S/246 
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16. Administration methods for the individual WTO tariff quotas remain largely unchanged 
(Table AIV.1).9  The allocation method for the tariff quota for milk protein concentrates was 
established 17 February 2010.  Most tariff quotas we re 100% filled or nearly filled in 2008 and 2009. 
A number of tariff quotas had fill rates in excess of 100%, reflecting preferential arrangements.  The 
main exceptions were wheat and barley, beef and veal, margarine, and "other dairy".  The fill rates of 
the tariff quotas for wheat and barley have traditi onally been low, reflecting the competitiveness of 
domestic producers.   
(ii) Domestic programmes 
17. Since its last TPR, Canada has adopted a new agricultural policy framework.  The Growing 
Forward Framework Agreement, which entered in to force on 1 April 2008, provides the basis for 
federal-provincial-territorial (FPT) measures for the period 2008/09 to 2012/13.  It replaces the 
Framework Agreement on Agricultural and Agri-F ood Policy for the Twenty-First Century (APF 
Agreement), which covered 2002/03-2007/08.  Canadi an agricultural policy is under joint federal and 
provincial/territorial responsibility, with cost-shared activities generally  shared at a ratio of 60:40. 
18. The Growing Forward policy framework is aimed at promoting (i) a competitive and 
innovative agriculture sector;  (ii) an agriculture sect or that contributes to the society's priorities (i.e. 
food safety, food security, environmentally responsible agriculture), and (iii) minimizing risk incidents and managing business risk.  It identifies initiatives that are cost-s hared, such as business 
risk management measures, and provides guidance on measures that are under exclusive federal or 
provincial responsibility.  
(a) Business risk management measures 
19. At the core of the Growing Forward policy frame work is a set of new or modified "business 
risk management" measures: the AgriStability, AgriInvest, AgriInsurance, and AgriRecovery 
programmes (Table AIV.2).  These national programm es, launched for the 2007 programme year, are 
intended to provide support to agricultural producer s experiencing income or production losses caused 
by low commodity prices, increased production co sts, reduced production, or natural disasters.
10   
20. AgriStability provides payments to compensate fo r margin (i.e. whole-farm income) declines. 
It replaces similar measures under the expired Cana dian Agricultural Income Stabilization (CAIS).11  
Payments are triggered when producers' "produc tion margins" drop more than 15% below their 
historical "reference margins".  The production ma rgin is calculated by subtracting allowable 
expenses (those related directly to the production of  agricultural commodities, including feed costs, 
fertilizer, and pesticides) from allowable revenues in  a year.  The reference margin is the average 
production margin of the previous five years, excluding the highest and lowest values (i.e. the Olympic average).  Market trends over time are re flected in reference margins, allowing market 
signals to be transmitted into production and business decisions.  The fee for participating in 
AgriStability is Can$3.80 per Can$1,000 of reference margin. 
                                                     
 
9 The representative period for the allocation of the be ef and veal tariff quota (Table AIV.1) has been 
amended each year in order to minimize disruption in the Canadian beef industry as a result of the BSE case in 
Alberta in May 2003.  See Canada Gazette  Vol. 143, No. 24 – November 25, 2009, "Order Amending the 
Allocation Method Order (Beef and Veal)".  Viewed at:  http://gazette.gc.ca/rp-pr/p2/ 2009/2009-11-2 5/html/sor-
dors299-eng.html. 
10 Article 19 of the GF Framework Agreement. 
11 See WTO (2007). WT/TPR/S/246 Trade Policy Review 
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21. Margin declines below the refe rence margin ranging from 15% to 30% are compensated by 
70% (stabilization component);  declines greater than 30% but less than 100% are compensated by 
80% (disaster component).  Total maximum compensati on is 66.5% of the decline.  Margin declines 
greater than 100% (i.e. allowable expenses are grea ter than allowable revenue) are compensated by 
60%, provided production margins were positive in at least  three of the previous five years.  Negative 
margin coverage was introduced under AgriStab ility to assist otherwise productive and viable 
operations facing significant short-term profitabilit y challenges to continue receiving assistance under 
the programme.  Supply managed commodities are e ligible under the disaster component and hence 
are covered only when the whole-farm margin falls by more than 30%.  The maximum annual 
payment under both AgriStability components is Ca n$3 million per farm.  The OECD observes that 
uncertainty about the level of payments and paymen t delays of up two years undermine the usefulness 
of AgriStability as a risk management tool.12  The authorities note that most payments are made 
within a few months of a claim and participants also have access to advance payments under certain 
conditions.  Participation ranged from a high of 1 47,195 farm applications in 2003 to a low of 
106,107 applications in 2008.  AgriStability expenditu res increased substantially in 2009/10, mainly 
due to droughts and excess moisture in the Canadian Prairies. 
22. Québec and Ontario maintain provincial pr ogrammes that complement AgriStability.  
Québec's Programme d'assurance stabilis ation des revenues agricoles  (ASRA) provides price 
insurance to producers of eligible products.13  Two thirds of the insurance premiums under ASRA are 
covered by the Québec government.  ASRA payments  are triggered by market prices that are lower 
than a reference price (based on estimated cost of  production on specialized farms);  these payments 
are commodity-specific.14  ASRA’s price-based support ofte n provides additional support beyond 
AgriStability and is in many situa tions considered more generous.15  ASRA payments amounted to 
Can$582.5 million in 2009 (excluding insurance prem iums).  Ontario's Risk Management Program 
(RMP), a commodity-specific support programme simila r to ASRA, which covers grains and oilseeds, 
was initially introduced as a three-year pilot prog ramme for the 2007 crop year.  Producers pay 30% 
of the cost of programme premiums. 
23. AgriInvest provides government assistance to en courage producer savings. Funds can be used 
to address small margin declines not covered by AgriStability, or to make investments in the 
operation.16  Producers may deposit funds into an AgriInvest account of up 1.5% of allowable net 
sales from the previous year, and receive a matc hing contribution from governments.  Allowable net 
sales include revenues from most primary ag ricultural commodities except those covered under 
supply management.  The maximum government c ontribution per participant is Can$22,500.  
Programme participation was 141,784 in 2007 and 107,932 in 2008. 
24. AgriInsurance is a continuation of the Pr oduction Insurance progr amme.  It provides 
insurance against production losses due to the weather,  pests or diseases.  Insurance is crop-specific 
and most commercial crops are eligible.  The federal government contributes to AgriInsurance 
contracts offered to producers by provincial/territori al governments or through public corporations.  
Payments under AgriInsurance ar e included as income under AgriStability, ensuring that producers 
are not paid twice for the same loss.  The Fede ral Government also has re-insurance arrangements 
                                                      
12 OECD (2011), p. 24. 
13 Agriculture, Pêcheries et Alimentation Québec onlin e information.  Viewed at:  http://www.mapaq. 
gouv.qc.ca/fr/productions/politiqueje unessevolet1/repertoirep rogrammes/programmess outienaccespropriete/asra
/Pages/asra.aspx. 
14 See WTO document G/AG/N/CAN/82, 12 November 2010, p. 11. 
15 OECD (2011), p. 33. 
16 AgriInvest replaces the coverage for margin declines  of less than 15% (tier 1), previously covered by 
the CAIS program (see WTO, (2007). Canada WT/TPR/S/246 
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with Alberta, Manitoba, New Bruns wick, Nova Scotia, and Saskatch ewan.  Government expenditures 
for reinsurance premiums are part of the AgriInsurance expenditures (Table AIV.2). 
25. AgriRecovery is a new framework programme to enable federal, provincial, and territorial 
(FPT) governments to provide financial assistance to producers in the event of natural disasters.  Its 
coverage seeks to fill gaps in  other business management risk and disaster relief programmes.  
Government assistance is ad hoc  and depends on potential paymen ts from existing programmes and 
on the specific disaster, based on criteria set out in the framework.  As of 31 December 2010, 
AgriRecovery had been used in 23 disaster incidents.17 
(b) Price and other guarantee programmes 
26. Most Canadian assistance to agricultural producers has been delivered in the form of market 
price support for supply-managed commodities (m ilk, poultry meat, eggs, and related products) 
(Table IV.1).  Market price support includes all po licy measures that raise the domestic price relative 
to the border price of the commodity concerned, including border measures, such as tariffs and tariff 
quotas, and export subsidies.  Supply management co mprises (i) control over imports of products and 
several by-products;  (ii) stable producer pri ces;  and (iii) production management (quotas).18  Supply-
managed commodities are governed by their own FPT agreements, the national marketing plans.  The 
Government remains committed to the supply management system.19  Under the GF Framework 
Agreement, supply management has been exp licitly recognized as a business risk management 
programme.20 
27. Canada maintains several guarantee programm es under the Agricultural Marketing Programs 
Act (AMPA), including the Advance Payments Program  and the Price Pooling Program (PPP).  Under 
the Price Pooling Program, the Federal Government  enters into an agre ement with a marketing 
agency, such as producer or processor associations , and provides a "price guarantee that protects 
marketing agencies and producers against unanticip ated declines in the market price of their 
products." 21  This measure is aimed at facilitating the cooperative marketing of agricultural products.  
The price guarantee is fixed at a certain percenta ge of the expected wholesale price of the product 
concerned.22  The price guarantee may be used by the ma rketing agency as security in obtaining credit 
from lending institutions, and allows the agency to im prove the producers' cash flow through an initial 
payment for products delivered.  If the realized w holesale price is less than the guarantee value (the 
initial payment plus the eligible costs), the progra mme allows for a payment for the shortfall (i.e. 
product-specific subsidy) by the Government of Cana da.  In 2010, five PPP agreements were in place, 
representing approximately 18,000 producers, with  a total guarantee amount of approximately 
Can$55.2 million.  According to the authorities, no government expenditures have been incurred 
under the PPP since 1997. 
                                                      
17 AAFC online information.  Viewed at:  http:// www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id= 
1200689505769&lang=eng. 
18 Growing Forward Framework Agreement, Section 19.2. 
19 Canada Governor General (2010). 
20 Growing Forward Framework Agreement, Section 19.2. 
21 AAFC online information.  Viewed at:  http ://www4.agr.gc.ca/AAFC-AAC/display-afficher.do 
?id=1289934791790&lang=eng. 
22 This includes eligible storing, processing, ca rrying, and selling costs of the marketing agency. WT/TPR/S/246 Trade Policy Review 
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Table IV.1 
Evolution of Canadian s upport and protection, 2006-09 
(Can$ million) 
 2006 2007 2008 2009 
Price support:  milk 2,946 2,550 1,817 3,367 
Price support:  poultry meat 249 293 493 447 
Price support:  eggs 179 7 -6 110 
Price support:  other co mmodities 1,175 910 693 1,213 
Producer Support Estimate (PSE)a 7,757 7,696 5,839 8,896 
Total Support Estimate (TSE)b 10,048 10,619 8,685 11,500 
Total value of agricultural production at farmgate 32,547 37,021 42,109 40,279 
PSE (as a percentage of gross farm receipts) 22 19 13 20 
Single Commodity Transfers (SCT) (as a percentage of PSE)c 64 58 66 71 
Nominal Protection Coefficient (NPC)d 1.16 1.11 1.08 1.15 
 
a PSE: total annual monetary transfers to farmers individually (not agriculture gene rally) from: market price support mainly 
 through border measures but also food aid, export subsidies (cal culated by the price gap between domestic and border price); 
 payments to farmers; and tax/ fee reductions (revenue forgone). 
b TSE: total transfers from consum ers and taxpayers to agriculture. 
c SCT:  sum of transfers to produ cers granted to a single  commodity. 
d NPC:  nominal protection coefficient. Ratio between the average price received by  producers and the border price (average 
 producer price includes payments based on cu rrent output, e.g. deficiency payments). 
 
Source:  OECD (2010), Agricultural Policies in OECD  Countries:  At a Glance, Paris;   and OECD PSE/C SE database.  
 Viewed at:  http://www.oecd.org /dataoecd/31/28/45560733.xls?contentId=45560734.  
28. The Advance Payments Program  is a product-specific loan guarantee programme under which 
the Federal Government, inter alia , guarantees cash advances of up to Can$400,000 provided by 
participating producer organizations to producer s, based on the value of the eligible product 
(including livestock).23  Loans are interest-free up to Can$100,000 and repayable within 18 months. In 
the 2009-10 production period, the Government  guaranteed Can$1.9 billion in advances.  
Amendments to the AMPA were made in February  2008 to provide for emergency advances in cases 
of severe economic hardship;  advances were made to hog and cattle producers for the 2008-09 
production period.24  During the review period, the Canadi an hog industry also received assistance 
through two ad hoc  measures (Hog Loan Loss Reserve Progr amme and the Hog Farm Transition 
Programme), (see Table AIV.2). 
29. The Canadian Agricultural Loans Act (CALA) programme of June 2009 (Table AIV.2) is a 
loan guarantee programme with expanded eligibilit y to start-up farmers, agricultural co-operatives 
and for inter-generational farm transfers.  Th e maximum loan amount has been increased from 
Can$250,000 to Can$500,000, with up to Can$500,000 for land and buildings and Can$350,000 for 
any other purpose.  Up 1 November 2010, 3, 400 loans totalling Can$183.3 million had been 
registered under the CALA. 
30. 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".25  A provincial entity that is granted this 
power, under an APMA delegation order, enacts regula tions or other instruments specifying how that 
power is exercised.  In some ca ses, these powers include the authority to set production quotas and 
                                                      
23 Agricultural Marketing Programs Act, Part I. 
24 Order in Council issued on February 29, 2008.  Due to economic hardship facing the cattle and hog 
industries, a "Stay of Default" was announced on January 23, 2009, which extended the repayment deadline to 
30 September 2010.  A second "Stay of Default", announced on 6 August 2010, further extended the repayment 
deadline for cattle producers to 31 March 2012 and for hog producers to 31 March 2013. 
25 Section 2(1). Canada WT/TPR/S/246 
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prices.26  The APMA also grants provincial entities the power to set levies on the interprovincial 
movement or export of agricultural goods.27  Provincial boards and agencies have enacted marketing 
regulations on storage and transportation;  gradi ng and quality;  revenue pooling;  maintenance of 
books, records, and marketing information;  re gistration of farms;  licensing of producers, 
wholesalers, processors, and truckers;  and price sett ing.  Under the APMA 82 delegation orders have 
been granted in 9 provinces (January  2010) covering a wide range of  products, including mushrooms, 
potatoes, wheat, apples, asparagus, beans, berries, flue-cured tobacco, grapes, onions, soya beans, 
pork, maple syrup, pulses, flax, and supply-manage d products.  Table AIV.3 gives an overview of 
commodities that are subject to price pooling or single-desk selling. 
(c) Other measures 
31. Canada maintains other measures in support of its agriculture and agri-food sector.  
Agriculture and Agri-Food Canada lists 142 progra mmes (as of January 2011).  Measures range from 
the Abattoir Competitiveness Program to the Y ukon Wildlife Damage Compensation Programme.28  
Canada's last annual notificati on on domestic support is for 2005.29 
32. Since its last TPR, Canada has implemented a number of transitional or ad hoc  measures 
(Table AIV.2). 
(iii) Export measures 
33. Canada has export subsidy reduction commitments  for 11 product groups, including grains, 
oilseeds and related products, dairy products, and incorporated products.30  For the marketing years 
2007/08-2008/09, Canada notified "producer finan ced subsidies" for four product categories 
(skimmed milk powder, cheese, other milk products , and incorporated products) (section (v)(b)) 
below).31 
34. The federal AgriMarketing programme provides matching funding to activities to enhance the 
marketing capacity and competitiveness of the Ca nadian agriculture, agri-food, fish and seafood 
subsectors.32  The Canada Brand International programme  was introduced in 2006, while a domestic 
Canada Brand programme has been launched under th e GF Framework.  Activities include buyer and 
consumer research;  gathering market intelligence;  developing marketing tools for use by industry;  
presentation of Canada's agriculture and food "bra nd" at trade shows, and promotional campaigns. 
(iv) Evolution of support and protection 
35. Overall, the market orientation of Canada's agriculture sector has improved since its last 
Review.  The percentage PSE of the OECD dec lined to 17% in 2007-09, from 22% in 2004-06 and 
36% in 1986-88, which indicates that agricultural producers have become less reliant on government 
                                                      
26 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;  
Farm Products Marketing Act of Ontario;  and Loi sur la mise en marché des produits agricoles, alimentaires et 
de la pêche . 
27 Agricultural Products Marketing Act, Section 2(2). 
28 AAFC online information "Programmes and Servi ces A-Z". Viewed at:  http://www4.agr.gc.ca/ 
AAFC-AAC/display-afficher.do?id=1204214137015&lang=eng. 
29 WTO document G/AG/N/CAN/82, 12 November 2010. 
30 Canada Schedule V, Part IV, Section II. 
31 WTO documents G/AG/N/CAN/78, 16 July 2009, and G/AG/N/CAN/80, 25 May 2010. 
32 AAFC online information.  Viewed at:  http://www4.agr.gc.ca/AAFC-AAC/display-
afficher.do?id=1239048540113&lang=eng. WT/TPR/S/246 Trade Policy Review 
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support over the long term.  A sharp rebound in the level of support in 2009, to 20%, meant that 20% 
of gross farm receipts were de rived from support policies (80% from the market without support).  
The total PSE in 2009 also reached its highest leve l since 1986-88 (Table IV.1).  This is mainly 
because Canada continues to provide price-rela ted support to supply-managed commodities, which 
leads to rising support when world market prices dec line and vice versa.  Canada's nominal protection 
coefficient (NPC), which measures the degree to which the agricultural markets are insulated from 
world markets through government policies, was about 1.11 in 2007-09, meaning that Canadian agricultural producers received average prices about 11% higher than world market prices.
33 
36. As indicated by the OECD measurement of support, earlier progress away from commodity-
specific support has reversed, mainly due to higher ma rket price support for milk in 2009.  Canadian 
commodity-specific support (SCT) accounted for 65 % of the total PSE in 2007-09, up from 57% in 
2004-06 (Table IV.1). 
37. Total federal and provincial gove rnment expenditures (including tax revenue forgone) to the 
agriculture and agri-food sector reached Can$7.3 billion in 2009/10 (Table IV.2).  Programme 
payments (i.e. income support and stabilization;  ad hoc  and cost reduction measures; crop/production 
insurance;  and financial assistance) accounted for almo st two thirds of that total.  The OECD notes 
that Canada's recent reforms to risk-managem ent programmes have focused on improving delivery 
rather than reducing the level of support.34  Provincial tax expenditures in  the form of tax exemptions 
and refunds are also a significant form of assistance.  Government support to the sector varies across provinces.  Producers in Québec, Nova Scotia, an d Newfoundland and Labrador  have received the 
highest level of financial assistance relative to th e size of their provincial agriculture and agri-food 
GDP.
35 
Table IV.2 
Federal and provincial government support in  the agriculture and agri-food sector 
(Can$'000) 
Fiscal Year Group category 
2007/08 2008/09 2009/10 
Operating expenditures 2,322,432 2,309,383 2,437,956 
Capital expenditures 137,203 166,958 183,088 
Programme payments 5,291,753 4,911,232 4,719,914 
Income support and stabilization 2,343,034 2,046,974 1,704,719 
Ad hoc and cost reduction 545,535 400,643 78,989 
Crop insurance/production insurance 614,692 858,914 813,263 
Financial assistance 135,400 98,148 346,754 
Storage and freight assistance 2,189 8,070 2,502 
Social and labour 21,097 29,498 30,413 
Research 247,440 130,973 164,826 
Food inspection 166,856 110,157 104,174 
Table IV.2 (cont'd) 
                                                      
33 The average producer price includes payments based on current output, e.g. deficiency payments.   
34 OECD (2010). 
35 AAFC online information, "Overview of the Canadian Agriculture and Agri-Food System (2008)".  
Viewed at:  http://www4.agr.gc .ca/AAFC-AAC/display-afficher.do?id= 1228246364385&lang=eng#a3. Canada WT/TPR/S/246 
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Fiscal Year Group category 
2007/08 2008/09 2009/10 
International development and food aid 432,435 618,528 939,379 
Marketing and trade 120,810 80,223 116,088 
Rural and regional development 157,082 151,811 123,732 
Environment 252,793 160,638 92,849 
Education 144,403 137,047 134,597 
Extension 107,986 79,607 67,628 
Tax expenditures 387,284 379,393 394,050 
Recoveries -467,643 -484,729 -444,191 
Total 7,671,030 7,282,237 7,290,817 
 
Note: Operating and capital expenditure includes general administ ration and management, policy, in formation, and statistical se rvices. 
 Programme payments include in come support and stabilization, ad hoc  and cost reduction, production insurance, and financing 
 assistance programmes.  
Source: Canadian authorities. 
(v) Selected commodities 
(a) Wheat and barley 
38. Canada is a highly export-oriented producer of wheat (including durum), and to a lesser 
extent of barley.36  Applied MFN tariffs for grains averaged 14.2% in 2010, with a maximum of 
94.5% (Table AIII.1).  While government assistance to  wheat and barley has generally been limited, 
the Single Commodity Transfers (SCT) for wheat and barley increased substantially in 2009, 
reflecting mainly an increase in Agri Insurance payments (Table IV.3). 
Table IV.3 
Indicators for selected agr icultural commodities, 2006-09 
(Can$ million) 
Commodity  2006 2007 2008 2009 
Wheat (including durum) Imports (000 tons) 26 23 26 117 
 Exports (000 tons) 19427 15857 18606 18481 
 SCT 33 55 69 229 
 % SCT 1 1 1 5 
Barley Imports (000 tons) 44 58 42 42 
 Exports (000 tons) 2008 3911 2398 2149 
 SCT 44 60 36 91 
 % SCT 3 2 2 10 
Dairy products Exports 262 283 255 230 
 Imports 520 622 679 573 
 SCT milk 2,946 2,550 1,817 3,367 
 % SCT milk 59 47 33 60 
 
Note: SCT:  Sum of transfers to producers granted to a single commodity.  The % SCT  is expressed a share of gross farm receipt s for 
 the specific commodity.  Trade data are for split years starting with 2006/07. 
 
Source:  Canadian Dairy Information Centre.  Viewed at:  http ://www.dairyinfo.gc.ca/index_e.php ?s1=dff-fcil;  OECD PSE/CSE 
database.  Viewed at: http://www.oecd.o rg/dataoecd/31/28/45560733.xls? contentId=45560734;  Cana da Grains and Oilseeds 
Outlook.  Viewed at:  http://www.agr.gc.ca/pol/mad -dam/index_e.php?s1=pubs&s2= go-co; and authorities. 
                                                      
36 About two thirds of wheat production (including durum), and about one-fifth of barley production  
were exported in 2008/09.  See AAFC online information,  "Canada Grains and Oilseed s Outlook" (7 July 2010).  
Viewed at:  http://www.agr.gc.ca/pol/mad-dam/index_e.php?s1=pubs&s2=go-co&s3=php&page=go-co_2010-07-08. WT/TPR/S/246 Trade Policy Review 
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39. No changes were been made to the Canadian  Wheat Board's (CWB) mandatory single desk 
regime during the review period.37  The CWB, a producer-controlled marketing organization38, 
operates a monopoly (single desk) in inter-provincia l and export sales of wheat and barley produced 
in Manitoba, Saskatchewan, Alberta, and the Peace  River area of British Columbia.  Exporters not 
operating on behalf of the CWB must apply for and obtain an export licence for each shipment.  The 
CWB has no exclusive or special rights or privilege s for imports of wheat and barley (and related 
products) , which are traded privately; the CWB is not engaged in imports nor tariff-quota 
administration of these products. 
40. The CWB applies price pooling on the returns from sales of wheat and barley over the crop 
year.  It claims that it thereby realizes price premiums for farmers and is able to sell grain at higher 
prices than global competitors.39  In 2000, the CWB introduced Producer Pricing Options (PPOs) to 
give producers alternatives to the system of initia l, adjustment, and final payments, which had been 
the sole pricing structure available to grain mark eted by the CWB.  Crop coverage, pricing periods, 
and pricing calculations vary for each PPO.  Ho wever, the PPOs do not operate in isolation from 
CWB pool marketing of grain.  The CWB market s all farmers’ wheat from the designated area, 
regardless of whether it is priced through a PPO or receives an average price through the pools.  
Farmers may also export wheat and barley through the CWB's producer direct sale (PDS) programme under which an individual can buy back wheat from the pool and market it wi th a licence from the 
CWB.
40 
41. In 2008, the Canadian Government sought legisl ative changes (unsuccessfully) to repeal the 
CWB's single desk monopoly for the marketing of barley.41  Nonetheless, the Government remains 
committed to allowing producers to choose whether th ey wish to market through the CWB or directly 
to other buyers and "is working with Canadian grain farmers to promote marketing freedom to 
address evolving needs of the sector".42 
42. The Government provides guarantees to the CWB fo r initial payments made to farmers at the 
time grain is delivered (receipts above the initial price are returned to farmers as adjustments and final 
payments).  Pool deficits are underwritten by th e Government; the last time a pool deficit occurred 
was in 2002/04 (Can$85 million).  The Govern ment also provides guarantees for the CWB's 
borrowings and its export credit programmes (i.e. the Credit Grain Sales Program and the Agri-Food 
Credit Facility).43  
(b) Dairy products 
43. Milk receives the highest level of commodity-specific support among the major commodities 
produced in Canada.44  The producer SCT for milk reached about Can$3.4 billion in 2009 because of 
a significant drop in world market prices for agri cultural products.  Transfers accounted for about 
                                                      
37 See also Canada's notification on state-trading enterprises in WTO document G/STR/N/12/CAN, 
6 August 2010. 
38 The CWB has a special governance structure, providing for a 15-member board of directors 
representing, inter alia , the farmers.  The CWB is not a Crown corporation (WTO document G/STR/N/12/CAN, 
6 August 2010, p. 11. 
39 CWB online information.  Viewed at:  http://www.cwb.ca/public/en/about/snapshot/. 
40 WTO document G/STR/N/12/CAN, 6 August 2010, p. 9. 
41 Bill C-46:  An Act to Amend the Canadian Wheat Board Act and Chapter 17 of the Statutes of 
Canada, 1998. 
42 Budget 2010, p. 99. 
43 Export credit sales through the Agri-Food Credit Facility were Can$148.2 million in 2007-08, 
Can$88.8 million in 2008-09, and Can$88.6 million in 2009-10. 
44 OECD (2010). Canada WT/TPR/S/246 
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33% to 60% of the producer revenues from milk in  2007-09;  this indicates a low level of market 
orientation, which is likely to ha ve an adverse effect on the intern ational competitiveness of the dairy 
industry (Table IV.3).  Export orientation in the Canadian dairy industry has been the lowest amongst 
the food, beverage and to bacco processing industries.45 
44. In order to support the incomes of Canadian dair y farmers, the dairy regime is underpinned by 
a combination of tariff quotas, prohibitive out-o f-quota tariffs, support prices (butter and skimmed 
milk powder), production quotas (milk) , and export subsidies.  Th e applied MFN tariffs on dairy 
products, which  averaged 237.3% in 2010, ar e the highest among all major product groups 
(Table AIII.1).  The cost of support for dairy farmer s is borne by consumers of milk and other dairy 
products;  there were no budgetary outlays for milk in 2007-09, according to the OECD.46 
45. The Canadian Dairy Commission (CDC), a Crown corporation, has responsibilities with 
respect to the implementation and administration of the supply management system for dairy products, mainly establishing support prices for bu tter and skim milk powder, and managing the 
market sharing quota for industrial milk at the na tional level.  It also has STE privileges in the 
implementation of Canada's tariff-quota commitment for butter (Table AIV.1).
47  Import permits for 
the butter tariff quota have been allocated exclusiv ely to the CDC with the requirement that these 
imports be directed to processors and further pr ocessors.  With the exception of a few products in 
some provinces (e.g. fluid milk in the Atlantic Provi nces), the majority of dairy products are traded 
freely between provinces, according to the authorities. 
46. The market-sharing quota (MSQ) is the nati onal production target for industrial milk 
distributed among the provinces according to the National Milk Marketing Plan.  Approximately 60% 
of Canadian milk production has been for industr ial dairy processing and 40% for the production of 
fluid milk.  The annual MSQ is based, inter alia , on the estimated demand for butterfat adjusted for 
surplus butterfat from fluid milk processing.  As a result of targeting the expected demand for 
butterfat, some of the (solids non -fat) surpluses are exported – with export subsidies – as skim milk 
powder, cheese, other milk products , and incorporated products.48  
47. The marketing of fluid milk (i.e. table milk and cream) is regulated at the provincial level by 
producers through provincial milk marketing board s.  Provincial boards issue a total quota to 
producers which covers the demand for fluid and industrial milk; production quotas are tradable 
within provinces.  Processors' demand for the manufact ure of fluid product (i.e. milk and  cream) is 
met in priority in each province. 
48. Support prices at which the CDC buys and sells butter and skim milk powder, i.e. minimum 
prices, are established annually. The CDC takes into account the results of an annual cost-of-
production survey at farm level, stakeholder views,  an evaluation of the processors' margin, economic 
indicators (e.g., the consumer price index), as we ll as its experience and knowledge of the industry.49  
                                                      
45 AAFC online information, "Overview of the Canadian Agriculture and Agri-Food System".  Viewed 
at:  http://www4.agr.gc.ca/AAFC-AAC/display- afficher.do?id= 1228246364385&lang=eng#a3. 
46 OECD PSE/CSE database.  Viewed at:  h ttp://www.oecd.org/dataoecd/31/28/45560733.xls? 
contentId=45560734. 
47 WTO document G/STR/N/12/CAN, 6 August 2010. 
48 As defined in Annex I to Section II of Part IV of Canada's Schedule V, Canada's export subsidy 
budgetary outlay commitment on incorporated products is to  skim milk powder, butter, cheese, and other milk 
products as ingredients incorporated into processed products, not included elsewhere in Annex I to Section II of 
Part IV of Canada's Schedule V (WTO document G/AG/R/55, 15 September 2009). 
49 CDC online information, "Support Prices".  Viewed at:  http://www.cdc-ccl.gc.ca/CDC/index-
eng.php?id=3809. WT/TPR/S/246 Trade Policy Review 
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The support prices are currently Can$7,192/t for but ter and Can$6,272/t for SMP, considerably higher 
than world market prices.50 
49. All raw milk production is purchased from da iry farmers by provincial milk marketing 
boards; revenues are pooled within regional milk pools (the P5 and the Western Milk pool51) and 
returned to farmers.  The price pooling schemes of the provincial monopoly marketing boards allow 
them to apply price differentiation and cross-subsid ize dairy products or sales to certain markets.  
They set the milk price according to a classifica tion scheme, whereby processors are charged for raw 
milk components (butterfat, protein, and other solids) used in each product.52  The support prices are 
used as a reference by the provincial milk marke ting boards and regional milk pools to establish the 
price in each province/pool for milk sold to domestic  processors.  Concerns have been raised in the 
WTO Committee on Agriculture about a new measure to offer reduced prices under milk class 4(m) 
to stimulate demand for milk protein concentr ates by Canadian dairy processors and further 
processors, and thereby undercutting de mand for imports of milk proteins.53  Class 4(m) milk is for 
components used to process milk products for the su rplus removal of milk or milk components, other 
than exports covered by WT O export subsidy commitments.54  In response, Canada noted that there is 
no evidence that the modifications to Class 4(m) had any significant impact on the overall imports of 
milk proteins. 
50. No administered prices are set for milk for the production of confectionery products 
(milk class 5(c)), or of cheese and other dairy products used as ingredients for further processing in domestic and export markets (milk classes 5(a) and (b )).  Prices for milk classes 5(a)-(c) (Special Milk 
Class Permit Program) depend on end use and reflect U. S. and/or world prices.  The Canadian dairy 
industry has implemented export class 5(d) through whic h all subsidized exports must be channelled.  
The subsidy provided is the difference between th e milk components price derived from the domestic 
support price and the milk component prices applicable on the export permit (5(d) permit).  Once the maximum amount allowed under WTO export subsidy commitments (in volume or value terms) for 
each dairy products group (butter, skim milk powde r, other and incorporated products) has been 
reached, no more export permits are issued.  The subs idies have been notified by Canada in terms of 
producer-financed subsidies.
55 
51. Canada, especially Canadian c onsumers, would likely benefit from the liberalization of its 
dairy markets.56  This could also provide relief to some competitiveness issues, such  as those that have 
been apparent in the cheese market.  For example, (i) the tariff quota for che ese has consistently been 
filled at 100% in recent years, whilst the out-of-quota  tariffs are at 245.5 % or higher (Table AIV.1);  
(ii) the WTO limits on budgetary outlays for subs idized exports of cheese and other dairy products 
have been virtually exhausted in recent years57;  (iii) Canada has taken steps to modify its concession 
for certain milk protein concentrates used primarily  in cheese milk extension, to replace a tariff-only 
                                                      
50 University of Wisconsin Dairy Marketing and Risk Management Program online information.  
Viewed at:  http://future.aae.w isc.edu/tab/prices.html#30. 
51 The P5 milk pool is a revenue-sharing agreement among dairy producers in Ontario, Québec, 
New Brunswick, Nova Scotia, and Prince Edward Island.  The Western Milk Pool comprises the four western 
provinces. 
52 CDC online information, "Harmonized Milk Classi fication System".  Viewed at:  http://www.cdc-
ccl.gc.ca/CDC/index-eng.php?id=3811. 
53 WTO document G/AG/W/80, 11 January 2011. 
54 Dairy Farmer of Canada online information.  Vi ewed at:  http://www.milk.org/Corporate/Processors/ 
Milk_Class_Table.aspx. 
55 WTO document G/AG/N/CAN/80, 25 May 2010. 
56 Jarret and Kobayakawa (2008). 
57 WTO documents G/AG/N/CAN/78, 15 July 2009 and G/AG/N/CAN/80, 25 May 2010. Canada WT/TPR/S/246 
 Page 107 
 
 
regime by a tariff quota regime;  (iv) concerns have been raised in the Committee on Technical 
Barriers to Trade and the Committee on Agriculture about the potential trade-restrictiveness of the 
new compositional standards for cheese58 (Chapter III(2)(viii)). 
52. Concerns have also been raised by WTO Me mbers about an ice-cream initiative by Dairy 
Farmers of Canada.59  According to the authorities, the Ice Cr eam Promotion Initiative is a private and 
confidential contractual agreement between th e Dairy Farmers of Ca nada, a non-governmental 
organization, and individual ice-cream processors.  The CDC plays no part in determining the terms and conditions of the Ice Cream Promotion Initiativ e.  The Commission calculates the pooling returns 
and sharing of promotion costs on behalf of produ cers, but producers decide independently on the use 
of their revenues. 
(vi) Fisheries 
53. Canada's fish and seafood industry is highly expo rt oriented, with exports of about 80% of 
production. 
54. The current Fisheries Act is one of the oldest Ca nadian statutes still in use;  it has not been 
modernized significantly since it entered into for ce in 1868.  The Canadian Government is committed 
to introducing "new legislation to  reform Canada’s outdated system of fisheries management" in line 
with the 2005-2010 Strategic Plan of Fisheries and Oceans Canada (DFO).
60  The authorities consider 
renewal of the Fisheries Act important as the current  Act does not provide direction to the Minister 
and officials on how to use the statute's broad di scretionary powers.  To strengthen accountability to 
Parliament and the public, the pending Fisheries Act, 200761 sets out mandatory principles that must 
be followed when making Ministerial and admi nistrative decisions including sustainable 
development, ecosystem, and precautionary approaches,  the use of scientific information, and respect 
for Aboriginal treaty and constitutional rights.  U nder the new Act, licences would be issued as per 
licensing regulations; appeals of licensing decisions  would be subject to review by the Canada 
Fisheries Tribunal, not the Minister.  The new Act would not place limits on the duration of licences (currently nine years without cabinet approval) to provide stability for the industry and allow for more 
long-term planning.  Currently, the Minister of Fi sheries has discretionary powers to limit foreign 
companies' access to fishing licences (Table AII.2). 
55. Several management measures are in place to regulate the fishery, including licence 
restrictions, total allowable catches (TACs), and other control efforts, such as number of traps.  These 
measures are contained in integrated fisheries management plans (IFMPs) and conservation 
harvesting plans for each species.  Access to commerc ial fisheries is through a licensing regime; most 
fisheries are limited entry.  Management measures vary among fisheries, but for the most part include gear limitations, seasonal closures, fishing area restrictions, and vessel size restrictions.
62 
                                                      
58 WTO documents G/AG/R/57, 20 January 2010 and G/TBT/GEN/74/Rev.5, 8 June 2010, p. 22. 
59 WTO documents G/TBT/M/51, 1 October 2010 and G/AG/R/57, 20 January 2010. 
60 Canada Governor General (2010). 
61 Bill C-32:  An Act Respecting the Sustainable Development of Canada's Seacoast and Inland 
Fisheries.  Viewed at:  http://w ww2.parl.gc.ca/Sites/LOP/Legislativ eSummaries/Bills_ls.asp?Language= 
E&Parl=39&Ses=2&lang=E&ls=c32&source=library_prb#commentary. 
62 Fisheries and Oceans Canada online information,  " Integrated Fisheries Management Plans".  
Viewed at:  http://www.dfo-mpo.gc.ca/fm-gp/ peches-fisheries/ifmp-gmp/index-eng.htm. WT/TPR/S/246 Trade Policy Review 
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(a) Import and other measures 
56. Canada's applied MFN tariffs on fish and fisher y products average 1.4%, ranging from zero to 
11% (Table AIII.1).  All importers of fish and fi sh products require a licence from the Canadian Food 
Inspection Agency under the Fish Inspection Act and its regulations.63  Additional SPS-related 
requirements exist for imports from certain countries.64  Annual licence fees are Can$500, or 
Can$5,000 for licences with CFIA Quality Manageme nt Program for Importers. Canada has recently 
introduced new regulations for aquatic animal hea lth and related licensing procedures for live aquatic 
animals, including specific regulated fish species, molluscs, and crustaceans (Chapter III(2)(ix)).  All 
imports of fish and fish products are subject to inspection based on history of compliance and product 
risks.  Importation of live freshwater mitten  crab and puffer fish is prohibited.   
57. Canada has allocated Can$7.2 million for 2010/11-2011/12 to fund the new Catch 
Certification Scheme of Fisheries and Oceans Canada, aimed at meeting new EU requirements to provide catch certificates attesting that marine fish and seafood products are harvested legally.
65  Over 
11,000 certificates were issued in 2010. 
58. The Canadian Freshwater Fish Marketing Corporation (FFMC), a state-trading enterprise, 
enjoys exclusive rights in inter-provincial and expor t trade of the main commercial fish species and 
related products from the freshwater commercial fisher ies of Alberta, Saskatchewan, Manitoba, (parts 
of) Ontario, and the Northwest Territories (pursuant to the Fish Marketing Act and federal-provincial 
agreements).66  The objectives of the Corporation are, inter alia , to market freshwater fish and fish 
products sourced in agreement areas in an orderly manne r;  to increase returns to fishermen;  and to 
promote international markets for, and increase inte r-provincial and export trade in, freshwater fish 
and fish products.  The FFMC is required by law to  operate on a self-sustaining basis.  According to 
the authorities, the corporation has no exclusive rights or privileges on imports.  
59. The Federal Government maintains five fisher ies programmes:  the Aboriginal Fisheries 
Strategy Allocation Transfer Programme;  Fisheries Access Programme;  Atlantic Integrated Commercial Fisheries Initiative;  Pacific Integrat ed Commercial Fisheries Initiatives;  and the Ice 
Compensation Programme.
67  The Aboriginal Fisheries Strategy Allocation Transfer Programme is a 
voluntary commercial fishing licence and quota retirem ent programme that transfers the equivalent 
commercial fishing capacity to Aboriginal Organi zations in the form of "communal commercial 
fishing licences".  Government expenditures amount ed to Can$9.65 million in 2007/08.  The Fisheries 
Access Programme has similar objectives.  The assistance covers, inter alia , the retirement and 
transfer to Aboriginal groups of commercia l licences, vessels, and gear (Table III.16). 
(3) MINING AND ENERGY  
60. Mining and energy play a major role in the Ca nadian economy in terms of their contribution 
to GDP, employment, and trade and investment (Table IV.4). 
                                                      
63 WTO document G/LIC/N/3/CAN/9, 18 October 2010. 
64 Canadian Regulatory Requirements for Fish Import  Licence Holders (Basic Im porters).  Viewed at:  
http://www.inspection.gc.ca/english/ fssa/fispoi/import/pol/base.shtml. 
65 Budget (2010), p. 97. 
66 WTO document G/STR/N/12/CAN, 6 August 2010. 
67 WTO document G/SCM/N/186/CAN, 9 September 2009. Canada WT/TPR/S/246 
 Page 109 
 
 
Table IV.4 
Selected indicators of the Canadian mining and energy industries, 2008-09 
(Can$ billion) 
                    Mineralsa                        Energy 
 2008 2009 2008 2009 
Gross Domestic Product 40.1 31.9 84.7 80.2 
In % of Canadian total 3.3 2.7 6.9 6.7 
Direct employment ('000) 351 307 276 257 
In % of Canadian total 2.4 2.1 1.9 1.8 
New capital investments 11.3 9.8 81.4 62.2 
In % of Canadian total 3.3 3.2 23.3 20.1 
Total exports 95.1 66.4 128.4 77.9 
In % of Canadian total 19.7 18.5 26.6 21.6 
Imports 69.3 55.2 52.9 34.0 
In % of Canadian total 16.0 15.1 12.2 9.3 
Balance of trade +25.8 +11.2 +75.5 +43.9 
 
a Minerals include uranium and coal mining. 
 Note: All dollar amounts shown are in current Canadian dolla rs, except GDP, which is shown in 2002 constant dollars. 
 
Source:  Natural Resources Canada (2010), Important Facts on Canada's Natural Resources . 
(i) Institutional and legal framework 
61. The institutional and legal framework for th e mining and energy sectors remains largely 
unchanged since the last TPR of Canada.  Under the Constitution, provinces have ownership over the 
natural resources (including electricity) that lie within their boundaries and thus regulatory oversight 
rests primarily within the jurisdiction of the provinc es, including with respect to exploration, local 
distribution, storage, and royalty regimes.  The federal government has jurisdiction over imports and 
exports;  international and inter-provincial pipe lines and electric power lines; uranium and nuclear 
power (including mining/production, transportation, and distribution);  ownership of mineral and 
energy resources in territories north of the 60th parallel, on federal cr own lands, and offshore68;  
administration of onshore mineral and energy r esources in the Northwest Territories and Nunavut;  
administration of all offshore mineral and energy  resources outside of offshore Nova Scotia, and 
Newfoundland and Labrador;  shared administrati on for oil and gas offshore Nova Scotia, and 
Newfoundland and Labrador;  and for works declared to  be for the general benefit of Canada, such as 
science and technology.  Agreement has yet to  be reached on an Energy Trade Enhancement 
Agreement that would be compatible but separate from the Agreement on Internal Trade (Chapter II(i)). 
62. The Federal Government's policy objectives for th e minerals and metals sectors (excluding 
uranium) remain as set out in the 1996 Minerals and Metals Policy, which is aimed at sustainable 
development.
69  Natural Resources Canada (NRCan) is the federal ministry mandated to ensure the 
development and use of Canada's natural resources,  and the competitiveness of its natural resources 
products.  The agency is also responsible for im plementing Canada's intern ational commitments under 
the Kimberly Process (Table III.9 and Chapter III(3 )(iii)).  Canada produces over 60 minerals and 
metals:  it is the world's largest producer of potash, and the second-largest uranium and nickel 
producer;  it ranks among the top five producers of aluminium (based on imported ore), cadmium, cobalt, diamonds, sulphur, molybdenum, platinum gr oup metals, salt, titanium concentrate, tungsten, 
and zinc.  Major mineral exports are gold, nickel, copper, potash, and diamonds. 
                                                     
 
68 The Great Lakes are an exception, where offsho re resources are under Ontario's jurisdiction. 
69 Natural Resources Canada online information.  Viewed at:  http://www.nrc an-rncan.gc.ca/mms-smm/ 
poli-poli/htm/mmp-pmm/con-con-eng.htm. WT/TPR/S/246 Trade Policy Review 
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63. A new agency, the Major Projects Management Office, established in 2007 functions, 
inter alia , as a single window into the federal regulatory and approval system for all stakeholders, to 
improve accountability, transparency, timeliness, and predictability of the federal regulatory system 
for major resource projects.70  The regulatory regime for natural resource projects in northern areas is 
overseen by Indian and Northern Affairs Canada (INAC).  The Government has allocated 
Can$11 million for streamlining INAC's regulatory process, aimed at improving the investment regime.
71 
64. The Canadian Government is committed to market principles in the energy and mining 
sectors, with limited government interventions to achieve policy objectives it believes the market will 
not meet on its own (e.g. encouragement of energy efficiency, cleaner energy, health and safety, and 
science and technology).  Both sectors are open to fo reign investment, subject to the horizontal rules 
in the Investment Canada Act (Chapter II(2)).  Under the Non Resident Ownership Policy in the 
Uranium Mining Sector, foreign ownership of ur anium mining property is limited to 49% but the 
Canadian Government is committed to ensure th at "unnecessary" regulation does not stifle foreign 
investment.72  This Policy is therefore currently under review. 
65. State-owned enterprises (i.e. Crown corporations) are prevalent in the provincial electricity 
markets.  Some provinces maintain pr ice controls on fuel (section (3)(iii)). 
66. Canada's taxation regimes for mining and ener gy have changed since 2007, as a result of 
changes to federal corporate income taxation, and re forms of several provincia l royalty regimes.  The 
federal corporate tax rate for income from mineral,  gas, and oil production, which was higher than in 
other sectors during 2001-06, has been aligned with the general corporate tax rate (16.5% for 2011 
and 15% for 2012 and future years).73  The Federal Government announced in the 2007 Budget that 
accelerated capital cost allowance for oil sands proj ects would be phased out over 2011-15.  For the 
mining industry, the overall effect of th e changes has been a decrease in taxation,  with the exception 
of Québec, which in 2010 announced a reform and a gradual increase in its mining duties from 12% to 
16% by 2012 using a "mine-by-mine" approach.  A number of preferential federal tax provisions 
remain in place for the mining, gas, and oil industr ies, premised on industry characteristics such as 
exploration risk, fluctuating prices, high capita l-intensity, and long lead times between initial 
investment and production.74 
67. A distinct feature of the Canadian tax regime  is the flow-through share mechanism intended 
to assist junior corporations in the oil and gas,  mining, and renewable energy industries to raise 
money for eligible exploration, development, and project start-up expenses. By issuing flow-through 
shares, a company can renounce, or 'flow through', cer tain (unclaimed) expenses to the purchasers of 
such shares.  These expenses are deemed to be incu rred by the investor and not the corporation and 
reduce income subject to tax in the hands of the investor (which can be an individual or another 
corporation). 
                                                      
70 A major resource project is defined as a large re source project that is subject to a comprehensive 
study, a panel review or a large or complex multi-jurisdictional screening, as defined under the Canadian 
Environmental Assessment Act.  (Cabin et Directive on Improving the Perf ormance of the Regulatory System 
for Major Resource Projects).  Viewed at:  http://www.mpmo-bggp.gc.ca/documents/directive-eng.php#b. 
71 Budget 2010. 
72 Canada Governor General (2010). 
73 For an overview of federal and provincial mining tax regimes, see NRCan online information, 
"Tables on the Structure and Rates of Main Taxes" .  Viewed at:  http://www.nrcan-rncan.gc.ca/mms-smm/ 
busi-indu/mtr-rdm/ tsr-tsp-eng.htm. 
74 NRCan online information, "Mining-specific tax pr ovisions".  Viewed at:  http://www.nrcan-rncan. 
gc.ca/mms-smm/busi-indu/mtr-rdm/mst-rps-eng.htm. Canada WT/TPR/S/246 
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68. The Mineral Exploration Tax Credit (METC) is a 15% tax credit for individual investors in 
flow-through shares issued by mineral explorati on companies that supplements the regular flow-
through deductions.  The tax credit aims to help junior mining companies raise new equity.  The 
programme applies only to preliminary mineral exploration activities conducted on the surface or 
above surface in locations away from existing mine si tes (greenfield exploration);  it does not apply to 
oil and gas, coal, bituminous sands or oil shale.  A report by the mines ministries indicates that this 
tax incentive scheme was a contributing factor in main taining investor interest in exploration during 
the global financial crisis.  The temporary METC  was extended in the 2010 federal budget until 
31 March 2011.75  Budgetary expenditures for the one-year extension of the METC were estimated at 
Can$65 million over  2010/11 and 2011/12.76 
(ii) Natural gas 
69. Canada is the world's third largest producer of  natural gas after Russia and the United States.77 
Over half of Canada's production is exported to the United States.  Exports of natural gas, including 
propane, butane and ethane, require authorization in the form of a short term export order from the 
National Energy Board (ethylene and propylene are exempt).  There are two forms of export 
authorizations: short term orders which are usually issued within two working days and are valid for a 
period of up to two years;  and long term licences which are valid for up to 25 years.  According to the authorities, the issuance of export orders  is mainly for monitoring purposes.  
70. Despite being a net exporter of natural gas, Canadian imports of natural gas are growing, 
particularly into Southern Ontario.  Canada al so started importing liquefied natural gas (LNG) in 
2009.
78  Import licences are required from the National En ergy Board (NEB) for natural gas in either 
gaseous or liquid state (imports of propane, butane, ethane, ethylene and propylene are exempt).79  
The purpose of import licensing is to ensure that impo rts are in the public interest, "having regard to 
the equitable distribution of gas in Canada".80  Import licences are granted by the NEB on a 
case-by-case basis for a maximum of 25 years, taki ng into account the impact on the Canadian gas 
industry, consumers, distribution, and other factor s.  The licence application process involves a public 
hearing and takes a minimum of four months;  approv al of the Governor-in-Council is also required.  
Licences are free of charge and are transferable subject to approval by the NEB and the Governor-in-Council (Chapter III(2)(vi)).
81  Import orders are used in the case of long-term small 
volume in-transit shipments between countries (typica lly between Canada and the U.S.) or short-term 
imports (less than two years). Orders are issued  free of charge within two working days. The 
authorities note that as a federal regulator, the NEB is responsible for regulating flows of natural gas 
across both provincial and national borders and in or der to serve the public interest, it must monitor 
energy flows into, and out of, Canada; import licensing is one tool for collecting data and information. 
71. According to the authorities, none of the fede ral/provincial/territorial governments has a stake 
in companies involved in the exploration, producti on or processing of natural gas in Canada. Producer 
                                                      
75 NRCan online information, "Mineral Ex ploration Tax Credit".  Viewed at:  
http://www.nrcan.gc.ca/mms-smm/ busi-indu/met-qfi-eng.htm. 
76 Budget 2010. 
77 NRCan online information, "Important Facts on Canada's Natural Resources 2009".  Viewed at:  
http://www.nrcan-rncan.gc. ca/stat/index-eng.php. 
78 WTO document G/LIC/N/3/CAN/9, 18 October 2010. 
79 NEB Part VI (Oil and Gas) Regulations [SOR/91-7] and the NEB Export and Import Reporting 
Regulations [SOR/95-563].  Viewed at:  http://laws.j ustice.gc.ca/ PDF/Regulatio n/S/SOR-95-563.pdf;  and 
http://laws.justice.gc.ca/PDF/Regulation/S/ SOR-96-244.pdf. 
80 WTO document G/LIC/N/3/CAN/9, 18 October 2010. 
81 WTO document G/LIC/N/3/CAN/9, 18 October 2010. WT/TPR/S/246 Trade Policy Review 
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prices for natural gas have been deregulated since 1985.  Canadian gas prices are determined by the 
larger North American market with price differen tials reflecting the cost of moving natural gas from 
surplus to deficit regions.82  Customers can buy natural gas from a local distribution company at the 
prevailing or spot commodity price plus a regulated transportation and distribution charge;  or they 
may enter a long-term contract with a natural gas br oker or marketer at a fixed commodity price plus 
the same regulated transportation and distribution charge. 
72. Canada's pipeline system (gas and oil) for in ter-provincial and intern ational trade is under 
federal jurisdiction.  The transmission system is regulated by the NEB, to  ensure that open and 
non-discriminatory access exists for all shippers.83  Transmission tolls and tariffs (inter-
provincial/international) and any expansions of the pipeline ne twork require approval from the 
regulator.  All pipelines within Canada are privat ely owned and operated with the exception of the 
natural gas transmission systems in Saskatchewan  and one transmission line between Saskatchewan 
and Manitoba, which are owned a nd operated by subsidiaries of th e provincial Crown corporation 
Sask Energy. 
(iii) Oil 
73. Canada is the sixth largest oil producer in th e world with the third-largest proven oil reserves 
after Saudi Arabia and Venezuela.  Canada’s oil r eserves are dominated by the oil sands (about 97%).  
Canada has a dual crude oil market.  About two th irds of Canadian oil production is exported from 
Western Canada, almost entirely to U.S. refineries, which are closer to Western Canadian production.
84  Refineries in Canada's Eastern provin ces rely mainly on imports of crude oil, 
principally from Algeria, Saudi Arabia, Ango la, Nigeria, Venezuela, Norway, and the 
United Kingdom.  Canadian oil imports are not regulated through a licensing regime. 
74. A short-term order is required for exports of crude oil and re fined petroleum products of one 
year or less (two years or less for heavy oil).85  The National Energy Board Act and Regulations also 
provide for long-term export licences for oil and pe troleum products of up to 25 years in duration.  
Exporters have opted to use the simplified export order process for crude oil and petroleum products 
even on a quasi long-term basis due to the expe ditious approval (two wo rking days) and renewal 
process and the unlimited nature of the quantiti es that can be exported under this type of 
authorization. 
75. The Government of Canada sold its  equity in Petro-Canada in 2004.   It retains a 8.5% stake in 
the Hibernia offshore oil field, through the Canada Hibernia Holding Corporation, a subsidiary of the 
Canada Development Investment Co rporation (a Crown corporation). 
76. Fuel is subject to federal Goods and Servi ces Tax or Harmonized Sales Tax, and provincial 
fuel taxes (Table III.8);  federal excise taxes on petroleum products also apply (Chapter III(2)(v)). 
77. The provinces have the jurisdiction to regulat e petroleum product prices.  Retail prices for 
fuel are regulated in some provinces, including Prince Edward Island, Newfoundland and Labrador, 
                                                      
82 International Energy Agency (2009), p. 148. 
83 Canada has not made any GATS commitments with respect to pipeline transport. 
84 In 2009, 99% of Canadian crude oil exports were sent to the U.S. market, and the remainder were 
shipped to the Asian market.  Private- sector projects, such as the Northern  Gateway pipeline project with a new 
terminal in Kitimat, B.C., may eventually lead to geogra phic diversification of Canada's exports of crude oil and 
gas to Asia and other markets (Enbridge Northern Gateway pipelines online information.  Viewed at:  
http://www.northerngateway.ca/project-i nfo/northern-gateway-at-a-glance). 
85 National Energy Board Act Part VI (Oil and Gas) Regulations (SOR/96-244). Canada WT/TPR/S/246 
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Nova Scotia, New Brunswick, and Québec.  In Québec , fuel retail dealers have legal recourse against 
competitor dealers selling below the minimum price le vel set by the Québec Energy Board (Régie de 
l'Énergie).  In Nova Scotia, the Utility and Revi ew Board fixes the wholesale price for petroleum 
products, a maximum retail price, and minimum and maximum retail markups.  
78. Provisions in the Canada-Nova Scotia Offshor e Petroleum Resources Accord Implementation 
Act, and the Canada-Newfoundland Atlantic Accord  Implementation Act require a benefits plan as 
part of the approval process for a petroleu m project.  A benefits plan requires, inter alia , that first 
consideration be given for training and employment of local residents in the respective provinces, and 
to goods manufactured in and services provided from within the respective provinces, as long as these 
are competitive in terms of market price, quality, and delivery.   
(iv) Electricity 
79. Canada is a net-exporter of electricity to th e United States within the integrated North 
American electricity grid.  The federal government  has jurisdiction over matters of inter-provincial 
power lines designated by the Governor-in-Council, and international trade (including construction 
and operation of international power  lines, and export authorizations).  Electricity exports require 
permits from the National Energy Board (NEB). A pproval depends on a number of factors, including 
the effects of exports on adjacent provinces, the e nvironment, and fair market access for Canadians.86  
Imports of electricity do not require authorization. 
80. The Canadian transmission network extends over 160,000 km.  It is characterized by 
north-south backbones, in part due to the location of  most major demand centres near the Canada-U.S. 
border and major hydroelectric energy projects in the northern regions of British Columbia, Manitoba, 
Ontario, and Québec.  Canadian utilities must provide reciprocal non-discriminatory open transmission access to be able to sell electricity di rectly to customers in the United States.  Many 
Canadian transmission providers have filed Open  Access Transmission Tariffs (OATTs) with the 
United States Federal Energy Regulatory Commission (FERC) in response to Order 888.  The OATT defines the rates, terms and conditions asso ciated with network transmission services.
87 Transmission 
service providers in three provinces have not file d open access tariffs with the FERC:  Ontario, 
Alberta, and Newfoundland and Labrador.88  The FERC has ruled that the Ontario system provides 
transmission access equivalent to that in an OATT.  Alberta has a wholesale market that is open to 
competition, while Newfoundland and Labrador does not  sell electricity directly to the United States. 
81. Electricity generation and internal tran smission is under the jurisdiction of the 
provinces/territories, and each province/territory h as its own regulator.  In most provinces and the 
Yukon, Crown corporations, owned by the provincia l governments, provide most energy generation, 
transmission, and distribution (Table AIV.4).  The provinces have various legal frameworks for 
independent power producers (IPPs) or they may en ter into power purchase agreements with IPPs.  
82. Electricity prices vary from pr ovince to province, depending, inter alia,  on type of electricity 
generation, cost of transmission and local distribution, and whether prices are market-based or 
regulated.  Overall, Canada's retail electricity pri ces are among the lowest of the International Energy 
                                                      
86 NEB online information.  Viewed at:  http ://www.neb-one.gc.ca/clf-nsi/rthnb/whwrndrgvrnnc/ 
rrspnsblt-eng.html. 
87 The Tariff and the Schedules of fees are posted on the website of the Independent System Operator 
(ISO) or of the Open Access Same-Time Information System (OASIS). 
88 The Yukon does not have OATT's or equivalent acce ss systems as its electri cal grid is currently 
interrupted. It supplies only Yukon customers. WT/TPR/S/246 Trade Policy Review 
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Agency members (28 advanced economies).89  With the exception of Alberta and Ontario, prices are 
regulated by a quasi-judicial board or commission.  In Québec, New Brunswick, Nova Scotia, Prince 
Edward Island, and Newfoundland and Labrador, retail electricity tariffs are regulated on a 
cost-of-service basis.90  In Alberta, wholesale and retail markets are deregulated and prices are 
market-determined, although households and smal ler commercial consumers have the option of 
subscribing to a regulated tariff.  Alberta introdu ced reforms in 2010 to encourage competition at the 
retail level.  Ontario has been moving towards regul ated or contracted prices for energy; eligible 
renewable energy projects in Ontario benefit from regul ated feed-in tariffs (see section (vi) below)).  
Nova Scotia deregulated its wholesale electric ity markets in 2007, allowing municipal power 
companies to choose their suppliers (Table AIV.4). 
83. The development, production and use of nuclear en ergy is regulated by the Canadian Nuclear 
Safety Commission (CNSC) under the Nuclear Safety and Control Act, to protect health, safety, 
security and the environment, and to implement Ca nada's international commitments on the peaceful 
use of nuclear energy. The operation of nuclear facilit ies, including nuclear power plants, is regulated 
by the CNSC through a licensing system.  Canada's  existing nuclear power plants (CANDU reactors) 
have been developed by Atomic Energy of Canada Ltd.  The Canadian Government is committed to a 
restructuring of Atomic Energy of Canada (a federal Crown corporation) as part as of its plan to better 
position the Canadian nuclear industry to  capitalize on new market opportunities.91 
(v) Renewable energy 
84. Canada is the world's second largest producer  of hydroelectric energy, which accounts for 
almost 62% of its total electricity generation (592.3 GWh in 2009).92  Wind energy and solar 
photovoltaic energy are the fastest growing sources  of energy, albeit from a small base, driven by 
federal and provincial government policies. 
85. In 2007, the Federal Governme nt launched the ecoEnergy initiative and allocated close to 
Can$4 billion for the period 2007-11 to support the development of a sustainable energy system and honour Canada's commitment to reduce total greenhouse gas emissions (by 17% by 2020 from 2005 
levels).  Canada's assistance for renewable en ergy encompasses financial and tax incentives, 
regulatory subsidies, and support for R&D (Table AIV.5).
93  All of the federal ecoEnergy 
programmes are open to participation by fo reign enterprises established in Canada.   
(a) Biofuels 
86. Under the ecoEnergy for Biofuels initiative (p art of the Government's Renewable Fuels 
Strategy94) production of biofuels is subsidized.  C oncurrently with the implementation of price 
incentives, the excise tax exemption for ethanol an d biodiesel was eliminated on 1 April 2008.  The 
financial incentives for biofuel production are u nderpinned by a regulatory environment that 
                                                      
89 International Energy Agency (2009), p. 35. 
90 Cost-of-service is defined as the process of regula tion whereby the regulator sets rates at a level that 
covers operating costs and provides a reasonable rate of return on the investment (rate-of-return regulation). 
91 Canada Governor General (2010). 
92 Information provided by the Canadian authorities. 
93 Several federal initiatives to assist the developm ent of renewable energy have expired since 2007 
(including the Wind Power Production Initiative, the Renewable Energy Deployment Initiative, the Market 
Incentive Program for Distributors of Emerging Renewable Electricity Sources, and Purchases of Electricity from Renewable Resources Programme).  See WTO (2007) Chapter IV, paragraph 63.  These programmes have 
been replaced by ecoEnergy programmes. 
94 Government of Canada online information.  View ed at:  http://ecoaction.gc .ca/ecoenergy-ecoenergie/ 
renewablefuels-carburantsrenouvelables-eng.cfm. Canada WT/TPR/S/246 
 Page 115 
 
 
encourages investment in renewable fuels (regulator y subsidies).  Pursuant to the Renewable Fuels 
Regulations under the Canadian Environmental Pr otection Act, fuel producers and importers are 
required to comply as from 15 December 2010 with a renewable fuel content of 5% of average annual gasoline production or imports.  For diesel and hea ting oil, a 2% renewable content may be introduced 
in 2011, subject to technical feasibility.
95  The federal fuel content requirements are estimated to 
create additional demand for ethanol and biodiesel of 2.2 billion litres and 0.6 billion litres, respectively.
96  In Ontario, fuel suppliers have been required to meet a 5% annual average ethanol 
content in gasoline since January 2007.  Fuel supp lies in Manitoba have been subject to an 8.5% 
ethanol content requirement in gasoline since 2008 a nd a 2% biodiesel content requirement in diesel 
fuel since 1 November 2009. 
(b) Other renewable energy 
87. The Federal Government is supporting electri city generation from renewable sources with 
some Can$1.5 billion during 1 April 2007 to 31 March 2011 through the ecoEnergy for Renewable 
Power Programme (Table AIV.5). 
88. Most provincial governments also support the generation of renewable energy. In 2009, 
Ontario adopted the Green Energy and Green Ec onomy Act (GEA) and the related Feed-in Tariff 
(FIT) programme.  The FIT programme offers rene wable energy producers that develop new projects 
a fixed-price under a long-term contract for ener gy generated by these projects (bioenergy, solar, 
water, and wind).  Projects must be located in Ontario.97  The feed-in tariffs are contractually 
guaranteed for 20 years (40 years for hydro-electricity projects) without quantitative limits on energy 
production (except for eligible hydro-power proj ects, which cannot exceed 50 MW, and solar PV, 
which cannot exceed 10 MW).  Feed-in tari ffs range from Can$0.103 per kWh for landfill gas 
projects larger than 10 MW to Can$0.802 per kWh to smaller rooftop solar PV projects of 10 kW or under
98;  prices are intended to cover project costs an d allow for a reasonable return on investment.  
Connection costs to the distribution or provincial transmission system are generally borne by the applicant. Ontario's FIT programme is the most comprehensive feed-in tariff programme in North 
America (Table AIV.5).
99  The "feed-in premium" under the ecoENERGY for Renewable Power 
programme is a top-up incentive that complements existing programmes or measures;  its repayable contribution clause sets a maximum price of Can$0. 13 kWh, after which the incentive stops.  Since 
most projects under Ontario’s feed-in tariff progra mme benefit from rates over Can$0.13 kWh, these 
projects are not eligible for the federal incentive.  According to the authorities, there are no budgetary 
expenditures related to the FIT programme as electricity costs are recovered from electricity 
ratepayers (i.e. through electricity bills).  
89. Solar and wind projects must meet local-content requirements, i.e. minimum content levels of 
Ontario-made equipment and/or Ontario labour.  Th e minimum local content is determined by the 
milestone date by which the project reaches comme rcial operation.  For larger generation projects 
(over 10 kW), the 2011 requirements are 25% for wind projects, and 60% for solar projects (over 
10kW but less than 10,000 kW;  the percentage for wind projects will increase to 50% as from 
                                                     
 
95 Government of Canada online information.  Viewed at:  http://www.ecoaction.gc.ca/news-nouvelles/ 
20100901-1-eng.cfm. 
96 International Energy Agency (2009), p. 94. 
97 Viewed at:  http://www.ontla.on.ca/bills/b ills-files/39_Parliament/Session1/b150ra.pdf. 
98 A 10% tariff reduction applies for production during off-peak periods. There are additional price 
incentives for aboriginal and commun ity-based projects. 
99 Ontario Power Authority posts updates on the prog ress of the FIT programme every two weeks at:  
http://fit.powerauthority.on.ca/P age.asp?PageID=749&ContentID=&S iteNodeID=1144&BL_ExpandID=273. WT/TPR/S/246 Trade Policy Review 
Page 116 
 
 
1 January 2012.100  For smaller solar projects (up to 10 kW) the local content requirement is 60%.  
Japan has requested WTO dispute settlement consultations with Ca nada on this matter.101 
90. In Québec, Hydro Québec has been using mi nimum regional-content requirements in its 
1,000 MW and 2,000 MW wind energy requests for proposals (RFP) since 2004. For example, in its 
first RFP for 1,000 MW of wind energy, Hydro Qu ébec requested minimum regional content of 40% 
for deliveries beginning 1 December 2006, 50% fo r deliveries starting 1 December 2007, and 60% for 
deliveries commencing between 2008 and 2012.  In a ddition to setting specific percentages for local 
content, Hydro Québec has required that the costs be incurred in the regional county municipality of 
Matane and in Gaspésie-Iles-de-la-Madeleine.102  In 2010, the Nova Scotia government released its 
Renewable Electricity Plan and established renewa ble electricity regulations that will require 
Nova Scotia to establish a community feed-in-ta riff (COMFiT) for small distribution connected 
projects. 
(4) MANUFACTURING  
(i) Overview 
91. The decline of the Canadian manufacturing sector continued during the review period 
(Table I.1).  The sector's share in GDP decre ased from 14.9% in 2007 to 12.1% in 2010, and its 
employment share decreased from 12.1% to 10.2%.103  The downturn reflects, amongst other factors, 
the long-term structural transformation towards a mo re services-oriented Canadian economy but also 
enhanced global competition, the appreciation of th e Canadian dollar, which has adversely affected 
Canadian exporters particularly in the manufactur ing sector, and the impact of the global financial 
crisis, which led to a sharp drop in manufacturi ng sales (a decrease of 11.1% from 2007 to 2010).  
The Canadian Government has adopted a range of measures in its long-term economic plan 
(Advantage Canada) with the objective of impr oving manufacturing productivity growth and 
competitiveness (which has been lagging behind the United States).104  Amongst these measures are 
tariff and tax reductions, other st imulus measures, industry-specific incentives for R&D (e.g. for the 
automotive and aerospace industries), and impr ovements of the business environment through 
streamlining of regulation and reducing the administrative burden (Chapter II(1).105 
92. Since its last TPR, Canada has launched a major unilateral initiative to permanently eliminate 
the applied MFN tariffs on manufacturing inputs, machinery, and equipment (Chapter III(2)(iv)).106  
In the 2010 Budget, 1,374 tariffs in the range of 2%  to 15.5% were reduced to zero;  the remaining 
381 tariffs in that range will be eliminated by 1 Janua ry 2015 at the latest (Chart IV.1).  It should be 
noted, however, that some of the imports covered by the initiative previously benefited from tariff 
remissions; for these products the effect of the trad e liberalizing measure is more apparent than real 
(section (iv) below).  According to the authoriti es, the tariff elimination initiative liberalizes over 
                                                      
100 Ontario Power Authority, "Feed-in tariff prog ram".  Viewed at:  http://fit.powerauthority. 
on.ca/Storage/102/11160_FIT_Program_Overview_August_new_price_version_1.3.1_final_for_posting-oct_27
.pdf. 
101 WTO document WT/DS412/1, 16 September 2010. 
102 Hydro Québec online information.  Viewed a t:  http://www.hydroquebec.com/distribution/en/ 
marchequebecois/parc_eoliens.html. 
103 Statistics Canada (various editions). . 
104 Mulrain (2008). 
105 Department of Finance Canada (2006). 
106 WTO document G/MA/W/101, 19 April 2010;  Government of Canada, "Budget 2010", pp. 88-90. Canada WT/TPR/S/246 
 Page 117 
 
 
Can$5 billion of imports and results in customs duty savings by importers of some 
Can$388 million.107 
93. On the one hand, the Canadian tariff el imination initiative provides opportunities for 
manufacturers to improve their productivity and competitiveness through lower-priced imports of 
inputs, machinery, and equipment.  On the other hand, the initiative probably provides higher 
effective protection for certain industries producin g final processed products (where tariffs remain 
unchanged).  The initiative is likely to favour some industries over others.  
94. Canada's applied MFN tariffs in the manufactur ing sector averaged 5.4% in 2010 (down from 
6.5% in 2006), ranging from zero to 532.2% (ISIC Re v.2 classification) (Table III.1).  The most tariff-
protected industries include the food, beverage, and tobacco processing industries;  chemicals, 
petroleum, coal, rubber, and plastics;  shipbuildi ng;  railways and tramways;  sporting goods;  and 
apparel (Table AIV.6). 
1,755
1,541
381
0
02004006008001,0001,2001,4001,6001,8002,000Chart IV.1
Canadian tariff relief on machinery, equipment and industrial inputs
Source:  Canadian authorities.Number of tariff items
Items subject to duty 
pre-Budget 2009Items subject to duty 
post-Budget 2009Items subject to duty 
post-Budget 2010Items subject to duty 
after full 
implementation in 
2015
 
95. According to the authorities, there are no Crown corporations operating in the manufacturing 
sector.  As part of the restructuring support (ba ilout) for Chrysler and General Motors (GM) during 
the global financial crisis, the governments of Cana da and Ontario received ownership stakes in the 
new parent companies and retain a 2% equity stake in Chrysler and a 9% equity stake in the new GM 
                                                      
107 Budget 2010, p. 89. WT/TPR/S/246 Trade Policy Review 
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following GM's November 2010 initial public offering.  Manufacturing in Canada is concentrated in 
Ontario and Québec, which account for about 70% of total manufacturing sales.108 
(ii) Automotive industry 
96. The automotive industry is Canada's largest manufacturing sector after the food, beverage, 
and tobacco manufacturing industries in 2009, and Canada's leading manufacturing export industry 
(Table IV.5).109  As Canada exports over 95% of automotive products to the United States, the 
appreciation of the Canadian dollar has pushed auto  companies to relocate to lower-cost countries, 
leading to the continuing decline of exports sin ce 2005 (Table A1.1 and A1.2).  Vehicle imports 
originate mainly in the United States, follo wed by Japan, Mexico, Germany, and Korea.110  Applied 
MFN tariffs for motor vehicles averaged 3.5% in 2010 ranging from zero to 9.5% (ISIC Rev.2 
classification) (Table AIV.6). 
Table IV.5 
Selected indicators of the Canadian automotive industry 
(Can$ billion) 
 2007 2008 2009 
GDP  25.8 19.8 14.7 
Imports 76.7 68.2 53.6 
Exports 67.4 51.5 37.1 
Employment ('000) 152.6 137.5 109.1 
 
Source:  Statistics Canada. 
97. Chrysler and General Motors are Canada's lead ing automobile manufacturers; others include 
Toyota, Ford, and Honda.  While the automotive indus try is concentrated in Ontario, there are about 
750 parts manufacturers across Canada.  The Canadi an and U.S automotive markets have become 
increasingly integrated in terms of the trading re gime (NAFTA), regulation, and supply chains; for 
example, vehicle components may cross the Ca nada-U.S. borders 6-7 times in the assembly 
process.111 
98. In 2009, as part of the federal government’s  support of the auto industry, financial 
restructuring assistance was provided to both GM and Chrysler to prevent the disorderly collapse of 
these companies, which would have had potentially negative effects across the auto sector. In 
exchange for their support, governments received owne rship stakes in the new parent companies that 
emerged after the restructuring (Table IV.6).112 
99. In 2009, the federal government  provided Can$700 million to Expo rt Development Canada's  
Accounts Receivable Insurance (ARI) to expand to in surance needs of Canadian auto parts suppliers  
(Table III.13).  The ARI is delivered on commerci al terms.  Under the Canadian Secured Credit 
Facility, the Canadian Government has committed to purchase up to Can$12 billion of newly issued 
term asset-backed securities backed by loans and le ases on vehicles and equipment, and dealer floor 
plan loans through the Business Development Banks.113  The programme, announced in the 2009 
                                                      
108 Statistics Canada (2010), p. 302. 
109 The automotive industry comprises manufacturing of cars, light and heavy trucks, buses and 
recreational vehicles. 
110 Foreign Affairs and International Trade Canada (2010). 
111 Government of Canada (2009). 
112 WTO document WT/TPR/OV/12, 18 November 2009. 
113 WTO document WT/TPR/OV/12, 18 November 2009. Canada WT/TPR/S/246 
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Budget, ended on 31 March 2010, an d five transactions were comple ted in auto and equipment asset-
backed securities totalling Can$3.65 billion. 
Table IV.6 
Assistance for the automobile industry, as at 21 February 2010 
Firm Form of support Valu e of support Observations 
Chrysler Loans to  Chrysler in 
support of restructuring Up to Can$3.775 billion Upon exit from bankruptcy , support provided by the governments of 
Canada and Ontario was converted in to a loan and a 2% equity share 
in new Chrysler.  Can$2.9 billion of the Can$3.8 billion has been 
advanced to Chrysler. 
 
 Warranty Commitment 
Program -- A federal initiative to guarant ee customer warranties on new 
vehicles purchased from Chrysler during the restructuring period.  
The Warranty Commitment Program  was concluded in September 
2009.  No funds were drawn.  
General Motors Loans to GM in support 
of restructuring US$9.5 billion Upon exit from bankruptcy, s upport provided by the governments of 
Canada and Ontario was converted into a US$1.3 billion loan (fully 
repaid in April 2010), US$403 million in preferred stock, and 11.7% 
of common equity in new GM (following GM’s November 2010 
initial public offering, Canada and On tario retain a 9% equity stake 
in the new GM). 
 
 Warranty Commitment 
Program -- A federal initiative to guarant ee customer warranties on new 
vehicles purchased from General Motors of Canada Limited 
(GMCL) during the restructuring period.  The Warranty 
Commitment Program was conclude d in September 2009.  No funds 
were drawn. 
 
Source:  Canadian authorities. 
100. Canada has implemented a number of incentive programmes aimed at stimulating R&D in the 
automotive industry.  The Automotive Innovation F und (AIF), launched in 2008 by the Federal 
Government, provides for Can$250 million over five y ears to support private-sector R&D projects to 
develop and build innovative, greener, and more fuel-efficient vehicles.114  Funding in the form of 
repayable contributions is subject to an investme nt threshold of at least Can$75 million over five 
years.  Eligible projects undertaken by companies incorporated in Canada include vehicle or power 
train assembly operations with significant automotive innovation and R&D.   
101. The Automotive Partnership Canada programme  is aimed at collaborative public-private 
sector R&D projects in three strategic areas:  improving the automobile's environmental performance 
and impact;  the cognitive car;  and next generation manufacturing.115  The programme, launched by 
the Federal Government in April 2009, provides Can$145 million over five years.  This programme 
supports university and/or government researchers in Canada in their collaborative R&D projects with 
industrial partners;  the projects must be driven  by industry needs and involve active industrial 
participation.  Foreign firms may be eligible to  participate, provided they have a Canada-based 
industrial partner that plays a major role in the project and exploits the research results for the 
economic benefit of Canada. 
102. An environmental programme designed to re duce air pollution by providing rewards to 
Canadians who retire their older, more polluting vehi cles, was launched in January 2009 and ended in 
March 2011.  The Federal Government allocated Ca n$92 million to this programme.  As of January 
                                                      
114 Industry Canada, Automotive Innovation Fund.  Viewed at:  http://www.ic.gc.ca/eic/site/auto-
auto.nsf/eng/am02257.html. 
115 Government of Canada, Canadian Automotive Partnership.  Viewed at:  http://www.apc-
pac.ca/Index_eng.asp. WT/TPR/S/246 Trade Policy Review 
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2011, over 120,000 vehicles had been retired, resulting in a reduction of 4,300 tonnes of smog-
forming emissions.  
103. Canada Motor Vehicle Safety Standards ar e developed by Transport Canada under the 
authority of the Motor Vehicle Safety Act.  Sin ce its last TPR, Canada has further harmonized or 
aligned a number of its vehicle safety standards (i.e. technical regulations) with U.S. regulatory 
requirements.116  Since 2007, it has also aligned itself with seven UN/ECE regulations.  The 
authorities note, however, that many of the othe r UN/ECE regulations are not suitable for Canada 
since they are not performance-based or not as strict as Canadian safety requirements.  Canada supports the international harmonization of sta ndards through the development of (performance-
based) UN/ECE Global Technical Regulations. 
104. Canadian vehicle safety regulation is stringent.  According to the authorities, vehicles sold at 
retail level in countries other than Canada and the United States do not comply with the Canada Motor 
Vehicle Safety Act and cannot be imported into Ca nada, since they cannot be modified to comply 
with Canadian safety standards.  Vehicles retailed in  the United States may be eligible for importation 
because they fall under the NAFTA provisions and, as they are manufactured to near identical safety 
standards, can be modified to meet Canadian requirements.  Under NAFTA, import requirements for 
vehicles sold at the retail level in Mexico ar e to be phased in between 1 January 2009 and 
1 January 2019.  Imports of second-hand or used cars are prohibited with certain exceptions for 
imports from the United States (Chapter III(2)(vi)).  In Québec, a ministerial order prohibiting the use of right-hand drive vehicles on roads entered into effect on 24 April 2010.
117 
(iii) Aircraft 
105. Canada's aerospace industry is the fifth largest in the world with sales of Can$22.2 billion in 
2009 (down from Can$23.8 billion in 2008), 78% of which were expor t sales.  Employment totalled 
about 79,000 in 2009.118  The industry has nonetheless suffered a significant decline of its global 
market share for aircraft, aerospace systems, and components.119 
106. The industry-led Future Major Platforms Initiative, provided recommendations to the 
Government to increase Canada's participation in the global supply chains of upcoming major 
commercial aircraft programme120  Another industry initiative is the Green Aviation Research and 
Development Network (GARDN), a business-led network of centres of excellence (BL-NCE) with an initial budget of approximately Can$23 million for 2009-13, to promote aerospace technologies for 
the protection of the environment.
121 
107. Applied MFN tariffs for aircraft manufacture averaged 0.5% in 2010, ranging from zero to 
11% (ISIC Rev.2 classification) (Table AIV.6).  To strengthen the international competitiveness of 
the Canadian aerospace industry, the Government  has launched a number of industry-specific 
                                                      
116 In 2007-10, 25 technical regulations on car safe ty were aligned with those of the United States. 
117 Société de l'assurance automob ile Québec online information.  Viewed at:  http://www.saaq. 
gouv.qc.ca/en/accident_preventi on/righthand_drive/index.php. 
118 Aerospace Industries Association of Canada (2010). 
119 National Research Council online information.  Viewed at:  http://www .nrc-cnrc.gc.ca/obj/nrc-
cnrc/doc/sectors-sect eurs/aero_e.pdf. 
120 Aerospace Industries Association of Canada (2008). 
121 GARDN online information.  Viewed at:  h ttp://www.gardn.org/.  Acce ssibility and financial 
management/reporting criteria are governed by rules and agreements established between the individual 
Business-led Network of Centres of Excellence (BL- NCE) and the BL-NCE Secretariat.  For additional 
information see:  http://www.nce-rce.gc.ca/NCESec retariatPrograms-ProgrammesSecretariatRCE/BLNCE-
RCEE/Guides-Guides_eng.asp. Canada WT/TPR/S/246 
 Page 121 
 
 
initiatives.  Under the Strategic Aerospace and De fence Initiative (SADI) the Federal Government 
allocated Can$1.1 billion over five years (2007-12) fo r repayable contributions  to support strategic 
industrial research and pre-competitive development in the aerospace, defence, space, and security 
industries.  Eligible recipients must be incorporated in Canada. 
108. In 2008, the Federal Government reaffirm ed its commitment to provide repayable 
contributions of up to Can$350 m illion to support Bombardier Aerospace's R&D costs of developing 
its CSeries commercial aircraft (in the narro w-body 100-149 seat segment of the market).122  I n  
addition, the Government of Québec committed to  provide repayable contributions of up to 
Can$117 million to support CSeries R&D costs.  Canada is a participant to the revised OECD Aircraft 
Sector Understanding (ASU), which took effect on 1 February 2011 and disciplines the provision of 
export credits by governments for civil aircraft  and other aircraft re lated parts and services.123  The 
Government of Québec assists the aeronautical industry within the framework of the Québec 
Industrial Aeronautical Development Strategy, in cluding through financia l assistance (loans, support 
to finance sales, share capital).124 
(iv) Textiles and clothing 
109. The Canadian textiles and apparel industries continued to decline in economic importance 
during the review period (Table IV.7).  Their combined GDP was Can$2.7 billion in 2009 (down by 40.8% from 2006), involving considerable job losses and reflecting the industries' diminished competitiveness on the domestic and export markets.   Apparel manufacturing, which is relatively 
labour-intensive, has continued to relocate abroad , while the textiles industry has been adversely 
affected by declining exports to, and increased co mpetition from overseas producers in its main export 
market, the United States.  Canada is a net-importer of textiles and clothing, with increasing levels of import penetration. 
Table IV.7 
Selected indicators of the Canadi an textiles and apparel industries 
(Can$ million) 
 Apparel Textiles 
 2007 2008 2009 2010 2007 2008 2009 2010 
Imports 7,391.7 7,912.9 7,801.2 7,758.2 4,959.3 4,756.0 4,238.1 4,467.0 
Exports 1,200.4 896.5 690.3 679.3 2,423.5 2,025.6 1,821.4 1,873.4 
Share of manufacturing GDP (%) 1.1 0.9 0.8 .. 1.1 1.0 1.0 .. 
Share of manufacturing employment (%) 2.3 2.0 1.8 .. 1.6 1.4 1.4 .. 
 
.. Not available.  
Source:  Statistics Canada. 
110. Canada's unilateral tariff elimination initiative covers applied MFN tariffs on textiles that 
qualify as manufacturing inputs. Duties on 464 tariff lin es have been or will be eliminated under this 
initiative.  In 2010, applied MFN tariffs for te xtiles averaged 4.5%, ra nging from 0-18%, while 
applied MFN tariffs for apparel averaged 14.3%, with a range of 0-18% (ISIC Rev.2 classification) 
(Table AIV.6). 
                                                      
122 Industry Canada online information.  Viewed at:  http://www.ic.gc.ca/eic/site/ic1.nsf/ 
eng/02290.html. 
123 OECD online information, "Aircraft Sector Understandings".  Viewed at:  
http://www.oecd.org/document/38/0,3746,en_2649_34169_47031526_1_1_1_37431,00.html. 
124 WTO (2007);  and Government of Québec online information.  Viewed at:  http://www.mdeie. 
gouv.qc.ca/index.php?id=3712#innovation. WT/TPR/S/246 Trade Policy Review 
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111. Duty remission programmes for textiles and appa rel, which allow eligible companies to 
import certain products on a duty-free basis, have been a feature of Canada ’s industrial development 
policy for some time (Chapter III(2)(iv)(d)).  Six te xtile and apparel remissi on orders have been in 
place under the responsibility of the Department of  Finance (covering men’s and boys' tailored collar 
shirts;  outerwear apparel;  women's blouses, shir ts and co-ordinates;  greige outerwear fabrics; 
finished outerwear fabrics; and shirting fabrics).  Th e six remission orders are scheduled to expire on 
31 December 2012, before full implementation of the tariff elimination exercise on 1 January 2015.  
On 18 November 2010, an additional remission orde r, the Designer Remission Order, was extended 
until 31 December 2014.125  The Canadian tariff elimination in itiative, upon full implementation, will 
simplify Canada's tariff structure and reduce the ad ministrative burden of complying with rules of 
origin under preferential trade agreements.  U nder NAFTA and Canada's FTAs with Chile and 
Costa Rica, specified quota amounts (the tariff prefer ence level) of clothing and textiles products may 
be imported duty-free among partners (Chapter III(2)(vi)).126 
112. In May 2008, Canada launched an outward processing initiative  for textiles and apparel. 
Under this programme, customs duties payable on apparel imported into Canada from developing 
countries are remitted, either totally or partia lly, if the goods incorporate Canadian textiles.127  This is 
intended to help Canada's ailing textiles industry to gain new mark et opportunities by providing an 
incentive for apparel manufacturers in developing count ries to use Canadian textiles.  Budgetary costs 
in terms of customs duties forgone are estim ated at Can$5 million for the initial years. 
113. The Canadian Apparel and Textiles Industries Program (CATIP) and its sub-component, the 
Canadian Textiles Program (CANtex),  which helped the apparel and textiles industries with funding 
to adjust to the impact of trade liberalization, expired on 31 March 2010.128  According to the 
authorities, no industry-specific financial incen tives are currently provided by the Federal 
Government to the Canadian te xtiles and apparel industries.  
(v) Shipbuilding 
114. Canada’s shipbuilding industry comprises over 150 establishments with about 30 shipyards in 
the Atlantic provinces, Québec, Ontario, and Britis h Columbia.  The industry has suffered declining 
demand, exacerbated by the global financial crisis.  The shipbuilding market in Canada has been in 
the range of Can$500-600 million annually.129  In addition to its importance for national security, the 
industry provides regional economic development in  many areas that are economically depressed.  
Exports of shipbuilding and re pair ranged from Can$58 million to  Can$132.7 million during 2005-09. 
115. Canada's shipbuilding policy is set out in the Shipbuilding and Industrial Marine Policy 
Framework of 2001.130  The main instruments of Canadian sh ipbuilding policy, to help sustain the 
shipbuilding industry, have been a duty on the im portation of large ships (eliminated in October 
2010), accelerated capital cost allowanc e, the Structured Financing Facility (SFF), and a Buy Canada 
policy for federal procurement. 
                                                      
125 Order Amending the Designer Remission Order, 2001 Order (SOR/2010-263).  Viewed at: 
http://www.canadagazette.gc.ca/ rp-pr/p2/2010/2010-12-08/h tml/sor-dors263-eng.html. 
126 WTO document G/LIC/N/3/CAN/8, 16 October 2009. 
127 Canada Border Services, Memorandum D8-2-6.  Viewed at:  http://www.cbsa.gc.ca/publications/ 
dm-md/d8/d8-2-6-eng.html. 
128 The CATIP and CANtex programmes were described in 2007 TPR of Canada. 
129 These estimates do not include boatbuilding.  Sh ipyards are also involved  in other manufacturing 
activities, which are not reflected in the sales figures. 
130 Government of Canada (2001). Canada WT/TPR/S/246 
 Page 123 
 
 
116. Canada's tariffs on 11 tariff lines under HS  89 are not bound in Canada's schedule 
(Chapter III(2)(iv)(b)).  Tariff protection for the sh ipbuilding sector (shipbuild ing and repairing) is 
among the highest industrial tariffs.  Applied MFN ta riffs averaged 12.9% in 2010, with a range from 
zero to 25% (ISIC Rev.2 classification) (Table AIV. 6).  In October 2010, the Canadian Government 
announced the waiving of the 25% import tariff on  general cargo vessels and tankers, as well as 
ferries longer than 129 meters, to encourage repl acement of older vessels and strengthen the 
competitiveness of the Canadian shipping industry. 
117. The Structured Financing Facility (SFF), which offers financial assistance to buyers and 
lessees of Canadian-built ships is scheduled to expire in March 2013.131  The objective of the 
Structured Financing Facility (SFF) is "to help en sure that shipyard capab ility exists for federal 
marine procurement and maintena nce requirements in keeping with  the Buy Canada procurement 
policy."132 
118. The Shipbuilding and Industrial Marine Policy framework refers to the Buy Canada policy 
and states that "the Federal Government will conti nue to procure, repair and refit vessels in Canada 
subject to operational requirements and the c ontinued existence of a competitive domestic 
marketplace."133  In June 2010, the Government announced  its National Shipbuilding Procurement 
Strategy (NSPS) for the Canadian navy and coast guard.134  Through the NSPS the Government of 
Canada is to establish a strategi c relationship with two Canadian shipyards, selected through an open 
competition, and designate them as sources of suppl y for the Navy and Coast Guard’s large ships.  
The value of these two work packag es is estimated to be over Can$30 billion over the next 30 years.  
Smaller ship construction will be set aside for co mpetitive procurement from shipyards other than the 
two selected to build the large ships. 
119. The Government of Québec offers a refundable ta x credit for the construction of vessels and a 
reduction of tax on capital on the acquisition of vessels made in Québec.135 
(5) TELECOMMUNICATIONS , BROADCASTING AND POSTAL SERVICES  
(i) Telecommunications 
120. Telecom revenues (excluding broadcasting) in creased to Can$41 billion in 2009, up from 
Can$34.5 billion in 2005, driven by increases in wireless business.136  Canada's main incumbent 
telecom operators in terms of revenues are BCE Inc. (operating as Bell), Rogers, and TELUS 
Corporation.  The Canadian Government has e xpressed concern about investment and productivity 
levels in its ICT industries, which have been  lower than those of competitors, notably the 
United States.137 
                                                      
131 For details on the SFF see WTO (2007). 
132 Industry Canada online information, "Str uctured Financing Facility".  Viewed at:  
http://www.ic.gc.ca/eic/site/sim-cnmi.nsf/vw apj/SFF-MFS_eng.pdf/$f ile/SFF-MFS_eng.pdf. 
133 Government of Canada (2001). 
134 Canada News Centre online information.  View ed at:  http://news.gc.ca/web/article-eng.do?m=/ 
index&nid=537299. 
135 Government of Québec online information.  View ed at:  http://preprod.md eie.gouv.qc.ca/index.php 
?id=4119&MP=4093-377 and http://preprod.mde ie.gouv.qc.ca/index.php?id=4120&MP=4093-377. 
136 Canadian Radio-television and Telecommunications Commission (2010), p. 15. 
137 Industry Canada online information.  Viewed at:  http://www.ic.gc.ca/ eic/site/ic1.nsf/eng/ 
06098.html. WT/TPR/S/246 Trade Policy Review 
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(a) Institutional framework 
121. Industry Canada is responsible  for telecommunications policy, spectrum policy, management 
and licensing under the Radiocommunication Ac t.  The Canadian Radio-television and 
Telecommunications Commission (CRTC), an independent  public authority, is mandated to regulate 
the telecoms industry in accord ance with the Telecommunications Act (1993).  The CRTC is also 
responsible, in collaboration with the Competition Bu reau, for ensuring that telecom operators do not 
engage in anti-competitive practices. 
122. The CRTC is guided in its regulatory activities by the "Policy Direction" of December 
2006.138  The directive is aimed at reducing the regulat ory burden by relying on market forces to the 
maximum extent feasible, and introduces a policy test (criteria) for developing new regulatory 
measures to ensure efficient and effective regulati on.  One of the criteria is, for example, that 
measures with an economic rationale should neither  deter competitive entry nor promote inefficient 
entry into the market.  The CRTC has the authority to refrain from economic regulation (forbearance) 
where there is "sufficient competition to protect the interests of users".139  Forbearance on tariff 
regulation is exercised on:  mobile services;  long distance and international telephone services;  most 
fixed local telephone services;  retail internet servi ces;  data services;  terminal equipment;  satellite 
services;  and services provided by non-dominant carriers.  On the basis of revenues in 2009, 71% of local telephone services were forborne and 91% of telecoms services overall.
140 
123. According to the authorities, there are no ta x or financial incentives provided to telecom 
operators other than those available to corpora tions generally.  Saskatchewan Telecommunications 
Holding Corporation (SaskTel) is the only provincial government-owned telecom company (Crown 
corporation).  SaskTel is regulated by the CRTC on a non-discriminatory basis in a telecoms market open to competition. 
(b) Foreign investment restrictions 
124. According to Canada's GATS commitments, 100% foreign investment has been allowed for 
international submarine cables, resellers of teleco m services, and fixed satellites and mobile satellite 
systems, with the condition that a mobile satellite  system "may be used by a Canadian service 
provider to provide services in Canada".
141  More than 75 foreign satellites have been approved by 
Industry Canada to provide services to, from or within Canada.  In July 2010, Canada lifted 
restrictions on foreign ownership of Canadian satelli te carriers, allowing the Canadian industry to gain 
access to foreign capital markets to finance its growth.142  This policy removes the competitive 
disadvantage vis-à-vis  the industry's main foreign competitors.143  Foreign investment in satellite 
                                                      
138 Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy 
Objectives, SOR/2006-355.  Viewed at:  http://canadagazette .gc.ca/archives/p2/2006/2006-12-27/html/sor-dors 
355-eng.html. 
139 Telecommunications Act, Section 34.  Viewed a t:  http://laws.justice.gc.ca/eng/T-3.4/page-2.html# 
anchorbo-ga:l_III-gb:s_34. 
140 Canadian Radio-television and Telecommunications Commission (2010), Table 5.1.6. 
141 WTO document GATS/SC/16/Suppl.3, 11 April 1997. 
142 In line with commitments made in the 2010 Speech from the Throne, the changes to the foreign 
ownership restrictions on satellite services were included in the 2010 Federal Budget omnibus legislation, 
passed by the Canadian Parliament on 12 July 2010.  S ection 2184 of Bill C-9 (Jobs and Economic Growth Act) 
amended the Subsection 16(5) of the Telecommunications Act to allow foreign ownership of satellite operators. 
Viewed at:  http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4649148&Language=e&Mode 
=1& File=812. 
143 The Canadian satellite services industry includes Te lesat, the fourth-largest fixed satellite services 
operator in the world. Canada WT/TPR/S/246 
 Page 125 
 
 
carriers remains subject to laws of general a pplication, including the Investment Canada Act 
(Chapter II(2(i)). 
125. Canada's remaining foreign equity restrictions  apply to terrestrial facilities-based operators, 
which must be Canadian-owned and controlled, an d incorporated under federal or provincial laws.144  
Foreign direct investment in these operators is capped at 46.7% of voting shares, based on 20% direct 
ownership and 33.3% indirect ownership.145  In addition, the carrier may not be controlled by 
non-Canadians and not less than 80% of the members of  the board of directors must be Canadian.  In 
July 2010, the CRTC established a new framework fo r ownership and control reviews.  The CRTC 
has the discretion to undertake a bila teral review or a public proceeding.146 
126. In 2010, Industry Canada held a public consu ltation on three options for further opening the 
telecoms industry to foreign investment.147  Under the first option, among other things, the maximum 
percentage of direct foreign ow nership would be increased from 20% to 49% of the voting shares.  
Under the second option, start-up telecom providers  and small companies would be exempted from 
the foreign ownership restrictions.  Under the thir d option, all foreign ownership restrictions on 
telecom service providers would be re moved.  No decision has been made. 
(c) Radio spectrum policy and roaming 
127. Canada has two mobile wireless operators with national licences.  Licences are issued with 
regional service areas.  For operators in the Cellu lar, PCS (Personal Communications Service) and 
AWS (Advanced Wireless Servic es) bands, mandatory roaming provisions apply.  National and 
international roaming rates are not  regulated, but if negotiations fail, commercial terms for roaming 
agreements may be subject to binding arbitration. 
128. Three mobile network operators dominate the Canadian market for wireless services (Rogers 
Wireless Communications, BCE, and TELUS).  Their co mbined market share in terms of revenues 
was 95.7% in 2007.148  A Canadian Telecommunications Policy Review Panel noted in 2006:  "The 
smaller number of mobile providers in Canada – a nd the fact that all three national wireless service 
providers are also owned by large telecommunicati ons service providers that also provide wireline 
services – may mean that there is less competition in the Canadian wireless market than in the U.S. 
market, which consequently has resulted in highe r prices, less innovation, lower uptake and lower 
rates of usage."149  Canada's penetrati on rate of mobile phone subscripti ons (71% in 2009) is relatively 
low for its stage of development.150 
129. To stimulate competition in the wireless market , in Canada's AWS spectrum auction held in 
2008, spectrum was set aside for new entrants.  Indu stry Canada considered that "in the absence of 
                                                      
144 Telecommunications Act (1993).  Viewed at:  http://laws.justice.gc.ca/eng/T-3.4/page-2.html# 
anchorbo-ga:l_II-gb:s_16;  and Canadian Telecommunications Common Carrier Ownership Regulations (1994). 
145 The limit on the voting shares for a holding company is 33.3%.  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.  The 
foreign ownership restrictions were introduced in 1987 in the context of the Canada's FTA negotiations with the 
United States. 
146 Telecom Regulatory Policy CRTC 2009-428 – Canadian ownership and control review policy.  
Viewed at:  http://www.crtc.gc. ca/eng/archive/2009/2009-428.htm. 
147 Industry Canada online information, "Opening Canada's Doors to Foreign Investment in 
Telecommunications:  Options for Reform".  View ed at:  http://www.ic.gc. ca/eic/site/smt-gst.nsf/ 
eng/sf09919.html. 
148 OECD (2009), p. 41. 
149 Industry Canada (2007). 
150 Canadian Radio-television and Telecommunications Commission (2010), p. 166. WT/TPR/S/246 Trade Policy Review 
Page 126 
 
 
these measures, there exists a potential that relia nce on market forces alone may serve to unduly 
restrict market entry, which could reduce innovatio n to the detriment of the industry's advancement 
and, ultimately, to wireless users across Canada."151  The AWS licence conditions for the incumbent 
wireless carriers include mandatory roaming and tower sharing with the market entrants.  To date four 
new facilities-based operators have launch ed wireless services since the AWS action. 
(d) Licensing 
130. The telecom licensing regime remains unchanged.   Facilities-based operators of local and 
long-distance fixed services are only required to regi ster with the CRTC.  Local telephone operators 
must register as a competitive lo cal exchange carrier (CLEC).  Resale of fixed-line capacity is 
permitted, provided resellers are registered with th e regulator and comply with consumer protection 
provisions.  There are no registration or licence fees. 
131. When Canada's licensing regime for the provisi on of basic international telecommunications 
services (BITS) was introduced, it was mainly to  ensure that foreign monopolies cannot use their 
dominance in the domestic market to gain an un fair competitive advantage in Canada, and to 
minimize barriers to entry for new service provide rs by addressing potential cases of anti-competitive 
conduct.152  Licences are subject to conditions on anti- competitive behaviour, participation in 
Canada's universal services regime , and others, and are valid for up to ten years.  In 2008, the 
rationale for the BITS licensing regime was reviewed in  light of the "Policy Direction" but the regime 
has been reconfirmed.153  Unless anti-competitive conduct affects the Canadian market, the CRTC 
does not regulate international settlement arrangements.154  Class A licences ar e for facilities-based 
operators, and Class B licences are for non-facilities-b ased operators, including resellers.  The CRTC 
is considering merging the two classes of licences since they are subject to the same conditions. 
132. Wireless carriers require licences under the Ra diocommunication Act for the use of radio 
spectrum and must comply with ownership and control eligibility requirements under the 
Telecommunications Act as well the Radiocommuni cation Regulations to provide services to the 
public.  The licence term for PCS and cellular mob ile broadband spectrum has been extended up to 
20 years.  Mobile virtual network operators must register with CRTC and comply with consumer 
protection provisions.  There are currently approxi mately 55 mobile licensees, some of which are 
small regional operators and some have not yet deployed service. 
133. Industry Canada authorizes Canadian satellite carriers by issuing a licence on a first-come 
first-served basis when there is enough satellite spectrum to accommodate demand or under a 
"comparative review process" when  there is competing demand for the spectrum.  Canadian satellite 
licensees are required to comply with spectrum polic y, and technical and regulatory requirements, and 
must pay annual licence fees.  Foreign satellites are not subject to licensing but an approval process to 
ensure compliance with Canadian spectru m policies and interference-free operations. 
                                                      
151 Industry Canada (2007). 
152 WTO document WT/TPR/M/179/Add.1, 22 June 2007. 
153 Review of the basic international telecommunica tions services licensing regime, Telecom Decisions 
CRTC 2008-70.  Viewed at:  http://www.crt c.gc.ca/eng/archive/2008/ dt2008-70.htm. 
154 Telecom Decision CRTC 98-17, 1998. Canada WT/TPR/S/246 
 Page 127 
 
 
(e) Interconnection 
134. The CRTC requires incumbent local exchange ca rriers (ILECs) to provide competitors with 
unbundled access to essential services,  including access to local loops155  ILECs are the companies 
that provided telecom services as a monopoly (within  regional services areas) prior to the introduction 
of competition.  The CRTC also requires ILECs to provide interconnection to competitive carriers.  In 
order to ensure non-discriminatory terms and conditi ons, ILECs must seek CRTC approval for tariffs 
for interconnection agreements and al l exchange of traffic with fixe d and mobile competitors, and for 
other services such as local telephone service in remote areas and wholesale services provided to 
competitors where the ILEC is dominant.  Interconnec tion rates of operators other than local exchange 
carriers are not subject to regulatory approval. 
135. Since the last Review of Canada, the local tele phone market has been further deregulated.  In 
2007, CRTC's Forbearance Order of 2006 was changed, to refrain from tariff regulation of ILECs in 
circumstances where a facilities-ba sed competitive market exists.156  Price deregulation is based on 
incumbents' applications for local  forbearance and meeting the relevant criteria, which have been 
adjusted essentially from a market share test to an infrastructure test.  Where a competitive market 
infrastructure does not exist, the CRTC retains re gulatory oversight, including through price-cap 
regulation.  CRTC estimates that services subject to price cap regulation at retail level account for almost Can$7 billion in annual revenues for the la rge ILECs with over 65% derived from the local 
residential voice market.
157 
136. For competitive local telephone service provide rs, the CRTC mandates the equal sharing of 
costs for the establishment of interconnecting trunks  in each pre-determined interconnecting region, 
and has adopted a "bill-and-keep" approach to co mpensation of calls term ination, with mandated 
pricing where traffic flows are not balanced between carriers. 
(f) Other 
137. There have been cases of some large incumb ent operators reducing the bandwidth for the 
(wholesale) ADSL services they are required to make available to competitors.  Such practices (i.e. 
bandwidth throttling) have raised concerns over network neutrality in Canada.  To address these 
concerns the CRTC requires that operators make any traffic management practices transparent and "competitively neutral".
158  In its latest "speed-matching" decision, CRTC decided that ILECs and 
cable operators must make their internet access ser vices available to competing ISPs at speeds that 
match those offered to their own retail customers.   In return for their investments, ILECs are 
permitted to charge competitors an additional 10% mark-up over their costs for the use of their 
wholesale internet services higher-speed options.159 
138. Universal services obligations are in place in the Northern and remote areas of Canada.  The 
subsidization of residential telephone users in these high-cost areas amounted to Can$182 million in 
                                                      
155 Revised regulatory framework for wholesale servi ces and definition of essential service, Telecom 
Decision CRTC 2008-17.  Viewed at:  http://www .crtc.gc.ca/eng/archive/2008/ dt2008-17.htm. 
156 Order Varying Telecom Decision CRTC 2006-15 P.C. 2007- 0532.  Viewed at:  
http://www.gazette.gc.ca/archives/p2/2007 /2007-04-18/html/sor-dors71-eng.html. 
157 Price cap framework for large in cumbent local exchange carrier, Te lecom Decision CRTC 2007-27.  
Viewed at:  http://www.crtc.gc. ca/eng/archive/2007/dt2007-27.htm. 
158 Telecom Regulatory Policy 2009-657 – Review of the Internet traffic management practices of 
Internet service providers.  Viewed at:  http: //www.crtc.gc.ca/eng/archive/ 2009/2009-657.htm. 
159 Telecom Regulatory Policy CRTC 2010-632, Wholes ale high-speed access services proceeding.  
Viewed at:  http://www.crtc.gc. ca/eng/archive/2010/2010-632.htm. WT/TPR/S/246 Trade Policy Review 
Page 128 
 
 
2009.160  As part of Canada's Ec onomic Action Plan, the Federal Government has allocated 
Can$225 million to extend broadband internet access to  under-served households in Canada.  Most 
federal assistance is provided under the Broadband Canada:  Connecting Rura l Canadians programme, 
whereby the roll-out of broadband networks is tendere d and successful applicants receive subsidies of 
up 50% of their one-time costs.161 
139. Number portability can play an important role  in enhancing competition.  Wireless number 
portability (fixed-to-mobile and vice versa, and mobile -to-mobile) has been available in Canada since 
March 2007.  Portability applies only within the local exchange area. 
140. Industry Canada provides information on its we bsite on mutual recognition agreements for 
telecom equipment and conformity assessment.162 
(ii) Broadcasting 
141. Canada's broadcasting regime remains uncha nged with regard to foreign investment 
restrictions, and the quota system for Canadian broadcasting content.  While foreign ownership 
restrictions for Canadian satellite carriers have been fully liberalized, th ere has been no change 
regarding Canada's satellite use policy requiring that direct-to-home (DTH) satellite broadcasting 
distribution services use Canadian satellites.163 
142. Canadian broadcasting policy is set out in  the Broadcasting Act.  It provides, inter alia , that 
the Canadian broadcasting system shall be eff ectively owned and controlled by Canadians, and 
programming is to be predominantly and distinctively Canadian.164 
143. The foreign ownership restrictions that apply to terrestrial facilities-based telecom carriers 
(see above) also apply to broadcas ting programming undertakings (BPUs)165 and broadcasting 
distribution undertakings (BDUs).  Most major Ca nadian communications companies are regulated 
under both the Telecommunications Act and the Br oadcasting Act since they are integrated 
companies.  Broadcasting licences are issued by the CRTC.  Under the Broadcasting Act, 
broadcasting licence fees are established by the CRT C regulations made with the approval of the 
Treasury Board.  Part I licence fees cover the cost s of the CRTC's broadcasting operations and Part II 
licence fees are regulatory charges, imposed for a broa dcaster's privilege to hold a licence.  According 
to the authorities, these fees recover part of the Government's annual investment in the Canadian 
broadcasting system. 
144. Pursuant to the Broadcasting Act, the CRTC has established a system to regulate Canadian 
broadcasting content.  New Canadian-content rul es for conventional television broadcasters will be 
introduced on 1 September 2011:  the current 60% of the broadcast year will be reduced to not less 
than 55%, while the level of not less than 50% of  Canadian content between 6pm and midnight is 
                                                      
160 Canadian Radio-television Telecommunications Commission (2010), p. 11. 
161 Industry Canada online information.  Viewed at:  http://www.ic.gc.ca/ eic/site/ic1.nsf/eng/ 
06045.html. 
162 Industry Canada online information;  for Telecommunications Equipment Regulatory Process, see 
http://www.ic.gc.ca/eic/site/mra-arm.nsf/eng/h_nj0005 5.html;  MRAs and procedures for conformity 
assessment, see http://www.ic.gc.ca/eic/site/mra-arm.nsf/eng/Home;  and MRAs for Telecommunications 
Equipment, see http://www.ic.gc.ca/eic/ site/mra-arm.nsf/eng/h_nj00050.html. 
163 Industry Canada online inform ation, "RP-SAT - Satellite-Use Po licy to accommodate Broadcasting 
Services to the Canadian Public".  Viewed at:  h ttp://www.ic.gc.ca/eic/site/smt -gst.nsf/eng/sf08453.html. 
164 Broadcasting Act.  Viewed at:  http://la ws.justice.gc.ca/ eng/B-9.01/index.html. 
165 A "broadcasting undertaking" includes a distribution undertaking, a programming undertaking, and 
a network (Broadcasting Act). Canada WT/TPR/S/246 
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maintained.166  Requirements for pay-tv, specialty, and pa y-per-view services vary and are set out in 
the licensing conditions.  The CRTC has developed a set of criteria to define and codify a "Canadian" 
programme.  In general, the CRTC certifies a Canadian television program based on its Canadian creative contributors;  at least one of the director or screenwriter positions and at least one of the two 
lead performers should be Canadian.
167 
145. The CRTC also requires that all conventional AM and FM radio stations ensure 35% of their 
popular musical selections are Canadian each week.  To qualify as Canadian content, music must 
fulfil criteria regarding music, artist, production, and lyrics (the MAPL system).168  French-language 
radio stations must ensure that at least 65% of th e popular vocal music selections they broadcast each 
week are in French.  Satellite sub scription radio undertakings must, if certain subscription thresholds 
have been met, distribute a minimum of ten orig inal Canadian-produced channels or contribute a 
minimum of 6% of gross revenues to the developm ent of Canadian talent.  Also, these undertakings 
must distribute a minimum of four French-langua ge original Canadian-produced channels.  A 
minimum of 85% of the musical selections broadc ast on Canadian-produced satellite radio channels 
must be Canadian, and a minimum of 65% of all popular vocal musical selections broadcast on each 
French-language radio channel must  be French-language selections.  There are no Canadian content 
restrictions on non-Canadian  satellite radio channels.169 
146. Under Canada's satellite-use policy, Canadian  direct-to-home (DTH) satellite broadcasting 
distribution services must use Canadian satellite facilities.170  An exception exists for Canadian digital 
broadcasting subscription radio services, where no Cana dian satellite facilities are available.  Foreign 
programming services must be authorized by the CRT C for distribution by broadcasting distribution 
undertakings and listed as eligible satellite services.171 
(iii) Postal services 
147. Canada Post is a Crown corporation with the exclusive privilege of collecting, transmitting, 
and delivering letters up to 500 g to addresses within Canada.172  Under the Canada Post Corporation 
Act, Canada Post may regulate, with the approval of the Governor in Counc il, rates of postage and 
other matters related to the e fficient operation of its business.173  The Act also gives the Corporation 
the ability to provide unregulated bulk rates.174  Canada Post is authorized to operate outside its 
monopoly services area but is not permitted to cr oss-subsidize its competitive services from its 
monopoly revenues.  In 2008, the Government of Ca nada established an independent advisory panel 
to offer analysis, recommendations, and advice that w ould ensure Canada Post's long-term capacity to 
achieve and retain financial self-sustainability and maintain universal postal service.  The Panel's 
recommendations, submitted in December 2008, in cluded that the postal market should not be 
                                                      
166 Broadcasting Regulatory Policy 2010-167 - A group-based approach to the licensing of private 
television services.  Viewed at:  http://www .crtc.gc.ca/eng/archive/2010/2010-167.htm. 
167 For a detailed description of the points system see CRTC online information, "Canadian program 
certification".  Viewed at:  http://www. crtc.gc.ca/eng/info_sht/t v11.htm;  and "Guide to the Canadian Program 
Certification Application Process".  Viewed a t:  http://www.crtc.gc.ca/canrec/ eng/guide1.htm#s2. 
168 CRTC online information, "The MAPL-system – Defining a Canadian song".  Viewed at:  
http://www.crtc.gc.ca/eng/ INFO_SHT/R1.htm. 
169 CRTC decisions 2006-37 and 2006-38. 
170 RP-SAT - Satellite-Use Policy to accommodate Broa dcasting Services to the Canadian Public.  
Viewed at:  http://www.ic.gc.ca/eic/ site/smt-gst.nsf/eng/sf08453.html. 
171 CRTC online information.  Viewed at:  http://www.crtc.gc.ca/eng/publications/satlist.htm 
172 Canada Post Corporation Act.  View ed at:  http://www.laws.justice.gc.ca/ 
eng/C-10/page-2.html#anchorbo-ga:l_I-gb:s_14. 
173 Canada Post Corporation Act, Section 19. 
174 Canada Post Corporation Act, Section 21. WT/TPR/S/246 Trade Policy Review 
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deregulated nor Canada Post's exclusive privile ge reduced, except that outbound international mail 
should be opened to competition.  In July 2010, Bill C-9 clarified that Canada Post's exclusive 
privilege does not include outbound international mail.175 
148. Universal services include deliv ery to every home or business in Canada (about 15 million 
addresses).  Canada Post is required to ope rate on a financially self-sustaining basis.176  However, the 
Corporation receives payments for government mail a nd materials for the use of the blind, which are 
delivered free of charge. 
149. Express services are not covered by Canada's Post  exclusive privilege.  The courier services 
market has been fully liberalized and there are no fo reign ownership restricti ons.  Over 20,000 courier 
companies currently operate in the Canadian market. 
(6) FINANCIAL SERVICES  
(i) Overview 
150. Financial intermediation and insurance servi ces (NAICS heading 52) accounted for 6.83% of 
Canada's GDP in 2009, up from 6.36% in 2006.177  Canada's financial system has shown remarkable 
stability amid the global credit turmoil and ensuing economic downturn worldwide.  While the crisis 
had an adverse effect on liquidity, no major Cana dian financial institution failed and none required 
public bailout.  Canada has already phased out sev eral initiatives under its Extraordinary Financing 
Framework, introduced in response to the credit crunc h (Table IV.8);  committe d public funds are still 
available through certain Crown corporations, including for export finance purposes (Chapter III(3)(iv)). 
Table IV.8 
Canada's extraordinary financing framework, 2008 -10 
Initiative Start Features Status 
Insured Mortgage 
Purchase Program October 2008 Committed a total of Can$125 billion for the purchase of 
insured residential mortgage pools from Canadian financial 
institutions under a competitive reverse auction process. 
 Phased out on 31 March, 2010;  
Total federal funds used:  
Can$69.35 billion 
Expanded capacity 
of federal financial Crown 
Corporations March 2009 The Business Development Bank of Canada (BDC) received 
Can$350 million in capital for incr eased term financing and a 
new time-limited facility providi ng guarantees for lines of 
credit; its borrowing capacity was increased by Can$1.8 
billion.  The mandate of Export Development Canada (EDC) was provisionally expanded to include support and 
development of domestic trade and business opportunities. 
Both BDC's and EDC's authorized capital limits were increased from Can$1.5 billion to Can$3 billion. Statutory 
limits on EDC's contingent liabilities and its outstanding 
commitments under the Canada Account (Chapter III(3)(v)) were raised to Can$45billion and Can$20 billion, respectively.  Ongoing 
Table IV.8 (cont'd)
                                                      
175 Canada Post Corporation Act, Section 15(3).  Viewed at:  http://www.laws.justice.gc.ca/eng/ 
C-10/page-2.html#anchorbo-ga:l_I-gb:s_14. 
176 Canada Post Corporation Act, Section 5 (2) (b). 
177 Statcan online information.  Viewed at:  http://www.statcan.gc.ca/pub/15-001-x/2010008/t046-
eng.htm. Canada WT/TPR/S/246 
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Initiative Start Features Status 
Business Credit 
Availability 
Program March 2009 EDC, BDC and private sector lenders collaborate to provide, 
at market rates, up to Can$5 billi on in loans and other forms of 
credit support and enhancement to businesses. 
In April 2010, BDC formed a public-private Vehicle and Equipment Financing Partnershi p with Canadian owned and 
operated TAO Asset Management Inc.; with an initial 
allocation of Can$500 million it is expected to expand financing options for small and medium-sized finance and 
leasing companies, increasing the availability of credit at 
appropriate rates for dealers and users of vehicles and equipment.  Ongoing.  At end-July 2010, 
financing support reached 
Can$8 billion (exceeding 
original target of at least Can$5 billion); more than 9,000 
businesses were served 
Municipal Infrastructure 
Lending Program 2009 A two-year programme to provide, through the Canada 
Mortgage and Housing Corpor ation, up to Can$2 billion in 
direct, low-cost loans for housing-related municipal infrastructure. Ongoing. Total loans made 
under this initiative were 
Can$1 billion in December 2009
Short-term Loans to the Automotive Industry December 2008 A federal-provincial loan facility with the Ontario government 
to make available Can$4 billion in short-term loans to Chrysler Canada Inc. and Gene ral Motors of Canada Ltd.  .. 
Canada Small 
Business Financing 
Programa April 2009 Maximum loan limits raised from Can$250,000 to 
Can$500,000, of which no more than $350,000 can be used for leasehold improvements and pur chasing or improving new or 
used equipment;  reimbursement limit on an individual 
financial institution's allowabl e losses raised from 10% to 
12%. Ongoing 
Canadian Secured 
Credit Facility January 2009 Up to Can$12 billion managed by BDC for the purchase of 
term asset-backed securities b acked by loans and leases on 
vehicles and equipment Ended on 31 March, 2010;  five 
transactions completed for a 
total of Can$3.65 billion  
Canadian Lenders Assurance Facility  November 2008 The government provided insurance on the wholesale term 
borrowing of federally regulat ed deposit-taking institutions Ended on 31 December, 2009;  
not drawn upon 
Canadian Life Insurers Assurance Facility 
 November 2008 The government provided insurance on the wholesale term 
borrowing of federally regulated life insurers Ended on 31 December, 2009;  
not drawn upon 
Modernization of Bank of Canada 
instruments January 2008 Modernized instruments of the Bank of Canada to support the 
stability of the financial syst em through the provision of 
extraordinary liquidity Extraordinary liquidity provided 
by the Bank of Canada peaked 
at over Can$40 billion in 
December 2008  
 
Extension of the Canada Mortgage 
Bonds Programb August 2008 The Government expanded the Bond program to include a 10-
year maturity Ongoing.  Over Can$10 billion 
in 10-year bonds issued 
 
.. Not available. 
 a The Program is a risk-sharing facility, administered by Industr y Canada, that makes it easier for small businesses (with gros s 
annual revenues of Can$5 milli on or less) to get loans from financial institutions. 
b Under the Canada Mortgage Bonds Progr am, introduced in 2001, the Canada Mort gage and Housing Corporation sells non-
 amortizing bonds to investors a nd uses the proceeds to purchase mortgages pack aged in National Housing Act mortgage-backed 
 securities. 
 
Source: Economic Action Plan , Canada. 
151. Canada's financial services sector is characterized by considerable integration, with 
conglomerates offering a variety of financial products  that cut across the core  activities of the four 
traditional pillars (banks, trust companies, insurers , and securities dealers).  While banks and life and 
health insurance companies have been most activ e in establishing specialized subsidiaries for the 
purpose of diversifying their operations, cooperative credit institutions have also branched out into WT/TPR/S/246 Trade Policy Review 
Page 132 
 
 
non-traditional functions, such as full-service brokerage, mutual funds, commercial lending, and 
wealth management.178  In general, chartered banks dom inate the market (Table IV.9). 
Table IV.9 
Market share for selected operations in Canada, 2006-10 
 2006 2010 2006 2010 2006 2010 2006 2010 
 Consumer credit Residential 
mortgages Non-residential 
mortgages Deposits 
Chartered banks 65.2 75.6 58.8 50.2 28.4 32.2 75.5 78.1 
Trust & mortgage loan companies 0.2 0.1 1.1 1.1. 2.1 3.2 1.4 1.6 
Credit unions & caisses populaires 6.6 6.1 13.7 12.7 24.3 27.2 14.5 13.7 
Life insurance companies 1.5 1.3 2.1 1.5 41.1 33.5 3.3 2.9 
Other channelsa 26.5 16.9 24.3 34.6 4.2 3.9 5.4 3.8 
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 
 
a Depending on the market segment, the "o ther channels" heading may include non-de positary credit intermediaries, special 
purpose corporations, National Ho using Act mortgage-backed securities, Govern ment-owned savings institutions, or money 
market mutual funds. 
 
Source: WTO calculations, based on data provided by the Canadian authorities. 
152. During the review period, Canada's federally  regulated financial services industry saw 
significant entry and exit of foreign companies (Table IV.10). The number of foreign bank branches increased from 24 to 30 between March 2006 and Ma rch 2010, whereas foreign branches in the 
insurance subsector decreased by 18.  On the whole, aggregate entry and exit figures for 2006-10 
point to broad-based dynamism across virtually a ll forms of incorporation at the federal level.
179  
Cooperative credit institutions constitute the vast majo rity of provincially regulated entities;  although 
their number declined by 226 in 2006-10, due mainly  to consolidation through mergers, their total 
assets increased considerably. 
153. Among Canada's federally regul ated deposit-taking institutions , some 90% of total banking 
assets are still concentrated in the six largest do mestic banks, roughly the same share as reported in 
2006 and in 2003;  the remaining 10% are held by niche players that tend to focus on one or two credit products, such as mortgage lending or credit cards.
180  According to the authorities, in 2009 the 
six largest domestic banks accounted for about 81% of the assets held by all deposit-taking 
institutions in Canada, including trust and loan companies and c ooperative credit institutions, down 
from 85% in 2006.  A recent IMF study suggest s that these banks' dominant position is largely 
attributable to their nationwide branch networks.181  While provincially regulated cooperatives 
(see Box IV.1) are a strong competitor in terms of the variety of products and services offered, so far 
they had difficulty in attracting customers who would like access to branches in multiple provinces.182 
                                                      
178 Department of Finance Canada (2005). 
179 Conversions of foreign branches into Canadian companies are also reflected in the entry and exit 
figures.  At the federal level, foreign financial serv ices providers are free to ope rate through branches and 
Canadian-incorporated entities;  they may maintain both types of commercial presence  in parallel, and convert 
their operations from one type into the other. 
180 The importance of managing risk (OSFI, 2010 and WTO, 2007). 
181 Ratnovski and Huang (2009).  Viewed at:  http://www.imf.org/external/pubs/cat/longres.cfm? 
sk=23040.0. 
182 Credit Union Central of Canada (2010). Canada WT/TPR/S/246 
 Page 133 
 
 
Table IV.10 
Financial institutions operating in Canada, 2006 and 2010 
 2006 2010 2007 -2010 
 Number of 
institutionsa Assetsb, c 
(Can$ million) Number of 
institutionsa Assetsb, c 
(Can$ million) Entry Exit 
 Federally regulated 
Banks       
Domestic 21 1,905,673 22 2,886,347 6 5 
Foreign subsidiaries 26 109,446 25 152,409 3 4 
Foreign branches 24 37,078 30 82,351 13 7 
Trust and loan companies       
Bank-owned 30 203,298 30 238,418 5 5 
Other 38 16,829 36 24,350 4 6 
Cooperative credit associationsd 7 14,931 6 19,648 0 1 
Cooperative retail associationse 1 4,826 1 4,165 0 0 
Life insurance companies       
Canadian-incorporated 45 361,997 45 487,665 7 7 
Foreign branches 53 18,429 39 15,116 3 17 
       
Fraternal benefit societies       
Canadian-incorporated 12 5,838 10 6,512 1 3 
Foreign branches 9 1,523 7 1,860 0 2 
Property & casualty insurance companies       
Canadian-incorporated 93 65,825 95 82,297 10 8 
Foreign branches 96 24,838 92 29,882 16 20 
Pension plans 1,304 116,576 1,398 122,560 173 79 
 Provincially regulatedf 
Cooperative credit institutions 1,113 189,884 887 252,561 .. .. 
Life insurance companies 25 33 24 41 .. .. 
Fraternal benefit societies 12 .. 8 .. .. .. 
Property & casualty insurance companies 40 9,508 40 11,348 .. .. 
 
.. Not available.  
a As at 31 March for federally regulated institutions  and 31 December for provincially regulated ones. 
b Total assets of the relevant subsectors are not the simple su m of the figures.  The figures for entities that report on a con solidated 
basis include subsidiaries whose assets may also be included in a different category. 
c As at 31 January or 31 March (depending on fiscal year-end) where available, otherwise 31 December. 
d Covers only associations that serve as central finance f acilities for cooperative credit institutions (credit unions and cais ses 
populaires);  these associations do not o ffer services directly to the public. 
e Since 2001, federally incorporated retail a ssociations may offer services directly to the public;  they must be composed of a t least 
2 provincial cooperative associations or at least 10 cooperatives from more than one province. 
f The available information does not allow a distincti on between Canadian companies and foreign branches. 
 
Note: Due to differences in reporting dates and da ta sources, the figures may not be comparable. 
 
Source: WTO Secretariat, based on OSFI Annual Reports  (various years), and information provided by the Canadian 
 authorities. 
154. In 2010, the Canadian insurance sector comp rised 335 life, health, property, and casualty 
insurers, of which 64 were provinc ially regulated.  There were 108 companies competing in the life 
and health subsector, down from 123 in 2006;  among these, the three largest Canadian-owned 
companies accounted for 82% of net premiums written in Canada in 2009 (83% in 2006).  In January 
2010, Canada's property and casualty insurance i ndustry comprised 227 companies (229 in 2006);  
approximately 50% of net premiums  written were paid to foreign insurance companies and the six 
largest federally regulated insurers accounted for some 28% (31% in 2006). WT/TPR/S/246 Trade Policy Review 
Page 134 
 
 
Box:  IV.1  Canada's Credit  unions and Caisses populaires 
Canada has a strong base of cooperative fi nancial institutions, with almost one th ird of Canadians belonging to a credit 
union or a caisse populaire .  While there are no residency requirements in the credit union legislation, cooperatives are 
allowed to set their own membership requirements, whic h may vary considerably across institutions.  Owned and 
governed by their members, cooperative s' primary commitment is to serve th e financial needs of their respective 
memberships and communities. 
Most caisses populaires  (430 in Québec, 20 in Ontario, 25 in New Bruns wick and 1 in Manitoba) are assembled under the 
Fédération des Caisses De sjardins du Québec (FCDQ), a support organization that supervises its me mber institutions and 
coordinates their activities under a single brand name.  Th e consolidated Desjardins Group is the sixth largest deposit-
taking institution in Canada with over Can$106 billion in deposits. 
The majority of credit unions outside Québec are shareholders in  one of 9 provincial centrals (1 central serves Ontario and 
British Columbia) whose main purpose is to provide liquidity su pport;  provincial centrals also serve as trade associations 
and facilitate the settlement of payments w ithin their networks.  This structure is so mewhat less centralized than that of the 
FCDQ;  however, like in the FCDQ, individual credit unions ma intain a separate identity and may compete for eligible 
members with other cooperatives operating in nearby areas.  A national umbrella organization, the Credit Union Central of 
Canada (CUCC), brings together the 9 provincial centrals,  but not the FCDQ.  CUCC is responsible for overseeing 
liquidity maintenance across its network;  it is federally regulated and entitled to liquidity support from the Government 
under the Cooperative Credit Associations Act. 
Notwithstanding their generally sma ller asset base, credit unions and caisses populaires  successfully compete with banks 
in the non-residential mortgage market;  they also ha ve strong positions in residential mortgages and deposits 
(Table IV.9).  While business credit is largely dominated by ba nks, financial cooperatives are very active in segments such 
as commercial loans of less than Can$250,000 and between Can$250,000,  and Can$1,000,000.  In 2007, their shares of 
these two segments were 24% and 23%, respectively. 
Source: WTO Secretariat, based on Department of Finance Canada (2005), The Canadian Financial Services Sector ;  
 Department of Finance Canada (2003), Canada's Credit Unions and Caisses Populaires ;  and Government of 
 Canada online information, "Key Small Business Financing Statistics", December 2009.  Viewed at:  
 http://www.sme-fdi.gc.c a/eic/site/sme_fdi-prf_pm e.nsf/eng/h_ 01250.html. 
(ii) Regulatory framework 
155. Canada's GATS market access and national treat ment commitments have not changed since 
its last Review.  In the context of the Doha nego tiations, Canada tabled a revised offer on services in 
2005.183 
156. The regulation and supervision of financial servi ces are carried out under a system of shared 
responsibility.  Exclusive federal jurisdiction over banki ng is stipulated in Canada's Constitution Act.  
Banks and bank branches must incorporate under fede ral legislation, and do not need any additional 
licences to establish and operate in a particular pr ovince;  in general, banks  may determine interest 
rates and service fees.184  Cooperative credit institutions, mutual funds and securities firms, including 
those owned by banks, are currently regulated at the provincial level for prudential soundness and 
market conduct.185  Although insurance and trust and loan companies may be incorporated either 
federally or provincially186, in their operations they must also  comply with applicable provincial 
legislation relating to, inter alia , licensing requirements, coverage provisions and premium rates of 
                                                      
183 WTO document TN/S/O/CAN/Rev.1, 23 May 2005. 
184 Provincial consumer protection legislation, containing rules governing disclosure of the cost of 
credit, also applies to federally incorporated institutions .  In addition, everybody in Canada is subject to the 
criminal interest rate provision of the Criminal Code (Section 347).  In British Columbia, the cost of payday 
loans, inclusive of all fees and char ges, may not exceed 23% of the loan principal (e.g., a maximum of Can$46 
for a Can$200 loan);  these loans cannot be contingent or included in agreements to purchase other goods and services (tied selling). 
185 Market conduct regulations generally bear upon disclosure requirements, business practices related 
to products and services, and a financial institution's dealings with its customers. 
186 Provincially incorporated entities may operate only within their home province.   Canada WT/TPR/S/246 
 Page 135 
 
 
insurance policies187, and marketing and sales practices.  All provinces except Québec accept the 
federal principles of prudential supervision, but r eserve responsibility for the solvency of financial 
institutions incorporated in th eir respective jurisdictions.   
157. The statutes that govern federally regulated fina ncial institutions are subject to review every 
five years;  the next is scheduled for 2012.   In addition to amendments enacted in 2007188, following 
the regular review, Canada updated its financia l institutions legisla tion through the Budget 
Implementation Acts of in 2009 and 2010.189  Recent measures include empowering the Minister of 
Finance to enter into any contract that promotes th e stability or maintains the efficiency of Canada's 
financial system190;  the creation of a bridge bank framewo rk as a means of preserving the residual 
value of a failing deposit-taking institution191;  and new credit card and mortgage insurance 
regulations with an emphasis on consumer protec tion.  Moreover, since 2010 cooperative credit 
institutions (credit unions and caisses populaires ) have the option to continue  or incorporate as federal 
entities, a measure that would potentially foster th e development of stronger domestic competitors in 
the financial services sector.  The Federal Govern ment also intends to establish a single securities 
regulator through a voluntary regime that would enable the existing 13 provincial and territorial 
authorities to opt in. 
158. At the federal level, prudential regulation and supervision are carried out by the Office of the 
Superintendent of Financial Institutions (OSFI)192, which also works with the Department of Finance 
on the development of federal policy.  The Canada Deposit Insurance Corporation (CDIC) 
administers the federal system of deposit insurance and has powers to restructure troubled institutions.  
The Financial Consumer Agency of Canada (FCA C) works to ensure compliance with consumer-
oriented provisions of the federa l statutes, including through supervis ion of financial institutions.  The 
Department of Finance, OSFI, CDIC, FCAC, and the Bank of Cana da are all represented on the 
Financial Institutions Supervisory Committee and the Senior Advisory Committee, both of which 
meet regularly to coordinate actions and advise th e Federal Government on financial sector issues. 
159. Under Canada's federal financia l institutions legislation, regu latory consent is required to 
carry out certain types of transactions, including incorporations, the establishment of commercial 
presence, mergers and other corporate restructurings , and ownership changes.  The approval process 
is administered by OSFI;  depending on the nature of the transaction, consent is granted either by the 
                                                      
187 Outside Québec, provincial stat utes governing life insurance policies are modelled on the Uniform 
Life Insurance Act adopted by the Canadian Council of Insurance Regulators.  Provinces legislate premium rates for automobile insurance;  there is no uniform cl assification of automobile insurance lines (OSFI, 2010). 
188 Bill C-37:  An Act to amend the law governing financial institutions and to provide for related and 
consequential matters.  Viewed at:  http://www2.par l.gc.ca/HouseBills/billsgovernm ent.aspx?Parl=39&Ses=1& 
Language =E&Mode=1#C37. 
189 Bill C-10 (Budget Implementation Act 2009) and Bill C-9 (Budget Implementation Act 2010) 
Viewed at:  http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3756934&Language=e&Mode =1 and http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4649148&Language=e&Mode=1. 
190 Indicative transactions include contracts to:  purchase, acquire, hold, lend or sell or otherwise 
dispose of securities of an entity;  create a charge on, or right or interest in, securities of an entity held by the 
Minister;  make a loan to an entity;  provide a line of credit to an entity;  guarantee any debt, obligation or 
financial asset of an entity;  or provide loan insurance or credit insurance for the benefit of an entity in respect of any debt, obligation or financial asset of the entity (Bill C-10 (Budget Implementation Act 2009). 
191 The framework enables the Canada Deposit Insuran ce Corporation to take control of assets and 
liabilities of a non-viable institution, thereby preserving franchise value and providing time to find a more permanent resolution. 
192 Three provinces (New Brunswick, Ontario, and Manitoba) rely on OSFI for the prudential 
supervision of provincially chartered lif e and property and casualty insurers on their behalf.  Nevertheless, these 
provinces retain full regulatory authority in their respective territories. WT/TPR/S/246 Trade Policy Review 
Page 136 
 
 
Minister of Finance, acting on OSFI's advice, or by the Superintendent of Financial Institutions 
(Table IV.11).  Most Ministerial approvals relate  to the acquisition of control or of a significant 
interest in a financial institution193, transfer of business or reinsurance transactions, and applications 
for the incorporation of financial institutions or the authorization of Canadian branches of foreign 
financial institutions.  In the assessment, the Minister  of Finance must consider all matters relevant to 
the transaction, including th e best interests of Canada's financial system.  Typically, OSFI approvals 
concern:  orders authorizing new en trants to carry on business in Canada194;  certain substantial 
investments;  transfer of assets in excess of 10%;  non-cash consideration for shares;  reinsurance by a 
related party;  and redemption of  shares/debentures.  The IMF and the OECD have expressed concern 
about Canada's regulatory approval process, flaggi ng uncertainty about the criteria applied in the 
assessment of mergers and other corporate restructurings.195 
Table IV.11 
Approvals granted for selected operations in Canada, 2009 –10a 
 2009 2010 
Approvals by the Minister of Finance 
New entry 16 11 
   Incorporation 4 2 
   Continuation 4 1 
   Branch establishment 3 7 
   Financial Establishment in Canada 5 1 
Change in ownership 131 136 
   Significant interest/control 94 125 
   Amalgamation 4 0 
   Substantial investment 3 3 
   Other 30 8 
Approvals by the Superintendent of financial institutions 
New Orders to commence and carry on business 12 4 
Modified Orders to commence and carry on business 46 64 
Non-cash consideration for shares 25 21 
Substantial investment 36 14 
Transfer/acquire > 10% assets 26 26 
Redemption of shares/debentures 29 34 
Reinsured by related party 82 63 
Reinsurance on an assumption basis 27 9 
Other 121 140 
 
a Information on earlier years, as well as on the nu mber of applications, was not made available. 
 
Source: WTO Secretariat, based on information provided by the Canadian authorities. 
160. Publishing a notice of intention is a prerequis ite for most transactions;  OSFI estimates that 
complying with the publication requirement may take  up to three months.  There is no statutory time 
limit for assessing applications for incorporation of orders authorizing the carrying on of business 
activities in Canada;  on average, the initial asse ssment of such requests takes three additional 
                                                      
193 Significant interest is defined as beneficially owning, directly or indirectly, more than 10% of any 
class of shares of a federally regulated financial ins titution (Bank Act, Section 8(1) and Insurance Companies 
Act, Section 8(1)). 
194 A Ministerial letter patent of incorporation is among the prerequisites for the Superintendent's Order 
to Commence and Carry on Business.  While the latter remains in force indefinitely, unless the Superintendent determines otherwise, it cannot be issued more than one  year after the day on which the financial institution 
enters into existence.  The application fee for an Or der to Commence and Carry on Business is Can$32,000, 
regardless of the type of financial institution. 
195 OECD (2010) and IMF (2006). Canada WT/TPR/S/246 
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months.196  In April 2005, OSFI adopted internal pe rformance standards establishing time frames for 
the processing of at least a certain percentage (ra nging from 80% to 90%) of complete applications, 
including Ministerial approvals (less than 90 calendar days) and non-deemed approvals (less than 60 calendar days).
197  During 2005-10, OSFI met or exceeded all of its established performance 
standards. 
161. Incorporation requirements have not changed si gnificantly since Canada's previous Review.  
(Table IV.12). 
Table IV.12 
Incorporation requirements under federal legislation, 2011 
 Minimum capital (in Can$) Canada residencea 
Banks   
Domestic 5 million A majority of directorsb 
Foreign subsidiaries 5 million At least half of directors 
Foreign branches   
- Full service Worldwide assets:  5 billion 
Capital equivalency deposit:  the greater of 
5 million or 5% of Canadian liabilities Principal officer 
- Lending Capital equivalency de posit:  100,000 Principal officer 
Foreign representative office None Principal officer 
Insurance companies   
Canadian-incorporated 5 million A majority of directorsb 
Foreign branches Depends on risk profile of foreign branch Chief Agent 
 
a The CEO of every bank or federal insurance comp any in Canada must be  a Canadian resident. 
b Until 2007, the requirement was formulated as "at least two-thir ds" of the directors.  Federa lly regulated banks and insuranc e 
companies must have at least seven directors. 
 
Source: WTO Secretariat, based on information provided by the Canadian authorities. 
162. OSFI has 33 active agreements on cooperation and information-sharing with host-country 
supervisory authorities that regulate significant fore ign operations of Canadian  banks and insurers.  
OSFI continues to negotiate such agreements as a means to improve coordination of supervisory work 
between home and host authorities. 
(iii) Banking services 
163. Commercial presence is required to carry on the business of banking and financial 
intermediation in Canada.  Besides acquiring a domestic bank, the options for commercial presence 
include establishing subsidiaries, full-service or lending branches198, and representative offices.  There 
are no statutory restrictions on the number of ba nks (domestic or foreign) that may establish and 
operate in Canada or the number of offices that  foreign bank subsidiaries or branches may open. 
164. Foreign banks are allowed to provide the same  services as Canadian banks, either directly 
(through a branch) or through a subsidiary.  Le nding branches may lend in Canada, but are not 
                                                      
196 OSFI (2004). 
197 A statutory "deemed approval" regime applies to cer tain types of transactions;  in those cases the 
Superintendent is required to  make a decision within 30 days of receipt  of a complete application.  See OSFI 
online information.  Viewed at:  http://www.osfi-bsif.gc .ca/app/DocRepository/1/eng/ guides/transaction/transop 
_e.html.  
198 A foreign bank may concurrently operate a full-service and a lending branch. WT/TPR/S/246 Trade Policy Review 
Page 138 
 
 
permitted to take deposits;  full-service br anches may accept deposits of Can$150,000 or more199, 
which are not eligible for Canada's federal deposit insurance scheme.200  Banks and other federally 
chartered deposit-taking institutions  are not permitted to offer through their branches (including their 
websites) auto-lease financing, securities brokerage or  insurance services, other than certain credit-
related insurance.  The OECD has flagged bot h the minimum deposit threshold for full-service 
branches and the prohibition on direct bank sales of non-authorized insurance products as barriers to 
fuller contestability in Canada's financial services sector.201 
165. In 2007, Canada modified the equity threshol ds used to define small, medium, and large 
banks under its size-based owners hip regime, raising the releva nt values from Can$1 billion to 
Can$2 billion and from Can$5 billion to Can$8 billion.202  Large banks must still be "widely held", 
i.e. no more than 20% of the bank's voting shares or 30% of its non-voting shares may be acquired by a single person, regardless of nationality.  The pr ohibition against any single person (Canadian or 
foreign) acquiring control of a large bank and th e relevant exceptions also remain in force
203, subject 
to the new size threshold.  Similarly, medium banks (equity of Can$2 billion or more, but less than Can$8 billion) remain subject to a public holding re quirement;  at least 35% of their voting shares 
must be listed and posted for trading on a recognized  stock exchange and must not be beneficially 
owned or controlled by a major shareholder of the bank. 
166. According to OSFI, Canadian banks are well positioned to implement the Basel III 
framework of higher capital and liquidity standards.  The IMF also expects a smooth transition, given the already high requirements applied in Canada and the sound balance-shee t positions of Canadian 
banks.
204 
(iv) Insurance services 
167. Commercial presence is required to carry on th e business of insurance, reinsurance, and 
retrocession in Canada.  Federally regulated insurers (both domestic  and foreign) may offer both life 
insurance and property and casualty insurance, but must do so through separate entities or branches;  
separate licences for the two business lines are also required in some provinces.205  A foreign 
company may incorporate a separately capitalized Cana dian entity, establish a branch or acquire an 
existing Canadian enterprise, subject to standard regulatory approval procedures.  Foreign insurers 
operating in Canada on a branch basis must appoint a Canadian resident as their chief agent;  they 
must also appoint an actuary and an auditor, and must have trust assets of a prescribed value.  There 
are no statutory restrictions on foreign ownership of  federally registered insurance companies;  no 
                                                      
199 Certain exceptions, allowing deposits to be taken from sophisticated investors, are contained in the 
Prescribed Deposits (Authorized Foreign Banks) Regulations. 
200 All banks that accept retail deposits (i.e., depos its of less than Can$150,000) must be members of 
the Canada Deposit Insurance Corporation (CDIC).  Ins titutions that only  accept deposits of Can$150,000 or 
more may opt out of CDIC.  Membership fees are determined on the basis of 13 quantitative and qualitative criteria, including members' capital adequacy, net impair ed assets, and other prudential factors  The basic 
coverage available for eligible deposits held at a single member institution is Can$100,000 per depositor. 
201 OECD (2010b). 
202 Bill C-37, Part 1. 
203 For entities such as a widely held regulated bank-holding company or for a foreign bank that control 
a Canadian bank subsidiary that has grown through the Can$8 billion threshold. 
204 IMF online information, "Article IV Mission Concluding Statement”.  Viewed at:  
http://www.imf.org/ external/np/ms/2010/102710.htm. 
205 Insurers incorporated in Saskat chewan can offer either life in surance or property and casualty 
insurance, but not both. Canada WT/TPR/S/246 
 Page 139 
 
 
ownership-based limitations are applied on the type of services that may be offered.206  In general, the 
number of insurance companies that can establish in  Canada is also unrestricted, except in areas 
subject to a public monopoly (i.e. basic motor-veh icle insurance in British Columbia, Manitoba, and 
Saskatchewan, and in Québec, moto r-vehicle insurance with respect to personal injury and death). 
168. Since 2007, Canadian providers of marine insura nce have had the option to incorporate at the 
federal level;  the federal model is similar to th e regulatory framework applicable to property and 
casualty insurers.207  A company chartered for the sole pur pose of insuring marine risks would cease 
to exist one year after the date of its incorporati on if, in OSFI's opinion, it has not actively engaged in 
insuring such risks during that period.  As of 1 Ja nuary 2010, foreign insurers are no longer allowed to 
"insure in Canada" marine risks wit hout prior authorization from OSFI.   
169. Canada's federal regulatory regime has been cl arified to apply to aspects of the insurance 
process that foreign companies carry out in Cana da, as opposed to the location of the risk being 
insured, which can be inside or outside of Canada.208  Foreign insurers need OSFI's approval to 
"insure in Canada" risks within a given class of insu rance, that is, to locate some of their insurance 
activities in Canada;  they must also hold assets in  Canada to cover the liabilities related to their 
Canadian business.  While a foreign insurer no longer  needs federal approval to insure Canadian risks 
from a head office or a branch outside Canada, its assets maintained under O SFI oversight would only 
be available to cover policyholders' claims for ri sks insured in Canada.  As of 1 January 2010, all 
documents prepared by foreign insurers for risks insu red in Canada must include a statement that the 
document was issued or made in the cour se of their insurance business in Canada.209  According to 
OSFI, this model may better align the federal regime with many of  the provincial and territorial 
regimes, which rely substantively on the mean ing of carrying on business in the province or 
territory.210 
170. According to federal guidelines, even if a fore ign insurer is not "insuring in Canada" risks 
(and hence does not need federal approval), its activ ities may still be subject to licensing requirements 
at the sub-federal level;  some provinces require a foreign insurer to obtain a licence merely to 
promote its products in, insure a person domiciled or resident in, or provide insurance coverage on a 
property situated in their territory. 
171. A public holding requirement, analogous to that a pplied to medium banks (see above), applies 
to federally registered insurance companies;  si nce 2007, the equity trigger for insurers has been 
raised from Can$1 billion to Can$2 billion.  Insura nce companies with equity of Can$1 billion or 
more must still publish annual statements on their contribution to the Canadian economy and society. 
                                                      
206 Information on similar restrictions and limitations at the sub-federal level was not made available.  
Some provinces have residency requirements for majority shareholders of insurance companies seeking a 
licence to operate in their jurisdiction. 
207 Marine and property and casualty insurance companies may not engage in any financial leasing of 
personal property in Canada. 
208 OSFI has provided guidance on the elements it will consider in determining whether a foreign entity 
is insuring risk in Canada.  (Advisory 2007-01-R1.  Viewed at:  http://www.osfi-bsif.gc.ca/app/DocRepository/ 
/eng/guidelines/regulatory/Adv_insurance_riskr1_e.pdf). 
209 Where a broker or agent is actin g on behalf of a foreign insurer, it is the foreign insurer's 
responsibility to ensure that the statement is included by the broker or agent in the document issued to the insured. 
210 OSFJ online information.  "Questions and Answers:  Implementation of Amendments to Part XIII of 
the Insurance Companies Act".  Viewed at:  http://www.osfi-bsif.gc.ca/app/DocRepository/1/eng/guidelines/ xiii/pXIII_instr_qa_e.pdf. WT/TPR/S/246 Trade Policy Review 
Page 140 
 
 
172. Several types of insurance are compulsory at the federal level, including certain types of 
marine, mortgage, aviation, nuclear, environmental, a nd surety insurance.  Ac cording to the Canadian 
authorities, numerous types of insurance are also com pulsory at the provincial/territorial level (e.g., 
automobile, surety, home warranty);  requirements in  this regard, including the regulation of rates, 
vary by jurisdiction. 
173. Under Part I of the Excise Tax Act, an excise tax of 10% is levied on insurance premiums 
when insurance against a risk in Canada is place d with a non-authorized or with an authorized 
insurer211, where that insurance is effected or renewed through a broker or agent outside Canada.  The 
tax does not apply to any contract of life, personal accident, sickness or marine insurance, or 
insurance for certain nuclear risks;  nor does it apply to any other contract of insurance that is not, in 
the opinion of the Commissioner of the Cana da Revenue Agency, available in Canada. 
(v) Securities 
174. Each Canadian province and territory administer s a unique set of securities regulations, some 
of which are nationally harmonized.  Under the co mmon "passport system", market participants are 
currently able to clear a prospectus, register as a dealer or adviser, or obtain certain discretionary 
exemptions from the regulator in their home jurisdic tion, with applicability in all other jurisdictions, 
except Ontario.  While the 13 securities regulat ory authorities continue their joint work on 
harmonization under a council known as the Canadian S ecurities Administrators (CSA), they maintain 
local regulatory instruments, exemptions, and separate bodies for ruling on regulatory issues.  Fees for participation in capital markets continue to be  levied separately in each jurisdiction. 
175. Provincial and territorial securities regulators  also pursue international cooperation on an 
individual basis. Currently, the Autorité des marché s financiers in Québec and the Ontario Securities 
Commission are ordinary members of the International Organization of Securities Commissions, while the Alberta and British Columbia Securities Co mmissions are associate me mbers.  In addition, 
individual regulators participate in the work of  the North American Securities Administrators 
Association (NASAA) and the Council of Securities Regulators of the Americas (COSRA). 
176. The Government of Canada is working with the majority of provinces and territories to 
establish a single Canadian Securities Regulator.  To that effect, a proposed Securities Act was 
released and referred to the Supreme Court of Cana da by the Government in May 2010 to determine 
its constitutional validity.
212 
(7) TRANSPORT SERVICES  
(i) Air transport 
177. Air transport has become Canada's second-largest  commercial transport subsector, after truck 
transportation.  In 2009, air transport contributed 0.4% to GDP213;  13% of Canada's trade (in value 
terms) was transported by air, with the most importa nt goods (in value terms) being gold, aircraft, and 
medicine.  An estimated 103.1 million passengers were enplaned and deplaned in 2009, a 5% 
decrease over the previous year;  domestic and trans-border (between Canada and the U.S.) traffic was 
                                                      
211 For the purposes of the Excise Tax Act, an auth orized insurer is one who is authorized under the 
laws of Canada or any province, to transact that business of insurance. 
212 Government of Canada online information.  Vi ewed at:  http://www.fin .gc.ca/drleg-apl/csa-lvm-
eng.asp. 
213 Statistics Canada, CANSIM Table 379-0027. Canada WT/TPR/S/246 
 Page 141 
 
 
particularly affected.214  The main locations of scheduled f light activity for cargo and passengers to 
and from Canada are set out in Table IV.13. 
Table IV.13 
Main areas of scheduled flight activity, 2009 
 Domestic Transborder International 
Passenger Calgary, Toronto, Vancouver Chicago, Los Angeles, New York City France, Germany, U.K. 
Cargo Toronto, Vancouver, Winnipeg Indianapolis, Memphis, Louisville Germany, Hong Kong, U.K. 
 
Source : Information provided by the authorities.  
178. Transport Canada is responsible  for transportation policy incl uding economic, legislative and 
policy frameworks related to air transport.  Econom ic regulation of the air industry is carried out 
under the Canada Transportation Act (CTA) of 1996 a nd Canada's bilateral air agreements.  The most 
recent amendments to the Canada Transportation Act entered into effect in June 2007:  these mainly 
relate to clarifying consumer complaints processe s with the Canadian Transportation Agency and 
requiring more transparent disclosure of terms and conditions of carriage.215  A proposed Canada 
Airports Act died on the order paper in 2007, wh en Parliament was prorogued, and has not been 
reintroduced. 
179. The Canadian Transportation Agency (unde r Transport Canada) has responsibility for 
granting, suspending, and revoking licences for air services, and addressing complaints about 
conditions of carriage.  It has the authority to  regulate prices and condtions of carriage for 
international air transportation, and has a more li mited regulatory role with respect to tariffs for 
domestic air services.  NavCanada continues to operate Canada's air navigation system.216  T h e  
Canadian Air Transport Security Authority (CATSA ) is the only federal Crown corporation operating 
in the air transport sector:  it is, inter alia , responsible for screening air travellers and their baggage.217 
180. The airline-industry-specific provisions in Ca nada's Competition Act were removed in 2009 
(Chapter III(4)(iii)). 
(a) Airlines 
181. All Canadian airlines are privately owned.  Air Canada remains Canada's largest airline 
business.  However, it has continued to lose domin ance over the scheduled domestic market during 
the review period (Table IV.14). 
Table IV.14 
Domestic market share of the main Canadian  airlines (offered seat kilometres), 2007-10 
Carrier 2007 2008 2009 2010 
Air Canada 59.9 57.1 56.3 56.1 
Westjet 33.1 35.5 36.1 35.7 
Porter Airlines 0.5 0.7 1.3 2.3 
Other 6.5 6.8 6.3 5.9 
 
Source:  Information provided by the Canadian authorities. 
                                                      
214 Minister of Public Works and Government Services (2009), as updated by the authorities. 
215 Transportation Amendment Act, Bill C-11. View ed at:  http://www2.parl.gc.ca/Sites/LOP/ 
LegislativeSummaries/Bills_ls.asp?lang=E&l s=c11&source=library_prb&Parl=39&Ses=1. 
216 The structure of NavCanada is described in WTO (2007). 
217 CATSA online information.  Viewed at:  h ttp://www.catsa-acsta.gc.ca/home.aspx?id=1&pname= 
Home_Accueil&lang=en. WT/TPR/S/246 Trade Policy Review 
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182. In July 2009, Air Canada entered into a fi nancing agreement with a club of lenders (GE 
Canada Finance Holding Company;  Export Developm ent Canada;  Aeroplan Canada Inc.;  and ACE 
Aviation Holdings Inc.).  According to the author ities, the financing plan extended a term credit 
facility of up to Can$700 million on commercial terms, for the purposes of debt refinancing, 
providing funding for working cap ital, and other general corporat e purposes.  Export Development 
Canada (EDC) (Chapter III(3)(iv)) provided a Can$150 million loan from its Corporate Account, and 
managed the Government of Ca nada's Can$100 million loan from th e Canada Account.  In August 
2010, Air Canada issued corporate debt for which it  received Can$1.075 billion, and repaid the loan 
with around Can$729 million of the proceeds. 
183. The other significant development with respect to  the airline industry in Canada has been the 
rapid expansion of Porter Airlines, which was establi shed in 2006.  It doubled its operations in terms 
of fleet and staff over 2008-09 and has rapidly gained market share. 
184. Under the Canada Transportation Act, only Cana dians are eligible for a license to provide 
domestic flights.  Currently, foreign ownership of  Canadian airlines is limited to 25% of voting 
shares.  However, amendments to the Canada Transportation Act may open the door to increased 
foreign participation.  The 2009 Budget Implementation Act (Bill C-10, Part 14) amended the 
definition of "Canadian" as it applies to airlines in the Canada Transportation Act  by changing the 
minimum of 75% Canadian ownership to a foreign ow nership ceiling, to be specified by regulation, 
that may not be more than 49% in respect of non-Canadians.218  The authorities noted that 
consultations are being held with affected stake holders on draft regulations.  This change stemmed 
from concerns articulated in a government-establishe d Competition Review Panel that maintaining the 
25% threshold could exclude Canadian carriers fro m future consolidation transactions that would 
result in global carriers.219 
185. The Competition Policy Review Panel also suggest ed that the Minister of Transport, on the 
basis of public consultations, should issue a polic y statement by December 2009 on whether foreign 
investors should be permitted to establish separat e Canadian-incorporated domestic air carriers using 
Canadian facilities and labour.  However, there have been no changes in this direction. 
(b) Airports 
186. There have been no ownership or management ch anges in Canada's airports since Canada's 
previous review.  Canada has 26 principal airports, forming the national airports system (NAS);  these 
handle around 95% of Canada's scheduled air passen ger and cargo traffic.  The Federal Government 
owns the land of 23 of the 26 NAS airports but does not operate any of these airports.  The operational 
and management responsibility for 22  of them was transferred to private not-for-profit, non-share-
capital airport authorities under 60-year leases as we ll as to one municipality.  The authorities note 
that these airports were leased to the current airport authorities following negotiations with the 
Federal Government;  and the majority of the me mbers of these airport authorities represent local 
interest of one form or another.  There are also a large number of regional and local airports, most of 
which are owned and managed by municipalities or territorial governments.220 
187. The authorities confirmed that there are no legal restrictions (in the GATS sense) on 
groundhandling in Canada;  any limitations would be based on physical constraints or operational 
                                                      
218 Part 15 of Bill C-10 also amends the Air Canada Participation Act, which will, once in force, subject 
Air Canada to the same foreign ownership rules as in the Canada Transportation Act. 
219 Government of Canada (2008). 
220 For a listing of NAS, regional and local airports, and their ownership status, see Transport Canada's 
Airport Divestiture Status Report.  Viewed at:  http ://www.tc.gc.ca/eng/programs/a irports-status-menu-441.htm. Canada WT/TPR/S/246 
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constraints related to airport safety or security.  A number of foreign companies are present in the 
groundhandling market, including Swissport Servisair, World Flight Services, Atlas Aviation 
Services, Menzies, and Cargo Zone Inc. 
(c) Air services agreements 
188. The air transport market in Canada is govern ed by bilateral agreements and arrangements 
with 91 countries.   
189. As reported in its previous review, Canada launched a Blue Sky policy in November 2006, 
which called for a liberalized approach to bilatera l air transportation negotiations.  In addition, the 
negotiation of liberal air services agreements is one of the key priorities set out in Canada's 2007 
Global Commerce Strategy (Chapter II).  Since 2006, the Federal Government has negotiated air 
transport agreements with over 50 countries.  These include open skies-type agreements with (Ireland, 
Iceland, New Zealand, Barbados, the Dominican Republic, Costa Rica, South Korea, El Salvador, Switzerland, Trinidad and Tobago, and Jamaica.  Th e authorities note that open-skies-type agreements 
generally cover the following elements for schedul ed passenger and all-cargo services:  open bilateral 
markets (third and fourth freedom rights);  no limit on the number of airlines permitted to operate;  no 
limits on the permitted frequency of service or aircraft type;  a market-based tariff regime for bilateral 
and third-country services;  an open and flexible re gime for the operation of code-sharing services;  
unrestricted services to and from third countries (fifth and sixth freedom rights);  and rights for stand-alone all-cargo operations (seventh freedom rights). 
190. Canada has also expanded exis ting agreements with Mexico, Japan, Jordan, Singapore, the 
Philippines, Morocco, Cuba, Egypt, and Algeria.  Ne w agreements have been concluded with Kuwait, 
Serbia, Croatia, Panama, Turkey, South Africa, Ethiopia, Tunisia, and Qatar.
221 
191. In addition, an air transport agreement w as signed between Canada and the EU and its 
Member States in 2009.  The author ities note that this represents 27 "open" bilateral agreements and 
includes 8 countries with whom Canada did not previ ously have agreements (Cyprus, Estonia, Latvia, 
Lithuania, Luxembourg, Malta, Slovakia, and Sloveni a).  It is the largest and most comprehensive 
agreement negotiated by Canada;  it allows any number of air carriers from Canada to operate direct 
scheduled passenger and all-cargo services to any city be tween each partner's territory and to continue 
to a third country as part of a service to or from their home territory.222 
(d) Sales, reservation, marketing, repair, and maintenance services 
192. Canada's air transport commitments under the GATS are limited to aircraft repair and 
maintenance services, and computer reservations sy stems.  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.223  Canada maintains MFN ex emptions under Article II of 
the GATS for aircraft maintenance and repair servi ces and for the sale and marketing of air transport 
                                                      
221 For further information on each of these agreemen ts see DFAIT online information.  Viewed at:  
http://www.international.gc.ca/trade- agreements-accords-commerciaux/agr- acc/facts-air-eclair.aspx?lang=eng# 
qatar. 
222 Transport Canada online information.  Viewed at:  http://www.tc.gc.ca/eng/mediaroom/ 
releases-2009 -h172e-5755.htm. 
223 WTO document GATS/SC/16, 15 April 1994. WT/TPR/S/246 Trade Policy Review 
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services.224  Canada did not make any further conditional offers on air transport services in its revised 
services offer submitted in May 2005.225 
193. As noted in Canada's previous Review, com puter reservation systems for the marketing and 
sale of commercial air services were partially deregul ated in 2004.  Certain provisions do still apply, 
particularly that information about commercial ai r services, distributed and displayed through CRS, 
should be comprehensive, ne utral and non-discriminatory.226 
194. Subject to the terms of bilateral air trans port agreements, Canada  permits the sale of 
international air transportation services by foreign air carriers in Canada, directly or through their 
agents, in Canadian dollars or in freely convertible currencies of other countries, without restriction.  
A foreign air carrier may establish a sales presence (i.e. local office) in Canada, subject to provincial 
laws and regulations. 
195. As explained by the authorities, all maintenan ce and repair operations on Canadian-registered 
aircraft must be performed by organizations a pproved by Transport Canada in accordance with the 
Canadian Aviation Regulations or with the regulations of a foreign state that is party to an agreement 
or technical arrangement with Canada.  Such ag reements are necessary because Transport Canada's 
requirements for the training of maintenance personne l exceed ICAO standards.  In the absence of an 
agreement maintenance can be performed only by a foreign aircraft mainte nance organization (AMO) 
under contract to a Canadian AMO, with the la tter providing the necessary oversight to ensure 
compliance with the applicable regulations.  Tr ansport Canada has approved 921 Canadian AMOs.  
There are no foreign ownership restrictions in Cana dian AMOs and, although no concrete data are 
collected, the authorities indicated that there is fo reign ownership in practi ce.  Approved Canadian 
AMOs need to be located within Canadian borders.  Transport Canada has issued approvals to foreign 
AMOs in accordance with existing technical arra ngements:  around 206 approvals are in place with 
EASA and EU member countries, and 38 approvals w ith Brazil;  Singapore;  Israel;  and Hong Kong, 
China.  According to the authorities, Canada's MF N exemption for aircraft maintenance and repair 
services (see above) was required because, for Mode 2, only foreign AMOs in certain countries may 
perform work on Canadian-registered  aircraft outside of Canada. 
(ii) Maritime transport 
196. Maritime transport accounted for close to 5% of  Canada's trade with the United States and 
close to 50% of its trade with other countries in 2009.227 Canada's three main ports (Vancouver, 
Montreal, and Halifax) handled about 95% of contai nerized traffic (totalling 4 million twenty foot 
equivalent units (TEUs) in 2009, down from 4.45 million TEUs in 2008).  Canadian ports play an 
important gateway role for imports to the United Stat es.  About 28% of the total containerized traffic 
unloaded at Canadian ports in 1999-2003 were for transhipment mainly by rail to the United States. 
(a) Shipping services 
197. Transport Canada is responsible for establishi ng maritime transport policies, regulations, and 
standards, while implementation and enforcemen t are mainly in the hands of the Canadian 
                                                      
224 WTO document GATS/EL/16, 15 April 1994. 
225 WTO document TN/S/O/CAN/Rev.1, 22 May 2005. 
226 For more details on the 2004 reforms see WTO document S/C/W/270, 18 July 2006.  CRS 
Regulations viewed at:  http://laws.justice.gc.ca/eng/SOR-95-275. 
227 Minister of Public Works and Government Services (2009), Tables EC6 and EC/. Canada WT/TPR/S/246 
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Transportation Agency.  The Canada Shipping Act is  the principal legislation governing the operation 
of Canadian flag vessels and foreign vessel s in waters under Canada's jurisdiction.228 
198. The Canadian merchant fleet (i.e. vessels flying the Canadian flag) carries mostly domestic 
cabotage and Canada-U.S. traffic, while more than  90% of Canadian international maritime cargo 
(other than to and from the United States) is carried  by foreign flag ships.  Most of the Canadian-
controlled international fleet operates under forei gn flags and employs foreign officers and crews.  
Canada has the 16th largest merchant fleet in the world in terms of control.229  Dry bulk carriers remain 
the backbone of the Canadian merchant fleet, carry ing the majority of domestic shipments of bulk 
materials on the Great Lakes and along Canada’s coastlin e (Table IV.15).  An extensive fleet of tugs 
and barges is also in operation both domestically and internationally (see also Chapter IV(4)(v)).230  A 
U.S. company (Seaspan Marine Corporation) owns most of the tug boats providing cabotage on the 
Canadian west coast. 
Table IV.15 
Canadian-registered fleet by type, 2007-09 
Type of carriers Gross tons ('000) Number of vessels 
 2007 2008 2009 2007 2008 2009 
Dry bulk 1,096 1,194 1,137 62 69 66 
Tankers 515 541 625 23 26 28 
General cargo 132 131 131 19 19 19 
Ferries 428 468 457 72 74 72 
Other 38 38 38 6 6 6 
Total 2,209 2,372 2,388 182 194 191 
 
Note: Self-propelled vessels of 1,000 gross tons and over, including gove rnment owned ferries but excluding tugs are used in of fshore 
 supply.  
Source:  Canadian authorities. 
199. There have been no legislative changes on cabot age during the review period.  The Coasting 
Trade Act reserves certain commercial maritime activ ities to duty-paid, Canadi an-registered ships in 
Canadian waters.  This reservation includes the wate rs above the continental sh elf, when the activities 
are related to the exploration, exploitation, or transportation of non-living natural resources of the 
continental shelf.  Foreign ships may perform th ese activities where no Canadian-registered duty-paid 
ship is available or suitable to carry out the activ ity, and where the activity entails the carriage of 
passengers, an identical or similar marine service is  not available.  There are no limits in the Act on 
the number of waivers for foreign ships to engage in  cabotage.  A waiver application for a temporary 
coasting trade licence involves, inter alia , a search for a suitable ship by the Canadian Transportation 
Agency, and a "labour market test"231 if the foreign or Canadian shipping company seeks to crew its 
vessel with foreign nationals.  There were 125 waiv er applications per year, on average, over 2006-09, 
and 109 applications in 2010. 
                                                      
228 Department of Justice online information.  Viewed at:  http://laws.justice.gc.ca/eng/C-10.15/page-
10.html#anchorbo-ga:l_17-gb:s__334. 
229 UNCTAD (2009) p. 53. 
230 In 2009, the Canadian fleet of tugs and barges was estimated to include 320 tugs (138,000 gross 
tons) and 890 barges and scows (1,017,000 gross tons). 
231 Labour Market Opinion by Human Resources and Skills Development Canada/Service Canada. WT/TPR/S/246 Trade Policy Review 
Page 146 
 
 
200. Canadian shipbuilding has benefited from tariff protection, which has led to an ageing fleet 
and appears to have adversely affected the competitiveness of Canadian shipping companies.232  The 
25% MFN tariff on foreign vessels was lifted in 2010 (Chapter IV(4)(v)). 
201. 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.233  
Notwithstanding the above, the Minister of Transport may direct the registrar to refuse to register a 
vessel built outside Canada.234  This provision was not used during the period under review.  A 
Canadian-registered ship must be operated by Cana dian officers and a Canadian crew hold Canadian 
certificates, and comply with Canadian safety st andards (Marine Personnel Regulations). According 
to the authorities, flying the Canadian flag does not confer access to any subsidies or preferential port 
treatment.  Canada does not maintain any foreig n ownership restrictions on maritime shipping 
companies, unless the acquisition of control involves a "net benefit test" under the Investment Canada 
Act (Chapter II(2)). 
202. The 1987 Shipping Conference Exemption Act, wh ich exempts certain collusive practices of 
shipping conferences, such as common prices and sh aring of capacity, from the provisions of the 
Competition Act, was amended in 2001 to promote more competition in liner shipping conference 
operations (Chapter III(4)(iii)).235  There are no requirements for non-conference liner companies to 
be licensed or to file documents with the Government of Canada. 
(b) Port services 
203. The Canada Marine Act (CMA) of 1998 provided the basis for the restructuring of Canadian 
ports, to shift the financial burden of port manage ment from taxpayers to users, and to improve the 
efficiency of the Canadian port system.  Manage ment and operation of Cana da's 19 major ports was 
transferred to non-profit corporations (Canada Port  Authorities), and the St. Lawrence Seaway was 
transferred to a not-for-profit corporation (St.  Lawrence Seaway Management Corporation).236  There 
are three categories of ports:  (i) Canada por t authorities (CPAs), (ii) regional/local ports, and 
(iii) remote ports.237  CPAs are autonomous federal entities that  have the power to manage federal real 
property or own property in their own names.  They are required to be financially self-sufficient.  New 
or revised port fees may be implemented by a CP A 60 days following the posting of public notice. 
Permitted activities are stipulated in their Letters Patent signed by the Minister of Transport.  The CPAs may engage in leases or contracts with thir d parties, including foreign firms, for the provision 
of services within the limits of the port.  There are currently 17 port authorities in Canada:  the 
3 British Columbia port authorities (Vancouver, Fraser  River, and North Fraser) were amalgamated in 
January 2008 into the new Vancouver Fraser Port Authority. 
                                                     
 
232 Ministry of Public Works and Government Services (2001). 
233 Canada Shipping Act, 2001, Part 2. 
234 Canada Shipping Act, 2001, Article 50. 
235 See WTO (2007). 
236 The St. Laurence Seaway serves a large number of international and regional ports in Canada and 
the United States. 
237 Regional and local ports are smaller than CPA ports, and serve regional economic and tourism 
needs;  remote ports serve the transport needs of isolated communities. Canada WT/TPR/S/246 
 Page 147 
 
 
204. The Port Divestiture Program is planned to end on 31 March 2012  but Canada is currently re-
evaluating whether the programme should be rene wed.  The programme seeks to transfer the 
ownership and operation of regional/local ports from Tr ansport Canada to other federal departments, 
provincial/territorial governments, or local  interests, including municipalities.  
205. The Canada Marine Act was am ended in 2008 to allow the CPAs to apply for funding under 
contribution programmes for infrastructure projects, environmental sustainability, and the implementation of security enhancem ents.  Other amendments enhanced  the financial flexibility of the 
larger CPAs:  the Government determines the ma ximum amount a CPA can borrow;  however, since 
2008, qualifying CPAs that meet the eligibility th reshold of earning over Ca n$25 million in operating 
revenues in three successive years may access a co mmercially based borrowing regime upon request. 
206. The St. Lawrence Seaway Management Corporation charges tolls to recover its costs;  these 
are negotiated with Transport Canada and filed wi th the Canadian Transportation Agency.  Marine 
navigation services and ice-breaking services for channe ls and ports remain under the responsibility of 
the Canadian Coast Guard;  the fees for these services recover only a portion of the costs. 
207. Numerous federal and provincial Crown cor porations operate in the maritime sector 
(Table III.23).  Pilotage is provided by four fe deral Crown corporations  (Atlantic, Laurentian, 
Great Lakes, and Pacific Pilatage authorities), wh ich are required by law to be financially self-
sustaining.  Pilotage charges must be fixed by the financial and operational issu es within each port, to 
avoid cross-subsidization among ports;  charges are s ubject to approval by the Minister of Transport. 
208. There are three major government initiatives to assist Canadian ports (amongst other 
institutions).  The Asia-Pacific Gateway and Co rridor Initiative (APGCI),  launched in 2006, is 
intended to support trade with the Asia-Pacific region and provides funding for transportation 
infrastructure projects (Can$1 billion).  
 Costs are shared between the Fe deral Government with other 
levels of government and the private sector.238  The federal contribution of selected projects is limited 
to 50% of eligible costs. 
209. The Gateways and Border Crossings Fund is  a seven-year (2007-14) infrastructure fund 
(Can$2.1 billion), under which CPAs are included as e ligible recipients.  The maximum federal grant 
from all sources is 50% of the total eligible proj ect costs, or 25% in the case of public-private 
partnerships.239 
210. The 2009 Budget established a new Can$4-billion Infrastructure Stimulus Fund that provides 
funding towards the rehabilitation or construction of provincial, territorial, municipal, and community 
infrastructure projects, including port and cruise-ship infrastructure.  Funding is available for two 
years for projects built during the 2009-11 cons truction seasons and comp leted by 31 October 2011. 
(c) Other 
211. The Small Vessel Regulations of 1 July 2007, pursuant to the Canada  Shipping Act, 2001, 
aim to protect the health and well-being of indivi duals;  to promote safety in marine transportation 
and recreational boating;  and to encourage viable, effective, and economical marine transportation, 
                                                      
238 Government of Canada online information.  Viewed at:  http://www .pacificgateway.gc.ca/ 
apgci.html. 
239 Infrastructure Canada online information.  View ed at:  http://www.buildi ngcanada-chantierscanada. 
gc.ca/funprog-progfin/target-viser/gbcf-fpepf/gbcf-fpepf-eng.html. WT/TPR/S/246 Trade Policy Review 
Page 148 
 
 
commerce, and recreational boating.240  According to the authorities, the Small Vessel Regulations 
will reduce the administrative burden for manufacturers  and importers of small vessels by transferring 
to them, from Transport Canada, the responsibility for the production of compliance notices that certify small vessels are constructed according to regulated standards and by harmonizing the 
construction requirements for pleasure craft and non-pleasu re vessels of six metres and less in length.  
The Small Vessel Regulations also specify processes for certification of small vessel construction that are consistent with those of Unite d States and the European Union. 
212. Canada participated in the post-Uruguay Rou nd negotiations on maritime transport services 
and made commitments on maritime auxiliary services and additional commitments on access to/use 
of port services and onward transport services.  In its revised offer on services in the context of the 
DDA negotiations, Canada has conditio nally offered to add four new port services to its additional 
commitments (pilotage;  navigation aids;  shore-based operational services essential to ship operations, including communications, water, and elect rical supplies;  and anchorage, berth, and 
berthing services), to make commitments with respect to international maritime transport, and to improve its commitments in maritime agency services and maritime cargo handling services.  
213. Under the NAFTA, Canada and Mexico agreed no t to introduce more restrictive measures 
affecting international maritime transport other than  those already in place at the time of the signing 
of the agreement.  Canada has an agreement wi th China to strengthen cooperation in maritime 
transport, which was updated by a Protocol that ente red into force in December 2009.  Canada has not 
negotiated any other bilate ral maritime agreements. 
(8) P
ROFESSIONAL SERVICES  
(i) Legal services 
214. Canada's, legal profession is self-governing and comprises lawyers and notaries (in Québec).  
The professional practice of legal services is conditio nal on membership in one of the 14 independent 
bodies, commonly known as law societies, mandated unde r provincial/territorial legislation to regulate 
their respective members in the "public interest".241  As at 31 December 2007, Canada's 11 provincial 
and 3 territorial law societies had approximately 79,000 practicing members;  non-residents accounted 
for 3.9% of the total.242 
                                                      
240 Notified to the TBT Committee in WTO document G/TBT/N/CAN/264, 28 May 2009.  The 
regulations apply to pleasure craft of all sizes (including human-powered pleasure craft), non-pleasure vessels of not more than 15 gross tonnage (except passenger vessels that carry more than 12 passengers), and human-
powered non-pleasure vessels of all sizes. 
241 The number of regulators reflects Canada's sub-federal jurisdictions, as well as the duality of the 
civil law tradition respected in Québec and the common law tradition that governs all other provinces and 
territories.  In 11 provinces and territories the governing body that regulates lawyers is known as a law society, 
whereas in Nova Scotia the regulator is called the ba rristers' society.  The pr ovince of Québec has two 
regulators:  the Barreau du Québec regulates lawyers,  and the Chambre des notaires du Québec regulates 
notaries. 
242 The statistics are sometimes provided in approximate numbers (Federation of Law Societies of 
Canada online information.  Viewed at:  http://w ww.flsc.ca/en/lawSocieti es/statisticsLinks.asp). Canada WT/TPR/S/246 
 Page 149 
 
 
215. Law societies set their own admission243 and professional conduct244 standards;  relevant 
mandatory fee structures, as well as residency, training, and examination process requirements vary across sub-federal jurisdictions.  In general, a la w degree from a recognized Canadian university is a 
prerequisite for membership in a Canadian law society.
245  Members of the law societies of Alberta, 
Saskatchewan, and Prince Edward Island must be eith er Canadian citizens or permanent residents;  
the law society of Newfoundland and Labrador requi res its members to be residents of Canada.246  
Maintaining a status of good standing in a Canadi an law society is typically contingent upon the 
payment of compulsory fees, such as admission and membership fees, as well as contributions to the 
liability insurance plan and the compensation fund  administered by the relevant law society.247  In 
case of non-compliance with its professional code of conduct, a law society may impose fines or 
conditions on the member's practice, susp end membership, or disbar the member. 
216. Consultations with the federal government are conducted through an umbrella organization, 
the Federation of Law Societies of Canada (FLSC), which has no regulatory functions.248  Through its 
National Committee on Accreditation, the FLSC assesses and certifies the credentials of 
internationally trained individuals who wish to apply for membership in a Canadian law society (other 
than in Québec where the Barr eau du Québec and the Chambre des Notaires conduct their own 
assessments).249  The Committee also evaluates qualifica tions from Québec for the purpose of entry 
into the bars of the common law provinces. 
217. The National Mobility Agreement, the Territo rial Mobility Agreement and the Québec 
Mobility Agreement provide for th e mobility of legal professionals across provinces and territories.250  
The National Mobility Agreement sets out the pr inciples that govern both the temporary (for a 
maximum of 100 days) and permanent transfers of lawyers among Canada's law societies, except the 
3 territorial societies and the Chambre des notai res du Québec.  Since June 2008, the Barreau du 
Québec allows lawyers from other Canadian jurisd ictions to work in Québec as Canadian Legal 
Advisors, with the right to practise federal law,  the law of their home jurisdiction, and public 
international law.  The Québec Mobility Agreem ent, signed in March 2010, paves the way for 
                                                      
243 The law societies have recently approved a report  from a task force of the Federation setting the 
criteria for approved Canadian common law degrees.  The criteria should be implemented in 2015.  The 
Federation is also working on uniform national standards for admission to the profession in Canada. 
244 The law societies of Prince Edward Island, Newfoundland and Labrador, the Yukon and the 
Northwest Territories have adopted the Code of Professional Conduct of the Canadian Bar Association.   In 
2009, the Federation of Law Societies of Canada adopted a Model Code of Professional Conduct, with the objective of bringing greater consistency to the professional conduct rules governing lawyers in Canada.  The 
Model Code has already been implemented by the Law Society of Manitoba, and the law societies of Alberta 
and British Columbia are in the process of doing the same. 
245 Canadian law schools, except those in Québec, typically require their prospective students to hold a 
recognized Bachelor degree (Feder ation of Law Societies of Canada online information.  Viewed at:  
http://www.flsc.ca/en/lawSoc ieties/lawSocieties.asp). 
246 Federation of Law Societies of Canada online information.  Viewed at:  
http://www.flsc.ca/en/lawSoc ieties/lawSocieties.asp. 
247 The liability insurance plans administered by law societies provide for coverage of at least 
Can$1 million for each claim;  the Barreau du Québec provides for coverage of Can$10 million for each claim. 
248 The Canadian Bar Association, a voluntary organization provides a voice on behalf of the legal 
profession;  it has approximately 37,000 members (CBA online information.  View ed at http://www.cba.org/ 
CBA/about/main/). 
249 Federation of Law Societies of Canada online in formation.  Viewed at:  http://www.flsc.ca/en/ 
committees/wto.asp. 
250 In 2007, there were 434 permanent and 252 temporary transfers between law societies (Federation 
of Law Societies of Canada online information.  Viewed at:  http://www.flsc.ca/en/lawSocieties/ 
statisticsLinks.asp). WT/TPR/S/246 Trade Policy Review 
Page 150 
 
 
implementation of reciprocal mobility for members of the Barreau in all other provinces and the 
territories, on the basis of the Canadian Legal Advisor regime.251  Under the Territorial Mobility 
Agreement, provincial law society members wishing to practise in the northern territories are granted 
permanent, but no temporary, mobility (transfer) rights.252 
218. 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 hom e jurisdiction and, in Québec and British Columbia, 
on public international law.  Ten law societi es have adopted rules governing the issuance of 
permits/licences for foreign legal consultants;  lo cal presence is not required under any of these 
regimes.  To practise as a foreign legal consultant , foreign lawyers must apply for a permit from the 
relevant jurisdiction.  Requirements vary, a lthough there are a number of common elements.253  The 
three territorial law so cieties and the Chambre des notaires du Québec have not yet adopted rules 
enabling foreign lawyers to act as foreign legal cons ultants.  International law firms may establish an 
office in Canada, provided that the lawyers employed in that office have been licensed by the relevant 
law society to practise as foreign legal consultant s.  As at 31 December 2007, there were 105 licensed 
foreign legal consultants in Canada. 
219. Under the GATS, Canada made binding comm itments on its 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.254  When establishing in Canada, foreign legal 
consultants must take the form of a sole proprieto rship or partnership.  As specified in Canada's 
horizontal commitments, foreign legal consultants ma y enter Canada temporarily with a pre-arranged 
service contract and stay up to 90 days or the time necessary to complete the service contract, 
whichever is less, on the condition that they have obtained the appropriate provincial licence.255  
Under NAFTA, representatives of the legal professions of Canada, the United States, and Mexico have negotiated an accord containing recommendations  and a model rule on the regulation of foreign 
legal consultants.  Although ne gotiations were concluded in 1998, the accord has not been 
implemented. 
                                                     
 
251 This agreement has been implemented by the law societies of British Columbia, the Northwest 
Territories, Saskatchewan, Manitoba, Ontario, Québec, No va Scotia and Prince Edward Island.  According to 
the authorities it will be implemented in New Brunswic k and Nunavut by the end of April 2011 and in the 
Yukon by end May 2011. 
252 The authorities note that the Territorial Mobility Agreement is likely to be renewed beyond 2011. 
253 Applicants are generally required to:  have three years of experience in their home jurisdiction or 
agree to work under the direct supervision of a foreign legal consultant from the same jurisdiction who satisfies 
the experience requirement;  be of good character;  provide proof that they are a member in good standing with 
the legal profession in their home jurisdiction;  undertake not to handle trust monies in the jurisdiction in which they are seeking to practise;  and carry professional liability insurance or a bond in an amount reasonably 
comparable to liability insurance required of lawyers in th e jurisdiction in which they wish to practise.  There is 
no requirement for validation by the National Committee on  Accreditation of the creden tials of foreign lawyers 
seeking to practice as foreign legal consultants. 
254 Statistical information about such appli cations for accreditation can be found at:  
http://www.flsc.ca/en/foreignLawyers/stats.asp. 
255 WTO document GATS/SC/16/Suppl.2, 28 July 1995. Canada WT/TPR/S/246 
 Page 151 
 
 
(ii) Accounting services 
220. The three main professional accountancy designati ons legally recognized in Canada are:  
Chartered Accountant (CA), Certified Manageme nt Accountant (CMA), and Certified General 
Accountant (CGA).  At end March 2010, there were some 76,296 CAs, 42,050 CMAs, and 48,000 
CGAs.256  Each designation is regulated and protected by  provincial legislation,  and is represented at 
the national level by its resp ective national professional body.257  To provide accountancy services as 
a CA, CMA or CGA, membership of one of the regi stered professional bodies in the relevant province 
is essential:  the educational and experience require ments vary from one jurisdiction to another. 
221. Some provinces restrict the provision of public accounting services to a particular 
designation.  According to the authorities, accountan ts within Canada benef it from the labour mobility 
provisions of the Agreement on Internal Trade (A IT) (Chapter II(1)).  In  2001 and 2005, panels 
convened under the AIT dispute resolution mechan ism found that public accounting regulations in 
Ontario and Québec impeded internal trade a nd labour mobility, and recommended that certain 
changes should be made.  Since then Québec has ame nded its legislation to remedy the situation.  
However, as not all designations enjoy the same mobility in Ontario, Manitoba initiated a dispute 
against Ontario on behalf of CGA Canada in November 2010. 
222. Under the GATS, Canada has made commitmen ts on accounting, auditing, and book-keeping 
services.  The cross-border provision of auditing services may be restricted by citizenship (in 
Manitoba and Québec) and permanent residency re quirements for the accreditation of auditors (in 
Alberta and Ontario).  There are scheduled limitati ons with respect to permitted forms of commercial 
presence in certain provinces258;  as well as requirements that aud itors' offices located in certain 
provincial jurisdictions be under the management of a resident.259  In Manitoba, the accreditation of 
licensed public accountants is scheduled as be ing subject to a residency requirement.260  T h e  
authorities note that in practice there are no longer any residency requirements in Alberta and Ontario, 
and Manitoba does not accredit licensed public accountants. 
223. Mutual recognition agreements (MRAs) for CA qualifications have been signed by the CICA 
with professional accounting bodies in England and Wa les;  Scotland;  Ireland;  South Africa;  
New Zealand;  Australia;  Hong Kong, China;  Belg ium;  and France.  There is also a trilateral MRA 
with Mexico and the United States.  CMA Canada has established MRAs with two professional 
accounting associations in the United Kingdom261 and has an MRA with CPA Australia. CGA-Canada 
has signed an MRA with the Association of Char tered Certified Accountan ts, an international 
accountancy body. 
                                                      
256 See online information.  Viewed at:  http://w ww.cga-online.org;  http://www.cica.ca;  and 
http://www. cma-canada.org. 
257 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). 
258 Under its GATS commitments the provinces of Saskatchewan, Newfoundland and Labrador, Nova 
Scotia, Manitoba, and Ontario may require auditors to establish a commercial presence in the form of a sole 
proprietorship or partnership. 
259 In the provinces of Saskatchewan, British Columb ia, Ontario, Nova Scotia, Québec, Prince Edward 
Island, Newfoundland, and Alberta. 
260 WTO document GATS/SC/16, 15 April 1994. 
261 The two U.K. professional acco unting associations are the Char tered Institute of Management 
Accountants and the Chartered Institute of Public Finance and Accountancy. WT/TPR/S/246 Trade Policy Review 
Page 152 
 
 
(iii) Architectural and engineering services 
224. The engineering and architecture professions are regulated at the sub-federal level.  The 
practice of either profession is subject to licensing by the relevant provincia l/territorial association of 
architects or engineers.  Licences are valid only for the province or territory in which they have been 
issued;  licensing requirements, including educatio n and professional experience prerequisites, vary 
across jurisdictions.  In some provinces, an authoriza tion or a Certificate of Practice is also required, 
along with professional liability insurance, in order to  offer services to the public.  In principle, the 
mobility of professional engineers and architects be tween Canada's sub-federal jurisdictions is 
ensured under the AIT (Chapter II(1)).  The Canadi an Architectural Licensing Authorities (formerly 
the Committee of Canadian Architectural C ouncils) is the national coordinating body of 
provincial/territorial associations on regulatory ma tters, including licensing.  Engineers Canada 
(formerly Canadian Council of Professional Engineer s) is the national organization of the provincial 
and territorial associations that regulate the practi ce of engineering;  it serves its members through 
national programmes, policies, and guidelines. 
225. Foreign architects wishing to obtain a licen ce must have their academic qualifications 
certified by the Canadian Architectural Certification Board, which also serves as the accrediting body 
for Canadian schools of architecture.  The certificatio n is a mandatory first step towards licensure and 
registration for all graduates from professi onal university programmes in architecture.262  Foreign 
architects may also apply for a temporary licence to practise in collaboration with a registered 
architect of the province.  Licences are for a specifi c project and must be renewed after one year.  
There are no residency requirements to obtain an architectural licence. 
226. Foreign engineers wishing to obtain a licence must have their academic and professional 
experience credentials assessed by the relevant provincial engineering association.  Temporary 
licences may be obtained in Québec (where the licen ce is project specific), Ontario (where a licensed 
collaborator must be named), and in Manitoba.  Neither citizenship nor permanent residency are 
required for permanent licensure in any of the provi nces or territories;  all jurisdictions grant full 
practicing rights to individuals who meet thei r requirements, regardless of residency status. 
227. Under its GATS commitments, Canada requires foreign architects to establish a commercial 
presence in the form of a sole proprietorship or partnership.  Canada's GATS commitments for architectural services also stipulate residency and citizenship requirements in some provinces for both 
cross-border supply and presence of natural persons.
263  Canada imposes no limitations on the legal 
form of establishment or ownership of an engineerin g firm by foreigners;  residency, citizenship, or 
commercial presence requirements affect market access in eight provinces.264  Canada allows foreign 
architects and engineers to enter the country tempor arily and stay up to 90 days or the time necessary 
to complete the contract, whichever is less. 
                                                      
262 Certification fees depend on the mode by whic h the applicant satisfies the Canadian education 
standard for admission to provincial architectural associations in Canada.  For the current fee schedule, see 
CACB online information.  Viewed  at:  http://www.cacb- ccca.ca/index.cfm?Voir =sections&Id=10414&M 
=1358&Repertoire_No= 660386109. 
263 A residency requirement is in place in Nova  Scotia, New Brunswick, and Newfoundland;  a 
citizenship requirement is applied in Québec. 
264 A residency requirement is in place in Albert a, British Columbia, Nova Scotia, New Brunswick, 
Newfoundland, and Ontario;  a citizenship requiremen t is in place in Québec;  and a commercial presence 
requirement is in place in Manitoba.  Additionally, Sask atchewan limits national treatment for engineers by a 
temporary residency requirement. Canada WT/TPR/S/246 
 Page 153 
 
 
228. 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.265  The Canadian Council for Professional Engineers has also negotiated MRAs with 
professional engineering bodies in Australia , France, Ireland, and Hong Kong, China. 
229. For architects, a Canada-United States Inter-recognition Agreement, signed by professional 
licensing bodies in 1994, establishes grounds for reciproc ity to 55 jurisdictions in the United States 
and 11 jurisdictions in Canada.  The jurisdic tions of Yukon and Nunavut  have not signed the 
agreement as they do not have a regulatory author ity in place.  A Tri-National Mutual Recognition 
Agreement for International Practice between Cana da, the United States and Mexico was finalized 
and ratified by all parties in mid 2010;  it provides for the recognition of credentials between the three 
countries;  a pilot process will be conducted in late 2011. 
                                                      
265 This agreement has been ratified by Mexico, Texas (United States), and by all Canadian 
jurisdictions except Ontario and Québec. Canada WT/TPR/S/246 
 Page 155 
 
 
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