President of the European Commission, Jean-Claude Juncker (R), Canadian Prime Minister Justin Trudeau (C) and EU Council President Donald Tusk (L) during a press conference at the end of an EU-Canada summit where they signed the agreement on the Comprehensive Economic and Trade Agreement (CETA), a planned EU-Canada free trade agreement, in Brussels, Belgium, 30 October 2016. (Stephanie Lecocq/CP)
OTTAWA – The federal budget watchdog says Canada’s free-trade pact with Europe will produce modest economic gains that work out to an average annual income boost of $220 per Canadian.
The parliamentary budget office estimates the trade deal would have lifted Canada’s overall economic output in 2015 by 0.4 per cent or $7.9 billion, if it had been implemented.
The report says Canadian exports of goods to the EU would have increased $4 billion, services would have been up $2.2 billion and investment would have grown by $3.1 billion.
However, the budget office predicts some Canadian sectors will likely see slower growth under the agreement – including some dairy and agricultural products, textiles and some machinery and manufactured goods.
On the other hand, sectors including transport and motor vehicles, some metals and wheat will likely show faster growth.
The report also says strengthening business ties with the EU will make Canadians a little less dependent on their existing trade partners, predicting that Canada’s annual exports to the United States could decline by 0.4 per cent or $1.4 billion, while exports to the rest of the world may fall by 0.7 per cent or about $384 million.
