REGINA — Anticipation of much-improved trade relations between Canada and India was evident from those at the second annual Western Canada – India Leaders Summit.
The event in Regina, put on by the Canada – India Business Council, brought together business and policy leaders to discuss issues important to Canada and India’s economic relationship.
The prevailing mood is optimism about the months ahead, following on the heels of what was seen as a successful visit of Canadian leaders – Prime Minister Mark Carney and Premier Scott Moe – to India earlier this year to meet with India Prime Minister Narendra Modi.
Canada’s High Commissioner to India Chris Cooter was positive in his view that a new trade deal between the two countries — the much talked-about Canada-India Comprehensive Economic Partnership Agreement (CEPA) — is on the way.
“The Free Trade Agreement, it will be achieved this year, no question. The two prime ministers have agreed it,” said Cooter to the audience.
But he also stressed the importance that Canada takes full advantage of that agreement when it does get done.
“So, when we get this agreement, and we will get this agreement, it's very important that we make sure we use it. It will provide benefits. It will raise some questions. It will answer those questions. But it's important to use that. It's important to use all of the dialogues that we've established between our ministers.”
Dinesh Patnaik, India High Commissioner to Canada, was asked by reporters about what the negotiations would entail.
“Everything is on the table,” Patnaik said to reporters. “So pulses, yellow peas, lentils, everything else."
He said the whole idea of a comprehensive economic partnership agreement is to make things easy between both countries.
“So that's one side, which is you make it so easy that you can do business without really having to worry about all the other administrative hassles, customs hassles, business hassles, so that businesses can trade with each other much better. But the other side of it is you have some sensitivities. For example, you don't want anybody coming into your poultry sector, into your dairy sector, into your animal husbandry sector. Similarly, we have some sensitivities in some areas. So what we are doing, trying to work it out, is how do we address the sensitivities while moving forward on all the other issues which do not meddle in our relations.”
He said almost 95-97 per cent of the items can be very easily done.
“It's those four per cent – five per cent which have to be done in a more imaginative way in which we can benefit from what the strengths of each other are, at the same time not allow our sensitivities to have any problems.”
This past week Maninder Sidhu, Minister of International Trade, had meetings with Piyush Goyal, Minister of Commerce and Industry of India, in Ottawa. According to a federal government news release they had “advanced discussions on priorities in key sectors such as aerospace, agri-food, energy, technology and others, in support of “Canada’s goal of doubling Canada-India trade by 2030.”
The Canada-India Comprehensive Economic Partnership Agreement was also discussed with chief trade negotiators, with the federal government saying they reaffirmed their commitment to conclude it this year.
Patnaik, who had flown to Regina from Ottawa, characterized this latest meeting as “always good. Let me tell you, there are no meetings which are bad, because what we're doing right now is we are saying these are the things we can work on. And we have kept the sensitive issues to the side.”
One issue, he acknowledged, is the “discrepancy in the size of the economies.”
“You are a 2.5 trillion economy. We are a four trillion economy,” Patnaik said. “If you look at the current growth patterns, everybody's calculation is that we'll go from about four trillion to about 25 trillion, minimum 25-30 trillion. You will go from 2.5 to about five trillion in the same time. This is about 20, 25 years. So in any negotiations, we are giving you an access to a 25 trillion market. You're going to give us an access to a four to five trillion market. So there has to be a balance in that. And so those are the things being discussed.”
Still hurdles in the relationship to be worked out
But there are challenges in the economic relationship between the two countries. Patnaik spoke at the summit about the reputation Canada had in India business circles of being hampered by too much bureaucracy and red tape.
In speaking to reporters he expressed optimism that was changing, because “you have a prime minister who's telling that he's moving forward on all this.” But he said investors wanted to see things happen on the ground, pointing in particular to the pace of major projects like pipelines.
“Unlike us bureaucrats and diplomats and others, we are hope-based that, you know, if somebody's saying something, they will do it. And I believe that this will be done. But my point is the businessman needs something on the ground to see.”
On the other side, Canada has pointed to their own gripes on the trade front in recent months, after India imposed pulse tariffs on Canada in the past year. Whether those tariffs can be removed in the near future is still an open question.
Scott Matthies, managing director of Saskatchewan’s India office, was asked if he saw pulse tariffs being included in that free trade agreement being discussed right now.
“Certainly, agriculture and agri-food is part of the discussion. We're hopeful and optimistic that that will have a positive resolution,” Matthies said.
A big issue for producers, Matthies indicated, was the sudden impact of the tariffs being imposed.
“Obviously, our producers are relying on long-term transparent signals. In the past, tariffs have been implemented on short notice, and that's obviously a huge issue for our producers in Saskatchewan. What we've seen in the last 24 months is more long-term forecasted tariff implementation and stable."
He noted that this past year, the 30 per cent yellow pea tariff was extended again for another year.
"So, that does give our producers some sense of certainty in terms of what the market looks like. Obviously, we'd love to see that be zero tariff, but the Indian government needs to do what it needs to do to protect its farmers. And our producers and our government are committed to continuing to be a long-term reliable supply.”
There was one major issue that all sides acknowledged as the cloud that hung over the trading relationship.
“The grizzly bear in the room in this country is, of course, the security part,” Cooter told the audience Friday.
Issues such as foreign interference have derailed the Canada-India relationship in the recent past, but Cooter pointed to much progress made on that front.
“In fact, in the very first week that I was in India in September, we had all the heads of all of our security agencies in India, led by our national security advisor, who met India's national security advisor and his team. And they began to build that trust that we now benefit from,” he told the audience.
“Things are happening to make our citizens safer. So that's continuing to build, and everything else can build from that. That doesn't mean we don't have to manage it. We do. There will be bumps in the road, but we've now got a mechanism to follow through on.”
Patnaik believed the security issue should be talked about in parallel with CEPA, and not hold up those negotiations.
“When we have a relation between both sides, there are people in Canada who believe the security issue is a big issue. And they keep on telling you all the time that unless you solve the security issue, let's not move forward on the economic issues, on the CEPA, on the people-to-people connection. Let's cut off relations with India until the security issue is solved,” Patnaik said.
“What we're saying is let's discuss all of it at the same time. Everything can happen in parallel. We are not ‘banana republics’ that we have only one issue between us and unless we finish, you don't buy my bananas — we cannot go ahead on other issues. It's a thing that you go parallel track on every one of them. You discuss on defence, on aerospace, on AI, on quantum, on students, on immigration, on energy, on agri-foods, on agri-tech, on fertilizers. Everything. You're doing all of these tracks, including the security track. And so that's what we want to do. We want to have multiple tracks, each of them running parallel to each other.”
Despite the challenges, Patnaik said he was “very optimistic” about a trade deal getting done. His Canadian counterpart Cooter also voiced optimism during the roundtable discussion at the summit, pointing to the huge potential for Canada to increase trade with India.
“I mean doubling trade is actually a rather modest objective,” Cooter told the audience.
“We should be thinking about quintupling trade. We should be at least where the Australians are, the population-wise, a much smaller country. We have far more resources, we're a much bigger country. So, the good news of that is, I guess, there's so much headroom to grow in so many different sectors."
