CETA comes into force

Photo: The Canadian Press

Canadian companies have much greater access to one of the world's largest markets starting Thursday, as a major trade deal between Canada and the European Union enters into force.

Known as the Comprehensive Economic and Trade Agreement, or CETA, the deal clears barriers to trade for Canada's largest trading partner after the United States.

As of Thursday, over 98 per cent of Canadian goods will be able to enter the EU without tariffs, compared with only 25 per cent a day earlier, which the federal government says will improve export opportunities for a range of Canadian producers, processors and manufacturers.

The deal not only clears the way for goods, which Canada exported $42 billion worth of last year, but also codifies access to services, which Canadian companies sold an additional $18 billion worth in 2016.

The deal will also mean Canadian companies can bid for work at all levels of the EU government procurement market, which the federal government says is worth an estimated $3.3 trillion annually.

The agreement is a two-way street though, with EU companies also gaining access and creating more competition in the Canadian market.

The federal government has been making investments to help prepare companies, including $350 million in funding announced last year to help the dairy sector get ready for the increased competition.

Overall, the trade agreement could increase bilateral trade by 20 per cent annually and boost Canada's income by $12 billion annually, according to a joint Canada-EU study.

The study suggested the economic benefit of the agreement would be equivalent to creating almost 80,000 new jobs or increasing the average Canadian household's annual income by $1,000.