Newfoundland and Labrador is suspending support for CETA and all trade agreements currently being negotiated with the federal government.
Darin King, the province's business minister, said the province's dispute with Ottawa over CETA — the Comprehensive Economic and Trade Agreement — is still focused on a controversial fisheries investment fund.
Newfoundland and Labrador says the federal government is not honouring a prior commitment to set up the fund, which it says will be needed to help the seafood industry when a trade deal with the European Union is approved.
"The federal government’s failure to honour the terms of this fund is jeopardizing CETA for all industries, economic sectors, and indeed all Canadian and European Union citizens," King said.
King, who attended a news conference Monday with Municipal and Intergovernmental Affairs Minister Keith Hutchings, said his department was advising the federal government that Newfoundland and Labrador is no longer working with them with ongoing trade agreements.
Dispute involves more than CETA
The statement went beyond the scope of just CETA, and said negotiations on other trade deals are also affected.
"As a result of the federal government’s failure to honour its commitment respecting the fisheries investment fund, I have advised the federal Minister of International Trade, Ed Fast, that the provincial government is suspending its participation in all trade agreements," he said.
"All trade agreements currently under negotiation by the federal government would not have any effect in matters within the jurisdiction of Newfoundland and Labrador.“
The letter described a history of the CETA deal, explaining the time period where the province felt that they were treated unfairly by Ottawa.
Meanwhile, International Trade Minister Ed Fast's office said Monday that the deal would bring "tremendous benefits" for both Canada and Newfoundland and Labrador, and the federal government plans to move ahead with ratification as soon as possible.
Fast's office said any exclusion of Newfoundland and Labrador would put the province at a "severe competitive disadvantage" in global markets.
"With almost 78 per cent of Newfoundland and Labrador’s economy dependent on international trade, anything that would delay or exclude Newfoundland and Labrador from taking advantage of any of Canada’s trade agreements would have a detrimental economic impact on the province," said Max Moncaster, press secretary to Fast.
"With regards to the MPR [Minimum Processing Requirements] fund, federal officials remain open to receiving proposals from their provincial counterparts on how to implement the MPR Fund. We have not yet received such a proposal."
Talks with other CETA stakeholders
At a press conference Monday, King said the provincial government met with a number of embassy representatives, as well as other national and international groups, that have a stake in CETA.
According to King, many of these groups have expressed their intentions to support the province by putting pressure on the federal government.
"We hope and expect that these groups will encourage the federal government to address this issue in order to best protect the interests of their respective members and stakeholders," he said.
"Our focus is on having the federal government live up to a commitment it made to Newfoundland and Labrador."
King added the province feels it has gotten a favourable response from the groups and international representatives it has talked with.
"Without exception, everywhere we go, with the exception of Minister MacKay, we haven't found any group or organization that's challenging the validity of this agreement and can't understand why the government is not living up to it," said King.
Intergovernmental Affairs Minister Keith Hutchings said several of the embassies the province went to have listened to Newfoundland and Labrador's case, and were sympathetic.
Hutchings said the European officials he spoke with expressed the feeling that they want to see support from all of the provinces for any trade deal with Canada.
"Obviously they wanted that, and from what we heard in Ottawa, they still want it," he said.
"They have concerns if that's not there, because that's what the original discussion with Canada was all about — that everybody would be on board."
Not backing down
Hutchings said that while breaking off negotiations may seem counterproductive to coming up with a solution, the province must stay committed to the original deal.
"We've got to be able to hold fast to those items that we negotiated," he said.
"It's a much bigger issue. Once we go down that road of giving the authority to the federal government and saying, 'Well, you can negotiate something, but once it gets to the final stages you can pull back and say no, that's fine.' As a government we can't approve of that."
King said the provincial government is not willing to wait around indefinitely for some progress on CETA, and will cut off negotiations soon if the Harper government doesn't live up to their previous commitments.
"The timelines for us are very clear here. We're talking weeks, not months," he said.
"If we see no activity we'll take the actions we've just described to you here from a trade perspective and we'll pull the plug on CETA and Newfoundland will no longer be a part of the deal."
Letter Darin King sent to federal trade minister on CETA
Letter Darin King sent to federal trade minister on CETA (PDF 333KB)
Letter Darin King sent to federal trade minister on CETA (Text 333KB)