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Canada country brief

Bilateral relations

The Australia-Canada relationship is mature, highly productive and broadly based. People to people contacts between our parliaments, government officials, private sectors, academics and communities are extensive and wide-ranging. We are both federal, large, geographically dispersed countries, with Westminster systems of government and a similar standard of living. Trade relations date from 1895, when the Government of Canada sent its first Trade Commissioner, John Short Larke to Sydney to establish an office. Diplomatic relations began formally in 1939 when, on the eve of the Second World War, Australia and Canada first agreed to exchange High Commissioners.

Our leaders and officials share close and productive working relationships and meet regularly on the margins of international meetings and during bilateral visits. Recent high level visits to Australia include: Trade Minister Fast in 2012; Prime Minister Harper and Foreign Minister Baird in 2011 (for CHOGM); former Defence Minister MacKay in 2011; former Immigration Minister Kenney in 2010; and Prime Minister Harper in 2007 (when he became the first Canadian prime minister to address the Australian parliament). Recent high level visits to Canada include: the Australian Governor General, HE Ms Quentin Bryce (April 2013); former Resources Minister Ferguson (July 2012); former Family and Community Services Minister Macklin (June 2012); former Home Affairs Minister Clare (June 2012); former Trade Minister Emerson (September 2011); former Treasurer Swan (for the Toronto G20 Summit in 2010); and former Prime Minister Howard in 2006.

Australian and Canadian military forces fought side-by-side in the Sudan War, Boer War, both World Wars, the Korean War, the 1990-91 Gulf War and Afghanistan. They have also cooperated on peacekeeping operations, including Canada’s contribution of over 600 troops to the Australian-led mission in Timor-Leste (East Timor) in 1999. Australia and Canada were among the first countries to join the global coalition against terrorism, and both countries committed military and development resources to stabilise and help rebuild Afghanistan and Iraq. Australia and Canada work closely to counter potential global terrorist threats through technical cooperation, information-sharing, exchanges of personnel and joint training.

Today, both countries face comparable public policy challenges in areas such as health, transport, indigenous issues, regional development, and the managing the effects of the global economic crisis. The Canada-Australia Public Policy Initiative (CAPPI), launched by Prime Ministers Howard and Harper, brings together Australian and Canadian departmental secretaries biennially for wide-ranging public policy discussions. The next meeting will be held in Australia in the first half of 2014. At any time there are a number of public servants placed in Australian and Canadian ministries on exchange.

A comprehensive range of bilateral agreements cover trade, social security, air services, consular services abroad, mutual assistance in criminal matters and avoidance of double taxation. Consular cooperation is important, with Canada and Australia providing consular services to each other's nationals in over 40 countries where the other is not represented. A working holiday program allows young people to travel and work for set periods in each other's country.

Educational links are also strong with more than 180 formal agreements between Australian and Canadian universities, almost 300 members of the Association for Canadian Studies in Australia and New Zealand and more than 2000 Australian and Canadian students enrolled in universities in the other country.

Political Overview

There are three branches of Government in Canada at the national level: legislative, executive and judiciary. The executive branch comprises the Prime Minister and the Cabinet. The Prime Minister is the leader of the party with the largest number of seats in the House of Commons.

The legislative branch consists of the House of Commons and the Senate. The House of Commons has 308 members, but will increase to 330 members at the next election. General elections are held every four years. The Senate has 105 senators appointed on a regional basis. Its basic functions are to review proposed legislation and to operate as a forum for debating public issues. Senators are appointed by the Governor General, on the advice of the Prime Minister. Prime Minister Stephen Harper's Conservative Party, which formed minority government in January 2006 and October 2008, secured a parliamentary majority in elections on 2 May 2011. The next Canadian federal election is scheduled for October 2015.

Foreign Policy

One of Canada's highest priorities is its bilateral relationship (political, cultural and commercial) with the United States. As a NATO member, Canada deployed combat forces to Afghanistan from 2006 to 2011 and continues to contribute to reconstruction and development through the deployment of military trainers (until March 2014) and a A$300 million aid program. Canada was also the third largest contributor to the maintenance of the NATO no-fly zone in Libya in 2011, an operation commanded by a Canadian General.

Canada, Australia and New Zealand work closely in the UN on issues ranging from security to development to human rights. Often the three countries work together informally (known as the CANZ grouping) and sometimes with other likeminded nations. This close cooperation in the UN is an important part of Australia's relationship with Canada.

Canada, like Australia, is an active member of the Commonwealth. Canada worked closely with Australia during our chairmanship (2011-13) to revitalise the organisation through the conclusion of the Charter of the Commonwealth and the implementation of the recommendations of the Commonwealth Eminent Persons Group.

As export-oriented economies with strong interests in agriculture and resources, Australia and Canada have a common interest in a fair, open and non-discriminatory world trade system. Both countries were prominent players in the creation of the General Agreement on Tariffs and Trade (GATT) in 1947, and today both are active and influential members of its successor, the World Trade Organization (WTO), which was established in 1994. In 1986, Australia invited Canada to participate in the Cairns Group, a unique and influential coalition of 19 agricultural exporting countries with a commitment to reforming agricultural trade.

Australia and Canada work closely together to promote a coherent and robust system of global trade and economic cooperation in key international organisations such as the G20, the Organization for Economic Cooperation and Development (OECD), the Asia-Pacific Economic Cooperation (APEC) forum and in many United Nations agencies. Canada joined APEC in its inaugural year (1989) and Vancouver hosted APEC in 1997. Canada continues to take an active role in economic and technical cooperation, health, security and trade/investment liberalisation across the Asia-Pacific region. It is one of the twelve countries participating in the negotiations for the Trans-Pacific Partnership free trade agreement.

Economic Overview

Canada has a low population density and a vast wealth of natural resources. The Canadian economy is the 11th biggest economy in the world by GDP (according to the World Bank in 2012). Australia was ranked 12th. It is highly integrated with the US economy, with each being the other's major trading partner. Canada has retained its ranking as the 14th most competitive nation economically among 148 countries ranked by the World Economic Forum (in the 2013-2014 WEF Global Competitiveness Report). The report said “Canada's efficient goods, labour and financial markets, excellent infrastructure, and well-functioning, transparent institutions helped the country hold on to its relatively high ranking…”.

Bilateral economic and trade relationship

Canada is Australia's 20th-largest merchandise trading partner, with two-way trade amounting to A$4 billion in 2012 - A$2.3 billion in imports to Australia and A$1.7 billion in exports to Canada. Top performing exports in 2012 included nickel (ores, concentrates and alloys), wine, beef and alumina. Companies exporting to Canada include food processors; major wine producers; consumer products retailers; packaging; software; financial services and processing; energy and mining services and equipment; and major universities. The top three merchandise imports from Canada in 2012 were civil engineering equipment and parts; sulphur and iron pyrites; and medicaments (including veterinary). Total services trade was valued at around A$1.7 billion in 2012, with Australia exporting A$808 million in services to Canada in that year. Though Canada's trade regime is generally liberal and transparent, tariff peaks and other distorting trade mechanisms apply to domestically sensitive agricultural sectors such as dairy and poultry. Tariff rates can be found on the APEC Tariff Database.

Investment ties between Australia and Canada are substantial and Canada offers a stable investment environment for Australian business. Australian investment in Canada was valued at A$42.7 billion in 2012, with over 80 Australian companies operating in Canada. Canadian investment in Australia was valued at over A$31.8 billion in 2012, mostly in resources and manufacturing.

Australia will host the next Australia-Canada Economic Leadership Forum in Melbourne in February 2014 with expected strong participation from Australian and Canadian companies, politicians and officials. Previous Forums have been held in Sydney (November 2010) and Toronto (July 2012). The forum is an exercise in 'private sector diplomacy' bringing together business, academia and other non-government players to contribute to the development of the bilateral relationship. It is modelled on similar gatherings Australia has with its closest political and economic partners, notably the Australian American Leadership Dialogue.

Australian Trade and Investment Strategies

Australia and Canada grant each other preferential tariff rates on a limited range of products agreed under the Canada-Australia Trade Agreement (CANATA), established in 1960 and amended in 1973. As CANATA pre-dates the multilateral trading system, most of its provisions have been superseded by tariff reductions achieved by negotiation in the WTO.

Australia and Canada are both participating in the negotiations for the Trans-Pacific Partnership free trade agreement. The negotiating parties are committed to creating a 21st century trade agreement in which tariffs are eliminated on all trade.

Austrade has offices in Toronto and Vancouver to pursue Australia's trade and investment priorities.

Chamber of Commerce

The Canadian Australian Chamber of Commerce (CACC) was launched on 20 October 2005. The Chamber is an independent, non-profit organisation that aims to contribute to increasing the level of trade and investment between Australia and Canada. Membership is free of charge to interested parties.

Updated September 2013