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Canada and the UK have a long history of close trade ties dating back centuries. Following the UK's withdrawal from the EU, the Canada-United Kingdom Trade Continuity Agreement (CUKTCA) was implemented in 2021 to maintain this important economic partnership.
The CUKTCA largely replicates the benefits of the previous Canada-EU agreement, fostering near tariff-free trade, simplified customs procedures, and increased mobility for business professionals.
Learn how the Canada-UK Trade Agreement (CUKTCA) fosters closer economic ties between Canada and the UK, promoting trade growth and enhancing business opportunities on both sides of the Atlantic!
What is the Canada-UK Trade Continuity Agreement (CUKTCA)?
The Canada-United Kingdom Trade Continuity Agreement (CUKTCA), implemented on April 1, 2021, bridges past and future trade relations between Canada and the UK. It was established for several reasons: maintaining trade benefits, providing stability, and increasing mobility between nations. Let’s take a look at these factors in detail.
| CUKTCA Objectives | Descriptions |
|---|---|
| Maintain Existing Trade Benefits | The CUKTCA ensures Canada and the UK continue to enjoy the advantages of near tariff-free trade, established earlier under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) |
| Provide Stability And Predictability | This agreement offers a framework for smooth trade continuity, fostering confidence and predictability for businesses operating in both countries. |
| Lay The Groundwork For Future Negotiations | The CUKTCA paves the way for potential future discussions toward a more comprehensive free trade agreement between Canada and the UK. |
What Are The Key Provisions of CUKTCA
The Canada-United Kingdom Trade Continuity Agreement (CUKTCA) includes vital provisions covering various trade aspects between Canada and the UK. Some of the significant requirements outlined in the agreement are as follows:
| Key CUKTCA Provisions | Descriptions |
|---|---|
| Tariff Elimination | The agreement maintains the near elimination of tariffs on vast goods traded between Canada and the UK, exceeding 98% coverage. This significantly reduces costs for businesses and consumers in both countries, promoting increased trade flows. |
| Simplified Customs Procedures | The CUKTCA streamlines customs procedures, facilitating faster and more efficient movement of goods across borders. This includes provisions for mutual recognition of customs documentation and simplified clearance processes |
| Services Trade Liberalization | The agreement fosters increased service trade by reducing barriers and promoting regulatory cooperation. This encompasses various sectors, including financial services, professional services, and telecommunications. |
| Investment Protection | The CUKTCA offers provisions for protecting investments made by citizens and businesses in each other's territories. This provides investors with greater confidence and security when conducting business across borders. |
| Government Procurement | The agreement opens opportunities for increased participation by Canadian and UK businesses in each other's government procurement tenders. This fosters competition and transparency in public procurement processes. |
| Mobility Provisions | The CUKTCA facilitates temporary business travel and work permits for citizens of both countries. Business professionals can easily move between Canada and the UK for short-term assignments and collaborations. |
How Can I Be Eligible to Conduct Business With Canada Using The CUKTCA
To be eligible to conduct business with Canada using the Canada-UK Trade Continuity Agreement (CUKTCA), you should ensure that your occupation or business falls under the following categories:
Business Visitors
There are two types of business visitors permitted under CUKTCA: short-term and business visitors for investment purposes. Both are permitted to stay in Canada for a maximum of 90 days in six months unless they are deemed work permit-exempt.
Short-term Business Visitors
To be eligible to apply for an LMIA-exempt work permit as a short-term business visitor using the CUKTCA, you must ensure your business activities in Canada do not involve:
- Engaging in selling goods or services to the general public,
- Receiving payment directly or indirectly from a source in Canada, and
- Supplying service to Canadian consumers except as provided in Annex 10-D.
Business Visitors For Investment Purposes
To be eligible to work in Canada as a Business Visitor For Investment Purposes using CUKTCA, you must ensure that you:
- Have a management position,
- Set up an enterprise but don’t directly transact (buy or sell) with the general Canadian public,
- Don’t receive direct or indirect pay from a Canadian source.
Investors
If you’re an investor who wants to engage in investment activities under the provisions of CUKTCA, you must:
- Establish, develop, or administer the operation of an investment in a capacity that is supervisory or executive,
- Be the investor in the enterprise, and
- Be an employee of an enterprise that committed or will commit a significant amount of capital in Canada’s economy.
Contractual Service Suppliers And Independent Professionals
Contractual Service Suppliers and Independent Professionals who want to work in Canada as under CUKTCA provisions, you must:
- Be a citizen or permanent resident resident of the United Kingdom (UK),
- Supply a service to Canadian business or public consumers temporarily for less than 12 months,
- Ensure the service supplied is listed on the Annex 10-E table,
- Have a Canadian university degree or equivalent foreign qualification accredited by Education Credential Assessment (ECA),
- Obtain a relevant professional qualification in line with the provincial or territorial laws of the place you’ll settle in.
Please Note
Some engineers and scientific technologists can enter Canada under this category without having a university degree.
What Are The Benefits of Doing Business in Canada Using The CUKTCA?
Among the benefits of doing business in Canada under CUKTCA provisions include:
For Goods Exporters
The Canada-UK TCA provides exporters with continued preferential access to the UK and Canadian markets, eliminating 98% of tariffs on exports entering Canada or the UK (carried over from CETA).
The elimination of an additional 1% of tariffs on Canadian exports to the UK by January 1, 2024, when the CUKTCA is fully implemented, will further bring the elimination of tariffs on Canadian and UK exports to 99%. This incentivizes exporters to do business among both countries by making it cheaper to export their goods, increasing the volume and value of goods traded.
For Services Exporters
CUKTCA ensures business people, investors, and professionals from both countries can have continued access to each other’s capital and commercial markets under some of the best trade terms granted to both trading partners. The financial services provisions of the CUKTCA help protect investments and loosen the regulations on doing business as a foreigner in the UK and Canada.
For Investors
CUKTCA offers important investor protections for UK and Canadian investors doing business in each other’s countries while preserving the right of each government to regulate in the public's interest. These investment protections ensure that your business interests as a foreign investor will be looked after. If not, you’ll receive legal redress through compensation or other applicable means.
For Goods and Services Suppliers
As a supplier, CUKTCA guarantees you access to procurement opportunities within the respective governments of Canada or the UK, estimated to be worth upwards of approximately 118 billion CAD.
Additionally, like in CETA, Canada and the UK government have agreed through CUKTCA to treat each other’s goods and suppliers non-discriminately, fairly, and transparently when identifying who will supply them with goods and services.
FAQs
Are Any Specific Industries or Sectors Targeted by The Canada-UK Trade Agreement (CUKTCA)?
No, the CUKTCA doesn't target specific industries. It generally applies to all goods and services traded between Canada and the UK, aiming to eliminate tariffs and simplify procedures across various sectors.
Will The Canada-UK Trade Agreement (CUKTCA) Affect Existing Trade Agreements between Canada and the European Union?
The CUKTCA is a separate agreement and doesn't directly affect existing trade deals between Canada and the EU. However, it ensures continuity for trade benefits previously enjoyed under the Canada-EU Comprehensive Economic and Trade Agreement (CETA).
What Are The Future Prospects For Trade Agreements Between Canada and The UK?
The CUKTCA is a foundation for future negotiations towards a more comprehensive free trade agreement between Canada and the UK. The specific details and timeline for such negotiations remain uncertain and will depend on ongoing discussions and priorities of both countries.
