Key UK/Canada trade facts
Core trade asks
1. Regulatory co-operation
The UK and Canada both have sophisticated financial markets. UK-Canada financial regulatory co-operation could shape a more integrated transatlantic financial market that would provide consumers and business end users with more choice and competition. The UK should:
- Create a framework for financial regulatory co-operation.
- Establish a UK-Canada Financial Regulatory Forum that meets regularly and engages with industry.
- Encourage regulators to achieve mutual compatibility of regulatory frameworks in areas of common interestand develop consistent regulatory approaches on an outcomes basis.
- Encourage UK and Canadian regulators to develop more aligned approaches towards sustainable finance, especially on green finance disclosure standards, green ratings, and green taxonomies, to facilitate trade in environmental services, build scale in green finance markets, and support the green transition.
- Promote UK-Canada regulatory co-operation in new financial services such as FinTech, cryptocurrencies, and applications of AI to financial services, and share best practices on cybersecurity and operational resilience.
- Explore the possibility of a UK-Canada “Covered Agreement” on reinsurance, similar to the UK-US Covered Agreement, that would liberalise UK-Canada insurance trade.
2. Expanding cross-border trade with Canada
Canada has already committed to allow UK businesses to supply maritime transport and aviation insurance, financial data, and some advisory financial services and portfolio management services on a cross-border basis. The UK should build upon this and seek further liberalisation of cross-border financial and professional services trade, and especially commitments from Canada to allow cross-border access to UK electronic payment services.
3. Facilitating Digital trade
Digital trade is essential for financial and professional services businesses. The UK and Canada both support open data regimes. Both should now commit to a high standard digital trade agreement that:
- ensures cross-border data flows, including in the financial services sector
- strictly limits data localisation requirements, including in financial services
- recognises the international validity of e-signatures and electronic contracts
- protects confidential information relating to software, source codes, and encryption technologies.
4. Providing UK businesses with more freedom to operate in Canada
While Canada is relatively open to foreign businesses establishment, the UK’s current FTA with Canada allows Canadian authorities to impose residency requirements on financial services businesses, such as Province level residency requirements for workers in banks, credit unions, insurance companies and securities businesses. UK negotiators should seek to remove all residency requirements on financial and professional services businesses.
5. Enabling business mobility
Financial and professional businesses succeed when they have access to the world’s best talent. The UK and Canada both offer large high-skilled talent pipelines: both countries could benefit significantly from an FTA that helps UK and Canadian professionals work in each other’s country.
UK and Canadian negotiators should achieve longer lengths of stay for professional workers in each other’s market, faster turnaround times and reduced administrative costs for business visas, and clearer definitions of who can get a business visa. Spouses and children should be able to accompany professional workers. Both countries should further agree more flexible requirements for the short-term business travel for inter-corporate transferees.
6. Mutual Recognition of Professional Qualifications (MRPQ)
To support trade in professional services, the UK should encourage Canadian authorities to shape MRPQ frameworks that set out a clear path for the admission of UK professionals into Canadian regulated professions. The UK currently has agreed an MRPQ framework with Canada but no MPRQ agreements have stemmed from it so far.
To increase the prospects of MRPQ agreements that would benefit both countries, the UK should seek an automatic path for the recognition of UK legal qualifications allowing for admission or requalification in Canadian professions. It should consider agreeing a framework with Canadian authorities based on the MRPQ terms in the UK-EEA EFTA FTA, which required EFTA and UK authorities to recognise each other’s professional qualifications subject to certain conditions being met.