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Ireland Canada Chambers of Commerce Embassy of Ireland Update – October 2021 - ICCCTO

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Embassy of Ireland in Canada: Embassies & Consulates in Ottawa, Canada -  Visas & Permits

Embassy Update

August saw the Embassy welcome our new Second Secretary, Sally Bourne. Sally brings a wealth of experience from her previous role in the Passport Office in Dublin and joins the team for the next three years. She takes over from Anderson Finlay who has gone back to our Human Rights Unit in HQ having been promoted.

The Embassy has seen a modest return to smaller meetings with partners over the last number of months, though lingering COVID restrictions have tempered our ambition somewhat. That being said, Ambassador McKee did manage his first official in-person visit to Vancouver in September. This included a very successful business breakfast hosted by our Chamber in Vancouver, along with a number of other high-level meetings. Another visit is planned for early November to Toronto and we hope to cover all areas represented by our Chambers in the not too distant future.

Over the summer, we ran a number of successful events, including our annual Bloomsday celebration, and more recently Ambassador McKee spoke at the annual Valentia lecture. We were also thrilled to support the Pan-Canadian Chamber event featuring Irish Foreign Minister Simon Coveney in June. Congratulations to all concerned on what was a very worthwhile and excellently executed online event.

Our political outreach continued apace, and we were very pleased to help facilitate meetings between the Canada-Ireland Inter-Parliamentary Friendship Group and its counterpart in Dublin, with James Maloney MP continuing his leadership as Chair.

Looking forward, the Embassy is embarking on a long-term ‘Four Valleys Mapping Project’, which aims to map out Irish heritage along the Gatineau, Rideau, Ottawa and St Lawrence valleys. If anyone has any historical or contemporary information they can pass on in that regard, please do not hesitate to get in touch. This is an ambitious project that we are certain will help us forge even deeper people-to-people ties between Ireland and Canada.

CETA Update

As you may be aware, Ireland’s ratification of CETA was challenged in a High Court case brought by Green Party TD Patrick Costello. In September, the High Court delivered its judgment, rejecting the plaintiff’s arguments that ratification of CETA by Ireland would necessitate a referendum as it does not represent an unconstitutional transfer of legislative or judicial power. While separate proceedings have also been taken by Sinn Féin Senator Lynn Boylan, the legal arguments made are very largely the same. However, Senator Lynn Boylan has confirmed that she wishes to proceed with her case notwithstanding the High Court’s rejection of the arguments in Costello, on the basis that her proceedings involve different legal issues that may result in a different outcome.

Brexit Update

On 13 October, the European Commission produced far-reaching proposals based on the concerns of the people of Northern Ireland and addressing the practical, genuine issues that matter most to them. These proposals follow months of careful listening across the political spectrum in Northern Ireland and with the business and citizens most impacted. Where challenges were identified, the EU found creative, credible and durable solutions. The Commission’s package respects the fine balance at the heart of the Protocol: protecting the Good Friday agreement, avoiding a hard border on the island of Ireland while at the same time protecting EU consumers and the integrity of the EU’s single market.

The proposals within the package make it easier for goods and medicines to move between Great Britain and Northern Ireland. The new customs and SPS provisions could reduce SPS checks and controls by about 80%. They will also cut in half the checks, controls and documentation currently needed for goods moving from GB to Northern Ireland. For example, if a truck carries 100 different food products (dairy, meat fish vegetables etc.), it will now only need one certificate to cover the entire load instead of 100. This reduction for groupage loads was a specific ask of traders.

These bespoke solutions make it easier for Northern Irish businesses to move goods into Northern Ireland while at the same time continuing to benefit from all the advantages of full access to the EU single market. The EU is also proposing an unprecedented role for NI political representatives and stakeholders in the Protocol ensuring that the voices of people in NI are heard. These proposals represent a real opportunity for Northern Ireland, especially those in the business community that see the very real opportunities presented by the Protocol.

The ball is now in the UK Government’s court to consider the proposals and to hopefully engage positively and constructively with the European Commission.

Irish Economy

The Irish economy has shown remarkable resilience throughout the Covid-19 pandemic. The economic recovery is gathering momentum as the vaccine programme progresses rapidly, while structural strengths (e.g. business environment, demographics, talent) and capital investment plans have positioned the economy well for future growth.

In GDP terms, Ireland was one of the best performing economies in the world in 2020. A sharp decline in domestic demand and consumption was offset by the resilience of key sectors, including the vital exporting activities of multinational companies.

Companies supported by Enterprise Ireland recorded €25.48bn in exports in 2020, an increase of 0.3% on the previous year, revealing a positive outlook for Irish exporters and an anticipated boost of up to 8% in export sales by the end of 2021, based on economies around the world recovering from Covid-19.

Export sales to North America and the Asia-Pacific region held up well, falling by just 1% in each case, to sales of €4.46bn and €2.14bn, respectively (although exports to Canada grew +1%). While the UK remains Ireland’s largest export market, it contracted by 3.8% in 2020. The UK now accounts for 29% of total exports, down from 40% 10 years ago but still accounting for €7.51bn now versus €5.5bn at that time. The main sectors of growth were construction, up 12% to €2.51bn; consumer retail, up 6.1% to €989m; and fintech, up 2% to €658m. Food grew by 0.6% to €12.17bn in export sales.

In the first half of 2021, Enterprise Ireland saw positive signs of growth:

585 new contract wins, a 14% increase compared to the same period in 2020;

173 new client overseas presences;

A doubling of engagement with companies looking to export into the Eurozone rising from 108 in the first five months of 2020 to 247 for the same period this year;

2,365 virtual meetings between Irish exporters and international buyers.

Enterprise Ireland has also recommenced its programme of in-market trade missions from September to the UK, Eurozone, North America and the Middle East, including a North American Trade Mission (including Toronto and Montreal) by Minister of state for Trade Promotion, Robert Troy T.D., in November.

The IDA meanwhile revealed figures that showed Ireland won 142 FDI investments in H1 2020, up 8% on same period last year and close to pre-pandemic levels. The IDA’s new strategy is well-placed to support continued growth and transformation of FDI in Ireland to 2024.

Employment in multinational companies supported by IDA grew by 3.6% in 2020, and IDA’s mid-year results show a strong flow of FDI into Ireland in first half of 2021, in line with that of 2019.

Finally, it was revealed that Ireland has the joint highest life satisfaction in the EU, and the 2nd highest quality of life in the world according to the UN Human Development Index (HDI). This is supported by Project Ireland 2040, a long-term spatial strategy, which includes major focus on quality of life. Ireland is also developing a Well-being Framework to better monitor and measure quality of life in Ireland as part of the policymaking process.

OECD International Tax Agreement

Earlier this month, the Government approved Ireland joining the international consensus on a suite of far reaching reforms to the global corporate taxation framework arising from the latest round of discussions at the OECD. Ireland’s focus was on securing the necessary changes to provide certainty and stability in the revised framework and to ensure that our strategic interests were protected.

Joining this agreement is a serious and significant decision for the next stage of Ireland’s industrial policy. It is a sensible and pragmatic decision which will provide the conditions to provide long term certainty for business and investors across Ireland.

While this consensus amongst countries at the OECD is an important step towards the implementation of a new international tax framework, and Ireland’s decision will bring renewed momentum to the process, there is much technical work to take place on the new model framework.

Ireland was not in a position to sign up to the interim agreement in July as there were important issues that needed to be resolved, not least in respect to the minimum effective tax rate proposed of ‘at least 15%’ noting the desire of some countries to seek higher rates.

The agreement now provides that the minimum effective rate for those companies in the scope of the agreement will be 15%. Importantly Ireland has secured the removal of ‘at least’ in the OECD text. Importantly also, the agreement will continue to allow our tax system to support innovation and growth including through the use of R&D tax credits.

The agreement will allow for the retention of our statutory 12.5% rate for businesses with annual revenues of less than €750million. This will mean that there will be no increase in the corporate tax rate for one hundred and sixty thousand businesses representing approximately 1.8 million employees.

There will still be a cost to the Exchequer arising from the agreement. While the final cost is very difficult to predict the Department of Finance and the Revenue Commissioners have estimated that it will be up to €2 billion annually. This must also be considered in the context of strong growth in corporation tax receipts over recent years. While this is a significant cost to the Exchequer, staying outside such an international agreement would arguably have had a far higher cost in terms of our international reputation, would have led to business uncertainty, and risk our attractiveness as a prime location for multinational investment.

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