The House resumed from September 25 consideration of the motion that Bill C-24, An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence, be read the second time and referred to a committee, of the amendment and of the amendment to the amendment.
Ms. Catherine Bell (Vancouver Island North, NDP):
Mr. Speaker, I am glad to have this opportunity today to talk about my concerns and the concerns of so many others in my riding that have been expressed to me about how this softwood lumber deal is bad for Canada.
I think everyone wants a softwood lumber deal, but the tariffs and the court challenges that have been plaguing the softwood industry for many years now have had a negative effect on forest dependent communities in my riding and across this country, and they were court challenges that the Canadian industry won over and over again.
The Conservatives campaigned on getting tough with the Americans, on standing up for Canada and Canadian interests, but instead they got tough with Canadian lumber companies. With the signing of this deal, they have negotiated away all of Canada's wins at the NAFTA tribunal and have put workers and communities in jeopardy.
Canadians should be very worried about this deal and what it means, not just for the softwood industry, but for all industry. When the U.S. can take Canada to court and it is proved that Canada is innocent at every level of appeal and tribunal, that Canada does not subsidize the softwood industry, and still the Government of Canada signs off on a deal that gives away the very thing we won, full compensation, the precedent this sets must have implications for every industry in this country that does business south of the border.
How can anyone agree to a precedent such as this? It sells out our ability and our credibility in the international courts, not to mention world public opinion.
This deal leaves more than $1 billion on the table. That is a lot of money. That money should be coming back to Canadian softwood lumber companies to invest here in impacted forest communities. Because of the length of time during which the softwood crisis has dragged on and because of inaction by the previous government, forest communities have suffered. There has been a serious under-investment in mills in this country because it is cheaper to send raw logs across the border than to pay the tariffs on processed lumber.
In my riding on Vancouver Island North, where I have heard very little support for this deal, workers, community leaders and small lumber companies are telling me that this deal will spell the end of their existence. Without the prospect of seeing a 100% return of the illegally taken tariffs, no hope of loan guarantees and, if a company does not sign on to this deal, a 19% levy, they are feeling pressure to support this softwood sellout.
The NDP called on the government for loan guarantees for affected companies to get them through the litigation process that they were on the verge of winning. Loan guarantees would have allowed cash-strapped companies to continue operating to possibly upgrade their mills instead of downsizing and maybe shutting down, but the government refused to assist those companies. In so doing, it refused to assist the workers and the communities in which they live.
When it becomes cheaper for the industry to export raw logs to the U.S. than to process them into lumber in our small communities, it effectively closes those mills, mills that provided good paying, family supporting jobs in coastal communities. There is nothing in the softwood deal which will ensure that mills will once again flourish, and communities along with them.
Not only are the lumber mills disappearing, but pulp mills are having a hard time getting fibre to make their product. Fibre in the form of wood chips from sawmills used to be plentiful and easily accessible, but with the closure of those mills not any more. Pulp and paper operations have to seek out fibre supplies from outside the province and the country, in fact sometimes buying the very wood chips of logs milled in the U.S. that grew in the same area as the pulp mill. It makes no sense.
The value added sector in this country is quickly disappearing and the government is doing nothing to stop the export of raw logs and processing jobs.
How do I tell those workers and those communities affected by this deal that it is in their best interest when we all know it is not?
The fact that over a billion dollars is not coming back to Canada is one thing, but let us take a look at where it is going and what it could be used for. Of the billion dollars Canada's softwood industry workers and communities will never see, $500 million will go to subsidize the U.S. Coalition for Fair Lumber Imports.
Canada is giving away $500 million to the very aggressor of this trade war, which purported unfairly that our industry was subsidized, to use against us in the future. If ever there were a schoolyard bully in this situation, and there seem to be two, the U.S. Coalition for Fair Lumber Imports is one of them.
As for the other $450 million, that is going directly to the George Bush administration to use at its discretion without congress approval or accountability. How can anyone justify it, no matter what it might be used for?
The other bully in this situation is the Conservative government, which is giving away Canadian dollars to the U.S. even though the Canadian softwood lumber industry won every NAFTA dispute and was awarded full compensation. It is like taking lunch money from little kids and giving it to the bullies who beat them up at recess so the bullies can buy bigger sticks to whack them in the future. How can this possibly be good for Canada? How is this fair?
The government may say that it has the support of industry and the provinces, but much of that support was conditional and the provinces were pressured to sign on. We know that less than 95% of the companies signed on by the government's due date. Much of that support was on the condition that the government in fact met its 95% threshold.
That did not stop the government from implementing punitive taxes of 19% on those who refused to sign up, another bullying tactic. It says that if they do not sign up and give 20% of company returns away, the government will take it away when they win 100% at litigation. How is that showing support for industry? That 19% just might be the straw that breaks the camel's back for some in the industry, yet the government will not support them with a process that they have every right to engage in and were about to win.
Then there is the issue of stability and certainty for the softwood lumber industry. The government has said that this deal will give seven to nine years of certainty in the industry, but if we look closely at this deal we see that it can be unilaterally cancelled at any time after just 18 months. Therefore, it does not provide predictability or stability to the softwood lumber industry.
The U.S. can also terminate the agreement immediately if it feels that Canada has not complied with the terms. Given its track record of imposing illegal tariffs in the first place, how can we be sure that the U.S. will not unilaterally decide to end the deal, regardless of a side letter that says it will not casually terminate it? There is no guarantee. Unfortunately, because of the events of the last several years, it will be difficult to trust the U.S. Coalition for Fair Lumber Imports once it has that $500 million of our money.
Supporting Bill C-24 means we would be voting confidence in the government. We are not prepared to do that, since we are not convinced that this deal is the best deal we can get. If the government had let the extraordinary challenge committee review panel do its job, instead of cancelling it, Canada would have won once and for all a 100% return of the illegally taken tariffs and all that money would now be flowing back to Canadian industry, communities and workers, not into the pockets of U.S. lobbyists and George Bush.
By undercutting our legal victories, the government has set a dangerous precedent that Canada will capitulate to American industry despite having a winning case. This precedent is as troubling for the lumber sector as it is for any other industrial sector. This deal is a betrayal of resource communities in British Columbia and across Canada.
In fact, just yesterday the government added to its list of betrayals of resource communities by cutting over $11 million from the pine beetle initiative. Ironically, on the same day, the government produced a press release saying the beetle knows no bounds and is threatening the boreal forest.
Also, $20 million has been cut from the DFO, money that could have been used for enhancement, enforcement and upgrading infrastructure.
The government has also cut money from western diversification, money that has not yet been allocated. The government is calling it unused program funding, but it is hard to allocate funding when everything is frozen.
It is an ongoing list. These betrayals of rural communities are becoming a shameful pattern in this minority Parliament. The sooner it ends, the better off Canada will be.
I have said it before and I will say it again: this is the same bad deal that was introduced months ago. It is the same bad deal that workers refused to support because they know their jobs are at stake. It is the same bad deal that industry refused to support until it was bullied by the government into signing on. It is the same bad deal that the NDP did not support in the beginning and will not support in the end.
It is our job as members of Parliament to defend Canadian interests, to defend Canadian jobs, and to defend Canadian communities, not sell them out.
Mr. John Cannis (Scarborough Centre, Lib.):
Mr. Speaker, I am pleased to participate in this debate for many reasons, aside from the fact that the deal is a bad deal. I will explain why I and the Liberal Party believe it is a bad deal.
There is an historical side to this. I cannot help but open with a comment because of the closing comment that was just made by the member from the NDP saying that it was the only party that stood for this. That is absolute rubbish. That is wrong and unfair, and I will explain why.
I had the honour, if I may say, to chair the subcommittee on international trade, trade disputes and investments for Canada under the Standing Committee on Foreign Affairs and International Development. We put together a report. The most in-depth issue we covered was that of the softwood lumber dispute. We heard witness after witness.
What is odd is that the New Democratic Party is trying to portray to the nation that nobody cared. Mr. Speaker, you know very well that we were close to making this deal work.
I will outline the witnesses who came before the committee. We had people from the Canadian Lumber Trade Alliance, the Free Trade Lumber Council, the Québec Forest Industry Council and the Department of International Trade. We heard from Mr. Grenier as an individual and people from Cassels Brocks & Blackwell as a firm specializing in international trade. We had people from the University of Ottawa. We heard from Mr. Donald McRae, Professor of Business and Trade Law, and from people with the B.C. Lumber Trade Council, Canfor Corporation, West Fraser Timber Co. Ltd., Weyerhaeuser, and the list goes on.
Those individuals, on behalf of their companies, said that they appreciated the support that the then Liberal government was providing but that they needed more financial support to see this through until the end. They knew they were right and that the ruling would be in their favour. In the committee report, which was brushed aside, was the recommendation that the government would provide the needed support that the industry was asking for.
What happened? The NDP forced a premature election and everything went down the drain. That is my comment on the NDP. My colleague from British Columbia knows very well that we worked together.
Why is this deal a bad deal? Recently I just happened to read an article that states:
|| “Non-profit bodies to manage softwood proceeds”, U.S. says.
It goes on to say that over half a billion Canadian dollars will go to various non-profit organizations for housing, et cetera.
I would not mind having that half a billion dollars here in Canada for people who need affordable housing, for seniors or for students to pay for post-secondary education. We do not know where the other half a billion dollars will go.
It says in this article that a couple of weeks ago several Washington trade lawyers told the Toronto Star that they were worried that the nature of the agreement would allow President Bush and his administration to direct the money to districts where republican politicians are in trouble in this fall's election. Where will the other half a billion dollars go? We do not know and that is Canadian money.
We know, through the dispute mechanism, that tariffs were lowered. When people say that this is a good deal and Canadians want it, that is hogwash. Canadians do not want it.
Not only is the government muzzling the industry, but it states here that--and I always tend to put my statements forward not because of what I say but because of what others say in bringing the facts forward--“Ottawa”, meaning the new Conservative government, “plans to tax holdouts”. In other words, if people do not agree with the government, this is what it will do to them. It says:
|| The federal government plans to levy a 19 per cent special tax on lumber companies that withhold their cooperation with the newly signed softwood lumber deal with the United States.
I am dumbfounded. I have never heard of this before. The government is saying that if a company does not agree it will be punished worse than it was being punished by the Americans. That does not make sense.
We are supposedly trying to resolve this issue for which we have been in the right ruling after ruling. This is the importance the Americans put on this issue. We have a picture here. Delegates at the signing of the softwood lumber deal in Ottawa yesterday included the Minister of International Trade and the Minister of Industry. Canada sent two senior ministers. The Americans were kind enough to send their trade representative. What an honour. Why did Canada not send its trade representative? That is the importance the Americans put on this issue.
What is wrong with this deal? The deal sends a wrong signal. It sets a precedent. In putting together the report that I showed the House, we also put a report together on emerging markets. Part of the discussion within that report was how Canada could protect Canadian companies and investors that do business with the international community. We need to ensure that the mechanism is there so that when Canadians go abroad their investments and efforts are protected.
Surely we would think that a nation such as the United States of America living in the 21st century would adhere to rules and regulations. This is all we asked for, nothing more and nothing less.
Some people said that this half a billion dollars would go to support the unfortunate incident of the Katrina disaster. I remember the day, and I know you were there as well, Mr. Speaker, when we went out and in just over an hour and half during the noon hour we raised I believe about $120,000 that would go to the Red Cross relief for the Katrina disaster. Canadians know how to show our brotherly love and our support for our neighbours to the south. In times of need, no matter where it is around the world, we have been there and I am confident we will continue to be there.
Therefore, I do not buy the argument that the Americans fouled up with trailers sitting in parks somewhere in the United States. If that country blundered and wasted over $1.5 billion that it cannot allocate for, that is their problem.
What this softwood lumber deal is saying is that the Americans have stolen $5.4 billion from Canadians. The courts have now ruled in Canada's favour but the Americans will only give Canada $4 billion of that money back. I thought we lived in a civil society that was governed by rules and regulations. I thought the NAFTA deal was there to ensure it was a free, transparent and equal trade process. The deal we have before us, where Canadians in the industry have been muzzled, it is not a free, transparent and equal trade process.
I have another concern about the Minister of International Trade and the Department of International Trade. We know very well that in the last Parliament, when our party put forth a motion to create the Department of International Trade, the Conservatives voted against it. That party did not want a Department of International Trade to exist.
Nevertheless, after the deal was signed with the trade commissioner from the United States, the minister appeared on television with Mr. Newman in a segment called Politics. When Mr. Newman asked the trade minister how this would unravel, he had some very ambiguous responses. He could not really give him an answer. However, of all the answers he could give, and the one that stuck in my mind, was, “How are we in Canada going to get our money back?” He could answer that. He mumbled and jumbled about EDC, about borrowing from here and getting from money there.
On behalf of each and every Canadian, because these are Canadian dollars, I want to ensure, as soon as possible, that the $4 billion cheque is handed over because I am suspicious that money will not be there. The government will borrow through different government organizations, EDC, insurance, et cetera and Canadians will never know if that money was indeed returned. I challenge the new government, as it wishes to be called, to show Canadians that the cheque has arrived in Canada. I am willing to bet a dime for a dollar, and I am not a betting man, that the money will never arrive in Canada.
It is a sad day in terms of our trade partnership with the United States. What members have talked about in the report is the abuse that is to unfold. We get elected to this honourable House because we are supposedly forward looking people. We can be creative. We can bring ideas. We can look to the future. We all bring respective experience, applied in this chamber, so we can fine tune our system and create a better environment for our citizenry. That is why this deal sends the wrong signal for the future. If the government can do that today with the lumber industry, then who says to every Canadian that it will not do it tomorrow and anything else?
One of the members on the committee at that time was quite upset and rebutted in a way that she was, in essence, to some degree criticized. Today we can say that was unfortunate because she was right. All members on the committee said that we had to take a tough position. When our men and women are needed in the theatre in Afghanistan, we say that Canadians can do it. Of course we can do it, and we have showed our toughness there. We will continue to show our toughness. Why can we not show our toughness in this instance? We have a product that is in demand. We managed to invest in our mills and make them modern, effective and efficient and put out a product that is very competitive. Why should we then be paying the price for it? I do not think that is right.
I will review some of the comments in the report. Mr. Potter, who came before the committee, said:
|What we now have is the U.S. administration saying that because you are a privileged NAFTA partner, you will be treated less well than if you were Korea. If you were Korea and did it under their domestic tribunals and won, you'd get your money back. But because you're a privileged NAFTA partner the U.S. is going to keep your money, and not only keep it but give it to your competitors, by the way. That hardly seems very principled
This is not coming from members of Parliament where people could say we are being biased and political and trying to rally the troops. This is from witnesses from the industry. We were simply hearing testimony. Another witness said:
|| If the U.S. parties succeed in obtaining even part of these deposits, the U.S. will have a great incentive to launch new litigation, because even if it loses a case, it will be rewarded twice—once by the investigation itself, which is a costly and time-consuming impediment to Canadian lumber exporters, and then by the illegal distribution of duty deposits, which actually belong to us, the competitors in Canada.
This is testimony. This is quoting the professionals in the industry.
I come from a community in the greater city of Toronto, Scarborough. It does not have a lumber industry, but does it affect me? Yes it does. It affects me in the businesses that run in my community, but it does not affect me as it affects other communities across our country, in British Columbia, Ontario, Quebec and in other provinces.
It affects me as an individual, as a Canadian, and I speak on behalf of my constituents and I believe I speak on behalf of all Canadians. My rights are impeded upon. We have an American partner and we have a deal. The Americans have decided, in the middle of the game, to change the rules to suit them. Yet again they come back and say that they know they are wrong, that all the rulings have been in our favour but that does not matter.
It typifies what has happened in the United States in the last several years. It is either “my way or the highway”. No wonder there seems to be such an anger on the international scene. They go to the United Nations and bring forward a resolution. They force the mechanism to seek compliance and enforcement of a resolution. They are right in doing so, but the question is, what has happened to so many other resolutions in years past on other issues?
There were other resolutions in years past, whether it be on the Cyprus issue, on the Palestinian issue, on so many issues. Why did we not ask for enforcement and compliance on those issues?
The question becomes this. Why are we not asking for enforcement and compliance of the rulings from the trade courts? The courts are there to govern us as a civil society. They are not courts or panels that favour Canadians or favour the Americans. They are independent. They are occupied by professionals who know the industry.
I am not expert on the lumber industry, but I have certainly heard enough testimony from the presentations of so many witnesses to try to understand the industry. One thing I understood over and over again was that we were right. Canadians did not subsidize. Canadians did not cheat. We did not have to cheat. We have a good product, we have a competitive product and we were doing our job as anyone else would.
My concerns are many. First and foremost, it is unfair that this industry has been muzzled. I know we have all followed it closely. We heard reports of backroom get togethers. We heard of muzzling, as I pointed out, and to tax the smaller players in the industry upwards to 19%, which is unheard of. We hear that the money will be spent not here in Canada but in the United States. Maybe the Americans have a problem because they are reaching record deficits and they are scrambling for money. I do not know. Our country over the past 12 to 13 years has put its house in order, has managed to provide surpluses and balanced budgets. Our trade increased, although most recently I was upset because I also heard that our trade surplus was unfortunately dropping. The record deficits in the United States to some degree will affect us as well at some point in time.
Therefore, what is the remedy? In my humble opinion, the remedy was, and should be, that we should have stood firm as a nation, as we have stood firm in many other situations, and said that we were right because the courts ruled in our favour.
The new government came here with a law and order attitude. This is a law and order attitude. It believes in the courts as do I. We all believe in the judiciary. The judiciary and the courts ruled. If the government believes in what it says, it should stand firm with the rulings of the courts and say that it wants all the money back.
My concern is this. I do not believe the Americans will cut a cheque for $4.7-something-billion to Canadians. It will go through different circles. Canadians will lose sight of it eventually. They will not even know what has happened. I heard that on Politics with Mr. Newman. I challenge the minister and ask him to give Canadians a clear accountability of where that money will come from.
Mr. Mike Allen (Tobique—Mactaquac, CPC):
Mr. Speaker, I am proud to rise to speak in support of Bill C-24. I will be splitting my time with the hon. member for Macleod.
My riding has a significant component of forestry operations, actually running along the entire east section of my riding all the way from the Grand Falls area all the way over to almost Boistown in the middle of New Brunswick.
It has to be understood that forestry is an important aspect of the New Brunswick economy as well as my riding of Tobique—Mactaquac. I have some statistics from the New Brunswick Forest Products Association. In New Brunswick, forestry accounts for 23,400 direct and indirect jobs with $1.1 billion in wages and salaries. It is significant that 40 rural communities depend on some aspect of the industry for their existence. In Tobique—Mactaquac communities like Juniper, Plaster Rock, Bristol, Napadogan and Hainesville are all impacted.
When we think of the impact, what do these revenues get us? Forestry revenues cover 200 hospital beds, 20 schools and 400 teachers. That is the kind of thing that forestry contributes to the economy in New Brunswick.
For example, this past Saturday, I was in Plaster Rock for the 100th anniversary of operations of the Fraser Company. At the ceremony a Fraser executive stood to state how appreciative the company was of the government's stance to get this deal done. It wanted the lumber deal to go through and for it to happen now.
Make no mistake about it, the industry in Atlantic Canada wants this deal. It was appreciative of what we have done and felt that this was a chance to pave the way for its next 100 years of operations, the certainty that this deal will give it for the next seven to nine years.
I have heard many statements about winning the next legal challenge, that this would be over, let us wait it out, and see what is going to happen. I can say that the industry people in my riding are under no illusion that this would be over with any next legal challenge. The only certainty that they see with the continued battle in the courts is that more money is going to be spent on lawyers, not on the industry, not the communities and most of all, not on the people in these communities who need the support.
The Atlantic provinces have been fortunate to have the support of the Maritime Lumber Bureau under the leadership of Diana Blenkhorn in this whole escapade over the last 20 years. The bureau has presented a united front for maritime lumber in protecting our industry as a non-subsidized industry. During the past summer, Ms. Blenkhorn provided testimony to the Standing Committee on International Trade where she talked at length about the maritime exemption, how hard the Atlantic provinces have worked for the exemption, the tracking of lumber and the certificate of origin processes. All of those have exempted our Atlantic industry from issues and problems.
At the same committee, the industry critic for the Liberals, and the member Beauséjour, praised the agreement for protecting Atlantic Canada's interests. As an Atlantic Canadian, I am certainly pleased that the agreement protects the rights we have fought hard to ensure are protected.
I am not sure how industry can reconcile the comments made by the hon. member for Beauséjour in July to his lack of commitment to the industry that he demonstrates by opposing this deal and going on at length yesterday in his speech in this place.
I asked a representative from Fraser, why would Atlantic Liberal and NDP MPs not back this deal? I do not understand. In fact, there are reams of paper in letters sent to every Atlantic MP asking us to support this deal, that it is a good deal for Atlantic Canada. They come from all over the riding. They asked us to support this and get behind it. The representative had no idea. He could not understand it, but he did assure me of one thing, that he would hear about it from his industry representatives coming forward.
As my colleague from Cumberland—Colchester—Musquodoboit Valley stated in the debate yesterday, the industry in Atlantic Canada has worked hard to gain efficiencies in its operations. The industry has striven to identify value added opportunities and the kinds of value and investment it needs to do that. People in the industry have worked hard to keep our rural communities alive. They want resolution. They want the certainty that this deal provides. They want to move forward. They have gotten their exemption.
I point to a relatively small sawmill in the Hainesville area of my riding. The owner wants to explore new business opportunities. He knows that in this down market he needs to be able to do things and create value added opportunities. An accelerated rebate is a key for him. Like other mill owners in my riding, he has no false illusions that the next court case or continued legal action will produce the results that he is expecting or will get him his money any faster. That accelerated rebate is a key.
This deal will deliver financial results mere weeks after going into effect. That is what these people are looking for. In fact someone from a sawmill called me yesterday saying, “We are going to need the money. I have deferred my investments. I want to put in a new saw operation. As well, I might be looking at a new pellet mill in my operation”. All these kinds of things are important investments that folks in my riding want to make to create value, not only for their sawn lumber but also for their low grade fibre.
I also want to applaud our Atlantic members who, with the Maritime Lumber Bureau, discovered the need for a minor wording change to ensure that Bill C-24 guarantees the exemption for Atlantic Canada. As my colleague pointed out yesterday, it is an important recognition by the Minister of International Trade to ensure that we say exemption and not zero rated. It may be minor but it is a very important and key thing for Atlantic Canada.
I want to conclude with a few comments and examples of support that I can point to over the last little while. The provincial governments in Atlantic Canada support the agreement. Many questions have been asked in this House over the past couple of days of whether people have checked with their premiers to see if they were taken out behind the woodshed and browbeaten to support this deal. I have not heard an answer to any of those yet.
The industry in Atlantic Canada supports this agreement. How could Atlantic Liberal and NDP MPs vote against it? The Maritime Lumber Bureau is a strong supporter of the agreement. How could Atlantic Liberal and NDP MPs vote against it? The new Liberal premier of New Brunswick is on record as supporting this agreement. How could Atlantic Canadian and New Brunswick MPs vote against this?
In contrast, not so long ago the Liberals were prepared to accept much less of a deal. As the minister has pointed out, he cannot believe how much of a better deal we have. The Conservative government ensured the Atlantic Canada's lumber industry was protected and its exemption maintained. The Liberal trade minister at the time admitted that the Liberals had been ready to trade away Atlantic Canada's interests as a bargaining chip. I guess Liberal MPs have to toe the party line. They do not have to vote for what is good for Atlantic Canada.
This is a good deal for Atlantic Canada. It is a good deal for Canadians. Two governments support it. The Government of Canada supports it. The industry strongly supports it. I urge members of this House to throw the partisanship aside and get behind this deal.
Mr. Ted Menzies (Parliamentary Secretary to the Minister of International Cooperation, CPC):
Mr. Speaker, it is a great pleasure to rise in the House today to talk about Bill C-24, which will implement Canada's obligations under the softwood lumber agreement. I ask all members of the House to recognize and support this bill.
Clearly, this softwood lumber agreement is good for industry, good for lumber communities and good for Canada. The previous member spoke about examples within his riding that speak volumes to how good a deal this is and how it will support local industry. It eliminates punitive U.S. duties. It ends costly litigation which has gone on for far too long.
I have listened to many members in the House during this debate talk about how close we were to an agreement, that with one more judge's ruling we would have it beat. My argument to that is that I have met lawyers whose entire careers have been based on negotiating softwood lumber.
Under this agreement the U.S. will immediately dismiss all trade actions against our companies. It takes our lumber producers out of the courts and puts them back where they belong, in communities across this country, growing their enterprises and contributing to Canada's economy.
It provides stability for an industry hit hard by years of trade action and drawn out litigation. For the next seven to nine years no border measures will be imposed when lumber prices are above $355 per thousand board feet.
When prices drop below this threshold, the agreement gives provinces the flexibility to choose the border measures most beneficial to their economic situation. I should add that all export charge revenues collected by the Government of Canada through these border measures will stay in Canada, in direct contrast to what these lumber companies have been facing up until now.
The agreement returns more than $4.4 billion U.S., a significant infusion of capital for the lumber industry and the workers and communities that rely on it. We have even developed a unique deposits mechanism to ensure that lumber companies receive their money as quickly as possible, within four to eight weeks of filling out and returning the necessary legal and administrative documents after the agreement enters into force.
This is an agreement to be proud of. It is a practical and flexible agreement that ends this long-standing dispute on terms that are highly favourable to Canada. Moreover, it directly responds to the specific issues and concerns raised by industry and the provinces. For instance, it recognizes provincial market based reforms and preserves provincial authority to manage their forest resources as they see fit.
It also excludes from border measures the Atlantic provinces and the territories and 32 companies, including Quebec border mills that were found by the U.S. Department of Commerce not to be subsidized. It ensures that independent lumber remanufacturers do not have to pay an export charge on the value added component of their products. It establishes a process for Canada and the U.S., in consultation with the provinces, to determine the steps regions can take to qualify for exemption from the border measures.
I am pleased to say that the agreement has the support of two national governments and all the key lumber producing provinces, as well as an overwhelming majority of industry players. The next step belongs to parliamentarians.
Bill C-24 will implement Canada's commitments under this agreement. In particular, it provides authority to impose export charges when lumber prices are below $355 per thousand board feet and it gives provinces the flexibility they need to choose the right border option for their economic situation.
The bill also seeks to amend parts of the Export and Import Permits Act to bring into operation the mechanisms we need to meet our commitments under the agreement.
I am happy to be part of a government that has done, in short order, what no other government could: put an end to this dispute and start directing our full attention to building a stronger, more competitive North America. I would ask all members of the House to join me in supporting this bill and putting this dispute behind us.
Mr. Guy André (Berthier—Maskinongé, BQ):
Mr. Speaker, I am pleased to speak today about Bill C-24, Softwood Lumber Products Export Charge Act, 2006.
The purpose of the bill is to give effect to the softwood lumber agreement that the Conservative minority government and the Bush administration reached on July 1. The bill sets terms and conditions for the repayment of countervailing and anti-dumping duties to companies. It also sets terms and conditions for the return to Washington of the billion dollars that Quebec and Canadian companies have to leave on the table.
Lastly, this legislation sets trade barriers that will govern the softwood lumber trade between Canada and the United States, including the export tax and export permits, and authorizes the payment of export tax revenue to the provinces.
As some of my colleagues have already stated, the Bloc Québécois will vote in favour of Bill C-24, but without enthusiasm.
It is important to remember that the industry stated nearly unanimously that this agreement was not satisfactory. However, given the catastrophic situation in which the Quebec and Canadian forestry industry finds itself, the industry concluded that it was better to accept this bad deal than to continue fighting in the courts.
The unreasonable attitude of the Conservative minority government, in its refusal to listen and support the interests of our industry, certainly contributed to weakening the industry and forcing it to accept this agreement.
Unlike the Conservatives, we consulted the industries and the workers in Quebec's forestry sector. We came to the conclusion that we had no choice but to accept this agreement because this industry had its back to the wall and could not keep up the fight. With no support from this government and a number of its businesses in serious financial difficulty, the industry and representatives of the forestry workers reluctantly chose to accept this agreement and thereby recoup some of the countervailing duties and anti-dumping charges it paid to Washington.
Let us not forget that it was our industries' money that was paid out and is being given back. They asked us to support this agreement and we will do so. To do otherwise would have been irresponsible of the Bloc Québécois and disrespectful to our industries' requests.
When we look at how the negotiations have unfolded since it was announced on July 1 that a deal had been reached, we can understand how the Conservative government's attitude toward the forestry industry and workers leaves a bad taste.
On July 1, 2006, when the international trade ministers from Canada and the United States initialled the text of the agreement to indicate that their governments approved it, something absolutely unbelievable happened. The Conservative government had not even consulted the industry before initialling the text of the final agreement. The industry ended up with an agreement signed by a government that had not even checked whether the industry was happy with it.
We quickly noticed, when the Standing Committee on International Trade met this summer, to what extent a number of Quebec's and Canada's forestry industries and unions were unhappy with the softwood lumber agreement reached between the Conservative government and the Bush administration. It is not surprising that several of them considered this agreement incomplete and asked for improvements to it.
Unfortunately, this government did not see the importance of the demands and needs being expressed, and decided not to provide them with help or support.
Instead of giving the industry ultimatums, and stubbornly imposing a botched agreement, the Conservative government should have endorsed the industry's requests for improvement and thrown all its weight into efforts to obtain those improvements.
Instead, this government decided to back the industry into a corner and force it to accept this agreement with the Bush administration, the Conservative Party's new best friend. It is obvious, I think, that the government was much more sensitive to other interests and more anxious to please them than to serve the interests of our industries and workers. Yet the improvements requested by our forest industries and unions were perfectly legitimate and deserved to be considered.
I would like to talk briefly about some of the improvements requested in particular by the Quebec Forest Industry Council. One of the council’s concerns had to do with making the export charges and quotas more flexible, that is to say, Option B. The industry in Quebec was quite rightly concerned that the agreement provided for monthly quotas—one-twelfth of the annual quota. In case of major shipments, the restrictions on exceeding their monthly quotas were so tight that companies might not be able to honour their contract or even reach their full annual quota.
It is important to remember that the construction industry is cyclical and lumber deliveries can easily vary considerably from month to month. Unfortunately, this issue was not resolved and the government has not made any particular commitments. At best, the binational council that is supposed to oversee the agreement will deal with this. The Bloc Québécois hopes that the government will attempt to make the monthly export ceilings more flexible through the binational council.
The Forest Industry Council raised other concerns about the termination clause. The agreement is theoretically for seven years and can be extended for another two years if both countries agree. At least that is what the agreement in principle said. To the surprise of many, however, the final text says that Washington can end the agreement at any time after it has been in effect for 18 months by providing six months' notice, as the hon. member for Shefford pointed out in his last question.
If the agreement is cancelled, the U.S. government cannot institute procedures to impose antidumping and countervailing duties for a period of one year. This means that the industry is assured of only three years of trade peace. We are far from the lasting trade peace claimed by the minority Conservative government. It is easy to see why the industry was so concerned about this provision in view of the fact that it is leaving a billion dollars on the table in order to obtain lasting peace. But the final agreement does not guarantee it.
It is very apparent, therefore, that the concerns raised by the Quebec Forest Industry Council in particular were perfectly legitimate and deserved to be taken seriously by the government.
This morning, the Quebec Forest Industry Council also raised the problem of Asian competition that is going to challenge our softwood lumber industry and hurt our companies.
I have spoken about the fact that the attitude of the Conservative government had left a bitter taste with many people. I listened with interest to the hon. members from the Liberal Party and I must confess that their remarks also left me puzzled. From the start of this dispute in 2002, the Bloc Québécois called for the introduction of a support program that provided loan guarantees to enable companies to avoid bankruptcy. For more than four years, the Liberal government, like the Conservatives now, refused to do so. During the last election campaign however the Conservatives made a promise to issue loan guarantees for companies.
I imagine that the Liberals, now that they are in opposition, have begun to see all the damage they caused because of their lack of political will, while the Conservatives have probably forgotten the promises they made during the election campaign.
For those of us in the Bloc Québécois, only sovereignty will enable us to be masters of our own economy.
In addition, our plan also proposed measures for greater flexibility of employment insurance to facilitate access and extend the benefit period to ensure income for workers affected by this crisis. Our plan offered support for transition programs to encourage new directions in the Quebec forest industry.
Finally, the Bloc Québécois called for Ottawa to assume the legal costs of the companies who were victims of this legal harassment by the United States. Those costs to date have exceeded $350 million. It has never been proven that our softwood lumber was subsidized or that we engaged in dumping.
We are convinced that these measures would have enabled those workers and industries to survive this dispute. If the Bloc Québécois supports the agreement, it is not because we believe it is a good one. It is only because the industry no longer has any choice and has asked us to support this agreement.
The government—as we saw this morning in the media—has a surplus of $13 billion, which will be applied against the debt. Not one cent will be spent to support our industries, either in textiles, furniture or softwood lumber. The government is too far removed from the needs of the people.
Between 2002 and 2005, more than 10,000 Quebec workers were affected, sometimes permanently. Recently, the situation has again deteriorated.
According to data from the Quebec Forest Industry Council, no fewer than 7,000 jobs have been lost in the forestry and furniture industries since April 2005, while another 5,000 jobs continue to be threatened. Business failures have multiplied and those companies that have survived are in serious financial difficulty.
Considering these figures and the attitude of the federal government, we understand why the industry had no other choice and has decided to stop fighting in the courts and to accept this agreement.
Contrary to what the Conservatives say, the Bloc Québécois is convinced that even though the bill must be adopted, the government cannot claim to have solved the problems that the industry is facing.
The industry is having structural problems and the softwood lumber agreement does not solve them. Moreover, the president of the FTQ, Henri Massé, has clearly indicated that, in view of this agreement, the Conservatives now have an obligation to take real action to help the industry get through the major crisis it has been going through for many years.
This is why the Bloc Québécois wants the federal government—this fall—to present a series of measures to help the forest industry, which is facing serious difficulties at the very time it is emerging from a lengthy trade dispute in a weakened state. The measures would also support the furniture industry before it gets caught up in a catastrophe it cannot get out of—like the textile industry.
In particular, these measures include an income support program for older workers. Such a program would be designed for workers aged 55 who are unable to re-enter the work force and were victims of mass layoffs. It will bridge the period between employment insurance and pension for numerous people who have been victims of the softwood lumber crisis.
Also, the measures we are putting forward contain proposals directed towards the communities.
We are proposing an increase in the community economic adjustment initiative for forest-dependent communities. We believe, however, that such funds should be transferred to the Government of Quebec to avoid overlapping and so that the program is better adapted to Quebec’s needs and so that it is, of course, closer to these needs. We have seen how removed Ottawa is from the industries’ needs.
This program should be accompanied by an increase in the funding for Canada's Model Forest Program run by the Canadian Forest Service and special tax status for the 128,000 owners of private woodlots in Quebec.
Finally, we are proposing a series of measures to help businesses. These measures include a special tax treatment for the $4.3 billion in countervailing and anti-dumping duties that will be refunded by the American authorities to take into account the damage suffered by the companies; a program to stimulate innovation within the forest industry and improve its productivity; and policies designed to support diversification of the markets and marketing of wood.
Some of these measures will become pointless if they are not presented this year and if they are not supported by the minority Conservative government and by all representatives in this House.
As everyone knows, this year is a decisive one for the forest industry. Let us hope that this time the government will pay attention and will take advantage of its economic and fiscal update to announce these measures.
Ms. Helena Guergis (Parliamentary Secretary to the Minister of International Trade, CPC):
Mr. Speaker, I appreciate the good work that the member does as we sit together on the international trade committee. I know that he, like our Conservative government, has been very focused on small families, the communities, the industry, and those who have been devastated by this dispute. I do want to thank him for the good work that he does do at committee on behalf of his constituents and on behalf of those in the softwood lumber industry.
The member did pass some comments though, suggesting that perhaps we as a Conservative government did not keep our promise. We did keep our promise. We made a commitment to be there for the softwood lumber industry during the election and that is exactly what we did. We delivered this deal. We delivered the return of $5 billion in Canadian dollars back into the industry. The industry has told the government that it can no longer continue, that it has been devastated by the lack of support from the previous Liberal government over 13 years. Now we see a return of money coming into the industry.
In the past we have also heard this member advocate for loan guarantees. I want to comment on loan guarantees for a moment. We are giving back to the industry its own money. It is by far better than just saying “here is some more debt for the industry. Let us give the softwood industry another loan to keep its head above water”.
I was a small business person and I was raised in a small business family of over 40 years, I can say right now I would rather have my own money back. The industry would rather have its own money back, so it can reinvest and go forward.
Would the hon. member comment and actually see a benefit in returning the industry's own money, rather than continuing to give it further debt?
I would also like to speak a little bit about next steps at committee and next steps for our government. The hon. member has rightfully talked about that we do need to look to the future. Our Minister of International Trade and our Prime Minister have made a commitment to do that.
Within this agreement there is a binational council where there will be representatives from both Canada and the United States who will work together over the next seven to nine years to build and go beyond the next seven to nine years, but to even talk about how we can fine tune the agreement.
I am hoping that at committee we will be able to sit down and work very closely together on how this council will play out and what its role will be. Some of the things that the council's initiatives could include are expanding the market for wood products and the non-residential construction market, developing new methods and markets for the use of wood, and defending wood use in existing residential markets.
The council would talk about where the softwood lumber industry will go into the future jointly, build trust between the two countries, build a strong industry, so that when other countries try to come in and bring in their exports that we are looking out for Canada's industry, as well as the North American industry as a whole. If the hon. would care to comment and perhaps let me know if he is willing to work together at committee to see if we can go forward, I would appreciate that.
Hon. Joe Comuzzi (Thunder Bay—Superior North, Lib.):
Mr. Speaker, I represent a riding that has over 50% of the product of softwood lumber within the confines of my riding. Therefore, I trust I am qualified to make some of the remarks that I am planning to make today.
I have phrased my remarks around what I call a tale of two cities. More precisely, I think this is a story of two small, single industry towns in northern Ontario, Schreiber and Terrace Bay, about 10 miles apart. They are on the Trans-Canada Highway and border the north shore of Lake Superior.
Although I use those two communities as examples, I think that I am also talking about 350 other communities right across this country that are dependent on the forestry industry and are single industry towns. When I talk of Schreiber and Terrace Bay, it is not exclusive.
Both are majestic little communities in a wonderful setting with all of the natural beauty of any community located in this scenic area. Schreiber had its genesis about 100 years ago as a railway town and has serviced the CPR since that time. Even today the CPR passes through Schreiber, but with a greatly reduced labour force. Some years ago, Schreiber relied on several mining companies, which were successful for a short time, but when the mines were depleted they closed and the miners and their families left the community, leaving only one major industry, that being Kimberly-Clark, a producer of kraft paper.
The reason for Terrace Bay's existence was the Kimberly-Clark organization in the United States. Its most famous product, as we well know, is Kleenex. The raw material, known as kraft, was produced in Terrace Bay. Kimberly-Clark decided to build this plant on the north shore of Lake Superior right after the second world war, mainly because there was an abundance of natural resources, with plenty of trees and a lot of water, which were so necessary.
Terrace Bay became the showplace on the north shore, an almost perfect single industry mill town employing almost 1,000 men and women from Schreiber and Terrace Bay. Terrace Bay developed because of this a great school system, a small well-run hospital, beautiful parks, a hockey rink, which we know is so important to every small town, a curling rink and a community hall. It developed a devoted and dedicated town council to run its affairs. There was everything a small community needed. Terrace Bay became home to many families. After working there throughout their careers, as in Schreiber, the people decided to retire there to stay in Terrace Bay and they left their assets within the community.
Kimberly-Clark, over the 50 years it operated, was an enlightened and empathetic employer and kept investing in the progress of the mill over those 50 years. As it is in all businesses, the forestry industry was going through some change. There was a marketing change. Costs were increasing. There was an ownership change. There was more offshore competition. About five years ago, Kimberly-Clark decided to sell its Terrace Bay operation to Neenah Paper. Neenah Paper was a company with its head office in Atlanta, Georgia.
Neenah ran the Kimberly-Clark operation for about five years. Then its board of directors decided to sell the Terrace Bay operation. It was not a good time to sell the forestry business. Markets were being devastated with high costs, offshore competition, the high cost of fibre and the high cost of energy. The value of the Canadian dollar was going up, making our product less competitive.
Although there was interest shown by the softwood producers, they were having their own problems of liquidity and were fighting for survival because of the ongoing softwood lumber dispute with the United States. Most of the softwood industry in Canada was simply out of money and had exhausted all lines of credit with the banks.
About a year ago, Neenah Paper announced, because it could not find a buyer, that it would permanently close the Kimberly-Clark paper mill in Terrace Bay and issued layoff notices to its employees in both Terrace Bay and Schreiber.
Devastation and despair settled into those communities. Men and women who had worked for years were out of a job. They had absolutely no prospects of any future jobs in those particular areas. Some left the communities for prosperity in Alberta and some returned.
The town councils, led by able, competent mayors, Mike King in Terrace Bay and Donald McArthur in Schreiber, did everything within their power to keep these communities together. We owe both mayors a tremendous vote of appreciation and gratitude. Can anyone imagine trying to run a small community where the largest property owners are vacating? How do they continue to provide the services, education, health care, policing, maintenance and public utilities without a proper tax base?
The residents of those communities, from firsthand knowledge, were devastated. Their life savings, mostly in the homes they had bought over the years, were now worth a small fraction of their original cost. Unfortunately, even if they wanted to sell their homes, there were no buyers within these communities. Everything they had worked for all their lives was lost. It was a disaster.
About six months ago there was a glimmer of hope. The government announced a break in the longstanding softwood lumber dispute with the United States and began negotiating a settlement with our friends in the United States. It stopped the lengthy, expensive litigation process and decided to negotiate a deal, a return to the softwood lumber producers in Canada of almost 80% of the $5.2 billion paid by the Canadian producers to the Americans.
On the announcement of that, private negotiations were resumed between Neenah Paper and a company called Buchanan Forest Products, which owns several mills, the largest softwood producer in Ontario as a matter of fact and the largest private employer of men and women in northern Ontario. The rest is history.
Last Thursday the Buchanan group of companies officially took ownership of Neenah Paper in Terrace Bay. Last Saturday, for the first time in six months, the first shipment of Kraft left Terrace Bay and was shipped to the United States. Orders are starting to come in on a daily basis.
The first shipment left after six months. It was a sight to behold, with the Ontario minister of natural resources present, the family owners, Kenny and Ken Buchanan, and their board of directors, made up of local people with a local interest, Russell York , Yves Fricot, Wolf Garrick and Hartley Multimacki all on board. All the inside workers at this mill were present at the opening of this mill.
There were tears of joy. I have never seen this in my life. There were tears of joy at the opening of the new mill in this single industry town. This would not have happened without the agreement with the United States on softwood lumber. That is why, along with some other reasons, I supported, voted for, still approve of and will continue to vote in favour of the softwood lumber agreement with the United States.
I am very proud to have represented the overwhelming desire of the constituents I represent in Schreiber, Terrace Bay and, indeed, throughout northern Ontario.
My only hope is that some of that same good fortune that we have experienced in Schreiber and Terrace Bay, because of the industriousness of these folks and the willingness to negotiate, will happen in the other 350 communities across the country that depend on the forestry industry for support and for existence.
That is the end of my story on the Tale of Two Cities.
Mr. Leon Benoit (Vegreville—Wainwright, CPC):
Mr. Speaker, it is a great pleasure for me to rise in the House today to speak to Bill C-24 which will implement Canada's obligations under the recently signed softwood lumber agreement.
Two weeks ago, the hon. Minister of International Trade joined with his American counterpart to sign the softwood lumber agreement. I have been in the House for almost 13 years and for all the time I have been here this softwood lumber issue has been a real serious bone of contention between the United States and Canada. It has been a serious irritant between our two countries and it has affected not only the lumber industry but trade generally in a very negative fashion between our two countries.
I am delighted to see this agreement finally reached. For those who have been following this dispute, I am sure many of us really thought it would be something we would never see in our time in politics, certainly in my case, or in our lifetime. There simply had not been any progress made on this issue until the past few months when our trade minister and the Prime Minister, and our Canadian Ambassador to the United States took this issue and paid special attention to it and finally made things happen.
Is everyone in the industry happy with this agreement? Absolutely not. There could never be an agreement quite frankly which would satisfy everyone in the industry, but does the industry recognize that this deal is a good deal? Yes, it does. It realizes that it is simply better than anything that has been talked about in the past seriously and certainly anything that has been agreed to in the past.
This agreement has left Canada's lumber industry, which has been in an extremely unstable position for a long time, finally with an agreement that it can count on for the next several years. I am delighted to be here speaking to the implementation of the bill which would actually implement this agreement.
Working with our American counterparts, Canada's new government was able to accomplish something that governments have not been able to accomplish in the past and this agreement is one which is highly favourable to Canada and to Canadian industry. Some others in the House have talked about the specifics of that. Some others have certainly talked about the importance of the money which will flow to the industry at a time when the industry is having serious problems. Lumber prices have dropped quite dramatically and the industry is in trouble. We recognize this. A lot of jobs depend on this industry.
This is an issue which is not just talking about the financial situation or finances, it is talking about jobs in the softwood lumber industry. There are tens of thousands of jobs in this industry and this agreement will allow most of those jobs to be kept where otherwise they would not, they would be lost. This is an agreement which is clearly good for the softwood lumber industry. It is good for the lumber communities, for workers in those communities, and it is good for our country. The softwood lumber industry is a huge industry in this country. The importance of this industry is not to be understated.
This agreement ends costly litigation which has been going on for the 13 years I have been in the House. It ends that costly litigation. It takes our lumber producers out of the courts and provides stability for the industry and it returns $4.4 billion roughly to Canadian businesses, to companies involved in the softwood lumber industry.
As I said, it is such a vital time for the industry, a time when the industry is in a serious state of decline with prices declining, many companies on the brink. I would suggest that this money will keep many of those companies from going out of business and those jobs being lost.
Clearly, this is a good agreement for Canada. Bill C-24 will allow Canada to fully implement its commitments under the softwood lumber agreement. That is what Bill C-24 is all about. As anyone watching would know, it is not about rewriting a deal. That is not on the table. The deal has been signed. The deal has been finalized. This is simply about implementation. Both governments have agreed to this deal. It is an agreement between Canada and the United States. This is about the implementation of the deal.
Bill C-24 will permit the government to impose a charge on the export of certain softwood lumber products to the United States and on refunds of duty deposits paid to the United States, to authorize payments to amend the Export and Import Permits Act and to amend other acts as a consequence of this deal. That is what this agreement is all about, to make it clear.
When listening to some others in the House and their presentations, we would never know that. Members would think that this bill was somehow about the agreement itself, about renegotiating the deal. Of course, that is not at all what it is about. That is not on the table. That is not going to happen. It is a good deal. I think we should be delighted that that is not going to happen.
As parliamentarians consider the merits of this bill, I would ask that they also consider the alternative to this agreement. This is something that I think is worth every one of us considering. The fact is we do not have to look too far into the past to see what life would be like without this agreement.
Our lumber producers have spent the better part of the last two decades engaged in a number of drawn out legal battles with the United States. We have had some that have said that we are going to win these and we should go ahead. I will talk a little bit about that in just a minute.
These members have missed firsthand the deep influence of the protectionist voices in the United States. They know the toll, both human and financial, that this dispute has taken. These long drawn out battles have had an extremely negative impact on the industry. Despite the clear cost of letting this agreement slide, some will continue to say that Canada was on the verge of a complete legal victory and should continue down the path of litigation.
Let me be clear on this point, even if, and it is a big if, even if Canada were to be ultimately successful when it comes to litigation, the United States industry could file a petition and request the imposition of new duty orders immediately thereafter. If we were successful in this round, the Americans would refile and would continue with the litigation.
I might add that this possibility was raised by the U.S. trade representative Susan Schwab herself when she was in Ottawa to sign this agreement. It has been raised by many others in the past. We have seen from the history of what has happened over the past two decades that the Americans would do that. That is exactly what could happen.
Any members of the House who are suggesting that we should just carry it through and finish with this agreement, and we will win and we will get all the money back, the $4.4 billion plus almost another billion dollars, they are not being realistic. I would ask parliamentarians to consider those people working in lumber communities right across this country, to consider what taking this risk and what taking this course of action would do to them, and what they would prefer, a continuation of this dispute, all the time, effort and money that this path requires, or the practical and immediate solution offered by this hard won agreement.
I would ask the members of this House to carefully consider these two alternatives. Those are the only alternatives. They are the only real alternatives that are before this House, to either take this deal, which is a deal many in the industry have said is not exactly what we want. It is not a perfect deal and we know that, but it is a good deal. It is good for the industry, good for companies involved, good for workers and good for the country. So do we take that deal, or do we take our chances on litigation? I would suggest that continuing litigation is really good for lawyers, but it is good for no one else.
I would say that the odds are extremely high that the litigation would continue for some time down the road, new challenges would be brought forth, and in the end we would have an industry in turmoil. I would suggest that a lot of companies would go out of business over the next year or two under that scenario, and this agreement will prevent that for many of them. Because of that, this deal will save a lot of jobs for people in the softwood lumber industry.
After careful consideration of the facts, I am confident that parliamentarians will come to the same conclusion that the provinces and the industry have come to, and that certainly I and members of my party have come to, that this agreement is in fact the best option for our country.
Today I ask all members of the House to support Bill C-24. This bill will help us to write the final chapter in this dispute. It will put it behind us and get us back to the business of making a more competitive North America and a more competitive and prosperous Canada for generations to come. That is what this deal will do.
For members who are talking like they will not be supporting the deal, I am confident that after they have talked to people in the industry in their areas and considered the consequences of this not going through, we will get enough support in the House. I am confident that this implementation legislation will pass and we will move on to some other critical issues facing our country right now, issues that we should be dealing with on an urgent basis.
I am looking forward to any questions that members opposite may have.
Hon. Raymond Chan (Richmond, Lib.):
Mr. Speaker, the Conservative government is set to ratify a softwood lumber agreement that is simply bad for Canada.
After removing all the support from the lumber industry by eliminating the loan guarantee, the Conservative government is trying to force companies to accept this flawed deal.
I cannot in good conscience support a deal that relinquishes $1 billion to the American government and the American lumber industry, one that gives Canada's lumber companies an ultimatum to comply or be heavily taxed, one that sets a dangerous precedent that seriously undermines our rules based trading relationship with the United States. This agreement is simply not good enough for the Canadian lumber industry or Canadians.
The softwood lumber agreement is a prime example of the government's willingness to accept mediocre deals from the U.S. rather than stand up for Canadians. Since when did giving up $1 billion to the United States equate to a good deal for Canada? Since when did bullying Canadian companies to take this deal or face a 19% penalty tax equate to standing up for Canadians?
The fact is this deal leaves $500 million in the hands of the American lumber industry which it can use to attack the Canadian industry by undercutting our prices or by launching future lawsuits. This deal gives the American government roughly $450 million of the illegally imposed duties. This deal creates an export tax that is actually higher than the current U.S. duty. This deal has anti-surge provisions which will deprive the Canadian industry of the flexibility to deal with unexpected situations like the pine beetle infestations. This deal abandons each of our legal victories under the rules of international trade in exchange for only 24 months of peace.
The fact is this deal is a bad deal for the Canadian lumber industry as it sells out Canadian interests for political expediency and the Conservative election checklist.
I want the House, the lumber industry and all other industries in Canada to take a look at the larger picture that is at stake here. This Conservative softwood lumber agreement sets a dangerous legal precedent.
By ratifying this agreement the Conservative government sacrifices Canada's credibility and the credibility of the dispute resolution provisions of NAFTA.
By ratifying this agreement the Conservative government is encouraging other U.S. sectors to ignore trade rules and instead seek political decisions that will act in their favour.
By ratifying this agreement the Conservative government will create more trade uncertainty which seriously undermines Canada's international position in the export market and inhibits investment in our forestry sector.
By ratifying this agreement the Conservative government is saying that it is okay to force a 19% penalty tax on companies that are unwilling to sign on to this agreement.
By ratifying this agreement the Conservative government is saying to Canadian industries that they must accept this deal or the government will abandon them.
This deal carries with it the potential to establish Canada's long term trading relationship with the United States. Do we want that relationship to be based on selling out Canadian companies and accepting less than 100% refunds or should the Canadian government establish a relationship that sends out a clear message, a message that says the Canadian government will fight for the rights of our companies.
Sadly this deal says to Canadians that losing $1 billion to the American government and the lumber industry is okay. That is not good enough for me. I stand here to fight for a better deal for Canada's lumber industry, a deal that does not bully companies into a flawed agreement.
Canadian companies have the legal right to the full repayment of the illegally imposed import duties and the right to opt out of the Conservative softwood lumber agreement.
Forestry companies should be able to pursue their legal rights, both under NAFTA and in our domestic courts. The government should be there to support these companies, not dictate to them.
The government should immediately make loan guarantees available to these companies so as to provide them with the credit worthiness that they will need to enable them to reclaim the money owed to them. From the onset, Conservative the softwood lumber agreement has been more about politics than what is best for Canada and our producers.
The government owes it to Canadians to achieve nothing less than what it promised: free trade and 100% refund. The Liberal Party has long been a staunch supporter of the lumber industry. We are steadfast in our commitment to a resolution of the softwood dispute that is based on the rule of law in international trade and one that seeks full compensation of the $5 billion in illegal lumber duties.
We call for the American government to fulfill its NAFTA commitments so as to lawfully resolve this dispute and set a clear precedent that Canada stands behind our industries.
The Liberal Party believes in a long term solution to the softwood lumber dispute. This is why we have developed and proposed a supplementary aid package that better meets the needs of the industry. This package is modelled on the very same package that was introduced by the former Liberal industry minister, David Emerson. This industry--
Mrs. Betty Hinton (Parliamentary Secretary to the Minister of Veterans Affairs, CPC):
Mr. Speaker, it is a pleasure to rise in the House today to talk about the softwood lumber agreement and add my support to Bill C-24, which will bring it to life. I ask all members of the House to join me in supporting it.
As the Minister of International Trade indicated in his speech yesterday, the softwood agreement is good for industry, good for lumber communities and good for Canada. This is particularly true in my riding of Kamloops—Thompson—Cariboo, which relies heavily on the softwood lumber industry.
This agreement eliminates U.S. duties, ends costly litigation, takes our lumber producers out of the courts, provides stability for industry and returns more than $5 billion. It is a practical and flexible agreement that ends the dispute on terms that are highly favourable to Canada and will put Canada and the U.S. back on track for making North America more competitive for the future.
I am pleased to note that the agreement has won a wide base of support from both industry and the provinces. There are a number of good reasons for this support, but perhaps one of the more significant reasons is that this agreement respects the diversity of Canada's lumber industry.
As the House knows, the lumber industry across the country is varied and different regions have unique challenges and opportunities. Today I would like to highlight some of the regional benefits of the agreement and explain how it responds to a wide variety of needs across the country.
First, the agreement gives provinces flexibility in choosing the border measure that best suits their particular economic needs. Exporters will pay an import charge when lumber prices are at or below U.S. $355 per thousand board feet. When prices reach this threshold, Canadian regions, as defined in the agreement, the B.C. coast, the B.C. interior, Alberta, Saskatchewan, Manitoba, Ontario and Quebec, can select one of the following two export charge regimes: option A, an export charge with the charge varying with price; or option B, an export charge plus volume restraint, where both the rate and volume restraint vary with the price.
This innovative mechanism will allow provinces to choose the export charge that is right for their individual economic and commercial situation. I should point out that funds collected under either option will stay in Canada.
Provinces and industry also asked for flexibility in export quota rules to be able to meet their U.S. customers' requirements. In response, the government negotiated provisions allowing companies to carry forward or carry back up to 12% of their monthly export quota volume from the previous or next month. This is a significant improvement over the current environment.
Under the current system, the duties imposed by the U.S. are reassessed annually. The industry never knows from year to year what duty rate will apply. Under the agreement, they will know and can take full advantage of a stable, predictable business environment.
The agreement also contains a provision allowing provinces to seek an exit from the border measures based on a process to be developed by Canada and the U.S. in full consultation with provinces within 18 months of the agreement entering into force.
It provides for reduced export charges when other lumber producing countries significantly increase their exports to the U.S. at Canada's expense.
It protects provincial jurisdiction in undertaking forest management policy reforms, including updates and modifications to their systems, actions or programs for environmental protection, and providing compensation to first nations to address claims.
It includes an innovative mechanism to ensure that the $4.4 billion U.S. in returned duties will be back in the hands of our exporters within weeks of the agreement's entry into force. It also ensures that independent lumber remanufacturers, which do not hold tenure and are independent from tenure holders, do not have to pay an export charge on the value-added component of their products. This represents a significant improvement in treatment compared to previous agreements.
In addition to these benefits and the flexibility built in for provinces, the agreement also addresses region specific concerns that were raised by different provinces and stakeholders throughout the negotiation process.
For example, the agreement provides a limit on the export charge imposed on high value lumber products such as western red cedar lumber, which is primarily produced on the B.C. coast.
Through the agreement's anti-circumvention provisions, it also recognizes the importance of B.C.'s forest policy. B.C.'s market pricing system and any updates or modifications to the system have been given a full exemption under this agreement.
In response to Canadian industry concerns regarding the exemption of coastal logs and lumber and running rules that govern the administration of export measures, the U.S. has also confirmed that it is prepared to engage in early discussions to ensure the agreement operates in a commercially viable manner.
The agreement also directly responds to concerns expressed by Quebec, Atlantic Canada and the territories.
For instance, the border measures will not apply to the export of lumber products manufactured at Quebec border mills, a key position supported by the government of Quebec and its industry. In fact, the government achieved exclusions from border measures for a total of 32 companies in Quebec and Ontario, including the Quebec border mills.
The agreement ensures that lumber produced from logs harvested in the Atlantic provinces which are certified by the Maritime Lumber Bureau will not be subject to border measures. It ensures that lumber produced in the Atlantic provinces from logs harvested in the state of Maine is exempt from the border measures, a key component of bilateral trade in that region.
Also, it exempts from border measures lumber produced in the territories.
These elements of the agreement respond directly to the concerns raised by the provinces and industry throughout the negotiation period. They have helped garner a broad, substantial base of approval for this agreement in regions across Canada.
I am proud to lend my support to this hard-won agreement and to Bill C-24, which will bring it into force. Today I ask my fellow parliamentarians to do the same.
In conclusion, let me echo the words of Premier Gordon Campbell from my home province of British Columbia:
|| It's time for the costly litigation and instability experienced over the last decade to end and for a new chapter in British Columbia's ongoing forestry revitalization to begin.
I could not agree more.
Mr. Paul Crête (Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, BQ):
Mr. Speaker, it is with considerable frustration that I join this debate concerning the bill on the softwood lumber agreement with the Americans.
Let us recall the free trade crusade initiated by the former Liberal government. It said: “We are going to win the legal battle and in the end we are going to impose free trade for softwood lumber”.
However, the Liberal government and the Conservatives, who later took their place, forgot one important thing, namely helping and supporting the forest industry and the forest sector workers, for example, with guaranteed loan programs, which we asked for for nearly 36 months before the agreement.
We listened to the entire softwood lumber industry, which told us that this sort of assistance was what was required for us to come out winners in the end and have free trade, because we were going to win the legal battle.
The governments stubbornly did not grant this assistance and today we have before us an agreement with the Americans that is very frustrating. The outcome is nothing to celebrate. There is no glory to be had from it.
Obviously the Americans won with their strategy designed to drag out the dispute as long as possible. Today we are faced with an agreement that the Quebec's industry and unions are asking us to support, because they lack the financial resources to weather the crisis, because the federal government did not do its work when it was time.
Now the agreement is before us. It will not settle the crisis once and for all, but it makes it possible to recover a significant share of the amounts paid by the Canadians to the Americans. In this regard, the Bloc Québécois has a very responsible attitude. We must not forget that, without its support for the agreement, we would be looking at an election right now. There would not be an agreement and the entire forest industry would be left to its own devices, as would the workers.
God knows we need security in this sector nowadays. We saw it again yesterday in the news on Radio-Canada: the forest industry is in a crisis throughout Canada.
The softwood lumber agreement with the Americans is only a small part of the solution to this issue. It buys us some time for a while, but other forms of action are also required.
The Bloc Québécois decided, as a responsible party, to support the agreement because we absolutely have to have some help so that our companies can keep their heads above water, continue to operate and keep job losses to a minimum. At the same time, though, an assistance plan is needed to help the industry. In this regard, the Conservative government has proved itself so far to be flagrantly irresponsible. They went to negotiate with the Americans and came back with an agreement that is not very good but which we have no other choice than to accept. On the other hand, though, they close their ears and turn a blind eye to the problems of the forest industry, which has appealed repeatedly to the governments in both Quebec City and Ottawa to do something and hopefully institute an action plan that could help it.
In my riding, whether in Saint-Pamphile or Saint-Just-de-Bretenières, we cut American wood. This agreement will ensure that these people are not affected by the imposition of duties. From their perspective, therefore, there is a significant gain. It is the same in L'Isle-Verte. Les Produits Forestiers Dubé cuts wood in a private forest and will be exempted from duties. So there is a benefit here too.
More broadly in my region, a company like Groupe G.D.S., which is a solid firm that been around for a number of years, unfortunately has severe financial problems, largely because the softwood lumber crisis was allowed to drag on for too long and there was no well structured assistance plan to help the industry.
I remember four years ago when the debate was at its height. We received requests for loan guarantees from executives at G.D.S. But the government never provided them. The result is that the company is now under the protection of the Bankruptcy Act because of this situation.
So we have to sign this agreement, and I challenge NDP and Liberal candidates everywhere in Quebec to go around the forest towns during the next election campaign claiming that we should not have signed the agreement. Actually, I would tell these candidates not to go to these towns because they may have a problem getting out in one piece.
These parties have acted irresponsibly, as has the Conservative Party if there is no assistance plan. If they confine themselves just to signing the agreement, we will not have what we need and the companies will close all the same.
The Liberals and the New Democrats will say that the agreement should not have been signed because, ultimately, the result is the same. To remedy the situation, to get back on track, we need an assistance plan, like the plan proposed by the Bloc Québécois. It contains some fifteen proposals. Let us quickly review a few of them. First, it proposes an income support program for older workers employed in the softwood lumber industry, and in all manufacturing industries, as well. In Quebec industry as a whole, people 55, 56 or 57 years old are being laid off today. They have no chance of finding other jobs and we are still waiting for the program that is going to allow them to bridge the gap until they retire.
As members of Parliament, we have pension funds. When we leave our job after a certain number of years, this provides a reasonable way to bridge the gap. We must not imagine that everyone is in that situation. People who have worked in a plant for 25 or 30 or 35 years find themselves, at the end of the line, with a maximum of 45 weeks of employment insurance, and then it is over. And yet those people have paid in for 25 or 30 or 35 years and have never claimed employment insurance benefits. We need an assistance program for older workers.
We are asking for an economic diversification program for forestry-dependent communities. The Minister of the Economic Development Agency of Canada for the Regions of Quebec has just announced an $80 million program. If we dig a bit deeper, we see that there is not one cent of new money in that figure. They have brushed off the suit and turned the jacket inside out, and handed it back to us. There is nothing new, nothing in addition. This is not what we need. We need real action with additional money to allow for economic diversification in our regions.
In this plan, we are also asking for special tax status for the 128,000 owners of private woodlots in Quebec. That is the only way to consolidate our forestry industry. We are also asking for accelerated depreciation on equipment. That is important, because the companies are going to be getting $4 billion that the Americans will be giving back to them. They will have to pay their debts and lines of credit with that money, but with the rest they must be able to buy the equipment they need to get back in the race and be able to compete with the Americans. We believe that improving the tax treatment in terms of depreciation is the kind of help they need. I think this is a useful, constructive and dynamic proposal, and the Conservative government should include it in its program.
We are also talking about financial compensation for maintaining the forest access roads. In the United States, forest access roads are maintained by the army on the pretext that this is a matter of security, so that tanks can get through. We could have a plan that would allow us to help our industry get re-established by doing this too.
We are also proposing a program to stimulate innovation and improve productivity in the forestry industry.
This is a set of measures that we need. The softwood lumber agreement signed with the Americans is going to provide for reimbursement of $4 billion. But that will have to be supported by other measures. These measures are not superfluous, they are essential so that the forestry industry can get through the crisis it is currently experiencing.
This is obvious to the people who represent rural ridings. It can be seen in industrial villages today. Yesterday, we saw reports about some villages in Abitibi. The same thing could have happened in my riding. If there is no assistance plan to help these industries get through the current forestry crisis, then in six months or a year or two years we are going to continue seeing villages close down.
I know this is diametrically opposed to the approach of the current Minister of Industry. He believes that only the marketplace counts and that the state should not intervene. The cuts announced yesterday to the Technology Partnerships Canada program bear witness to this. However, I urge all his colleagues to make the minister understand that fundamental ideological principles have no place in this issue. We must find appropriate solutions to the problems that arise. In terms of developing the forestry industry, we expect the federal government to provide an action plan that will enable our communities to rebuild, to make it through the current difficulties and to continue to contribute to the Quebec and Canadian economies as they did in the past.
It is true that the natural resources sector and the forestry sector have been impacted by the new economy and the energy sector. However, we should never forget that this basic resource makes it possible for people to live in these areas and represents the lifeblood of communities. It also provides employment to those who are not necessarily very educated but who are vital to any economy, whether that of Quebec, Canada or North America.
Given the situation, yes, the Bloc Québécois will act responsibly and vote in favour of the agreement. However, it expects the Conservative government to have the same sense of responsibility and to come up with an assistance plan for the forestry industry, a plan necessary for the recovery of the forestry industry.
Mr. Paul Crête:
Mr. Speaker, I want to thank my colleague for his very wise comments.
First the Conservative government needs to acknowledge that this agreement is not perfect and that it has flaws. In my opinion, no Canadian would voluntarily give $1 billion to the Americans, $500 million of which will be allocated to the U.S. softwood lumber industry so that it can compete with us. This is one of the flaws of the agreement. That does not mean it should not be signed. It means there is a major flaw in the agreement.
However, it is in response to these flaws that an assistance plan comes into play. With such flaws, there needs to be compensation that allows our industry to face increased, somewhat undue, competition, which was financed with our very own money.
Our assistance plan suggests offering preferential tax treatment for the $4.3 billion of countervailing duties and anti-dumping charges that will be reimbursed by the U.S. authorities, in order to take into account the loss the companies have suffered.
This money will be refunded to companies early in December and will be considered revenue. It is being repaid at a time when the Canadian dollar is worth 90¢ American, whereas the payment to the Americans was made when the Canadian dollar was worth 65¢ American, which means that the companies are losing out.
Yesterday, we saw that the Conservative government can announce sudden cuts at the same time as it announces last year's $12 billion surplus. When making economic statements, the Conservative government could decide to give our industries a break by allowing them to declare the revenue for the year in which they paid out the amounts to the Americans. These companies must not suffer an additional loss with the repayment in 2006, when they paid these amounts in 2003, 2004 and 2005.
This is the sort of practical measure we would like to see for the industry. For the sake of older workers, we also hope that the Conservative government will realize that the agreement it signed will continue to have a highly detrimental impact on the economy, the forestry industry and the rest of the manufacturing sector.
It would therefore be appropriate to table a plan to help older workers who lose their jobs. Such a plan would cost $75 million annually, but Canada had a $12 billion surplus last year. This is disproportionate when we consider the individuals who are suffering the consequences of the softwood lumber crisis. The worker in St-Pamphile did not cause the crisis, the federal government did, in the way it negotiated with the Americans.
In the end, the government is forcing us to signed a flawed agreement. But plant workers and their families will suffer the consequences of that agreement every day. That is why our repeated calls for an older worker assistance program are appropriate and justified. It is time for the Conservative government to put older workers front and centre in an assistance plan for the entire forestry industry, in order to deal with this crisis.
Mr. Roger Valley (Kenora, Lib.):
Mr. Speaker, thank you for the opportunity to speak on this important issue, the softwood lumber agreement, or should I say disagreement.
I had the opportunity to listen to the Minister of International Trade start off the debate in the House yesterday. I heard, as all Canadians did, how the agreement in his opinion would provide for years of stability and again in his opinion we would have eight or nine years of harmony and stability in our industry. To me that is a joke. I do not know if the minister was guessing, praying or just dreaming.
Thankfully, the next speaker was the member for Beauséjour and he put some facts on the table, facts like how the government left over $1 billion of Canadian companies' money in the hands of those who started and perpetuated the lumber trade dispute. What a sellout. Even worse than a sellout, we have to pay for being right. We are financing the very groups that caused all the problems. What a sad day for Canadian companies to have to pay those groups that do not want free trade in the lumber market.
All Canadian companies wanted was fair and open access to the markets of our largest and closest trading partner, our friends in the United States. To be sold out and then threatened by our own government shows just how desperate the government is to ram through this project.
Before I continue, I would like to make it clear that I believe that industry especially in my riding needs some of this money. There are people in my riding who feel we should take this deal. They are scared for their immediate future in an industry that is evermore precarious.
People in Kenora riding also recognize that this is a bad deal. I am voicing their frustration that the government was unable to deliver a better deal for their families. I am against supporting this deal because I have to stand up for the people who have been forced to take it.
Canada has repeatedly won favourable rulings at WTO and NAFTA. We are members of these international trade tribunals to ensure that trading practices are executed in a fair manner. We have a responsibility to accept the decisions that tribunals make, as does any other member, including the United States. By accepting a deal that is contrary to the rulings that have been made, our credibility and standing will be seriously undermined in any future trade disputes.
The forestry industry is the most important industry for the people of Kenora riding. Our communities are dependent upon these jobs. Just as they are dependent, our communities are devastated when the industry is in decline.
The industry has been faced with many obstacles. Very high energy costs, transportation costs because of the huge distances we have to travel, and the lack of ability to invest in research and development are just some of the examples. With those obstacles came job loss. In December last year the Abitibi mill in Kenora was shut down causing a loss of over 450 jobs. Days later, hundreds of jobs were lost in my home community of Dryden. These are jobs lost in a community where there is only one industry. It is totally devastating to the community.
Our way of life is in jeopardy in northern Ontario. We need the federal government to step up and stand up for us, not sell us out at any cost to get a photo op with the American president.
One of the biggest challenges our industry has faced is the softwood lumber dispute. As I have said before in the House, the forestry industry in my part of the world is an integrated industry. Every type of mill, be it a sawmill, pulp and paper mill, or value added, depends on the others for success. When the sawmill operations were forced to pay the illegal tariff, the financial repercussions rippled throughout the industry and throughout the communities.
We have been negotiating this deal for years. In that time the effects of the tariff have devastated every sector of the industry. The money that the industry receives from this deal will only go so far. The federal government must recognize the industry needs more support, more assistance simply than the money that is being returned to them. Many of our mills have not had equipment upgrades in years and they are unable to look beyond the current markets they access for new ones. They have been financially choked to the point where they are desperate. What does our government offer them? A bad deal, “take it or we will impose a 19% export tax and crush the rest of your company”.
We must look beyond the optics of the negotiation of the deal and look at the industry in its entirety. That is what the former Liberal government did. It recognized the softwood lumber dispute was only part of the problem and it set out an aggressive plan to help the industry overcome some of the other obstacles caused directly and indirectly by the dispute.
We must help the industry enhance its competitiveness. Funding research and development initiatives is key. Considering the growing bioeconomy, this is the opportunity for the Canadian industry to be a world leader with support from its federal government.
We must support companies that are willing to expand their operations. The Kenora Forest Products sawmill for example has been working hard to create more jobs in its plant in order to assist the community impacted by other mill closures. The Prendivilles are community leaders and they want to help Kenora. They are ready to accept this so-called deal because it is this or nothing. What kind of choice is that for a government to force on a hard hit community?
We must also support economic diversification projects for communities with a dependence on this industry considering the tough times they are having. The mayor and city councillors in Kenora along with other stakeholders have worked tirelessly to develop an action plan to help Kenora's economy. The city has enormous potential in other economic endeavours but requires the full support of the federal government to achieve its goals.
The industry is already at a disadvantage and now the government will force the deal on Canadian lumber producers that again will see $500 million left in the hands of the American lumber industry; those very people who lobbied and were successful against ours. That is not to mention that if a company decides not to support this deal, it will in fact face a 19% levy on all refunded duty deposits.
Without the return of 100% of money taken by the American government and the commitment by the Conservative government to assist the entire industry long term, more jobs will be lost. This take it or leave it attitude will hurt confidence in the sector. What other industry in Canada has had to put up with the heavy hand of the government that says it is this way or no way? Whose side is the government on, the Canadian industry or the American lumber lobby?
Northern Ontario is a very beautiful, wild and abundant place. We work hard, we play hard, and we want the best for our families, for our communities and for our country. Give us the support and the tools to build our industries. Give us the confidence that our government will defend our rights to manage our forests for our future, not sell us out to lobby groups funded by our own money.
In northern Ontario we want a softwood lumber agreement that protects us, our future and our forests. In this agreement we have nothing, nothing but more problems in the future, less control of our forests and our industry, and clearly a government that will sell us out.
I cannot support this deal knowing that more jobs will be lost. I cannot support this deal knowing that we are selling out to the American lumber lobby. I cannot support this deal knowing that hundreds of millions of dollars will be left in the United States in the very hands of the people who did this to us. I will not support this deal because I need to stand up for the workers in the communities of Kenora riding.
Mr. Ron Cannan (Kelowna—Lake Country, CPC):
Mr. Speaker, it is an honour and a privilege to rise in the House this afternoon to speak to Bill C-24. I know I only have a short time to address the bill. I want to speak about the myth that the status quo will suffice.
The status quo will not suffice. It is simply not enough that Canada is right. Canada wins the disputes and the tribunals find in our favour again and again. In practical terms, being right is an anti-victory if it does not bring resolution. What good is it if we win the battle but lose the war? Without this agreement we have no resolution.
The opposition is suggesting that the status quo will suffice. The status quo does not suffice for this government. Canada's new government has opted for moving forward. It has opted for an agreement that spells an end to the status quo, an agreement that returns over 80% of losses to be invested back into our industry, instead of the millions more that will leave Canada if the current situation prevails.
I applaud and accolade the Prime Minister, Minister of Industry, and the Minister of International Trade who have worked so hard to develop this agreement. I know the ministers have taken a lot of heat over this. I want to personally thank the minister on behalf of all Canadians. He has shown that his diligence, wisdom and expertise has shone brightly for all Canadians. We should all be proud of him.
The government has opted for an agreement and a future that will allow our lumber producers to get on with business free from non-stop litigation, which to many is an American pastime. If anyone has ever studied south of the 49th parallel, they will understand that Americans take their lawyers and litigation very seriously. I think it is just a road to nowhere to continue that path.
Members on the other side called the agreement a sellout. The real sellouts are those who opt to do nothing. The hard fact is that the future of our lumber industry is in trade and the stronger trade agreements we have the more stable our industry will be.
Business cannot survive on a diet of hope. Business relies on stability and certainty. Like it or not, wish for a perfect world, but this agreement will keep industries from shutting down. The agreement keeps people working, puts food on the tables and that is no myth.
As the member of Parliament for Kelowna—Lake Country in beautiful British Columbia, I am acutely aware of the importance of moving forward on softwood lumber. This agreement has been accepted by the province of British Columbia, by the minister of forests, by the lumber producers in my riding and, more importantly, my constituents have overwhelmingly supported this agreement. It is time to move forward. The opposition sits in the House and says it had no choice, that they were abandoned by the government. This is absolutely false.
As a matter of fact, I sat in a meeting this morning with Premier Campbell of British Columbia. I did not get the impression that he would say B.C. was forced to support this agreement nor that he had no choice. Premier Campbell was very happy. He got everything that he was looking for as far as a negotiated settlement. In a perfect world we like a perfect deal, but Premier Campbell being a realist knows this is great for British Columbia and all of Canada.
Premier Campbell worked actively to ensure that this agreement would serve B.C. lumber producers very effectively. I would like to thank Premier Campbell for his efforts as well. The fact is that B.C. is on side. B.C. is interested in strengthening freer trade and our softwood lumber industry. Unlike the opposition, B.C. wants to move forward.
It is time that Liberal and NDP members get behind B.C. Some 57% of Canada's lumber exports to the United States come from British Columbia. It is time these members got behind our communities and the lumber producers that employ them. In my riding alone there are over 1,000 people directly employed by the softwood lumber industry. Kelowna—Lake Country is in the heart of Canada's softwood industry. My riding is situated in southern British Columbia and the producers in my riding typically export between 70% to 80% of the product south of the border.
Kelowna falls under the Okanagan timber supply area which has an AAC or an allowable annual cut of almost 3 million cubic metres. This comprises 6.9% of British Columbia's total AAC.
Tolko Industries, which I would also like to congratulate on celebrating its 50th anniversary this year, produces 144 million board feet annually. Gorman Bros. Lumber, which is across the lake in Westbank, has an annual capacity of 96 million board feet. We also have a mill, Oyama Forest Products, and it has annual estimated capacity of about 4.8 million board feet.
These numbers are from 2001, but they at least demonstrate a capacity of over 249 million board feet being produced locally. When we compare this to the 21.5 billion board feet a year Canada exports to the United States, we find that the Kelowna--Lake Country area produces almost 1% of Canada's total softwood exports. This is to say nothing of the additional Tolko veneer and plywood plant, which has an annual capacity of some 280 million square feet.
Therefore, I can speak confidently about the effects of this agreement on my constituents, and the effects will be positive.
Canada has worked closely with provinces and industry stakeholders throughout the softwood lumber dispute to secure a durable agreement with the United States that promotes a stable bilateral trade agreement in which Canada's softwood lumber exporters and industry can profit and prosper. The agreement has that stability and certainty the industry is looking for. It will see a return of most of their duties collected on softwood lumber. As I said, that will be over 80%.
The agreement maximizes the benefits to the Canadian industry and the workers and communities that depend upon it. That is the bottom line: the people of our ridings across the country. The 308 of us here represent the workers, their families and the industry.
The agreement will be for a term of seven years with an option to renew for two additional years. The legal text specifies those lumber products that will be subject to any export measures.
The agreement includes the full and complete revocation of the U.S. countervailing and anti-dumping duties and the return of over $4 billion in duties collected by the United States since 2002 through a deposits mechanism that will ensure companies receive this money as quickly as possible. Once again, our new government is creating ways of trying to bring that money back into the industry's hands as soon as possible.
The agreement includes the safeguarding of the provinces' ability to manage their forest services and a choice for provinces of the border measure that best addresses their individual economic and commercial situations. The key word there is “choice”. Also included is the establishment of a range of initiatives to enhance binational cooperation and the development of a North American lumber industry.
The softwood lumber agreement is good for Canada and good for the softwood lumber industry. The agreement eliminates U.S. duties, returns more than $4.3 billion to producers, provides stability for industry, and brings an end to this long-running dispute and costly litigation between Canada and the United States. The return of more than $4 billion U.S. marks a significant infusion of capital for the industry and will benefit workers and communities.
Canada and the United States can now turn the page on this dispute and we can direct our full attention to building a stronger, more competitive North America. That is the key. We can move forward now. We can turn the page and continue to move forward rather than hashing out the dithering that went on in regard to this file for the last 13 years and specifically for the last five years.
In closing, I agree with Tolko president and chief executive officer Mr. Al Thorlakson, who said:
|| This Agreement is a long way from perfect, but the realities of the U.S. industry and the U.S. marketplace have to be considered.
Once again, he is a realist. We are living in a real world. We do not have a perfect world and we have to come to a compromise. It reminds me of Preston Manning, who sat in this House for many years, and of his perspective on Canadians and working on and negotiating deals. He once said, “Why did the Canadian cross the road? It was to get to the middle”.
I think this agreement is a great compromise for Canadians and North Americans in general. We can work in harmony together as we move forward.
Canadian companies can compete and outperform American producers. This is because of the quality and abundance of our timber resources as well as the ingenuity, efficiency and dedication of our rank and file workers. Our softwood lumber companies, because of the past five years, have been forced to be leaner and more efficient. With this agreement about to be implemented, I am fully confident in the upcoming prosperity for our forestry sector.
Mr. Lloyd St. Amand (Brant, Lib.):
Mr. Speaker, I am pleased to have an opportunity to speak to Bill C-24, a bill that has been described in various ways and in particular has been described as essentially the best deal under the circumstances.
This was definitely not the best deal under the circumstances for both parties, though it could forcefully and persuasively be suggested that it is truly the best deal in any and all circumstances for the United States. It is not the best deal for our Canadian industry and justifiably and not unfairly can be described as a capitulation on the part of our government to forces within the U.S. industry and within the U.S. government.
What is abundantly clear and beyond dispute is that the United States improperly imposed duties in excess of $5 billion, and the negotiated settlement will return to Canadian producers, whose hands are entirely clean, only 80¢ on every dollar or some $4 billion.
If we were negotiating with an impecunious party, receiving only 80¢ back when fully one dollar is owed may be considered a good deal, arguably the best deal under the circumstances. However, in spite of the fact that President Bush, due to providing tax cuts for the wealthiest and due further to his ill-advised war on Iraq, is running annual deficits of some $500 billion, with the result that the U.S. debt is in the trillions of dollars, to the best of my knowledge the fact remains that the United States is not an impoverished or impecunious party. Simply put, it has the means to pay back every dollar which is owed by it and this deal allows it to wiggle out of its obligations and, again, to repay only $4 billion of the more than $5.2 billion owed.
How that partial repayment to Canadians can be described as “the best deal in the circumstances” makes no logical sense. Of the $1.2 billion that will be kept--kept in my view improperly--by the Americans, fully $500 million will remain in the hands of the U.S. lumber industry and a further $500 million will remain in the hands of the U.S. government.
Our government, unhappily, has seen fit to abandon or to ignore all of the legal victories we have achieved under the rules of international trade. We have essentially given up $1.2 billion to the United States in exchange for, at best, 18 months of relative peace or relative harmony within the industry.
We should certainly be concerned about other industries, manufacturing or otherwise, which will then seek recourse under NAFTA. It is quite likely that other U.S. sectors will seek political alternatives in order to get around the clear rules of free trade. We have been bullied into this settlement by the Americans, and at some point the bully needs to be confronted, to be challenged, or we will be bullied again.
Canada's legal position was very strong. It was supported or confirmed by numerous decisions of international trade law tribunals and domestic courts, both here in Canada and also in the United States. It is most regrettable that the government has bullied Canadian industry with an ultimatum, saying that it must accept this deal, flawed as it is, or the government will abandon it. I am referring, of course, to the fact that loan guarantees, which were put in place before the last election, were taken off the table and the government threatened to abandon the industry if it chose to pursue its legal rights instead of accepting the deal.
The deal is flawed in various respects, including the fact that it directly abandons our long-held position that our softwood industry is not subsidized. The deal further creates an export tax, which is actually higher than U.S. duties. That is, the government intends to impose substantial crippling export duties on softwood, which will add billions to the government's general revenue stream within the next few years but will be punitive indeed for our producers.
The Liberal Party is committed to helping the softwood lumber industry. Our priority is to truly assist the industry on both a long and a short term basis, and not to be bullied by or capitulate to the American government or to the American industry.
We are proposing a supplementary aid package that would result in, first, the provision of $200 million over two years to enhance the forest industries' competitive position, to improve its environmental performance and to take advantage of the growing bioeconomy; second, the provision of $40 million over two years to improve the overall performance of the national forest innovative system; and third, the provision of $100 million over two years to support economic diversification and capacity building in those communities affected by job losses in the forest industry.