moved that Bill , be read the third time and passed.
He said: Mr. Speaker, judging by last night's 12 votes on softwood lumber related matters, all members of this House are starting to suffer a little bit of softwood lumber fatigue. Hopefully, they are beginning to understand the kind of fatigue that the softwood lumber industry is experiencing after the better part of two decades of protectionist attacks and trade disputes dealing with softwood lumber.
It is a great pleasure for me to rise in the House today to begin deliberations on third reading of Bill , an act to implement Canada's commitments under the softwood lumber agreement. Once again, I ask that all members of the House support this bill.
To begin, I would like to thank all members of the House and particularly those members of the House Standing Committee on International Trade for their close study of the bill and their proposed amendments.
Much has happened since this bill was first introduced in the House on September 20. On October 12, the softwood lumber agreement officially came into force. Three weeks after that Export Development Canada commenced refunds of duties to sawmills and producers in many of the more than 300 communities in Canada that are dependent on the forest industry.
This has been a much needed infusion of cash for this sector at a time of very weak lumber markets. Thanks to the accelerated process we developed through Export Development Canada, over 93% of lumber companies participating in the accelerated refund mechanism have now received their refunds.
That is more than $3 billion disbursed ahead of schedule and Export Development Canada will clean up the balance of those refunds in the next few weeks. Considering what this money represents for forestry workers and communities, this is a critical period because this industry is facing some very tough times. Lumber prices are in a cyclical low as a result of weaknesses in the U.S. housing market. Energy costs are up and the exchange rate advantage enjoyed a few years ago has now been erased by the strong Canadian dollar.
Cash provided by the agreement will help lumber producers reinvest in their enterprises, improving efficiency and helping to weather that downturn in lumber prices. What is more important, it will let them do so in a more stable, more predictable trade environment, an environment where the rules are clear and where for the first time in years we are not dragging the dead weight of litigation and the crippling attacks of U.S. protectionists.
We cannot overestimate the importance of a stable environment to our lumber industry and now Canadian companies are investing again. They are buying U.S. companies. They are investing in technology. They are assuming the mantle of global leadership in an industry where Canada has historically been a world leader.
What do I mean by stability and certainty? We are talking about seven to nine years, the life of this agreement, during which Canadian forest policies are going to be protected from further protectionist attacks by U.S. interests. If there is a moratorium on trade actions, it would give our industry a sustained period to begin to rebuild and to plan their future.
We have an agreement which provides mechanisms for improving and strengthening the trade framework. We will be improving it through improved operating rules. There is an opportunity to examine exit ramps for further regions in Canada to come out from under some of the remaining restrictions in the softwood lumber agreement.
We have a provision for an examination of the coastal industry in British Columbia which, as members will know, has been in decline for 10 to 15 years now. We will now work with the province of B.C., with the industry, and with our U.S. counterparts to ensure that the softwood lumber agreement evolves and provincial policy and Canadian policy evolves in such a way as to breathe new life into the coastal industry in British Columbia.
We will have an opportunity through this agreement to look at the value added sector and what we can do to improve conditions for the growth of the value added sector here in Canada.
We have a dispute resolution mechanism which is a non-NAFTA dispute resolution mechanism. It will provide for quick, clear, transparent and fairly immediate resolution of disputes arising from this agreement.
In weak markets, which occur regularly in the lumber business, as anyone familiar with this industry knows, we do have a framework which is flexible. We have opportunities for provinces to choose how they wish to manage and react to markets when prices are below certain threshold levels. We have retention of revenues. When we have an export tax in place, those moneys stay here in Canada and the largest portion will be returned to the provinces from where the tax was collected.
When we think about the agreement and members of the House make a decision on how to vote on the agreement, we should think long and hard about the alternative. Our lumber producers have spent the better part of the last two decades engaged in costly and drawn out legal battles with the United States. They know that winning the battle is not the same as winning the war. Our victories in a number of trade courts, both with the NAFTA and the World Trade Organization, were helpful in setting the stage for a negotiated settlement.
However, litigation was never intended to be an end game. The government has not seen it that way. The last government did not see it that way, and the vast majority in the industry never saw litigation as a route to the final solution in softwood lumber. It was always intended to give Canada a strong basis for negotiations. Taken to the limit, litigation has proven to be a sinkhole into which we can pour hundreds of millions of Canadian dollars. It is a ticket to affluence and opulence for U.S. trade lawyers, but it is not a ticket to full free trade in lumber.
Some have suggested that Canada should have held out for the ultimate win in litigation, which they claimed would come some time in 2007 or beyond. Every member in the House must recognize that legal victory is never certain. On any given case, it is never certain. Every member must recognize that the United States, or its softwood lumber lobby, could simply file a new case the very next day.
There is little to prevent the U.S. from changing its laws to erase the basis for our legal victories. Only an agreement, such as the one we have reached, can prevent new cases and a new dispute from erupting immediately. In weak lumber markets, such as we have now, that is the time when Canada is most vulnerable to the most egregious, painful and destructive attacks by U.S. protectionists.
The NAFTA is a good trade agreement, but it was never devised to avoid trade disputes and trade litigation, whether originating on the U.S. side or the Canadian side. Those who reject a negotiated softwood lumber agreement are basically arguing for a sustained attack on U.S. trade law. That would be a war of attrition and I do not think it would be a war that we could win with the emerging and growing protectionist sentiments in the U.S. It is a war that would be fought on the backs of Canadian companies and Canadian workers. In the end, the legal victories would be empiric victories, the pain would far exceed the gain.
That is why the government took action, and it started right at the top. When our met with President Bush in Cancun earlier this year, they decided that resolving this dispute was fundamental to the Canada-U.S. trade relationship overall.
Together with the active involvement of industry and the provinces, we negotiated an agreement that is good for lumber communities and good for Canada. This agreement eliminates punitive U.S. duties. It ends costly litigation. It takes our lumber producers out of the courts and puts them back where they belong, growing their businesses and contributing to their communities.
For the next seven to nine years no border measures will be imposed when lumber prices are above $355 U.S. for a thousand board feet. When prices drop below this threshold level, the agreement provides provinces with flexibility to choose the border measures most beneficial to their economic situation. All export charge revenues collected by the Government of Canada through these border measures will stay in Canada. The agreement returns more than $5 billion Canadian to the industry. That is a much needed infusion of capital for an industry and the workers who rely on the lumber industry.
Make no mistake about it, if we turn our backs on this negotiated softwood lumber agreement, that some members continue to advocate, that would mean a return to the courts. It would mean greater job losses for the people and communities that depend on softwood lumber.
Ask the major lumber producing provinces that joined the overwhelming majority in industry in supporting this agreement, ask the producing companies, and ask the workers, if they really want to continue with a softwood lumber trade war at a time like this when markets are weak and protectionist pressures are strong and growing in the United States. Ask them if they would like to go back to paying U.S. duties. Ask them if they want to take on new legal attacks, new cases, and new duties, and further fill the pockets and the coffers of U.S. law firms. Ask them if they want to follow the opponents of a negotiated settlement like lemmings off another cliff in an act of collective economic suicide.
Our lumber communities have suffered long enough. They need the stability and the resources that this agreement provides. This agreement is the best way forward for our softwood lumber industry and the over 300,000 Canadians who rely on it. It does not solve every problem, but it does provide the framework for resolving outstanding problems. We will work with provinces, with industry, and with communities to build a great future for a great industry. I ask members to support Bill .
Mr. Speaker, I am pleased to participate in this debate on the softwood lumber products export charge act, 2006.
I appreciate the minister's forthright comments on my earlier questions. I must say that I was a big cheerleader when Canfor launched its chapter 11 claim under NAFTA to say that the assets of Canfor had been wrongly put at risk and jeopardized because of an unfair process in the United States to come up with the lumber tariff. The reality is, in a nutshell, that this is what a chapter 11 filing does. I appreciate the minister's remark that this was to keep pressure on the United States, but nonetheless I believe it is an illusion to think that this agreement is going to find us any sort of peace.
In 1996, for example, there was the softwood lumber III round of negotiations, in which we agreed on managed trade for a five year period. When that ended, the U.S. launched softwood lumber IV. I know the argument is that if we keep litigating they can keep launching a countervailing duty file, but frankly at some point it comes down to being on the right side, and it has been shown that the Canadian softwood lumber industry does not subsidize its softwood lumber.
If we go back to softwood lumber I, the U.S. may have had a case. Our lumber was not priced as well as it could have been in terms of the market, but governments caught on to that and made changes in their stumpage and royalties. We know that today it has nothing to do with subsidies and everything to do with market share. As soon as our market share gets beyond 30%, the U.S. launches another countervailing duty file.
In my judgment, the problem in this case is that while many in the forest industry have said they would rather accept this deal, I think they are doing it under duress because the Conservative government told them that if they did not agree to this deal it was not going to support them any longer. We know that the forest industry in Canada could not possibly continue the countervailing duty process and fight what has been proven time and time again to be a lie, the lie that our softwood lumber in Canada is subsidized.
The industry could not continue this fight without the support of the federal government. That is why our Liberal government had proposed a package to help the industry with bridge financing and a whole range of issues to get over this hurdle and to keep fighting. Why would we cut a deal when we are winning at every stage?
I beg to differ with the minister. This has set a terrible precedent. I do not think it positions us that well with respect to the U.S. market in other areas. If I were in the steel industry or any other industry in the United States, I would tell myself that if Canada had to cut a deal on softwood lumber when it was winning at every conceivable stage and when objective panels comprised of Americans and Canadians were saying that Canadian softwood lumber was not subsidized, then the Americans should have an easy time on other products. I do not think it positions us very well.
I am not suggesting that this is an easy file. This is a very difficult file, but on balance I believe very strongly that the government should not have negotiated a deal. I do not think it is going to work in our interests in the long run.
We even have had confirmed by the minister that the way softwood lumber pricing is going at $300 for 1,000 board feet, the effect today would be that Canadian softwood lumber producers would actually be paying more under this deal, so we are going to be voting on this deal, finally, to say that our industry should actually end up paying more in terms of an export tax than it is paying in U.S. tariffs. While I understand what the minister is saying in that there are other pressures to review the U.S. tariff, et cetera, it is not money in the bank where I come from. That is something that might have happened or could have happened. Right now we know the effect is that our Canadian lumber producers are going to be paying more.
The sliding scale, where the export tax goes up when the pricing comes down, works very advantageously for U.S. softwood lumber producers. When the pricing goes down, they want less competition in the market. I am not sure that helps the Canadian softwood lumber producers. When the pricing is tanked, they do not want to have to pay more in export taxes. They want to increase their market share.
The industry is under duress and needs the support of the federal government. It did that this might be a good deal, but when the alternative was they would not get any support from the federal government, I think they knew it was all over. They had to cave in like the government caved in and support the agreement, although not all companies or all associations in Canada have said that. I believe they see the longer term implications of this deal.
We need to understand that the U.S. lumber producers are essentially saying this. Because they have a different system in the United States where the vast majority of their forest land is privately held, where in Canada it is just the reverse and most of our forest land is owned by the Crown, and because they auction a lot of their timber and we auction only a small percentage, their system is right and our system is wrong. I dispute that. We do have a different system. Our system of pricing timber has evolved over many decades in Canada.
I would like to know this from the minister. What happens if we move to this softwood lumber deal and many of the provinces move more aggressively to auctioning timber and the price becomes lower than the Crown pricing? That is a possibility. I have talked to many companies. I have also seen companies in the Prince George region where they have a mix of private timber and Crown timber. The private timber they get through the small business auctions is priced lower than the stumpage that is charged by the British Columbia government.
Therefore, there is no guarantee whatsoever that if we move to more of an auction based system, the delivered cost of wood will be lower. In fact, the pricing could increase and go the other way.
What will the U.S. lumber producers do then when they find that the delivered wood costs in Canada are declining because of more auctioned timber? Will that be the panacea they look for then?
A study was done a few years ago by an independent consulting group. It came to the conclusion that Canada's forest industry was 40% more productive than the U.S. forest industry. That was on the basis of total factor productivity. Admittedly that cuts across different parts of the forest industry, pulp and paper, lumber, panels, et cetera. In fairness the lumber sector was not quite as productive as the rest, but on average it still did very well. It was more productive than the U.S. sawmilling industry. On a total factor productivity basis, the Canadian forest industry is 40% more productive than the United States. That total factor productivity is a way of looking at how the industry applies labour, technology, person power, et cetera.
All one has to do is go to Prince George, British Columbia and see some of the sawmills there. They are some of the most efficient sawmills in the world. In fact, U.S. sawmill owners and operators come to Canada and they are given tours of these sawmills in the Prince George area. They are some of the best and most productive sawmills in the world. Therefore, it is not surprising that we can sell a lot of softwood lumber into the United States.
We also have a great resource. We have a colder climate that produces a better product. There are more rings. The wood does not warp or wane as much as on some of these southern plantations in the United States. If one goes to the southern United States to a construction site and asks a carpenter or building contractor what he prefers, U.S. southern yellow pine or spruce pine fir from British Columbia, he will say that he prefers the SPF from B.C. because it is a better quality product.
We know we have a comparative advantage in softwood lumber, yet we are caving in and making a deal. We are acknowledging the lie that softwood lumber in Canada is subsidized. That was the term used by the Free Trade Lumber Council, and it is an absolute truth. We have a very productive industry.
If senators or congressmen or congresswomen in Montana, or Washington state, or Oregon state or Wyoming have sawmills in their areas that might go bankrupt, what do they do? They will pull out all the stops. They will not allow the sawmills to go down because the market is being penetrated by Canadian softwood lumber, which is a better quality product and is priced the same because it is a commodity market. If the margins are good in Canada, more lumber will go there. That just makes economic sense.
This is not a matter for the Canadian government or Canadian producers. Something else should be found for those sawmills that are not as competitive as Canada's sawmills. Pittsburgh was converted into a high tech centre because its commodity based steel mills could not compete on the same scale with the Japanese and the Taiwanese. It became a niche player in the steel industry. That may not be possible with the few sawmills scattered around Montana, or Washington state or Oregon.
Why push the problems up to us? Can we not acknowledge that Canada has a comparative advantage in softwood lumber? I am prepared to concede that perhaps the U.S. has a comparative advantage over us in high tech and some other sectors. Can the U.S. not accept the fact that we have a comparative advantage in softwood lumber? The U.S. industry either cannot or will not accept this fact because U.S. senators and congressmen and congresswomen are trying to prop up inefficient mills. They have the power through Congress and through the Senate to start these protectionist movements. We need a better way to resolve disputes.
The minister has had a long history and a distinguished career in the forest products industry. He knows if someone wants to put up a sawmill, or an OSB mill, or an MDF mill, or a plywood plant, or a pulp mill or a newsprint operation in the U.S. south, that the individual will be offered just about everything to make the deal come true. State and local governments will offer sales tax abatements, tax holidays, property tax abatements and deals on energy. The capital costs of putting up a mill in the United States are about 20% less than the cost of putting up a comparable mill in Canada. Why? I have listed some of the incentives or subsidies, but there are others such as tax free bonds, cheap industrial land, cogeneration agreements, et cetera.
These deals are not limited to the forest products sector. The minister would know full well from his days in the industry portfolio that U.S. state and local governments offered somewhere in the range of 40% to 50% in subsidies for the capital costs of starting up or expanding an auto plant.
I am talking now about the hypocrisy of the United States producers and government supporting those producers when it comes to dealing with subsidies. As I said, people can get almost any kind of subsidy they want if they want to put a new mill in the United States, if they wanted to put up an auto plant or expand.
What about agricultural subsidies? My colleagues in rural sectors will know all about that. The Americans are probably one of the champions of agricultural subsidies, maybe a close second to Europe. They even call them subsidies.
The USDA Forest Service auctions off land and forestry resources. In the past some of those sales were done through auction. In some cases companies bid on that timber and years later they were unable to complete the deal because the price of 2x4 lumber had gone down. If they harvested the wood at that price, it would have been a very difficult economic situation for them. I think they have to go the White House to get this rescinded, and it has been done. The U.S. government notes that the price was bid 10 years ago, but since the economics have changed, it lets them off the hook. That is not an auction system when someone is let off the hook.
We know in the United States, particularly the Pacific northwest, that a lot of the pricing is speculative in nature. We read about the issues around the spotted owl. We read about many of the trends that were causing huge amounts of commercial forestry land to be taken out of production, and it may have been for very legitimate reasons. I am not arguing about the spotted owl. Maybe it needs to be protected. Maybe huge swaths of commercial timberland need to be taken out of production to protect it, but we know there is a scarcity.
In other words, the demand for timber in the U.S. Pacific northwest exceeds the supply. Therefore, if companies are in an auction system, they bid the price up because they want to have access to those timber resources in 15 years to feed their sawmills. We have never heard anyone argue that maybe the price of timber is too high in the United States. Maybe it is pricing itself out of the market. Maybe our pricing is the right.
However, the countervailing duty process does not allow us to get into questions like that. We cannot ask why in some cases the USDA Forest Service, which is a public agency, sells the rights to harvest timber at prices that are less than its costs. Under the countervailing duty process, all we can do is defend our system.
We cannot ask the U.S. government about all the subsidies it throws at U.S. producers because quite conveniently the U.S. Senate and the U.S. Congress have defined the countervailing duty process in a different way. They allege that we are subsidizing timber. It is up to us to show that we do not. We cannot tell them that they are subsidizing their softwood lumber and forest products. They do not talk about things like that. The process is quite flawed.
All of that really upsets me, but look at the anti-circumvention clause in the softwood lumber agreement. If the House supports this, then we agree that this clause is just fine. The clause says that if the U.S. feels actions are being taken, actions that might run counter to the agreement, by the Government of Canada, or the provincial or territorial governments, it can say that it is against the agreement and call for action. That could cover the whole range of forest policy initiatives of the federal and provincial and territorial governments. That is a very dangerous precedent.
The producers are being told they have to drop their lawsuits. If they drop them, in two or three years the U.S. producers can say that they do not think the softwood lumber deal works for them and that they want to scrap it. What do the companies that have dropped their lawsuits do then?
I know there is a lot of pressure from local companies in some cases to sign this deal but it is a terrible precedent. It really does not work for Canada and it does not work for our forest industry. I urge members in this House to study this carefully and defeat this bill when it comes forward.
Mr. Speaker, we have reached the last step: we are beginning debate on third reading of the bill.
Today we are discussing Bill regarding the softwood lumber agreement settling the dispute between Canada and the United States. In practice, this bill leads us straight to the agreement between the United States and Canada.
We cannot talk about Bill , particularly at this last stage, without referring to the agreement and the situation that has almost always characterized the softwood lumber sector. The softwood lumber trade with the United States can be traced back 150 years. There have been problems and disputes with the United States for a very long time. We opted for free trade even before that. Free trade would normally have covered all goods and services between the two countries so that they could trade freely with one another. However, once again, the United States complained five years ago. They began legal proceedings and imposed huge tariffs on Canadian and Quebec lumber crossing the border, claiming that it was subsidized and that dumping was occurring. They demanded countervailing and anti-dumping duties.
During that period, $5.4 billion in duties was paid to the United States. Imagine what that money could have done had it been invested in bringing procedures and processes up to date and modernizing equipment. Imagine how innovative a healthy forest industry would have enabled us to be in terms of remanufacturing. We know that Quebeckers and Canadians have great imaginations and can act fast to produce just about the best product at the best possible price for export to the United States. But the United States decided to collect crippling duties from the forest industry: $5.4 billion.
The Bloc Québécois recognized the problem years ago. It even tabled proposals and recommendations for programs in this House and in committee.
It made sense for us to ask the Liberal Party, which was in power at the time, to offer the industry loan guarantees. The United States was siphoning money away from companies, and their litigation did not hold water; it made no sense and was not logical. We knew that we were headed for a court victory. It was only a matter of time.
However, being robbed of $5.4 billion makes time move very slowly. There were tangible losses—job losses almost all over Canada. Some regions and provinces were hit harder than others—even Quebec, in some sectors. The situation demanded the effective application of loan guarantees so that companies could continue to survive in the first place, and maybe even grow despite this setback.
In fact we knew very well that they would win in court and that, one way or another, the United States would have to reimburse Quebeckers and Canadians, and the entire forestry industry.
When they were in power, the Liberals refused to assist the forestry industry and grant loan guarantees. During the election campaign—nearly a year ago, when it was in full flight—the Conservatives promised to help the forestry industry and were prepared to give loan guarantees in the event that they were elected. Some Canadians—a minority overall, if we consider the absolute number of people who voted—decided to place their trust in the Conservatives. They were soon disappointed, given the fact that the Conservatives have not kept their campaign promises, their campaign commitments.
There followed negotiations about which the House was not necessarily informed. The outcome of those negotiations was an agreement that they tried to present to us as the deal of the century, but it was the deal of the century only for one of the two parties, which is going to save a billion dollars. I am under the impression that the ideal outcome of an economic transaction is in fact that both parties be completely satisfied. We have to remember one important factor here. When we are talking about parties, we are talking about people, people who work in the industry. We are talking about the industry itself, companies, company owners, workers, everyone who works in the forestry industry. That is who the party was here in Canada and Quebec.
The same thing was true in the United States, but the people who were representing the entire forestry industry in Canada claimed that this was a huge win. Well the real winner is the United States, which bagged the billion dollars that stayed in the United States. That is big money. That is in fact a sweet deal for them, after illegally collecting $5.4 billion. They come out of it with a billion dollars. Mr. Speaker, if you were 100% in the right and I owed you $5.4 billion, you would not be content with $4.4 billion. You would ask me for all of the money owing.
That is what the forestry industry would have wanted. But given the time that had passed, given that the Conservatives did not want to offer loan guarantees and the Liberals had also not wanted to offer loan guarantees, those people were being strangled in their day-to-day lives, and they were not able to make any progress at all at that point. It was all they could do to keep their operations going, and especially to keep their businesses afloat. That could have meant that thousands, tens of thousands of people could have lived with their families, in their communities, in their regions, and that the economy would have functioned.
We were presented with this agreement, Certainly, to start with, everyone was unanimous in saying that it made no sense at all. What were we going to have to do? We knew very well that the government had the prerogative of signing and implementing the agreement. It did so. And then, we can be sure that discussions took place and a number of companies that were still denouncing that agreement felt obliged to accept it at a certain point.
I know that conditions are not the same in all regions. My colleague from the NDP, who is a member of the Standing Committee on International Trade, has described quite a different situation in the region he represents, British Columbia. Clearly the situation there is in no way similar to the conditions facing the people of Quebec.
I respect him, of course, when he says that the Bloc Québécois is going against nature. The Bloc Québécois feels no great enthusiasm in supporting Bill . Everyone knows that because we have said so. All of my colleagues who have spoken since the start of debate on Bill have said and repeated that they are not eager to support Bill . Indeed, the bill is a carbon copy of an agreement that no one really accepts. We have been forced to accept it.
Consultations and representations took place and Quebeckers, like people in other parts of Canada, recognized that it was necessary to move forward in order to—
Ms. Diane Bourgeois: Save what was left.
Mr. Serge Cardin: As my dear colleague says, clearly, it was necessary to save what was left because there was not necessarily very much left.
For that reason people were obliged to accept the agreement almost by force. Today, for several hours in the Standing Committee on International Trade, we saw my colleague from the NDP arguing like a Liberal in holy water to uphold the interests of his region. During that time the committee was full of controversy. Nevertheless, I obviously respected my colleague’s enthusiasm in wanting to move the matter forward.
The bill in its present form leaves many gaps that will probably cause problems in the implementation of the agreement. Those aspects could have been anticipated and corrected in order to allow the Canadian forest industry to develop adequately, or even better than that, because we have to make up for what has been lost.
Of course, there are still potential irritants in the bill. However, we must accept it because people have told us to do so and are asking us what we are waiting for.
I repeat also, for the benefit of my colleague from the NDP, that we give our support to Bill without enthusiasm and with some reluctance.
The downward negotiations by the minority Conservative government have clearly served to place the forest industry in danger, especially in Quebec. In addition, refunding the illegally collected money, contrary to what the actually seemed to believe at one time, is neither a miraculous injection of cash nor a gift from the government. In fact, the industry’s own money is being returned to the industry, and we must never forget that, because the communities will not forget it.
It is forgivable, I think, to talk politics a little in this House, and in my opinion the Conservative Party will have to answer for this bill, this act and this agreement all across Canada in the next election. And that election is not far off. That is why we must settle this matter. It will always be possible to make improvements later.
As we all know, several committees will have to work on enacting this legislation and promoting the industry. Moreover, the modest sum of $50 million will come out of the $1 billion and be allocated for promotion. That is not much, except that the United States will have the benefit of a larger sum to develop their industry.
Once again, we would have preferred that the softwood lumber industry be part of a real free trade agreement with the United States.
Certain individuals claim that the softwood lumber issue is now settled for the next nine years. Can we really count on any promises made by the Americans? After all, they are the ones who came along and imposed antidumping and countervailing duties on Canada. Can we really hope that when it no longer suits them, they will sit down and negotiate to improve the situation and conditions for both sides? I doubt it. Anytime the Americans change their tune about the softwood lumber file, Canada and Quebec ate the ones that automatically suffer the consequences.
Thus, I do not belive that the softwood lumber sector will be left undisturbed for as long as seven or nine years. I think the next issue will arise much sooner than that. We must therefore negotiate an agreement within NAFTA, calling on the Americans to stop their protectionist activities in whichever areas and industries they like.
Once again, the Bloc Québécois will vote in favour of Bill , in the hope that the forest industry and softwood lumber industry can use the money illegally taken from them and now returned to them to get back on track, become more modern, more competitive and more innovative in secondary and tertiary processing. The resulting value added, the surplus value, must be profitable to those industries once and for all, and must be paid back to the people who worked in the industry and the businesses themselves.
In closing, I hope we can improve the forest industry as quickly as possible for the benefit of the people who have dedicated their efforts, their energy and, in some cases even their lives, to the industry.
Mr. Speaker, I am dismayed to have to stand and speak at third reading of Bill . I am dismayed because here is a case where clearly due diligence and responsibility of parliamentarians was lacking when there is legislation that touches in such a direct way the lives of Canadians across the country from coast to coast. When that due diligence is not paid, we end up with legislation such as we have before the House now at third reading. This is what is so deplorable.
In a moment I will go into the process that led to this illegitimate birth based on a complete and utter deception by the Conservative government. What is astounding, certainly to people in softwood communities across this country, is the role that the Liberals and the Bloc have played in getting this deplorable legislation through now to the point where we are at third reading, despite the fact that we have seen 4,000 direct jobs lost in the softwood industry since this deal was provisionally rammed through based on whether or not Parliament would actually adopt Bill . Of course, if we do not adopt it, then we can actually start to get those jobs back.
These are 4,000 direct jobs and according to the steelworkers we are looking at 10,000 direct and indirect job losses. This is in a matter of only a few weeks.
It is no wonder that the Conservatives are not standing up in the House to defend this badly botched negotiation, this badly botched deal. What will be left for Canadians to consider, if indeed this week the House votes to proceed, is the role that the Liberals have played in actually bringing Bill to the floor of the House of Commons.
Without the support of the Liberal Party we would not be at third reading now. Without the support of the Liberal Party Bill would still be in committee. Members would still be addressing the egregious errors that have been made in drafting this piece of legislation. We would still be hearing what many organizations and representatives from softwood communities asked for. We would still be hearing testimony from these organizations from across the country that wanted to speak to Bill . I will come back to that in a moment.
Basically, we started at the end of April with the framework agreement that was announced in the House. The NDP saw problems with the agreement right away. We raised serious concerns about where the government was going. One of the aspects of the framework agreement in April was the fact that we would suspend litigation.
At that point we were a few softwood board feet short of winning final victory. Canada had only two pieces of the legal process to go through. One was the ECC challenge that would have taken off the tariffs once and for all in August. The second was the Court of International Trade judgment. It is unbelievable that despite efforts by the Conservative government to intervene in court to stop Canada from winning a final victory on softwood lumber, we won on October 13. The American government is already repaying the industry because of the court judgment on October 13.
The first alarm bell at the end of April was that the Conservative government was intervening to stop us from winning those final victories that would establish the fair trade that Canadians were seeking in softwood lumber.
We then came to an agreement that quickly ran off the rails. We have the , the illegitimate member of Parliament for , someone who could not get re-elected in that riding no matter how much he tried. This is his last mandate there after having switched parties.
Ms. Dawn Black: He can't even walk in his riding.
Mr. Peter Julian: He cannot even walk in his riding. He cannot even appear publicly in his riding as the member for reminds me and she is absolutely right.
We have someone with no political legitimacy whatsoever, who could not run in his riding if he tried even to be dog catcher, steering this through, seeing the industry opposition, and putting forward the softwood proposals and having the industry react. We saw on July 1--
Mr. Dave Batters: That's pretty mean, Peter. That's pretty meanspirited.
Mr. Peter Julian: The Conservatives are speaking now. I hope they will have the guts to actually stand up shortly in the House and defend this bad agreement. We know that they will not because they understand and they are ashamed of this deal too. They just will not admit it.
After members of the industry from across the country had said to not sign this draft agreement because it was absolutely horrible for them, using their typical bullying techniques the Conservatives rammed it through on July 1. They announced it on a Saturday. I found out at a Canada Day celebration at Heritage Village in Burnaby, B.C. It was unbelievable that they had signed what many people described this summer as the worst agreement that Canada has ever initialled. July 1 was a sad day for Canada.
Summer hearings were immediately set up to hear back from the industry. There actually was consultation. The refused to consult because he heard back from the industry that the deal was absolutely atrocious, but the committee decided to hear from the industry, softwood workers and softwood communities. What it heard was not only that this was the worst deal ever initialled by a Canadian government, but we also found out that it was commercially non-viable. That is what was attested to by witness after witness.
The Quebec industry voted against the agreement 35 to 12. Witness after witness this summer clearly indicated that this was an absolutely horrible deal. What is more, the Conservative government, in its incredibly youthful and one might say juvenile zest to try to rehabilitate the sordid reputation of the , in a desperate measure, pulled out all the stops to ram this thing through regardless of the testimony.
One notable example was Stephen Atkinson from BMO who said that this was a guaranteed way of assuring that Canadian logs would create jobs in American mills because it would stimulate raw log exports, but I will come back to that in a moment.
We heard testimony throughout the summer. Obviously, the industry and softwood workers were opposed and then the bullying started. We saw the government pulling out all the stops to push the industry to accept this deal no matter what the cost. That is what the government did. It pushed it.
What it received, grudgingly, from the industry were conditional letters of support, which the government has never released. The conditional letters of support were based on the Conservative government achieving 95% support from the industry. It never achieved that. In fact, it never even achieved close to that. The conditional letters that the was running around with, holding up, and refusing to show to the media or to anybody else, which is a public responsibility, showed very clearly that unless it had 95% support it did not have the support of those companies.
What did the government do? It bullied a certain percentage of the industry. Whether it was 50% or 60% we will never know, though access to information requests have been made. We are sure that the Conservative government will try to cover up just as much as the previous Liberal government tried to cover up with ad scam and other various scandals.
The Conservatives promised to be more transparent and that was their very first broken promise. They have not been transparent about this at all because they know it is embarrassing. They badly botched the negotiations. The industry reacted and they tried to bludgeon the industry into submission. What they got were very tepid letters of conditional support that were never operative because they did not get the 95%.
Then they said they would simply change the agreement behind closed doors and that is what they did. They rewrote portions of the agreement. It was unbelievable. They did not have the required level of industry support, so they simply rewrote it. They told industry that there was no way that they could rewrite or renegotiate any of this badly botched negotiation. That turned out not to be true, just another mistruth.
Then we come forward to this fall and Bill was before the international trade committee. The first thing the NDP said was that there were folks who expressed interest in being witnesses and should be allowed to testify. The NDP proposed two witnesses who testified and raised serious concerns about Bill . It was inadvertent, I am sure, and the trade minister only does things in a very political and haphazard way, but there was a double tax written in to Bill .
What was very clear was the intent of the government in the draconian nature of Bill regarding the penalties. People would get 18 months in jail if they countered the intention of the . There were special penalties.There was the ability of the government, not only to go after softwood companies, mom and pop operations in northern British Columbia, northern Saskatchewan, northern Ontario and northern Manitoba but to go after their commercial clients.
If there was any discrepancy between what the Minister of International Trade said the softwood companies owed and what the companies said they would actually owe under these punitive taxes and draconian measures, the minister had the right to go after commercial clients and go after trust funds, even if they were set up 10 years before. The government basically had, through Bill , a total blank cheque with our softwood industry.
We raised this issue at the committee of international trade. We said that these witnesses, who had identified themselves from British Columbia and from right across the country, should be allowed to come forward and testify. They were not witnesses that the NDP recruited. These were witnesses who said they wanted to testify and went to the clerk of the committee.
What happened, unbelievably, was that the Conservatives, the Liberals and the Bloc said that there would be no testimony. They would not hear from anybody else. They heard from two witnesses who raised serious concerns about the draconian measures, about the poor drafting, and about the effects of this legislation. They did not want to hear from anybody else. They just wanted to get the thing through.
The NDP, unfortunately, in this Parliament, has only one seat on the committee. Hopefully in the next Parliament we will have many more and the NDP will have a greater role to play. This kind of shoddy, slipshod, and irresponsible approach to governing is something that certainly Canadians rejected on January 23 and now they have seen the Conservatives at work. They know they are just as bad. Canadians will be looking at, I think, other alternatives, and I believe the NDP will be one of them in the next election.
Essentially, we proposed 98 amendments to try to fix some of the most egregious parts of this bill and we tried to save the Conservatives from themselves. We were also trying to save softwood jobs.
We were opposed to this agreement, but we did our due diligence. There were 98 sections of this bill that should have been redrafted. However, the Liberals and Conservatives were working together at the international trade committee with the support of the Bloc, and unfortunately said that they were not going to actually treat these amendments in any rigorous fashion. They were not going to deal with the issue of double taxation and companies being penalized twice. No, sir, they were not going to fix this at all, and they rammed it through in just a day and a half. They rammed it through without due consideration.
In fact, most sections of this bill have not been scrutinized anywhere. What they did was simply adopt it. In fact, it was difficult for members to keep up with the voting. There was no debate and no discussion on over half of this bill. There was no debate and no discussion on the Draconian measures of putting people in prison for 18 months. It was a simple show of hands.
Conservatives and Liberals said that if mom and pop operations made a mistake, and the did not like it, well, hell, they would be put in prison for 18 months. No due diligence was done. There was absolutely no due diligence. It was unbelievable.
So, we now have in front of us a badly drafted bill, pushed forward by the Liberals and Conservatives principally. And last night, in trying to eliminate some of these clauses, such as the double taxation clause, again, Liberals, Conservatives and Bloc were all voting to keep those provisions in the bill. That is what we have now. We have Bill , a shoddily, hastily crafted piece of legislation with serious errors in it, even from a Conservative perspective, not receiving due diligence at committee, not receiving due diligence in this House, and now the Conservatives, the Liberals and the Bloc want to ram through.
Well, 4,000 lost jobs in the last few weeks, I think, begs the question: What is this House doing, ramming through this legislation when 4,000 jobs have been lost directly, and 10,000 jobs directly and indirectly? It has been a hemorrhage across this country, particularly in western Canada, particularly in British Columbia, and Quebec of course, where we have seen almost 2,000 jobs lost.
What is in this softwood sellout? We talked about some of the references in the bill. First, the most important point is that on October 13 we won in the Court of International Trade. The money has to be paid back. The American government is already paying back to the companies which did not sign on through EDC and that is most companies which showed very clearly that the industry did not have confidence in this deal. The is hiding the facts from the public because he knows it is embarrassing that most companies did not sign on to the Export Development Corporation.
Second, and this has been well documented. We are giving a billion dollars to the United States that we did not have to. We won and every penny should be coming back. The Conservatives, because they are, to say the least, financially irresponsible, just shovelled that billion dollars right over to the United States, but half a billion of it goes to the American softwood industry that has been attacking our softwood industry now for years.
They were at the end of their rope. They had no longer any ability or capacity financially to go after our softwood sector. It was the end of the road for them this year. Now, again, snatching defeat from the jaws of victory, we have a government that is giving half a billion dollars to them for the next stage of assaults on the Canadian softwood industry and companies.
Another aspect of this deal is that we are imposing tariffs on ourselves that are higher than the illegal American tariffs that preceded them. We actually saw tariffs in October going up when we have won those victories and the only thing that was stopping the tariffs from being taken off completely was the ECC judgment that the government should have put in place for August. Unbelievably we are now paying more.
Why have we lost 10,000 jobs directly and indirectly? It is simple math. When the tariffs go up, it becomes financially non-viable and that is what we are seeing now: jobs lost in British Columbia, Alberta, Saskatchewan, Manitoba and northern Ontario. I am quite sure we are going to see a lot of Conservatives losing their seats because of their irresponsibility and Liberals too. In northern Ontario there are Liberal MPs who have been pushing this deal. That is absolutely irresponsible.
It is important to note that for Canadians who are listening right now, they actually had to pay the refund. Until we won on October 13, when the American government started paying back the money to the companies that did not sign on to the Conservative government's bad deal, the government's plan was to use the EDC and have Canadian taxpayers pay the rebates. If we had not won in the Court of International Trade on October 13, Canadian taxpayers would be paying through EDC, so it is important for Canadians to know that they would have been picking up the tab for this badly botched deal.
It is also interesting to note that there is a clause within the agreement which allows the Americans to terminate it any time. All they have to do is allege non-compliance. This is important for our Quebec friends, but also for people right across the country. This means that if a provincial government, British Columbia or Quebec, were to make any changes to forestry practices, the Americans could simply allege non-compliance and terminate the agreement. They could keep the billion dollars and run. What could be more irresponsible than that? We are talking about a government that has completely abrogated any sense of responsibility, and any sense of due diligence for softwood workers and communities across the country. That is absolutely appalling.
I talked about the anti-circumvention clause and the fact that we now have to go to Washington. Any provincial forestry practice changes need to be vetted through Washington. That is incredible. We have running rules that are, to say the least, non-viable, retroactive, and after the fact. We sell our product and then at the end of the month we find out whether or not we made money or whether we have to close down.
The most egregious fact is that there is nothing for softwood workers. There is not a penny for softwood communities. This stimulates raw log exports and shuts down value added production.
What we should do is stop this agreement on third reading. If the Bloc Québécois is prepared to vote against it, the agreement can be stopped. The money is already in the hands of the industry. However, we cannot give the Americans the right to come and change our forestry policy. We cannot give them a billion dollars and we cannot allow the American industry to come and attack our softwood lumber industry.
We need a policy that works. I implore the hon. members to vote against this agreement on third reading, but if they fail to, it will be up to the other chamber to vote against it and stop this bad agreement.
Mr. Speaker, I rise today to speak on the third reading of Bill
The Bloc Québécois members for and have worked on the various committees, and their work has finally led to third reading of this bill in the House. Amendments have been made by the various parties. We, of course, made the decision to support this agreement, unlike the NDP members, whom I respect very much.
Why did we decide to support this agreement? The member for has often asked us the question. We always give him more or less the same answer. We analyzed the agreement and consulted our companies and our unions. They too analyzed this agreement, but this long-lasting dispute has had a very big impact on employment in our softwood lumber industry. Caught in a bind, our companies and our unions recommended that the Bloc Québécois approve the agreement.
The Bloc Québécois is a party very close to its base, which is made up of workers, unions, associations and industries. In short it is very close to the people and it defends Quebeckers’ interests. So in the end it made the commitment to these economic stakeholders to support this agreement. These include the Québec Forest Industry Council and the various unions, led by the FTQ.
Of course, with regard to the comments by the Conservative Party—which I will return to a little later— that we will recover $4 billion under this agreement, we must not forget that we nevertheless have lost $1 billion. The member for is right to say this. This is not a new additional amount of money for the Canadian softwood lumber industry, but money recovered by our industries, which had paid it in countervailing duties. Actually the industry is getting back part of this money, the $4 billion.
This third reading will bring to a close this long legislative process respecting the softwood lumber agreement. The Standing Committee on International Trade began its study of this agreement last May. The committee held numerous meetings to discuss the agreement, which was signed about July 1 by the Conservative government and the Bush administration. I was in Geneva when this agreement was very hastily signed, thus somewhat surprising all members of the House of Commons.
Finally last September 20, the government introduced Bill . Its purpose is to implement the softwood lumber agreement. In addition to determining the procedures for the repayment of the countervailing and anti-dumping duties to the companies, the bill establishes a system for returning the billion dollars to Washington that the Quebec and Canadian companies have to leave on the table and it authorizes the return of the export charges to the provinces. So we get $4 billion but are leaving $1 billion on the table.
Finally, the legislation determines the barriers that will regulate the softwood lumber trade between Canada and the United States, that is to say, the control system that sets up an export charge and export permits.
It is very strange to see that this control system takes the form of amendments to the Export and Import Permits Act. This act is generally used to control trade in arms and dangerous materials or to limit trade with certain countries under economic or military sanctions. In the current case, though, it is Canadian producers who are hit by the restrictions in the act.
Finally, the agreement provides for a complex combination of export charges and quotas. They are very complex. It took us many hours to understand all the issues. After a careful examination, the government of the Quebec nation—the Government of Quebec—chose option B. The Quebec nation was actually recognized in the House because our hon. colleagues voted in favour of the Conservative motion. As we know and as I discussed with a certain colleague here, they did not vote in favour of the Bloc motion. Still, we are now a nation.
I realize that the export quota procedures are not determined by the act but rather by regulation. However, some questions remain. The Quebec industry is concerned, and rightly so, that the agreement provides for the quotas to be attributed on a monthly basis and that the possibilities of exceeding the monthly quota, in case of a major delivery, are so limited that companies might not be able to honour their contracts or even reach their full annual quota.
Prior to this agreement, there was a quarterly quota, but now it is monthly. Insofar as the regulations are concerned, the Bloc Québécois still thinks that the agreements with the companies are very important in order to enable them to reach at least their possible softwood exports.
It is important to remember that the construction industry is cyclical and that lumber deliveries are therefore likely to vary a great deal from one month to the next. This issue remains unresolved. Let us hope that, within the binational panel, the federal government will try to address the Quebec industry's concerns and relax the monthly export caps. Quebec has high expectations about this.
On April 27, 2006, the Conservative government and the Bush administration announced that they had reached an agreement to settle the softwood lumber dispute. The text of the agreement, which the two countries completed on July 1, 2006 and finally signed on September 12, gave rise to Bill .
It is important to give a bit of background here. Although we had been selling softwood lumber to the United States for decades, major disputes arose in the lumber trade in the 1980s, as the American softwood lumber lobby became increasingly intransigent. In May 2003, at the conclusion of an investigation that international tribunals would subsequently invalidate, the American government accused Canadian producers of receiving subsidies and engaging in dumping.
However, it is important to point out that throughout the dispute, the tribunals ruled overwhelmingly against the United States. Washington was never able to prove that American companies were being harmed. All the companies that went before the tribunals received no support from either the Liberal government at the time or the Conservative government.
As for the American claims that Canadian lumber was subsidized, there again, a NAFTA tribunal handed down a clear ruling that that was not the case.
Throughout this lengthy dispute before the courts, the Bloc Québécois has, since May 2002, repeatedly called for an assistance plan including loan guarantees. How many times did we ask the Liberals at the time, in this House, to support the softwood lumber industry? We asked for loan guarantees for companies, but we received no reply. The government did not support the industry, and companies were left on their own to face the huge American lobby.
We did not help our businesses during this dispute. We are supporting this bill against our better judgment, because we have no choice. The present softwood lumber agreement would not exist if our governments had stepped up to the plate and at least listened to what the Bloc Québécois was proposing for supporting the industry. No. The Liberals and the Conservatives turned a deaf ear, and so today we are losing $1 billion under this bill.
When the Liberals were in power they consistently refused to establish this assistance plan. But since they have been in opposition, they have, curiously, changed their minds. It is hard to understand, but the Liberals are saying something completely different. Today they think that the proposals that the Bloc Québécois made for the first time in 2002 are now necessary. This is hard to grasp and understand. They turned a deaf ear for years, both in relation to the program for older worker assistance—which I will come back to a little later in this speech—and in relation to the assistance plan for the industry, regarding loan guarantees for companies.
Unfortunately for the Quebec and Canadian forestry industries, the federal government’s decision not to take concrete measures to ensure better financial health for our forestry industry will be damaging for them—for the industries in Quebec and the industries in western Canada alike, in British Columbia for example, as my friend from the NDP was saying.
Today, the Liberals must bear a large share of the responsibility and acknowledge that they have caused irreparable harm. The Conservative Party has signed an agreement that we support because there was no support in the first place.
When the Conservative Party was campaigning, it will be recalled, it offered Quebec loan guarantees for companies. And then when it came to power, it did the same thing as the Liberals: it offered no support for those companies. It simply signed an agreement.
Allow me to quote a passage from the Conservative Party platform on this point. I do not know whether my Conservative colleagues remember their election platform, but we on the Bloc Québécois benches paid attention to it.
That platform says: “Provide real help for Canadian workers and businesses coping with illegal American trade actions”.
That is what their election platform said. They presented that to Quebeckers. I repeat: “Provide real help for Canadian workers and businesses coping with illegal American trade actions”.
Power does make people corrupt or blind, it has to be said. I do not really know what to say about this, because the softwood lumber agreement does not really reflect the political direction that was announced to Quebeckers regarding the softwood lumber agreement as we saw it in the election platform.
As I said, the Conservatives wanted to support the industry by giving loan guarantees, but they did not do that; no sooner was the government elected than the promise was forgotten. Quebeckers will remember.
I have said on several occasions that the attitude of the Liberal and Conservative governments left a bad taste in the mouths of some representatives of the forestry industry and forestry workers.
Scarce financial resources, abandonment of the industry by the Liberals and Conservatives, not forgetting the intransigent attitude taken by the Conservative minority government in refusing to listen to and support the interests of our industry when it called for changes to the agreement—all these factors certainly contributed to weakening the industry and ultimately forcing it to accept this agreement.
We accept this agreement because we have no choice. The government has put a gun to our head. Thousands of jobs are being lost. People are at the end of their rope. There is no more money. Companies are closing. The government is not giving us what we need, despite enormous surpluses here in Ottawa. It is not listening to businesses. Businesses are telling us that under the circumstances, they have no choice but to support the agreement.
The Bloc Québécois supports this agreement reluctantly. We are supporting it because, as I have told my committee colleagues many times, Quebec's forest industry and Quebec's worker representatives have asked us to. They have studied the agreement thoroughly. These are lawyers, manufacturers and people working in this sector. Their jobs are at stake. Their export needs are high and they need to start producing more softwood lumber so they can export it. Thousands of jobs depend on that. These people have concluded that it is important for us to support this agreement, and that is why we are supporting it.
Nevertheless, we continue to believe that, since the beginning of the conflict, there should have been a plan in place to help the industry. The Conservative government is wrong in thinking that this agreement will solve all of Quebec and Canada's forest industry problems. Because both the Liberals and the Conservatives failed to support the forest industry, it has been crippled by the softwood lumber dispute. It is now facing an unprecedented structural crisis. A number of Quebec forest industry stakeholders have stated that the government cannot claim that this agreement solves everything. They say the Conservatives are now responsible for taking concrete action to help the industry through this major crisis.
I would like our Conservative colleagues in this House to listen to what we are saying. This agreement will not solve all of our problems, so we are asking for an assistance plan to complement it. The forest industry is in big trouble and needs an assistance plan. We have already lost 7,000 jobs in Quebec. Closures announced by Abitibi Consolidated are just the latest in a string of similar announcements over the past few months.
According to the Quebec Forest Industry Council, no less than 7,000 jobs, as I mentioned, have been temporarily or permanently lost in Quebec since April 2005. That is a significant number. Many jobs have been lost due to this government's failure to act. I would even say that, because Quebec still remains within this federation, we cannot master all our economic development levers. Quebec could have supported the industry on its own, but we are still within this federation. We are still here today, asking for this government's support, which unfortunately, we have not yet been able to obtain for the Quebec forest industry.
The Bloc Québécois is calling for an assistance package that includes an income support program—the infamous POWA—for older workers who lost their jobs because of mass layoffs in this sector, as well as a number of initiatives to help businesses become more competitive by updating their equipment or venturing into secondary or tertiary processing activities. The package includes measures such as faster amortization on production equipment, diversification of lumber markets and special tax treatment for the $4.3 billion in countervailing and antidumping duties that will be paid back.
Since the very beginning of the dispute, the Bloc Québécois has been proposing concrete measures to help workers and businesses in the softwood lumber sector.
Now that the bill has support, and if it is passed by the House, we hope that the Conservative Party will propose a plan—
Mr. Speaker, it is a privilege to speak today on Bill .
It is important that we acknowledge the work of the NDP member for on this file. He has advocated for many hours to try to get a better deal and improve the current situation.
Sadly, we have not seen the significant changes that would have actually made this a bill that we as New Democrats could support. As well, the bill shows the real weakness of current government policy. As the NDP critic for industry and Canada-U.S. border relations, I can say that this is very significant not only in the context of this particular file, but also in regard to the precedent set by this move.
I want to begin my remarks by noting that the previous Liberal government's administration had been working on the softwood file for a number of years before this deal. The Liberals had not progressed very far, hence we had the workings of the member who is currently the , a Liberal at that time and the minister of industry. He started this process before he crossed the floor and he tried to bring a similar deal to the table. It was a deal that I think really spelled out the framework of what we currently have right now, which is really an abominable position to take. It is an outright and complete capitulation of Canadian sovereignty in trade negotiations and it will have long-ranging impacts.
The softwood agreement is also counter to the way that this country has lived up to NAFTA as well as the challenges that we have had in the Canada-U.S. relationship over the years. Despite having a significant series of losses in manufacturing and other types of industry related to the implementation of NAFTA, we have lived up to the agreement. Canada has followed the rules and has done what is right. That has led us to a point right now where our partner, the United States, has determined unilaterally to take a different direction, basically casting that and the agreement out, along with the mechanism process that was supposed to be there for dispute resolution. That is fairly significant.
I want to underline a few things in my comments. We have seen past Liberal governments, as well the current Conservative government, try to profess this myth out there that there is a so-called free trade area or world trade market. They say that if we have open markets and if we compete the hardest, that is all it takes to be victorious, to be champion, and then we will just have to lower corporate taxes to be successful.
That is not the case. In fact, even within our current agreements we have interventions by states and also at the federal level in the United States on a series of industries, which they use to protect employment in manufacturing based industries.
It is important to note that even with an agreement under NAFTA, under which we were supposed to have this dispute resolution, that is where we lost a significant edge in one of the most important and historic manufacturing industries in Canada. It was something that really set the standard for negotiations as a country that matured and was able to increase market share: the Auto Pact.
The Auto Pact is something very near and dear to the hearts of those constituents who live in Windsor-Essex County as well as Oshawa, Oakville and other manufacturing based areas that had new entry access to the American market, based upon a system of fair, principled trade. It was an agreement that was set up to be advantageous not only in terms of our industries here but also to be helpful with the United States in growing the industry at a time when we had world market share very much in our favour.
Something appalling happened during the negotiations. We were promised that the Auto Pact would be fine and would be protected, that nothing was going to take away from what we had. We were going to continue to be on the cutting edge of automotive research, development, advancement and assembly.
We were told that those jobs that every year paid millions of dollars into the coffers of this country were going to continue to be there. Those were good jobs. Through those jobs, we advanced a number of different workplace initiatives by some of the strong, progressive CAW workplace amendments, so that workers were safer and more productive and also received more training.
As well, we expanded the industry so that when there were new products coming forth we would be the ones who would capitalize on that and we would not simply become a dumping zone.
It was promised that the trade agreement would continue to be successful through the new free trade agreement. Later on, the United States challenged it and we lost. What did Canada do? It complied. Canada lived up to the agreement, to what it had signed with its partners. We knew the tremendous damage that it would have on our economy and on working class Canadians, our brothers and sisters who were raising their families, making a decent living, saving for pensions and paying an incredible amount of tax in this country. We were giving up and surrendering that.
Since then, we have witnessed the decline in auto sales, manufacturing and assembly. Canada has gone from fourth to eighth with regard to production and we will continue to slip if we do not have an auto policy.
Something that is ironic in all of this is that Bill was initially introduced by the when he was a Liberal and carried on when he was a Conservative. However, he has never lived up to the much promised auto strategy that he promised the committee and myself in the chamber a number of different times. He did not deliver on that in the recent budget. Not a single initiative whatsoever was moved on that file. He did it for trade and he is doing it with the Korea trade deal, which is another one I will touch on a bit later, but he did not do it for the auto sector.
We gave up this golden opportunity that had flourished in Canada because we believed in the rules and accepted the fate of the rules on this particular industry and our country. This bill is an utter capitulation of the system, the rules of engagement and the terms and conditions because the U.S. did not like the results of those rules, despite the many times we went through court challenges, all the evidence that was presented and the work we did with progressive industry forces in the United States.
I was part of a lobby group that went to Washington in 2003 and met with the Home Builders' Associations and organizations that recognized that the artificial increase of lumber pricing in the United States because of the industry greed on that side was a detriment to many of their citizens because they could not manufacture and produce homes at a level citizens could afford. This artificial increase and denying market access for Canadian products at a competitive level was something that U.S. citizens did not support and wanted changed.
We had a series of different taxation policies that punished Canadian companies. As this process continued, we fought many times in the chamber about how to support the industry through loans and other supports, such as research training, so that at the end of the process we would go back to the successful industry that we had.
It is important to note at this time what is happening in the industry. I have a research paper that was provided to the industry, science and technology committee entitled “Challenges Facing the Canadian Manufacturing Sector: Forestry Products and Furniture Industries. We witnessed a decline in that sector which has lost a lot of really good paying jobs, as well as jobs that have historically been in Canada.
One of the charts, the perfect storm, identifies what has been happening in this industry over a period of time. It mentions the fact that the Canadian dollar has increased over 35% since January 2003 and that its rapid acceleration was due to the natural resource exportation of the oil and gas industry to the United States and other countries. This led to the rapid increase of the Canadian dollar at the expense of other manufacturers. Historically, this has never been faced before. Some would say that the Canadian industry should have been ready but that was impossible to predict in terms of the rapid acceleration and there was no support.
The second thing in the perfect storm was the culmination of the $5 billion of softwood duties paid. The industry faced $5 billion on top of that. Despite having a deal, we will not get all of the money back. What kind of a deal is it when we actually end up having to pay to get out of a deal that will be a bad deal in the end anyway? What kind of nonsense is it when we will be forking over $1 billion? Ironically, most of that money will go to the Bush administration, with no accountability in terms of how it allocates those funds. Other funds will go to subsidize the industry and the competition that we are facing. It will now have a resource to use to subsidize its industry versus our industry.
The third point is that the industry's energy costs have risen by 35%. I have an interesting statistic about pulp and paper and wood furniture products. The total production of pulp and paper products in Canada in 2005 was 5.1% lower than the peak production levels registered in 2000. In 2005, production of paper and paperboard declined by 4.4% and 6.1% respectively compared to the 2004 levels. We are watching it decline. Those three things punish the industry at this time.
What do we do? How do we fix this? We allow the Americans to keep $1 billion of those duties. That does not sound like much of a solution. It does not sound like much of a solution if Canadian citizens are losing out on that resource. It does not sound like much of a solution for the people currently employed in this industry if their foreign based competitors now have the cash resources to undermine their production.
Whether the Americans put the money into further efficiencies, into research and development, toward lowering the prices or to deal with energy costs, whatever it might be, they will now have an advantage. It does not make any sense. It is absolutely offensive that we would sign a deal that we must pay to get out of.
One of the things that I think really sticks in the minds of Canadians right now is this $1 billion and the fact that we could use those funds. We looked at the cuts in the last budget session and at how they have affected Canadian lives. For heaven's sake, if we take the ideology of the government, why would it not want to put another $1 billion on the national debt? I guess it wants to put $1 billion into the pockets of the forestry and lumber producers in the United States and the Bush administration. Is that the government's solution to the issues Canadians are facing today? I do not think so. I think it is alarming.
I must also note that in all of this the Bloc members have not been very successful in negotiating any changes to this bill. They have rationalized the reason why they are supporting it. I understand their pressures and decisions but we should have at least seen a counterpunch on the government for the support that it is receiving. I find that alarming because if we are to have a true building of perspective in this House of Commons we should see something. They could throw them a bone or something that would soften the blow on Canadian workers who are losing their jobs and on the industry itself and the future it faces.
I do want to go through a number of different things here that we are concerned about. One of them is really ironic.
Canadians can see how complicated the bill is and how much information it contains. It is an issue that has taken a number of different years to come through here. At the same time, the committee spent one week going through it for witnesses. How is that even possible, in a modern, functioning democracy, that we could only have one week's worth of witnesses? We have witnesses on a regular basis in our parliamentary committees who spend more time on less settled things. This bill was rammed through the committee stage, denying amendments and debate.
The Canadian public needs to understand that that is not good government. It is about trying to move an embarrassing situation along. Shutting down debate does not make any sense.
We have many friends in the United States and many of them do not support this particular bill because of what it does to our relationships. However, when the Americans actually signed on, through our current trade agreements, they received protectionism clauses.
In some of my earlier remarks I talked about how we lost the auto pact. However, in the actual trade agreement, the Americans have a whole series of protectionism measures for aerospace and bus manufacturing that literally take away the opportunities for Canada to expand these industries. The Americans have this because they decided it was in their national interest. The U.S. government thought enough of those particular industries and the value they added to manufacturing, to the employment base and to the future of the country that it said that free competition did not matter and which country made the best product or which country was the most efficient did not matter, that it would guarantee that the work would only happen in the U.S.
In our own country right now we cannot even decide that for our industry. We would rather capitulate. It does not make any sense. While our competitors are employing strategies, techniques and different types of measures to protect their industries, we cannot even support fairness for our own industries that must compete in that environment.
Another big concern I have is about where this goes. When I look at the bill and the measures in it, I worry about our wood manufacturing, the products, the post-production and having to take down the trees. The whole softwood industry is actually having some manufacturing base.
We only need to look at our oil and gas industries. Despite their billions and billions of dollars in record profits and the fact that they are also receiving subsidies, they put less than 0.8% of their money into research and development. The average national manufacturing industry, in terms of research and development, and other comparable industries invest a modest 4%. That is not good. That is a poor standard on OECD levels and compared with other developed nations. It is not a very good measure but at least it is at 4%.
It is 500% more.
Mr. Brian Masse: The member for said that it was 500% more.
All we do is export the natural resource, which hurts us on a number of different things. It hurts us on innovation. Because we do not do any of the research and development, refining industries are not being developed in Canada, which affects a series of other issues. We see the loss of jobs and the loss of good minds for research and development, who leave this country. We cannot attract the brightest and the best. On top of that, we lose on taxation on the secondary product as well. We allow somebody else to take all that.
I am worried that Bill will set up the same situation in the softwood industry, that we will just be the net supplier of the resource and that will be all we have to offer. However, I think Canadians believe that we can offer more, that we can be the ones to do the research and development, that we can create finished products of which people can be proud and that we can create jobs, not just in those particular industries, but which also lead to spinoffs. I believe Canadians want to be part of that process. It is not good enough for this country to become only an exporter of natural resources, and Bill leads us down that path.
In summary, I want to say something that is important to note. The is currently selling us out on a Korea deal where it is not fair trade. It worries me that this is the template. If we are giving up the ghost on this issue, what will we see on the Korea trade issue?
I have had meetings with the industry committee and industry staff related to the auto sector and under the Korea trade deal the auto industry is up on the block. We are continuing to trade and develop the trade initiatives that will cost more manufacturing jobs in our country by the setting up of a failed trade deal policy. Bill is really all about the failure of a government to protect its industry, which is about the natural resources of the men and women in this country who deserve to have these resources used to their advantage, not against them.
Mr. Speaker, I appreciate the opportunity to speak to this very important topic, a topic particularly important to areas of the country like northern Ontario where forestry is such an important part of our economic activity. It is the lifeblood, the heartbeat, the industrial centre of so many of our communities in that wonderful part of the country.
As we look at the devastating situation in which the forest industry finds itself across northern Ontario and the country, many of us have asked ourselves why the government would take us down this road. This deal has no obvious benefits at first look. Those who have analyzed this agreement, those in the forest industry who have a vested interest in this, have said they have some very real concerns about it.
Why is the government so bound and determined to impose a new set of rules on an industry that has served us so well for so many years and has been the bedrock of the Canadian economy for centuries? I believe this is another part of the effort by global forces of the right wing political, economic and private sector movement in our country. Whether we kick or scream about this, it does not really seem to matter. Whether it makes sense financially to the people, the workers, the communities and the tourist industries, it does not seem to matter either. Come hell or high water, we are going down this road.
I believe this is an attempt by the government to have this industry, along with other industrial sectors in our economy, conform with the American approach to doing business. I believe it is an attempt to have industry conform to some of the global realities that we have to play a part in as we try to move forward to create work and provide support for our industries, businesses, workers and communities.
I have looked at this issue quite closely for some time now. I have been in this place for almost three years. I have watched as both the previous government and the Conservative government have struggled with the American heavy-handed approach in trying to bring Canada and its industrial sectors to heel, and I am shocked. I know the previous Liberal government was working very hard to try to find some balance or compromise in this equation. However, once it was turned over to the leadership of the present government, it went from bad to worse. Now we have this deal staring us in the face. Once we pass it through this place, it will become the order of the day, and that is unfortunate.
We have been very creative and intelligent in Canada. We have worked very hard to situate ourselves in the global economy, even in the context of the North American free trade agreement. There was great resistance to and concern with that agreement when it was talked about back in the eighties and nineties. Many of us predicted that it would severely hurt our manufacturing sector. When we look at the numbers today and the jobs we have lost, and are losing, in the manufacturing sector, the chickens really have come home to roost.
Instead of dealing with this in a truly Canadian way, which is to work collectively to put in place laws, rules, a regime, a framework to protect all the interests that need to be considered in the Canadian community, we have simply thrown in the towel and said if we do it like the Americans, then it will be better down the road and we will all benefit.
That has not been our experience. We have worked very hard and have been as efficient as is possible in situating our industry in the country, but we continue to be battered by the forces out there that would have us do business differently.
I only have to look at how the government of the day is now trying to change the way we sell our grain from western Canada on the global market. In a very unique and Canadian way, collectively over a number of years and driven by farmers, we put together the Wheat Board. It has been very successful in ensuring that farmers, who grow and market grain in western Canada, continue to have a viable economy working for them. It has ensured that they continue to make enough money to keep themselves in business so they can pay their bills, have decent standards of living and later can turn their operations over to their children. However, farmers in my community of Sault Ste. Marie have said that this has become more difficult.
Farming has become more difficult because of the pressures brought to bear by what is happening on the global scene. Our farmers have rallied and put their best efforts forward. They have brought their greatest research and information to the table. They have put together organizations and schemes that would protect their interests. Farmers get up early in the morning to do their chores. They go out and plant seeds or look after their animals. At the end of the day, there must be sufficient return on that effort. When farmers invest in their enterprises, they should get a return on that investment. However, that is not the case now in so many of our agricultural sectors.
In my area farmers are looking at walking away, or trying to sell to somebody else, or declaring bankruptcy. This is a terrible state for an industry that is so fundamental and foundational for all of us as a society. If we are not a country that can support an agricultural sector that feeds us, then we are in really big trouble.
We now have a government that wants to take this vehicle, the Wheat Board, and throw it away. Farmers put the Wheat Board in place. They have taken ownership and control of it. They have run it for a number of years and have been successful in that venture.
I know, with some good concern, many of our farmers think this is just the thin edge of the wedge, that once we head down that road, the next thing will be supply management. A lot of our poultry and dairy farmers are concerned that this will be the next—
Mr. Speaker, in this place we have plenty of latitude to connect things and set the context within which we are having these discussions. I do not think that was a point of order. It was actually an attempt to simply stop us from making our arguments. As the government has done in this instance, it has fought back against us as we have tried to protect the interests of our forestry sector.
The point I was making is what the government is doing to the Wheat Board is reflective of its approach to the forestry sector, which is to have it conform to the American way of doing business. At the end of the day our small forestry communities, small forestry enterprises and those who work in the forestry industry are not protected. They have no protection.
Through NAFTA and the numerous other trade agreements that are being signed every day that goes by, the government loses more and more of its ability to protect that which is essential to its own economy, industry and enterprise. I am using the case of what the government is doing to the Wheat Board because in my view it is a lot clearer and in sharper focus than what is happening in the forestry sector. The way this agreement has been rammed down the throats of the industry players, imposed on the provinces and brought to the House as a fait accompli is indicative of the under the surface damage and concern many of us have about the bill as it works its way through this House.
What the Conservative government is doing to the Wheat Board is reflective. It is not just the Wheat Board; it is a number of other cave-ins this country has participated in over a number of years now. When the North American Free Trade Agreement was imposed on us, those of us who opposed it back in those days accepted that. We sat down at the table, read through the documents, came to understand what it meant and how we should work with it. We began to be quite successful in putting together structures and ways of protecting particularly our resources that would give us at least some significant return on our investment and effort.
Alas, even in that when we found ways to do business that were good for Canada and good for Canadian communities, our American neighbours did not like it because we were being too successful. We were competing too successfully with them. Our product was of a quality and at a price that competed very successfully in that market. The Americans began to take us to court. As they took us to court, we fought back. We went to court and we took advantage of those vehicles that were put in place with the Canada-U.S. Free Trade Agreement and the North American Free Trade Agreement to protect our interests.
We made our case and we were successful. Time after time we were found to be right by the courts. We expected that our American neighbours would honour that. We expected that they would be honourable people and would live up to the agreements that we had signed in good faith as we entered into those free trade agreements, but alas, they were not honourable. They were less than honourable. They continued to bring us back before the courts to wait us out until they had a government in this country that was amenable to their interests. In the interests of a good relationship and currying favour with our good friend George W. as the Conservatives would say, the government agreed to this softwood sellout that we see before us today.
Nothing in the softwood agreement is going to be helpful in any meaningful way to the forestry industry in northern Ontario. That industry is struggling so badly these days. Communities have been hit hard by the closing down of paper mills, pulp mills and sawmills. People are having to leave their homes. They are having to sell or walk away from their businesses and move to other parts of the country in order to get work to feed themselves and support their families.
In September the NDP caucus met in Thunder Bay with some of the leaders in the forestry industry in northern Ontario, particularly in northwestern Ontario. The softwood agreement is whacking all of northern Ontario. We met with the political leaders and the mayors of many of the communities in northwestern Ontario when we were in Thunder Bay.
We visited some of the plants that were hanging on by their fingernails at that point in time in northwestern Ontario. They all told us the same thing, that they were in difficulty. It was not connected in any serious way at that time with the work that was going on here driven by the Conservatives on the softwood lumber situation. It was driven by a number of other things that the government should have been putting its mind to. We hope the government will put its mind to those issues when we get this piece of work done, but who knows.
The forestry industry needs leadership. It needs the help of the federal government. The federal government should be there. That is the role of government, to protect those industrial sectors that are so germane and inherent to the good economy of this country.
How does Canada as a country respond to some of the pressure that is being brought to bear around the monetary policy and the level of our dollar? When I spoke with some of the industrial leaders in Sault Ste. Marie they told me that if the government could somehow bring the best minds to the table and work with partners out in the private sector and somehow bring the dollar down to about 80¢ they could all be doing much better.
In northern Ontario it is also a question of the price of energy. As we again respond to the American pressure to conform to the way that they manufacture, produce, distribute and use energy, we should be turning our energy operations over to the private sector. What we find, as we did in Ontario, is when that is done the price of energy goes through the roof. Our industries become non-competitive again because they cannot afford the price of that energy. Our industries in Ontario cannot compete with jurisdictions like Manitoba and Quebec which continue to retain control of their energy enterprises.
We have tried in Ontario under the leadership of Mike Harris and now Dalton McGuinty to turn control of our energy enterprises over to the private sector. More and more we find that we are getting deeper and deeper into a hole and that we cannot compete. We need the federal government to talk to those who have control over those pieces of the puzzle, so that our forestry sector can again be successful and profitable and provide the kind of support that it has provided over the years to those communities and the parts of the country that are dependent on that sector.
The dollar is battering our forestry industry. The price of energy is battering our forestry industry. There is the way that we manage our forests. Access to fibre and the cost of fibre are huge concerns. There are all kinds of concerns in the forestry sector that need to be addressed by government.
The previous Liberal federal government sat down with the forestry industry leadership before the last election. The forestry industry was here in large number with a very effective and energetic lobby. They met with our caucus. I am sure they met with the Conservative caucus and with the Liberal caucus and convinced them that they needed an influx of some dollars in order to upgrade their technology, to invest in new technology, to do some research and development and some training.
We heard the federal government of the day announce that it was going to put billions of dollars on the table and make it flow but, alas, it never happened. It was not there and it is still not there. Our forestry sector is struggling and in some instances has disappeared. Some of the communities have suffered damage that will not be fixed.
Instead of dealing with those very direct issues that the forestry industry was bringing to the table and wanted addressed, the Conservative government moved ahead full force with this new softwood lumber deal. The softwood lumber issue would have, in my view, worked itself out in time through the courts much more to our advantage than this deal is presenting.
How we deal with our forestry sector is critical to northern Ontario, the communities in my area and communities across this country.
Mr. Speaker, I am pleased to enter into this debate on behalf of the good people of the riding of Winnipeg Centre, especially as we enter the final hours of the final stage of this very long, drawn out and controversial piece of legislation, Bill , which as anybody watching will have realized implements the softwood lumber agreement.
It would be helpful in this final stage of debate to summarize and perhaps detail for Canadians who may be watching just what transpired in this whole agonizing drawn out process, this roller-coaster ride that we have been taken on, which has led us to the point where we are today.
It seems that the and the new Conservative government are moving at warp speed to integrate Canada's security and foreign policies with the U.S. and to shred any competitive advantage over the U.S. in areas such as lumber and wheat as well as an overall harmonization and integration on any number of facets in our relationship with the United States.
It seems that the Conservative government is voluntarily and unilaterally giving up the competitive advantage that we enjoyed over the years in the softwood lumber sector and, as raised by my colleague from , the sale of our superior wheat, a Canadian brand of wheat that is in such great demand around the world. I will speak to this later.
Bill deals specifically with the softwood lumber agreement. To set the context for my remarks I would like to remind Canadians that days before Ottawa bludgeoned Canada's lumber industry into this deeply flawed softwood lumber agreement, the Vancouver Sun published the details of a leaked letter from the Bush administration to the U.S. lumber lobby.
In this letter the American administration confirmed its objective was to hobble the Canadian industry for seven years. This should have been shocking to Canadians. Having our competitors reveal in a leaked letter that the administration's intention was not to achieve fairness in the North American marketplace for softwood lumber, but to hobble the Canadian industry should have made us all sit up and wonder who negotiated this deal and wonder if they were really acting in our best interests. I cannot blame the administration for being aggressive that way because it is very good at defending its own domestic industries. This is only the beginning.
What we learned and what our colleague from has been trying to point out in every way that he knows how, to alert Canadians to the realities of this deal, is that the Americans will get to keep $450 million of the illegal duties they were collecting. They will get to keep this money to grease the wheels for the protectionist republicans in the White House who were facing tough fights in their mid-term congressional elections. With no strings attached, $450 million goes not to the government of the United States, but to the republican administration to wage war on Canadians who are financing this attack on our trade relations.
Canada's timber industry would be forced to subsidize an ongoing illicit attack on itself. What kind of deal is that? It makes one wonder who would negotiate terms and conditions like that on our behalf. Who are we sending to do our bargaining for us in this regard? It is astounding. All of this is going on with the explicit consent of the Canadian government.
There is even more. This is where a worrisome trend is beginning to develop, a motif, one of the characteristics of the current government. When the industry balked, the current government used intimidation, which is now almost a hallmark of our new .
On August 4 the Globe and Mail quoted a senior government official's warning that industry opponents to this deal “should prepare themselves for the consequences of rejecting it and...might want to start contemplating a world where Ottawa is no longer in the business of subsidizing softwood disputes”.
In other words, they were told that if this deal was voted down, if they did not support this softwood lumber deal, they should not expect Ottawa to help them in any future and subsequent deals. It is some kind of economic blackmail to lord this over the heads of the industry players, saying that if this deal is voted down, if industry players trust their best instincts and vote this deal down, then Ottawa will not help in any subsequent deals. The only conclusion Canadians can draw is that this softwood deal is a deal that is managed of, by and for the American lumber lobby.
Here is the most worrisome thing--and I will say this as clearly as I can because it is a complex notion--even more worrisome than the billion dollars that we are leaving on the table in illegal tariffs and duties collected by the Americans. The most worrisome thing yet is that a supposedly sovereign nation has signed on to an unprecedented clause which requires provinces to first vet any changes in forestry policy with Washington. To me, this is more damaging.
People studying this deal 20 years from now will probably find that the most alarming thing about it is that we have voluntarily forfeited our sovereignty to manage our own affairs in the softwood lumber sector. This is where it raises a question: how in God's name did the Bloc Québécois support the ruling party, the government, to get this deal passed when it is all about sovereignty? I have heard a thousand speeches by my colleagues from the Bloc about Quebec's sovereignty and how they did not want the federal government to trample on the jurisdiction of Quebec to control its own affairs as it pertains to its resources. I support the Bloc in that argument.
How, then, can the Bloc support a softwood lumber deal that has this unprecedented and precedent setting clause that requires provinces to vet any changes they may want to make, perhaps in the stumpage fees, the quotas or the amount of cutting in certain cutting areas? Any of those changes will have to be first cleared with Washington before the provinces can implement those changes. It is an affront to Canadian sovereignty. It is an affront to Quebec's sovereignty. But that is the softwood lumber deal that we are about to sign.
One of the things that people often overlook in all the hype about how thankful we should be that the Conservative government gets along with the Americans is the reality that Canada tossed away a significant victory, which we won not before the virtually useless NAFTA panels but from the U.S. Court of International Trade. It ruled that U.S. duties on Canadian softwood lumber were illegal.
In other words, we were winning the court challenges that we threw aside when we went into the softwood lumber agreement. We snatched defeat out of the jaws of victory, as it were. If only we had stayed with that route. I have heard the minister and others say that they could not keep throwing millions and millions of dollars to lawyers in never-ending court challenges. That is true, but they were not never-ending. We were winning them. We were within a hair's breadth of winning them. We were almost there. We were within days of winning when the government announced that it was going to accept a far inferior package.
That is what is incomprehensible about the artificial urgency on the part of the Conservative government to accept a deal that is substandard. When we could have had it all, the government left a billion dollars on the table.
This is the second time that a Conservative government has done this. Let me take people back to 1986, when the GATT, the World Trade Organization's predecessor, issued a preliminary finding on the legality of U.S. lumber duties against Canada. The government of Brian Mulroney at the time, bent on negotiating a free trade agreement with the U.S., abruptly aborted the challenge, with eager acquiescence to the Americans.
That is another example of where we were well on our way to winning our argument that U.S. lumber duties against Canada were illegal. That finding, too, was nipped in the bud before it could take effect. The finding was never published. It does not take a paranoid mind to assume that the GATT had ruled for Canada. Mulroney foreclosed on the GATT ruling because it would have wiped out his entire argument about the necessity of a bilateral free trade agreement with the United States.
It seems to many of us that free trade is like a computer virus coursing through Canada's social, economical and political systems, eradicating everything unique. Everything that is unique and special and advantageous must be eliminated, it seems. We must harmonize with the United States, it seems, but we find no fault in leaving the Americans with the advantages they enjoy in the industry sectors where they do things better than we do.
But it seems we are supposed to forfeit anything that we do better than they do. The first agricultural casualty in that regard was the prairie wheat pools. They corporatized. They were hoping to surf on the private American market. Instead, they surfed on losses and put the Canadian Wheat Board on a timeline. The Americans began gunning for it before the ink was even dry on their signature to the initial free trade agreement in 1989.
I live in Manitoba, and for those of us who live in the prairie provinces, I can tell members that since then the Wheat Board has been subjected to 11 separate U.S. trade attacks. The cry, as with lumber, has been “unfair subsidies”. The U.S. does not just want to eliminate a formidable competitor in the world wheat market for its multinational agriculture business; it wants that agribusiness to capture the price advantage enjoyed by superior Canadian wheat. This is the pattern that is developing. This is the worrisome motif that is developing in trade relations as contemplated by our new Conservative government.
It is as if the new Conservative government is prepared to do the Americans' dirty work for them in terms of these two specific trade irritants. As an example, it has now begun a process to abolish the Wheat Board's monopoly. I will not go into that in any great detail other than to say there have been very worrisome things happening in recent days. Mussolini would be proud of the current because he slapped a muzzle on the board of directors of the Canadian Wheat Board.
The directors are not allowed to defend their own best interests. They are not allowed to represent farmers and to advertise in any meaningful way why the Canadian Wheat Board, which has a business case that shows it, is in the farmers' best interests. The government has taken draconian measures to make sure that the Wheat Board directors are not heard, to the point of cancelling a meeting of the Standing Committee on Agriculture and Agri-Food today, in fact, so that the directors could not make their own case. I will not dwell on this except to say that there are such natural and obvious parallels between these two longstanding trade irritants between our two countries.
I will simply say this, and perhaps I can do it best by quoting John Morriss, the editor and publisher of the Farmers' Independent Weekly, who says that a dual marketing board is “a chimera”, that it cannot work. He asks farmers to recall the voluntary central selling agency, which was run by the pools in the 1920s, and the voluntary Canadian wheat board, which began in 1935. Both of these voluntary wheat board organizations had spectacular bankruptcies. They were likely the two biggest business failures in Canadian history. The voluntary Canadian wheat board lost $62 million in 1938-39, which was an enormous sum at the time and the largest bankruptcy in Canadian history.
The way we explain this is really quite simple, even to a lay person like me. The reason a dual market for marketing Canadian wheat will not work is simply this: if the open market is higher than the initial payment, then the board gets fewer deliveries, and if the initial payment is higher than the market, it gets those--