Mr. Speaker, I was caught off guard because I thought there would be someone speaking before me.
Bill would implement the Free Trade Agreement with the European Free Trade Association. The Bloc Québécois will be in favour of Bill C-55 primarily because this agreement does not have the same flaws as some previous agreements. There is also the fact that it does not affect supply management in the agricultural sector.
Obviously, one important point has to do with shipyards, but another is the fact that what is really at stake is the European Union. I will provide some context for the Bloc's position on this agreement, or rather the supplementary opinion of the Bloc Québécois. I will conclude with a caution about free trade agreements throughout the world.
The international economy is currently in an era of globalization. Multinational companies and big businesses are practically in a mad dash to make money from situations all over the world. They are making profits from the working conditions, human rights conditions and environmental conditions in various countries.
A closer look reveals that there are plenty of multilateral agreements. The WTO has 152 member nations, while the UN has 192. In 1955, the WTO had 89 members and the UN had 76. Twenty years later, in 1975, 157 countries belonged to the WTO and 144 to the UN. Today, the UN has 192 member countries and the WTO has 152. It seems that a lot of countries have signed on to multilateral agreements.
In the current context, however, particularly in the context of WTO negotiations—the Doha round, to be precise—more and more countries are taking part in the headlong race to sign bilateral free trade agreements. Nearly 200 countries want to sign free trade agreements—bilateral ones, of course.
At some point, Canada wants to sign as many as possible. It is hoping to sign agreements with close to 200 countries, and each of those 200 countries wants to sign agreements that will benefit them. We all know that for an economic transaction to work, both parties have to win. That is not always the case, but most people try to win most of the time. In many cases, a country might have general considerations that are not industry-specific.
That is the spirit in which Canada has signed some agreements and is negotiating others. We find such agreements perplexing. For example, consider an agreement that is currently being negotiated and that Canada would like to sign as soon as possible: the agreement with Colombia, a country with a deplorable human rights record.
I would like to go back to the European Free Trade Association, which is an association of four countries: Switzerland, Norway, Liechtenstein and Iceland. We believe it is a good agreement because, for one thing, Quebec stands to benefit the most.
Take the example of Switzerland, which has a very vigorous pharmaceutical industry producing brand-name drugs. Prescription drugs account for 40% of Canadian exports to Switzerland and 50% of imports. To break into the American market, Swiss pharmaceutical companies might think about manufacturing drugs here in Quebec, or rather on the other side of the river, to be more precise.
In addiction, the mecca of brand-name drugs, with its pool of skilled researchers and advantageous tax rules, is Quebec. So a free trade agreement to facilitate trade between a corporation and its subsidiaries would likely bring new investments in the pharmaceutical industry in Quebec.
As for Norway, nickel accounts for over 80% of what we export there. The biggest mine in Canada, ranking third in the world, is in Quebec, in Ungava, owned by the Swiss company Xstrata. Our leading export to Iceland is aluminum. There again, production is concentrated in Quebec.
I was saying earlier that we were also in favour of this agreement because it did not have the same flaws as other agreements Canada has signed in the past. For example, NAFTA, the agreement with Costa Rica and the agreement with Chile all contain a bad chapter on investments that gives corporations the right to bring proceedings directly against a government if it adopts measures that reduce their profits.
There are no such provisions in the agreement with the European Free Trade Association. The agreement with that association covers only goods, and not services. So there is nothing that will mean we have to open up competition in public services, whether they are delivered by the government or not, since they are not covered. Similarly, financial services and banks will not be exposed to competition from Switzerland, which has a very solid and also very discreet banking system.
Liechtenstein is a veritable paradise for the financial world because of its tax system and bank secrecy. That country, with its population of 35,000, has no fewer than 74,000 corporations, primarily financial. In fact, the Prince of Liechtenstein himself owns the largest bank in the country.
The same thing is true for government procurement. The government will continue to be completely free to give preference to procurement here, subject to the WTO agreement on public procurement. Obviously it would be somewhat ridiculous for the government to negotiate latitude for itself and then decide not to use it actively. We fervently hope that the federal government, the largest purchaser of goods and services in Canada, will give preference to suppliers here and think about the benefits that flow from its purchases.
I started out by saying we would support it because when it comes to agriculture, supply management is not affected. Bill also allows for implementation of the bilateral agricultural agreements in addition to the free trade agreement with the European association. Those agreements, which are no threat to supply management, will have no great impact on agriculture in Quebec. Milk proteins are excluded from the agreement. The tariff quotas and over-quota tariffs remain unchanged. In other words, products that are under supply management are still protected. In fact, it is mainly the west that will benefit from the agricultural agreements because they provide for freer trade in certain grains, but the impact will not be significant.
There is some concern in relation to shipyards. We know that a policy to provide for support and development in that industry is needed quickly. That is the main point on which concerns could be expressed.
Naturally, we have concerns about the future of our shipyards. At present, imported vessels are subject to a 25% tariff. Under the agreement, these tariffs will gradually decrease over three years and will be completely eliminated in 15 years.
However, our shipyards are far less modern and in much worse condition than Norwegian shipyards. Norway has made massive investments in modernizing its shipyards, whereas the federal government has completed abandoned ours. If our borders were opened wide tomorrow morning, our shipyards could disappear.
For economic, strategic and environmental reasons, we must have shipyards. Imagine the risks to Quebec if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, the world's foremost waterway?
For years the Bloc has been calling for a real marine policy, and for years the government has been dragging its feet. Now that the agreement has been signed, time is of the essence. A policy to support our shipyards is urgently needed. Moreover, this is the only recommendation in the report of the Standing Committee on International Trade on the free trade agreement between Canada and the European Free Trade Association. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic and deputy critic. It reads as follows:
|| Therefore, the Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.
This is practically the only major recommendation in the report. The Conservative policy of leaving companies to fend for themselves could be disastrous for shipyards. We expect the government to give up its bad policy, and we call on it to table a real policy, by the end of the year, to support and develop the shipbuilding industry.
Given the urgency, we will not be content with fine talk, something the government specializes in. This time, we will not be content with rhetoric. We need a real policy that covers all aspects of the industry.
The four member countries of the association offer good opportunities for Canada and Quebec. They represent a total population of roughly 12 million inhabitants. These are economically sound countries. The GDP per capita is $60,000 in Switzerland, $82,000 in Norway, $62,214 in Liechtenstein and $60,000 in Iceland. Canada's is $44,389.
This is a good endeavour. Somewhere at the end of the tunnel, we can see a dim light. Does the Conservative government intend to drop the philosophy it might have had during previous negotiations? This is a good endeavour. The outlook is good, but there are far higher stakes for a number of industries in Quebec and Canada, namely the European Union.
We see the government putting its energy into free trade agreements, like the ones with the European association and Colombia. The agreement with Colombia has not been ratified by the U.S. Congress for human rights reasons, but Canada is proceeding with the negotiations. In fact, two weeks ago, we went to Colombia and Panama.
We have heard witnesses and met with government representatives, people from non governmental organizations, unions and businesspeople.
Of course there have been some improvements, but there is still a nagging doubt. Without prejudging the Bloc Québécois position in these negotiations, there are nonetheless some points that need to be considered. In today's context, as far as international agreements are concerned, whether they are multilateral or bilateral, there is a growing sense that certain elements need to be incorporated into various trade agreements.
In the context of the European Free Trade Association, there are no cases of exploitation of people or workers. As far as the environment is concerned, some countries are cited as models. Nevertheless, the international economic movement is expressing its will to include in trade agreements such elements as human rights, labour rights and environmental aspects. These elements will increasingly have to be incorporated into agreements and will have to be assessed according to the situation in each country.
A country is responsible for distributing wealth among its population. Canada has not set the best example because, in 1989, this House unanimously adopted a motion whereby Canada was committed to the elimination of poverty in 10 years. That was almost 20 years ago and we now have more poverty than at that time and the gap between rich and poor is widening. Yet, it is a governmental responsibility.
On the international scene, governments will also have to give greater consideration to this international responsibility towards countries with much bleaker economic situations than ours. This responsibility must be reflected in agreements by including provisions covering human rights, labour law and the environment, of course.
Let us return to the main issue, that is the European Union. A free trade agreement with Switzerland, Norway, Iceland, and Liechtenstein is quite positive but we must be aware of the limits of this agreement. The total population of these countries is about 12 million and they account for 1% of Canadian exports.
The real opportunity lies with the European Union. With a population of 495 million generating 31% of global GDP, the European Union is the global economic powerhouse.
Canada is far too dependent on the United States, which has accounted for more than 85% of our exports; today, that figure stands at 79%.
That is the warning I wanted to convey. We should remember the committee's recommendations contained in the Bloc Québécois Supplementary Report. I would advise the Conservative government to truly realize that it must now follow the new direction being laid out—and it is unfolding quickly—and which consists of including employment rights, human rights, environmental considerations and even, in the near future, food sovereignty in bilateral agreements. This should also be adopted by the WTO.
Mr. Speaker, I am quite happy to engage in the debate today on Bill . It is actually a happy event. It is a trade agreement and my party, the Liberal Party, is in the normal flow of events very supportive of trade and has been for all 140-some odd years of our country's existence.
Before I get into remarks on this actual trade bill, a related matter has to do with what we can call ratification. I recall when the current government took office there was some talk, in fact I believe there was a statement, that the government would be submitting international treaties to the House for some informal ratification. It certainly was not a formal statutory required ratification, but I am not too sure whether the government has forgotten about that or whether it is going to live up to its commitment or not.
However, in this particular case, the treaty that has been entered into by Canada requires legislation that has to come to the House in any event, so there certainly is not a practical need for any kind of an informal or specific ratification. I wanted to put on the record that the announcement by the government that it would embark on this ratification mechanism was quite a significant change in the parliamentary process.
I will give credit to the government for that. We have not yet seen the fruits of that announcement. It has not played out the way we believed it would, however, I want to remind the government that it did make the commitment and while government officials in the Department of Foreign Affairs and International Trade are probably squirming with that commitment, that is the way I believe the House is headed and the government has certainly reflected that in its announcement. I encourage the government to live up to its commitment.
Now, I will revert to this trade bill. As previous speakers have said, this is a new trade agreement which Canada has entered into with four European countries. It is a happy event with the trading stars of five countries coming into alignment with all of the countries potentially benefiting from the freer trade and access provided for in this treaty.
There is something actually quite grand happening in Europe which most of us and the world are aware of. But after some thousand years of conflict and fighting, killing, burning, looting, shifting of borders, and tribal inter-tribal conflicts, Europe, after the last war, came together and decided to form a union, and to adopt mechanisms which would pre-empt and get rid of this sordid history of war and conflict. It is succeeding beyond the dreams of most people who lived through the horrors of the first half of the 20th century.
The European Union has adopted models for trade, international relations, monetary and fiscal matters, criminal law, the environment, and certainly succeeding in making the EU a new focus for global presence. I was going to use the word “power”, but there is more going here than just that. The EU is certainly a focal point for economic and political leadership in the world. Recently, at a meeting Europe of course is grappling with what we sometimes call multiculturalism. We can see dozens and dozens of cultures and languages in Europe, not so much coming together, but living together, interspersing, accommodating and flowering, and that is all happening in Europe now, as much as it is happening in Canada. In fact, I heard the Europeans refer to the Canadian model of multiculturalism when they were looking for a kind of a road map as to how to handle many of their internal issues involving culture, language, religion, heritage and preserving these things.
The European Union has approximately 20 to 30 countries and it is a market of about half a billion people. The EU and the countries we are dealing with here is a part of the world that is highly educated and very well off. The point I want to make is that the four countries we are dealing with are not in the EU. They are interspersed throughout the geography of the European Union but they are not actually members. For their own reasons they are not a part of the European Union. Those four countries are Norway, Liechtenstein, Switzerland and Iceland.
Those particular countries, while they may each individually seem small, are actually a fairly significant group of traders with Canada. As I said, my party is usually very keen to endorse, support and promote improved trading relationships around the world, and I know the current government is following a similar policy.
We are a big exporting country. We would like to have access to as many world markets as we can gain access to. I should say that in this particular set of circumstances as we enter into this trade agreement and change our domestic laws to align with the treaty, and they are minor adjustments, not major ones, but as we do this, one of the issues we do not have in this particular trade agreement is the potential problem of having a trade agreement with a country that has a labour force that is very inexpensive and has low labour wage rates. We do not have that issue here because these European countries all have fairly standard European level wage rate structures.
If we were doing a trade agreement with a country that had very low labour wage rates, organized labour and labour generally here in Canada would have some concerns. Those types of arrangements often involve significant adjustments in the marketplace with one country making use of the relatively valuable low wage labour rates in the other party to the treaty. In this case, those adjustments are not present. The labour wage rates are pretty typical and similar to those in Canada.
Some people will wonder what we are really dealing with here. We are talking theory; we are talking some money, but what are we talking about when we are talking about trade with these countries.
In this particular case Canada exports to these four countries which call themselves the European Free Trade Association. This is what we in Canada sell to them: pharmaceuticals, copper, nickel, machinery, precious stones, metals, medical devices, aluminum, aerospace products, pulp and paper, organic chemicals, autos and auto parts, art and antiques. That is a pretty eclectic list. What do we buy from them? Not the same type of things. We buy specific types of mineral fuels, pharmaceuticals, chemicals, machinery, medical and optical instruments, clocks and all those expensive watches that we see in the jewellery stores at the malls. A lot of those come from these countries in Europe.
We have a great trading relationship. In 2007 we sold to them about $5.1 billion worth of merchandise trade and they sold to us approximately $7.4 billion of merchandise trade. There is lots of other trade going on as well in agricultural goods and in services.
There is investment moving around. In 2006 Canada invested $8.4 billion in these countries and the four of them invested $15.6 billion in Canada. There is a fairly healthy foreign direct investment movement going on here. I think Canadians should be aware of that. Our entrepreneurs and our investors do not only invest in Canada, but Canada now is a capital exporting nation. We invest in businesses, places and countries all over the world. That may scare some people, but many of us have pension plans and I think it should be reassuring that Canada's investments now span the world, at least the investments of individuals and of our pension plans, and on a global scale, our pension plans are looking rather large.
There are some highlights that I want to mention for the record. There are special provisions in this trade agreement. Do not forget that this agreement has been negotiated and there were some Canadian interests that needed to be recognized in the agreement, just as there were interests of these four countries that had to be recognized.
The first one has to do with agriculture. As we all know, Canada has a fairly robust system of supply management for many agricultural products. We think this has served our country well, domestically and internationally. There is some debate about some components of our supply management system here in Canada, but generally, I think the agricultural community believes that it has served us well.
When we enter into a trade agreement such as this, it is necessary to take some steps to protect the supply management system we have here, because supply management is not total unrestricted free internal trade; it is a supply managed pricing and supply. The countries with which we trade want to know, are we really free traders with the market governing freely or do we have a supply management system. In this particular treaty, for those countries themselves that have some supply management mechanisms as well, we have recognized the Canadian supply management system in agriculture and it will carry on unimpaired by the provisions of this trade agreement. That should be good news that makes entering into the treaty a lot easier.
The second is in terms of shipbuilding. Canada's shipbuilding industry has been under pressure economically for many years now. Many members of the House ensure that their remarks and their work in Parliament are calculated to support and sustain the shipbuilding industry where it carries on in Canada.
This treaty, therefore, had to be adapted to ensure that our Canadian shipbuilding industry was reasonably protected. The means chosen for that involves tariffication, putting tariffs on ships that would come into Canada from these countries. I am sure that Liechtenstein does not have much of a shipbuilding industry, being landlocked in the European Alps, but I know that Norway does and I think Iceland does.
We have created a very long period of tariffication for different types of ships, which runs 10 to 15 years. For 10 to 15 years after this treaty is put in place there will be protective tariffs for the Canadian shipbuilding industry. At the end of 10 or 15 years, however, those tariffs must come to an end. They will be tapered off. Our Canadian shipbuilding industry must compete with these other countries, but there is 10 to 15 years of adjustment. That is good news for our shipbuilding industry.
The third component that was added is a component one finds often in trade agreements like this. It is called a snap back provision. I believe that in most treaties it is invoked unilaterally. It is there to protect areas of the domestic market where there is a serious threat by the import of a foreign product.
Where there is a threat, perhaps by very low predatory pricing or dumping of a product from outside Canada in Canada, Canada would have the ability under this agreement to adopt the snap back provision which would reimpose a tariff. We have to keep in mind that this is a free trade agreement where there are no tariffs. If there were a dumping situation and a serious threat to a Canadian industry, Canada could reimpose a tariff up to the level of what is called most favoured nation. That tariff would be reimposed to protect, for a period of time, against the unanticipated threat from this offshore dumped product, merchandise, whatever it might be.
Those are the three specific provisions. In retrospect, it looks like this trade agreement was actually quite easily reached. However, let the record show that it took 10 years to put it together. Negotiations on this trade agreement began in 1998 and were completed in 2007, and we are now moving to implement the completed treaty.
In the view of this particular member and my party, on balance this trade agreement is a keeper. It is a good one. It will serve our country well. It will serve the four countries of the European Free Trade Association well. Our trade showing will undoubtedly increase and improve. Exports, jobs, and prosperity in all the countries will undoubtedly improve.
We are planning to vote in favour of the bill.
Mr. Speaker, on behalf of the NDP, I am happy to join in the debate on Bill .
What I understand from the speeches of my colleagues from and is that the NDP might be the only party standing in opposition to Bill , the enabling legislation for the Canada-European free trade association agreement.
We in the NDP have some compelling reasons to oppose this legislation, most of which have been cited by the other opposition critics, and yet they still seem fit to support the bill even though they have raised very legitimate concerns about its shortcomings and potential hazards in the context of the shipbuilding industry in Canada, or what is left of it, and in agriculture.
As my colleague from the Bloc pointed out, the supply management of our agricultural products is important to our Canadian agricultural-industrial strategy and we do not want to do anything that will jeopardize, undermine or diminish, in any way, our commitment to supply management.
I point out to my colleague that this particular bill was criticized heavily by Mr. Terry Pugh, the executive director of the National Farmers Union, because he noticed that the provisions of the agreement concerning agriculture defer to the World Trade Organization's principles and mechanisms if there is arbitration or a disagreement.
We know the World Trade Organization's view on supply management and we do not trust its dispute mechanism when it comes to maintaining the strength and integrity of the Canadian supply management, be it the Canadian Wheat Board or supply management in various sectors in the province of Quebec. I would have thought that alone would be reason enough for my colleagues in the Bloc to oppose the adoption of this enabling legislation.
Until the shipbuilding provision was carved out and until the provision of using the WTO's dispute mechanism was pulled out, the NDP was not prepared to support this bill, and we maintain that principle today. We are not alone in that. Even though there are a few people who agree, apparently, in the House of Commons today in standing up for the Canadian shipbuilding industry and supply management, there are important third party validators in civil society who have made their opinions known at the committee and who spoke very well in defence of the NDP's stated position that we cannot support this legislation as it stands currently.
I will get into detailed specifics about the bill in a moment but I want to express my bewilderment over how it was that Canada abandoned and walked away from shipbuilding as a key industrial sector that we want to promote, support and maintain. What gang of chimpanzees decided that Canada should get out of shipbuilding? It seems to me that was the policy decision that was made.
I was the head of the Carpenters' Union in my home province of Manitoba and I know, from the history of my union, that in the 1940s, 1950s and 1960s the Carpenters' Union had 30,000 members working in the Burrard Dry Dock shipyards alone in downtown Vancouver. Those were 30,000 good paying union jobs in my union alone. That does not include the marine workers, the boilermakers, the ironworkers or the other tradespeople who were involved in the fitting out and production of ships in British Columbia.
My colleague from has tried to defend what is left of the shipbuilding industry in her coastal city. We had a burgeoning shipbuilding industry in this country. We were at the leading edge. At the Burrard Dry Dock alone, where my colleagues in the United Brotherhood of Carpenters and Joiners worked, they were producing a ship a week for the convoy to support Great Britain during the second world war, the merchant marine supply ships. The Burrard Dry Dock was setting the industry standard in the massive production of a certain category of ships that today cannot be built in Canada. That was 60 years ago.
We were at the leading edge, but by somebody's design, by some convoluted pretzel logic, somebody in the policy and decision making area of the federal government decided that shipbuilding was not really an industry in which we wanted to specialize as a nation. Maybe that someone had a grandiose idea that we would go on to more high tech industries or into the knowledge industry sector.
That is all well and good, but we should not think for a minute that shipbuilding is some smokestack blue-collar industry that is obsolete. It is not. Anyone who has ever been to Norway, as I have, would know that in Oslo the slips and the shipyards that build some of the world's finest ships are in a state of the art, computerized, high tech facility. It is on a par with the technology associated with the Canadarm in the robotics and magnificence of the machinery.
I have been to Lévis in Quebec, where there has been a fabulous tradition of shipbuilding throughout the 1800s and 1900s right up to today. If that were prioritized and nurtured the way other industry sectors have been, Canada would be right up there with Norway, Korea and Japan as one of the leading shipbuilding countries in the world.
However, there was a policy decision made many years ago to abandon that sector. People said, “Our kids do not want to work on those dirty tradesmen types of jobs, so we will move on to other types of work”. That was a tragic mistake.
No one can claim ignorance on this, because they have been reminded time and time again that abandoning the shipbuilding sector was a mistake. This bill that we are debating today compounds that mistake. It adds insult to injury in terms of abandoning that important sector.
Yesterday we sat in the House and listened to the president of the Ukraine outline the many bold, courageous moves that his struggling, burgeoning and newly independent country is going through. One of the things he focused on in his speech is how proud Ukraine is of the inroads it is making in getting competitive in shipbuilding.
Ukraine will be surpassing Canada in shipbuilding capacity and capability, because its government, through what I would argue is bold leadership on this front at least, has targeted shipbuilding as one of the industry sectors that it intends to promote.
We have a lot more shoreline than the Ukraine. We have deep sea ports in three oceans, including the port at Churchill, Manitoba. Of all countries, Canada should be at the leading edge of the shipbuilding industry. We are being left in the dust.
Members have talked about phasing out the tariffs on shipbuilding in order to enable and facilitate trade with these countries in this free trade agreement. Some have said that Norway has phased out its subsidies and is willing to drop its tariffs and therefore it is a fair trade relationship with a comparable country with high wages, et cetera. I am willing to admit that it is a social democratic country with a high wage, high cost economy similar to Canada's. That is a level playing field.
However, where it is not a level playing field is that Norway's shipbuilding industry was very heavily subsidized right up until the year 2000, when shipbuilders could stand on their own two feet and they did not need that subsidy any longer. We cannot compare that with the industry in Canada, which has been starved and systematically dismantled and is a mere shadow of its former self.
I argue that our shipbuilding industry cannot stand in fair competition with an industry that was nurtured, developed and fed for many years by public subsidy until the year 2000 and now is a successful, burgeoning, contemporary industry sector. It is folly to not acknowledge the inequity in these two businesses in these two countries as an example.
I said at the outset that the NDP is not alone in its opposition to this particular free trade agreement. While it has few supporters in the House, it seems, and our arguments have not moved MPs of other parties off their positions to support our position, there are many important third parties in civil society who validate and support the NDP's position.
Let me mention one. It is perhaps no surprise that the president of the Shipyard General Workers' Federation of British Columbia, Mr. George MacPherson, says:
|| The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.
Les Holloway, the Atlantic Canadian director of the Canadian Auto Workers and an outspoken champion of the shipbuilding industry, has made representations many times at committees before Parliament and before the House of Commons and said to the international trade committee that it “should not recommend this Free Trade Agreement without first recommending that the federal government first address the issues facing the shipbuilding industry that would allow the industry to compete in a fair and equitable manner with” these new trading partners.
That in and of itself, I would have thought, should have motivated my colleagues from the Bloc to say that this bill in its current form is not acceptable until some of these very real concerns are addressed.
Andrew McArthur, from the Shipbuilding Association of Canada and the Irving Shipbuilding yards, said before the Standing Committee on International Trade on April 2:
||--our position from day one has been that shipbuilding should be carved out of this trade agreement. We butted our heads against a brick wall for quite a number of years on that and we were told there is no carve-out. If the Americans, under the Jones Act, can carve out shipbuilding from NAFTA and other free trade agreements, as I believe the Americans are doing today with Korea, or have done, why can Canada not do the same?
That is a legitimate question. The Americans are better negotiators than we are. Their negotiating stance is from a position of strength. They have decided that they are going to protect their shipbuilding industry under the Jones act. Eleven separate times, the Americans have challenged the Canadian Wheat Board as being somehow an unfair trade subsidy or advantage. We have never challenged the Jones act even though it is protectionism pure and simple, in its purest form.
I remember going down to Washington to argue with American senators on trade related issues. One time, in fact, it was on Devils Lake. One senator put it very succinctly to me and Mr. Lloyd Axworthy, who was the minister of foreign affairs at the time. We were sitting around a table with that American senator, who looked us in the eye and said, “Son, if it ever comes down to what is good for you and what is good for us, we are going to do what is good for us. Thanks for coming”. Then he showed us the door.
That is the bargaining stance of the Americans. The bargaining stance of Canadians seems to be one of weakness. We are lucky to get out of the room with some dignity after what we leave on the table.
I am no stranger to negotiations. I have negotiated collective agreements for the better part of my adult life. I know that we do not always get everything we want at the bargaining table, but I also know that we do not fold when issues of key importance to us are still on the table and there are still steps to be taken.
I put it to the House that there are still options for Canada if we want to make a statement about the integrity and the strength of our shipbuilding industry.
Mr. McArthur from the Irving Shipbuilding company also said:
|| We have to do something to ensure shipbuilding continues. The easiest thing is to carve it out from EFTA...if you do one thing, convince your colleagues in government to extend the ship financing facility, make it available to Canadian owners in combination with the accelerated capital cost allowance, and you will have as vibrant an industry as exists.
The capital cost allowance is something with which we are all familiar, something that is touted when it comes to promoting and supporting other industry sectors.
Those are two simple key recommendations that would be a vote of confidence in our industry instead of cutting it adrift and abandoning it to other actors and other players in other countries.
I was surprised at some of the things my colleague from was saying. He said that we have to put in place these free trade agreements with no tariffs and barriers because we need to be able to compete with these countries of low wages and low costs that may be able to produce ships at a cheaper rate.
Korea is no longer considered a low wage, low cost country. Norway has a higher average industrial wage than Canada does. The people we have to worry about competing with are not, frankly, the low wage, low cost actors in this particular competitive environment.
Let us listen to what Karl Risser Jr., president, Halifax Local 1, Canadian Auto Workers Shipbuilding, Waterways and Marine Workers Council, said before the Standing Committee on International Trade. He said:
|| I am here on behalf of the workers in the marine sector of our union to express our opposition to this agreement. Canadian shipbuilders find themselves competing for work in domestic and international markets on far from a level [playing field]...Other governments, Norway for one, have supported their shipbuilding industries for years and have built them into [key] powers, while Canada has not. We have had little protection, and what little protection we have left is a 25% tariff on imported vessels into Canada, which is being washed away by government daily through agreements such as this and the exemptions being negotiated with companies.
Why are we giving this away? To what end? What greater power are we serving here? It boggles my mind. Mine is not a very scientific, professional or academic approach but a gut feeling that we are making a tragic mistake. I despair sometimes. Where are my kids going to work if Canada does not build anything any more, if everything is built somewhere else? Are we willing to abandon those key manufacturing sectors so lightly and so readily?
Karl Risser Jr. ends his comments by saying:
|| So this EFTA deal is a bad deal for Canada. I'd love to see someone answer the question, what is Canada going to get out of this agreement? I know we're going to destroy our shipbuilding industry, a multi-billion-dollar industry in Canada. It's on its last legs now and needs a real boost. We have that opportunity in front of us, but whether we take it or not is the question.
He closes by saying:
|| Again, the one question I have is, what is the benefit to Canada from this agreement? The last thing I would like to ask is, will this agreement be put before Parliament, as [the current Minister of Foreign Affairs] has said, for a full debate and vote?
I guess his question is answered. We are here for a full debate. We are not here in quite the context that we were told we would be when it came to free trade agreements and some of the points of concern that have been raised regarding the process, as we were told.
I do have some comments and notes to make on that subject. We are not entirely satisfied that free trade agreements are getting quite the vetting that was committed to us over the years. This debate today is still subject to the fact that the government “may” bring it before the House of Commons and “may” put it to a vote. I do not know at this stage what we can do to satisfy ourselves that the concerns of Canadians are being met in the context of at least the shipbuilding industry.
Second, with what time I have left, I would like to express again our concerns in the context of the integrity of supply management in this country, which is put in jeopardy by the dispute mechanism stipulated in this free trade agreement. If the government is going to subject disputes over supply management to the WTO, which we know is no friend of supply management, then the National Farmers Union and its counterparts in the province of Quebec would have serious concerns.
For those two reasons alone, we feel confident that we are doing the right thing in voicing our opposition to this bill. We are not opposed to free trade. We are not opposed to fair trade, especially with countries that are virtually our equals in terms of economies.
With social democratic countries such as Norway, I believe there should be a free movement of goods and services and products, but we should not trade away the farm. We do not have to be Jack and the Beanstalk here, where we trade the family cow for three beans, none of which may actually sprout. With that analogy, I will end my remarks.
Mr. Speaker, before I begin my remarks, let me say how delighted I am to speak on this issue. I think all members of Parliament, however they feel on this issue, whether they are in favour of it or against it, I am sure are quite pleased that we have an opportunity to debate this before this House.
It was not too long ago, and it still is to an extent today, that free trade agreements and trade agreements had been the exclusive domain at the executive branch. I think it is a positive step that the government has put forward this before this House. Bill , the European free trade association agreement, is certainly an agreement worthy of debate in this House and also, I think, worthy of support because we are talking about some of the most ideal friends and countries with which we could possibly trade.
Obviously, some of us have concerns when we do trade with certain countries that have issues of human rights. This is not the case. These are, in fact, countries in Europe that we can certainly do business with because they have a proud history defending human rights as western democratic countries. They share the values that Canada and Canadians have.
Throughout our history, Canada has always been a nation of traders. From the fur traders of the early years of Canadian history to the current day when we sell the world everything from energy products to high tech products, our prosperity is dependent on our ability to trade.
In the early days of Canada, in 1867, when we founded this country, and before the Treaty of Westminster, the predominant trading partner for Canada was Great Britain. Today, 80% of our trade is done with our American partners. Diversity in trade is going to be extremely important as we get into a more competitive world.
I think that this particular deal, the European Free Trade Association agreement, is a great opportunity for all of us to broaden the trading partners that we have, and also the trading agreements that we have in place to ensure that we, as Canadians, benefit from the whole process of trade with countries in Europe.
It is important to remember that as a nation of approximately 34 million people, from the very beginning, Canada has relied upon trade for our prosperity and for our continued growth, both in terms of economics and population. We are a country blessed with resources of wealth and a labour force that is second to none in the world.
Our GDP is valued in excess of $1.4 trillion, creating a per capita wealth of over $38,000 per person. Our purchasing power as a nation is over $1.2 trillion. We export over 2.2 million barrels of oil per day. We export over 100 billion cubic metres of natural gas. We export aircraft, automobiles, industrial goods, plastics, timber and aluminum, to name but a few products.
Today, as we talk about the ever-increasing price of gasoline and the cost of a barrel of oil constantly going up, there are concerns about how this will impact on our economy.
Canada is certainly blessed with an abundance of natural resources and we are an energy super house, to say the least, because these are very valued commodities throughout the world at the moment. Canada is certainly benefiting and as we see today, the rising dollar in this country is having some positive effects and also some negative effects.
Some members in this House and I certainly have spoken before of the issues of concern in relation to the manufacturing sector. We are, of course, concerned about the loss of jobs in the manufacturing sector. Yesterday, it was reported in the news that today more people are working in the service sector than in the manufacturing sector.
Some people might say this is a positive things, however, others are really concerned. I would say the one issue of concern, specifically, is not just the loss of manufacturing jobs, which I think is so critical and important to this country, but it is also the fact that we are losing good-paying jobs as well.
The manufacturing sector pays twice what the average person is making in the service sector, and the service sector also has very few benefits offered to individuals and their families. This is of grave concern to all of us. We have to pay special attention to those issues of concern.
Total exports each year account for over $440 billion. What does all this mean to us as parliamentarians and, more important, to Canadians across our country who work each day to build prosperous lives for themselves and for their families?
Simply put, the future prosperity of Canada is dependent upon trade and our trading relationships as much as it was in the early days of settlement of this country. The most profound difference is that in the early days of settlement in Canada almost all trade was targeted locally or within the context of colonial realities. In later days, trade with Britain and within the context of the Commonwealth was very much the primary reality we faced as a country.
Few would argue that the world is a very different place, not only from the time of the early settlers hundreds of years ago, but from the world we knew less than 50 or even 20 years ago.There are a few realities that we as a nation must recognize and address. They are the emerging markets of Asia, the powerhouse economies of China, India and Brazil that will continue to grow and to impact upon the world economy.
We all know that Canada in the late 1980s entered into negotiations with the United States that saw the creation of the North American Free Trade Agreement. There are areas of the agreement that continue to cause us concern, but the reality is that our trade with the United States represents over 80% of our trade with the world. The reality is that under NAFTA Canada enjoys a substantial trade surplus with its trading partner, the United States. Possible changes to NAFTA are a debate for another day but the point is that in negotiating this agreement it was clear that new economic realities exist in the world and we must be in our best position to deal with them.
The European Free Trade Association agreement we are debating today may not appear to represent an enormous part of our economy. In fact, the European free trade agreement countries are the fifth largest merchandise exports for Canada.
There are some key points that need to be addressed and also to be highlighted on this particular bill. This bill eliminates duties on non-agricultural goods and selected agricultural products, giving Canadian exports better access to Canada's fifth largest merchandise export destination. It lays the groundwork for a more comprehensive agreement on service and investment with European free trade agreement countries as well as free trade talks with the broader European Union.
The bill addresses concerns regarding the shipbuilding sector by obtaining the longest tariff phase-out for any agreement with developed nations: 15 years for the most sensitive vessels and 10 years for other sensitive vessels, with known tariff reductions for the first three years. Shipbuilding is also supported through a $50 million renewal of Industry Canada's structured financing facility.
A snap back provision exists, raising tariff levels to the most favoured nation rate for up to three years if the agreement results in serious threats to domestic industry. A process for binding arbitration is also laid out. Canadian agricultural supply management and buy Canada government procurement programs are protected.
The European free trade countries, as I stated before, are the world's 14th largest merchandise traders and Canada's fifth largest merchandise export destinations. Two-way Canada-EFTA non-agricultural merchandise trade amounted to $12.6 billion in 2007. Canadian exports to the European free trade market amounted to $5.1 billion, as of 2007. It included some very important materials, such as nickel, copper, pharmaceuticals, machinery, precious stones and metals, medical devices, aluminum, aerospace products, pulp and paper, organic chemicals, autos and parts, art and antiques. There is a broad perspective of things that we are trading with the Europeans already and we expect this to grow with this particular agreement.
Canadian imports from the European Free Trade Association countries amounted to about $7.4 billion in 2007. These imports include mineral fuel, pharmaceuticals, organic chemicals, machinery, medical and optical instruments, and clocks and watches. Canadian foreign direct investment in the overall EFTA market was about $8.4 billion in 2006 and direct investment in Canada from the EFTA market was about $15.6 billion in 2006. We are talking about very large sums of money.
It is also important to note the reactions of some of the stakeholders. Some concerns have been raised and it is important to highlight what some of the stakeholders are saying. Despite the protections given in the agreement, there is still fear that the shipbuilding industry may be unable to compete under these terms and may result in significant job losses. That is an issue that needs to be addressed.
There are some provisions in here that address those concerns, but the government has to take those issues seriously. It must make sure that the shipbuilding industry is protected in whatever way possible, not just through these agreements but also through financial incentives that are needed to maintain that vital industry for Canada. We as a country should take very seriously the manufacturing sector and the shipbuilding industry.
The National Farmers Union believes that the agreement will negatively impact supply management by undermining Canada's position at the World Trade Organization. None of the supply management groups have indicated any concerns. One sector which is likely to feel the most effect is dairy, however, Dairy Farmers of Canada was consulted and has expressed no concerns. These are issues that need to be put on the table.
As I mentioned before, we are talking about an agreement the history of which goes back to 1998 when the Liberal government under Jean Chrétien first began negotiating this agreement. The agreement was signed on January 26, 2008 in Switzerland. It was tabled in Parliament on February 14, 2008. A committee reviewed the agreement and reported to the House on April 7, and now we are debating this government bill to enact it in legislation.
Of all the agreements we have spoken to in the past, this one deals with countries of like mind, countries for which we have a lot of respect and with which we have built long term alliances over many years. There are many historic and cultural ties that bind Canada and those European nations.
We have also seen the birth of the European common market, which has been a huge success. It has brought countries that at one time were in poverty into first world status and improved the quality of life of all people who live in those countries. The European Union has done a magnificent job of raising the standard of living of all Europeans, creating a common market that has been a huge success.
Every day I read about what is taking place in Europe. There was a major meeting to sign the treaty of Lisbon. Once it has been voted on by the parliaments in Europe and comes to fruition, it will certainly solidify a truly great united nations of Europe, if we could call it that.
It is a great leap of faith for all of these countries to work together. It is something they realized they had to do because of some of the strifes and wars that had taken place in the past, but also, the European nations realize this is a new reality that is important for the 21st century.
We here in Canada are quite pleased with the development that is taking place in Europe. We certainly want to solidify our ties not only socially, but also economically. This particular agreement that has been put forward will go a long way to doing that.
I am pleased to lend my support, notwithstanding the fact that there are still some concerns out there. I am not unsympathetic to those concerns. Those concerns need to be addressed. There are different mechanisms that can be put in place. It is beholden upon the government to do so and make sure that our sectors and industries are protected.
At the end of the day we want to ensure the well-being of all Canadians to make sure that they have a decent job and earn a decent wage. We want fair trade, as has been talked about. Fair trade is the important ingredient to make sure that these agreements stand the test of time and that they produce positive results for all Canadians.
I am delighted to once again state how pleased I am that this bill is before this House and that the executive has allowed Parliament to have a debate on a trade agreement.
Mr. Speaker, it is with keen interest that I join the debate today on Bill , which would implement the free trade agreement between Canada and the European Free Trade Association. The association is made up of four countries: Norway, Iceland, Liechtenstein and Switzerland.
To begin, I want to reiterate that after responsible analysis the Bloc Québécois will support this bill, which we believe, in general, offers promising economic trade opportunities for Quebec that are worth pointing out. However, there are also some concerns that my colleagues have mentioned and that we share.
We all know that Quebec is a trading nation. Many of our companies, especially those operating in leading-edge sectors, rely on exports to ensure their growth. That is important. International exports represent almost one-third of Quebec’s GDP. If we include trade with Canada's provinces, Quebec’s exports represented about 50% of its GDP in 2006.
In trading terms, Quebec is far too dependent on American markets. Indeed, nearly 85% of our current exports go to the United States. Given the slowdown in the American economy that we are now witnessing, the rise in the Canadian dollar and the aggressive tactics of emerging countries such as China and India, we are finding it increasingly difficult to maintain our market share with our neighbours to the south. The results have been significant for Quebec. More than 150,000 manufacturing jobs have been lost in the past five years, including more than 80,000 since the advent of the Conservative government and its laissez-faire doctrine.
The riding that I represent, Berthier—Maskinongé, has been severely affected by the loss of jobs in the furniture and textile industries. If our trading opportunities were more diversified and we were less dependent on the United States, our manufacturing sector would not be so threatened. This is why this free trade agreement with the European association deserves to be explored and, indeed, to be supported.
For example, as is the case in Quebec, the brand name pharmaceutical industry is very strong in Switzerland. Quebec is the Canadian leader in the field of brand name drugs because of its pool of skilled researchers and its favourable tax system. One can easily imagine, and we even hope, that Swiss pharmaceutical companies could be tempted to produce their drugs in Quebec as a way of gaining easier access to the American market. We will strongly encourage that idea, which would result in new investments in Quebec. That is one of the main reasons why we support this bill.
If we look at the case of Norway, nickel accounts for more than 80% of Canadian exports to that country. The largest mine in Canada, and the third biggest in the world, is located in the Ungava region of Quebec and is owned by a Swiss company. This agreement can provide significant benefits for Quebec.
That is another reason why we support this agreement.
As I already said, we will support this agreement because it gives Quebec some good opportunities and the Bloc Québécois is here primarily to defend the interests of Quebec.
This agreement also has the advantage of not containing the same kinds of shortcomings as some other accords. For example, in contrast to NAFTA, the agreements with Costa Rica and Chile have a bad chapter on investment, as we know very well, which gives companies the right to sue a government that adopts measures that could reduce their profits. There are no such provisions in the agreement with the European Free Trade Association. The Bloc Québécois is very happy about that. These countries have a basic respect for human rights and the rights of working people and that is another reason why we support this agreement.
In addition, the agreement with the European Free Trade Association covers only goods and not services. Nothing would force us, therefore, to open public services to competition, whether provided by the government or not, because they are not included in the agreement.
Similarly, financial services and banks will not be exposed to competition from Switzerland, which has a very strong banking system.
It is the same with government procurement. The government remains perfectly free to purchase in Canada, subject to the WTO agreement on government procurement. This is an indispensable aspect of any kind of trade agreement.
I would also like to mention agriculture. Our colleagues in the NDP seem to have some concerns in this regard. I want to speak more especially about supply management, which is very important to Quebec and the riding of Berthier—Maskinongé that I have the honour of representing.
We all remember it was the Bloc Québécois that got a motion passed in 2005 requiring the full maintenance of supply management. We have been assured by agriculture officials in Quebec that this agreement does not derogate from supply management and does not contradict it or call it into question.
We are very proud of this motion and will continue to defend it because we think that farmers and consumers are best served by this system. We are satisfied with the bilateral agreements on agriculture because products subject to supply management remain protected.
The in-quota tariff is eliminated of course under the agricultural agreement with Switzerland, but it applies only to the part of the market already covered by imports, or 5%. The elimination of this tariff will therefore have only a marginal effect on our dairy farmers because the tariff rate quotas and the over-quota tariffs remain the same. It is important for this to remain as is, especially since milk proteins are excluded from the agreement. This is another essential provision for keeping our agriculture strong.
The fact that the 7% tariff is eliminated under this agreement makes it all the more necessary, however, for the federal government to remain adamant at the WTO that supply management is simply not negotiable. The Bloc Québécois will continue to demand a full defence of supply management at the WTO.
This being said, we have some concerns about what the agreement means to the future of our shipyards. Imported ships are currently subject to a 25% tariff. Under this agreement, the tariffs will gradually start dropping in three years and will be eliminated in 15. I heard the boasting about the fact that his government had managed to negotiate this 15-year adjustment period.
I think the minister must be aware that the adjustment period provided for in the agreement will be useful only if it is accompanied by vigorous adjustment and modernization programs for shipyards.
Otherwise, it will just slow the decline of our industry. Norway has grasped this quite well, by the way.
In Canada, the federal government, be it Liberal or Conservative, has done nothing to support our shipbuilding industry. It has not supported shipbuilding since 1988. This is really a shame, given all the subsidies that are currently being handed out to the oil industry, which makes exorbitant profits.
As well, not only are the few aid measures still available very poorly adapted to the shipbuilding industry, but the federal government has even penalized the provinces that have instituted innovative measures, such as the refundable tax credit in Quebec, which for some years was considered by Ottawa to be taxable income under the Income Tax Act. That allowed it to claw back 20% to 25% of the assistance that Quebec paid to the shipbuilding industry. Unbelievable but true.
So today, some of our shipyards are having trouble and are not really very competitive. This kind of policy has to be shelved. We have to provide more support for our shipbuilding industry.
Because it receives support from its government, the industry in Norway is productive and competitive today. And now the Norwegian government is working to open up new foreign markets for it.
The Conservatives’ policy, which amounts to leaving companies to their own devices, could be very harmful to our shipbuilding industry. We have 10 to 15 years to get back on track and implement programs to support our industry.
In the case of the manufacturing sector, we can see how Conservative inaction has led to the loss of thousands of jobs. We should learn that lesson when it comes to the shipbuilding industry. So we are calling on the federal government to abandon its laissez-faire policy and put forward a policy to support and develop the shipbuilding industry quickly. The Bloc Québécois has been calling for this for several years now.
In fact, this is the motion that I introduced at the Standing Committee on International Trade, on behalf of the Bloc Québécois, and that received support there:
|| The Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.
The motion was supported by all members of the committee, but only after some discussion and some hesitation. I think it is important in this context.
We have to support our industry. We have 10 to 15 years, depending on the type of ship, to support the industry. It is therefore time for action.
In this motion we are telling this government that it has to act and put forward a comprehensive strategy to support the shipbuilding industry, because the Conservatives’ bad industrial policy must not be allowed to result in a bad trade policy.
Laissez-faire has produced no results for several years, and it is time for action. This government has the resources. The strategy should facilitate access to capital for the industry, stimulate investment, give preference to local suppliers in public procurement and of course encourage shipowners to buy their ships here at home.
When shipyard representatives appeared before the committee, they reiterated that they wanted a program to facilitate accelerated amortization that buyers of Canadian ships could use, and a structured financing mechanism.
On the question of support for struggling industries, the Conservative government is practising a hands-off, laissez-faire policy, as I said earlier, a free enterprise policy: free trade will solve everything, all by itself. That is not true.
In the case of shipyards, as in the case of manufacturing, where we have lost many jobs, we believe this policy is quite simply irresponsible.
We know how the Americans and the Europeans support their industries. We need to do the same so that we can become more competitive. That is why the Bloc Québécois will press the government to quickly introduce a series of measures to promote the development of our shipbuilding industry. I ask the opposition parties here to support us.
In closing, even though we support this agreement, we need to be aware that its impact will still be limited. The four members of the association represent nearly 12 million people and account for roughly 1% of Canadian exports. The real trade issue is the European Union. With its 495 million inhabitants who generate 31% of global gross domestic product, the European Union is the world's leading economic power. We believe that Canada should be pursuing a free trade agreement with the European Union.
As we know, Canada's petrodollar has risen substantially in value against the American dollar, which has led to a major crisis in the manufacturing industry. What people may not know is that the dollar has gone up in value much less against the Euro. As I said earlier, if our trade were more diverse and our exports less focused on the United States, our manufacturing sector would be much stronger and more robust. The European Union is an essential trading partner.
Moreover, a free trade agreement with the European Union would have benefits in terms of investment. Together with NAFTA, the agreement would make it attractive for European companies to use Quebec and Canada as their gateway to the North American market and consequently to move some of their production there. We will support such a free trade agreement. As nearly 40% of European investments in Canada are in Quebec, it would certainly be a desirable location for European companies that want to invest in North America.
We hope that the federal government will quickly reach an agreement with the European Union, because it would be the best way to diversify our economy and reduce our heavy dependence on the American market.
I am willing to answer any questions hon. members might have.
Mr. Speaker, it is a pleasure to stand in the chamber and speak to this important issue.
There are so many different facets to any trade agreement. The principle behind it should be, for obvious reasons, to ensure a fair and principled trading relationship is developed so that it not only fosters economic development and social prosperity in our country, but also leads to greater relations with other countries and improves their trading and prosperity as well.
However, in that discussion there needs to be a balance and restitution when there are policy changes that will affect workers across this country, whether they are in Quebec, in British Columbia or in my home province of Ontario. We have seen some very significant shifts in people's lives when a trade agreement is brought into place by the government, although we are not sure whether we will be doing that here yet as we are just discussing it right now.
We have expressed some concerns on this one from day one with regard to the shipbuilding industry and also supply management for the agricultural industry. What we have sought to do is to find remedies to those main elements because workers will be exposed to some unfair practices and procedures. Until we actually get those things taken care of, that is the reason we object to this trade agreement.
I find it a little naive for the other parties to raise these issues of concern and then blindly hope the Conservatives will bring something in later on. Those things need to be put in the structure of the agreement now because, if we then start to take other measures, there will be challenges by other governments about the faith of the agreement and whether we were acting in good faith when signing it but then we were going to then do something different later on. We will create another complicated situation.
With this trade agreement, we need to ensure that all the parties understand there are a couple of areas of particular concern that are heightened here and which need to have a different set of rules to them.
For the shipbuilding industry, it is a real concern related to the fairness. Norway, in particular, is after this Canadian gem. It really is an opportunity. There has been discussions about the erosion of the industry but there is also an incredible opportunity right now to rebuild our shipbuilding capacity. I will talk a little about that later. However, it is an exciting opportunity for Canadian manufacturing and also Canadian value added work that could be done in our home ports.
It has been done in the past. We have an opportunity right now that we are squandering if we are going to be entering this agreement, because the phase out period, from 10 to 15 years, depending upon the circumstances, is not sufficient to put the proper policy in place. Once again, if we take other measures to try to do that after signing an agreement, I am sure we will end up being challenged on that. These things need to be fixed first before they go forward.
The second element that we have had increasing concern about is the issue of our supply management. What we would be doing right now is giving up our agricultural independence in many respects. Some elements would go to the WTO and there will be trade dispute mechanisms there. I will talk a little about that later. We would also be giving up our sovereignty.
Coming from a community that was reliant on jobs in the auto sector and still is to this day as we try to transition to a certain degree and win back some of the jobs in the auto sector, we witnessed first-hand the catastrophe of trade agreements and also the WTO.
Specifically, we can see it across this land right now with manufacturing. We now have more service jobs in Canada than manufacturing. We have lost around 250,000 jobs in the last five years and 60,000 of those lost jobs have been since January this year alone. That is unacceptable. We have witnessed this basically from a false economy, by having a high export of natural resource commodities, especially in the oil and gas sector, and it is not sustainable. We have driven our dollar so far up so quickly that rapid escalation has taken place and we have not been able to adjust in many ways.
We actually have not had the opportunity to prepare for this. Often what is not discussed in this whole debate is the fact that we had a lot of assembly and manufacturing that did not get the proper research, development and procurement for new equipment because we did not have a proper capital cost reduction allowance program in place to increase productivity levels. That was missed out.
What often ends up happening in a branch plant economy is that even knowledgeless jobs are lost to China, Mexico and the United States. Many of the jobs that are being lost right now in my constituency are sister and feeder plants that are being relocated to the U.S. because of the high dollar. The government has simply not done anything about it.
The new auto policy that it put in place is very vague and it is a modest amount of money. Ironically, it is derived upon a new tax on the auto sector itself and people are furious about that situation. The government has not shown any goodwill to address this issue.
I am not sure why the other parties think that the Conservatives will somehow get it and then, on top of that, politically act and put measures in place that will protect the shipbuilding industry. I do not think that is a realistic expectation. Once we make these decisions, we can change significant features of the Canadian economy. Even though shipbuilding is not at the peak that it was in the past, it has the opportunity to go forward.
I want to touch a bit on what happened with another trade deal. The Auto Pact in Canada was one of the best trade agreements ever entered into. It is a good example of dealing with the situation. Essentially, the deal was that if people wanted to ship vehicles into Canada, the vehicles had to be built here too. It opened up the North American market between Canada and the United States and a lot of value added jobs were added to the Canadian economy. It was very successful.
A number of new plants opened and a whole series of supply elements came with that. We had research and development and headquarters were located in Canada. It created an evolution, in many respects, in the automotive industry. Windsor was where the first automobile was produced in Canada. Despite that, there had not been the big progression that we wanted.
However, when the Auto Pact came into play, it really took off and was very successful. It was different than some of the manufacturing and service sector jobs. The service sector jobs are important too but they do not bring in the type of income that is necessary to sustain and support the average Canadian family. We have seen that through a series of statistics and heard it in testimony from constituents who are having a hard time getting by today and making the payments on their ordinary bills. These manufacturing jobs really became the basis for many progressive values in the Canadian system.
What also came about because of that trade agreement was the first program in Canada, developed in Windsor, that provided payments for prescription drugs as part of people's health care plans. That resulted from the trade agreement and the auto policy. Later on it became a feature of negotiations by the CAW and other labour organizations. Now the system is used is many places across Canada. It is a way of compensating employees by providing partial coverage for drug plans.
We entered into NAFTA with the United States and we became exposed to the WTO that then ruled against Canada having the Auto Pact. What became the recipe to create a good environment then became another one to dismantle it. The result is that we have gone from being the fourth largest assembler of vehicles in the world to number ten, and we are slipping further on that. We are continuing to witness a decline.
It is sad. At a time when the industry is starting to change significantly because of newer technologies and an exciting future, we are not there. Some projects in this country have gone forward and have been positive but, by and large, we are missing out on greater opportunities for vehicle development that is now happening in other countries for a whole host of reasons. A lot of that is over policy.
I see the same type of situation taking place with the WTO in the supply management situation that we will be facing with this trade agreement deal. I have a lot of concern. When we look at the WTO and how it rules, it has been described in some categories as a kangaroo court because the bodies listening to complaints are often controlled by corporations and business interests and can override domestic laws and sovereignty issues.
It is very important to recognize that the dairy and some of our other agricultural sectors will be giving up terms and conditions that could be favourable to Canadians in having other people set our rules. I do not particularly get great comfort in that given the experience we have had in the auto sector on this.
I want to turn my attention to this agreement and the shipbuilding industry. Right now there is a current tariff of 25% and Norway has been really good. It is interesting because Canada, despite having the largest coastline of any nation, really does not have the shipbuilding industry that it should have and historically has had since World War II. What is important about this deal is that there was an attempt by the shipbuilding association and the unions to carve this out of the actual agreement.
People might say, that is fine but they cannot get their way, so we should just go ahead with it anyway and see what happens and that is the way we do things. It is not. In the United States the Americans have the Jones act. The Jones act was something they put in place to protect their industry, not only just in terms of military ships but also other ships so that they are not only going to be built there, but they are actually going to be repaired and serviced there, and they are going to protect that industry.
They see it through the lens of not only just in terms of the protection of jobs but also what I think is important and being missed in this debate, and that is the ability to maintain sovereignty over national defence along with the security of the country.
If Canada sees a further erosion of our shipbuilding industry, and we have had some recent success stories because there is now a maturation in some of the fleets and there is a requirement to build at quite a significant increase in pace, we are going to witness a loss of that capacity, and we will be dependent upon others. I cannot understand how a country, with such a large coastline and such a strong tradition with regard to building and being engineers on the cutting edge in many respects of advancement, would want to pass up that opportunity.
For example, in the Great Lakes, when we had the last period of shipbuilding, there was a large influx that came in about 30 to 40 years ago or longer actually. Collingwood evolved as a shipbuilding community and a lot of the Great Lakes shipping was replaced there. Now the industry is having to change its ships, extending their life cycle, and there needs to be a large replacement of them over the next number of years.
That is a challenge because there are environmental issues, a whole host of manufacturing issues, but also it is an exciting opportunity at a time when we are witnessing the erosion of other types of employment in manufacturing in the country.
Why not now use this as an important opportunity to redefine the Canadian lens on shipbuilding and also manufacturing? We know that the work has to be done. The association admits it. It has been out there advocating because it needs to replace its fleets. At the same time we have this incredible opportunity.
Instead, by signing this agreement, we are actually going to be like Norway, having a different set of rules, and it will have more access to Canadian jobs and we will lose out on this.
We can see the characteristic comparisons with the auto industry quite clearly. After the second world war, Japan and Korea set up very specific strategies to get into the automotive market and the manufacturing market to rebuild their economies. They set up national strategies that would make them efficient and also would support the development of the industry because they knew that the jobs would be good and important, and they could create a based economy on that which was stable.
Therefore, they went ahead and did that, everything from Kia Motors in South Korea and Japan was very much supported by the American industry at that time. They got into an industry where they are now shipping into our industry quite lucratively and we cannot ship back to them.
Meanwhile, it has been the same thing with Norway. It has been very aggressive building its industry and good for it. Norway decided that as a public policy and decided to move forward with it. Now it has phased out that support, but it has done it at a time when it is really at the top of the game. It will be very difficult for us to be able to penetrate into that market. Therefore, we are going to be losing out on jobs which is unfortunate. Once again, this is a clear economic opportunity for Canada to move forward.
The testimony just did not come from the unions that are concerned about losing jobs and opportunities for the workers. Some of the shipbuilding association members actually came forward as well and presented this evidence. That is important to recognize because once again there was an attempt to say, “Let's carve it out and make sure the proper policy is there. At the same time, the deal could go forward if there were going to be those changes.”
So, as we are faced with this decision, we have to ask the fundamental questions about whether or not we should be entering into this agreement right now. The government has a period of time right now to consider it before signing this or bringing it back to the House of Commons for a vote.
I would argue that if the other parties are sincerely concerned about the shipbuilding and supply management issues, they should not support this bill until we get those clear indications from the minister and, as well, from this government. That would be the strategy that we would employ. There is no requirement right now for us to hang out this opportunity and to lose it.
What we should be doing is exercising our leverage as political parties to say, “Listen. This is a minority Parliament. There are some issues here that have been identified with this particular bill”. There are some strengths in it as well, recognizing that there are some positives, but we believe that these two things need to be examined and dealt with. That is the responsible way to go about dealing with other nations when we are entering into agreements.
If we think, and the other parties think, that once again we can just basically in a couple of years from now try to roll out some big policy that is going to shift investment opportunities that other people have already tried to go after or terms and conditions of this deal, and that they are just going to stand down, that is not going to happen.
They are going to challenge Canada on those things. We have even seen that with the softwood lumber sellout. There is a signed agreement right now. It was a sellout, a bad deal, but at the same time, despite it being a bad deal, the United States is now challenging what the provinces are doing. So we have to be accountable and upfront on this.
At the very least, we have an opportunity right now to say no to this and send it back to the government and say, “Let's fix this”. We can go to the partners that have actually said that they have some terms and conditions. They have some financing suggestions, as well as a couple of cash reduction allowance suggestions, and also a few other measures smaller than that, that they would be willing to negotiate with to derive a solution to this. Let us go back to them and actually sit down and come up with that type of a strategy.
The shipbuilding aspect, in terms of this trade agreement, is really focused on Norway. So, our leverage is quite good in many respects because only one other nation is really seriously interested in this shipbuilding component.
We have to deal with the supply management issue, as well, but I think it can be done. I think it can go forward in that context. However, until that time we, as New Democrats, are not willing to hang this industry out to dry by itself. There are too many workers.
It is interesting. I had a chance to go down to the shipyards, and speak to the workers and management as well. There is a lot of pride there. There is also a lot of willingness to work and to do the right thing. Some of those workers in the skilled trades who have been laid off have actually gone to other communities to work and then come back home.
They are willing to do those things to be productive for Canada and to be basically a breadwinner for their home, despite the fact that they cannot write off their travel expenses. This is an interesting side subject. Those workers who work in the skilled trades cannot write off the travel expenses if they travel for their work; however, curtain salesmen can. It is just unbelievable that we can have one set of standards for one group who are in sales and another set of standards for Canadians who are skilled tradespeople. It makes no sense.
I know the government has talked about this a bit and has not shut down the discussion on this, but it really needs to move on that right away. The mobility of people moving back and forth from their families needs to be dealt with. I have talked to those workers and they are willing to do that, whether the work be in Halifax, whether it be in British Columbia, or whether it be even in Alberta, when they are actually working on different projects.
I would say, just to summarize as I know my time is up, that living with the trade agreements, and coming from a constituency like mine, we are seeing the demise of the auto industry based upon the loss of trade agreements and by going to the WTO. There is an opportunity that we have in front of us, not just the challenges but the opportunity with the new procurement that is necessary for shipbuilding. With the massive loss of manufacturing jobs right now, the opposition parties need to tell the government strongly no to this deal. Let us take advantage of the opportunity of shipbuilding in our country and do it right. We can do that and we can move forward. But until then, we will not support this deal.
Mr. Speaker, I am pleased to speak to this bill and to say that the Bloc Québécois supports the free trade agreement with EFTA, the European Free Trade Association. This association refers to Europe but EFTA does not represent the Europe we know. It represents four small countries—Switzerland, Norway, Liechtenstein and Iceland—with a total population of just over 12 million and a small percentage, about 1%, of Europe's GDP.
However, we support this agreement because it has significant benefits for Quebec. The free trade agreement will liberalize trade between Canada and these four European countries. I am referring to trade in non-agricultural goods. In fact, this agreement covers only goods and not investments or services.
Why do we support it? Why are we saying that it benefits Quebec? For example, Switzerland is known for its pharmaceutical industry which is very active in the area of brand name drugs. Drugs represent 40% of Canadian exports to Switzerland and 50% of imports. That is a great deal of trade. To penetrate the American market, Swiss pharmaceutical companies might be tempted to manufacture drugs here. Quebec is the home of the brand name drug industry because of its pool of skilled researchers and its tax breaks. Given that a free trade agreement facilitates trade between a company and its subsidiaries, it is likely to mean new investments in the pharmaceutical industry in Quebec. That is fortuitous.
As for Norway, nickel accounts for over 80% of our exports to that country.The largest mine in Canada and the third largest in the world is owned by the Swiss company Xstrata and is located in Ungava.
Aluminum is our main export to Iceland. Aluminum production is also concentrated in Quebec.
Thus, we have a de facto agreement with respect to production in Switzerland and in Quebec.
One of the extremely important factors, in the Bloc Québécois's opinion, is that this agreement does not include the same condition as previous agreements, which we did not approve of. I am referring to the agreements with Costa Rica, Chile and Colombia. I am talking about the infamous chapter on investments that gave companies the right to directly sue any government that adopted measures that caused a reduction in their profits.
We fought against those provisions, which are contained in several bilateral agreements between Canada and the countries I named. There are no such provisions in the agreement with the EFTA, no doubt because this is not a situation where Canada can impose such provisions, which it can do when dealing with underdeveloped countries. We will come back to that at another point.
As I have said, the agreement does not deal with goods or services. Accordingly, there is nothing to open public services to competition, whether or not they are provided by the state, because they are not covered. In the same way, banks and financial services will not be exposed to competition from Switzerland, or from the very solid and very discreet banking system in Liechtenstein, a veritable paradise—we will say it a whisper—for the financial world, because of its tax regime and its banking secrecy.
It is a similar situation for government purchasing. The government retains complete freedom to promote buying at home, subject to the World Trade Organization's agreement on government procurement. Obviously, it would make no sense for the government to negotiate some room to manoeuvre and later to decide not to make use of that option. Let us fervently hope that the federal government, the largest buyer of goods and services in Canada, will favour domestic suppliers and consider the spinoffs from its purchases.
I am sure that many people are concerned about the provisions on agriculture. What is important for us and for Quebec producers is that supply management is not affected. Bill allows for the implementation of bilateral agricultural agreements, which would be added on to the free trade agreement with the EFTA. There are bilateral agreements that in no way threaten supply management and will not have a great impact on Quebec agriculture. I should mention that milk protein, for example, is excluded from the agreement.
The agricultural agreements will primarily benefit the west, since they liberalize trade in some grains. But even there, the impact will not be huge. Where there are problems, however, and it must be said—I heard my NDP colleague speak about this as well because he is familiar with the problems facing shipyard workers in Canada—is in the area of shipyards.
We will try to fix these problems by calling for a shipyard support and development policy, and I am sure many members in this House will join us in doing so. We also have some concerns about the future of our shipyards.
Imported vessels are currently subject to a 25% tariff. Under the agreement, these tariffs will gradually decrease over three years, and will be completely eliminated in 15 years. Our shipyards are far less modern than Norwegian shipyards and in worse condition. Norway has invested heavily in modernizing its shipyards, while the federal government completely abandoned ours long ago.
If the borders all had to be wide open tomorrow morning, our shipyards could end up whisked away like straw in the wind, or swept away with the tide, I should say. But, for economic, strategic and environmental reasons, we cannot give up our shipyards.
Imagine the risks to Quebec if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, the largest waterway in the world? It is unthinkable, and we will not give up on our belief—this is more than just a flighty idea—that we need shipyards that are equipped with the latest technology, robust and able to stand up to competition. A little later we will see that there are several conditions that need to be met for shipyards to truly be able to develop.
For years, the Bloc Québécois has been calling for a real policy.
For years, the government has been dragging its feet. Now that the agreement has been signed, time is of the essence.
Moreover, this is the only recommendation in the report of the Standing Committee on International Trade on the free trade agreement between Canada and the European Free Trade Association. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic and deputy critic:
||—the Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.
This is the only recommendation in the report. The Conservative policy of leaving companies to fend for themselves is deadly for shipyards. We expect the government to give up its bad policy, and we ask that, by the end of the year, it table a real policy to support and develop the shipbuilding industry. Given the urgency, we will not be content with fine talk. We need a real policy that covers all aspects of the industry. I will come back to this at the end of my speech.
I want to say that when it comes to free trade, the real issue is the European Union. A free trade agreement with Switzerland, Norway, Iceland and Liechtenstein is nice, but we have to realize—and everyone does—that it is limited. As I mentioned, it represents just over 12 million people and roughly 1% of Canadian exports.
The real issue is the European Union, with its 495 million inhabitants who generate 31% of global gross domestic product. The European Union is the world's leading economic power.
Canada is far too dependent on the United States, where we send over 85% of our exports. The American economic slowdown, coupled with the surge in value of Canada's petrodollar against the U.S. dollar, reminds us that that dependence undermines our economy. Quebec has lost more than 150,000 manufacturing jobs in the past five years, including more than 80,000 since the Conservatives came to power, with their laissez-faire doctrine.
To diversify as we must do, we should not look to China or India, countries from which we import, respectively, eight and six times more than what we export to them. The European Union is an essential trading partner if we want to diversify our markets and reduce our dependence on the United States.
The fact that Canada has not concluded a free trade agreement with the European Union considerably diminishes how competitive our companies are on the European market. With the rising value of the petrodollar, European companies tend to skip over Canada and open subsidiaries directly in the United States. The Canadian share in direct European investments in the United States went from 3% in 1992 to 1% in 2004.
Add to that a free trade agreement between the European Union and Mexico since 2000. The Europeans are saying that they can negotiate a real tariff reduction with Mexico, while that is not really possible with Canada. They are saying that there needs to be a reduction in non-tariff barriers with Canada.
When Pierre Pettigrew was Minister of International Trade, Pascal Lamy, European Commissioner for External Trade, said he would negotiate another type of agreement.
No such negotiation is known to be taking place. I think it will not happen because it is too difficult. Just consider the fact that Europe requires GMOs in products to be identified, while in Canada, as we know, the government just recently refused to accept this measure.
The European Union has a free trade agreement with Mexico. That is an advantage for Mexico, an advantage that is prompting companies in Quebec to invest more in their own operations in Mexico since this gives them access to the European market as well as the U.S. market.
Again, Quebec would benefit from a free trade agreement with Europe. In fact, it would probably be the primary beneficiary. For example, 77% of the people who work for French companies in Canada are from Quebec, as are 37% of those who work for U.K. companies here and 35% of those who work for German companies here. In contrast, just 20% of people working for U.S. companies in Canada are Quebeckers, hence the great interest for Quebec of having a free trade agreement with Europe.
The Government of Quebec has been working with companies since the Quiet Revolution, and that is a major advantage when it comes time to seek out European investment. We have everything we need to become the bridgehead for European investment in North America.
I will use my last few minutes to appeal for a real marine transportation policy. It would include several factors, because otherwise, it will be impossible to revive this complex industry. I would remind the House that the federal government has been ignoring it since 1988. The industry needs funding, assurances and loan guarantees linked to sales contracts. In this case, access to credit at a reasonable rate is an important determining factor for the buyer. It needs loans and loan guarantees intended for shipbuilders who must invest or deposit a financial guarantee to bid for new contracts. It needs better fiscal regulations for leasing and a refundable tax credit for shipowners. Those are some measures that would help the industry.
We also need measures specifically for marine transportation in Canada. For example, we must eliminate the fees charged to marine transportation companies that practice cabotage. Truckers' employers do not pay for the damage caused to highways—and Lord knows it is extensive—although those who practice cabotage pay ice breaking fees, among others. It makes no sense.
Second, the government must implement a plan for major investments in port infrastructure. It must also bring up to standard all the ports that have been left to crumble and it must strengthen the Coastal Trading Act. It must also do something to fight against flags of convenience and poison ships. It is the federal government's responsibility to do something. It must negotiate an agreement like the Auto Pact and, lastly, eliminate all subsidies to shipyards. This House owes it to shipyard workers to pass real legislation that will allow shipyards to prosper once again.