Mr. Speaker, I would like to inform you that I am going to share my time with the hon. member for .
It is my pleasure to rise today in the House on Bill . I want to ask all the hon. members in the House to join me in supporting this bill. Why? As most of my colleagues have pointed out here in the House today, the softwood lumber agreement benefits the industry, consumers and Canada as a whole. It is a practical, flexible agreement that puts an end to the trade disputes that have been going on for years and provides the softwood lumber industry with access to the U.S. market on very favourable terms.
The agreement eliminates the punitive American duties, puts an end to costly legal proceedings, and gets our softwood lumber producers out of the courts. Since 2002, this dispute has cost more than $35 million in fees that the Government of Canada has paid to help the softwood lumber industry fight this battle.
Now we have an agreement that will bring stability and recover more than $5 billion in duties that have been levied. I am proud to be part of a government that has found a solution that will give Canada and the United States a future opportunity to make North America more competitive in this sector.
I would like to explain briefly today how the concerns that the industry expressed during our consultations in the summer have been met in the agreement. We had the good fortune of being able to build on a strong Canadian position developed with the cooperation and contributions of the provinces and the industry. Ultimately, an agreement was reached of which all Canadians can be proud.
How were the concerns of the industry and the provinces taken into account? From the outset, they wanted the government to negotiate an agreement that would ensure repayment of the duties that had been collected. The industry asked the government and me personally, from the moment the new government came to power, to negotiate a real agreement with the Americans.
This objective has been achieved. Under the agreement, more than $5 billion Canadian will be returned to the industry by the end of this session. They asked that their deposits be returned quickly. They will be. Why? Because we developed a unique mechanism through Export Development Canada that will ensure that the money is repaid to our exporters in the weeks after the agreement comes into effect, that is to say, in the first few weeks after next October 1. This process will be much faster than the usual process, which was the American process under which people could have waited as long as two and a half years to get their money back if we had not included a quick repayment process in the agreement.
The government also managed to get an exemption from the border measures for the Atlantic provinces and the territories, as well as 32 companies including sawmills in Quebec, sawmills close to the border, that the U.S. Commerce Department did not consider subsidized. Among these sawmills are several in my own riding of Beauce.
The provinces and the industry have also called for flexibility in the regulations related to export quotas in order to respond to the needs of their American customers. As a result, our new government negotiated provisions that allow companies to carry forward up to 12% of the volume of their export quota from the previous month to the following month.
The provinces and the industry also asked for an agreement that ensures stability and predictability. I am pleased to tell you that this objective has been achieved. The agreement covers a period of seven years or up to nine years, if the parties wish to extend the agreement by an additional two years. During this time, the United States cannot intervene in the courts and it cannot apply other trade remedies. This will provide Canadian companies with a significant period of stability in which to invest in their businesses and to become more competitive. They asked for an agreement that gave the provinces the latitude necessary to manage their forest. We achieved that objective. We have negotiated anti-circumvention provisions that fully protect provincial forestry management policies, including complete exemption for the new market-based pricing plan in British Columbia.
This is an initiative that promotes management of the environment. It provides for payments to respond to the claims of First Nations and measures that are specific to the forest industry.
Following a meeting on August 9 with CEOs of the forest industry, additional clarification has been made to the agreement. Specifically, maintenance of the status quo in terms of American trade remedies for a period of 12 months at the end of the agreement. The cancellation notice period has also been adjusted to provide for a 12-month status quo period in the event that the United States requests a quick cancellation of the agreement.
We are pleased to announce that the United States has provided a parallel letter to this agreement, and these clarifications respond to the concerns of the government and the industry. This letter confirms that the Canadian industry will be well protected and that the duration of the agreement will be a minimum of seven years. All of these elements of the agreement respond directly to the concerns raised by the provinces and the industry during the negotiations.
As a consequence, I am pleased to say that the agreement enjoys broad support, both in Quebec and all across Canada. More than 90% of the industry is in favour of the agreement and, in Quebec, a major union, the FTQ, supports the agreement.
Given that level of approval, I am proud to lend my support to this agreement and to , which will make the legislative amendments necessary to bring the agreement into force. I ask all honourable members to join with me in supporting this bill and to join us in our mission of making Canada a more competitive and more prosperous country.
Mr. Speaker, it is an honour for me to speak to Bill , the softwood lumber agreement, which I respectfully ask all members of the House to join me in supporting.
The softwood lumber agreement is good for our industry, good for the lumber communities and good for Canada. I remind all hon. members that we have two national governments that support this deal. All of our major softwood lumber producing provinces support the deal, including those of the members who introduced an amendment and subamendment today. We also have 90% of the industry supporting the agreement and the deal in the legislation. One has to ask why the hon. members are not listening to their provinces and why they are not listening to the industry.
This deal eliminates the punitive U.S. duties. It ends costly litigation, takes our lumber producers out of the courts, provides stability for industry and returns more than $5 billion Canadian. It is a practical and flexible agreement that ends the dispute on terms that are highly favourable to Canada.
Let us remember that this disagreement has been going on for 24 years, this last legal agreement five years alone.
I am proud to be part of a government that has provided a solution that will put our two nations back on track for making North America more competitive for the future. I also want to give my appreciation to our and to our for their exceptional work on securing this deal on behalf of our softwood lumber industry.
Today I would like to outline some of the key features of the agreement. Let us begin with the return of the duties.
Clearly, one of the agreement's most important features is the return of $5 billion Canadian. This is a significant infusion of capital for the industry and will directly benefit the workers and communities across Canada that rely on softwood lumber for their livelihood. Without question, this dispute has been extremely difficult for Canada's lumber industry. That is why it is imperative that companies receive this money as quickly as possible so that they can continue to invest in their operations and their people, and to increase their productivity and their competitiveness.
An innovative deposit refund mechanism has been developed that will ensure that Canadian companies receive their share of duty deposits within four to eight weeks after the agreement comes into force. It is designed to help Canadian companies begin reinvesting in their enterprises and bring a measure of stability to an industry that has been hit hard for over 20 years of repeated trade action.
I also want to comment that we have seen the U.S. lumber trade coalition tell us that if this deal did not proceed, if we did not have this agreement, that it can guarantee Canada that there will be continued litigation regardless of the outcome of any lawsuits.
A second key feature is the revocation of the U.S. duty orders and the end to related litigation.
Let us talk about the flexible export measures. The deal also provides a strong measure of flexibility for our provinces. For the next seven to nine years no border measures will be imposed when lumber prices are above $355 per thousand board feet. When prices drop below this threshold, the agreement allows provinces to choose the option that best suits their particular economic situation.
Option A involves an export charge that increases in steps from 5% when the price of lumber is $336 to $355 per thousand board feet to 10% when the price is $316 to $335, and then 15% as the price of lumber falls below $315 per thousand board feet. Option B combines at the same price levels lower export charges of 2.5%, 3% and 5% with quotas.
I should point out that funds collected under either option will now stay in Canada. The Government of Canada will distribute to the provinces revenues from the export charge minus the administrative and perhaps legal costs that are associated with the agreement.
This is a significant improvement over the current environment. Currently the duties imposed by the U.S. are reassessed annually. In other words, the industry never knows from one year to the next what duty rate may apply. Under this agreement the industry will know and can take full advantage of a stable predictable business environment.
The agreement also contains a provision allowing provinces to seek an exit from border measures based on a process to be developed by Canada and the U.S. in consultation with the provinces.
I urge the members who sit on the trade committee with me to work with us in committee, rather than try to hijack it this session. Let us work together toward a better future for our softwood lumber industry. Let us work on this agreement.
It provides for reduced export charges when other lumber producing countries significantly increase their exports to the U.S. at Canada's expense.
Importantly, this agreement has a dispute settlement process for issues related to the implementation of the agreement. The process will be neutral, transparent and efficient.
Often we hear opposition members talk about chapter 19. What they are neglecting or actually choosing to ignore is the testimony that we heard in committee that clearly told us that never was softwood lumber to be included in NAFTA. In fact, there was a memorandum of understanding that was pulled out of the agreement so that it would not be there. We have been trying to apply this dispute to NAFTA when no one agreed that it should be there in the beginning.
This new dispute mechanism will no longer be U.S. trial law. It will be international trade law. There are many who suggest that signing on for this new dispute mechanism is reason alone for signing on to the agreement.
The agreement of course will provide a stable business environment. But perhaps the feature of this agreement that has garnered the most attention and continues to be the subject of myth and misinformation from those who do not understand it is the termination clause. Let me be clear. This agreement will last for seven to nine years, providing a stable market environment for our softwood lumber industry. During this time, the U.S. will be prohibited from initiating further trade action.
I should also point out that the U.S. has agreed to a 12 month standstill on trade action in the event that it may decide to terminate the agreement. This provides yet another measure of stability, one which I might add was added at the industry's request following an August 9 meeting with CEOs.
While the termination clause in this agreement is a standard feature of international trade agreements, I can tell the House that termination by either country is highly unlikely. This is a hard-won agreement and both sides have a clear interest in maintaining the rights and privileges under it.
Within Bill these features are key elements of the agreement. Bill C-24 will bring these elements into play and implement Canada's commitments under the agreement. In particular, the bill provides authority to impose an export charge in a manner consistent with the agreement. It also seeks to amend the Export and Import Permits Act to bring the export measures component of the agreement into action.
Today I ask all parliamentarians to join me in supporting this bill, putting an end to this long-standing dispute and building a brighter future for Canada's softwood lumber industry, for the workers, families and communities that rely on it.
I want to comment a little further on the proposed amendments. I find it very interesting that the member for tabled such an amendment, considering that the industry in his own province is unequivocally supporting this deal. The industry had written asking him to support this deal. In fact, it does not quite understand why he would not want to support the deal. I have the names of companies, such as the Maritime Lumber Bureau, J.D. Irving Limited, M.L. Wilkins & Son Ltd., Pro Lumber Incorporated, North American Forest Products Ltd., and the list goes on and on.
I am not quite sure where the member is coming from because this deal would provide market access by providing the stability and certainty that the industry has told us it clearly must have. This is exactly what the focus of the and the has been all along, to find a stable and predictable market for our industry.
The U.S. is not interested in escaping its obligations on this deal. It has no interest in backing out whatsoever. I remind everyone that it is only the Canadian government or the United States government that can terminate the deal.
We also know, as I alluded to earlier, that the softwood lumber industry was not included in NAFTA and that is why any attempts to try to govern it under NAFTA rules have not worked. The new dispute settlement will work. Canadian workers have always had the support of this government. It is the workers who will finally gain their job security who will benefit most from this deal. Over $5 billion will be returned to the industry ensuring that it can prosper and secure its workers jobs in the future.
In conclusion, I ask all members to can the rhetoric and to support this deal. Let us move forward for a stronger North American softwood lumber industry that will benefit all of Canada.
Mr. Speaker, the proposed softwood lumber deal will affect my riding of and the entire region of northwestern Ontario in many adverse ways. The constant shifting position of the has caused much confusion about just what it is we are voting for or against.
When the minority government announced an agreement in late April, the severe flaws were to have been addressed. When the minority government re-announced the deal in July, it claimed the deficiencies had been addressed. When the announced in late August that the agreement was concluded and all deficiencies corrected, many of us in northwestern Ontario felt then that we could possibly support the deal. When the largest forest products company in northwestern Ontario, Buchanan, announced that it would reluctantly sign on, many of us questioned that reluctance, but we were prepared to do what we had to do for our region. Then at the international trade hearing, it became painfully apparent that few of the very major concerns for Thunder Bay—Rainy River would ever be satisfied.
Softwood companies all across the country are on their knees financially and need the cash flow. They could have been supported by the previous government, with a $1.4 billion forestry package, which many of us in northwestern Ontario as MPs worked so hard to achieve. That would have given our companies the loan guarantees to keep them going as we won each of the key dispute panels. However, no, the NDP joined with the Conservatives to destroy the forestry package. Northwestern Ontario rightfully blames the NDP and knows that it is largely its fault that it does not exist now. Then after the election the minority government would not give that $1.4 billion to help the forest industry carry through this fight to a clear victory. The money was there to help. We should remember that those $5 billion in tariffs were illegal. Yet only 80% of that may be returned. It is not what people in Canada think is a fair deal.
Point after point has been made outlining the many flaws and deficiencies. Somehow they combine to be an outright sellout. Still, I have been prepared to hold my nose and support the deal for our workers, for their families, for our communities, for the industrial suppliers and for the companies large and small.
As my constituents are frustrated, so am I at the government's changing of these rules and negotiating positions. Now that the actual motion has been presented and we see what it actually says, on principle, I must now vote against the deal. The motion spends more words punishing Canadian companies than it does trying to achieve a positive agreement.
The Bloc's votes will ensure that the government deal will pass. After it does, I will not do anything to hold up the flow of funds to those companies that need them to stay solvent, even if the deal passes without our positive amendment. However, it is clear that the unprecedented and atrocious bullying of Canadian companies by a 19% surcharge, one that would force many into bankruptcy, is just a shameful move by the in collaboration with President Bush.
Why would a minority government try to bankrupt Canadian forest companies? It is unbelievable in a democratic nation. Enough is enough, and I know many share that this is not what they thought they could support.
Then there is a bizarre double whammy that will occur if there is a downturn in the American housing economy. We will lose market share and then be further penalized by additional tariffs. This current deal is not even half as good as the deal the previous government was close to concluding.
As members can see, I have been doing my best to support what is best for the people of my riding. In the hearings at international trade committee, I watched the partisan giddiness of the government members, who blindly assumed that this was some kind of fantastic win for Canadians. We all know now that it is far from that delusion. It is especially flawed by the two year window that leaves northwestern Ontario very vulnerable to American lumber lobbyists. I am fearful that the damage will get even worse in the next two years. What then of those workers, their families, industrial suppliers, the communities in which they live? I will continue to work to ensure those companies will still be around.
If there are so many doubts, and there always have been in these long years of negotiations, then even those who want me to support the government will realize that we are only hurting ourselves. There is still, believe it or not, no package to help companies. Take it or leave it, the says. I could have supported a deal if there were at least some commitment by the government to help. Instead the coercion is beyond measure and will not help obviously.
The people of Thunder Bay—Rainy River certainly support their industries. When the industry says that they will take 80%, but will not delay further any payouts even though there is no dispute mechanism if a Canadian company does not get all it feels it should. They have no recourse. Canadian forest companies can get further illegally hit by millions of dollars without recourse. There are no appeals for those disputes.
As people understand these things, they still want federal support for forestry, not a misguided submission to President Bush. The previous $1.4 billion would have saved hundreds of jobs in Thunder Bay—Rainy River. It will forever be the marked shame of the NDP for abandoning Canadian forest companies as will the current minority government for not utilizing that $1.4 billion available to help our softwood and forest industries.
I stand firm in my commitment to standing with our workers, our families and our communities. Indeed, there is a way we could all support the bill should the amendment pass. Then the House could make it unanimous. It is similar to when people want to buy a car and fully intend to buy it, but when they get to the car lot to buy the car, the tires are flat. Because they said they would buy a car, would they buy it because they said they would, even though the conditions have changed?
I asked government members if now that they know the tires are flat on this deal, would they sign it? There are so many flaws, not only with the car, but with everything about it, that there is ample room for them to consider. The amendment would at least help the government get out of this.
Regarding the second part on punitive measures, of which there are far too many for a democratic nation, we always have to ask ourselves, why would we do this and hurt Canadian companies so badly?
In my region and riding, as we go from company to company, we realize that it is not only the softwood companies that are affected. The pulp companies, the paper companies, those companies that deal in forest products are interdependent and they need each other. They are affected as well. That is why the forest package of November was meant to be across forest products assistance. The amendment would ensure that we would not condone further illegal conduct, that we would get the remaining billion dollars back and have open access for Canadian producers.
The government should be supporting and showing concern for our Canadian forest products. By eliminating the punishment and the big stick, it would show that it wants to help Canadian forest products and the softwood lumber industry. With the amendment, we can get all that done and achieve what we intend to do, and that is to support free trade and a lumber agreement that will work in the best interests of Canadians, sustain jobs, remove barriers and ensure fair access to the American market.
It does not take much education for people to understand that there are many factors involved simply besides this deal such as the value of our dollar and the cost of energy. When we in northwestern Ontario talk about the cost of energy, we have worked with the province of Ontario for a fair energy policy, or regional pricing some may call it. With the anti-circumvention clause in the agreement, support for our industry in northwestern Ontario would be lost or could be essentially appealed and overruled by the American interests.
I use that illustration for the members of Parliament here to understand how badly flawed this agreement is and some of those things that will affect us directly still have not been addressed.
It is not the best deal possible. It is far less than what we had before. We know now that if we go forward without these amendments, within the next two-year period we will be back in the same place and we will have financed with a half a billion dollars. That will pay lot of lawyers firms for a lot of years to work against Canadian interests.
I am appealing to the government to stop and slow down, take this amendment under consideration and realize that we can have a positive bill, that we can do this well and that we can come away with an agreement that allows Canadians to hold their heads up high.
Mr. Speaker, I am pleased to stand today as the member of Parliament representing the largest softwood producing riding in all of Canada, the great riding of Cariboo—Prince George which includes Vanderhoof, Prince George, Quesnel, Williams Lake, Likely and Horsefly.
The area is good, strong, traditional softwood lumber country that quite possibly could supply, if permitted, the majority of the softwood lumber sales to the United States, our biggest customer, and it has a huge interest in the outcome of this legislation. I am pleased to say that a vast majority of the lumber producers in British Columbia, including virtually all of them in my riding of Cariboo—Prince George, the communities in my riding, the province and all those others who have a vested interest in a good, secure future with certainty and predictability in the softwood lumber industry support this deal.
I am pleased to stand in support of my riding and the producers. I should mention that I will be sharing my time with the great member of Parliament for who is the . He will be able to share some reasons from the other part of the country, namely Quebec, eastern Ontario, the Maritimes and Atlantic Canada, as to why this deal should be supported by Liberal members from that area and also NDP members. In defiance of the spin doctors, they should support it because it is a good deal.
I am pleased to support Bill because this softwood lumber agreement is good for Canada. It is good for my riding and for ridings in northern Ontario, as evidenced by the member of Parliament for who had the courage to stand up and represent the mills and forest workers in his riding while his counterpart up there from apparently does not have the courage to represent the mills and forest workers and does not have the courage to support certainty in the softwood lumber industry.
As the indicated, the softwood lumber deal is good for industry, good for lumber communities and good for Canada. I am proud and pleased to be able to concur with that. It does eliminate U.S. duties. It ends costly litigation and it takes our lumber producers out of the courts, out of the large legal fees and provides stability and certainty for the industry. It returns more than $5 billion to our producers.
It is a practical and flexible agreement that ends the dispute on terms that are highly favourable to Canada and will put Canada and the U.S. back on track for making North America more competitive for the future. I am pleased to note that the agreement has won a wide base of support from both the industry and the provinces.
There are a number of good reasons for the support. Perhaps one of the most significant reasons is that the agreement respects the diversity of Canada's softwood lumber industry. The lumber industry across Canada is varied and different regions have unique challenges and opportunities.
Today I would like to highlight some of regional benefits of the agreement and explain how the agreement responds to a wide variety of needs across the country. Let us talk first about the provincial flexibility and benefits.
First of all, this agreement gives provinces flexibility in choosing the border measure that best suits their particular economic needs.
Exporters will pay an import charge when lumber prices are at or below $355 U.S. per thousand board feet. When prices reach this threshold, Canadian regions, as defined in the agreement--the B.C. coast, the B.C. interior, Alberta, Saskatchewan, Manitoba, Ontario and Quebec--can select one of the following two export charge regimes.
Option A, as was spoken about previously by my colleagues, is an export charge with the charge varying with price. Option B is an export charge plus volume restraint where both the rate and volume restraint vary with the price. This is an innovative mechanism that allows provinces to choose the export charge that is right for their individual economic and commercial situation. It provides flexibility to the provinces.
I should point out that the funds collected under either option will stay right here in Canada. As was pointed out, although the NDP and Liberals failed to grasp it, if we carry on with this uncertainty of litigation, those fees are going south of the border and we will have more and more difficulty trying to repatriate those moneys back into our industry.
Provinces and industry also asked for flexibility in export quota rules to be able to meet their U.S. customers' requirements. In response, our government negotiated provisions allowing companies to carry forward or carry back up to 12% of their monthly quota export volume from the previous or next month. This is a significant improvement over the current environment.
Under the current system, the duties imposed by the U.S. are reassessed annually. The industry never knows from year to year what duty rate will apply, but under this agreement it will know. This is certainty. Companies can plan and prepare for it and take full advantage of a stable, predictable business environment. This is what the industry needs. This is what the investors want.
The agreement also contains a provision allowing provinces to seek an exit from the border measures based on a process to be developed by Canada and the U.S., in full consultation with the provinces, within 18 months of this agreement coming into force.
It provides for reduced export charges when other lumber producing countries significantly increase their exports to the U.S. at our expense.
It protects provincial jurisdiction in undertaking forest management reforms, including updates and modifications to their systems, actions or programs for environmental protection, and providing compensation to first nations to address claims.
It includes an innovative mechanism to ensure that the $4.4 billion U.S. in returned duties will be back in the hands of our exporters within weeks of the agreement's entry into force.
I know my time is running out. I could spend all afternoon talking about the great benefits of this softwood lumber deal and the courage that our government has had to stand up and put this forward to bring some stability and certainty back to our industry, to provide some job security for our forest workers and their families, to provide some economic comfort to the investors in the forest industry, and to provide the ability for our lumber producers to make long term business plans in order to plan the journey of their economic investments.
These elements of this agreement respond directly to the concerns raised by the industry, the provinces and the workers. This is a good deal for the industry, it is a good deal for the provinces, and it is a great deal for Canada. I think it is time to put aside the rhetoric from the NDP down at that end of the chamber. It is time for the Liberals to be honest with themselves about the merits of this deal, to support it and to quit playing politics.
The province of Quebec and the industry in Quebec do support this, and we want to encourage the Bloc to continue to support their industries with the province's acceptance of the bill and of course support the bill when it comes up for a vote.
Mr. Speaker, like my colleague, the member for Cariboo—Prince George, I am pleased that we can share our time.
I am happy, here today, to be able to speak on behalf of my riding as the member for Mégantic—L'Érable, and as Parliamentary Secretary to the Minister of Natural Resources.
Last Tuesday, September 12, the Minister of International Trade signed, along with his American counterpart, U.S. Trade Representative, Susan Schwab, the long-awaited softwood lumber agreement.
This signing represented a major turning point for both our countries. Settlement of this complex, longstanding dispute until now seemed like an unachievable objective. In spite of all the efforts, previous governments never managed to settle it. The Canadian softwood lumber industry was thus faced with an extremely unstable trade environment resulting in lengthy and costly legal proceedings against the United States.
Thanks to the new spirit of cooperation between our two countries, the Canadian government has been able to accomplish what no other government had managed to do, that is, conclude an agreement that ends this dispute, on conditions that are very favourable to Canada and that respond directly to the concerns raised by the industry and the provinces.
This concrete and flexible agreement ensures foreseeable access to the American market, provides for the refund of over $5 billion Canadian—or $4.4 billion U.S.—of duties held on deposit and ends years of costly litigation. Furthermore, it enables the softwood lumber producers to break the vicious circle of legal proceedings and provides them with the stable trading environment they need to make their companies grow and to invest in them.
This agreement is in the best interest of the Quebec forest industry, which employs 107,000 workers and accounts for 18% of Canadian softwood lumber exports to the United States. For example, the agreement exempts from the export measures sawmills located near the Quebec border—and I am proud to have many of them in my riding of Mégantic—L'Érable—a key position supported by the government and industry in this province. For companies that are not exempted, Quebec can choose the border option that best suits its economic and trading situation.
The province and the industry in Quebec were greatly concerned about their inability to respond to the needs of their American customers because of the rigidity of the regulations related to export quotas. As a result, the government negotiated provisions allowing companies to carry forward or carry back up to 12% of their quota export volume from the previous or next month.
The agreement has the strong support of the three main producer provinces, including Quebec, the Quebec Forest Industry Council, the president of the Fédération des travailleurs du Québec, Mr. Henri Massé, as well as the vast majority of Canadian softwood lumber producers.
The ball is now in the court of Canadian parliamentarians. It is our turn to review the bill and adopt it so that Canada can meet its commitments under the agreement.
In reaching a decision, honourable members should give special consideration to the situation that would prevail if the bill is not adopted, including the high costs that would result if the bill is not passed.
Indeed, one need not go far back in time to recognize what would happen in the absence of this agreement. Our softwood lumber producers have spent the better part of the past two decades in waging numerous unending legal battles against the United States. They have been able to see the great influence of American protectionists and they know too well the harmful consequences of this dispute, both on the human level and in financial terms.
I invite my fellow members to ask the people who live in the communities that depend on softwood lumber if they would prefer a continuation of the dispute, with all that implies in terms of effort and dollars, or the concrete and immediate settlement that this hard-won agreement provides.
After a careful examination of the facts, I am convinced that hon. members will come to the same conclusion as the provinces and the industry: that this agreement represents the best solution for the future of the Canadian softwood lumber industry, for the 300 communities and the 300,000 workers and their families who depend on softwood lumber.
This agreement is in the best interest of Quebec and of Canada.
Mr. Speaker, I feel very bitter as I rise to participate in this debate.
Everything we see today, the whole mess, is the fault of the Liberals and Conservatives. Things could have turned out very differently if Canada—as it behaves at the WTO and in all the international trade forums—had not acted like a peewee, if not an atom, in the negotiations, starting with the and his far-fetched statements last spring that opened the way to this cut-rate agreement.
I rise as well to be very responsible. When the agreement with the Americans was signed, we went around to the industries, unions and communities in Quebec. They told us, contrary to what the parliamentary secretary claimed, that the agreement was not perfect and needed to be clarified, but they were exhausted. They said that the Conservative government had smothered them and they were on the verge of bankruptcy. They asked us, therefore, to vote in favour of the bill based on this agreement but to go on saying that the agreement was cut-rate and far from the original objective. That objective, back in 2001, was for free trade in the softwood lumber industry.
This responsible approach led us to go and listen to what the industry, the unions and the communities had to say. This approach also means that the Bloc Québécois will vote in favour of Bill .
I rise today not only to be responsible but also to be constructive. Everyone said throughout Quebec that this agreement was not enough to resolve the structural crisis that the forest industry is going through, especially in Quebec. It is probably the same everywhere in Canada, and the parliamentary secretary must have heard about it. We will need much stronger action to help the softwood lumber industry and our workers to survive this crisis.
If the Conservative government just sits on this bad agreement, thinking that people will forget the rest, it is sadly mistaken. I reach out to the Conservatives so that they proceed with the post-agreement phase and institute a real plan in support of the forest industry. It is true of Quebec, and I am sure it is true of Ontario, Alberta and British Columbia. If the Conservatives are happy just to pass Bill and think that that solves the problem, they will pay a heavy price in the next elections, which, I can assure the House, will not be long in coming. Our responsible, constructive approach should not lead the House to forget that we have not achieved the objectives that Parliament set for itself in 2001.
I myself introduced a motion, which passed unanimously, asking the Canadian government to do all it could to ensure that the softwood lumber industry was finally included in free trade. Unfortunately, as I said, the attitude, policies, approaches and directions of the previous government and the one that followed have led to this dead end. The industry needs a little oxygen.
Remember that Guy Chevrette said the industry needs some breathing room. He also said that if there were loan guarantees, he would refer the issue to his association for a vote, and that he thought people would be ready to fight to the end. The Conservative and Liberal governments refused to help the industry. They forced it to its knees and then suggested it accept the agreement, without which it would surely face ruin.
We refuse to let it be ruined. Saving it from ruin means more than just adopting Bill ; it also means instituting a whole series of measures to help the industry survive the structural crisis that, in Quebec, resulted from the Coulombe report, as the parliamentary secretary should know. Cut volumes will gradually be reduced by 20%. Energy costs have risen, the dollar has reached great heights, and there are a number of other problems Quebec alone faces. I will come back to this later.
I would like to review the order of events briefly. On March 31, 2001, the previous agreement fell. It, too, was a trade agreement administered with the United States. At the time, companies belonging to the American protectionist coalition submitted a petition. The Department of Commerce responded by imposing a 28% duty.
What was the Liberal government's strategy? That is the root of the problem. That government adopted a two-pronged strategy: negotiation with the Americans and legal proceedings.
Once the Canadian government sat down at the negotiation table, the Americans—both the American authorities and the protectionist coalition—expected to reach an agreement like the one before us now, which led to Bill . The responsible thing to do would have been for the minister in charge at the time, Mr. Pettigrew, to say that we intended to pursue all legal avenues to resolve the issue once and for all. Indeed, sooner or later, we will have to find out who is in the right: the Americans, or Canadians and Quebeckers.
As you know, all of the courts, both the WTO and NAFTA, ruled in our favour. Our lumber is not subsidized and is not harming American producers. As such, the duties are illegal. However, we did not pursue this course to its end.
And a few months later, as I mentioned, the industry itself asked us to vote in favour of Bill . Why? Because the Liberals not only pursued both paths, which sent a bad message to American authorities and the American industry, suggesting that we were going to bend sooner or later, but the government also refused to implement an aid program for the industry, although the Bloc Québécois has been requesting this since May 2002. I proposed this plan along with my colleague, the hon. member for . I would remind the House that if we had achieved those elements, our situation would be different today. But, no, the Liberal government refused, just like the Conservative government.
First, to allow businesses to avoid bankruptcy, we demanded an aid program with loan guarantees on the basis that illegal duties levied by the Americans constituted accounts receivable. We were told that that was impossible, that international trade legislation did not allow for loan guarantees. Two weeks before the election, the Liberals, sensing they were in hot water, agreed to offer $800 million in loan guarantees for the next five years.
Even worse than that, in the agreement and in the legislation, the federal government is going to operate precisely through loan guarantees. It will buy back the illegal duties levied by the Americans because they are accounts receivable. We could have been doing this since 2002.
Second, we also asked for a relaxation of employment insurance requirements. We are still asking for this and still have not obtained it, not from the Liberal nor the Conservative government. Third, we also asked for support for processing activities in order to offer more job opportunities in Quebec forestry. We never obtained that support. True, the Liberals established a program to diversify economic activity in those areas suffering from the softwood crisis. However, not one business affected by this crisis received a single cent in aid from the government, apart from $20 million for legal fees, if memory serves. This was, moreover, the fourth point in our action plan, namely, that Ottawa would pay the legal fees of any businesses that fell victim to American legal aggression. At that time, legal fees totaled $350 million. As we know, that figure is now much higher.
So if this plan had been put in place, on the basis of our legal victories—we were not far from the end—we could have got through the legal proceedings. When all options had been explored, there would have been a legal victory. It is clear that a legal victory, and the Minister of Industry said so to us—and he is right on this—does not guarantee that the Americans were going to act on these legal victories. Still, they would have put us in a much better negotiating situation than what happened to us when, in early April or late March, theMinister of Industry went and said that, actually, we did not expect to receive all the duties collected illegally by the Americans. What a great message! That creates some negotiating power!
I have been a negotiator for a long time. When we say to our opponent, to the party across the table, that we know that ultimately we will not get everything we are asking for, even though it is our own money, there is a problem. Obviously, the Americans leapt at the agreement and, oddly, a few weeks later, on April 27, we had an agreement that was slightly improved—it must be admitted—on July 1, and that led us to Bill .
As I said, if the Conservatives had continued on the path I have indicated, that is, right to the bottom of the legal issue, with an assistance plan for the industry, we might have been talking about a few months. We would have been able now to have negotiations with the Americans that would have enabled us eventually to go back to free trade. Unfortunately the agreement may be terminated in three, seven or nine years. We do not know. Let us hope that it will last as long as possible. I am not one of those who wish the worst for our industry, on the contrary. I want what is best so that we can have stable and flourishing communities, businesses and jobs.
As I mentioned, when it ends in three, seven or nine years, we will have to do it all over again. Do you think that the American coalition will stand around idly with this $500 million we have just given it? No, certainly not, it is going to start building its case. We can be sure that in maybe three, seven or nine years a fifth dispute concerning lumber will start again.
What are we going to do then? Is it better to give in immediately and say that we Canadians—not Quebeckers—are prepared to accept everything the American coalition wants, because we are not prepared to fight to the finish?
We have some lessons to learn from this episode, and the first one is never to open negotiations before exploring all the legal options. But the only way to explore all the legal options in this issue is to provide solid support for our lumber industry.
Unfortunately, in three, seven or nine years, I will no longer be here since Quebec will be a sovereign country. However, I want to leave Canada's parliamentarians with a constructive lesson that I am taking from this softwood lumber saga; during negotiations, never extend the hand of friendship to the American authorities and softwood lumber industry until the legal process is over. From day one there has to be an assistance plan with teeth, as the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup and I suggested in 2002.
I was saying that we had a responsible attitude in this case, that we toured the regions and the industries. The leader of the Bloc Québécois and I phoned big businesses, talked with people from the associations, presidents of the major unions, and representatives of the municipalities affected by this crisis. As I was saying, no one spoke publicly to encourage the Bloc Québécois to vote against the bill resulting from the agreement—the future legislation—or to say they were out of money, out of breath and in the process of suffocating.
Although the agreement is far from perfect, it is in this context that the Bloc Québécois will vote in favour of Bill . As I said, the crisis is huge. In Quebec there have been 7,000 layoffs since 2005. In my riding, there were 400 layoffs just a few weeks ago. Louisiana-Pacific closed its sawmill and waferboard plant. In my opinion, there is not one region in Quebec where this industry operates that is not suffering right now or worrying. The Louisiana-Pacific closure is indefinite. Let us hope it reopens as soon as possible. But for that to happen there needs to be an assistance plan.
The FTQ and the CSN have issued press releases. We know that Mr. Chevrette also issued a press release immediately after the Bloc Québécois decision to support the bill resulting from the agreement, saying that the Bloc met the industry's expectations.
Nonetheless, I will read some excerpts from the FTQ and CSN press releases to show to what extent the Bloc Québécois is in tune with the stakeholders in Quebec, by taking concrete action on the ground. If the Conservatives want to do the same, they will need to use more than words. They need to take action. I will close later with what we propose they do to get through this structural crisis.
I will read the FTQ press release:
The Fédération des travailleurs et travailleuses du Québec (FTQ) salutes the Bloc Québécois decision, announced yesterday, to support the softwood lumber agreement.
Given the catastrophic situation of the forestry industry, the FTQ believes that this agreement, although far from perfect, represents the only possible outcome that will save the industry. “This agreement will now force the Conservatives to take concrete action to help the industry survive the major crisis that it has been living through for several years,” stated Henri Massé.
For many years, the FTQ has been calling for concrete measures to help the forestry industry and workers, as well as an assistance program for older workers.
“It is vital that the government listen carefully to the Bloc Québécois demands regarding assistance for the industry and for the workers,” Henri Massé pointed out.
This is the FTQ press release. As we can see, that is not the end of the matter. Once Bill is passed, I hope that the Conservatives will not sit on their laurels. There is work to be done and we will suggest avenues to be pursued.
I would now like to quote from the Confédération des syndicats nationaux press release:
The CSN gives its support to the demands of the Bloc Québécois, announced yesterday, which seek to support the workers, companies and communities that have been hit hard by the softwood lumber dispute.
The CSN press release goes on:
Referring to the dramatic situation many communities in Quebec are in because of massive job losses in recent months, CSN president Claudette Charbonneau said that the federal government must act quickly to put in place a structured assistance plan. “Older workers and companies in difficulty must have financial support. The hemorrhaging has to stop”, she said.
The release continues:
The CSN stated that the softwood lumber deal is far from perfect.
So two out of two. That seems fairly clear. The release goes on:
However, it is unrealistic to hope to re-open the agreement with a view to improving it in time to help workers.
A quote from the CSN president follows:
The federal government, which negotiated this bad deal, has a responsibility to make up for these deficiencies using effective support measures that will give new life to an industry that is on its last legs. The survival of whole communities in many parts of Quebec is at stake.
The CSN adds:
The federal government should have taken steps long ago to help the workers and companies. Now, it has a golden opportunity to demonstrate its good faith.
As hon. members can see, support for the deal is far more qualified than the Conservatives let on. As well, I have a hard time understanding how the Liberals from Quebec can oppose Bill , which has arisen out of the agreement, just when the players themselves, while stating as we have that the deal is not perfect, are acknowledging that it exists and was negotiated with the Americans.
Given the series of mistakes that have been made since 2001 by the Liberal and Conservative governments, it is hard to go back. Back to the Future is a movie; it is not reality. We have to recognize this.
I will conclude by talking about the support measures that we have proposed to the Conservative government and that are mentioned in the CSN and FTQ press releases: first, an income support program for older workers.
We discussed it during question period. We want a program like the one that was abolished by the Liberals in 1998: a plan for workers 55 years of age or more all over Quebec in sectors hit by mass layoffs. We will not agree to an income support program for older workers aimed at a particular sector or region to the exclusion of others. There is a group of workers who need help making the transition from their lost job to their pension. We need this program back, which as I said, used to exist until 1998.
Insofar as communities as concerned, we suggest real economic diversification programs for communities dependent on forestry. I will mention them. The Liberals established one, but it did not help the industry, it just helped communities. We need not only that program back now but also programs for businesses. For businesses, we want the $4.4 billion in countervailing and antidumping duties that will be paid back by the American authorities to be subject to a tax treatment that will take into account the damages suffered by these companies.
Indeed the dollars in which the companies paid these duties three or four years ago are not worth the same nowadays. Companies will therefore be paid back in Canadian dollars that are worth much more. They will therefore get less back in Canadian dollars than they paid three or four years ago. The government should take this into account. According to the companies’ assessments, they will lose between $400 and $500 million because of the changes in the exchange rate.
Since the tax formula that the government is going to adopt takes changes in interest rates into account, we expect that changes in the exchange rate will also be taken into account. We have a request from the Canadian Manufacturers and Exporters that could be applied to the forest industry on an experimental basis, namely accelerated depreciation on machinery. Obviously, if the depreciation can be deducted faster, the taxes on earned income are reduced.
We also recommend setting up a program to stimulate innovation in the forest industry and improve its productivity, programs to diversify lumber markets, and financial compensation for maintaining the road network. Our last suggestion relates to the tax credit for research and development. In the case of the forest industry, this is not worth much because the industry does not pay much tax—in fact, it does not pay any. I have been told that several companies have accumulated enough tax credits for the next 10 or 20 years. We therefore ask that this tax credit be refundable—on a trial basis, no doubt—to the forest industry.
For example, Tembec invests $80 million a year in research and development, but cannot benefit from tax credits for these expenses. Refunding the tax credit could stimulate research and development in a sector that really needs it.
I would like to end by saying that the Canada-U.S. agreement provides for a bilateral committee to administer it. The industry has identified a number of problems. We hope the bilateral committee will be able to correct these problems. I would like to see the creation of a sub-committee of Canadian, Quebec and American elected officials to work alongside the bilateral committee.
In conclusion, one of the problems we are facing is complete insensitivity on the part of American elected officials to the realities of the forest industry in Canada and Quebec. They are under the thumb—let us be frank—of an industry lobby that buys elections and probably even buys some elected officials. It might be time to correct this situation by having more frequent and regular contact with them.
Mr. Speaker, I will be sharing my time with the very distinguished member for who will be speaking to the softwood lumber debate on behalf of his constituents.
I first want to thank the who has worked so closely with Atlantic Canadian industries and who has worked with us to try to resolve issues as they pop up all the way through this debate.
The softwood lumber agreement is critical to our area in Atlantic Canada. I was first elected in 1988 and the first thing on my table was the softwood lumber issue. It has been on our table ever since and with this agreement perhaps it will get off our table for a little while.
The Maritime Lumber Bureau represents the mills in Atlantic Canada and it has been totally focused on this for at least two decades. It has been very successful in negotiating exemptions from any countervailing or anti-dumping duties. It has negotiated with the United States governments and Canadian governments repeatedly and has been successful each time. It means that Atlantic Canada is not involved with this. We are totally exempt from the accusations of subsidies or interference with the marketplace.
The exemption was earned by Atlantic Canada. The Atlantic Canadian industry worked hard to get it and it earned it. It earned it by maintaining forestry practices that are exactly the same as they are in the U.S. It does not allow the United States to give complaint to our practices. Most of our woodlots in Atlantic Canada are privately owned, as they are in the U.S. Our lumber is sold at market value, as it is in the U.S. It removes the opportunity for anyone to accuse Atlantic Canada of having any subsidies or grants.
The industry in Atlantic Canada has consistently refused funding from a variety of programs offered by our federal and provincial governments because it does not want to be in a position where anybody can point a finger and say that Atlantic Canada received a subsidy, grant or benefit, a position that would allow the United States authorities to point a finger and accuse us of subsidies.
The last thing industry did to earn this exemption was quite amazing. After the industry earned the exemption, suggestions were made that some lumber was coming in from other provinces and funnelling through Atlantic Canada in order to get the exemption. The Maritime Lumber Bureau established its own tracking and certification system and now if a 2x4 pops up in Texas it can be traced back to an Atlantic mill and right back to the private woodlot from whence it came. There now can be no question that all softwood lumber from Atlantic Canada is coming from private woodlots.
There is no basis for any accusations of subsidies in Atlantic Canada, not now and not ever has there been a basis for an accusation of a subsidy, which has allowed the Maritime Lumber Bureau to negotiate these exemptions time after time, both with the American government and often with the Canadian government to convince it. Sometimes the Canadian government has seemed a little more difficult in the past than the American government but, in any case, the bureau has been successful in negotiating these exemptions.
The Maritime Lumber Bureau represents mills in the four provinces of Atlantic Canada. Its CEO and president is Diana Blenkhorn. I have to compliment her for her negotiating skills and her ability to understand the market, the challenges and the situation. She has negotiated with the Americans, with Canadians and with other provinces and she has been able to maintain, on behalf of the Maritime Lumber Bureau, this exemption. I believe she is the most knowledgeable person in Canada, probably anywhere, on this subject.
The softwood lumber agreement provides Atlantic Canadian mills stability. Atlantic Canadian mills do not want to spend their time in court. They do not want to spend their time with lawyers. They do not want to spend their time in tribunals. They want to spend their time making their mills the best and most efficient mills they can be and producing the best possible product they can produce.
From the beginning, when the softwood lumber agreement terms were finally ironed out, which took quite a while, the Maritime Lumber Bureau has supported the agreement wholeheartedly on behalf of all the mills in Atlantic Canada because again the agreement confirms the continuation of the exemption that has been so hard-fought and so justly earned in Atlantic Canada.
However, the bill actually does not provide the specific term exemption for Atlantic Canada. It does provide for zero rating, and some people may consider that the same thing, but for those of us in Atlantic Canada a zero rating is not the same thing.
At the end of this agreement, five, seven or 10 years down the road, we may be at this debate again. The Atlantic industry wants to maintain the exemption exactly the way it has been. We want the same words in the agreement that have always been there before, that is, that Atlantic Canada is exempt. It is essential that the bill we are dealing with now reflects the agreement and specifies that Atlantic Canada is exempt.
After discussions with the minister today, we have agreed that we are going to work together to come up with an amendment to clarify this issue and make sure the wording of the bill is the same as the wording in the agreement. Again, I thank the minister for his open-mindedness on this issue and his ability to react quickly and move forward. That is why we have the agreement we have today. It is because the minister has done that. He has worked with the industry from coast to coast. He has worked with governments in Canada and the United States. When there is an issue he deals with it, and we find a way to resolve it and we move on.
The Maritime Lumber Bureau has worked closely with the Department of International Trade throughout this negotiation. It has supported the agreement, but again, the bureau is very anxious to see the exemption clearly stated in the bill. I agree with the bureau. I think we can find a way to resolve this very quickly with the cooperation of the minister, who has agreed to take the steps to clarify it.
At the end of the day, this agreement will allow Atlantic Canadian mill owners and forestry workers to focus on what they do best, that is, working in the industry to try to improve the quality of their product and the efficiency of their businesses. This agreement will allow them to reinvest and to compete worldwide in the softwood lumber industry. That is all they want to do. With this agreement, they will be allowed to do that in Atlantic Canada.
Again I will say that we have had nothing but cooperation from the minister on this right from the get-go, right from the beginning. There were a lot of different things that had to be hammered out, ironed out and resolved, but they have been, so much so that not only has the Atlantic Canadian industry been quietly supportive, but it has been actively supportive of the softwood lumber agreement. It will have the same endorsement and same support for the bill if we can just get the specific wording changed so that it reflects the softwood agreement that was originally signed between the United States and Canada.
I again want to thank the minister and the department. This has been an issue for me for almost 20 years. It looks like there is light at the end of the tunnel. We might have a resolution to this. Although this agreement does have an end to it, perhaps if it works and everyone is happy it can be extended indefinitely and our industries can all go back to work and do what they do the best.
Mr. Speaker, it is my pleasure today to rise to speak to Bill , which outlines the government's resolution of the longstanding softwood lumber dispute.
It was interesting to listen to the member who spoke previously. He says it is a dispute that he has been following since he was elected in 1988. I have not been here for quite as long as the previous member or as long as the Speaker himself, but this has certainly been a dispute that has attracted the attention of Parliament and the country since I was elected in the year 2000.
It certainly affected our trade. It was the biggest trade irritant between us and our greatest trade partner south of us, the United States. It was certainly impeding what I would consider a very successful trade agreement, NAFTA. It was certainly having an impact on that.
It is perhaps helpful to remind ourselves just how successful that agreement has been in the sense that I believe softwood lumber consists of about 3% of the trade between Canada and the United States, while 95% of the trade between the two countries goes through irritant free. That shows exactly why it was so important to address the softwood lumber issue. That 3% in fact was very much affecting other trade areas.
I want to compliment the for tackling this head-on. I know he certainly did as much as he could in the former government, but certainly since this Parliament started he has been very active on this file.
I think it is important for us to remember exactly what we were facing as a government and as a country. We were facing two choices. The first choice was to continue the route of litigation, to continue to try to win disputes through NAFTA and the World Trade Organization to force the United States to recognize that we were not subsidizing our lumber industry, our forestry products industry, and to try to force the Americans to reduce the countervailing duties and repay the upwards of $5 billion they had collected to that point. That was the choice. The choice was more litigation.
Looking at that, I think we have to be honest with ourselves. The fact was that this was not a resolution. The fact was that we would be spending more in legal fees to go down that route. The fact was that we would probably be discussing some form of loan guarantee program and putting taxpayers' money at risk in order to support our industry.
The fact is that there was no real end in sight, because if we won another NAFTA dispute, another resolution, the United States could simply change its own legislation, start another series in litigation along this route and we would be no closer to a settlement than we were two, three or 20 years ago. So we had a choice. We had a choice between more litigation or this resolution.
In fact, I know that a lot of members of the House have been very critical of this agreement, but I will say quite honestly that this agreement is better than I thought we as a government could get in the first place. I thought the Americans would never sign an agreement of this type. In fact, I want to review some things that are in the agreement and some of the benefits that accrue to Canada.
The agreement eliminates the punitive U.S. duties and returns more than $4.4 billion to producers to provide stability for the industry. It spells an end to the long-running dispute. It obviously addresses the massive trade irritant between ourselves and the United States. U.S. countervailing and anti-dumping duty orders will be fully and completely revoked. The absence of U.S. trade remedy action under the agreement will offer a period of stability for the industry, which will allow Canadian companies to make the investments necessary to ensure that their competitiveness goes forward.
There is also an issue that some members are raising now in portraying what kind of export tax would have to be paid if certain provinces go over a prescribed limit. In fact, as members know, there are two choices. Option A is the export tax if our exports rise above a certain level, but there is also option B, which is the quota and a small tax. What this does is keep these moneys in Canada, in the provinces, thereby allowing the provinces to not only direct their own forestry practices but obviously address situations that may arise.
One of those situations is in my own province of Alberta. Members will know, and certainly members from British Columbia will know, of the seriousness of the pine beetle devastation in that area of the country. Two summers ago, I had the opportunity to survey from a helicopter how much had actually been affected by the pine beetle. It was incredible. One had to see it to believe it.
The concern from the Alberta industries is that the pine beetle will make its way into Alberta very shortly. It would cause some of the producers to want to harvest more quickly, as they did in British Columbia, and therefore the amount of exports would go up.
The agreement allows the Canadian government and the provincial government of Alberta to deal with that situation by having the resources come back to the province and then the province can deal with that situation. Rather than have the United States collect those duties, it allows the provinces to deal with it in a much better way. There is an option between litigating it with possibly no resolution, probably no resolution in sight. In my view, this is the best possible agreement that could have been negotiated.
As I mentioned, it makes a $4.4 billion immediate cash infusion into our communities across the country. It is one thing to talk to the industry itself, and the Minister of International Trade has identified that over 90% of the industry supports this agreement, but let us talk to the communities that are most affected.
Hon. members should talk to the people in those communities, mainly in the rural regions of our country. We should ask them if they want a situation where they will be paying duties, there is no resolution, and they do not know whether they will have a job in a year or two because this situation could carry on, or do they want to have the situation resolved? Do they want to have some stability? The companies in various provinces would then know what kind of situation they are dealing with and have some cash infusion to make their company more competitive.
It is incumbent upon members who are critical of this agreement to put on the table exactly what they are criticizing, to say what specific measures they would want to see in place that the agreement does not address. They should be realistic in the sense that there are two sides to a trade dispute, two sides that have to come to the table and two sides that have to come to an agreement.
In my view, the agreement is the best possible agreement that Canada could have signed. As I mentioned before, it is a better agreement than I thought we would have been able to get. I would like to encourage all members of the House to support the agreement. The Bloc Québécois is supporting it.
I am very surprised that the Atlantic Canadian members of the Liberal Party are not supporting the agreement. It is a very good agreement for Atlantic Canada. Responding to a previous question, a very good question from the NDP to my colleague from Atlantic Canada, I would agree with him. As a westerner, as someone from Alberta, I would say Atlantic Canada, by its forestry practices, deserves this exemption. I, as a Canadian from western Canada, support that.
I want to finish up by saying that I did have the opportunity, and companies across this country have been very open to all parliamentarians, to see firsthand what the industries do and what their workers do. I have seen all aspects of the forestry industry in this country and have been amazingly impressed.
We hear the expression “hewers of wood and drawers of water”. If anyone has been to a softwood lumber facility, and they should go to the one near Prince George, they would see the computer system that measures every single log and the IT system that follows that. If they went to the mill just outside Calgary in Palliser, they would see the way that all the employees, aside from just working in the plant, are also upgrading their skills, learning how to move up the system, and taking logs that other companies may not utilize and turning them into a wood product that they can then export. It is a fantastic industry and one that all Canadians should be very proud of, but it deserves some stability. It obviously deserves our government's support.
We have signed, in my view, the best agreement possible. It is obviously supported by the large lumber producing provinces and it should be supported by all members of Parliament. I encourage all members of Parliament to take a serious look at the agreement, to support it, and to support our lumber industry across this country, but most important, to support the families in the communities who really need a resolution to this issue.
Mr. Speaker, it is a privilege to stand today to address this issue.
Bill is, obviously, of immense importance to the people of British Columbia, a province that supports about half of the logging industry in the country. It is also of great importance to all of us.
We have heard variations from across the country of the impact in different regions and certainly in British Columbia itself there is a variety of impact on different aspects of the forest industry.
Value added manufacturers have a different interest than interior logging and mill operations. Coastal logging operations have a different interest than the interior ones. We have valuable coastal cedar being logged and being unfairly coupled with other types of timber being sent to the Untied States and it should have had a varied approach.
We have also heard the member for talk about the private land logging in the Atlantic provinces which were never caught by the subsidies here.
We have companies in northern Ontario and Quebec that are hurting desperately. To answer the question of the Bloc Québécois as to why they would support it, I fear the softwood lumber companies are facing a situation where they simply cannot afford not to take back only 80% of what they have paid under illegal dumping and countervail charges and neither can their communities and the workers.
In the other cases, we have interior forest companies in British Columbia that are highly efficient, have rationalized, are some of the most efficient mills in the world and have been making profits, notwithstanding the illegal countervail and dumping penalties, and they of course cannot afford to take only 80% back.
We have a range across the country and it is incumbent upon the Government of Canada to ensure that it embraces all those interests, which, obviously, is a complicated thing to do.
Let us look at what has happened in softwood lumber over the years. The and I have seen various aspects of this over the last 20 years. We have watched the trade in softwood lumber with the United States and various disputes that have come about over it.
We hear often from the government that it has never been managed trade in softwood lumber with the United States. That was certainly true before the free trade agreement but after the free trade agreement it was supposed to be free trade, not managed trade, and yet in various iterations and agreements where governments have given in to the pressure from the American industry, we have had quotas and we have had export duties. Now we have quotas and export duties. I fail to see how that can be a victory in terms of the softwood lumber industry.
Let us say clearly and out front that this is not about subsidies for the Canadian industry. I hope we all know that. The World Trade Organization and NAFTA panels have said it over and over that it is not about subsidies to Canadian softwood. It is about protectionism in the United States. That is what it is, that is what it will always be and I think we had better call it as it is, put it right in front of us and remember that as we see what happens going forward in the future.
We have pressures from the United States that simply will not let up. My great fear is that with all the immediate, perhaps, benefits to some aspects of the industry, some communities and their workers, that this agreement might provide in the short term, this does not provide the stability that is being suggested.
Let us think about where we were a year ago. Yes, the former Liberal government had pursued this for over four years on a number of tracks. Litigation was certainly one of them and, my goodness, it was certainly expensive and continued to be expensive. However, going through the WTO panels and the NAFTA panels where we were in the minority against the Americans, where they had two members and we had one, we continually kept winning and we have finally came close to the end. After four to five years of expensive litigation, we have come before the U.S. court of international trade, which is an American domestic court.
The one thing the American administration, quite apart from Congress and the individual sectoral lumber industry in the U.S., has always said is that at the end of the day it will change its rules because it does not want to be subject to super national arbitrations or decision making dispute resolution systems.
We got through those and then into the U.S. courts and won at one level. Yes, that could be appealed, but it was getting so close.
Yes, it is fine to talk about and it is important to appreciate the cost of continuing litigation, but it is extremely important not to throw away all of the work that has been done by litigation with the agreement of lumber councils across the country, the softwood industry, individually and collectively, the producing provinces and the federal government. We went forward and finally got to the point where it could be won and it is being thrown away. Let us not forget what we are throwing away when we measure the value of the so-called stability of this agreement.
We fool ourselves if we think we can sit here and rely on the United States in all its complexity, whether it is the administration, the Congress or sectors of their industry, when it has shown in this case its persistence in flouting the rule of law and going forward with arguments that are not being accepted by the various courts and panels.
Will we get stability with this? We know it may go for seven years, it may go for nine years or it may go for three years. I would not put a lot of trust at this stage in the system. However much the administration may intend at this time to see it go for many years and provide stability, it is not entirely in control of this issue. I think the evidence of the past suggests exactly the opposite, that we should not count on stability into the future. The fact is there will be no stability without the rule of law, which is what we are talking about here. Can we depend on agreements, on international trade obligations, on rulings of dispute resolution panels and, eventually, which we were close to, U.S. domestic courts themselves?
Yes, litigation is expensive, but to throw it away now in the name of perhaps a false stability when we are so close to a good outcome in the American courts is a great risk.
We then look at the Byrd amendment. We keep hearing from the government, depending on how it wants to scale and emphasize the amounts, whether it is U.S. dollars or Canadians dollars, that we are giving back over $1 billion American to the United States, to be used by both the the administration and Congress for projects that may be of assistance in their re-election campaigns at various times and to help various sectors of different industries in different parts of the country. Half of that $1 billion will also go to the industry itself which has been using every opportunity to encourage its government and its Congress to flout the law and avoid its responsibilities. How can we put trust in that?
The reason only half of the money will be going to the industry is because the Byrd amendment, which would otherwise allow all of it to go to the industry, over $1 billion American, was found to be against the WTO rules. Now we find, even after this agreement was signed with Canada, the American administration is appealing that WTO ruling. How can we put trust in stability in the future and in the good faith of this agreement when no sooner have we signed it than there is an attempt to get double the amount to go to the softwood industry in the U.S. to be used against Canadian industry and Canadian interest? That is not much of a deal.
We heard the member for say, quite appropriately, that the softwood industry, as important as it is, and it is immensely important to the province of British Columbia, is only 3% of our trade with the United States. He asked why we would worry that we do not have perfect free trade in this area when it represents such a small percentage of our overall trade with the United States.
I will tell members why we should worry. We should worry because it is a bad precedent. Ninety-seven per cent of our trade with the U.S. could be exposed to the tactics that have proven successful through the government's agreement in the softwood lumber industry. What kind of a precedent do we want to set? What kind of a risk do we want to take with this type of agreement? I suggest it is a short-sighted agreement and it does not bring stability. There is nothing in this agreement that should convince us, from past behaviour, that this will provide stability into the future.
We are not just leaving $1.4 billion or $1.5 billion in the United States as the member for Edmonton--Leduc has mentioned, which may ultimately all go to a competing industry there. We have not talked about the other $1.4 billion that was presented by the former Liberal government a year ago to go toward a number of initiatives to assist the industry in this country, the communities, and the workers. This must be added to the other $1.4 billion. Now we are getting into really large sums.
Those adjustment projects were meant to go to a whole range of things. We have heard of loan guarantees, litigation support and coordination for further negotiation. We have heard of taking the argument directly to the American consumers, one of the parties, in addition to Canadians, who are being hurt over all these years by this illegal U.S. action against Canada. The homebuilding industry and the homebuyers with aspirations to afford a home are being hurt by this U.S. action.
Where has Canada been putting its initiatives in supporting communities, workers and the industry? I will just focus on something that has not been talked about a lot and that is some of the community economic adjustment initiatives of the former government that actually bore fruit, helped stabilize communities, helped get people back to work and helped to provide some strength and support to the individual firms that were threatened.
Let us take the British Columbia part of that softwood adjustment initiative as an example because it is the province I come from. Over the last three years in the last government, $50 million went through community economic adjustment to hard hit resource communities around British Columbia. It went to diversify the economy in those communities in a number of stabilizing, helpful and growth stimulating ways.
When we look at diversification, an industry, which is a commodity industry, or part of it is, that is boom or bust vulnerable given the fluctuations in international commodity prices, that makes us extremely vulnerable. We need to add value. We need to diversify the product by adding value to widen the profit margin so that if there is a fluctuation in commodity prices we can withstand those fluctuations within broader profit margins.
In British Columbia, 145 programs were funded by the federal government in the amount of $50 million. A further $95 million was leveraged which went into 140 communities. One of the important objectives of that was the diversification by adding value added industries and providing support for them. Otherwise, we look for diversification in resource dependent communities to diversify markets. That is where a lot of this investment went and it is where part of the $1.4 billion that had been planned by the previous government would have gone.
I know that 11 ministers in the last Liberal government visited China. Of interest to all of us when we were there was how to diversify our markets away from a dependence on the United States into that huge China market. Forest products, home building and forest product-related sales and markets were a major focus of our initiatives, and those can never be forgotten.
The third part of diversification that we have to look to as an industrial strategy to move ahead and ensure that our resource-dependent communities are not subject to boom and bust or to illegal trade action by countries such as the United States, our biggest trading partner and therefore the one that can have the greatest negative impact on us, is to diversify into other sectors of the economy.
These adjustment funds, highly leveraged through private investment, also went into tourism, into economic infrastructure of various types and into the value added part of the forest products industry. About 30% of the projects, 140 or 145 projects, that were supported went to first nations to help them in their economic adjustment and over dependence on commodity-based forest products.
This is the way we need to go forward, along with litigation and negotiation and along with considering loan guarantees or whatever might be put forward. It shows an understanding of the economy, the vulnerability in our communities and the need to take a broader approach.
I am extremely concerned that we have traded away an agreement in which there is no guarantee whatsoever that there will be stability going long into the future. If the behaviour of the past is any guide, it should suggest to us the opposite.
We have a quota. We have duties. These export duties, and let us not shy away from it, are nothing more than an additional tax, and that is a tax that is going to be on our industry. Where will that money go? We have not heard about that. We can be sure that it cannot go back into the forest products industry or we will have a cancellation of this agreement with countervail action by the United States as fast as we can blink an eye.
Canadian business is being taxed this extra amount. As we have heard a number of people say, if we think through this situation, before the ink is even dry, before the ink was even applied on the agreement, the export duty, for which our industry is vulnerable, already exceeds what the illegal countervailing and dumping duties were. This really goes beyond imagination. It may give some short term relief, and any relief is good, but this is not something that we should not count on or cheer about.
I am very curious that, with the much vaunted new relationship of the new government with the George Bush administration, all we get out of that tremendous new arrangement and relationship is a bad deal. If this is all we can extract from that new relationship, then I am not sure it is particularly helpful to Canadians, and that will be seen in the end.
There is another aspect to this that is somewhat troubling, and I think it should be, to all of us. I do not for the moment suggest that the or the government has intended this, but there is an aspect of bullying that has been going on, which sits there underneath the surface in a very troubling way. It is about taking advantage of an industry that is on its knees and the communities and workers who are dependent upon that industry.
It is an uncomfortable feeling that we have to be very cautious of as we try to craft trade and industrial policy in the country, which is so diverse. We do not want to extract, through undue or unfair pressure, from vulnerable areas of our country or aspects of our industry anything that is not in the long term best interests of the industry, its workers or the communities.