That, recognizing that the Prime Minister and the Minister of International Trade promised 400,000 Canadian forestry workers a framework agreement on softwood lumber exports with the Obama Administration by mid-June, 2016, recognizing the government’s failure to meet that deadline and their subsequent failure to negotiate a final agreement before the expiry of the last trade agreement on October 12, 2016, and given that many high-quality, well-paying jobs in the forestry sector are now at risk due to the government’s lack of action, the House call upon the government to stop delaying and take all necessary steps to prevent a trade war that will threaten the livelihood of Canadian workers and communities.
He said: Mr. Speaker, it is a great honour to stand today and move this motion forward. I will be splitting my time with my colleague from . Of course, this is very near and dear to her heart and her riding.
There are over 650 communities that rely on mills to maintain their viability, and around 400,000 people work in those mills and the ancillary jobs that are supported by them. It is very important that we get this right.
There have been four separate trade wars since 1982, and that was mentioned in the reading of the motion. The longest period of calm we have had throughout this was the last decade of the former Conservative government, which I was happy to be a minister of. My good friends, the ministers of trade during that time, were able to negotiate 10 years of truce, 10 years of relative stability and predictability in the softwood lumber sector. Because of that, we saw our softwood lumber sector grow. We also saw the American sector maintain a stronger portion of their own domestic supply because of the stability of that sector, even though there was more Canadian product going in.
It is a complex agreement, to say the least, and I do not want to undersell it. It is made worse now by the obfuscation of the Liberal government of the day, in that it did not recognize this as an issue as far back as the mandate letter to the , the throne speech, its budgets, and so on, or how important this industry is. It is a multi-billion dollar industry across Canada that feeds into the GDP of this great country. It is part of the diversity that we have.
As I said, 650 communities are on edge now because of this impending fifth trade war. The problem is that once these start, they run on five-year cycles. The Americans will use these five years for litigation and all sorts of actions that will stop the flow of our product going south. There are four or five major industry groups that are both American and Canadian in content. They are very much integrated. Those are not the ones we are concerned about. They are very important, but it is the small and medium-sized enterprises that are going to get squeezed out if we do not get this deal right.
As I understand it, from the hearings we had at the trade committee, which I am happy to sit on, and from leaks that have happened through the American side, we are not getting anything out of the Canadian side. The provinces are kept in the dark as to where the federal government is at. Industry in Canada writ large is in the dark as to where the Government of Canada is at. The problem is that no one really knows what is being said or what is being done.
We are all led to believe that there is a brand new way of doing things with the Americans. Everybody was all aglow about the family reunion that the held in Washington. We were all on edge when the American president came and spoke to us here in the House. However, at no junction was softwood lumber ever made an issue of, even though it was coming to a conclusion last week.
We are now in that position where we are not negotiating from a level of strength. We are negotiating while trying to play catch-up with the Americans who hold all the cards at this point. Having said that, there are things that the and the could and should be doing. One of them, of course, is getting hold of the Liberals' buddy in Washington, the president, who is still the president in what is called a lame duck session. If he wants to make this a legacy, he certainly could but it is going to take a heavy push from this side of the border to make that happen. It is certainly a lot more important for us than it is for the Americans at this point.
The other thing is that the Liberals dropped the ball over this past year and did not really pick it up until probably July when people started putting pressure on them and asking what was happening. We asked questions back in late winter and early spring about where we were with this. The Liberals had the time to be on the ground. For the first 100 days, there were all these wonderful promises made as to what was going to happen. None of that has come to fruition, on any level, on any issue.
At the end of the day, the least the could be doing right now is securing the agreement that there will be no litigation from the American lumber side while we are negotiating. That is the very least she could be doing. I am hoping she is on the phone later today. Now that we have given her that idea, she should at least be securing that so that we do not, again, deal with this from a state of less strength than the Americans.
As I have said, this has been a problem for decades and will continue to be simply because of differences in the way we do things. What the Americans are calling us out on, and it is always this one issue, in layman's terms, is stumpage. This is what the province of record charges for the timber that is withdrawn, and it varies from province to province.
The Province of Quebec has made some significant changes in the way it does that in coming to grips with what the Americans are going to want to demand. There are also 30 mills right along the border in Quebec that use material from Maine, which comes up into those mills, is manufactured into softwood lumber framing materials, and goes back into the U.S. Therefore, Quebec has always had an exemption. There are two of those in Ontario, as well.
We have also had an exemption for Atlantic Canada because most of that is privately held lands and it does not really fit within the description of the trade war fight, but again, the government has not shown an ability to get that exemption for Atlantic Canada, Newfoundland and Labrador.
There are a lot of irons in the fire, none of them warm at this point, other than the end we are trying to hang onto, which the Americans are handing us. At the end of the day, there is a lot of work to be done. I just do not see that happening. I know the work that we went through on country of origin labelling to get our beef and pork equal access into the U.S. It took a WTO challenge. We have been there before on softwood lumber as well and I will give the government of the day credit for that work, but when negotiating at the WTO, or NAFTA, or in the American courts, or however we decide to move forward, our industry is taking a hit. In those 650 mill towns, 400,000 workers are not going to have a happy Christmas and an early 2017.
It is up to the government to get to Washington. I know a lot of work was done with Ambassador Froman over the TPP. He is a tough negotiator, but the Americans need our product. They cannot supply their own domestic market, so they need Canadian product to do that. We have heard through some of our American connections and consumer groups working with us on country of origin labelling that the first foray of the Liberal government was to move from the 34% access we have now, which we have never used; we hit a peak of 28% to 30%. The first foray was to start at 26%, so they are taking 33% right off the table to begin with. That is a terrible negotiating ploy and if this is what it takes to say we are cozying up to the American president, then that is too high a cost. We have to realize that we need to negotiate a lot tougher than that, not just bend over and let the Americans run rampant on us on softwood lumber.
It is going to take some pretty severe work to get this turned around. The biggest thing that the minister is going to have to do right away is to make sure to take the litigation right off the table. That gives the Americans a hammer, not just a lever but a hammer. If there is no litigation in the works, then we can sit down and negotiate properly and get this done, much the same as other issues have been resolved.
Despite $30 billion of supposed stimulus spending the government has done in the first year, none of it has really driven any jobs. We have not seen any jobs increase across Canada at all, let alone that we are starting to see jobs lost in the oil patch, in the industry sector, and because we are not consummating the pending trade deals such as the TPP. We need to get serious about how we handle all of that work.
The opposition has put together a softwood lumber task force. We made the announcement this morning to look at how we move forward working with those contacts that we developed as we came to grips with country of origin labelling and had it finalized, and working with consumer groups, the construction association, the homebuilders association, the retailers, all of those people in the U.S. who want Canadian lumber. They want Canadian content because in the long term, it keeps their own industry honest. We also need to diversify our portfolio when it comes to softwood. That means taking up the advantages that we have in Japan, Korea, and China, where they are starting to buy a lot of our product, and making sure that we have that to use as a bit of a push-back on the Americans.
For a number of different industries we have too many eggs in that basket. We rely on the Americans for far more than we should and that is the whole nature of having diversity within our trade portfolio so that we make sure we have access to those other markets to keep the Americans honest.
We are asking the Liberal government to get serious about this file, become transparent, become accountable to the provincial ministers, to the small and medium-sized businesses. When we held the hearings that my colleagues and I have had with our provincial counterparts, they are not getting a lot of information, if any at all, to know what is being done and what they should be prepared for.
There is a tremendous amount of work to be done. I know the minister has travelled extensively. The parliamentary secretary has discussed this with a number of industries across the country as well, but the message is not getting through. The industries say they are being led down a dark alley they really do not want to go down, and that somehow we are dealing from a position of less than strength. We are asking for the government to take heed of the motion we are putting forward, help us pass this, and get serious about the softwood lumber file.
Mr. Speaker, I am very pleased to rise to today to speak to this important issue. My colleague from articulated a broad picture of the issue, its importance, and that we need to come to some resolution. It has been a challenge over the last 30 years, but the Conservative government got the job done.
I was first elected in 2008, but from 2006 to 2008, I remember the relief that the ridings and communities across our country felt because they knew the agreement was in place. No agreement is perfect, but it brought peace in the woods for over 10 years. It was something that the Conservative government was able to get done. After 30 years of very challenging circumstances, it got the job done.
Many people in the House represent urban areas and are perhaps not as familiar with the forestry industry as some of us who live in rural communities, so I want to talk a bit about the forestry industry and how important it is. Someone who lives in Toronto and represents a downtown riding may hear about the softwood lumber agreement and be a little puzzled as to why this agreement even matters.
The Forest Products Association of Canada has a map that shows communities across the country. I urge people to go to that website and look at the amazing map. There are little green dots that represent communities whose viability completely depend on the forestry industry. If they look at British Columbia, parts of Quebec, and Ontario, they will see provinces that are full of those green dots, rural communities that are completely dependent on the forestry industry.
In British Columbia right now, 34% of its exports are forest products. B.C. represents 72% of Canada's softwood lumber industry, so clearly the softwood lumber agreement is absolutely critical to the province. The Conservative government recognized that it should not be so dependent on the American market, and British Columbia has done a great job with the Asia-Pacific gateway and how it moves products. Asia has now replaced Europe as its second most important partner in terms of getting its products to market. Having said that, the U.S. market remains absolutely critical. British Columbia has 58,000 people in the industry and $6.5 billion in GDP.
Right now in Canada, the fiscal situation is very concerning. When we look at Alberta, Saskatchewan, and Ontario, British Columbia has been a glimmer of positive movement forward. I am very concerned that if an agreement is not reached, the province will have very significant challenges.
I will narrow this down a little more. I talked a bit about the big picture in British Columbia. In the riding I represent, there is a beautiful little community, Clearwater, which is on the Yellowhead Highway. People may have driven through it when travelling from Kamloops through to Jasper. It is a very popular place for tourists, including those from Europe, who visit beautiful Wells Grey Provincial Park.
In that community of about 2,200 people, there is the Canfor Vavenby mill, which is predominantly spruce and pine. This particular mill has 150 direct workers. Tourism is important to this little community of 2,200 people, but the most important industry in that community is the mill, with 150 workers. It has a payroll of $20 million and is estimated to add $100 million to the local economy. We can imagine what would happen if it were no longer viable. This community is just one example of the many green dots on that map by The Forest Products Association of Canada.
Not only does the mill provide well-paying jobs in the community, but it does a great job in terms of the apprenticeship training program. It also sends chips to Kamloops. Another thing it does as a community benefit is for heating. It provides chips free of charge to the Dutch Lake Community Centre to keep that heat going.
It is estimated that 70% to 80% of its market is to the U.S. Therefore, 70% to 80% of what is produced right now in that Vavenby mill is loaded on rail and trucks destined for the U.S.
Companies like Canfor, West Fraser, Interfor are important to our communities. They have expanded into the U.S., and certainly they have other opportunities to continue to do the good work they do. However, it is the communities that are going to be most hurt. It is the coffee shops and small businesses that die in rural communities when they lose their forestry industry. These communities are absolutely critical for British Columbia.
We have talked about the massive billion dollars in terms of supporting Boeing, but there are communities across British Columbia that need the government to get the job done and get a new softwood lumber agreement.
British Columbia said that this is absolutely critical, and the Premier was quoted in The Globe and Mail. On March 10, there was an agreement between the and the President that they were going to get the job done in 100 days. At the time, the Premier was optimistic that a top-level agreement was going to head off another Canada-U.S. softwood lumber trade conflict. She talked about the $3.3 billion, and applauded the commitment at that time to get the job done.
That happened on March 10, but on May 16, again I will talk about the Premier of British Columbia as she was quoted in an article from the Vancouver Sun. The headline was “After an initial flurry of optimism, Premier Christy Clark is now anxious about Canada's prospects for a renewed agreement with the United States...” She said, “I am worried about softwood, period...I think we are going to have to work incredibly hard now to try and get a deal because we are not a lot closer.”
We can see that the premier of the province is very concerned. Those little communities across British Columbia and across the country are hugely concerned in terms of what is going to happen to them if the agreement is not met.
However, what has the Liberal government done?
First, I knew that this agreement was expiring. At my town hall meetings in those rural communities, when we were going to the election, constituents asked what we were going to do about the softwood lumber agreement.
However, this agreement was not mentioned by the Liberal government in the Speech from the Throne, and it was not mentioned in the minister's mandate letter, which is absolutely stunning. To not have that mentioned in her mandate letter shows what low priority the government has in terms of getting the job done. The Liberals have given lip service to getting the job done.
Certainly when the and President had that 100-day commitment, we hoped that they would get the agreement done, to be quite frank. We wanted it done, and at that time we were thinking that maybe there was a priority to get this done. Clearly, the Conservatives got it done. The Liberals keep saying that this is our fault. They have had a year, and I do not see us being any closer to getting this done.
The only other thing that is important to mention in closing is that it is absolutely critical that not only this is done, but that it is a good deal, that they do not give away the farm in terms of getting a deal done.
I hope that by talking today, it will have impressed upon people, not only in the House but across Canada, how important the agreement is for the basic fabric of our communities, especially our rural communities, in terms of continuing to be an important part of our country.
Mr. Speaker, I welcome this opportunity to address the motion before the House today. I would like to start by underscoring a rare moment of unanimity from the speeches and questions earlier today. We all disagree about a lot, but I think we all agree about the importance of the softwood lumber industry to our country. I want to start by saying that it is great to have a chance to talk about it. As Minister of International Trade, I want to assure all members of the House and Canadians how strongly personally committed I am to this issue.
I would also like to respond directly to a comment made by the member for . She talked about members, for example from downtown Toronto ridings, and issues they may or may not be familiar with. I am very proud of the number of downtown MPs we have on this side of the House, and as we have already heard from my colleague from , very many of them have a deep familiarity with issues ranging across our country's geography and economy. I want to say for the members opposite and for all Canadians who are listening that I personally am very proud to represent the amazing downtown Toronto riding of University—Rosedale. I am equally proud of my own background, having been born and raised in Peace River in northern Alberta. I am personally extremely familiar with and very emotionally connected to the rural economy of this country. One of the things I take greatest pride in, as the Minister of International Trade, is fighting for our rural economy. I want Canadians to know that.
Let me talk a bit about the softwood lumber industry and how important it is to our country. Communities across the country, particularly in rural areas, depend heavily on this sector, which employs nearly 200,000 Canadians. In 2015, 69% of Canada's softwood lumber exports went to the U.S. which continues to be our largest export market despite excellent work by the industry to expand our markets, particularly in Asia but also in Europe. CETA, which I am working very hard on, could expand those markets further. Softwood lumber production is a driver of economic growth in Canada. It contributed more than $20 billion to our GDP last year, and maintaining access to the U.S. market is essential.
However, I would like to note that it was under the previous Conservative government that the old softwood lumber agreement expired, on October 12, 2015, when the previous government was still in office. I would like to take this opportunity to share with the House the details of a briefing I had nearly a year ago when we first formed government. I was astonished to learn in one of my first briefings by trade officials that the Conservatives did absolutely nothing to try to negotiate a new deal with the United States, even with the expiry date fast approaching. There was no outreach, no meetings, no telephone calls, and no action to try to protect the thousands of Canadians who work in this essential industry. The deadline was looming and the Conservatives sat on their hands.
Our government, by contrast, understands how important this industry is to Canada, and unlike the previous government, we have been engaged, starting with the , from day one on this issue. The Prime Minister raised the issue of softwood lumber in our first bilateral meeting with President Obama in Manilla last year. It was a key issue in our state visit to Washington in March. It was a key issue when President Obama came to Canada in June. We have been on this issue at the highest level. My negotiators were in Washington last week working on the softwood lumber issue. I spoke with Ambassador Mike Froman at length on Friday and I will meet with him again in person in Europe later this week. We are very engaged.
I want to take this opportunity to publicly thank and commend the work of our ambassador, David MacNaughton; of our negotiators, who are working very hard on this fiendishly complex issue; and of the team at the Canadian embassy in Washington. I have been meeting with my U.S. counterpart, Mike Froman, repeatedly around the world, whether in Shanghai or just a couple of weeks ago in Toronto.
In 35 years, Canada and the United States have been in open conflict four times over softwood lumber. All the stakeholders knew that a new agreement would take time and a lot of hard work.
When I started working on this portfolio, I was shocked to learn that the Conservatives had not even begun discussions with the Americans on the renewal of the softwood lumber agreement. Precious time was wasted during which the Conservative government could have been moving this file forward.
That is why, immediately after I was appointed, I asked that extensive consultations be held with key stakeholders in the forestry industry, namely the provincial and territorial governments, small and large lumber companies, producers of various types of softwood lumber products, industry associations, unions, and representatives of indigenous groups.
Our government is therefore working very hard in co-operation with the provinces and industry representatives. The negotiating teams are in constant communication. They are in contact daily. The Canadian ambassador to the United States and I are personally involved in the discussions.
I met with my counterpart and industry stakeholders, as well as the workers. When I went to Saguenay, I had the opportunity to speak with them directly. It was very productive
Let us not forget that softwood lumber was a key aspect of the second state visit to Washington in March. My U.S. counterpart, the United States Trade Representative, and I were expressly instructed, and I quote, to intensively explore all options and report back within 100 days on the key features that would address the issue.
On June 29, following discussions outside the North American leaders' summit held here in Ottawa, the and the President of the United States made a joint statement reiterating their support for a mutually acceptable solution.
Both leaders agreed on nine key elements for a lasting and equitable solution, including exclusion provisions, regional outputs, and transparency, to name a few. This road map continues to guide the negotiations, which, I would like to point out, are ongoing.
On October 12, my American counterpart and I issued a statement indicating that the governments of the United States and Canada remain committed to continuing negotiations in an effort to achieve a durable and equitable solution for North American softwood lumber producers, downstream industries, and consumers.
We recognize that forestry management policies differ across the country, and we are taking those differences into account in our negotiations and as we work toward a national solution. We represent all provinces, including Quebec, the Maritimes, and British Columbia, and will ensure that their needs are reflected in an agreement that benefits all of Canada. Our goal is to sign a good agreement.
Even so, the opposition has been critical. Would it rather we signed a bad agreement? We Liberals are working to negotiate the best deal for Canadians.
MPs and Canadians need to understand that the Government of the United States cannot impose an agreement on its industry even if our two governments do settle on a deal acceptable to us both. That is because, for an agreement to be reached, the American industry must relinquish its legal right to impose tariffs on Canadian exports, a condition that further complicates negotiations.
Another factor that is making negotiations particularly difficult is the level of protectionist rhetoric in the United States.
With the election campaign under way, protectionism is gaining ground and influencing the media and the people. Despite the looming threat of American protectionism, the showed strong leadership during the G20 when he stood up for free trade and open society.
Also complicating matters is the most protectionist climate in the United States since the Great Depression. This is a serious moment and a serious trend. We are seeing it very much at play not only in the U.S. election but in Europe. We saw it in the lead-up to the Brexit vote, and there is a consequential election soon in Austria, where these themes are very significant.
What we are seeing around the world, both south of the border and in Europe, is a gathering protectionist wave, and it is mixed up with a lot of other things. It is mixed up sometimes with anti-immigrant sentiment. It is mixed up sometimes with xenophobia. This is a powerful backlash against globalization, and it is looking for a target. This broader political environment certainly complicates any trade negotiation, including this one.
Having said that, we are working very hard to secure export markets for Canadian producers, and we are succeeding. In fact, we started our mandate by working hard and successfully repealing protectionist COOL legislation in the United States, notwithstanding the comments made by the member for . I was rather surprised to hear him raise this issue. They did not get the puck in the net on COOL. Our government did, and I was very proud to secure that access for our ranchers. We then secured access for Canadian beef in Mexico and in China, which was another real victory for our producers. Finally, we had last month's absolutely breakthrough agreement on securing access for canola exports to China through 2020. This is terrific news for Canadian farmers, including my dad, who hopes that the snow melts off his swaths of canola and that he can finish harvesting this fall.
Canada is pushing back hard against the anti-trade sentiment, and we are securing some tangible wins for our producers. However, we in this House are all very aware of the real challenges. Despite these challenges, our government is doing everything possible to find a solution on softwood lumber that works for industry and safeguards the interests of all Canadians, whether in Atlantic Canada, Quebec, Ontario, the Prairies, or B.C.
The negotiating teams speak on the phone almost every day. To date, my officials have had formal meetings with U.S. officials on 16 occasions, most recently last week in Washington. My officials have had more than 65 meetings with Canadian stakeholders, including provinces and industry.
To further understand the views of the industry on both sides of the border, and to move negotiations forward, Ambassador Froman and I hosted a round table with the U.S. industry in Washington, D.C., last month. Then, on October 5, we hosted a round table with the Canadian industry in Toronto. Our Canadian meeting included small and large producers from across the country, including a first-nations-owned business. These meetings shed valuable light on the concerns of both sides as well as on areas where we share similar views, including our joint desire to grow the market for softwood lumber products within North America and abroad.
On October 12, Ambassador Froman and I released a joint statement in which we agreed to continue negotiations and to work to meet the mandate agreed to by President Obama and our when they met in Ottawa in June. In this mandate, our two leaders agreed to nine key features of a durable, equitable deal. Those features include provisions for exclusions and regional exits, to name just a few.
While my officials continue to engage diligently in negotiations, and I am very personally directly involved in that work, we are at the same time preparing for litigation. Should we have to fight, we will be ready to do so. Our softwood lumber producers and workers have never been found in the wrong. International bodies have always sided with our industry in the past.
Canadian officials have been working closely with provinces, territories, and industry since I became minister to prepare for possible U.S. trade action against our softwood lumber products. We are also preparing for the possibility of subsequent litigation at the WTO and under NAFTA. This work has included hiring economic experts, gathering evidence, monitoring U.S. trade law, and preparing our briefs.
While I, personally, and our government are ready to fight in the courts, negotiating an agreement that is good for Canada is the best way to secure stability and predictability for our industry. We will continue our unflagging efforts on this front.
One of our government's top priorities is the economic well-being of the hundreds of Canadians and the hundreds of thousands of families across Canada that depend on the forestry sector and on softwood lumber exports to the United States. That is why we are working so hard to find a solution to the softwood lumber issue.
Let us be clear about what the opposition is asking us to do here today. It is asking us to agree to a deal right now. To do that would mean agreeing to the inadequate deal the U.S. industry is putting forward today. We will not do that. I will not do that. We will keep fighting for the best deal for Canada and for Canadians.
We want a good deal for Canadians, not just any deal. We are hoping for the best and working for the best, but we are preparing for the worst. We are prepared to fight for and defend our industry and our workers in the courts if that is what it takes.
I would like to close by assuring this House, and above all, by assuring Canadians, that the Government of Canada is prepared for any situation and that we are working vigorously and tirelessly to defend the interests of Canadian workers and Canadian producers.
Mr. Speaker, I will be splitting my time with the member for .
Before I begin my remarks, I would like to offer my sincere condolences to the friends and family of Jim Prentice. He was a respected parliamentarian, and my heart goes out to all of my colleagues who are mourning his tragic passing today.
Today's motion is timely, and I am glad my Conservative colleague from has brought it forward for debate. The motion urges the government to take all necessary steps to prevent a trade war with the United States over softwood lumber exports.
I absolutely support the motion. For the many thousands of Canadians whose livelihoods depend on this important industry, it is imperative that Canada secures a fair deal with the United States.
Softwood lumber is a vital part of Canada's forestry sector. For many rural communities, it is the backbone of their economy. According to Canada's labour force survey, in 2015, the forest industry accounted for 260,000 direct and indirect jobs, compared to just over 400,000 jobs in 2003. Hundreds of sawmills across Canada have been shuttered, taking with them high-quality, well-paid jobs, the kind of jobs on which families and communities depend.
Today, the softwood lumber industry is on the verge of more job losses. With the expiry of the 2006 SLA, producers are bracing for more U.S. tariffs, which will further devastate an industry that has already been hard hit by the long-standing dispute with the U.S., as well as factors like the recent recession, the crash of the U.S. housing market, and domestic issues like the spread of the pine beetle across British Columbian forests.
Canadian producers and workers are hoping that a new SLA will bring fairness and predictability.
The Canada-U.S. softwood lumber dispute first began in 1982. For nearly 35 years, the American industry has argued that Canadian producers benefit from subsidization, a claim that has been defeated time and time again.
Over the years, there have been several managed trade agreements and upon their expiration, more duties slapped on Canadian exports to the U.S. and more costly litigation. Canada has spent in the ballpark of $100 million in legal fees to defend our position.
After the previous agreement expired in 2001, the U.S. levied $5.4 billion in duties on Canadian imports, money that should have stayed in the pockets of Canadians. It was the beginning of a decade of massive job loss in the Canadian industry.
Soon after the Conservatives were elected in early 2006, they quickly negotiated a new agreement with little to no consultation with Canadian stakeholders. The result was a very controversial agreement that many argued represented a sellout of Canadian interests. For starters, it was based on the falsehood that Canada's industry was subsidized, which tribunal after tribunal has said is not the case. This set a terrible precedent that the rules of trade did not apply.
The agreement provided an option for Canadian regions of an export tax or a quota with an export tax at a lower rate. It took $50 million from Canadian industry to create a binding dispute settlement system where the U.S. was able to bring more actions against Canada. Perhaps most egregiously, the agreement allowed the U.S. to keep $1 billion of the duties it illegally levied on Canadian producers.
At the time, BMO Nesbitt Burns analyst, Stephen Atkinson, said, “Why would you give 22 per cent to your competition?...This money belongs to the companies and their shareholders, and the Canadian government is giving it away.”
Canadians were furious with the 2006 SLA. When the Conservatives brought it to Parliament in the form of Bill , the NDP argued vehemently against the agreement. When we look back at this agreement, it is fair to say that the Conservatives caved to American interests. Today, it is imperative that the Liberals do not do the same.
As we know, the 2006 agreement was renewed in 2012 and expired last October. The Liberals love to blame the Conservatives for failing to initiate negotiations on a new agreement. It would seem the Conservatives made zero effort to work on the issue before the election. However, the current government must shoulder the responsibility for its role in failing to get a new deal done in time. For months, the government has hinted at breakthroughs that have never materialized.
In March, the boasted, “I'm confident that we are on a track towards resolving this irritant in the coming weeks and months.” That is from the CBC. The fact is that the Liberals broke their own commitment and failed to get a deal done before time ran out.
Beyond softwood specifically, the government does not seem to have a plan for the forestry sector. The federal budget contained no vision for supporting this important industry, which provides jobs right across Canada. It also failed to renew funding for the forest innovation program, which expired earlier this year.
The international trade committee undertook a brief study of softwood lumber earlier this spring, given that the expiry of the standstill clause was fast approaching. Over the course of two meetings, we heard from witnesses from British Columbia, Quebec, and Atlantic Canada. We heard a lot of frustrations about how Canada had gotten to the place it was at now. The 2006 SLA was a bad deal and the Conservatives did a poor job of negotiating it.
While many concede that another managed trade deal is better than more costly litigation, there is something inherently unfair about the fact that despite continued findings that Canada is not in the wrong, we continue to negotiate agreements that are clearly in the interests of U.S. industry. Many witnesses expressed a desire to see Canada and the U.S. reach a negotiated settlement, one that would work for all our regions. However, I also heard very clearly that people did not want another bad deal. Quebec, for example, has made a lot of changes in its forestry practices and any new agreement must recognize these and other regional differences. A one-size-fits-all solution simply will not do.
One important voice we did not get to hear from at committee was labour. The United Steelworkers, which represents some 40,000 forestry workers, has laid out several requirements for what it would like to see happen now that the 2006 SLA has expired.
It wants the creation of provincial forest community restoration fund. These funds would be invested in workers, forest-dependent communities, and forest health. It wants fair access to the U.S. lumber market and discourages a new quota system. It also wants a guarantee that Canadian producers will have the same access to the U.S. market that other countries will enjoy.
I appreciate the perspective of the United Steelworkers because it represents the workers' point of view. For workers, these three things would help give them greater job security and strengthen, instead of weaken, the industry.
The committee's final report made five recommendations to the government, including that it get a deal done that would serve Canadian interests, that it consult with big and small producers, and that any new deal respect regional differences. The committee submitted its report to the House last spring, but as the summer went on, we continued hearing worry and concern over the lack of progress on the government's part. In August, opposition committee members, including myself, pushed for a summer meeting to get an update from the department.
We also called on the government to broaden its consultations and convene a round table of stakeholders that had been excluded in the past. The Liberals rejected this proposal and, quite shockingly, called the whole meeting a waste of time.
In just a few short months, Canadian producers expect to be hit with U.S. tariffs of around 25%. Mills will be shut down right across Canada. Thousands of jobs will be lost. It is extremely important that the government gets this deal done right and gets it done fast. I hope the government understands the gravity of what these job losses will mean in our communities: thousands of people with no jobs to go to, no more paycheques to bring home, and families worried about how to pay the rent or make the next mortgage payment.
I am from southwestern Ontario and people in Essex know what it is like to lose a lot of jobs in one sector. It is tough and people are resilient, but it is very difficult for families and communities to work through these types of events. I urge the government to act in the interests of those whose jobs are on the line. That means getting the deal right and working collaboratively with the communities that will be impacted by another round of duties.
If the Liberal government is serious about holding out for a good deal, instead of signing a bad one tomorrow, then it owes Canadians more transparency and openness about how it will help Canada's industry weather this impending trade storm. Some in the industry want the government to provide loan guarantees to help them deal with a new round of U.S. duties. If this prevents sawmills from closing and jobs from being lost, then it is imperative that the government provide this support. Canadians deserve answers from the government, not more empty promises and hollow words about meetings and consultations.
The New Democratic Party supports this motion and urges the government to make a new agreement that is in the best interests of Canadians a top priority.
Mr. Speaker, I am glad to have the opportunity to speak here this afternoon in favour of the motion because I am concerned about the future of Canada's forest industry.
I come from British Columbia, which, as most people know, has some of the most magnificent forest resources anywhere in the world. From the rainforests of cedar and hemlock on the coast to the vast pine, fir, and spruce forests of the interior, British Columbia produces more than half the softwood lumber in Canada.
The forest industry has been a critically important part of the British Columbian economy for over a century. Today, it contributes $12 billion every year to the B.C. economy. It provides $2.5 billion in direct government revenue in British Columbia. It creates 145,000 jobs in British Columbia alone. That is one in every 16 jobs in British Columbia. That figure was touted to be closer to one in every two jobs when I was younger, but the industry has been hit hard over the past few decades.
The softwood lumber agreement of 2006 came after over 20 years of disputes between the two countries. At the heart of those disputes was the claim by the United States that the Canadian forest industry was subsidized by the way companies paid for the harvesting of wood from public lands. That claim has repeatedly been repudiated by both international and American tribunals. I think we won something like 14 legal decisions in a row between 1982 and 2005. Despite these victories, the actions of the U.S. industry brought uncertainty to the lumber export market and cost our industry billions of dollars.
The softwood lumber agreement did bring back certainty to lumber export access and costs, but the Canadian industry paid a very high price for that certainty and many mills did not survive those added costs and quotas; especially, after years of wearying trade battles with the United States.
In my riding, the Weyerhaeuser mill in Okanagan Falls closed in 2007, putting over 200 people out of work. The Pope & Talbot mill in Midway closed in 2007 as well, but fortunately, has been reopened by the Vaagen Brothers, which has invested in new equipment to create a highly efficient mill that uses the smaller logs that are easier to find in today's wood supply. The Atco lumber company in Fruitvale closed its lumber operation around the same time to concentrate on veneer products for plywood, which are not subject to softwood lumber quotas and tariffs. The surviving mills in my riding strive to be as efficient as possible, trying to get the right logs to the right mill. It does not always work, the system is far from perfect, but for the moment the mills are doing well.
As elsewhere in Canada, waste wood in all the local mills is usually chipped and sent to the local pulp mill, in my case, it is the Celgar mill in Castlegar, to add a bit to the bottom line for the mills. The pulp mills also depend on the input of those chips. I heard testimony from a pulp mill representative, a couple of weeks ago, at the finance committee pre-budget consultation in Alberta, that pulp mills in Alberta would be hooped, in his words, if local sawmills closed because of inaction on the softwood lumber agreement.
As I tour my riding today, I see a forest industry that is innovative and efficient, each mill specializing in some niche that will allow it to survive and hopefully thrive. I imagine that is the case across British Columbia and across Canada.
The industry faces challenges from all sides today, and one of the main challenges these companies face is uncertainty. When I ask representatives from the forest industry about a new softwood agreement, they agree that the former agreement has brought some amount of certainty and stability to the lumber market in Canada, but feel that it failed, in some areas, to protect Canada's interests in an unfair trade negotiation.
The forest industry would like to see the agreement renewed, but not at any cost. It does not want to see a new agreement that is more punitive than the last, since it is clear that countervailing duties are not legally warranted at all. It recognizes that we need an agreement that is flexible to the needs and circumstances of the different regions in Canada.
The Liberal government promised quick action on this file. It repeatedly said these negotiations were an example of how things go right when the President of the United States is a good friend of the , but it has failed to deliver and the Canadian forest industry is clearly worried about the future. We need to get a new agreement in place. The government can and must do more for the forest industry than just get this softwood agreement.
The industry, especially in British Columbia, has been working hard to build new international markets for our lumber products. It has been working on innovative new wood products and new ways to use wood in buildings. It would be a great boost to the Canadian forest industry as a whole if the federal government instituted a wood-first policy that promoted the use of wood in government building projects.
In my hometown of Penticton there is a company called Structurlam, which builds huge glulam beams for beautiful structural supports for large buildings. It also manufactures crosslam wood panels, which combine with the beams to allow the construction of very tall buildings without steel and concrete. The company just completed an 18-storey project at the University of British Columbia, called Brock Commons. It is the tallest wood building in the world, and because the parts are built off-site, the Brock Commons building took only 66 days to construct. The UBC project used 1.7 million board feet of British Columbia lumber. Structurlam gets its lumber locally at mills such as Kalesnikoff in Castlegar, so the benefits are widespread.
If we could support domestic markets in this way, it could really help the forest industry in our country and partially shield us from the political vagaries of American trade negotiations.
Despite the challenges it has faced over the past 30 years or so, the British Columbia forest industry is very much alive, and is still very important to British Columbia and the Canadian economy. However, it faces serious challenges: a future with a declining wood supply, a future with more frequent catastrophic forest fires and insect epidemics due to climate change, a future with increased uncertainty around the demand for wood products, and a future with rising costs associated with trade disputes with the United States.
We need the government to do everything in its power to support the forest industry. We need a new softwood lumber agreement that is fair and flexible across all regions of Canada, an agreement that will bring certainty to the forest industry. British Columbia and hundreds of thousands of Canadians across our country depend on it.
Mr. Speaker, I will be splitting my time with the member for .
It is disturbing that we are at this point today where some 400,000 jobs are in jeopardy across Canada going forward this winter, not 200,000 jobs that the minister claimed were at stake. That is approximately 650 communities that do not have a certain future because the Liberal government decided not to think seriously about having an agreement on softwood lumber in place.
If we look at the minister's priorities and the mandate letter she was given when she took on the role, softwood lumber was nowhere to be mentioned. When we talked about softwood lumber at committee and said that we needed to have an emergency meeting to talk about it to see where things were at, the committee member from Quebec called it a waste of time and money. That shows the attitude of the Liberal government toward the forestry sector and all resource jobs in total. Its disdain for that sector is obvious. The fact that it did not make it a priority is very disappointing.
The talks about his special relationship with President Obama. That special relationship got him a dinner at the White House and a whole pile of photo ops with the President. It brought the president here, where they embraced the bromance right in the area of the Chair in June. However, if that relationship is so special, we would think he would have been able to say, “You know what? I need this deal done, Mr. President.” He could have done this in June. Then we would have no insecurity in this sector going into the winter season. However, he chose not to. I think he took his time and decided to have a photo op instead of sitting down and talking seriously about getting this done, noting how important it was to Canadians.
I want to remind the House that the previous government not only got the negotiations done within the first three months of taking office in 2006, but also renegotiated the agreement in 2012, both with two different presidents. The Liberals talk about how the previous government has such a bad relationship with the U.S. when in fact it was able to use that relationship and get things done for Canadian workers. Now we have this supposed bromance, which is nothing that can be cashed in on.
I know the Liberals like to deal with their friends. That is quite obvious from the history of the Liberal Party if we go back to the Gomery report, and the like. However, they do not realize that dealing internationally is done in a business-to-business format and that we have to take these things seriously, that when we sit down at the table the friendship ends when the negotiations start, as my colleague said in a press conference today. However, they do not seem to get that. They do not understand what is at stake and what is important.
There are some other things that the previous government managed to get done: the beyond-the-border action plan of 2011 to expedite legitimate trade and travel across the border, which is something that needs more co-operation on to keep moving forward; the Canada-United States energy dialogue in 2009 to strengthen the bilateral co-operation and development of clean energy technology; the expansion of the Nexus program to make it easier for pre-approved individuals to cross the border; and the Gordie Howe bridge. There are many examples of the previous government's success in dealing with Washington, both with Democrats and Republicans, yet this bromance produces nothing but photo ops.
If I go back to the riding and talk about jobs—because this does impact my riding substantially—I look at the mill at Carrot River, for example. This mill was expanded. Millions of dollars was spent in redoing the line. It was putting some stability back into a small town where forestry is very important. I now have to go back to those workers and tell them that the Liberals did not try to negotiate a deal until the last minute and that I cannot promise them any type of bankability as they move forward. Therefore, I have to go to the guy who owns 10 trucks and probably has millions of dollars tied up in equipment and tell him I do not know what the future holds. I have to go to the employees of that sawmill and tell them that the Liberals have not done it and that I do not know what the future holds for them. These are families. These are people who will be going into Christmas unsure of what they can or cannot spend on gifts for their kids. These are people who invest in things like tree cutters, parts, and service across the community as a whole. They do not know what they can or cannot do now because there is no stability in the market.
I was in Prince Albert when the mill shut down. That was back at the time of the old trade dispute in 2004 and 2005, when the pulp mill and the sawmill were shut down. The impact on the community was devastating. If it were not for Fort McMurray and the growth in that sector, it would have been even more devastating and taken the feet right out of the city of Prince Albert. It would not be the city it is today.
We can look at the resource sector and see how important it is to our economy. To see the disdain that the Liberals show towards it and their inability to get results, whether in a softwood lumber agreement or a pipeline to port, shows they do not understand the importance of this sector.
The Liberals used the election and the protectionist climate as an excuse. The Conservatives negotiated the last extension agreement in 2012 during a presidential election. Protectionist measures are nothing new in dealing with the United States. We must deal with them as they come up. We can remember dealing with buy American in the House, and how we had to deal with those issues as they came up. The Conservatives dealt with them.
Country of origin labelling is another example. We were able to resolve those issues while we were in government. It took a lot of hard work and consensus building with our American partners, but we did the hard work and we did it together.
If we look at country of origin labelling and what was involved in getting that result the way we needed it, it was not just litigation. It was actually a matter of working with like-minded professionals, industries, and people who understood the importance of having Canadian beef come across the border, the importance of consumers, and the importance of building alliances down in the U.S. with those types of groups to put political pressure on Congress to say this needed to change. We got it done.
One other concern I have about the government is the secrecy of negotiations. When I go to industries or the provinces and ask what is in the negotiations, what is being proposed, what is being offered, they do not know and cannot tell me because the government will not tell them. I say they could sign a confidentiality agreement, and then at least they would know what is involved in the negotiations. It is not even being offered.
The minister is basically doing these negotiations in secret, in private, with only four major players who have an interest on both sides of the border sitting at her side. How can that be fair to the small players in the sector, the small forestry companies in Canada? How can that be fair to the provincial ministers, who do not know? Why do we have to go to the U.S. to find out bits and pieces of what is in the agreement? That is so disappointing.
How does Parliament function without knowing what is in the agreement? Again, I encourage the minister to come to Parliament and tell us what the government is proposing, what is being put on the table, what the numbers are, if she is using a quota system in the proposal or a tax exemption or taxing system such as tax pricing? What is it?
Those are things the committee could have worked on this summer. Those are the things we could have assisted the government in moving our sector forward and seeing this agreement happen. However, it thought it was a waste of time and money.
Forgive me when I do not take the government seriously when it says it takes this seriously. Forgive me when I look across the aisle and see that the priorities of the lie somewhere else, and not on dealing with this issue, because I do not believe him, and Canadian forestry workers definitely do not believe him.
Let us look at the jobs at stake. I go back to Carrot River, Big River, Meadow Lake, and look at the sector as a whole. It is a very tight-knit sector. When one piece of it fails, it has domino effects on other areas. For example, with the closure of the pulp mill at The Pas, all of sudden Carrot River will not have a source for its chips to go to in The Pas. What will they do with their chips? They have to go to Hudson Bay or somewhere else.
If the saw mill is taken out of Carrot River, then how does Hudson Bay, which shares a forestry management agreement with the company out of Carrot River on hardwood, get their hardwood? When hardwood is cut, the softwood is cut at the same time. It is a coordinated effort, so it is harvested properly.
As we can see, when one of these things fails, the domino effect goes into the sector, and not just into the softwood sector but also the hardwood sector, into particleboard, into pulp and paper. Whole sectors start to fail. The cluster becomes no longer viable.
I will not go into the carbon tax. I will not even talk about what that would do to the sector. Again, let us talk about 11 cents a litre or 45 cents a litre and what that does to the price of diesel. All of this forestry product moves out of the bush by truck. It has to compete with people around the world, including our American competitors and other markets. They do not have a carbon tax. They are not going to have a carbon tax. Yet we are expected to pay for that.
In fact, when we look at the forestry sector, what is so ironic is that these trees sequester so much carbon. It is amazing. It is about one tonne per metre, I understand. If we look at a per acre basis, we can see the amount of carbon that our forestry sector sequesters. When that tree is cut and another tree is planted, again, more carbon is sequestered.
In closing, this is something that the government needed to take seriously. It did not. The result is that we do not have an agreement in place. If the Liberals could do one thing right now, it would be to get a stay of litigation. They could say that while they are negotiating, no illegal activity should be going on in the background, so that there are no duties coming into play at this point in time.
These are some of the things they could do at this point to bring some stability to the market, for this year at least. The best thing they could do is get a good agreement. However, in order to get an agreement, they have to be at the table and have to understand the impacts of their decisions. I do not think they are at the table seriously, and I do not think they seriously understand the impacts.
Mr. Speaker, I have a duty to speak to this matter today. Since arriving here in 2007, I have always felt that it has been my responsibility to stand up for the forestry economy of all regions of Canada, from northern British Columbia to the Atlantic regions, in order to protect communities, because the forestry industry is often their sole provider of jobs.
I have always been told that people are judged more by their actions than by their words. We can say many things, but we have to look at the facts and the results. A bill to abolish the title of minister of the Economic Development Agency of Canada for the Regions of Quebec was introduced recently. They abolished the position of the political lieutenant for the regions. I get it: they do not want complaints from the regions. No one is going to stand up for their region because they will be rapped on the knuckles.
The Economic Development Agency of Canada was often the only department to wave the Canadian flag in Quebec's regions. People never see other federal government departments or officials. Now the government is going to abolish the department of Economic Development. Perhaps if the sawmills we are talking about today were not located in Rivière-aux-Rats, Port-Cartier, Girardville, or Saint-Thomas-Didyme, which are in my riding, but rather in Montreal, Toronto, Vancouver, or Winnipeg, we would have heard quite a bit about them earlier.
Today, the situation affects 400,000 jobs across Canada in regions that have fewer voters. However, it is important that we maintain the economic health of all regions in Canada so there are jobs for the people.
Our party came to power in 2006, and I arrived in September 2007. The government really did not need me to deal with the softwood lumber issue because it had already done so. What was the situation when the government came to power in January after 10 years of inaction by the Liberal government? Between 27% and 37% of export duties and $6 billion were frozen in a trade war with the United States. We dealt with that in three or four months. In April, everything was settled. We brought in $5 billion out of the $6 billion.
Members are saying that Canada gave the United States a billion dollars, but what they fail to mention is that we brought in $5 billion. We brought in $5 billion of the $6 billion that was on the table and we gave that money back to the forestry industry. We signed a deal that brought 10 years of peace and stability.
Of course, the former minister had begun working on this issue. He had begun discussions but not negotiations. He too consulted with our Canadian partners. What was said earlier is not true. We began paving the way for future negotiations. We were moving firmly in that direction.
When we look at which party or which government resolved international trade issues in the past, it is not the current government. It is our former government and Brian Mulroney's government.
The Liberals have always been more reluctant to sign trade deals, so we need to be careful. We jumped in. We opened doors and we signed a 10-year agreement.
As my colleague said earlier, we are talking about softwood lumber, but those who know forestry know that trees must first be felled and limbed, loaded onto trucks, and transported to sawmills. Milling produces byproducts that go to secondary and tertiary manufacturing facilities, which make cushions, mattresses, and all kinds of other things. Wood chips go to pulp and paper mills. All of that will be jeopardized. Not just lumber mills, but the entire forestry industry supply chain will be jeopardized, from truckers to equipment manufacturers that sell machinery used to cut and process wood.
The government has been in power for a year but says it has not had enough time to get anything done. It blames everything on the big, bad former Conservative government that did not get the job done. The Liberals wanted power. They have it. Now they have to keep their promises. It is up to them to seal a deal for this whole economic sector.
We understand that the deal with the Americans has to benefit the country and all regions of the country. Of course we agree with that; that is what we did in 2006.
Whenever someone tells me we have to reach an agreement that is good for the whole country, I say we did.
What is currently at play? When we came to an agreement in 2006, the provinces could opt for percentages with no quota, or unrestrained exports, as British Columbia did. It was between 5%, 10%, and 15% according to the prevailing price per thousand board feet. That is how the measure was drafted. The price could vary, and accordingly, so did the export percentage.
It was 5%, 10%, or 15%. Now we are being told that if there is no agreement, and I hope there will be one, the cost of exporting will be 25%. That is hundreds of millions of dollars that will go toward export costs instead of to jobs or the people who are already working in this sector.
We read the press release that said that negotiations were ongoing and that the government hoped to conclude an agreement. I hope so too.
The Canadian province that exports the most lumber to the United States is British Columbia. Statistically speaking, the numbers are there. Quebec is the second-largest exporter. More importantly, especially seeing that 40 Liberal members come from the regions in Quebec, Quebec exports roughly 48% of its softwood lumber products. In other words, half of its two-by-fours go to the United States. Of this 48%, 98.5% of the lumber exported from Quebec goes to the United States. It is easy to see why this agreement is so important. That is why Quebec's entire forestry industry is quite anxious today. They know what is at stake.
Today, it takes a lot of courage and I hope that my colleagues across the way have that courage. I would like the government to deal with this issue and to conclude an agreement that is good for the entire country, one that respects regional differences. Quebec changed how it allots timber: 75% remains public and 25% is sold at auction, as is the case in a number of U.S. states.
We would like the particularities of every region of the country, including the Atlantic provinces, Quebec, and the western provinces, to be recognized and a good deal to be negotiated, rather than having to take our partners to court. Of course we are enjoying a warmer relationship with the U.S., as the Liberals claim. All these grand dinners and accolades are all well and good, but what about jobs, results, and salaries for those workers?
Why are we even talking about job creation? Some 400,000 jobs already depend on that deal. Before we create any more, let us protect the ones we have. This sector already provides a lot of good jobs. It is the government's duty to reach an agreement quickly to give these workers some job security.