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View Simon-Pierre Savard-Tremblay Profile
BQ (QC)
Mr. Speaker, as we saw yesterday, the first bill was passed with the support of all parties in the House except for the Bloc Québécois. That does not mean that we are against free trade and openness to trade, far from it.
In fact, if we look at Quebec's history, the separatist movement has nothing to prove in that regard. The great economists, who were also some of the greatest statesmen of modern Quebec, such as Bernard Landry and Jacques Parizeau, were the fathers of free trade in Quebec. We need not be lectured about that. It would be in extreme bad faith to accuse us of being opposed to trade with other countries.
Nevertheless, that did not prevent Jacques Parizeau from opposing certain agreements. We had to vote against the agreement as presented yesterday for somewhat similar reasons. There seemed to be more arguments against than for. This is politics, not religion. Just because this agreement has a free trade label on it does not necessarily mean that it will get our vote, if it has negative impacts.
Sure, the agreement has some positives and we wish we could have supported it. Some real progress has been made, compared to the old NAFTA. However—and I think that the outcome and the policy positions show exactly why the Bloc is necessary—we represent Quebec, and Quebec is getting the short end of the stick with this agreement in many respects.
Some significant concessions were made, and this came up earlier in some of the questions that were asked. Quebec is bearing the brunt of these concessions, as usual. This agreement contains two deal breakers in particular. First, it undermines our agricultural model, which relies heavily on supply management. Once again, the dairy industry is an example of that. Second, it significantly hinders our aluminum industry's future prospects. This industry is Quebec's second-largest exporter and is a jewel in the crown of our economy.
Our aluminum industry shines for its small carbon footprint. Some even call it carbon neutral, and my colleagues from Saguenay—Lac-St-Jean would know about that. This agreement benefits Chinese aluminum, which would literally flood the North American market through Mexico. A great deal of carbon pollution is created in manufacturing this aluminum.
We are working very hard to force the government to take into account Quebec's interests, which it bargained away during the negotiations. That is our job as parliamentarians and our mission for the immediate future. We are reaching out to the government so that it will work with us to find ways to limit the harm it is causing to the aluminum industry and dairy farmers. As members know, we proposed a way to improve the agreement without having to open it completely. That does not mean that we will not do our job in committee by asking questions and trying to take the agreement in a better direction. Nevertheless, we suggested an approach that would not require opening the agreement.
If the government finds a way to limit the harm that the agreement will cause our dairy industry and to protect our aluminum smelters, particularly against Chinese dumping, then we will be pleased to support the next steps. That is what we want for Quebec.
The government started speaking about openness the very evening it was elected. We have also heard about openness in this debate. However, openness goes both ways. We are willing to negotiate and discuss, but we will not compromise our principles.
Let's talk first about the key sectors of the Quebec economy that are threatened by this agreement. We believe that supply-managed products are a non-negotiable item, yet the government undermined protections for these products when it gave the Americans oversight over our trade practices.
We also believe that the aluminum industry is a non-negotiable item, yet the government agreed to allow Chinese aluminum to flood the North American market by going through Mexico.
Obviously, the government did not stand up for Quebec with the same vigour as it did for Ontario and western Canada. We cannot support the bill to ratify the CUSMA as it stands.
That is why we want the government to co-operate with us and take Quebec's needs into account.
Let's start with aluminum. Canadian and U.S. courts determined that Chinese aluminum was being dumped. That is not our allegation; it is the courts' finding. Unfortunately, as we all know, dumping is common, unfair and illegal. Canada and the United States both impose anti-dumping tariffs. Mexico, however, has no aluminum smelters, so it does not impose anti-dumping tariffs on Chinese aluminum.
As written, the agreement makes it possible for Chinese aluminum to flood the North American market, even though Canada and the United States have protective anti-dumping tariffs. Chinese aluminum is simply processed in Mexico, circumventing the protections we put in place. For free trade to be truly free and profitable for all, it must make unfair trade practices such as dumping impossible.
We also want to minimize our dairy producers' losses. In addition to opening up 3% of the Canadian market to American producers, CUSMA will make it harder for our producers to sell their milk protein to processors. As a result, American diafiltered milk imports could skyrocket, which is an ongoing issue we have been talking about for years.
As drafted, the agreement gives the Americans oversight into all our milk protein exports outside North America. Having a provision like this in a trade agreement is unheard of and it has the potential to completely destroy the dairy industry. We are trying to raise the main concerns with that aspect of the agreement.
I want to come back to aluminum to recap. Under NAFTA, automobile and truck manufacturers are under no obligation to buy North American steel and aluminum. Under the terms of the new CUSMA, 70% of the aluminum and steel bought by car and truck manufacturers has to originate from North America. To qualify as originating from North America, the steel and aluminum will have to undergo significant processing in North America.
On December 10, 2019, the three negotiating parties of the agreement signed a protocol of amendment to CUSMA. The protocol states that seven years after entry into force, steel purchased by manufacturers will have to be refined and cast in North America. That is the rub. There is no such provision for Quebec's aluminum. The amendment also states that 10 years after entry into force of this agreement, the parties will review the appropriate requirements in the interest of the parties so that aluminum can be considered as originating from North America.
Groupe Performance Stratégique, or GPS, examined the absence of a definition for aluminum similar to the definition included for steel in the protocol of amendment, and the economic impact this will have on Quebec between 2020 and 2029. According to GPS, the absence of this definition will jeopardize six major projects on the North Shore and in Saguenay—Lac-Saint-Jean, in other words, the heart of Quebec's aluminum sector. The authors explained that Mexico can continue to transform primary aluminum purchased at a very low price from China or elsewhere and export it to the United States.
I am pleased that my colleagues from Saguenay—Lac-Saint-Jean are here for the debate, because those six projects involve construction investments worth about $6.2 billion. I am sure everyone would agree that that is a lot of money. Between 2020 and 2029, if you add up the combined economic impact of the development and construction phases of the six projects, we are talking about investments worth $12.2 billion and 60,000 jobs created, at an average salary of $59,775.
These projects would generate revenues of more than $900 million for the Government of Quebec and almost $325 million for the Government of Canada. These projects would also produce 829,000 new tons of the greenest aluminum on the planet.
As we have been told repeatedly by the government, nothing in the former NAFTA protected the aluminum sector. We agree. This addition may look like progress, yet that is exactly where the problem lies. They are mixing up aluminum parts and aluminum. My colleague from Lac-Saint-Jean just talked about that. Why is aluminum, a Quebec product, not being offered the same protection as steel, which is a product of other provinces? That is where the problem lies and I will say that we are going to stand firm on this issue.
The definition of steel is clear. It includes the entire process, from melting, to mixing to coating. This will come into effect in seven years. Auto and parts manufacturers will have time to switch suppliers and to start purchasing North American steel. That is all very well and good. We have no problems with that at all.
However, a definition for “originating good” was not adopted for aluminum. Back in 2018, since there was no definition, the agreement was nothing more than a statement of intent that essentially allows automobile and parts manufacturers to get their primary aluminum wherever they want.
I should point out that Canada is the only of the three signatory countries for which protection against Chinese dumping is a real issue. In Quebec, it is imperative. For parts manufacturers in Ontario, this will be more of a long-term issue, which may explain why the government is so reluctant to deal with it.
Now, I want to talk about dairy farmers. Quebec needs a strong voice standing up for it, and we hope to be that strong voice. As members know, supply management is extremely important in Quebec, but less so in the rest of Canada. This is what makes us different as a people, as a nation. This is why we will not compromise on this.
Since 2001, which, coincidentally is the same time when the Bloc lost its recognized party status, there have been three breaches in supply management. When the Bloc had power, there were no breaches in supply management. Once again, this very fact demonstrates why we need to be here.
The Canada-United States-Mexico Agreement, or CUSMA, opens up a new breach in supply management that will take away more than 3% of our dairy market, which amounts to a loss of about $150 million a year, every year. The government announced that there would be full compensation. Let us be clear about the nature of that compensation. It is out of the question for this support to come in the form of a modernization program, like the fiasco that happened in 2018 with the European agreement. We are demanding a direct support program, starting with the next budget. That is what farmers are calling for. We will not budge on this either.
One issue that is not getting much attention, but that has the potential to destabilize the industry, is milk protein. Consumers in both Canada and the United States are drinking less milk but eating more butter, cream, cheese and ice cream. This leaves dairy farmers with surplus protein to dispose of. The Canadian International Trade Tribunal ruled in 2006 that above a certain concentration, these proteins became so denatured that they could no longer be considered dairy products and were therefore no longer subject to supply management, the existing laws that prohibit cross-border imports. The American agrochemical industry has developed milk protein concentrates designed specifically to circumvent supply management and enable U.S. farmers to dump their surplus into the Canadian market at lower prices than our farmers can afford to sell for. In Canada, the price paid to farmers is regulated by the Canadian Dairy Commission, as we know. However, imports of diafiltered milk, which does not even deserve to be called milk, have simply skyrocketed.
From zero in 2008, they shot up to 20,000 kilograms in 2014 and 33,000 kilograms in 2015, and they probably would have kept rising.
To solve the problem, farmers came to an agreement with processors on a price that would enable them to switch from American diafiltered milk to our domestic surplus protein. Their agreement was endorsed by Ottawa, the Canadian Dairy Commission, the provinces and the marketing boards.
Canada created a new class of dairy products, surplus protein, that could be sold at a low price. It was commonly known as class 7. Imports of diafiltered milk collapsed, prompting a flurry of irate tweets from U.S. President Trump, who promised to solve the problem during the renegotiation of NAFTA, as members may recall.
In CUSMA, the Americans insisted on spelling out in black and white that Canada would abolish class 7, and Ottawa agreed. To make sure that the class was not revived under a different name, they demanded that they get a say in Canada's protein trade. This whole section of the agreement is deeply disappointing to farmers, but sadly, with a certain sense of resignation, they are giving up the fight. They are not asking the government to push back on this. What they are asking for is a little time to adjust, as much time as is necessary and reasonable.
The government's eagerness to hastily ratify this agreement could cause a lot of harm. Let us take our time on a debate like this one. Let us not rush through this or there will be collateral victims.
Right now, our dairy farmers are selling some of their surplus milk protein concentrates on international markets, for example, in Asia and the Middle East.
The wording of CUSMA regarding the trade of protein concentrates seems to give the United States a say in all of our exports. Washington could decide to limit the quantity of protein concentrates that our farmers can sell to third country markets. Depending on how this CUSMA provision is interpreted, Washington could limit the quantity of protein concentrates that our farmers have the right to sell to the rest of the world. This would enable the Americans to get rid of a competitor on global markets at very little cost. It is a first in the history of international trade to give a foreign country oversight over our trade with the rest of the world. It basically hands over a part of Canada's sovereignty to Washington.
Our producers are likely to end up with huge surpluses of milk solids they cannot sell, which would totally destabilize the system. As written, CUSMA makes that catastrophic scenario a possibility, but the wording is unclear. We need clarity about things like that before we can support the agreement.
Fortunately, there will be a process to debate it. We are perfectly willing to do our job as parliamentarians with the government and the other opposition parties, but let me make it clear that some things are off the table. We are willing to compromise, but not to be compromised.
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