Bill C-24 (Historical)

Softwood Lumber Products Export Charge Act, 2006

An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence

The purpose of this enactment is to implement some of Canada’s obligations under the Softwood Lumber Agreement between the Government of Canada and the Government of the United States, by imposing a charge on exports of certain softwood lumber products to the United States and on refunds of certain duty deposits paid to the United States and by amending certain Acts, including the Export and Import Permits Act. The charge on exports will take effect on October 12, 2006 and will be payable by exporters of softwood lumber products. The enactment also authorizes certain payments to be made.

Softwood Lumber Products Export Charge Act, 2006

[Gilles-A. Perron, Bloc, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I would almost like my colleague from the New Democratic Party, who has just spoken, to take back his words. He said some inappropriate and false things.

Yes, the Bloc Québécois was pressured, but the pressure to support Bill C-24 did not come from the political environment. This pressure came from the business community, from the people who own sawmills and paper manufacturing plants. Besides these businesspeople, the unions unanimously asked the Bloc Québécois to support this agreement, which is not all that good, but which for them is a question of survival.

My question is as follows. What would the member opposite have done if the people from the steel sector in the Hamilton region, that is, the workers, union leaders and employers, had put pressure on him to support a bill that, in his opinion, was not right? What would he have decided in such a situation?

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I stand today to speak to Bill C-24, An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence. It is the part that states, “to amend other acts as a consequence”, that caused the discussions that we had back in Hamilton.

When I ran for Parliament in the last election I made a pledge to my constituents that they would have, in this member, someone who would represent the people to the government and not necessarily the government to the people.

When my constituents saw the machinations in the House, and especially after hearing the stories of the issues our critic from Burnaby—New Westminster faced in committee, the obstruction and the ongoing problems of trying to get an honest dialogue going on this particular issue, the folks back in Hamilton East—Stoney Creek wanted to know how we reached such a point in time.

I will be gentle here because in the areas to which some of the members were speaking they were not using what I would refer to as kind language. They were referring to what I, in their stead, call rogues and scoundrels because I have done that in the House before. They want to know how this trend happened and how we arrived at this point in the House.

I have spoken to this before in the House. A prototype of the Avro Arrow was marched out earlier this year. It was a reminder to many Canadians. I was a young boy at the time of the Avro Arrow. All of us caught the spirit of that particular endeavour. Canada would be a leader in aircraft development in the world.

Some of us will recall that discussions were held with the government of Dwight D. Eisenhower around the Beaumark missile and significant pressure came about from that U.S. president. The Americans did not want us building this particular aircraft, even though Canada had five prototypes ready to go. As I said, we were in a position to take that leadership role.

In the opinion of the folks back in Hamilton East—Stoney Creek, that was the beginning of the change. They believed in the prime minister they had at the time, a prime minister who was a Progressive Conservative, Mr. John Diefenbaker. However, he caved in, and the day was known throughout the province of Ontario as black Friday because the heads of 15,000 families lost their employment. Sometimes both spouses worked at this particular plant and their futures were gone. Some were more fortunate than others. They were able to move to the United States and become involved with NASA.

Moving along from that, the trend that the folks back home are speaking about is that they saw that continue on. Many workers lived in Hamilton East—Stoney Creek and worked in manufacturing. Our area was the heartland of manufacturing.

What happened in the 1980s is that the discussions around free trade started taking place and the apprehension started to ripple through our community. A tentative draft agreement was signed on free trade in, I believe, 1988, and the very day it was signed, lo and behold, Firestone laid off 1,300 employees and closed its plant based on the fact that it could warehouse its materials now and did not need to manufacture in Canada any more.

I do not want the government today to believe I will only pick on Conservatives. I will not do that because part of the history of how we arrived at today has to be borne by the Liberal Party opposite. Prior to the Liberals being in government, when they were in search of power in 1993, they had advertisements in the newspapers, as many will recall, promising that there were some things that party just would not do. One of the things the Liberals promised they would not do was sign the NAFTA agreement. The other thing the Liberals said they would do is cancel the GST.

This is of particular note in Hamilton East because the member for Hamilton East ultimately had to resign her seat and run in a byelection as a result of that broken promise. A few short weeks after the 1993 election, the Liberals signed NAFTA. The people of Hamilton East—Stoney Creek have had doubts in their governments since those days and these doubts continue today.

The people of Hamilton East—Stoney Creek watched the party opposite, when it was in government, break promise after promise.

Following the last election, a member, who was elected to the House as a Liberal and who had held the portfolio that negotiated and worked on the softwood lumber deal, crossed the House to the government side. We heard not nice words said about that earlier today, which I will not repeat in the House, but we have to wonder how the people in that member's riding felt when they elected a Liberal and woke up to a Conservative. I guess they would have a certain sense of betrayal, which, I guess, follows through when people are looking at this particular deal negotiated by that individual. Many people have used the word betrayal when they talk about this particular agreement.

I would like to refer to some dates that are quite important. The hardest day to look at is late on Canada Day when the Prime Minister announced that the government had agreed with the United States to a final text on the settlement of the softwood lumber dispute. To announce that on Canada Day, and add insult to injury to the people who worked in that industry, is beyond belief.

We go on a little later and we find that on August 22 the government announced that the provinces of B.C. and Ontario were in support of this agreement, that it would be tabling enabling legislation in the fall when Parliament reconvened and that it would be a confidence vote.

Here is where we get into the area that I know concerns our friends in the Bloc. At that point the pressures came to bear on them. I still have difficulty with this coming from a community with other industries that I know will be affected by this, but the Bloc chose, because of the pressures applied to it, to support the government and move this legislation forward. When we look back in history I think it will be seen as a mistake. I am sure that the members opposite would debate me on that point at this point in time.

As a result of that support from the Bloc, on October 12 the softwood lumber agreement, as amended secretly by two governments, entered into force. The Standing Committee on International Trade conducted one day of hearings on Bill C-24 and refused to accommodate any additional witnesses, including many groups, such as first nations and trade unions that wanted to be heard. Only the NDP presented witnesses for the hearings at that stage.

Earlier I asked how it was that the Liberal Party helped blocked those hearings, hearings that should have gone across our country.

In conclusion, I want to mention the giveaway of $500 million in funds owned by the Canadian softwood industry to subsidize the U.S. Coalition for Fair Lumber Imports. By whose definition is that fair?

The agreement has no stability. It can be cancelled unilaterally at any time and it does not provide stability or predictability in our Canadian industry. As we have heard before in the House, it kills any credibility of the NAFTA dispute settlement mechanism, which would have ensured a full refund if we had allowed it to run its course.

It has also been stated that we have won court case after court case. Why in the world did we need to negotiate on our knees? This is a precedent that will damage manufacturing across our country and it is a total sellout.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I am naturally very pleased to speak here today at the report stage of Bill C-24, the Softwood Lumber Products Export Charge Act, 2006.

I would like to begin my speech by making a few comments on the motions we are studying today. There are a number of them. Many of the motions were moved by the NDP—a party that is not comfortable with this agreement—some by the government, the Liberals and the Bloc Québécois.

We examined these motions and we conducted a clause by clause study of this bill. We would have preferred the bill to be amended to give a little more flexibility to the definition of “independent manufacturer” so as to allow more processed wood products to possibly be excluded from the agreement and therefore cross the border without restrictions.

We believe that the wording of this bill is too restrictive and prevents processed products from freely entering the United States. Had there been greater flexibility, the two signatory countries could have enforced the agreement with fewer restrictions and therefore could have increased the trade in secondary and tertiary processing products.

We feel that the future of our industry is especially dependent on its ability to develop new products and process them here. There will unfortunately be job losses if the forest industry continues exporting wooden planks that are eventually processed abroad.

In view of the act’s vagueness in this regard, we believe that this addition could have improved the way in which the bill before us today works—a bill, I remind the House, whose purpose is to implement the softwood lumber agreement reached last July 1 that laid out in particular the procedures for returning the countervailing and anti-dumping duties to the companies and established rules for the return of the billion dollars to Washington.

This legislation determines the barriers that will regulate the softwood lumber trade between Canada and the United States and establishes procedures for the federal government to return the export duties to Quebec and the Canadian provinces.

This bill does not specify how export quotas will be allotted. That will be done by regulation. The Quebec industry is concerned, and rightly so, that the agreement provides for these quotas to be allotted on a monthly basis. In the past, they were allotted quarterly. It would help our industry survive if the regulations could be more flexible.

It is important to remember that the construction industry is cyclical and lumber deliveries tend therefore to vary substantially from one month to another. Unfortunately, this issue still has not been resolved in the bill and the government has not made any specific promises. That is a cause for concern.

At best, the binational council responsible for overseeing the agreement will deal with this problem. We hope that the government will try through this binational council to make the monthly export ceilings more flexible.

It was on April 27, 2006 that the Government of Canada and the Bush administration announced the conclusion of a framework agreement settling the softwood lumber dispute. The agreement reached by the two countries on July 1, 2006 and finally signed last September 12 has led to Bill C-24, which is before us today.

We have said on many occasions over the last few months that the Bloc Québécois will vote in favour of Bill C-24, but not very enthusiastically. We have consulted industry representatives and representatives of forest sector workers on this. The unions also asked us to support the agreement.

My colleagues in the NDP say they do not understand the position of the Bloc Québécois because it supports this agreement. We have spoken with experts, with those who are affected in Quebec, because we are ready to defend our industry and we are close to our unions, as the NDP should be in other provinces. Those people told us that it was time to get out; that they could not carry on any longer, they were bleeding to death. They needed an agreement; they needed to get back the countervailing duties as quickly as possible to try to get out of this crisis. Of course, this agreement does not put an end to the crisis, but we believe that, at this time, it is the best thing to do.

They said that, while the agreement was not satisfactory, they preferred to accept it rather than to continue to fight in the courts. There was no progress; there were negotiations, then no negotiations. The industry and the representatives of workers in Quebec asked us to support this agreement and that is what we are doing. To act otherwise would have been irresponsible.

It must be clearly understood that the Quebec and Canadian softwood lumber industry is in a very difficult situation. We know; we are all well aware that the forest industry was weakened by the softwood lumber dispute, and that it is now facing a structural crisis without precedent. The government must not think that by signing this agreement it has found a solution to the softwood lumber crisis.

Since April 2005, 8,700 jobs have been lost in the forest industry in Quebec. Of those 8,700 jobs, 2,850 are lost forever. The importance of a support program for older workers to make up for those lost jobs is becoming greater every day.

The companies that have survived are in serious financial difficulty. Equipment is not being replaced, investments are not being made and the competitive ability of these companies has been seriously affected. We must not forget that this situation also affects pulp and paper companies—of which there are many in the Trois-Rivières region—who are the owners of the sawmills that produce almost 80% of softwood lumber in Quebec.

In short, the forest industry, which is widespread in the Mauricie region and elsewhere in Quebec, no longer had the resources to continue to fight. The representatives of this sector told us that and they asked us to support this agreement.

There is reason to wonder whether the forest industry would have accepted this agreement if it had been in a stronger position. However, since the beginning of the dispute in May 2002, both the Liberal and Conservative governments refused to take action to ensure that the industry was in better financial health.

The Liberal and Conservative governments must assume their responsibilities and explain the very difficult situation in which our forest industry currently finds itself.

We hope that this agreement, which is very unsatisfactory for our industry—even though the industry and our unions in Quebec are asking us to support it because they have been bled white and cannot carry on because of a lack of support—will be a good lesson for the House because the Bloc Québécois has made many requests since I was elected in June 2004.

What did the Bloc Québécois ask of the Liberals over all those years? It asked for loan guarantees to support the companies and help them avoid bankruptcy; it asked for employment insurance to be relaxed and made more accessible; and it asked for an income support program for older workers. It asked for support for processing activities to provide new markets for Quebec’s lumber, and it asked Ottawa to assume the onerous legal fees incurred by the companies that fell victim to legal harassment by the United States. Instead of that, under this agreement we are paying the fees incurred by the Americans.

The industry has structural problems and this softwood lumber agreement does not help to solve them. The president of the FTQ stated that along with this agreement, the Conservatives now have a duty to take concrete action to help the industry survive the major crisis it has been enduring for years now.

I will conclude by emphasizing that the Bloc Québécois would have preferred a return to free trade in all forest products as a way of settling the softwood lumber dispute, which continued for more than four years.

Unfortunately, though, that is not what this agreement provides for.

[Dawn Black, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, I want to start by thanking my colleague from Burnaby—New Westminster who has done such admirable work on the bill before the House. He has been unstinting in the effort he has put into opposition on Bill C-24, in contrast to what has happened with the other opposition parties. He has consistently been a strong voice on every aspect of the legislation, while other opposition parties have caved in and supported the government's side on amendments without even any debate. They have moved amendments, voted against them and moved on without any real debate. It is a shocking indictment of our democracy. Again, I pay tribute to the member for Burnaby—New Westminster for the opposition he has provided.

I first spoke on the bill last month at second reading. One of the things I said was that the softwood lumber agreement would further downsize the Canadian softwood industry and that there would be huge impacts on softwood communities and on workers in British Columbia and elsewhere in Canada. Little did I know how quickly that would start to happen.

In my own community of New Westminster, Western Forest Products has announced that it will shut down its sawmill on February 7. It will be laying off 284 workers. Industrial consolidation has been a part of this, but also the impact of the softwood lumber tax on the coastal forest industry were given as reasons behind the closure of this mill.

Brian Harder, who is the president of the Steelworkers Union Local 1-3567, which represents the workers in New Westminster, says:

I think it is a direct result of the softwood lumber agreement. [The mill] makes wood for the American market, does it profitably, yet they are shutting it down....

The closure of the 92-year-old New Westminster mill came as a surprise because it has been profitable.

The workers are devastated. Their future is gone. This crew has done everything asked of them to improve productivity. Yet for all the work they have done, they are out of a job now.

This affects not only the workers. It also affects their families and my community in New Westminster, the small businesses where these workers spend their money.

I spoke earlier about my colleague from Burnaby—New Westminster and the work he has done on this. He proposed to the committee that it hold public hearings. The government and the opposition voted it down. The only public hearings that were held on the legislation were in Nanaimo, British Columbia, on Vancouver Island, and in Thunder Bay. Those public hearings were supported by the Steelworkers Union and a large number of people came out to speak in opposition to this legislation.

I do not know why the government is so afraid to listen to the people whose lives are impacted by the very legislation it puts forward in the House.

The committee only heard from two witnesses. One, a lawyer, Elliot Feldman, testified that people who did not follow the new rules set out in the bill could be sent to prison for up to 18 months. He also called the bill draconian in nature. He said that it would allow for inspections without warrants and for the government to seize transferred funds at any time. That is pretty alarming testimony.

Another witness, trade lawyer Darrel Pearson, pointed out that the lack of precise definitions in the bill could trigger more litigation and trigger it almost immediately.

As I said, there were only those two witnesses at that stage of the committee hearings.

It is important to go back and talk about the trade victories that Canada had on this legislation.

On August 13, 2003, NAFTA ruled that the 18% tariff imposed on softwood lumber by the U.S. was too high. Two weeks later, the WTO panel concluded that the U.S. wrongly applied harsh duties on Canadian softwood exports.

On August 10, 2005, the extraordinary challenge panel under NAFTA dismissed American claims that the earlier NAFTA decision in favour of Canada violated trade rules.

In March the NAFTA panel ruled in Canada's favour, saying that Canadian softwood lumber exports were not subsidized. The total duty collected by the U.S. at that point was $5.2 million.

This deal kills any credibility that the NAFTA dispute mechanism may have had. It was supposed to ensure the full refund to the Canadian softwood industry of the $5.3 billion in illegally collected duties. It makes the dispute mechanism of NAFTA totally meaningless and useless.

It seems the deal can be cancelled unilaterally at any time and it does not provide stability and predictability for the Canadian softwood industry.

Bill C-24 is fiscally flawed, as well. The payout is based on Canadian softwood exporters, which are owed the equivalent of 95% of the total $5.3 billion in illegal duties that have been paid to the U.S. We know that the Conservatives have not reached the 95% target, which means additional costs to the Canadian softwood industry and to the Canadian taxpayer. Most important, the deal does nothing for the thousands of workers who lost their livelihoods over the past five years. There is nothing in the softwood sellout to deal with the major disruption that the U.S. abuse of trade rules has caused to working families and to our communities all across the country.

As I said earlier, it is going to trigger significant job losses in the future through consolidation caused by the quotas and export taxes and by discouraging Canadian value added production and stimulating more raw log exports, which is something that none of us wanted to see. Sadly, the agreement discriminates against Canadian companies that refuse to sign on to the softwood sellout by resorting to a bullying and fiscal arm twisting tactics.

Many companies and workers in my community were opposed to this deal. They have not been heard by or listened to by the government. Their concerns were not part of the agreement. The participation process was flawed. While U.S. customs slapped punitive taxes on about 1,500 Canadian softwood companies, the Minister of International Trade secretly consulted with a core group of about 25 large softwood companies. These are the only companies to which he listened, not the majority of companies in British Columbia or in the rest of Canada, the smaller forestry companies, their workers and their families. They were not heard.

The deal will not deter American litigation in the future, as has already been shown by the recent move of the Bush administration to overturn the U.S. Court of International Trade decision of April 7 and July 14, which ruled the Byrd amendment could not apply to Canadian merchandise. It was another win for Canada that the government chose to ignore.

The Conservatives are trying to tell Canadians that the deal will end litigation, but years from now, looking back, we know this argument will be unconvincing as more and more small communities feel the pinch of job losses and mill closures. The deal does not account for the seasonal nature of the market. Companies are not allowed the flexibility to sufficiently carry forward export quotas to other months.

The softwood industry was bullied into supporting the deal. Witnesses at committee confirmed that the Conservative government coerced the softwood industry into accepting a flawed deal. The bullying forced the cash strapped softwood industry to capitulate, just a few months away from winning the final legal battle against American tariffs.

We have seen the effects of the softwood dispute across the country and we have particularly seen them in my province of British Columbia. Coastal communities, communities like mine on the Fraser River, have been so negatively impacted by this. It really has had a terrible impact. These trade disputes are not just games. They have real effects on the lives of real people.

I urge the government to rethink this and I urge the opposition parties to unite behind turning this bill down.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, it is somewhat disturbing to hear such things. People who are watching these House debates must be wondering what is going on.

We know that the hon. member for Burnaby—New Westminster has often repeated—as did the member for Hamilton Mountain—that the industry does not want us to vote in favour of Bill C-24 and that it even wants us to oppose the agreement that was already reached.

In Quebec, we consulted everyone, including the industry and forestry workers, and everyone wants us to pass Bill C-24. So, that is what we will do, on behalf of the industry and the workers.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, it is now with even less enthusiasm that I again speak to Bill C-24.

As I was saying, this bill aims to impose charges on certain softwood lumber products exported to the United States and charges on the refund of certain customs deposits paid in the United States.

It is positively appalling to see a bill that imposes such charges on an industry that is having enough problems, in addition to charges—that I would say are illegal—imposed by the United States for many years.

The Bloc Québécois believes that the softwood lumber agreement that was signed is not the breakthrough of the century. This is really not what the softwood lumber industry needed. The United States, which imposed duties on softwood lumber for many years, levied approximately $5.4 billion from the forest industry, of which $1 billion will be returned to the United States. As for the other $4.4 billion, it will be paid back to the industry.

The reason the forestry industry is having problems at present is clearly because of inaction on the part of one government after another: inaction by the Liberal government followed by inaction by the Conservative government. From the very beginning, the Bloc Québécois repeatedly called on the Liberal government of the day to implement measures to support the forestry industry. First, the Bloc asked for loan guarantees. It knew that some day the industry would win its cases against the United States. So the government could have given advances, or lent money, or guaranteed loans. That would have given the forestry industry a chance to preserve a large number of jobs.

It would be wrong to say that this would have preserved all those jobs, because we know that the softwood lumber industry is cyclical. A large share of the job losses could have been avoided, however, if the Liberal government had given loan guarantees at that time. As well, the Bloc suggested a number of other measures and is still suggesting them, in spite of the implementation of the agreement, Bill C-24, and the law that will ensue.

The Conservative government came next. The worst thing is that even in January of this year the Conservative government was making campaign promises saying that it would support the forestry industry. It would have supported it precisely by giving it loan guarantees. As soon as the government was elected, the promise was forgotten. That was the end of loan guarantees. The government negotiated a softwood lumber agreement.

There are a number of bizarre circumstances in this case. For example, the government was negotiating an agreement while the industry was engaged in proceedings against the United States. How would the United States see this situation? The government was negotiating with them, the industry was bringing proceedings against them. The United States was in a position of strength. They knew very well that the courts would find that what the United States was charging the softwood lumber industry was illegal. Canada and the industry would have recovered all of the duties that had been collected by the United States.

At the same time, the Conservative Party was negotiating an agreement. What, exactly, was going on? We might think that what was going on was appalling.

The money of course belonged to the softwood lumber industry—$5.4 billion dollars—and the agreement signed by the Conservative government let $1 billion of it go. Why? As administrative fees for collecting duties charged to the Canadian forestry industry? This is a completely bizarre situation and we cannot follow it. Today, however, we have to acknowledge that the agreement exists and that the purpose of this bill is to act on it and to implement the softwood lumber agreement. We know perfectly well that something else could have been done, and certainly that the Bloc Québécois is not particularly enthusiastic about this outcome. Nonetheless, the industry has asked us to support it through all the ups and downs it has been through and all these problems, problems that I would say were virtually invented by the United States, throughout this long period of time.

In Quebec, the industry, if I may say so, was on the brink of bankruptcy. People want the forestry industry to survive in Quebec, and certainly they needed to recover that money, their money the United States had made off with. So they let $1 billion go, money that will moreover, and this is odious, assist the United States forestry industry. This makes absolutely no sense. So this begs the question. Why? Why did the Conservative government let $1 billion go to the United States of America when the forestry industry needed it so badly? Why?

Why give someone $1 billion if you know perfectly well that the courts and the judges are going to tell you in the end that the duties imposed by the U.S. were illegal? Why leave $1 billion in the U.S.? Since nothing in the hypotheses we might come up with makes sense, we could quite simply say that it is for future considerations. What are they? I leave it up to the people, the public and other MPs to figure out what it might be, though it definitely will not be anything very brilliant or perhaps even legal.

We know exactly who comes out ahead in the softwood lumber agreement. I repeat, of the $5.4 billion, only $4.4 billion has been reimbursed, and $1 billion remains in the United States. Who is the winner here? The U.S. companies, of course, which are going to cash in $500 million and are going to invest in their industry, in their businesses. A $50 million fund will go to initiatives aimed at promoting the use of wood for both residential and commercial purposes, and $450 million will be left to the discretion of the American government. This is an unexpected windfall for the Republican Party. At that point, it was just in time for the elections. Still, we know how that turned out. Not everything can be bought.

To conclude, I repeat that the Bloc Québécois reluctantly supports this agreement. The cut-rate negotiations of the Conservative minority government will have served to jeopardize the forest industry, particularly in Quebec. The return of funds collected illegally, contrary to what the Minister of Industrye appears to believe, is not a miraculous injection of money, or a gift from the government. It is the industry’s money that is going back to the industry. We must never forget that.

It is time to give the industry a chance to recover, at least for the companies that have not already given up the ghost.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, it is with little enthusiasm that I rise now to again speak to the House about Bill C-24. This bill aims to impose export charges—

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I am pleased to rise to speak at third reading of Bill C-24, the softwood lumber products export charge act.

I have spoken on the bill at various stages, but I feel quite strongly that this bill is the wrong way to proceed. I am very disappointed that we have a Minister of Natural Resources on the Conservative side who seems to be missing in action. Where is the Minister of Natural Resources in defending our forestry communities? Where is our Minister of Natural Resources in dealing with the issues that are presented in the softwood lumber deal, which is a bad deal and sets a horrible precedent?

However, not only are there those issues. I am not surprised that steelworkers are concerned about this. If I were a worker in the steel industry, I would be concerned. If we can win every single battle at the NAFTA panels, as well as independent reviews as to whether softwood in Canada is subsidized, but we still cave in and cut a deal, what does that mean for other sectors? I would be concerned if I were a steelworker.

The Minister of Natural Resources has a responsibility to speak out in support of our natural resource economy, but where has the minister been? Recently two large Canadian icons in the mining sector, Inco and Falconbridge, were taken over and gobbled up. Where was the Minister of Natural Resources? Maybe he was in China trying to sell uranium or trying to do something over there, but he was not here defending Canadian interests.

He is not listening to the forest industry and forestry communities when they are telling him they need to combine into larger entities so they can compete globally but that we have a process at the Competition Bureau which does not support this. We know that the domestic forest products market in Canada is very small. The market is the United States, Europe or Asia. There are really no competition policy issues for domestic consumers of forest products in Canada. Would one not think that the forest industry companies could consolidate in Canada so they could get the economies of scale and scope they need to compete internationally? No, because the process is flawed. The minister stands up and says he is going to fix it, but we are still waiting.

Where is the Minister of Natural Resources when the industry says it has a huge problem with energy? Energy used to be a competitive advantage in our forest products industry in Canada. Where is the minister when the industry talks about that?

The forest industry has huge possibilities in regard to converting biomass into energy, into electricity that in fact would be surplus to its needs. It could sell that electricity to the grid, but it needs support, policies and programs to help make the conversion. The stress that the forest industry is under today does not allow it to make those needed investments. This would have a huge, positive environmental impact and it would also help the industry competitively in reducing its energy costs significantly. The cost of energy is one of the industry's big problems.

Where is the Minister of Natural Resources in talking to the Minister of International Trade to say that we have to diversify our markets? We cannot rely as we used to on the U.S. softwood lumber market. Whatever we do, we know that it is not a stable market for us. Where is the Minister of Natural Resources in talking to the Minister of International Trade and saying that we have to find more markets for our products, markets other than the United States?

Where is the Minister of Natural Resources when the industry tells him that we have huge labour shortages looming in the forest industry in Canada? What is the minister doing about that? We do not hear anything from the minister on these very important points.

With respect to the deal, where was the Minister of Natural Resources in speaking out for communities? I understand that there are some communities whose members of Parliament are listening to the sawmills and the companies in their towns, and so they should. But companies go to them and say they would like the members to support a deal because the federal Conservative government is holding a gun to their heads. Federal ministers are saying to them that if they do not sign the deal, they will cut off all support to the forest industry.

What kind of coercion is that? That is called duress. No wonder some of the companies are saying that we should sign the deal. It is because they do not have any real choice. How can the forest products industry in Canada fight a countervailing duty claim by the United States without support from the federal government? It cannot be done. The industry knows it.

Our Liberal government supported the industry in the fight. We had a two-track process. We were supporting the industry in the fight through the NAFTA panels, the litigation and all that morass, and we were also looking at whether we could negotiate a deal. We never saw a deal that was worth cutting and the deal before us is no such deal either.

The agreement sets out certain aspects that are very disadvantageous for the forest products industry. It calls on the companies to drop their lawsuits. Once they drop their lawsuits, they can sign on and get their rebate. In fact, the rebates are going out as we speak, through the Canadian Export Development Corporation, at an irrevocable discount, I might add. If this deal is not followed through on, those companies will not be able to get the 20¢ that they have left on the table, the $1 billion that the Conservative government has left on the table.

However, some of the companies are doing it because they do not have much choice. The government has basically pulled the rug out from underneath the forest products industry in Canada.

The previous Liberal government proposed a package of $1.5 billion. In fact, in today's environment, that ante probably would have to be increased. It would have supported the industry. It would have supported the industry in using biomass energy to help companies reduce their energy costs. It was a package that would have helped them diversify their markets. The package would have helped them innovate. It would have helped them with some tax measures and made them more competitive with the U.S. softwood lumber producers and the U.S. forest products industry.

Where was the Minister of Natural Resources while the sawmills, pulp mills and newsprint operations in Quebec, Ontario and British Columbia were dropping like flies? Where was the Minister of Natural Resources in defending these forestry based communities? We do not hear from him. What initiatives has the minister come forward with? Nothing. This is a tragedy, because the forest industry is being devastated. It is being hurt very badly and we do not hear a peep from the Minister of Natural Resources.

We hear something from the trade minister, but we do not hear anything from the Minister of Natural Resources. We hear that he is travelling in China and here and there, but we do not hear anything about concrete measures that would help the forest industry in Canada.

Next, there will be foreign takeover proposals for our oil and gas industry and our forest products industry, and maybe there will be more in our mining industry. Where is the Minister of Natural Resources in speaking out?

We know what the position of the Minister of Industry is on these points. His position is that the markets will solve everything, the markets will prevail, and the government has to get out of the way and allow the markets to resolve everything.

What about the question of whether this is in Canada's national interest to allow our natural resource icons, our natural resource assets, to be gobbled up by companies outside of Canada? Does this make any sense? We should have a debate in Canada about this. We should not allow foreign companies to just take over Canada by stealth. Let us have a good public policy debate about it.

Where is our Minister of Natural Resources when it comes to standing up for Inco, for Falconbridge, for the oil and gas industry and for the forest industry? We do not hear much from him. This is a time when the Minister of Natural Resources should be defending the interests of our forestry communities and our natural resource communities across Canada. We hear nothing from him. It is a shame. It is a crime.

It is most unfortunate, because the gun is being held to the heads of some of these companies. The companies then go to their members of Parliament and say that they need their members of Parliament to sign this deal. It is a bad deal, they say, but they do not have any choice because the Conservative government has pulled the rug right out from under them.

These issues are understandable. If we had a Minister of Natural Resources who actually stood up for the forestry communities, we would not be in this mess. We would not have the policies being dictated by a Prime Minister who goes to Cancun and allegedly comes back with something. He did not come back with anything. We are now mired in Bill C-24, which should be defeated forthwith.

The House resumed consideration of Bill C-24, An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence, as reported (with amendment) from the committee, and of the motions in Group No. 1.

Motions in amendment

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I appreciate the parliamentary secretary's efforts to vainly defend the indefensible, which is this badly botched deal and this badly flawed bill.

What is interesting, in the exchange with the Liberal member opposite, is that it is quite clear that there was even more botching in the process of drafting the amendments that were supposed to fix the first draft of botches that came in Bill C-24.

The parliamentary secretary said that Canadians needed to think about what life was like before the softwood sellout. The answer to that is very simple: the 4,000 people who had jobs then do not have them now after the signing of the agreement. In the last four weeks, 4,000 jobs have evaporated into thin air. Canadians who think about what life was like before the softwood sellout can think of the thousands of people who are no longer working and the thousands of families that have lost their breadwinner because of the appalling incompetence of the government.

The parliamentary secretary referred to some repairs that were made to this badly flawed bill, Bill C-24. We only heard two witnesses at the standing committee. A number of errors were identified. Why were other clauses, like clause 6, clause 25 and clause 18, not repaired?

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Speaker, in her comments, the parliamentary secretary referred to some of the government amendments it is seeking to have accepted at report stage of Bill C-24.

By our examination, six of the seven government amendments, which deal with the Atlantic Canada exclusion, reduce or roll back some of the amendments proposed by the member for Cumberland—Colchester—Musquodoboit Valley. In her speech, the parliamentary secretary thanked him for his good work. We believe his amendments, which were supported at the committee by Conservative members, improved the position of Atlantic Canada's historic exclusion. Yet at report stage, we find the government intends to roll back what its member had proposed as an amendment, an amendment supported by the Conservatives at committee stage.

We see the same thing with respect to the definition of independence, which was included with respect to Canada's independent lumber remanufacturers. The committee included this definition in the legislation, supported by some government members. We were surprised at report stage to see the Conservatives trying to turn back the clock, or undo what we thought had been some very positive work done at committee.

Could the parliamentary secretary explain why they have changed their minds?

[Helena Guergis, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, it is a great pleasure to rise in the House today to report on the deliberations in the Standing Committee on International Trade on Bill C-24 to implement Canada's obligations under the softwood lumber agreement.

I would like to start by thanking the committee for its close study of the bill. The members worked hard across all party lines to put forward amendments that took into account the concerns of industry and the pressing need to implement the bill in a very timely fashion. It was truly a team effort. I know I speak for all members on this side of the House when I express our gratitude for the energy and ideas brought to bear on the bill. I am confident that their collective contributions and amendments have helped to clarify important elements of the bill.

Today I would like to update the House on the amendments approved by the committee.

The first amendment stems directly from a request from the Maritime Lumber Bureau. The bureau represents lumber companies throughout Atlantic Canada. As members know, the softwood lumber agreement already excludes Atlantic provinces from an export charge. This reflects a long-standing history whereby these provinces have been excluded from U.S. trade action.

Bill C-24 included provisions respecting the exclusion of the Atlantic provinces. However, the bureau wanted to ensure that this exclusion was further clarified in the bill. Therefore, led by the government and in particular the member for Cumberland—Colchester—Musquodoboit Valley, the committee discussed and passed this important amendment.

This clarification leaves no doubt that exports from the Atlantic provinces are excluded from the export charge and that a charge will only be imposed if there is a circumvention of the agreement. It also brings other exclusions, those of the territories and the included companies into the same clause. To ensure the proper functioning of the Atlantic Canada exclusion, the government will be proposing a few technical amendments to the bill at report stage.

Our colleagues from the Bloc Québécois proposed amendments that stemmed from concerns expressed by the Quebec Forest Industry Council. The first is a proposed amendment to clarify the timing with respect to the date of shipment for exports sent by rail to the U.S. Second is a proposed amendment to further clarify the definition of FOB value, which is the freight on board cargo, in the legislation. As with the Atlantic exclusions, these amendments directly address the concerns of the lumber industry.

The next amendment concerns independent remanufacturers. As the House knows, the softwood lumber agreement ensures that independent lumber remanufacturers will not have to pay an export charge on the value added component of their products. In fact, this was an essential component of Canada's position throughout the negotiations and in direct response to industry requests. However, the industry asked for further clarity. Therefore, the bill, with the government's amendments at report stage, will make clear how the independent remanufacturer will be treated and certified.

The government also put forward a number of amendments to reflect the agreement's entry into force date of October 12, 2006.

These proposed amendments, while relatively minor in nature, will give our lumber exporters an added measure of certainty and predictability to go forward and plan for the future. Indeed, time is of the essence for the bill. Canada's lumber industry is facing a number of challenges. Lumber prices are at the low end of their cycle and production costs are rising. Combine these challenges with the continued strength of our dollar and we can begin to understand what our industry is up against.

That is why, as the amended bill makes it through the House, we should remind ourselves of the importance of moving it through in a timely manner. Our lumber companies need the stability, predictability and cash that the agreement provides.

The agreement eliminates punitive U.S. duties. It ends the costly litigation, which has gone on for far too long. Under the agreement, the U.S. will immediately dismiss all trade actions against our companies. It takes our lumber producers out of the courts and puts them back where they belong, in communities across the country, growing their enterprises and contributing to Canada's economy. It provides stability for industry hit hard by years of trade action and drawn out litigation.

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 gives provinces flexibility to choose the border measures that most benefit their economic situation. I should add that all export charge revenues collected by the Government of Canada through these border measures will stay in Canada and not end up in the U.S. treasury, which was the case before.

The agreement returns more than $5 billion Canadian to companies, a significant infusion of capital for the lumber industry and the workers in more than 300 communities across Canada who depend upon it.

I am happy to report that the Export Development Canada duty refund mechanism, which we developed to expedite refunds to companies, is ahead of schedule. More than $1.8 billion has already been dispersed to companies, and Export Development Canada will continue to make expedited refunds over the coming weeks.

While the money is good news in itself, we must also consider what this money represents for the forest workers and the communities. The badly needed cash provided by the agreement will help our lumber producers reinvest in their enterprises, improve efficiency and weather the current downturn in lumber prices. Most important, it will let them do so in a stable and predictable trade environment.

We cannot overestimate the importance of this kind of stable environment to our lumber industry. Along with the refunded cash, the stability and predictable environment created by the agreement will allow lumber companies to make long term plans and grow. It will also put us on the right path toward fostering further development and integration of a stronger North American lumber market, one where Canadian companies can play an essential and leading role.

Contrast this positive new environment with what life was like before the agreement. Our lumber producers have spent the better part of the last two decades engaged in a number of drawn out legal battles with the United States. They know that just because we win one battle, it does not mean we win the war.

Our victories in a number of trade courts, including NAFTA and the WTO, were simply appealed by the U.S., costing millions in legal fees and creating much uncertainty for the industry. In fact, some estimates pegged the total cost of fighting these battles for governments and individual lumber companies alike at over $300 million since 2002. The enormity of these fees stands as a testament to the high price of continuing with the strategy built entirely around litigation.

When I hear calls to continue litigation, I remind people of the steep price of taking this path and the extremely uncertain outcome waiting at the other end. This is a case where there is simply no trade peace waiting for us. There is only continued litigation, crushing legal fees and punishing U.S. duties.

Therefore, I would ask all members to carefully consider the cost of turning our backs on this agreement. Ask the lumber companies that are getting over $5 billion Canadian back to reinvest in their enterprises and weather the tough economic times in which they find themselves. Ask the major lumber producing provinces that join the overwhelming majority of industry in supporting the agreement. Finally, ask the hundreds of thousands of people in lumber producing provinces across the country who rely upon a stable and predictable trade environment for their livelihoods. Ask them if they would like to turn back the clocks to a time when this agreement did not exist.

The government believes our lumber communities have suffered long enough. We believe they need the stability and resources that the agreement provides. We believe the agreement is the single best way forward for our softwood lumber industry and the over 300,000 Canadians who rely upon it.

I am confident that the majority of parliamentarians agree with this assessment. Therefore, I ask for their support of the amended Bill C-24, and I thank them very much.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, since the beginning of the debate on Bill C-24, I keep hearing the member for Burnaby—New Westminster continually bring up the position of the Bloc Québécois on this bill. Time and time again, my colleagues from the Bloc Québécois who spoke on the bill have explained the situation of the forestry industry and the people who depend on it, with respect to the softwood lumber issue and the agreement with the U.S.

Time and time again, we have said that our industry in Quebec literally had a gun to its head; time and time again, we have said how many sawmills in Quebec had to be sold to American interests; time and time again, we have repeated that we in the Bloc Québécois stand up for our Quebec industries. We are the voice of the industries and people of Quebec in this House.

On many occasions, however, I have seen colleagues from the NDP put forward all sorts of arguments that did not take into account Quebec's position.

Why is the NDP defending the Canadian position so strongly today? Why is it shouting from the rooftops that this is not a good bill and that—

[Richard Nadeau, Bloc, Gatineau, QC]

Mr. Speaker, I will first state the position of the Bloc Québécois on the proposed amendments to Bill C-24, Softwood Lumber Products Export Charge Act, 2006, and, then, outline the position of the Bloc Québécois on Bill C-24 per se.

The Bloc Québécois is opposed to the following amendments.

Under Motion No. 4, the government would not be required to enforce the act; that does not make much sense in the context of fiscal legislation. Motion No. 25 greatly complicates the collection of export taxes and the enforcement of the act. We understand that the New democratic Party does not want the act to come into force, but Quebec lumber companies want it to.

Motions Nos. 83 and 84 would have the act become effective as of November 1. The fact of the matter is, however, that the anti-dumping duties were removed on October 12. Adopting these two motions would mean leaving the lumber trade unregulated for two weeks, which is contrary to the terms of the agreement.

To help members understand the position of the Bloc Québécois on the thorny issue of Canada-U.S. relations with respect to softwood lumber, I will describe once more our party's approach.

It is important to understand that the Bloc Québécois is unenthusiastically supporting Bill C-24.

This bill allows the implementation of the July 1 softwood lumber agreement between Ottawa and Washington by: setting the terms and conditions for the return to Canadian lumber companies of countervailing and anti-dumping duties representing 81% of the money currently held by Washington and about 65% of the amount that these companies have paid, taking into account variations in the exchange rate over the past four years; setting the terms and conditions for the return to Washington of the billion dollars that companies have to leave on the table; setting trade barriers that will govern the softwood lumber trade between Canada and the United States, including export taxes and export permits; and authorizing the payment of export tax revenue to the provinces.

The industry has stated nearly unanimously that this agreement was not satisfactory. It has, however, concluded that it was better to accept this bad deal than to continue fighting. In a word, the industry is at its wit's end.

The attitude of the federal government, be it Conservative or Liberal, has left a bitter taste. By refusing its support, it has considerably weakened the industry, forcing it to accept this agreement for fear of seriously jeopardizing its future.

The Bloc Québécois, after consulting the industries and workers in the forestry sector during the summer, came to the conclusion that it had no choice but to support the agreement because the industry, with its back to the wall, could not wait any longer. To act otherwise would not have been irresponsible.

The Bloc insists, however, on stating clearly that although the bill must be approved, the government cannot claim to have settled the problems the industry is facing. The industry is dealing with structural problems and the softwood lumber agreement does not solve them.

That is why the Bloc Québécois is calling for the government to implement a series of measures this fall to assist the forest industry, which is facing serious difficulties at the very moment it has been weakened by a lengthy trade dispute.

We want an income support program for older workers, an economic diversification program for communities that depend on the forests and special tax status for the 128,000 owners of private woodlots in Quebec.

In addition, we want an increase in funding for the Canadian model forest program of the Canadian Forest Service, and special tax treatment for the $4.3 billion in countervailing and anti-dumping duty that will be refunded by the American authorities to recognize the losses incurred by companies. We also want accelerated amortization of equipment; a program to stimulate innovation and improve productivity within the forest industry; a market diversification and wood marketing program; and, finally, financial compensation for maintaining forest access roads.

Some of these measures will become meaningless if they are not introduced this year, a pivotal year for the industry. The Bloc Québécois is counting on the Minister of Finance to properly respond to these needs when he makes his financial and economic update announcement.

Bill C-24 contains legislative measures to implement the softwood lumber agreement of last July 1 between the governments of Canada and the United States.

All of the provisions take effect from October 1, 2006. Since the bill was not yet approved on that date, the measures that it contains will be retroactive to October 1, 2006.

It introduces an export control system in the softwood lumber sector, which I will now describe.

Ironically, this control still takes the form of amendments to the Export and Import Permits Act. This act is normally used to control trade in arms and dangerous substances or to limit trade with particular countries under economic or military sanctions. Here, though, it is the products of Canadian firms that are being hit by the restrictions in the act.

In provinces like Quebec that choose to be subject to a lower export tax but have a ceiling placed on their exports, the bill provides that exporters must acquire a licence, which is a kind of export permit. It will enable Ottawa to ensure that companies cannot exceed the quota allocated to them under the agreement.

The methods of allocating export quotas are not specified in the act. This will be done later by regulation. The Government of Quebec has suggested that 94% of the quota should be allocated to companies on the basis of their past exports, with the remaining 6% available on a first come, first served basis.

The Quebec industry was concerned that the agreement provided for quotas to be allocated on a monthly basis—one-twelfth of the annual quota—and that the possibilities of exceeding this monthly quota in case of especially large deliveries were so limited that companies would be unable to honour their contracts or even reach their full annual quotas. We must remember that the construction industry is cyclical and lumber deliveries tend therefore to vary considerably from one month to another.

This issue still has not been resolved, and the government has not made any specific promises. At the most, the binational group responsible for ensuring that the agreement works well will deal with the problem. The Bloc Québécois hopes that the government will try through this binational group to make the monthly export ceilings more flexible. In order for this to be done, the bill already provides all the latitude needed to accommodate greater flexibility because things are done through regulation.

I could go on explaining the entire bill in this way, but I will stop here, Mr. Speaker.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Speaker, that is quite a question. The reality is that the committee was becoming quite dysfunctional. Mostly because of the NDP filibustering, the committee was not going to get past the first clause.

We all knew that the Bloc and the Conservatives would push the bill through committee. We, being the wise Liberals, the party of the centre, we tried to get some amendments in at committee that would help the lumber industry, not only in Atlantic Canada but right across Canada. We made the best of the situation. We cancelled the filibustering that was going on by the NDP and the rhetoric that was not making any sense.

Yes, we pushed some amendments through because, at the end of the day, the Bloc and the Conservatives were going to push the bill through and we needed to make some constructive changes to the bill. Those are the changes we are pushing for and the changes we still want to see but we are adamantly against Bill C-24.

We wish that in the future the NDP could be a little more cooperative at committee and make things work. It is the season and I am still waiting for my Christmas card.