Mr. Speaker, thank you for allowing me to speak to Bill C-2, the enabling legislation of the Canada EFTA trade agreement, signed on January 26, 2008, by the government. This enabling legislation is something of the utmost importance to my riding and the country as a whole.
I would like to begin by quoting a question, “I'd love to see someone answer the question, what is Canada going to get out of this agreement?” Those are the words of Mr. Karl Risser, union president of the Halifax shipyard and a constituent of mine when he appeared before the Standing Committee on International Trade in April of last year. They are words we should be asking ourselves whenever we are considering international trade agreements.
Ships are a part of my family's past, as they settled on the shores of Georgian Bay when they came to Canada. My grandfather, Allan Leslie, worked on a steamer called the SS Caribou to pay his way through university. When I was little, we used to go down to the grain elevators to have a good look at whatever freighter was docked. My grandfather talked about what a blow it was to the area when the Collingwood shipyards closed. Half the jobs in the area were lost and the economy suffered greatly.
This trends continues across the country, leaving us with the limited shipyards we see today. Despite having the largest coastline in the world, Canada has no strategy for the shipyard building industry and the neglect of this industry makes it vulnerable.
Now, as the member for Halifax, I represent a place with even stronger roots in shipbuilding, and the great work of this sector continues today. We can be proud of our strong traditions in this area, from the construction of wooden sailing ships in the 19th century to the establishment of our powerful navy in the 20th. Through it all, Halifax has been a central force in that development.
However, as my colleagues, the members for Sackville—Eastern Shore and Burnaby—New Westminster and others, have pointed out during this debate, we have deep concerns about the impact of trade deals and, in particular with the bill, their impact on the shipbuilding industry.
Speaking with workers down at the Halifax shipyards recently, I heard about the need for targeted investment in the shipbuilding industry as part of an economic stimulus plan. With the government's plan to construct new joint supply ships and Coast Guard vessels delayed, workers are left hanging. While the shipyard there presently employs 400 to 500 people, that number could rise to 1,000 or more if it were working at full capacity. Those are good paying jobs. It has been noted that one shipbuilding job created creates about four spin-off jobs. The economic benefits of a strong shipbuilding industry are obvious.
Unfortunately, the government has no industrial strategy. Whether it is forestry or manufacturing, our industries are being hindered by the lack of vision for a sustainable and prosperous economic future. In my consultations for the budget, constituents made it very clear that investment in shipbuilding was a priority. The government's budget may promise of a $49 million investment over two years to the industry, but there is worry that much of that will go to small craft and perhaps to repairing larger ships that will continue to be built elsewhere.
That is hardly the kind of stimulus that the members in my community were hoping for. My constituents wrote to me in my call for budget submissions. They called for investments in the green economy of the future. They called for housing and EI reform. However, they also wrote to me about shipbuilding. I would like to share some of those today.
Bob Cameron, a constituent in my riding, wrote to me:
In reply to your request for budget items, I would like to suggest that with the need to replace aging destroyers our shipbuilding industry could certainly use at least one to be built in the Halifax metro area.
Leslie Pezzack wrote:
First I want you to know how pleased I was to see in The Chronicle Herald, you along with Liberal, Independent and Provincial NDP together supporting local shipbuilding.
Sally Hodgson, who is not from my riding but from Dartmouth, felt compelled to write in, and I will share these comments with my colleague for Dartmouth—Cole Harbour. She wrote:
We have been learning that both the Naval Fleet and the Coast Guard/Department of Fisheries fleets are again aging and there is need to replace several vessels. Also the cost of maintaining these older vessels is becoming prohibitive. The other part of the consideration is the inability of the Canadian Ship Yards to handle this type of work because they cannot obtain and retain the necessary skilled personnel due to the Spike nature of equipment acquisition programs.
This long term program also has to be viewed as obtaining and maintaining a “Strategic” resource. We have basically three choices of shipyard: Vancouver or Victoria, Lauzon, Quebec and Halifax. These yards should be told to build a ship a year and their instructions as to what to build will be given in January of each year.
These were responses to a call for submissions about people wanted to see in a budget.
I was not asking, specifically, for shipbuilding feedback, yet I received so much of it. It is clear that this is an important issue to Halifax. I would like to point out what Paul Ellis from my riding wrote. He wrote:
Being from Halifax, I feel that shipbuilding requires a boost. We have the means but not the work.... Please vote for the people...
In the budget consultations, I had the opportunity to take Tim Bousquet, the news editor of The Coast, a Halifax weekly newspaper, around on an economic stimulus tour of the riding. We stopped by shovel ready projects in the riding that were waiting for federal investment.
I would like to read from the article he wrote in The Coast, which states:
From there, we go to the Halifax Shipyard and speak with Karl Risser, union president at the yard.
There are unfunded plans for two "joint supply" naval ships, four Arctic patrol vessels and 12 smaller coastal patrol vessels, says Risser. “All we have to do is get that work on the ground. We start building ships, all of a sudden we can say to our workers, 'We're not going to employ you for three months, lay you off for a month, employ you for three months, lay you off for a month.'”
Many of the laid-off went to find temporary work in Alberta to hold them over the lean times, but that work too has dried up. Presently, there are 400 to 500 people employed at the yard, but contracts for just two Arctic Patrol vessels would bring the yard to full capacity, with 1,000 workers, says Risser.
While shipbuilding was failed by the budget, we are standing in this honourable House debating enabling legislation that, if passed, will fail this industry again.
We have seen the shipbuilding industry fade due to lack of investment from consecutive Liberal and Conservative governments. It is clear that this industry is facing hard times, and much of that is due to unfair trade deals that pitted our shipbuilders against those in other countries where the production was subsidized. A 25% tariff is all that protected our industry from being erased entirely. Now, this otherwise innocuous trade change could be the final blow for this struggling industry. Workers and their families in my riding deserve more.
To return to Mr. Risser's testimony before the committee last April, he testified that:
—this EFTA deal is a bad deal for Canada. I'd love to see someone answer the question, what is Canada going to get out of this agreement? I know we're going to destroy our shipbuilding industry, a multi-billion-dollar industry in Canada. It's on its last legs now and needs a real boost. We have that opportunity in front of us, but whether we take it or not is the question.
The hasty signing of this trade deal would unfairly disadvantage workers in my riding and across Canada. For this reason, I must voice my opposition. However, there is a very simple solution before us. The NDP is calling for shipbuilding to be removed from the trade agreement and for the government, instead, to invest in the industry to increase its competitiveness. It is a simple solution that could save our shipbuilding industry and hundreds of jobs in Halifax and elsewhere.
I ask that other parliamentarians to join us to ensure that trade deals like the EFTA are fair to both partners.
Just yesterday, I met with Bernie MacDougall and Jack Ferguson, two dairy farmers from Nova Scotia who are concerned about their industry and how the WTO negotiations would impact the production of Nova Scotian dairy products. Not often do we see dairy and shipbuilding linked in the House of Commons, but their question was, “What will Doha negotiations do for Canada? What will it do to support our dairy industry?” It is a different industry, but it is the same questions and it is the same demand for fairness in trade negotiations.
While there are no dairy farms in my riding, the people of Halifax pride themselves on being able to buy locally and support Nova Scotian agriculture.
When the subject of the EFTA came up while I was meeting with the dairy farmers, the farmers noted that the impact of the EFTA on shipbuilding is similar to the situation that they face regarding trade in the dairy industry. They also acknowledged the importance of the shipbuilding industry as part of a strong Nova Scotian economy and they said that they hoped it worked out for those shipbuilders because those were good jobs, and if they were employed, they would benefit.
I reiterate, one shipbuilding job creates about four spinoff jobs.
Once again, it shows that folks on the ground producing goods and working in the real economy understand what a fair deal is. It seems the government has not come to the same understanding.
It brings us back to the question of what Canada is going to get out of this agreement.
As my colleagues have pointed out over the course of this debate, EFTA has some merits, but let us carve out shipbuilding until it can fairly compete with subsidized European shipyards.
This has been the testimony of witnesses who have testified before the international trade committee. There are simple solutions. These are some of the solutions that were proposed.
Andrew McArthur from the Shipbuilding Association of Canada and Irving Shipbuilding Inc. testified:
So our position from day one has been that shipbuilding should be carved out from the trade agreement. We butted our heads against a brick wall for quite a number of years on that and we were told there is no carve-out. If the Americans, under the Jones Act, can carve out shipbuilding from NAFTA and other free trade agreements, as I believe the Americans are doing today with Korea, or have done, why can Canada not do the same?
We have to do something to ensure shipbuilding continues. The easiest thing is to carve it out from EFTA. And if you do one thing, convince your colleagues in government to extend the ship financing facility, make it available to Canadian owners in combination with the accelerated capital cost allowance, and you will have as vibrant an industry as exists.
Even those who are from the business community and who have a vested interest in actually accelerating the implementation of the EFTA, such as the Canadian Shipowners Association, justify their support on the basis that Canada has forever lost its ability to build ships.
We do not share its pessimism. With proper and intelligent support from the federal government, Canada's domestic shipbuilding industry could be rapidly up and running, as Karl Risser has testified and said repeatedly to media and to government. All that is missing is the political will of the government.
The U.S. has always refused to repeal the Jones act, the legislation that has been in place since 1920 and that protects the U.S. capacity to produce commercial ships. The Jones act requires that commerce between U.S. ports on the inland and intracoastal waterways be reserved for vessels that are U.S. built, U.S. owned, registered under U.S. law and U.S. manned.
The U.S. has also refused to include shipbuilding under NAFTA and has implemented in recent years a heavily subsidized naval reconstruction program. Why are we not doing that here in Canada? Why are we not learning from both the mistakes and successes of other parties?
While we are learning from the successes of other parties, I would like to bring up the case study of Norway.
During the last 20 years, Norway, Canada's EFTA main competitor in this sector, has built a strong shipbuilding industry by initially protecting its market and heavily subsidizing production. Now Norway is actually able to compete in a zero tariff environment, something that Canadian industry is not currently able to do.
During all that time Canada had kept a 25% tariff on ship imports, but without a shipbuilding policy of any kind and no money to support the industry, something for which my friend from Dartmouth—Cole Harbour recently called.
The so-called generous 10 to 15 years phase-out term simply means a stay of execution for Canada's shipbuilding industry. It is precisely this type of policy that allowed Norway to become the world-class player it is today, and it is precisely what the federal government has failed to do by completely gutting Canada's shipbuilding industry.
When we talk about business being an unlikely supporter, because it does want to fast track the benefits of the EFTA, we can point to Mary Keith, who is the spokeswoman for Irving Shipbuilding Inc. This is a situation where labour and industry are on the same page, singing from the same fire book so to speak.
Ms. Keith was quoted in the Chronicle Herald, my local paper, as saying:
Canadian shipbuilders and marine service operations should be carved out from the agreements in the same way that the Jones Act carves out U.S. shipbuilding and marine operations from NAFTA and in the same way that Canadian agriculture is protected. We have been advised that this will not be done. The future of skilled Canadian workers and the communities where they live is being traded away by our own federal government.
We have lost workers at the Halifax shipyards to the west. I do not begrudge the west for the work that it is doing, but our workers are skilled specifically in shipbuilding. They are taking whatever jobs they can because they know those jobs will be for the long term, or at least for the medium term, whereas in Halifax with shipbuilding we get a little contract here, a little contract there. There is absolutely no security. I do not blame those workers for leaving, but they have skills and talent that they can bring to this industry.
Earlier I talked about meeting with the dairy farmers and how it was a bit of an unlikely allegiance between farming and shipbuilding in this situation. I would like to read a quote from Terry Pugh, the executive secretary of the National Farmers Union. He also testified before the standing committee and brought a new perspective to this issue from the perspective of farming. He said before the committee:
But the most critical and highly negative aspect of this deal, from our point of view, is its impact on supply management, for example, in the dairy industry. It's true that our access commitments remain in place for imports of certain commodities, as specified under the WTO agreement, but the tariff rates on some of those imports have been dramatically lowered, some of them to the point of elimination entirely.
It's good when the tariff rates on our exports are reduced. It's another matter when we see tariff rates on imports of dairy products, for example, coming into Canada reduced.... I think the Ag Canada representative, in early March, pointed out that, for example, on butter, under 4,000 tonnes of butter coming into Canada, which is our access quota, right now under the WTO--that's a 7% tariff. Under this deal, that 7% goes down to 0%. That is, without a doubt, a tariff cut from 7% down to 0%. The amount that's coming in stays the same, but the tariff rate is actually reduced.
That is a key point, because what that does is effectively facilitate access to the Canadian market for imports of dairy products. We have to keep in mind that the more we open up our market to imports, the more we shut out Canadian producers from their own domestic market. As I pointed out, that cut from 7% to 0% for some dairy products coming in is definitely a cut in tariff rates.
This is exactly what the Dairy Farmers of Nova Scotia came to talk to me about yesterday.
We have an opportunity to learn from the shortfalls of previous trade agreements. I urge all members of the House to join the New Democrats in opposing this bill as it stands to ensure that Canada's shipbuilders get something out of this agreement.
