Bill C-2 (Historical)

Canada-EFTA Free Trade Agreement Implementation Act

An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation

This enactment implements the Free Trade Agreement and the bilateral agreements between Canada and the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation signed at Davos on January 26, 2008.
The general provisions of the enactment specify that no recourse may be taken on the basis of the provisions of Part 1 of the enactment or any order made under that Part, or the provisions of the Free Trade Agreement or the bilateral agreements themselves, without the consent of the Attorney General for Canada.
Part 1 of the enactment approves the Free Trade Agreement and the bilateral agreements and provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional aspects of the Free Trade Agreement and the power of the Governor in Council to make orders for carrying out the provisions of the enactment.
Part 2 of the enactment amends existing laws in order to bring them into conformity with Canada’s obligations under the Free Trade Agreement and the bilateral agreements.
Part 3 of the enactment provides for its coming into force.

Canada-EFTA Free Trade Agreement Implementation Act

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, I am pleased to rise once again here today to speak to BIll C-2, which should lead to the implementation of the Free Trade Agreement between Canada and the states of the European Free Trade Association. The Standing Committee on International Trade has already studied it at length. We have heard from a number of witnesses and we are ready to debate it here today at this stage.

The Bloc Québécois has already indicated that it is generally in favour of this agreement. We in the Bloc think that it is a good agreement, especially for the Quebec economy, because there are attractive economic opportunities for us in the countries that are signing it. I will not spend any more time on why we support this agreement, since this has already been explained in previous speeches by some of my colleagues and myself, during the debate at second reading.

In my last speech I also spoke about shipbuilding and its place in this agreement, and I will take advantage of this opportunity to clarify my position on this matter. First of all, I must say that I am aware of the concerns the representatives of the shipbuilding industry in Quebec have about the implementation of this agreement.

The future of our shipyards is a matter of vital importance to Quebec, particularly its eastern part, where a sizeable portion of the economy depends on the economic spinoffs from the shipyards. I feel it is absolutely vital for Quebec's shipbuilding industry to remain healthy and able to develop in the years to come. For that to happen, the government needs to finally accept its responsibilities and invest in this field.

It must be understood that the difficulties being experienced by the shipyards and the marine industry in general did not just crop up today, and the blame must not be laid on the adoption of an agreement whose impact will not be felt here for many years to come. On the other hand, we must not miss our opportunity to make a major change of direction in our marine policy. We can state that there is no real marine policy in Canada at this time, and that could cause real trouble in future years if action is not taken now.

There is no denying that there will be more competition. We have concerns about competition from countries like Norway, where the marine sector has been heavily subsidized for many years. That said, we must start immediately to implement measures to help this industry become more modern and more competitive. We know that the major problem, the real problem, is that for years the shipbuilding sector has suffered, and still does, from a flagrant lack of government support. It is time the needs of Quebec and Canadian shipyards were paid attention to.

According to the agreement in question, there will be a tariff phase-out on the most sensitive shipbuilding products, for up to 15 years in certain cases. After that period of adjustment, no tariff protection will be allowed, and ships from EFTA countries including Norway will appear on the Canadian and Quebec market and compete on an level playing field with our own. This would not pose a problem if we were not so far behind.

According to the witnesses we heard in committee, if our borders were opened to our competitors tomorrow morning, our shipyards would simply not survive. That would be a very bad thing, because our shipyards are essential on a number of levels—economic, strategic and environmental.

One question comes to mind today: what will our shipbuilding industry look like in 15 years?

We are convinced that if the government finally assumes its responsibilities, as I was saying earlier, and decides to recognize that establishing a true marine policy is of the utmost importance, this industry will surely progress and be in an excellent position with respect to its future competitors.

Obviously, we do not believe that the government will take any action at all without pressure from those concerned. Therefore, in the hope of obtaining some movement by the government on this issue the Bloc Québécois presented the following important recommendation to the Standing Committee on International Trade before the free-trade agreement takes effect:

...the Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada's commitments at the WTO.

That was the only recommendation made in the report. The Conservatives never see any problems with their policies, the Liberals, as usual, failed to propose any recommendations, and the NDP, in its predictable opposition to free trade, opposed the agreement altogether. The Bloc Québécois recommendation, which finally received the committee's support and was included in its report, meets the expectations of many shipbuilders in Canada and Quebec. Even though they have no hope of seeing their sector excluded from the agreement, they do expect the government to act quickly and forcefully.

We see in the report that, according to representatives of shipbuilders and marine workers:

...without combined access to the structured financing facility and accelerated capital cost allowances, the impact of the agreement would be devastating to the industry and would lead to job losses. In their view, this additional government support was critical if the Canadian industry was to survive increased competition from Norwegian producers.

Some will say that Norway has announced that it has stopped subsidizing its shipbuilders and that that will enable Canada to compete on a level playing field with that country. But what are we doing to make up for all the years when there were no subsidies here, while Norway was achieving the high level of competitiveness it enjoys today, thanks to generous government support? Quite simply, there needs to be a dramatic shift in the federal approach to the marine industry, which means abandoning the laissez-faire policy the Liberals and Conservatives have followed to date.

I am happy that we are holding this debate on the trade agreement with the European Free Trade Association, because it reveals how fragile our marine industry is in the face of foreign competition and forces us to take a stand on these issues quickly. It is not the agreement that is bad, but our policy. That is why a change of direction is imperative. In 5 or 10 years, it will be too late. We must act now. With a few targeted measures, our shipyards can become modern, productive, financially healthy and extremely competitive. The biggest problem to date has been the lack of political will to change things, and it is high time that changed too.

Of all the aspects of this free trade agreement, this one has concerned me the most. The other aspects of the agreement, including agriculture, seem to be well handled and in line with Quebec's interests.

I would just like to add, as some of my colleagues have already pointed out, that this free trade agreement may open the door to a future agreement with the European Union. We must seize the opportunity when it arises and, more importantly, be ready to compete.

The House resumed from March 11 consideration of Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, as reported (with amendment) from the committee, and of Motion No. 1.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I thank all my colleagues, particularly my colleague from Burnaby—New Westminster for the work he has done on this trade deal, the Canada-European free trade agreement, and the many free trade agreements that the present government and previous Liberal government have inflicted on the people and communities of Canada.

I say inflicted because I and members of my caucus have profound concerns about the CEFTA as we did with the first Canada-U.S. Free Trade Agreement, NAFTA, the Canada-Colombian Free Trade Agreement, the Multilateral Agreement on Investment, the Korean free trade agreement and the Security and Prosperity Partnership, which is not secure, will not create prosperity and is far from being a partnership. It is, indeed, a one-sided proposal that will compromise Canada's sovereignty with regard to water, airline safety and our independence in terms of foreign policy, culture and technological products.

The Canada-European free trade agreement, conceived by Jean Chrétien more than nine years ago, advanced by Liberal-Conservative trade minister, David Emerson, and now reintroduced by the current trade minister, presents a profound concern for Canada's agriculture and shipbuilding industries.

Evidence provided during industry committee hearings clearly demonstrated a key concern with the CEFTA related to the treatment of Canada's shipbuilding industry, which was abandoned by successive Liberal and Conservative governments.

Canada has the longest coastline in the world and yet it has no strategy for our shipbuilding industry. When the tariffs in the CEFTA come down in 15 years, Canada's industry will be unable to cope with Norwegian competition. The Canada-European free trade agreement is yet another of the Conservative government's hastily concluded bilateral trade agreements and highlights its piecemeal approach to trade that lacks a coherent, fair trade vision and policy.

Canadians are entitled to expect their government to support Canadian jobs. That point was made by Andrew McArthur, a member of the board of directors of the Shipbuilding Association of Canada, and the CAW, which made its case before the committee. It said that the shipbuilding sector must be excluded from this agreement and that the federal government should immediately help put together a structured financing facility and an accelerated capital cost allowance for the industry.

In addition to this testimony, was the concern expressed by Mary Keith, spokeswoman for the Irving shipbuilding conglomerate, about the Canada-European free trade agreement. She said:

...is a devastating blow for Canadian shipbuilders and marine service sectors.

The government of Canada is continuing its 12-year history of sacrificing Canadian shipbuilding and ship operators in the establishment of free trade agreements with other nations.

That is at the heart of the efforts made by the hon. member for Burnaby—New Westminster to amend Bill C-2 at report stage. The shipbuilding industry is at a critical point.

As was pointed out by Mr. Andrew McArthur and Mr. George MacPherson at the international trade committee on March 3, they said:

The Canadian shipbuilding industry is already operating at about a third of its capacity. Canadian demand for ships over the next 25 years is estimated to be worth $40 billion. Under the proposed FTAs with Norway, Iceland and the planned FTA with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government plan is an absolute outrage.

Imagine that, $40 billion and it will not benefit Canadian workers.

The position of the association from day one has been that shipbuilding should be carved out from the EFTA. We have been told categorically time and again by the government that it does not carve industries out. We have mentioned the fact that the Jones act in the U.S. was carved out from NAFTA and now we are not allowed to build or repair for the Americans but the Americans have free access to our market. So industries do not get carved out.

Unfortunately, and apparently, that only happens in the United States.

New Democrats have proposed that Bill C-2 be redrafted by the government to exclude shipbuilding. We hope the Liberals from Atlantic Canada will see the wisdom of this amendment and support the hard-working men and women across the country who build the ships.

Bill C-2 simply must change. This is not, as I have already indicated, the first time that a Liberal-Conservative trade deal has left Canadian workers and industries in ashes. We have seen it over and over again in communities like mine, in London, Ontario, and the smaller centres of southwestern Ontario. Free trade agreements, be they the FTA, NAFTA, or the Korean free trade agreement, have robbed families of their livelihood and taken away their future.

NAFTA was supposed to bring prosperity to Canada. Instead, we have seen industry after industry abandon the workers who made them successful and the communities that paid for the infrastructure that allowed them to prosper. They have abandoned them in favour of jurisdictions that sacrifice environmental and safety standards and permit their employees to earn only substandard wages. They have done that despite the fact that Canadian workers are the best and most skilled in the world.

For example, a detailed study of productivity levels in North American auto assembly confirms that Canadian auto factories are the most efficient on the continent. The Harbour Report, the leading survey of auto productivity, indicates that average labour productivity is more than 11% higher in Canadian auto assembly plants than in U.S. plants and about 35% better than in Mexican plants. I dare say that is true of shipbuilders, too.

The Navistar truck plant in Chatham and the Sterling truck plant in St. Thomas are two tragic examples of the exodus of profitable and efficient plants that have completely closed down. They closed at a tremendous cost to families and communities. I have met with the workers from those plants and their families. The consequences of those job losses are devastating, because hopes, opportunities, dreams and futures are destroyed.

NAFTA is not the only trade deal that threatens our communities. The government is still in negotiations with South Korea to put in place a free trade deal that is profoundly unbalanced. It tolerates a trade deficit of over $3 billion at a cost of thousands of jobs. Korea has been allowed to keep its domestic markets closed to Canadian vehicles, and the promises by Koreans to remove non-tariff barriers are unenforceable.

In 2005, Canada imported $5.4 billion in goods from Korea, while it exported only $2.8 billion. Sixty-seven per cent of that trade deficit was automotive. Canada imported 129,376 light-duty vehicles with virtually no reciprocal sales of vehicles from Canada. This is not free trade nor fair trade. It is the kind of trade deal, like the FTA, NAFTA, the Colombia trade agreement, the MAI and the SPP, that robs our families and communities of jobs.

I have a couple of letters that I want to quote from. They are from people who are very concerned about this trade deal.

The first letter is from Robert Vance, who writes that he is very concerned and disheartened. He is a shipyard worker. He writes:

It is shameful to think that although other countries including those involved in the European free trade agreement strongly support their shipbuilding industry, while we as Canadians do not.

One of the most surprising things to me as a shipyard workers is that all stakeholders in the industry including owners, operators and unions from coast-to-coast have emphasized the need for this support during the many committee meetings that were held on the use of free trade talks.

Unfortunately, the Liberal Party of Canada did not feel it necessary to support these workers and backed up the Conservatives, instead.

It is up to the government and all parliamentarians to protect Canadian jobs and industries. That includes agriculture and it includes shipbuilding, as well as those in manufacturing and the auto sector. We must protect Canadian jobs and industries for the sake of our communities, for the sake of our workers, for the sake of this country.

[Jack Harris, NDP, St. John's East, NL]

Madam Speaker, I am pleased to have an opportunity to join in the debate on Bill C-2. First, let me pay tribute to the member for Burnaby—New Westminster for carrying this debate on behalf of our party.

I come from a shipbuilding province, but I do not want to be parochial about this. We are a shipbuilding nation. My part of the country has been building ships for hundreds and hundreds of years for the fishing industry, going back 400 and 500 years.

We are building ships now. We have a modern shipyard in Marystown that is capable of terrific work. It was selected, in fact, for the joint supply ships for the Canadian navy, one of the two final bidders that were ready to roll and go to build these ships. What happened? At the last minute, or 72 hours before the election was called, the government cancelled the contract. The Canadian navy was about to issue a contract that was worth some $2.5 billion, which would have provided work, if Marystown was the successful bidder, and lot of people in my neck of the woods had every reason to believe that it would have been, to build those ships for six, eight or ten years of work and another fifteen or twenty years to provide the maintenance of them.

While Newfoundland and Labrador is part of the historic fishing, maritime, shipbuilding, boat building nation, we cannot forget that shipbuilding is a modern 21st century industry today. It is not part of the rust belt. Yes, ships are built of iron and steel, but they are also built with the most modern telecommunications and navigation facilities. They are built to rigorous standards. It is an industry of the future, requiring the highest degree of skill, technology and knowledge. It is a knowledge-based industry as well as part of the industrial base of our country.

It is something that requires the support of government to keep us in the game. What has happened is that other countries such as Norway have done that for their industry, for their people, for their prosperity and for their participation in the future of industry in the world, but we have not done that for ours. That is the reason why this should be out of this deal.

There are other problems with this deal too. The premier of my province has mentioned some of them. We are not using this opportunity to negotiate a free trade agreement to ensure that we remove the tariff, for example, from shrimp, which has been crippling the shrimp industry in the east coast for many years. This non-tariff barrier is being promoted now in the European Union by an attempt to ban seal products from a humane, controlled industry in the east coast.

We see no effort by the Government of the Canada to use these negotiations as an opportunity to extend our fishing jurisdiction outside the nose and tail of the Grand Banks. We still have to deal with an ineffective regime there.

Therefore, there other disappointments, but the big one, for which we are looking for support from both sides of the House, is our shipbuilding industry. We are trying to get some sense into the government, but we are also hoping that others on this side of the House will support our efforts. We are looking to the Bloc Québécois members who may be supportive, but we are also looking to the Liberals. So far I have not heard the Liberals participating in this debate and saying how they feel about this.

That was not always the case. I have in my hand a report that was produced, with the support of Brian Tobin, a former premier of Newfoundland and former industry minister. It is called “Breaking Through: The Canadian Shipbuilding Industry”. This report came out with a whole series of recommendations produced through a consultation process led by a number of individuals called the National Partnership Project Committee. Part of that was the president of the Shipbuilding Association of Canada, Peter Cairns, Les Holloway, the executive director of the Marine Workers Federation, Philippe Tremblay from the Fédération de la métallurgie CSN and Peter Woodward from the Woodward Group of Companies. They made a very good presentation with a lot of recommendations for the shipbuilding industry, which would have assisted this industry. However, we have not seen those recommendations implemented.

I would ask the Liberals, both nationally and from my own province, to support the amendment that we put forward because it would be important, not only to our own province of Newfoundland and Labrador but to the whole country. We have heard of the importance of shipbuilding on the west coast. We know it is important in the Thunder Bay area and in the province of Quebec. We see shipyards struggling to maintain their place in the modern world.

One important recommendation for this shipbuilding project was to ask the Government of Canada to eliminate the peaks and valleys of procurement for the navy and the Coast Guard through more effective forward planning and thereby keeping order books and employment levels more consistent over the long term.

That is extremely important because we do need to maintain a significant plan and a significant capital investment. According to an article in the Ottawa Citizen a couple of weeks ago on the estimated demands and needs for the navy, it stated:

One area that could provide significant employment for domestic firms in the coming decades is federal shipbuilding. With the navy's warships and Coast Guard vessels rusting out and in need of replacement, there is an estimated $40 billion to $60 billion worth of work over the next 20 years.

Where this work will take place is the question marine workers across the country are asking. With the cancellation of the joint supply ships project back in August, concerns were being raised that the government had plans to go overseas, to go offshore. It went through a tendering process and then it gave up on it.

Now we see the government supplying the Canadian Forces without contracts. It is buying helicopters from the United States without any contracts. There is not even an opportunity for a competitive bidding process. That is shocking. The government acquired C-17s and C-130J transport planes from the U.S. with no contracts and no competitive bidding.

There is a concern that the new search and rescue aircraft will go to a non-competitive bid. Canadian companies have no opportunity to participate because the Canadian Forces, apparently, have their eye on a particular Italian plane manufactured in the U.S. and there does not seem to be any plans to even have a competitive bid for that.

What is going on? Have we lost our way? Every country in the world, when it comes to procurement for their army, navy and air force, look to their domestic industries, except Canada. What is wrong with us? Is there something that I do not know about? Maybe members opposite could tell us what is wrong with us. What is it about us that we cannot build our own ships to ply the seas and look after our air forces, transport and so on? Maybe members opposite have the answers. Maybe there is something going on that I do not know about, but we seem to have lost our way.

For some reason, a bunch of Liberals seem to be going along with the government. I do not understand that. The shipbuilding industry is a modern, 21st century industry in which we should be participating. Why we are not doing so, is absolutely beyond me.

In the minute I have left, I would ask members opposite to get up on their feet during questions and comments and explain to the House and to Canadians why they are not protecting, supporting and expanding the ship industry in Canada. Perhaps some of the Liberals could tell us why they do not care either.

What is the plan for the $40 billion to $60 billion that will be spent by the government alone on the shipbuilding industry over the next coming decade? That could make a big difference to the economy of parts of this country, mostly coastal areas that have been struggling over the past many years for all sorts of reasons, some having to do with the fishery. Why is it that we cannot ensure that this kind of work is being done in this country?

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I am very pleased to rise today and speak to Bill C-2. I particularly want to acknowledge the tireless work of two members from the New Democrats.

The member for Sackville—Eastern Shore, of course, is a very familiar voice in this House and has called consistently over the years that I have been here for a shipbuilding policy. The reason we are speaking today in this House is because both the Conservatives and the Liberals have failed on that account.

I also want to particularly acknowledge the member for Burnaby—New Westminster. It is with his very good work that we are here today to oppose vehemently the inclusion of shipbuilding in Bill C-2.

I want to turn to some of the work that the member—

I was going to say “the minister”. That would be an improvement, if we had here a minister from Burnaby—New Westminster.

I want to refer to some of the work that the member for Burnaby—New Westminster has done in connection with identifying some of the issues around shipbuilding. When he tabled a dissenting opinion, what he said was that Canada's shipbuilding industry is not operating anywhere near its maximum capacity and lacks support from the federal government.

Canada is the only major seafaring nation without a strategic plan for its shipbuilding industry. Unlike Canada, Norway has used its period of tariff protection to invest heavily in an expanded shipbuilding industry, making it competitive and efficient. It was thus able to phase out its government subsidies by the year 2000.

Because the shipbuilding industry has been worn away for so long by a lack of interest from the federal government, by the time the tariffs are dropped in 15 years, if no aggressive policy is put in place, there will be little left in Canada other than foreign shipbuilding firms.

The major concern, of course, is that this trade bill reduces tariffs on ships from 25% to zero over a period of 10 to 15 years, depending on the type of products, and nothing happens for the first three years.

Why does it matter?

I want to draw members' attention to a news release from 2007 that was titled, “No celebrations Friday for BC shipyard workers”. It talks about the fact that BC chose to build ferries in Germany. What we see is not only the fact that we could have had the capability to do it here, but as this particular article states,

While BC Ferries holds a $60,000 party in Germany for 3,000 people on Friday, there will be no celebrating the launch of the first of three German-built Super-C Class ferries that have cost the province 3,500 direct and indirect jobs and the loss of $542 million in investment, says the BC Shipyard General Workers' Federation.

By investing in shipyards in this country, we not only create direct and indirect jobs, we not only generate significant amounts of dollars in new investment, but what we always fail to calculate when we are looking at costs of shipbuilding are the returns to government. Those workers pay taxes, and successful businesses pay taxes. That needs to be factored into any kind of equation when we are talking about support to our shipbuilding industry.

When the committee was hearing testimony on this, there were a couple of industry people who came forward and talked about the importance of shipbuilding and why we should exempt shipbuilding from this particular agreement.

George MacPherson, the president of the B.C. Shipyard General Workers' Federation, at the standing committee on trade, on March 3, 2009, said,

The Canadian shipbuilding industry is already operating at about a third of its capacity. Canadian demand for ships over the next 25 years is estimated to be worth $40 billion.

Andrew McArthur, from the Shipbuilding Association of Canada, said,

The position of the association from day one is that shipbuilding should be carved out from EFTA. We have been told categorically time and again by the government that we do not carve industries out. We raise the question of the Jones Act in the U.S., which was carved out from NAFTA. We are not allowed to build or repair for the Americans. The Americans have free access to our market. So industries do get carved out. I'm sure there are numerous other examples.

So we have industry and labour arguing for this.

I want to touch on a couple of companies on Vancouver Island.

In my very own riding of Nanaimo—Cowichan, we have the Nanaimo Shipyard Group. This shipyard has been in business since 1930 and has been in the same location, in the Newcastle Channel. It has over 10,000 square feet of covered area. This company mainly carries out refit and maintenance on DND, Coast Guard, and BC Ferry Corporation vessels. It also carries out work on deep-sea cargo vessels, fishing vessels, tug and barge fleets, yachts, fish farming service vessels and other coastal vessels. We can see that it has a wide range of experience in terms of the kinds of repairs it does.

Point Hope shipyard in beautiful Victoria was first established in 1873. Some have said it was the first shipyard in B.C. In fact, the ways were of wooden construction. It has a very significant history. It had written a letter to a number of ministers and talked about its long history, but it also pointed out their capabilities. It said:

Point Hope's capabilities extend to the construction of complete steel and aluminum vessels up to 1,500 tons and 60 meters in length.

It went on to talk about the fact that it was ISO certified. It was also applying for additional ISO certifications so that it would meet environmental standards. It said:

We are a key participant in Canada's defence and industrial marine sector providing significant employment and revitalization in the core of the City of Victoria. Point Hope is a success story and a model for the industry and has the capabilities and resources to continue to grow and expand.

We should be standing up for our shipyards. The member for Burnaby—New Westminster says that we should stand up for Canada. The shipyards and labour have some solutions. The Nanaimo shipyard has written to the Standing Committee on Government Operations and Estimates saying that it is the owner-operator of a small to medium-sized enterprise engaged in shipbuilding and repair. It employs approximately 100 to 150 people in four locations, Halifax, Nanaimo, Port Alberni and Victoria.

The shipyard talks about the fact that so many of the small and medium-sized enterprises have either gone bankrupt or been forced out of the industry. It has asked why the Government of Canada, in the context of a larger shipbuilding strategy, does not have a policy that carves out some work for the small and medium-sized enterprises. It has pointed to the example of what happens in the United States.

The United States has something called a small business administration program. I will not go through all of the details on this, but it is a really good example of how the U.S. government has created categories for contract opportunities reserved exclusively for small and medium-sized businesses. There is a whole procedure that small and medium-sized businesses can access.

In case members do not think there is not widespread support from shipyard workers in industry, I want to quote from some letters.

One letter is from the Shipyard General Workers' Federation of British Columbia, dated March 11, 2009. This is written to the member for Burnaby—New Westminster, but it feels so passionately about this that it wanted to ensure some of its words were said in the House. It says:

The Shipyard General Workers Federation represents approximately 2,000 skilled members who work in the shipyards, marine manufacturing and supply industries, and in the metal fabrication shops in British Columbia's coastal communities.

In its letter, it is requesting that, at the very least, the industry should be exempted from EFTA. It says:

We urge the government to recognize and act in the interest of this vital and strategic sector and develop a comprehensive industrial strategy that has as its' objective the long term stability and viability of a shipbuilding and marine fabrication industry on both the East and West coasts.

In the Pacific Northwest, which includes Victoria and Nanaimo, we know that between the major retrofits that used to be available through Point Hope and some of the other shipyards, we also have a significant number of small pleasure craft. I do not have the exact numbers, but it has been rumoured that in the whole base, including Washington and Oregon, there is up to a million small pleasure craft. When we are talking about a shipbuilding industry, we are not only talking about large-vessel building. We are also talking about the smaller pleasure craft. There is a whole range of abilities there.

A national shipbuilding strategy needs to look at that range of abilities. The fact that we have the longest coastline in the entire world, that we literally do go from coast to coast to coast, could be a significant economic driver in many of our communities. It used to be.

In the words of the member for Sackville—Eastern Shore, we need to remember shipbuilding. It was one of the founding industries in our country. When I talk about coast to coast to coast, I am not ignoring the inland waterways, which the member for Welland rightly brought up. However, I want to focus on the west coast for now.

We have the ability to rebuild that industry. We still have infrastructure in place. I urge the members in the House to not support this bill, carve out shipbuilding and develop that national shipbuilding strategy.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, the historical perspective of the member for Hamilton East—Stoney Creek about these trade agreements really informs the debate on Bill C-2.

One thing that strikes me is that since 1924, every free trade deal that has ever been negotiated by the Americans has excluded shipbuilding and marine services. The Americans have always understood how important shipbuilding and marine services are to their economy and to their sense of national purpose, and the industry is very important.

It is very interesting to hear these notions of what free trade is all about and that somehow it is about enhancing the economy and protecting jobs. We can see, in this case, the Americans have actually carved out shipbuilding because they want to protect it. This is very relevant to the debate today.

Would the member comment on that?

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

Mr. Speaker, as I stand today to speak to Bill C-2, yet another free trade agreement, I am concerned for the workers of Hamilton and for Canadian workers as a whole.

Canada has gone through over 20 years of free trade agreements. In my riding of Hamilton East—Stoney Creek, particular the Hamilton East portion, I have watched this seemingly endless parade of companies that have left Hamilton or closed as a direct result of free trade. My observation is that most Canadians do not feel free trade is free at all.

I watched Burlington Street in Hamilton go from a dynamic, bustling centre of manufacturing to a mere shadow of its former self. In fact, the very day the original draft free trade agreement was tabled, the first one between Canada and the United States, Firestone Canada in Hamilton, on the words of that draft agreement, closed its once proud plant on Burlington Street.

We, the labour movement and organizations like the then brand new Council of Canadians warned them, Because most Canadian cities were within 100 miles of the American border, we warned them that with free trade and the removal tariff barriers our plants owned by American companies would move or close.

I take absolutely no satisfaction in having been right. During the first two years of that original free trade agreement, between 1988 and 1990, Ontario lost 524,000 manufacturing jobs. Canada and Hamilton, in particular, quite literally bled jobs to the United States and Mexico.

Hamilton, long known for steel production, was once one of the leading textile manufacturing sites in all of North America. Those plants are long gone. During the past 20 to 25 years, Canada and, to a great degree, much of the free world has been on the track, a track comprised of deregulation and free trade as espoused first by Ronald Reagan, Margaret Thatcher and Brian Mulroney.

For evidence, look to today's crisis in the American market, a place where business was conducted in this wild west environment. Now we can see the outcome, the lack of proper regulation or deregulation and the requirement of enforcement. It is almost like the sheriff left town and Wall Street ran rampant with that reckless abandon, which we have become so aware of in the last few months.

Canada once had an auto pact, which protected our market and ensured employment in that important industry and the associated support industries. The Liberals, when in government, let that agreement slip away. Now we not only have cuts to auto plants, but Hamiltonian steelworkers are being laid off. In fact, we are seeing thousands upon thousands of support jobs lost along with those direct manufacturing jobs.

For Hamilton and Hamilton steel plants, this has proven to be devastating. No orders means no work which means layoffs.

As I said before, I can recall in 1988 when the labour movement and other organizations like that newly minted Council of Canadians were warning that this day would come if the Government of Canada signed on to that free trade agreement.

Similar warnings were issued in 1993, regarding NAFTA. The Liberals were at the front with those warnings. In fact, they were warning themselves. They made promises that they would not sign onto NAFTA, which they did shortly after winning that election.

Today Canadian industries are very fragile. Industries like shipbuilding, in particular, need attention from their government. Canada has been known worldwide for the quality of our shipbuilding, but other countries have worked hard to protect their shipbuilding with massive subsidies to aid their development, such as with Norway. Canada has lagged and has not had the comprehensive strategy to protect this important industry.

At committee, the New Democratic Party tried to protect this industry with no less than 16 motions, which were turned back by the chair with the aid of the Liberal Party members present. For the information of the members present today, shipbuilding is exempted from NAFTA.

At committee, the Shipbuilding Association of Canada made it clear that shipbuilding must be removed from the Canada-EU trade agreement. This agreement would reduce Canadian tariffs on ships from 25% to zero over 10 to 15 years. If we allow this to happen, we will lose our market altogether.

Members also need to know that the United States has always protected its shipbuilding industry ever since the Jones bill of 1920. That legislation protects the U.S. capacity to produce commercial ships. The Jones act requires commerce between U.S. ports on inland waters to be reserved for ships that are U.S. built, U.S. owned, registered under U.S. law and U.S. manned. In recent years the United States has implemented a heavily subsidized naval reconstruction program. All of this is to the direct benefit of its shipyards and its U.S. workers.

Where has Canada been? Canada can and must do the same thing. Canada must separate shipbuilding from this free trade agreement.

Finally, the shipbuilding sector must be completely excluded from the agreement, as I have said. The government should immediately put together an enhanced, structured financing facility, along with an accelerated capital cost allowance for this industry. An important component would be a buy Canadian strategy.

We have heard this buy Canadian strategy at a number of levels. We heard it first when the United Steelworkers made representation to the Congress in the United States on the buy American plan.

Within the free trade agreements to which we are now party, there are provisions that allow for a buy Canadian strategy. They allow for municipalities and provincial governments to buy Canadian. There are some limitations to that, but the Conservative government does not seem to want to entertain this option at all. In fact, the so-called free traders of the world raise their arms in concern when it happens, but that could be the very foundation for the salvation of not only shipbuilding, but our manufacturing sector altogether.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, once again I rise in connection with Bill C-2 , but this time at the report stage. I hardly need mention that we in the Bloc are here first and foremost to defend the interests of Quebec. We also count on the people of Quebec to keep us informed, and at times that makes us almost a substitute for the government. To date the government has never really given us any impact studies to provide an overview of the repercussions of a free trade agreement on the economy of Canada or Quebec as a whole.

But some careful analysis is required. Overall, in Quebec, we see that we will stand to benefit from the free trade agreement with the European free trade association. As hon. members know, pharmaceuticals are hugely important to Quebec. We export and import with one of the countries, Switzerland. As well, nickel is an important mineral and some 80% of trade in nickel is with Norway. Then there is aluminum with Iceland. Those three factors mean that Quebec would stand to gain from this free trade agreement, and would have huge potential opportunities in future.

As we can see from a closer analysis, the shipbuilding industry is an important component of this free trade agreement. The agreement has been in negotiations since 1998. Preparations to sign it have taken 10 years. We know there have been slowdowns, and even interruptions in the negotiations, in large part due to the shipbuilding component. This industry is an important part of the negotiations. Today we see that, whether or not there is a free trade agreement that would do away with duties applicable to ships after 15 years, after an initial 3 year period—so 18 years in all—that is not the only thing that threatens shipbuilding. What does threaten it is the lack of a policy for this industry, particularly on the part of the federal government.

The federal government, for all intents and purposes, has not given any type of subsidy to the shipbuilding industry since 1988. Norway has heavily subsidized this industry, allowing it to modernize, progress and become more productive, while Canada and Quebec were dealing with gaps in the federal government's shipbuilding policy. For one thing, measures to assist the shipbuilding industry were ill-suited. As well, the Quebec government had a refundable tax credit which for some years was considered by Ottawa to be taxable income under the Income Tax Act. That allowed it to claw back 20% to 25% of the assistance that Quebec paid to the shipbuilding industry. Not only did the federal government cut assistance to the industry but it raked in 20% to 25% of the funding and refundable tax credits that Quebec gave the industry.

So, with or without an agreement, if we want to preserve the shipbuilding industry, it is imperative that the government invest heavily in it.

The government appeared before the committee today to testify. It said that the help it is giving to the industry is sufficient, be it structured facility financing or accelerated capital cost allowance. That is far from sufficient.

My NDP colleague stated earlier that his party recently received the support of the union at the Davie shipyard in Lauzon. The union is supporting the NDP attempt to have the shipbuilding industry excluded from this free trade agreement. However, this agreement has been under negotiation for 10 years with countries in the European Free Trade Association. Since the shipbuilding industry is the problem, if it is excluded from this agreement, another agreement will have to be negotiated.

The Bloc Québécois is here to work in the interests of Quebec. Those interests are well served by this agreement in various ways, even in terms of the shipbuilding industry. As we can see, the agreement covers a period of over 18 years. The federal government will definitely change during that time, and a new government would see the need to invest heavily in the shipbuilding industry. If it were to receive nothing from the government one way or another, free trade agreement or not, the shipbuilding industry would probably not survive. We must give it a fighting chance of surviving through direct assistance, which could take many forms.

We often hear about loans and loan guarantees these days. This is important. The government can also provide assistance for lease agreements for boats, which would have the same effect as accelerated capital cost allowance and have an impact on the working capital of the various businesses. We could also talk about funding for the purchase of boats. A responsible government could bring all of these elements together in such a way as to establish a real policy for the shipbuilding industry. The term “responsible”, however, applies less and less to the current government . It is hard to say if it was any more applicable to the previous government. People often learn from their mistakes. Perhaps one day this country will have a truly responsible government to the great benefit of these industries, which make such an important contribution to Canada and Quebec.

In any case, 18 years is a long time. That is enough time for Quebeckers to give themselves their own country, one that will take charge of its shipbuilding industry and its own trade agreements with the rest of the countries on the planet. We would then have the best of all possible worlds.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I would like to thank the member for Skeena—Bulkley Valley because he has reflected the concerns that our caucus has about the real problems in Bill C-2.

I am the member for the riding of Vancouver East, which includes the port of Vancouver. I can remember the days when we had a great shipbuilding industry in the greater Vancouver area along both sides of Burrard Inlet. The demise of that industry and what is going to happen now under this bill deeply concerns us, as well as the Canadians who have been involved in this important industry for generations. I was taking note of the comments of George MacPherson, the president of the Shipyard General Workers' Federation. He said that the Canadian shipbuilding industry is already operating at about a third of its capacity. He pointed out that with the passage of this trade agreement, Canadian shipbuilding jobs are in serious jeopardy. He said that the government's plan is an outrage.

Would the member comment, in terms of the impact on workers who have built up this industry and have developed those skills only now to see it be lost?

The House resumed from March 6 consideration of Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, as reported (with amendment) from the committee, and of Motion No. 1.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am pleased to speak on behalf of the Bloc Québécois about the NDP's amendments to Bill C-2.

The Bloc Québécois' agenda is to defend the interests of Quebeckers. Overall, the Free Trade Agreement between Canada and the European Free Trade Association is a good one, and the Bloc Québécois will support it because it will liberalize trade of non-agricultural goods with that part of the world. Quebec will likely benefit.

For example, Switzerland has a flourishing brand name pharmaceutical industry. Pharmaceuticals account for 40% of Canadian exports to Switzerland and 50% of our imports from there. Swiss pharmaceutical manufacturers seeking to penetrate the American market may consider making prescription drugs here. It is no secret that Quebec's pool of skilled researchers and favourable tax system make it a premier destination for brand name drug companies.

A free trade agreement that facilitates trade between a company and its subsidiaries could promote new investment in Quebec's pharmaceutical sector. And then there is Norway, where nickel accounts for 80% of our exports. The largest mine in Canada, third largest in the world, is owned by a Swiss company, Xstrata, and is in Quebec's Ungava region.

Aluminum is our top export to Iceland, and aluminum production is concentrated in Quebec.

This agreement does not have the same flaws as some previous agreements. NAFTA, the agreement with Costa Rica and the agreement with Chile all contain a bad chapter on investments that gives corporations the right to take a government to court if it adopts measures that reduce their profits. There are no such provisions in the agreement with the European Free Trade Association.

This agreement covers only goods, not services. Nothing would force us, therefore, to open public services to competition, whether provided by the government or not, because they are not covered. Similarly, financial services and banks will not be exposed to competition from Switzerland, which has a very strong, secretive banking system, or Liechtenstein, which is a true haven for the financial world when it comes to taxation and anonymity.

The same thing is true for government procurement. The government is perfectly free to prefer Canadian suppliers, except as provided in the WTO agreement on government procurement. It would obviously be pretty ridiculous for the government to give itself a certain amount of latitude and then decide not to use it. We therefore want the federal government, which is the largest purchaser of Canadian goods and services, to prefer Canadian suppliers and show some concern for the spinoff effects of its procurement. And it has the right to do so.

In the area of agriculture, Bill C-2 also allows for implementation of the bilateral agricultural agreements in addition to the free trade agreement with those countries.

Those agreements, which are no threat to supply management, will have no great impact on agriculture in Quebec. Milk proteins are excluded from the agreement. The tariff quotas and over-quota tariffs remain unchanged. In other words, products that are under supply management are still protected. That is what we have been calling for all along, and what the Conservative Party usually refuses to recognize.

In fact, it is mainly the west that will benefit from the agricultural agreements because they provide for freer trade in certain grains, but the impact will not be significant.

As for shipbuilding, we need a real policy to support and develop the shipbuilding industry as soon as possible. Like many people, we have some concerns about the future of our shipyards. At present, imported vessels are subject to a 25% tariff. Under the agreement, these tariffs will start gradually decreasing in three years and will be completely eliminated in 15 years.

However, our shipyards are far less modern and in much worse condition than Norwegian shipyards. Norway has made massive investments in modernizing its shipyards, whereas the federal government has completed abandoned ours.

If our borders were opened wide tomorrow morning, our shipyards would likely disappear. But for economic, strategic and environmental reasons, we cannot let our shipyards disappear.

Imagine the risks to Quebec if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, the world's foremost waterway.

For years, the Bloc Québécois has been calling for a real marine policy, and for years the government has been dragging its feet. Now that the agreement has been signed, time is of the essence. A policy to support our shipyards is urgently needed.

Moreover, this is the only recommendation in the report of the Standing Committee on International Trade on the free trade agreement between Canada and the EFTA. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic and deputy critic, which reads as follows:

...the Canadian government must without delay implement an aggressive maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada's commitments at the WTO.

That is the only recommendation in the report. The Conservative policy of leaving companies to fend for themselves could be disastrous for shipyards. We expect the government to give up its bad policy, and we call on it to table a real policy, by the end of the year, to support and develop the shipbuilding industry. Given the urgency, we will not be content with fine talk. We need a real policy that covers all aspects of the industry.

The Bloc Québécois believes that this free trade agreement is a good agreement. The problem is shipyards. We call on the government to table a real policy by the end of the year to help shipyards become competitive. However, we cannot afford to jeopardize this free trade agreement, which is good for Quebec.

The real issue for the Bloc Québécois, and what it has always called for, is a free trade agreement with the European Union. Bill C-2, a free trade agreement with Iceland, Liechtenstein, Norway and Switzerland, is good, but we have to recognize that it is limited. Together, these countries have a population of only 12 million people and account for roughly 1% of Canadian exports. The real issue is the European Union, with its 495 million inhabitants who generate 31% of global GDP. The European Union is the world's leading economic power.

Canada is far too dependent on the United States, which buys more than 85% of our exports. The American economic slowdown, coupled with the surge in value of Canada's petrodollar against the U.S. dollar, reminds us that this dependence undermines our economy. Quebec has lost more than 150,000 manufacturing jobs in the past five years, including more than 80,000 since the Conservatives came to power, with their laissez-faire doctrine.

To diversify as we must do, the priority should not be given to China or India, countries from which we import, respectively, eight and six times more than we export to them. The European Union is an essential trading partner if we want to diversify our markets and reduce our dependence on the United States. What is more, the fact that Canada has not signed a free trade agreement with the European Union considerably diminishes how competitive our companies are on the European market. With the rise in value of the petrodollar, European companies have tended to skip over Canada and open subsidiaries directly in the United States. Canada's share of direct European investments in North America went from 3% in 1992 to 1% in 2004.

Add to that the fact that the European Union and Mexico have had a free trade agreement since 2000. Consequently, if a Canadian company is doing business in Mexico, it is in that company's best interest to relocate more of its production to Mexico because it can access both the European and U.S. markets, which it cannot do if it keeps its production in Quebec.

Quebec would be the first to benefit from a free trade agreement with Europe. 77% of the people who work for French companies in Canada are from Quebec, as are 37% of those who work for U.K. companies here and 35% of those who work for German companies here. In contrast, just 20% of people working for U.S. companies in Canada are Quebeckers. The Government of Quebec has been working with companies since the Quiet Revolution, and that is a major advantage when it comes time to seek out European investment. We have everything we need to become the bridgehead for European investment in America.

For the Bloc Québécois, this free trade agreement between Switzerland, Norway, Liechtenstein and Iceland is a first step. We cannot not sign it. The amendment proposed by the New Democratic Party, the NDP, runs the risk of jeopardizing this agreement. The Bloc Québécois will oppose the NDP motion.

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

Mr. Speaker, having been in the House for a while, the member for Cariboo—Prince George should know that this does not “destroy” Bill C-2. On third reading it is referred back to committee so that the carve-out is enshrined. As he well knows, that is what we are trying to achieve and that is what the shipbuilding industry has told us unanimously.

I have the transcripts right here. Not only do we listen when witnesses testify before the Standing Committee on International Trade, but we also take the transcripts and reread them afterwards. I would suggest that the member might be well served by doing that.

Representing the Shipbuilding Association of Canada, Andrew MacArthur said that it's not only the EFTA that concerns them, and he said that it's very close to a sellout. He supports the carve-out on behalf of the Shipbuilding Association of Canada.

I asked the member earlier why he thinks he knows more about shipbuilding. Apparently we have the answer.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, when the shipbuilding industry was at committee, I asked them point-blank if shipbuilders in this country can compete with shipbuilders around the world. The response was that yes, they could. They said they have the ability to build ships that are as good as any in the world, and I believe that.

We have done a number of things in Bill C-2. We have provided for the structured financing arrangements and we have put in the 15-year tariff phase-out. Through the budget, we are putting $43 billion into the shipbuilding industry in Canada. It is all good news. Why does the member for Burnaby—New Westminster want to destroy Bill C-2 and see it not go ahead?

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I want to thank the member for Esquimalt—Juan de Fuca for those two excellent questions. I know that the member certainly does like good news when it comes to the shipbuilding industry. He is looking for a revival of that industry in his riding, and good for him.

I will certainly bring those two points he has made to the minister's attention and work with him and members from all parties who want to see the shipbuilding industry complete this revival and once again make Canada a world force to be reckoned with by competition around the world.

That is exactly what Bill C-2 is trying to do. It is unfortunate that the NDP is opposing it so strongly. The Liberals and the Bloc are supporting it. They know a good-news story when they hear it. Unfortunately, the NDP does not like good-news stories, so we expect them to oppose it.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I had just spoken about a very important part of Bill C-2, and I think it is worth going over it again. It is that Bill C-2 does not introduce any new obligations on Canada in the area of government procurement, whether for ships or for any other products. Accordingly, federal and provincial governments in Canada will continue to have the right to restrict their bids to Canadian shipyards in the purchase, lease and repair of vessels of all types.

This is good news for the shipbuilding industry in Canada. This is good news for Canada's economy. This goes along very well with the recent announcement by the government that it is putting more than $43 billion into the procurement of maritime vessels over the next 30 years. That is good news for the Canadian shipbuilding industry, and the industry is rejoicing about that huge government infusion of cash.

That is good news for the economy of Canada. That is good news for everyone but the NDP, because the NDP does not like good news. It cannot survive with good news. Whenever there is good news happening, NDP members do whatever they can to try to carve out some little portion of it to make it into bad news, because that makes them happy.

That is why the member for Burnaby—New Westminster does not like Bill C-2 at all. As a matter of fact, he does not like any free trade agreements. If people listened closely when he was talking about the softwood lumber agreement, which he wants to rip up, they would have heard huge applause coming from the American softwood lumber dealers in the southeastern part of the U.S.A. They were cheering him on. They want to rip up that softwood lumber agreement, go back to the courts and stop any sales of Canadian wood to the U.S. That would be the best thing for them. They were cheering the member for Burnaby—New Westminster. They do it regularly whenever he talks about scrapping the softwood lumber agreement.

The government continuously encourages the use of Canadian shipyards for building ships through the structured financing facility. That allows shipowners who buy their ships from Canadian shipyards to reduce their interest cost on their financing. The government has put an additional $50 million into that fund, and that is good news for the shipbuilding industry. It is bad news for the NDP, because that party does not like good news and has trouble with it.

The government also recognizes the importance of Canada's domestic government procurement market for our shipbuilding industry. We are taking steps to address the many challenges faced by Canada's shipbuilding industry by buying down the interest rate of the loans that shipowners are using to purchase ships from Canadian shipyards.

The government has shown its support for our ship industry. In budget 2009 we invested $175 million on a cash basis for the procurement of new Coast Guard vessels and to undertake some life extensions and refits.

I could go on, but I want to remind members that Bill C-2 passed second reading by a vote of 258 to 36. That vote was a clear show of support for this agreement in the House, except from the NDP, which, as I said, does not like good news.

I would like to ask all members of the House to continue to support this government and its efforts as we continue creating a strong competitive economy for Canada today. It will give our children the opportunities they need to succeed in tomorrow's world. Bill C-2 is an example of that.

We appreciate the support of the Liberals and the Bloc in getting this agreement. We have been trying to do it for 10 years and finally we have an opportunity. Notwithstanding the NDP, which does not like agreements such as this one, we are going to get this passed.