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.

The House resumed from February 2 consideration of the motion that 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, be read the second time and referred to a committee.

Canada-EFTA Free Trade Agreement Implementation Act

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, I am very proud tonight to rise and speak to 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.

I do not know if I have ever told the House about my late uncle, John Lindsay MacNeil. He quit high school, which was common in those days, and he was a jackleg miner in the McIntyre Mine. I know members are thinking to themselves that MacNeil must be a Cape Breton name, and it certainly is. The MacNeils left the beautiful region of Iona to come to northern Ontario because working in the dangerous gold mines in northern Ontario was safer than working in the collieries in New Waterford and Glace Bay. John Lindsay worked underground on the drills and decided that he should get himself an education. It was not easy then. Actually it was a Russian immigrant who taught my uncle Latin on the night shift. This is a true story. I can see that I have the House's complete attention on this.

He learned Latin on the night shift and went back to university at St. FX, where all the Cape Bretoners go. He became a trade negotiator for Canada and he was in the first trade negotiations for Iceland. Iceland might seem like a small country to many, but we are a trading nation and we send out our trade negotiators to come back with great agreements.

As a very interesting aside, when he was in Iceland meeting with the Icelandic trade commission, he had another Cape Bretoner with him. After three days they had a few shots of Icelandic vodka and the Icelandic trade commissioner looked at my uncle said, “MacNeil, you are not one of those pithy little Celts. Look at your stature. You are one of us. You are a Viking. You are Neilson, not McNeil”. Not only was he able to deal with trade negotiations at the international level, but he also learned a lot about the heritage of the people from Iceland.

I say that because when a trade agreement comes back from our trade commissioners, who bring it to the House, it is the role of the opposition to ensure that the trade agreement is in the best interest of the country. That is our job. If we fail to do that job, we have no business being here.

There are many elements about international trade deals that are important. I know many people, for example, are looking forward to Norwegian cheese coming in. My kids have always wanted to have access to the famous Norwegian blue parrots, which have a beautiful, remarkable plumage. They stun easily though and one has to watch them, especially when they are pining for the fjords, but in a trade agreement that might be something that we might be able to assess.

We have to then ask ourselves, if we are making the trade agreement, what are we giving up? That is the rub of international trade. It is not to close our borders or to be protectionist. It is to ensure that we are on a level playing field. When we go up against a country such as Norway, which has a coherent national strategy in terms of shipbuilding, and we look at Canada that has been completely derelict in terms of a national strategy in key sectors such as forestry, auto and shipbuilding, we are not on a level playing field.

We are signing an agreement with the country of Norway and we have to ask ourselves what is on the table. We are looking at billions of dollars in lost opportunities in Canada, and I simply do not think there is any way we can sell that to the Canadian public and say that it is in their best interests.

Time after time, Canadians have been hosed at various levels of trade agreements. The most notorious of course was the softwood sellout, engineered as a photo op by the Conservatives. From northwestern Ontario to Abitibi region, we can count on one hand the number of saw mills that are still running. When we talk to anybody in those communities who are trying to get value added agreements off the ground, to get small manufacturers going, they do not have quota. They are not allowed to compete anymore, because under the Conservatives' idea of trade, we give up our ability to compete on a fair and open field against the Americans. We have seen that even if they actually produce value added products, they end up paying more in the softwood tariffs. The Conservatives' idea of trade was to have a disincentive against our own producers, who could compete against anybody on the global scale.

Another example of course is the notorious chapter 11 provisions of NAFTA, which have left Canadians on the hook. In Mexico we have seen the same problems.

If one has not dealt with the provisions of chapter 11, then one might not believe how bad some of these trade provisions are. I could give the example of the Adams Mine garbage plan. This was a municipal contract in the province of Ontario to haul waste from a city. It was a notorious crackpot scheme that was eventually shut down. It took the Ontario government to step forward and expropriate the site. A number of years after this was shut down there was suddenly a chapter 11 challenge, which I have here, by a guy from the U.S. calling himself Vito Gallo. He claimed that he was the sole owner of this property through his 1532382 Ontario Inc. company.

This Vito Gallo asked the Conservative government, which is notorious for not standing up for trade interests, for $350 million. We go into chapter 11 without knowing what kind of testimony Vito Gallo is going to bring to defend his claim. The interesting thing to note is that he tried to sue the Ontario government, but his claim was thrown out of court. He could not win in court so it was brought to chapter 11. There is another interesting thing about this Vito Gallo. If we try to find out who owns the Adams Mine, we find that 1532382 Ontario Inc. is registered in North York. It is an Ontario-based company.

In 2004, 1532382 Ontario Inc. gave $4,000 to a leadership bid in the Ontario provincial Conservative Party. Who was the person given this money by this supposed Vito Gallo, this American investor who was robbed of his international rights? It was our own august finance minister.

This case involved a numbered company, registered in North York, Ontario, that gave money to the man who is now the finance minister of Canada, and yet he went to chapter 11 claiming $350 million from the taxpayers of Canada without having to do proper disclosure and without having to prove anything. We have to ask ourselves how could this numbered company that is registered in North York actually be able to sue Canadian taxpayers for a municipal waste contract in the province of Ontario.

A lawsuit was filed by Canadian Waste Services, the Canadian arm of Waste Management Canada, on February 28, 2003. Canadian Waste Services filed a lawsuit against Notre Development, the Cortellucci Group of Companies, which also has given a fair amount of money to the Conservative Party, and 1532382 Ontario Inc. for $4.6 million over the ownership of the Adams Mine. The lawsuit referred to the 2002 sale to 1532382 Ontario Inc. as the Cordellucci agreement, not Vito Gallo. Nobody ever mentioned Vito Gallo but they mentioned Mario Cordellucci, who was very well known to the old Mike Harris wrecking crew and a number of our frontbench people.

We see in this bizarre world of NAFTA that this Vito Gallo, who appeared out of nowhere, can take his case behind the curtain without any public prying eyes or the normal obligations of fair disclosure and public disclosure of evidence. As a citizen of the U.S., he can claim to hit the taxpayers of Canada up for $350 million because we signed on to this in a trade provision. The only thing defending our interests is the Conservative government with the present finance minister. I am not saying there is any connection, but he also received money in the past from the same company.

We have to look to the Conservative Party of Canada to defend our interests in this matter. Oh my God, the Canadian taxpayer will have to wonder what is going to happen to that $350 million. Is the government writing the cheque right now?

This all comes back to Bill C-2. Before we sign a trade agreement, we need to actually squeeze the Charmin and make sure that the kind of things the Conservatives are bringing forward are actually coherent and in the national interest. We need to push them back to the drawing table where they can write a coherent bill of which we can all be proud.

I would be more than willing to entertain questions and comments.

The House resumed consideration of the motion that 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, be read the second time and referred to a committee.

Canada–EFTA Free Trade Agreement Implementation Act

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, it gives me a great deal of pleasure to speak to the issue before the House for a number of reasons. We are debating 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. This bill has been reintroduced. It was formerly known as Bill C-55, enabling legislation of the Canada-EFTA agreement signed in January 2008 by the present government during the 39th Parliament.

One of the reasons I am pleased to speak to this issue is that the bill was initially introduced by my predecessor in the riding of Vancouver Kingsway, the former minister of international trade.

I would like to take a rather different approach to a proper trade policy for Canada, vis-à-vis the policy that was being pursued in the previous Parliament.

I would like to begin my remarks by talking about the opportunity this legislation gives us to analyze what would be an appropriate trade policy for Canada in 2009 and as we go forward.

In my view and the view of our party, the principles that ought to be attached to an intelligent policy on trade at the present moment and in the years ahead are based on the following:

We must base our policy on the concept of fair trade, not free trade. We must base our policy on the notion of having balanced and reciprocal agreements, that is, agreements that actually respect the principles enshrined in the agreements and which guarantee that both countries have equal and untrammelled access to each other's markets. I will speak about this a bit later and we will see that a number of our recent agreements have failed in this regard.

Our trade policy ought to be based upon a foundation of a strong Canadian industrial strategy; that is, we profit best on the world stage and in our trade relationships when we have strong industrial sectors in Canada and approach trade from a position of strength for our Canadian businesses and workers.

We also need to build our policy on a position of a sound agricultural sector and well-functioning professional and service sectors. In other words, we need to build our trade policy on a strong foundation of a well-functioning and healthy domestic economy.

Unfortunately, this trade agreement does not meet the test of the principles I have just outlined. It falls short in several key areas.

As has been pointed out by several of the eloquent speakers who have preceded me, the essential problem with this piece of legislation is that it would phase out tariffs. This would put at risk a couple of very key and pivotal sectors of the Canadian economy, including the shipbuilding and agricultural sectors.

To elaborate more upon the concept of free trade, and fair trade as a distinction, I want to explain what I mean when I say fair trade. What we in the New Democratic Party mean by that is that we must ensure that we enter into agreements with other nations that respect the principle of fair wages for their workers and respect the principle of avoiding unfair subsidies to their industries. I will speak about this particular aspect with respect to shipbuilding and what Norway has done in contrast to what the Canadian government has done over the last decade.

Any agreement must be based on the concept of true reciprocal access to each other's markets and enforce standards in environmental protection, safety and employment standards.

If we enter into trade agreements with countries that do not have respect for each and every one of these principles, then we put at risk Canadian domestic sectors and we do a disservice not only to Canadian businesses but also to the workers they employ.

Agriculture and shipbuilding are two pivotal key sectors that are put at risk by the provisions in the agreement. Both sectors are particularly important to British Columbia, the province from which I come.

Agriculture is a very important industry in the province of British Columbia. I see a number of MPs who joined me last night at an event put on by the dairy producers. Dairy production is a very important part of British Columbia's agricultural sector. British Columbia has the third largest production of dairy products in Canada. It employs thousands of families. It is a clean and renewable sector. It is an important part of our domestic food supply. We need to ensure that this sector remains healthy in Canada so that we have a stable food supply for our country not only today but in the years ahead.

Shipbuilding is an industry which my colleagues have spoken about. It has a long proud tradition in this country from the east coast to the west coast. On the west coast the shipbuilding industry has been under a severe strain for the last several decades. This bill, unfortunately, would do nothing to help in that regard.

Essentially, this legislation would reduce tariffs on ships from 25% to 0% over a period of 10 or 15 years, depending on the types of products. One category of ships would go down to 0% right away. This provision refers to very large ships in the category of post-Panamax, which are ships that are not able to go through the Panama Canal.

If this bill were to pass, the Canadian shipbuilding industry, which we want to encourage to build ships, would have to compete with shipbuilding industries in other countries that have been supported by their governments in a manner that the Canadian government has not done domestically. This would put our domestic shipbuilders at great risk. Specifically, our analysis has shown that Norway has had a great head start in terms of support for its domestic shipbuilding industry and with that head start, Norway is able to produce ships which, unfortunately, Canadian shipbuilders would have a difficult time competing against.

Andrew McArthur of the Shipbuilding Association of Canada has made a compelling case on behalf of Canadian shipbuilders to have this industry explicitly excluded from this bill, as it is from NAFTA, I would point out. He notes that Norway's world-class shipbuilding industry is not subsidized today, but it does owe its present competitiveness to generous government support in years past.

This is not just a position that is taken by our party. It is a position that has been validated by industrial sectors and business people in civil society in Canada.

It is precisely the type of policy that has allowed Norway to become the world-class player that it is today. This is precisely what the federal government, once again, has failed to do by not supporting Canada's shipbuilding industry.

In terms of British Columbia, recently the current federal government and the present Liberal government in British Columbia declined to stand up for our shipbuilding industry. The example is British Columbia ferries. Hundreds of jobs were lost by the shortsighted government investment in a German shipbuilding industry rather than supporting British Columbia jobs for building ferries in B.C. coastal waters. Our party has asked that the import duties on three super C-class B.C. ferries built in Germany be entirely sent to support the shipbuilding industry in British Columbia. This very reasonable request has been refused by the current government. It would go a long way to providing some much needed money to kick-start the shipbuilding industry in British Columbia.

Shipbuilding and agriculture, besides being two key industries, are industries that not only provide good jobs but they are the jobs of the future and are sustainable.

In terms of shipbuilding, not only does it provide good, well-paying jobs upon which families can be raised, it also has multiplier effects and spin off jobs in a lot of areas in our economy, which I would think all members of the House would be interested in supporting, including research and technology, development, skilled trades, professional designing, engineering and other types of jobs that are not only the jobs of the future, but are jobs that our children will want to be trained for and occupy in the years ahead.

It is very important, when we talk about developing a trade policy that works in the years ahead, that we pay homage not only to the concept of having access to markets, but also one that promotes a strong national economy at the same time. I think I mentioned earlier that I would speak of an example where a previously poorly negotiated trade agreement resulted in us not getting the access that was promised. This example is illustrated by the softwood lumber agreement, where not only do our producers end up having to forfeit billions of dollars in duties to the United States, but at the end of the day we do not have the untrammelled access to the market we were promised by the agreement.

In my home province of British Columbia forestry is an incredibly important sector that at present is suffering in a terrible way. An almost record number of mills have shut down. I have been told by both trade unions and representatives of the business sector that they cannot remember the forestry sector being in such poor shape in living memory. Those who have studied the issue compare it to the worst state since the Depression. Tens of thousands of workers and their families have been laid off. We simply have a problem that is harming the economy of British Columbia and Canada, and part of its roots can be traced to poor trade agreements.

It is so critical, when we do negotiate trade agreements like the present one, that we ensure we get them right. In this case, we have to ensure that the interests of our domestic industries, like shipbuilding, agriculture and any other industrial sectors, affected by this are taken into account and taken care of so we do not subject them to further erosion, job loss and difficulties in terms of bringing their product to market, which is what this bill would do.

There are some good things in the bill. Entering into trade agreements with progressive countries that have respect for their workers and the environment, like the types of countries covered by this agreement do, is a good step. However, the legislation can be improved. In that respect, I would ask that the government listen to the remarks made by my colleagues and all members of the House, who seem to consistently point out the same problems, and ensure we develop and enforce policies that will ensure we have a strong shipbuilding industry, on both the west and east coasts, and a strong agricultural sector across the Prairies, Ontario, Quebec and wherever we have vibrant food production in this country.

We need to ensure we have a vibrant forestry sector and industrial and professional classes in our country, which will ensure we create the jobs that are not only so needed today in this time of economic crisis, but which will also form the basis for a strong economy in the days, weeks, months and years ahead.

There is some money in the budget for shipbuilding, and it is pleasing to see that. While that is a good start, as has been pointed out by my colleagues, it is far too little. There is a bit of money for some Coast Guard vessels. There is a bit of money to replace some aging infrastructure, including some wharves. However, in terms of a true Canadian policy that will kick-start and sustain our shipbuilding industry, the budget simply does not do that.

I would encourage the government and all members of the House to pay attention to this, because we all have an interest in developing a vibrant Canadian economy in this regard.

George MacPherson, the president of the Shipyard General Workers Federation of British Columbia has stated the following:

The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.

That is from someone who is involved intimately with the shipbuilding industry in our country. The House would do well to follow and listen to his warnings in this regard.

Again, Mr. Andrew McArthur from the Shipbuilding Association for the management side takes a similar view. He says, “We have to do something to ensure shipbuilding continues”.

The easiest thing is to carve it out from EFTA, the present legislation before the House, and if members do one thing, it is this. They should convince their colleagues in government to extend the ship financing facility, make it available to Canadian owners in combination with the accelerated capital cost allowance and we will have as vibrant an industry as exists.

When we have the unique situation of both the industry businesses as well as representatives of the workers joining and meeting minds on this issue, it would well behoove the members of the House to pay attention.

It would be my great hope that the members of the House would join together and urge the government to amend the legislation, which, once again, does go some distance in arriving at an agreement that may derive benefits for our country and improve the legislation.

In the case of the government, the previous minister has stated that the shipbuilding industry is of strategic importance to the sovereignty of this nation. Our defence minister , in a press release last summer stated that the “government recognizes the challenges being faced by the shipbuilding industry and is taking real action to help both in the short and longer term”. He said that as a marine nation, Canada needed a viable shipbuilding industry to support our sovereignty.

Those are good words and I hope the government backs up those good words with policies and actions that are consistent with that rhetoric.

It is vital in this legislation that we heed not only the comments made by members of the House, both within and outside the House, but that we pay heed to the comments of the industry and to the interests of the workers and that we continue to work toward a policy that will create the kind of economy that will serve us in the future.

My colleague from Halifax had an all party press conference in Halifax at a shipyard. Once again, this underlines the fact that all parties of the House ought to be interested, as is my party, in developing and reinvigorating a shipbuilding industry that can derive and produce benefits for this country.

Reference has been made to the Jones act in the United States. which has been in place since the 1920s and which the United States has studiously refused and resisted abolishing, including during the NAFTA negotiations. That act requires the United States to have American built, American registered, American staffed vessels operating on intracoastal waters in the United States. That is sound policy for the United States and it is a policy that we should be pursuing in Canada as well. Once again, it is a principle that, unfortunately, the legislation before the House does not respect.

I hope members of the House would join me in standing up for a strong, vibrant Canadian shipbuilding industry, a strong and vibrant agricultural industry and fair trade policies upon which we can continue Canada's proud tradition as a trading nation.

Those are my comments. I would be delighted to entertain any questions that any members of the House may have.

The House resumed consideration of the motion that 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, be read the second time and referred to a committee.

The House resumed consideration of the motion that 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, be read the second time and referred to a committee.

Canada-EFTA Free Trade Agreement Implementation Act

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I appreciate the opportunity to rise again to speak on this very important issue, namely Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association, in particular Iceland, Liechtenstein, Norway and Switzerland.

It is important to recognize that our trade relations are very key to how we develop our sector economies, how they affect Canadian employment, and how they affect even issues of national defence and strategies related to growth industries in terms of technology and so forth.

We believe in fair trade, and one of the principal components of fair trade is to ensure that when a country that we are trading with has had a strategic advantage or has a system in place that is providing a benefit, we actually deal with that and have a plan in place for our workers and our people in Canada.

In particular, there is a problem with this trade agreement, as it currently stands, which we find very difficult. There are some issues with regard to agriculture, but in particular the hardest one is the issue of shipbuilding.

Norway has had several years, in fact over a decade, to develop and implement a strategy regarding its shipbuilding industry. What will happen in this agreement is that over a series of years we will see the phase-out of a 25% tariff that partially helped protect the shipbuilding industry, which is still struggling over here in some respects. We would like to see this as an opportunity, in terms of what is happening right now with the laws of trade that are out there, to actually rebuild our shipping industry.

It is something that should be noted. It is done in other countries. It would not create an offensive front. It would not be seen as protectionism because quite frankly, the United States, for example, under the Jones act has a protection of its procurements. As well, under its defence policies, it actually has local and domestic procurement that it controls.

We do not begrudge the United States for that. We can certainly understand the fact that it would want to maintain some of its base industrial elements that protect its national interests and national defence. It is something that is important for the United States in terms of its sovereignty and how Americans view themselves in the world, but also in terms of the workers who have good skill sets.

Value added work is very important with regard to the notation of shipbuilding. It is not a case of simply sending natural resources out of the country. It is something that actually has value added components. It is also something that is actually changing right now, with new technology, so we get those advancements in technological development clustered around the shipbuilding industry. That also includes the elements that it connects to passive shipbuilding industry as well.

I am familiar with this as well in terms of the auto sector. It has that strategy and it is a strategy at which we have not stood up and raised our fists in anger. At the same time, on the Canadian side, we have done the very least of things to protect our industries and provide the same things.

It is interesting to note because this is a big difference, especially right now with the heightened discussion of what is happening in the United States with its buy American clause, with what Canada can do and cannot do, and what the United States can and cannot do. We do not even do the base minimum that the United States would respect.

One of the most egregious situations that has now come to the public discussion forum is the fact that the government has chosen to procure $250 million worth of trucks from Texas. That is unacceptable because our trade agreement right now allows us to have defence procurement and to purchase from our own country.

Ironically, we have a facility in Chatham, Ontario, that was actually going to close a few years ago and there was government support. The then Liberals said that they could not do it, that it was against NAFTA and against everything else, and there was no way they could save this plant. We hit the streets and we worked really hard. We saved the plant and it has actually been very successful until recently. It was well worth the investment it got from the government which it paid back to the coffers, not just from the company but also more particularly from workers who have paid taxes and have been able to raise their families with some dignity and integrity and also chase the Canadian dream of having a prosperous life in this country.

Sadly, what has happened now though is that the plant is in jeopardy. Ironically, the government has decided to abandon it. There is a $250 million of work going to Texas when retooling is estimated to cost $800,000 at the Navistar truck plant in Chatham.

Let us weigh this out. For $800,000 of retooling, done by Canadian workers and a with lot of Canadian content, it would facilitate the improvements that are necessary on the truck that would make it meet the obligations of the Canadian military. It would also allow for new innovation in the plant, which is a very good plant that has been known for its quality. Prior to much of its production being sent down to Mexico from Navistar, we used to get some of the Mexican produced vehicles into Canada to fix them. The men and women are very good, adept at their skills and solid workers. We know that the quality would be of the highest calibre and I am sure that the workers in Chatham would take a lot of pride in building vehicles for our military. They would get behind this 100% and produce the best vehicles possible.

Instead of putting that $800,000 into the retooling that would have had workers paying taxes again and going forward into the future, they have decided to ship it all down to Texas. When one compares the $800,000 with the $250 million of the defence procurement contract one has to wonder where the strategy is in this government. Why does it not believe that Canadian workers are just as capable of building vehicles for our soldiers and our military infrastructure?

It would also guarantee, and this is a key element in the trade agreement that worries me, a key element of our industrial complex that is still necessary for the world that we live in. We need to have a manufacturing capacity that is going to protect our national interests. The trucks would be used for a whole series of operations. We know that if we have control over that, we could actually continue to produce those vehicles for future contracts. If other countries have an interest in the vehicle, they could come to us. Perhaps we could have a continued expansion of the facility or a continuation of the work, which would go on for nearly a couple of years.

It is really disappointing when we pull away from that opportunity, especially at a time when down in my region unemployment in the Windsor-Essex County area is at 10%. Chatham is up there as well. That those individuals would not be the men and women who would be assembling the vehicles for our country is very frustrating. We lack the visionary elements from this government to see that forward. It comes forward with plans in this budget to help Canadians put sod on their lawns, but it will not help Canadians maintain the industrial complexes that are necessary for our national security and that will benefit the overall economy. On top of that, it is going to be the cutting edge of the new development of the actual manufactured vehicles. They will be the newest and latest in the field.

This is a problem with regard to our concerns on the shipbuilding aspect. There is going to be a loss of opportunity there. It is not just us who are calling for this. I want to read a quote that shows that the New Democrats are not alone on this. A number of different shipping associations have commented on this and made objections. The president of the Shipyard General Workers' Federation of British Columbia George MacPherson states:

The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.

He gets it right because he understands that it is not just about the current capacity we have and need to protect right now. It is about making sure that we are going to continue to be able to reap the rewards of the investment that we have done before.

When I was part of the industry committee, we had over 20 recommendations regarding the manufacturing sector. One of the things that has been moderately positive with regards to the budget is that we came forward with a policy on the issue of a capital cost reduction allowance for machinery and tools. It was supposed to be a five-year policy. First, the government had a position of doing it for a two year period. Now, it is proposing to do it for a three year period, so it has the accumulation of the five years. Unfortunately, not having it done properly through a one five year period undermines the planning necessary for the capital cost reductions on some of the more expensive and thought-out equipment changes that will be necessary in the future.

It is a modest step forward, and it is something that we certainly support. At the same time, it also provides some of the elements that are necessary for the actual procurement of additional capacity that could be important for our shipbuilding industry. We should not simply be relying on the hope of having our yards filled right now. We would like to see expansion.

In this economic downturn it is easy to use elements like this as a way to have procurement, especially when we look at some of the defence contracting that needs to be done. The budget notes that there is going to be $175 million allocated for a number of different craft. Small craft are going to be built and we hope that they will be done in our own shipyards. The proper policy is needed to do that. That is what worries me. It is why the example of Navistar with regard to the trucks being built in Texas instead of Chatham, Ontario is disturbing. That $175 million contract could be awarded in several different ways for procurement in South Korea, Norway or the United States, all of those things. As we go through trade agreements like this we have to be very careful of the details.

One element I would like to touch on is that the past Liberal government thought it had it right when it brought in the free trade agreement and other trade agreements after signing the auto pact. The auto pact made us one of the strongest auto manufacturers in the world, but when we brought in the other trade agreements the auto pact was killed, despite the government of the day arguing that we would stand up and would be able to have it. Since that time our auto industry has crumbled around us as others have decided to move forward.

I hope that is a lesson we keep in mind. We should vote this down and vote for Canadian action instead.

The House resumed from February 2 consideration of the motion that 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, be read the second time and referred to a committee.

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

Mr. Speaker, it is a pleasure to speak to the bill before the House, Bill C-2, on the European Free Trade Association trade agreement. It is important to understand what we are talking about. There are only a few countries involved: Iceland, Liechtenstein, Norway and Switzerland. There is also an agreement on agriculture between Canada and the Republic of Iceland and various agreements related to the Norway and the Swiss federation on agriculture as well. They are part of the bill.

This party believes in trade. We believe in fair trade. I know a lot of members across the way would like to guffaw about that. They seem to think that free trade is a thing we do by taking off our warm coats and exposing ourselves to the cold for reasons of fashion. It is fashionable to talk about free trade and trading with other countries.

Our party believes in fair trade. We have a lot of examples of that. The Auto Pact is one of them, where there is a fair trade agreement between Canada and the United States dealing with trade and very important commodities at serious risk today. However, the government has a very one-sided view on trade, and that is knock down the barriers and we will have free trade. However, when it chooses to do it, it seems to choose to do it with people who have already put their own industry in a position where they are anxious to enter into a free trade agreement with Canada because Canada is not willing to protect its own industries.

We have heard various speeches this afternoon. I was particularly impressed by the speech by the member for Sackville—Eastern Shore, who has been on the shipbuilding file ever since he entered the House of Commons. I have worked with him over the years on this file, as well as with other members of the shipbuilding industry, in particular, the Marine Workers Union. The Government of Newfoundland and Labrador was very interested in this, as well. Newfoundland and Labrador has a great interest in shipbuilding. The Marystown shipyard, with the Cowhead facility, has been active in building up its capacity and ability to actively participate in shipbuilding ventures. We have been following this file tremendously.

In fact, if the government of the day and the previous governments listened to the member for Sackville—Eastern Shore for the last I think 11 years, we would have a shipbuilding industry that would be able to compete on a level playing field with Norway and we would not be probably in this position opposing this aspect of the bill. We would have had what Norway has had for the last 10 or 15 years. It used to be called an industrial policy on shipbuilding.

I know industrial policy is a very unfashionable word among the think tanks of the right, industrial policy as opposed to this whole notion of “let the free enterprise system do everything”. It is some ideological mantra that has got us where we are today in the world with the collapse of the international financial markets and the stock market as a result of this blind ideology of deregulation, free trade and lack of concern over the ways in which governments can and should regulate industry, protect their national interests and ensure that the kinds of things that should be happening are happening.

We are a coastal nation, as has been mentioned before today. We have the longest coastline in the world, the Arctic, the Pacific and the Atlantic, areas where we have a national interest, whether it be on the east coast with respect to protection of our fisheries and coastal protection in general, environmental protection in the Arctic, which is very important, and in the Pacific as well. Yet we have a situation where we do not really have a shipbuilding industry policy.

I listened to the minister of state, the chief government whip. I am glad to hear that all these shipbuilding projects are, I think he said, on the books.

The books were presented to the House of Commons the other day. I did not see all these projects. I did not see the joint supply ships back on the books. I did not see the Arctic icebreakers that we need and which the government said it has to have in order to ensure our Arctic sovereignty. I did not see them on the books in the budget.

Here is a budget that is supposed to provide economic stimulus to the industrial workers of Canada. If the contract for the joint supply ships alone had gone to the Marystown facility, it would have provided about 20 years of long-term stable work, the construction phase for about eight or ten years and a longer term maintenance project for the joint supply ships, which is something that Canada needs. We all know we need it. The government knows we need it, but what did it do? A couple of days before the election was called it shut down that project. It shut down that bid.

Why did the Conservatives do that? They said the price was too high. The price was too high because the project was initially costed back in 2002. The government never made any allowances for the increase in costs of procurement and materials, labour and everything else in between. Of course, when the price eventually came in, it was over what was anticipated in terms of the budget.

There is something wrong with a government that is not prepared to recognize that if we do not move fast on projects, the costs will obviously go up and we still have to decide whether or not we need these facilities and ships.

I listened carefully to the budget and I did not hear very much about shipbuilding, but I have to say that I was very pleasantly surprised when I looked in the budget documents, the big thick book that we got with the budget. Lo and behold on page 172 of the budget there is actually a section called “Shipbuilding”.

I was very enthused because I thought that the joint supply ships would be put back, the Arctic icebreakers would be built and we would see a serious attempt by the government to recognize the needs of the shipbuilding industry in Canada. What did I find? There is a recognition of the importance of the industry with 150 establishments, 30 shipyards across the country, recognizing, contrary to what the minister of state has said, that everybody is thriving. The budget itself recognizes that in recent years the industry has experienced decline in demand which has been exacerbated by the economic downturn. The Minister of Finance must need to hear from the government whip, who would inform him that everybody is thriving and everybody is busy. However, that is not the case.

The government's response is to have a shipbuilding program, so called, that involves $175 million to build something in excess of 90, what it calls, vessels. Someone talked about conveyances or vehicles a few minutes ago, but the government calls them vessels. What are these vessels? Sixty new small craft and 30 environmental response barges. The last time I looked, a barge was not exactly a ship. It goes in the water and it floats, but I do not see it as the kind of thing we would regard as a major undertaking in the shipbuilding industry. Obviously it is very necessary, do not get me wrong, and I was delighted to see the term “shipbuilding” being used.

I was delighted to see the recognition of the importance of shipbuilding, but I was very disappointed to see that what was involved here was new small craft. It does not say how small they are. Thirty barges, five lifeboats and there were three inshore science vessels. Those are important. One is home ported in Mont-Joli, Quebec, one in Shippagan, New Brunswick and one in Saint Andrews, New Brunswick, so there are two in New Brunswick and one in Quebec. Again, we do not know how big they are. We do not know whether they play the same kind of role as the very important scientific vessels that have been operating off the east coast for the last number of years.

We see vessel extensions as part of the project. The Cape Roger, whose home port is St. John's, is one that will be given a major repair.

There is something called vessel refits. There are 35 vessels scheduled for refit. These vessels are not large craft. There are 60 small craft, 30 barges, 5 lifeboats, and 3 inshore vessels. There are 98 vessels being built along with a number of major refits totalling $175 million. As the minister of state would know, when dealing with the building of ships, that is not a lot of money, $175 million for 98 vessels, not counting the ship repairs and the major refits that are involved. That money is spread out very thinly across the country.

What we did needed to see was a recognition that a national shipbuilding program was going to be part of an ongoing effort by the government to ensure that we have a shipbuilding industry that is able to compete. It is one thing to talk about how this is going to take place over 15 years and is gradually going to go down, but what are we going to be doing in the meantime?

If the Liberal government back in the 1990s, and the Conservative government, both the current one and previous one, had listened to what the member for Sackville—Eastern Shore was saying throughout the years, we would have a shipbuilding policy and we would not be complaining about the problems of engaging in competition with Norway. This really should be taken out of the trade agreement, the same way it was taken out of the free trade agreement with the Americans.

Countries protect their interests when they are dealing with trade deals. That is why, for example, the Americans refused to repeal the Jones act. The Jones act has been around since 1920. It is a piece of legislation that protects American shipbuilding under the guise of defence. The Jones act says that with respect to commercial travel, one cannot travel between two ports in the United States without having a ship that has been built in America, is manned by Americans, is owned by Americans and operates within America. It cannot be done, unless it is on that kind of ship. Canada has no such policy. America refuses to get rid of that policy. We do not have an equivalent policy in Canada.

It appears that we have no desire to develop a shipbuilding policy that is going to protect our workers and our industry before we are forced to run head to head with the Norwegians. The shipbuilding industry has asked to have this excluded from the agreement with good reason. The industry knows what Norway has done to build and support and protect its shipbuilding industry for the last 15 years. If there was a commitment, if we had an industrial plan laid out, a long-term commitment of government funds, it might be a different story, but we have not seen that.

There is an opportunity at this time when governments are being given permission by all the economists, the public and other nations of the world to engage in economic stimulus. The conditions are most favourable for the kind of investment we are talking about, and the response from the government is $175 million to deal with 98 smallish--and I do not want to put them down totally--but smallish projects for the Canadian coast guard.

No doubt these vessels are needed. No doubt their refits are needed. We have seen inadequacies in our coast guard. In fact we have seen situations where the coast guard was so inadequately financed that the ships were staying in port. The ships were not going out because there was not enough in the budget to pay the diesel fuel to move the ships around, to protect our coastal waters, to protect our environment, to inspect the fisheries. They were staying in port because the government was not giving them enough fuel. That is the state of the support for our coast guard.

We see some change. At least the coast guard will be given some vessels that it needs, but it is not being given the support for the important role it should be undertaking in protecting our waters for environmental reasons, in protecting our Arctic sovereignty, in ensuring that fisheries patrols are carried out efficiently and effectively. These are the kinds of things that should be part of a modern, industrial, coastal nation such as Canada and they are absent here.

There is another aspect of this agreement which I will only touch on briefly because other members have talked about it. It goes back to the whole notion of fair trade. Why is it that Canada does not protect to the degree required the supply management system? It is an important way that we secure our food supply. Food security in an uncertain world is becoming more and more important. It is going to become even more important as we see the ravages of climate change on food production in other parts of the world, as well as in Canada.

We have to recognize that part of our responsibilities as a government and as a people is to ensure that food supply is available when we need it, that production is here, and that the people who are engaged in the production have an opportunity to make a reasonable living. They play an important role in ensuring that our economy is safe from the kind of vicissitudes that can occur when trading goes awry or when food supplies go awry and we do not have the kind of supply that we have built up through a totally free trade system coming from other nations.

Supply management is part of that. It is a building block for a fair trade system and should be protected better than it is in this particular agreement.

Supply management plays an important role in ensuring that production occurs across our country. Some of our colleagues from Quebec have spoken about the importance of the dairy industry to that province and I agree. In Newfoundland and Labrador, for example, by securing part of the quota for industrial milk, it has been able to build its post-production with commercial milk, yogourt and other dairy products. These are value-added products from industrial milk quotas protected by the supply management system, a necessary kick-start to an industry that would have great difficulty growing on its own, especially with the cheap products coming in from outside the region, because they have had an opportunity to build up an industry over a longer period of time.

These are the two main problems that we have with the agreement. Why is it that there cannot be a carve out of the shipbuilding industry? It should be taken out. In the absence of a rather robust and long-term commitment for shipbuilding and industrial policies in this country, our shipbuilding industry will be put at risk. This is something that we do not want to happen.

Those are my remarks. I would be pleased to respond to any questions or comments from members on this matter.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I cannot speak for the Liberals as to why they are not intervening. I understand that the NDP wants to boast that it is the new official opposition—and I am only saying that is their boast—but the third party here remains the Bloc Québécois. One thing is sure, Bill C-2 now before us will be sent to committee. This will mean another opportunity to reiterate the problems contained in it, in particular as concerns shipyards.

If this is a matter of national security, it must of course be debated. One thing is sure, it is an economic issue of prime importance. This is why the Bloc Québécois ensured that the committee report included its recommendation that the government stop dragging its heels on the matter and finally adopt a real policy on shipyard development. Count on us to continue to defend that tooth and nail.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I thank the minister for telling me where the minister is. I know we are not permitted to say he is not in the House. One thing for sure: he went to Davos and said he wanted to meet with the director general of the WTO himself to revive the Doha round. Reviving it for certain trade agreements is one thing, but putting that instrument back on the table, when it has been discussed and it would jeopardize the supply management system, is cause for concern. The Bloc Québécois will be even more vigilant in this regard.

With regard to the present agreement, we will look closely at what happens. Elimination of the 7% tariff, as provided in this agreement, makes it even more necessary that the government take a firm position at the WTO. Supply management is simply not negotiable. We have to say that and keep saying it. We believe that weakening supply management would justify renegotiating the agricultural agreement with Switzerland.

It should be noted that the part dealing with modified milk proteins, which were debated in the House of Commons not long ago, has also been properly examined. Switzerland is a major producer of modified milk proteins. At present, Swiss products are processed to the point that the tribunals have held that they are not agricultural products. They are therefore not covered by the agricultural accords referred to in Bill C-2. In any event, a schedule to the agreement excludes them completely. So milk proteins are excluded from the accord and tariff rate quotas and over-quota tariffs remain unchanged. In other words, products under supply management are still protected. That is what we currently see in practice and it is what we see in the bill. As I said, we will nonetheless be vigilant when it comes to agriculture, because that is our duty.

There is an interesting aspect to this agreement: it does not make the same mistakes that other Canadian agreements did. For example, NAFTA and the agreements with Costa Rica and Chile—two bilateral agreements—all have a bad chapter on investments, chapter 11, which gives corporations the right to bring proceedings directly against a government if it adopts measures that reduce their profits. The agreement before us, which we have been discussing for several hours, contains no such provisions.

I would like to point out that I worked with a member who was responsible for international trade. I was the deputy globalization critic. Some examples of chapter 11 action were absolutely ridiculous, and they must not be repeated. For example, in Mexico, an American company decided to take a municipality to court because it had adopted a bylaw prohibiting the development of a disposal site. Under chapter 11 of NAFTA, the company argued before the NAFTA tribunal that it would lose profits if not allowed to set up its disposal site at that location.

The municipality was taken to court under chapter 11 of NAFTA. I doubt that that is what the negotiators had in mind during NAFTA talks, but the pernicious effect of that part of chapter 11 led to that kind of completely unacceptable situation.

Fortunately, there is no chapter 11 in Bill C-2. The agreement with the European Free Trade Association covers only goods, not services. Therefore, we will not be forced to open public services to competition, whether provided by the government or not, because they are not included. Also, financial and banking services will not be exposed to competition from Switzerland, which has a very well-known banking system, or Liechtenstein, which is a true haven for the financial world when it comes to taxation and anonymity. None of that is included in this bill.

As my colleague from Sherbrooke just explained during questions and comments, the same is true of 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.

There was some discussion of this today in question period. We have to comply with the rules of the World Trade Organization, but there is absolutely nothing to prevent us from favouring local suppliers. The Americans are a problem for us now with their steel, but that is because they are not complying with some of the WTO rules. In other cases, though, when we have an opportunity to prefer our own employers and companies, we should do it and we should not hesitate.

One of the government’s first announcements after the election was the purchase of 1,300 trucks for the Canadian Forces, and the contract was quickly awarded to an American company. In my view, the Quebec company Paccar du Canada Ltée could very easily have filled this kind of order. Under the national security rules, the government could have ensured that such a contract was awarded within Canada. That would not break the WTO rules. We have to be very vigilant about other countries adopting extremely protectionist measures, but at the same time we are perfectly entitled to take steps to favour local suppliers, especially in these times of economic crisis. I cannot see why we would fail to take advantage of this right, especially when we are not contravening the WTO rules.

I spoke a little earlier about our shipyards. We are very concerned about some aspects of them, but we can still agree on a government policy if only the Conservatives would open their eyes and make an effort to ensure that the shipbuilding industry is not penalized too heavily by this bill. We are still concerned, however, about the future of our shipyards.

At present, imported vessels are subject to a 25% tariff. This is a form of protection, of course. However, under the agreement, these tariffs will gradually decrease over three years and will be completely eliminated in 15 years. Nevertheless, the government still has the flexibility to avoid the rocks and reefs that this kind of agreement could present and keep our shipbuilding industry afloat.

Our shipyards are far less modern and in much worse condition than Norwegian shipyards, for example. Norway has made massive investments in modernizing its shipyards, whereas the federal government has completely abandoned ours. If our borders were opened wide tomorrow morning, our shipyards could be wiped off the map. Yet for economic, strategic and environmental reasons, we cannot let our shipyards disappear.

Imagine the risks to Quebec, for instance, if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, which, I would remind the House, is the world's foremost waterway.

For years the Bloc has been calling for a real marine policy, and for years the government, whether Liberal or Conservative, has been dragging its feet. Now that the agreement has been signed, time is of the essence. We cannot waste any more time, since, as we have already heard, in three years the tariffs will begin diminishing and in 15 years the existing tariffs will be completely eliminated. The Bloc Québécois made a specific recommendation in committee on the matter. The recommendation reads:

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 on that bill, which at the time was numbered C-55, and is now known as Bill C-2.

The Conservative policy of leaving companies to fend for themselves could be disastrous for shipyards, and we expect the government to give up its bad policy. 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, something the government specializes in. We need a real policy that covers all aspects of the industry.

Those are our concerns. There will always be some. As I said, the pros and the cons of any agreement must be weighed. Of course, the four countries we are talking about are not the biggest European economies. However, what is interesting about this free trade agreement is that it could be a foot in the door for an agreement with the European Union. That is the real issue. The Quebec government is currently lobbying and having discussions about a free-trade agreement with the European Union. A free trade agreement with Switzerland, Norway, Iceland and Liechtenstein is all well and good, but we have to be aware that it is very limited. Together, these four countries represent 12 million people and about 1% of Canada's exports. So, we are not doing the majority of our business with these countries. The real issue is the European Union, with its 495 million inhabitants—that is a much different story—who generate 31% of the world's GDP. The European Union is the strongest economic power in the world.

Since we are very dependent on the United States in matters of trade, this openness to Europe might be a very important alternative for the economy of Quebec and Canada. Canada is altogether too dependent on the United States. We send over 85% of our exports there. The slowdown in the American economy together with the explosive rise of Canadian petrodollars in contrast to the greenback, brings home the fact that our dependency weakens our economy. Quebec has lost over 150,000 manufacturing jobs in five years, including over 80,000 since the arrival of the Conservatives and their laissez-faire doctrine. It is wake-up time. An agreement with the European Union could reduce this trade dependency on the United States.

This vital diversification should not be undertaken first with China or India—countries from which we import eight times and six times respectively what we export to them. The first priority should be the European Union. This is the only way we will be able to diversify our markets and lessen our dependence on the United States. In addition, the fact that Canada has no free trade agreement with the European Union significantly reduces our business competitiveness in the European market.

In conclusion, this is a most important undertaking. The bill has shortcomings, specifically with regard to shipyards, but this can be resolved. There is no reason to ignore all the benefits that might accrue from an agreement with these four European countries, especially since, as I was saying, it could potentially lead to a free trade agreement with the European Union.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, it is my pleasure to participate in the debate on Bill C-2, the Canada-EFTA Free Trade Agreement Implementation Act. This agreement includes Switzerland, Norway, Liechtenstein and Iceland.

This free trade agreement will liberalize trade of non-agricultural goods. My Bloc Québécois colleagues have already had the opportunity to discuss this bill today. They have said, and I agree, that we support the bill. Quebec is likely to benefit greatly from this free trade agreement. This trade agreement could benefit certain Quebec industries. I am thinking of the pharmaceutical industry in particular. In weighing the pros and the cons, it is clear that we have to support this kind of bill. Yes, this could be a cause for some concern in the shipbuilding industry. I will discuss that later in my remarks. My colleagues have also mentioned it. We know that the NDP member who just commented on the bill expressed some serious concerns about the shipbuilding industry. However, the government should take certain measures to eliminate any cause for concern.

I think that one of the bright spots is, as I said, the pharmaceutical industry. It would be in Switzerland's interest to produce prescription drugs here so that it can penetrate the American market. We also know that Switzerland's pharmaceutical industry is very advanced, and so is Quebec's. The industry is more dynamic and better developed in Quebec than anywhere else. For example, for Swiss pharmaceutical companies wishing to gain access to the U.S. market, setting up shop in Quebec will be an economically attractive proposition. The pharmaceutical industry is more advanced in Quebec than anywhere else in Canada.

My colleague from Berthier—Maskinongé also mentioned nickel. We already export nickel to Norway, and Canada's largest mine—the third largest in the world, if I am not mistaken—is in Ungava, Quebec. This free trade agreement could make that market very relevant, very interesting and very profitable for Quebec.

The same is true of aluminum. Again, Quebec is a world leader. Naturally, Iceland comes to mind as a signatory state which also imports considerable amounts of aluminum. It would definitely be in the interest of Quebec smelters that such an agreement be entered into.

I would like to touch briefly on agriculture. While Bill C-2 does not deal with agriculture, there are bilateral agreements concerning the agricultural community attached to it, which will therefore be implemented. In reality, these bilateral agreements will have little effect on agriculture in Quebec. It was nonetheless important to make sure that the agreement would not create distortions in Quebec's agricultural economy.

That having been said, we will keep a close eye on the agricultural agreement with Switzerland. Indeed, a bilateral agreement with Switzerland which would be implemented through this bill provides for the elimination of the 7% tariff on dairy products imported from Switzerland.

This makes it all the more important to protect the supply management system at the WTO. A quota increase in a context where the in-quota tariff was abolished would expose our dairy producers to increased competition from producers in countries which, unlike Canada, subsidize their industry, their milk production. The Bloc Québécois motion asking that the government oppose any outside quota tariff cut or tariff quota increase was passed unanimously, as we know, by the House of Commons.

There is cause for concern at present because, even though the Doha round was interrupted, we know that the states involved have yet to come to an agreement.

What we saw last July was cause for concern, to say the least. The document presented to the country in fact talked about lowering tariffs and increasing the number of products entering Canada. That threatened producers who are under supply management in Quebec and Canada: milk, poultry and dairy producers. That is why we passed the unanimous motion in the House of Commons in 2005: to preserve the supply management system in its entirety.

Last July, we saw in that document that a shift was starting to happen. As well, the Conservative ministers, one by one, gave us to believe that Canada was going to sign an agreement with the WTO in any event—we know that. The former ministers of agriculture and international trade both stated that Canada would not be the only country out of 148 not to sign an agreement. This was a serious concern for people under supply management in Quebec and Canada.

The present Minister of International Trade is in Davos at the moment, if I am not mistaken, or he has been to Davos.

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

Mr. Speaker, I am pleased to take part in this debate on Bill C-2, which should lead to the implementation of the Free Trade Agreement between Canada and the European Free Trade Association. The Standing Committee on International Trade has already studied it and I am glad to be able to add my thoughts to the current debate.

The Bloc Québécois has already indicated that it is generally in favour of this agreement. We think that it is a good agreement, especially for the Quebec economy. There are attractive opportunities for us in the countries that are signing it. Whether in pharmaceuticals, nickel mining or aluminum exports, Quebec is very well positioned and will surely benefit from its advantages. This does not mean, though, that the agreement is perfect. We have serious concerns, especially in regard to the inclusion of shipbuilding. The Bloc expressed these concerns in the supplementary opinion it attached to the committee report, and I would like to take this opportunity to draw this issue again to the attention of the members.

The future of our shipyards is very important to Quebec and especially eastern Quebec. This region lies along the shores of the St. Lawrence River, the largest navigable waterway in the world, and shipbuilding is an important part of its economy. This free trade agreement will therefore have a direct impact on the people of my region in a few years. That impact will be positive or negative depending on the choice that the government makes today.

Shipbuilding has suffered for many years from a flagrant lack of government support. Our shipyards have fallen well behind the Norwegian ones, and Norway is one of the signatories of this agreement. While Norway has been investing massively for years in modernizing its shipyards, it is sad to say that the federal government has long been ignoring our shipbuilders. There is no real marine sector policy in Canada today, and the results over the next few years could be very bad.

Under the existing agreement, the most sensitive shipbuilding products will enjoy a gradual reduction in tariffs for a period of up to 15 years in some cases. After that adjustment period, no tariff protection will be allowed, and vessels from Norway, for example, will enter the Canadian and Quebec market to compete on par with our ships. This would not be a problem, except that we lag far behind in this area. If our borders were to open wide tomorrow morning to the competition, our shipyards would disappear. And that would be very unfortunate, since our shipyards are essential for economic, strategic and environmental reasons. Now the question remains: how will our marine industry look 15 years from now?

If the past is any indication, we have every reason to be extremely pessimistic about the survival of this industry, given the increased foreign competition. Clearly, if the federal government continues to ignore the needs of our shipyards and refuses to take action to support them, we will definitely see them gradually deteriorate over the next 15 years. That is why the Bloc Québécois presented an important recommendation to the Standing Committee on International Trade in advance of this agreement taking effect. The recommendation reads, “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 and the Liberals, as usual, failed to propose any recommendations. 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 read in the report that, according to representatives of shipbuilders and marine workers:

...without combined access to the SFF and ACCA, 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 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.

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

Mr. Speaker, I would like to thank my hon. colleague from the NDP for his question. I would also like to point out to him that, of course, this bill has been referred to committee. As he knows full well, a Bloc Québécois motion currently before the committee calls upon the government to provide greater support for shipbuilding.

Together with the NDP and Liberal members who voted for the motion, we will press the government to take action to support shipbuilding. However, as the hon. member indicated, other aspects of this agreement promote Quebec's interests and meet its needs.

Reference was made to the pharmaceutical industry, which we think is a very important industry, but we must not forget the nickel industry, nickel representing 80% of our exports. The largest nickel mine in Ungava is owned by a Swiss corporation. Aluminum is the main export product in Iceland as well. Again, production is overwhelmingly concentrated in Quebec. These are all reasons for us to support Bill C-2.

Of course, I agree with the hon. member: when the Bloc Québécois votes in favour of a bill in this House, it is always with the needs and interests of Quebeckers in mind. As long as this bill meets the needs and aspirations of Quebec, we will support it. Should the bill be referred to committee and no longer meet the Bloc's expectations, we will have to reconsider.

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

Mr. Speaker, I thank you for allowing me to continue my remarks. I will repeat part of my speech on Bill C-2 An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association. Earlier, I examined the advantages and disadvantages of this agreement. There are, of course, more advantages than disadvantages and this is why we are supporting this free trade agreement.

One major disadvantage, however, involves the shipbuilding industry. We in fact tabled a motion with the Standing Committee on International Trade to have government support the shipbuilding industry in the coming years. When this agreement comes into effect, Norway's significant investment in its industry could pose a threat to the economic viability of some Quebec and Canadian businesses.

I continue in this regard. We might well expect that Swiss pharmaceutical companies might consider manufacturing their products in Quebec in an effort to penetrate the American market more easily. This would be an advantage for Quebec and would mean more investment there. This is one reason we support the agreement.

Let us take a look at the case of Norway. Nickel represents over 80% of Canada's exports to Norway. This is another advantage. The largest mine in Canada, which belongs to a Swiss company and is third largest in the world, is located in Quebec, in Ungava. So the agreement could significantly benefit Quebec and its mining industry.

I could list other benefits, but, overall, we support this agreement because it offers sizeable trading possibilities for Quebeckers. It has the added benefit of not incorporating the failings of previous agreements. For example, as we all know, the North American Free Trade Agreement and the agreements with Costa Rica and Chile contain an unfortunate chapter on investment. There is the agreement the Conservatives have just signed with Colombia, a country with a poor human rights, labour and environmental record, which is not the case in this agreement. The chapter in question allows businesses to sue a government adopting measures that limit their profits.

This sort of provision is not contained in the free trade agreement with Europe, which pleases the Bloc Québécois. In short, these four European countries respect human rights and, of course, workers' rights.

I should also say that the Free Trade Agreement between Canada and the States of the European Free Trade Association covers only goods and not services. This provision ensures that services to the public will not be opened to competition, whether they are provided by the government or not, because they are simply not included. The same is true of financial services. Bankers will therefore not be exposed to competition from the famously efficient Swiss banking system.

This is also true of government procurement. The federal government will be able to give preference to Canadian suppliers, except as provided in the WTO agreement on public procurement. This is very important because the federal government is the largest purchaser of goods and services in Canada.

I would also like to mention agriculture and especially supply management. My colleague from Richmond—Arthabaska tabled a motion protecting supply management in Quebec and Canada. This is also very important in my riding of Berthier—Maskinongé. The Bloc Québécois and our colleague, who had this motion passed, will continue to defend supply management and insist on preserving it in its entirety.

We do not think that this agreement poses any threat to the integrity of the supply management system. We are very proud of how we protect supply management, hence the importance of the Bloc Québécois, which made sure that this motion was passed. We believe that our farmers and consumers are best served by this system.

It is hardly surprising that the Bloc Québécois would continue to insist on preserving the supply management system under this agreement. We are satisfied with the bilateral agricultural accords in it because goods produced under supply management are still protected, and that is the important thing.

The agricultural agreement with Switzerland provides for the elimination of the within-quota tariff, but this applies only to the market segment already covered by imports. The elimination of this tariff will therefore have only a marginal impact on our dairy farmers because the tariff quotas and the over-quota tariffs stay the same. We should also not forget that milk proteins are excluded from the agreement. On the other hand—and this is very important—the elimination of the 7% tariff under this agreement makes it even more imperative for the federal government to maintain a firm position at the WTO, that is to say, supply management is simply non-negotiable and the Bloc Québécois will continue to insist that the supply management system be defended in its entirety at the WTO. I hope that the Conservatives and their Liberal friends—who sometimes surprise us, as with the passage of this budget—have fully understood this message.

However, we are worried about the future of our shipyards. I spoke about this a little bit before question period, but I want to come back to this very important point within this agreement. At present, imported vessels are subject to a 25% tariff. Under the agreement, these tariffs will gradually decrease and will be completely phased out in 15 years. Obviously the planned adjustment period will not be useful unless it is coupled with a vigorous adjustment and modernization program for shipyards.

Norway has grasped this quite well. In recent years, the Norwegian government has invested heavily in modernizing its shipyards. Because it receives support from its government, the industry in Norway is now productive and highly competitive in foreign markets. In Canada, the federal government, be it Liberal or Conservative, has done nothing to support our shipbuilding industry. It has not supported shipbuilding since 1988. The Liberals and Conservatives have totally neglected, if not abandoned, our shipyards to the point where today they are less modern, less productive and thus less and less competitive in international markets.

With this free trade agreement, the federal government cannot drag its heels any longer. We have 15 years—a decent amount of time—to prepare ourselves before the tariffs on imported vessels are phased out completely, hence the importance of implementing a real maritime policy. This is the only recommendation that was included in the report from the Standing Committee on International Trade and it was part of a Bloc Québécois motion moved at this committee.

This is the motion, and I hope that the government will take action to this 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.

The purpose of the motion was to urge the government to take action and introduce a comprehensive support strategy for the shipbuilding industry, a strategy to facilitate the industry's access to capital, stimulate investment, give preference to local suppliers in public procurement and, of course, encourage shipowners to buy their ships here at home.

After so many years of government inaction and apathy with respect to the many challenges facing our shipbuilding industry, the federal government must bring forward, without delay, an effective, comprehensive policy to support and develop the shipbuilding sector in Quebec and Canada.

When it comes to supporting industrial sectors that are experiencing problems, the Conservative government practises a laissez-faire approach. For shipyards, as for the manufacturing sector—a major presence in my riding, Berthier—Maskinongé—in which Quebec has lost thousands of jobs, we believe that this laissez-faire policy is totally irresponsible and must stop.

I have to say that, in light of the Conservatives' most recent budget, which received Liberal support, we will have to devote a lot of energy to making sure that the federal government does not abandon Quebec's shipbuilding industry. In the latest budget, the Conservative leader chose to respond to the demands of Ontario and its automotive industry by offering some $4 billion in assistance, while Quebec's manufacturing sector will be getting just a few million dollars.

These measures, which are unfair to Quebec and were supported by the leader of the Liberal Party, are further proof that we must be vigilant. Let me make it very clear that we still believe this free trade agreement is a good thing, and we support it. But we have to insist that the federal government bring forward an effective plan to help the shipbuilding industry. Promises are not enough when it comes to this.

I would like to close by emphasizing that I think this free trade agreement is a step in the right direction. As I said earlier before question period, I think it is important to diversify our markets and reduce our dependency on U.S. markets. This agreement with the European Free Trade Association is a good one, but it is limited. What we really want is the power to sign a free trade agreement with the European Union that will produce meaningful, productive results in all of our trade with European countries.

Although the four countries that make up this association represent only 1% of Canadian imports, the European Union has 495 million inhabitants who generate nearly 31% of global gross domestic product. The fact that Canada has not yet signed a free trade agreement with the European Union considerably diminishes the competitiveness of our businesses on the European market. It is important to note, for example, that Mexico has had a free trade agreement with the European Union since 2000. Thus, a company that does business in Mexico would definitely have a greater interest in moving part of its production there, since that would open up access to the European market, while maintaining its access to the American market through NAFTA. This situation must be corrected.

We support the agreement we are discussing here today, but negotiations must be ramped up, so that a free trade agreement between Canada and the European Union can finally be reached. Furthermore, a free trade agreement with the European Union would also prove beneficial in terms of investments. Indeed, together with NAFTA, the agreement would make it attractive for European companies to use Quebec and Canada as their gateway to the North American market and consequently to move some of their production here.

As a final point, since nearly 40% of European investments in Canada are in Quebec, it would certainly be a desirable location for European companies that want to invest in North America. We hope this government will quickly reach an agreement with the European Union, because it would be the best way to diversify our economy.