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 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

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

Mr. Speaker, today it is my pleasure to speak to Bill C-2, an act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association. The association is made up of four countries: Norway, Iceland, Liechtenstein and Switzerland.

As some of my colleagues mentioned this morning, this is the second time that Parliament is considering the bill to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association. During the second session of the 39th Parliament, Bill C-55 was passed at second reading, but could not be finalized before the 39th Parliament ended on September 7, 2008.

Bill C-2, which is before us today, and Bill C-55 are identical. I want to reiterate that the Bloc Québécois will support this bill because we believe that it will provide good trade opportunities for Quebec. Nevertheless, it is important to point out that this economic initiative, while very positive for Quebec, raises some concerns that I will explore later in my remarks.

As we all know, many Quebec businesses depend on exports to ensure growth. However, 85% of our exports are to the United States. That means that we have to diversify free trade.

International exports represent almost one-third of Quebec's GDP. Every day we are painfully becoming more aware that our economy is far too dependent on that of the United States. When there is a recession or a downturn in consumerism as is now happening with the Americans, coupled with the obvious aggression of emerging countries such as China, India and Brazil, we can see that it is getting more and more difficult to keep our place in the American market and to encourage growth in our manufacturing businesses. The results have been significant for Quebec. We have lost over 150,000 manufacturing jobs in the past five years, more than 80,00 of those since the Conservatives came to power.

The riding that I represent, Berthier—Maskinongé, has been severely affected by the loss of manufacturing jobs, particularly in the furniture and textile industries. If we were less dependent on the American market and our trading relationships were more diversified, I am convinced that our manufacturing sector would not be so hard hit.

And this is what makes the agreement that we are looking at today such an interesting initiative. It also offers new opportunities for Quebec business. For example, like Quebec, Switzerland has a large pharmaceutical industry, vigorous and innovative, especially with respect to brand name drugs. It is not surprising that Quebec is the Canadian leader in the field of brand name drugs because of its pool of skilled researchers and its favourable tax system. We could therefore easily imagine that in order to more easily break into the American market—

I think that I will stop there and continue after question period.

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

Mr. Speaker, I am pleased to rise on Bill C-2, which is the Canada-EFTA trade agreement but could also be entitled the “bamboozled by Liechtenstein act”, because here again we have a Conservative government that, as we saw with the softwood sellout and as we have seen in every single negotiation that it has undertaken, basically sat down at the table and was outplayed, outnegotiated and bamboozled, in this case by the Principality of Liechtenstein and the other members of EFTA.

What EFTA wanted access to our shipbuilding industry. As members know, Iceland and particularly Norway have an extremely strong industrial sector in shipbuilding. The Norwegian government has invested and protected its shipbuilding industry for many years and has built up an extremely strong shipbuilding industry.

They sat down at the table, and the Conservative government, which was outplayed and outnegotiated, basically handed over our shipbuilding industry without attaining much more than the ideological platitudes we heard from the Minister of International Trade just a few short minutes ago. The government simply handed it over in the same way that it did in the softwood sellout, when it handed over a softwood industry without being the tough negotiator that I think the vast majority of Canadians would have wanted it to be.

Essentially what we have seen from the government is a steady drumbeat of wanting to sign trade agreements at whatever cost. In this end of the House the NDP stretches right across the aisle, because after the last election and the increase in NDP MPs we now occupy the whole end of this House. We decided to look at what is actually in the agreement. Before we decided to support it or not, we wanted to see what the actual impact of EFTA would be.

I am going to read into the record what those who best know the shipbuilding industry in Canada have had to say about this agreement. I am going to start with Mr. Andrew McArthur, who, as a member of the board of directors of the Shipbuilding Association of Canada, appeared before the Standing Committee on International Trade on this agreement and on this bill. Here is what he said about the negotiations around this agreement:

From day one, we said the Norwegian industry has been totally supported by its government to build up a tremendous infrastructure. It is a good industry with a lot of government help, and now they're looking to see what else they can do.

So our position from day one has been that shipbuilding should be carved out from the trade agreement.

We know that did not happen.

He continues:

We butted our heads against a brick wall for quite a number of years on that and we were told there is no carve-out.

We were bamboozled by Liechtenstein.

When asked how the Americans can carve out on the Jones act from NAFTA and other free trade agreements, as I believe the Americans are doing today or have done in carving out shipbuilding with Korea, and why Canada can not do the same, he continues:

...we feel we were sold down the river on NAFTA. We cannot build for American shipowners, but American shipbuilders can build for Canadian shipowners and import the ships into Canada duty-free. There has never been such a one-sided agreement, to my knowledge. It's totally ludicrous that they can build for Canadian owners, come in duty-free, and we cannot build for American owners. On the repair side, it is even worse. We used to be able to do some repairs for American Jones Act ships. Today it's very, very difficult. There are a lot of restrictions, and that work has basically disappeared.

Those were comments from Andrew McArthur of the Shipbuilding Association of Canada.

What did the marine workers say about this bill? We had Mr. Karl Risser, representing eastern marine workers, who said the following:

Other governments, Norway for one, have supported their shipbuilding industry for years and have built them into powers, while Canada has not. We have had little protection, and what little protection we have left is a 25% tariff on imported vessels into Canada, which is being washed away by government daily through agreements such as this and the exemptions being negotiated with companies.

I encourage all members of the House to read the testimony before the Standing Committee of International Trade. We cannot just have Conservatives simply approving government actions by rote when it means the elimination of Canadian jobs, many of which are actually in the ridings held by Conservative members. They will not read the agreement. They will not look at the impacts. There has been no economic impact analysis of this agreement. How any Conservative member could sell out their own constituents by voting for this agreement is beyond me.

Karl Risser continues:

With all these statements, you'd think the government's action would be to put into place national strategies to ensure a viable shipbuilding industry, but we have seen no sign of that. What we have seen is the EFTA agreement, which we feel will further devastate the shipbuilding industry.

He continues:

But to get back to this agreement, the Norwegians have built their industry into a very powerful industry.

So this EFTA deal is a bad deal for Canada. I'd love to see someone answer the question, what is Canada going to get out of this agreement? I know we're going to destroy our shipbuilding industry, a multi-billion-dollar industry in Canada. It's on its last legs now and needs a real boost. We have that opportunity in front of us, but whether we take it or not is the question.

I am going to continue on this because I think it is important that these voices, people who understand the shipbuilding industry, who are raising these concerns, are heard in the House of Commons and the members vote accordingly. We have heard the Liberals and Bloc say they are going to vote for this agreement. Beyond my comprehension, the Bloc is voting despite the fact that Davie Shipyard has completely shut down. Over 1,000 workers out of work, and yet we are playing with fire in trying to push through an agreement that witness after witness said very clearly will devastate the industry.

Les Holloway, representing marine workers in eastern Canada and referring to the Standing Committee of International Trade, said, “How in good judgment and conscience can your committee recommend anything other than that this agreement should not go forward?”

The president of the Shipyard General Workers' Federation of British Columbia, Mr. George MacPherson, said:

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.

How could any B.C. MP, especially after the softwood sell-out, vote to eliminate shipbuilding jobs in British Columbia? How could any Nova Scotian or Atlantic Canadian MP vote to eliminate jobs in Atlantic Canada? How could any Bloc Québécois MP vote to eliminate jobs in Quebec?

In The Chronicle-Herald, Mary Keith, the spokesperson for shipbuilding in New Brunswick, said that under the EFTA agreement: “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”.

Here we have case after case after case of those who know shipbuilding best saying that this is going to be disastrous. This is not some sort of ideological debate we are having because some of us in this House think that protectionism is bad and free trade is great so let us just sign an agreement and not worry about the consequences for Canadian jobs.

The Conservative government has finally admitted that we are in economic crisis, yet it adds this fuel to the fire and says we are going to slap our own shipbuilding industry. It is a strategic industry that every other government in the world, including Norwegian, Asian and Europeans governments, is actually supporting, yet three of the four parties in this House seemed prepared to sell it out and throw those jobs away.

We have by far the longest coastline in the world and to eliminate the last vestiges of our shipbuilding industry makes absolutely no sense. That is why the NDP caucus is saying no. It simply does not make sense to bring this agreement in when we have not provided the necessary supports to our shipbuilding industry. It makes absolutely no sense at all.

My colleague from Sackville—Eastern Shore will back me up on this. He will agree that our shipbuilding industry has to be of fundamental importance. We need a strategic plan in place. We should not be signing trade agreements that simply give our shipbuilding industry away. I know my colleague agrees with me and I appreciate that. That is why we are saying it makes no sense to put this forward. But there is more.

We also had testimony from the National Farmers Union before the Standing Committee on International Trade about the possible effect on supply management. Lip service has been paid to supply management. The Conservative government has said it is in favour of fighting hard for supply management. The infamous David Emerson, the former international trade minister, always said the government supports supply management and it will never walk away from the table. The Conservatives have said they support supply management. The National Farmers Union said in testimony that this essentially undermines our supply managed sector. That does not make a whole lot of sense either.

The arguments we have heard in favour seem to be ideological, so let us get back to the basic fundamental tenets of the economic policy, or the lack thereof, of the Conservative government.

Since the Conservatives came to power we have seen them progressively sell off our country in a whole range of areas. First there was the softwood lumber sellout. We had won that case in the U.S. Court of International Trade. David Emerson, with the support of the Conservatives and Liberals, supported the softwood sellout that literally blew up our softwood industry across the country. Tens of thousands of jobs were lost within days of implementation because of the self-imposed punitive tariffs. We gave away $1 billion that the American court said the American government had to pay back.

The Conservative government tried to say it was not a conclusive judgment, but it was. The Conservatives simply were not telling the truth by pretending that the court judgment was meaningless. That court judgment compelled the U.S. government to pay back every single cent it owed Canada and that court judgment also ensured tariff-free access in to the U.S. of our softwood products.

Politically, the Conservatives were in too deep. David Emerson decided to push the agreement through just the same, and the result was catastrophic. Many softwood communities in British Columbia, Alberta, Saskatchewan, Manitoba, northern Ontario, and northern Quebec have paid the price for what was sheer folly.

Warnings are now coming from many workers in the shipbuilding industry and many of the companies that are involved in shipbuilding saying, as I quoted George MacPherson, “--this government's plan is sheer folly and an outrage”.

We should have learned from the past mistakes. The softwood sellout was unparalleled folly. It was a sheer outrage and we should have learned from that. We cannot play with the jobs of Canadians simply on the basis of ideological direction. Essentially, the government has a strong ideological bent and come hell or high water, it will put that ideology into place no matter how many jobs are lost.

It is important to note that we are talking about the principles of maintaining Canadian jobs. It is important to look at the economic consequences of what the Conservative government has done, which has enacted exactly what the Liberals put into place over the last 20 years. It is important to ask the question: What has happened to average family incomes in Canada over the last 20 years?

We have had these free trade agreements when we have decided that we are opposed to protecting Canadian jobs, that is unless it involves the job of a corporate CEO or a banker and then of course the protectionist Conservative government is willing to weigh in with lots of money.

It will shovel money off the back of a truck to protect a corporate CEO's job and a corporate CEO's bonus, or a banker. It is willing to be fully protectionist. It is the most protectionist government in Canadian history. It is willing to do that for the big guys. It is willing to do that for extremely wealthy corporate CEOs. It is willing to be fully protectionist, but not willing to be protectionist for Canadian jobs even though every other government around the world puts into place protections around their strategic industries like shipbuilding. Every other government in the world puts into place protections over fundamental jobs. Every other government does that, but the current ideological government only wants to protect corporate CEOs and bankers. So what has the result been over the last 20 years?

For most Canadian families their real income has gone down. Canadians know that their real income has declined and it has been particularly striking for the lowest income categories. The Conservatives seem a little bit perplexed and I think it is important that they had a little dose of realism in the House of Commons, for most Canadian families over the last 20 years, real income has gone down. For those families who are in the bottom 20% in the Canadian population, their real incomes declined by over 10%. That is a lot.

It means on average that families have lost about six weeks of real income. For a month and a half of the year, compared to 20% years ago, they are working for free. They are working longer and longer hours, harder and harder, but under the Conservatives and the Liberals over the past over 20 years, their economic geniuses, has meant that for most of those poor Canadian families they have lost a month and a half of income.

What about the people in the middle class? They have lost about two weeks of income. It is like they are working 52 weeks but only getting paid for 50 weeks. For that middle income category, they lost about a week of real income a year over the past 20 years.

We put in place NAFTA. We put in place these free trade agreements and a whole bunch of economic measures such as a lot of corporate tax cuts and a whole range of economic measures designed to help those corporate CEOs and bankers because Conservatives want to make sure they get as much protection as possible from the federal government.

However, for most of those income categories the real income has gone down, not up. Now the wealthiest 20%, which is what the economic policies of the Conservatives and Liberals are oriented toward, such as EFTA, essentially now take half of all real income in Canada. This has not been seen since the 1930s. We went through the Great Depression. We had that type of income inequality. The foundation of the CCF, the NDP's precursor party, fighting in the House of Commons and fighting across the country, made a real difference. We had a much more balanced economy and much more balanced economic approaches. That worked for us very well until about 20 years ago when the Conservatives and Liberals moved to the right which has essentially meant for most Canadian families that their real income has gone down.

This is important to note because it shows that the strong ideological drive that we see from the right, that we see from Conservatives and Liberal parties, has not worked on the bottom line. It has not worked for communities. It has not worked for family income. It means that most people are worse off now than they were under the so-called protectionist agenda.

That is why other governments around the world are actually acting to protect jobs and their economies. Those examples are what we in the NDP side of the House believe that the government needs to look at, to be forthright and protect Canadians. The EFTA agreement does exactly the opposite. I have cited quotation after quotation of those in the shipbuilding industry who say that this will be a devastating agreement. This will eliminate jobs. How could any member of Parliament, representing their riding, representing their region, representing Canada, vote for an agreement that we know will devastate the shipbuilding industry? That is why we are voting no.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, it is my pleasure today to address the House during this debate on Bill C-2. For those who have not necessarily had the pleasure of learning about this bill in detail, I just want to say that it calls for the implementation of the Free Trade Agreement between Canada and the States of the European Free Trade Association. The association, EFTA, is made up of four European countries—Switzerland, Norway, Iceland and Liechtenstein—with a little over 12 million inhabitants, all told.

I should point out that the European Free Trade Association once included nine countries, but has lost members over the years. To compensate for those losses, the four members of the European Free Trade Association have undertaken to sign a series of free trade agreements, including this one with Canada. Earlier, the minister mentioned that he has been trying to speed up negotiations on all kinds of bilateral free trade agreements. Typically, multilateral agreements of the type with which we are all familiar are preferred. The WTO oversees all trade agreements.

Now, some 200 countries around the world are trying to negotiate bilateral free trade agreements at a more frenzied pace than ever. It also looks like the government is in a hurry to finalize the free trade agreement with Colombia. As we all know, committee debates have focused on human, workers', union and environmental rights. That is why the opposition will not accept this agreement. We also know that the new President of the United States does not support the free trade agreement with Colombia. I am not sure how the minister and the new government want to approach this debate. Many free trade agreements are currently being negotiated, but we still have to be careful about what we agree to in the end.

This is not an agreement that was hastily put together. On the contrary; negotiations began in May 1998, over 10 years ago. We know that in the fall of 2000, governments agreed on a first draft. Because it opened up the ship markets too quickly, it threatened our shipyards. Only the economic sector feels directly threatened by this agreement. As a result of new negotiations, implementation will be staggered over several years, up to 15 depending on the type of vessel. Although it is not thrilled, the association representing shipbuilders is resigned to accepting the agreement but is asking for an aggressive shipyard modernization program before the elimination of tariffs.

I asked the minister that question earlier, but he did not answer. I wanted to know what exactly he intends to do to make up for all the years and money invested in the shipbuilding industry in Norway, which was heavily subsidized in order to develop its competitiveness and expertise. The minister simply stated that he would ensure that it would not reoccur and that there would be no more subsidies. That is not what I wanted to know. I wanted to know what Canada will do to ensure that the shipbuilding industry can also benefit from certain programs that will result, by the time tariffs are removed, in a competitive situation. We were not given an answer.

The free trade agreement between Canada and EFTA is a traditional free trade agreement. Once implemented, it will liberalize trade of all non-agricultural goods.

It concerns only non-agricultural goods, not services, agriculture or investment. Of course, it provides for a dispute resolution mechanism that the parties, and only the parties, can use.

Another provision of this agreement has to do with anticipated economic impacts. In committee, opposition members have often asked the government to conduct an economic impact study in order to make projections and determine what will happen and what the impact will be on various sectors, such as agriculture, manufacturing and other specific areas. It has never carried out a single study, even though it has had 10 years to do so. Even the website for some countries in the European Free Trade Association is not up to date, because information is missing. How could the government have produced an economic impact study on this agreement? It must be condemned. It is always the same thing: the government never provides us with an economic impact study. We had to make do with drawing conclusions from a few general observations.

Needless to say, the goal of the Bloc Québécois is to work for the interests of Quebec, and we are going to keep on doing that as long as we are here. Logically, Quebec stands to benefit the most from this agreement. Canada's main exports to these three countries all come from Quebec. It follows that lifting the trade barrier should also benefit Quebec.

In addition, in high-tech sectors, Quebec's economy is strong in areas where these countries are also active, which should promote investment in Quebec. Take the example of Switzerland, which has a very vigorous pharmaceutical industry producing brand-name drugs. Prescription drugs account for 40% of Canadian exports to Switzerland and 50% of imports. To break into the American market, Swiss pharmaceutical companies might think about manufacturing drugs here, and the mecca of brand-name drugs, with its pool of skilled researchers and advantageous tax rules, is Quebec. A free trade agreement to facilitate trade between a corporation and its subsidiaries would likely bring new investments in the pharmaceutical industry in Quebec.

Nickel accounts for over 80% of our exports to Norway. The biggest mine in Canada and third largest in the world is in Quebec's Ungava region. It is owned by the Swiss company Xstrata. Our leading export to Iceland is aluminum. There again, production is concentrated in Quebec. Basically, subject to the implementation of an aggressive policy to support and modernize shipyards, Quebec should benefit from this agreement.

When we presented our supplementary opinion to the report from the Standing Committee on International Trade, there were two issues that directly affected us: protection of supply management and shipbuilding. Now I would like to talk about protecting supply management.

Obviously, Bill C-2 also touches on agriculture. It allows for the implementation of bilateral agricultural agreements, which would be added to the free trade agreement with the EFTA. These agreements are not far-reaching and will not have a significant impact on Quebec agriculture. Of the three agricultural agreements, the agreement with Switzerland in particular caught our attention because it abolished the 7% tariff on dairy products imported from Switzerland. Currently, 5% of the Canadian dairy product market is open to foreign competition. The 7% tariff was levied only on the imports that were part of this unprotected segment of the market to which our producers do not really have access.

Since the elimination of the within-quota tariff provided for in the agricultural agreement with Switzerland will affect only the market segment that is already covered by imports, the impact on our dairy producers will be negligible. However, this will make it all the more important to vigorously defend supply management at the WTO. A quota increase coupled with the elimination of the within-quota tariff would expose our dairy farmers to increased competition from countries that, unlike Canada, subsidize their dairy production.

The House of Commons unanimously adopted the Bloc Québécois motion calling on the government to reject any reduction in the over-quota tariff and any quota increase. Given the elimination of the 7% tariff in the current agreement, it is imperative that the government maintain a firm position at the WTO: supply management is absolutely not negotiable. In fact, in our opinion, a weakening of supply management would justify the renegotiation of the agricultural agreement with Switzerland.

I should also point out that modified milk proteins—which Switzerland produces—are transformed to such an extent that the courts have ruled that they are not agricultural products. That means that they are not covered by agricultural agreements. That being said, one of the appendixes in the bill to implement the agreement has been completely excluded. Milk proteins are excluded from the agreement, and the tariff quotas and over-quota tariffs remain unchanged. In other words, products that are under supply management are still protected. 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 because these countries are not heavily populated. The message is clear: supply management must be vigorously defended at the WTO.

The second aspect that directly affects us is shipyards. 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 European Free Trade Association. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic—incidentally, that was me, at the time—and of course the deputy critic, who is sitting behind me.

It 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 made in the report, and the government must fully implement it.

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, as quickly as possible, a real policy to support and develop the shipbuilding industry.

When they appeared before the committee, shipyard representatives stated that two measures should be given priority: allowing accumulated depreciation to be transferred to buyers of Canadian ships and putting in place a structured financing mechanism. These simple measures—at the very least—could be adopted immediately. However, there are other measures that should be added.

In conclusion, I would like to say that it is, indeed, a free trade agreement. Bilateral free trade agreements are proliferating. We continue to be convinced that multilateral agreements should be signed as often as possible.

The agreement we are discussing involves four small countries. It is a very positive agreement but we must realize that it is also very limited. Together, these four countries represent approximately 12 million people and about 1% of Canada's exports. The real opportunity lies with the European Union. With a population of 495 million people, generating 31% of global GDP, the European Union is the global economic powerhouse. Canada is far too dependent on the United States, which has accounts for 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, we should not look 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 recent 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. Bombardier is a case in point.

Overall, this free trade agreement with the European Free Trade Association is good for Quebec. But as I have said and will keep on saying, it is better to promote multilateral agreements, where the rules apply to everyone. Important considerations such as human rights, union rights and environmental rights are sometimes left out of bilateral agreements. It is not true in this case, but it has happened in other agreements. I am more and more convinced that multilateral agreements should include social and environmental clauses. That is the direction we need to take.

[Stockwell Day, Conservative, Minister of International Trade and Minister for the Asia-Pacific Gateway]

moved 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.

Mr. Speaker, it is very timely that our colleagues on all sides of the House are giving consideration to this important legislation. With regard to the actual work that has been done, people on all sides need to be congratulated for the extensive amount of work that was done to conclude the negotiations. That has taken place. The process now is it comes to Parliament for ratification.

The timing of this is really fortuitous because we are engaged right now, whether we like it or not, in a synchronized global downturn of economies and the world is gripped by this. We are looking for ways in which trade and commerce can move and sending signals that the opportunities for workers, producers and manufacturers are there. It is an important that we are seen to be pursuing this, and we are.

We understand that if we really want to protect industries within our country, if we really want to protect our workers, then what we do is we open up the doors and the opportunities for them to sell their products and services and manufacture those things which are wanted in other parts of the world.

As Canadians, as a country, we are as prosperous as we are because we are free traders. We believe in the importance and the power of doing that. As a nation, we cannot in and of ourselves consume everything we can produce. We must have ways to sell and to market not only our products but our services if we are to continue to be prosperous.

The backdrop to our discussion today is the fact that there are clouds on the horizon related to the whole issue of protectionism. Some countries possibly are reflecting that the best thing they can do is build protectionist trade walls. We know this would be a negative thing to see happen. We know history is very clear. When we look at the conglomeration of nations and how nations encourage and move along in terms of prosperity, we only have to look back to the horrific economic ramifications of the Great Depression.

In 1930, when that global economic downturn took place, some economic specialists speculated that they were facing probably a one or two year recession at the time. The United States came out famously with the Smoot-Hawley legislation that started to build a protectionist barrier. Other countries responded in kind and pretty soon around the world we had situations where countries could not sell or export the very things that were needed and that would have led to prosperity. In fact, the recession was deepened, leading to the Great Depression.

That is a 60 second summary of what took place. Therefore, it really is a backdrop of what we are talking about today and it shows the importance of moving on with this type of legislation.

Our competitors are many and are friendly allies, whether it is the United States, or Australia, or the U.K. or the EU. We are friendly nations, but we compete and do have things that we can sell back and forth and encourage our mutual prosperity.

We should be aware that in the pursuit of free trade agreements our competitors have been very busy and active. The United States just over the last short period of time has concluded some 17 free trade agreements. It is in the process of pursuing another eight. Mexico, our other partner in NAFTA, has concluded 12 free trade agreements. If we go further south in the Americas, Chile has concluded 13 free trade agreements with other countries. In fact, its 13 agreements cover 43 separate countries.

Therefore, if we look at a situation where we want to deal with a country that has a free trade agreement with somebody else, its goods and services will get into those countries tariff and barrier free. That puts our manufacturers at a serious disadvantage. We need to look at reducing those obstacles and increasing and expanding our doors of opportunity.

At what is now referred to as the Washington conference last fall, the G20 leaders made a declaration that countries should not fall back into or delve into areas of protectionism. It is called a stand still on any protectionist activity. I would suggest that a stand still is necessary, and that was endorsed by trade ministers around the world at the following discussions that took place in Peru at the Asia Pacific economic meetings. From our perspective, we are going even further than that. We are not saying stand still, we are saying move ahead and overcome the inertia that is gripping the world in terms of trade right now.

Therefore, we have before us the European free trade area agreement. When we talk about what those letters stand for, some people might think this is a deal that engages all the European community. In fact, it does not. We are talking about four very sophisticated entities: Iceland, Norway, Switzerland and tied in with that, Liechtenstein. These are modern, sophisticated entities. They say that they want to engage with us and we want to engage with them to reduce and eliminate trade barriers.

The numbers coming in at the end of 2007 for two-way trade and investment with Norway were $4.7 billion. In the summer of 2008, Norway added to that investment another $3 billion just in the areas of oil, gas and agriculture.

There is a broader platform and picture that needs to be taken into account, because we are talking about engaging these four entities. However, for us, this is an entry and lever into the broader EU community for an eventual and much hoped for Canada-EU free trade agreement. This is something we are zeroing in on, something we have been discussing for some time. The Czech Republic has the presidency of the EU for the next six months. I was in Prague last month and I talked to officials there. I made it clear that we were ambitious on that score. We made that point with the European Commission as well. On another free trade area, being the EU area, we are very ambitious and are working toward the conclusion of discussions to get a formal framework in place to start that process.

In and of itself, the so-called EFTA agreement before us today is important for the prosperity of our citizens and the four entities named. However, there is the broader context which is important to keep in mind. Clearly, consultation between us and the provinces is very important when we look at these types of agreements. The consultation process involved in the EFTA agreement was extensive, and will continue to be. We want provinces to come forward with their areas of concern and sensitivity. That has been done in this process and those have been thoroughly fleshed out and addressed to the point where we could sign the agreement.

As an example, we had concerns from the shipbuilding industry in Canada. What happens when we take away the tariffs related to shipbuilding, we open ourselves up to global competition. We believe we can rise to that competition and meet any of the challenges the world has to offer, but we looked at those sensitivities, particularly those in Quebec and other provinces with shipbuilding industries. In a spirit of co-operation and understanding, as we discussed this with our four partners on the other side of the EFTA agreement, we agreed we to look at the removal of those tariff barriers, but do it over an extended period of time, 15 years in this case related to the shipbuilding industry. Therefore, the sensitivities we hear from around our country and from various industries are taken into account as we move along this road.

It also fits with our government's global commerce strategy, as we have talked about in our comprehensive action plan in which $60 million has been committed just to the area of doing what we can in terms of our global strategy to assist manufacturers, exporters, entrepreneurs and innovators to get not just the message but the products out there in a way that gets worldwide attention and shows that Canada has something to offer, which then increases our ability to manufacture, export and to be prosperous.

We are not stopping with this agreement. We have been very clear that we have agreements now concluded with Peru and Colombia. These will eventually come to the House. We had an earlier agreement with Jordan, and there are others in process. Our officials are in discussion with South Korea, Panama, the Dominican Republic, the CARICOM nations in the Caribbean, Singapore and the group of nations called the Central American Four, being Guatemala, Honduras, Nicaragua and El Salvador. We are actively engaged to ensure we do everything globally in our commerce strategy to keep the doors open and the opportunities very much alive for Canadians.

It is not strictly on a trade side. There are other areas that have to be pursued, and we do that in concert with the trade discussions. For instance, if we are going to invest in another country, our investors and business people have to be assured that there is a platform, a framework, that offers the benefits of rule of law, respect for contract law and other similar areas. We call these our foreign investment protection agreements. It is necessary to strike these with other countries. We will never guarantee that somebody's product will sell, but we can work with another country to ensure that the investment itself is subject to certain standardized rules and certain rules of contract law and investment law, banking law and credit, so at least our investors and business people know they have a level playing field and a platform when they go into those countries.

Along with that are science and technology agreements. We have put in place these very important initiatives with a number of countries, and I signed one not long ago with Brazil, where industry and the academic communities will know we have science and technology agreements, where both governments would pool an agreed upon amount of funds and then send out a message inviting the universities or scientific communities to bid for procurement of those funds to mutually pursue areas of science and technology.

Along with those, we look at a variety of other agreements that affect our economies. Air service agreements are very important when we are talking about giving choice to consumers, but also keeping costs down in terms of transporting and shipping product.

I might add we have in our budget considerable funds, into the billions of dollars, for our great gateways in our nation for shipping, such as the Asia-Pacific gateway. We have a gateway proposal and the funds to back it up for the Atlantic region.

We are doing everything we can, on a variety of levels, to build the platforms and construct the frameworks for Canadian entrepreneurs, innovators, manufacturers and exporters in virtually any area of endeavour who feel they have something worth selling. We will never guarantee they will be able to sell that, but we can guarantee we will smooth the way as evenly as possible within the context of the various trade agreements that are signed onto globally so their products can be established and Canada can continue to be prosperous.

I arrived in Switzerland for meetings on Friday and met with the vice-president. Literally moments before my arrival the upper house had in fact passed its portion of the agreement before us today. I am certainly not saying it was my arrival that moved that along. I would not even suggest that. However, it gave me great encouragement that the Switzerland legislators were dealing with it, that they saw this as positive and that they were moving it along. I assured them that we would be going through a similar process here and that, respectfully, with the input of colleagues here, we hoped for a successful conclusion of the discussions, the ratification of the agreement in our Parliament and the ongoing prosperity of Canadians, especially in this era of global concern.

Canada-EFTA Free Trade Agreement Implementation Act

[Stockwell Day, Conservative, Minister of International Trade]

moved for leave to introduce 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.

(Motions deemed adopted, bill read the first time and printed)

[Stockwell Day, Conservative, Minister of International Trade and Minister for the Asia-Pacific Gateway]

moved for leave to introduce 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.

(Motions deemed adopted, bill read the first time and printed)