Industry Committee on June 6th, 2006

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In their testimony earlier on, they mentioned that they were heading into a storm. I would say that they didn't strike me as being very well dressed for a storm.

[Maxime Bernier, Conservative, Beauce, QC]

I have confidence in the textile industry and in our government because we have recently provided some very significant support to the textile industry by decreasing those taxes that apply to their industry.

[Robert Vincent, Bloc, Shefford, QC]

Earlier, you mentioned facts and investigations. There is a tool at the disposal of those manufacturers who believe that dumping is occurring in their sector. That tool is called the Canadian International Trade Tribunal. The industry has invested more than $100,000 in making representations to that tribunal. They obtained a favourable ruling and a surtax will be imposed temporarily — and I emphasize the word temporarily — for three years.

Are these manufacturers being led to believe that those rulings will be enforced simply for the purpose of impressing them? Who reimburses the employers for their costs when a favourable ruling is handed down but the government does not enforce it? What is the purpose of this tribunal if their rulings cannot be enforced?

[Maxime Bernier, Conservative, Beauce, QC]

I believe you're referring to the tribunal's ruling on barbecues and bicycles.

[Robert Vincent, Bloc, Shefford, QC]

That is what I was referring to. Raleigh invested $100,000 in that case.

[Maxime Bernier, Conservative, Beauce, QC]

I should point out that in terms of that industry and bicycles, a 13 per cent duty has applied to imports of bicycles from China and Taiwan since 1992.

[Robert Vincent, Bloc, Shefford, QC]

Minister, I believe we're going off topic. My question was on the $100,000 that was spent on that case. There was a favourable but non-enforceable ruling. What happens to the money? Do the manufacturers appeal to courts whose rulings are not enforceable?

[The Chair, Conservative, James Rajotte]

We have to let the minister respond.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you, Chair.

What I want to say, and I'm going to add to that, is it's very simple. We had a decision and the government has to take its responsibility, and what we have to look at is the interest of all Canadians. And it's not in the interest of all Canadians to pay $67 more for a bicycle. So I think we have to look for a larger portrait, and that's what we did in this decision, and I'm very proud of that. I'm very proud that we fight for the general public, we fight for mothers and fathers who are going to buy bicycles for their children so that they don't have to pay $67 more. So it's a very good decision and it's a decision we're going to follow. I think we must go ahead. This industry is very competitive. I have the good fortune to have some bicycle industries in my riding, and they're doing pretty well.

So I think it's a good decision for Canadians and we're going to follow that path.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Vincent.

We'll go to Mr. Shipley now.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chairman.

I also want to welcome you to the committee and thank you, Mr. Minister, for being here today.

We talk about a lot of things that happen, and one of them that is obviously important is the budget, the budget that came out on May 2. It resonated well, I think, across this country in all areas. But since we're talking about manufacturing and research and development, I think certainly with business and universities in research and development it's been positive.

There have been some comments, one actually that came from the Canadian Federation of Independent Business. Those are companies that employ the majority of our citizens in this country, and they said, “This budget exceeds our expectations”; and then it ends by saying that it would be great if all the political parties in this minority government could support these initiatives.

This next comment is from the president of the Association of Universities and Colleges of Canada: “We are pleased with the budget's support for university research, as well as the government's recognition of the important role that research plays for Canadians.” The president said: “These increases in research funding underline the government's commitment to promote a more competitive, more productive Canadian economy.”

I think those are fairly strong words that we would hear. And then we have the Canadian Manufacturers and Exporters, whose president, Perrin Beatty, said, “This is encouraging--a better budget for business than we have seen in the last five years.” .

Those are coming from fairly significant individuals, who are well recognized, and companies or associations of credibility. I'm wondering if you were not just to take those comments at par value maybe, but rather, I wonder if you could take those and expand somewhat on what actually they mean for Canadians and what value that actually means for Canadians.

[Maxime Bernier, Conservative, Beauce, QC]

In answer to your question, yes, our budget was a very important step towards a stronger Canadian economy. We decided to reduce the income tax for the companies from 21% to 19% by 2010.

Also, concerning my own portfolio, the science and research portfolio, in this budget we provide additional funding for scientific research and technological development.

For example, we put in this budget $40 million per year for the indirect costs of research programs; another $20 million per year for the leaders opportunity fund of the Canada Foundation for Innovation; another $17 million per year into the Canadian Institutes of Health Research; another $17 million per year for the Natural Sciences and Engineering Research Council of Canada; and another $6 million per year for the Social Sciences and Humanities Research Council of Canada.

All these new funds follow a discussion that I personally had with members of the scientific community and the business community in Canada. What they told us at the beginning of February and March is that it's very important fundamental research in Canada and it's in line with our values. We think R and D and experimental research are important to the development of a strong country, so we want to be in line with the other countries all across the world. That's why I'm proud of what this budget delivered.

Also, last week I was in Edmonton and in Vancouver, where we had a round table with business people and members of the scientific community and researchers. They all told us that this budget was very good and was a big step for bigger and smarter research in Canada.

From this expert panel report, as we said in the budget--it's a very important piece in the budget--my colleague Finance Minister Flaherty and I are in charge of building a strategy for science and investment, and we're going to deliver that before the end of this year. That's why I did some consultation and I'm going to do consultation during the summer, to make sure that we have a strong strategy for science and technology all across the country.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I have another quick question, until I run out of time.

Could you expand a little bit on the positive business climate that you feel has been developed by this 2006 budget?

[Maxime Bernier, Conservative, Beauce, QC]

I think it's important, and as I said in my speech at the beginning, the tax reductions for small businesses that we delivered in budget 2006 reflect our intention to improve the productivity and success of small businesses and medium-sized businesses in Canada, by reducing the time and resources they devote to being in compliance with all the regulations that we put on our small enterprises.

So in our budget, $6 million over two years has been allocated to help expand Biz PaL. Biz PaL, as you know, is a program that will help enterprises to deal with the new technology. It is a partnership of federal, provincial-territorial, and municipal governments that streamlines and harmonizes permits and licence requirements. We're going to be sure that each small and medium-sized company is able to meet permit and licence requirements in a more effective way.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Shipley.

We'll go to Mr. Julian for six minutes.

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

Thank you very much, Mr. Chairman.

Minister, thank you for coming today.

I would like to come back to the softwood lumber issue. In April, you stated that you did not agree with providing loan guarantees to the softwood lumber industry. The government obviously followed your advice, because one of the outcomes of the negotiations on the agreement reached at the end of April included the threat of not providing loan guarantees if the industry pursued this issue with NAFTA.

We have an agreement that is experiencing problems, if not on the verge of collapse. Last week, industry representatives stated that they were concerned that each new draft was worse than the previous one, that our rights under NAFTA were being surrendered and that all kinds of privileges were being granted to the American industry.

My question is very simple. Have you changed your mind? Would you be willing to state today that if the agreement collapses, as many people predict it will, the government will be willing to provide loan guarantees in order to allow the process to run its course under NAFTA and to defend our rights under NAFTA?

[Maxime Bernier, Conservative, Beauce, QC]

Thank you for the question; it's most appreciated.

In terms of the softwood lumber industry, that is a file that my colleague, Minister Emerson, has managed with great knowledge and tact, and we are very pleased to have him with us in cabinet. Mr. Emerson has been a leader in the softwood industry and he is very familiar with that sector.

We were therefore able to reach an agreement in 80 days, something the previous government did not manage to do in 13 years. We can now focus on improved prosperity for the softwood lumber industry workers. This agreement guarantees free access to the American market at current market prices and puts an end to all litigation. It's not the lawyers who will be better off as a result of this agreement, but rather the people in the industry.

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

Minister, that does not answer my question. My question was on loan guarantees. Are you willing to provide loan guarantees to the softwood lumber industry if the agreement collapses?

[Maxime Bernier, Conservative, Beauce, QC]

I'm telling you that the agreement will be signed. We have a process, lawyers are reviewing the final details, and the agreement will be signed and abided by. We therefore have no need of loan guarantees. What we are providing workers with is the guarantee of stable employment in a stable market for the next eight years.

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

So if I understood you correctly, there will be no loan guarantees if the agreement collapses. You answered my question, but you say that there will not be...

[Maxime Bernier, Conservative, Beauce, QC]

The agreement is on the verge of being signed. I trust in the officials of the International Trade Department and in Mr. Emerson on this file. The agreement will be signed as agreed to in Washington a few months ago.

As I said in the House — this is not a new statement — there will be no loan guarantees for the forestry industry because we have reached an agreement that respects... Ninety per cent of Quebec stakeholders approved this agreement as negotiated and a vast majority of softwood lumber businesses in Canada also supported it.

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

Mr. Minister, we heard from the industry last week and they were not saying that. They were saying that they had very serious concerns about where this is heading, and very serious concerns about the fact that each draft is worse than the last one. I am appalled that this government is not thinking of loan guarantees for an industry that urgently needs them.

I take issue with your comment around free and guaranteed access to the American market. You've said that before. The benchmark price has already changed. We're already subject to volume caps and an export tax, which actually makes our current situation worse than the illegal penalties are currently, and certainly much worse than what we can anticipate receiving after the NAFTA panel rules in August. You've said a number of times that somehow we are going to get free access. Under the current benchmark price, we don't. We have a volume cap, we have an export tax.

So will you take back your words? And what measures will you take--

[The Chair, Conservative, James Rajotte]

Mr. Julian, we have less than a minute for the minister to respond.

[Maxime Bernier, Conservative, Beauce, QC]

What I just want to add is that I believe we have an agreement--that's a reality right now--and I'm very pleased that it is a very good agreement for all Canadians.

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

Given that we do not have free access now, that there is an export tax that would take effect as soon as we sign this agreement, and that we have a volume cap as well on the current benchmark price, do you concede that your comments are misplaced and that we do not have free access?