Debates of May 3rd, 1999

Supply

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Speaker, this debate is very interesting from the point of view of the motion that was tabled. I want to read the motion and try to get some understanding and appreciation of what the Tories are looking for. The motion reads:

That this House calls on the government to develop a new national shipbuilding policy to support the revitalization of the Canadian shipbuilding industry by maintaining and advancing the degree of excellence and the technologies for which Canada is historically renowned, given that Canada has the longest coastline of any nation in the world and that historically Canadians are among the finest shipbuilders in the world.

Whilst we were debating that I tried to understand exactly what it was that the Tories were looking for. I go back to asking what is the Tory policy. Since they were in government for 10 years they must have an articulated position on this issue but I cannot find it for the life of me.

At this point in time I doubt very much if members of the unions involved, in particular the Marine Workers Federation of Atlantic Canada, would be all that pleased to be looking for policy at this point. I think the marine workers are looking for action. After all, we have lost a fair number of workers from that industry in the last number of years. Over the 1990 to 1996 period total employment within Canada's shipbuilding and repair industry has declined from 11,984 to 5,566 workers.

I can hardly believe we are in the House of Commons today, with that kind of record in the shipbuilding industry, looking for more policy. What we should be looking for, and what the Tories should have been going after, is some things that will increase productivity. I will talk about those in a moment. From my perspective they would have been better off providing the House with a better motion, something that would create some action.

I heard the Minister of Industry talk about some of the things that were going on. I agree with him that the international playing field has been restructured. We acknowledge that the playing field is not equal due to the subsidies in other countries.

The Liberals talk about federal policies: that we must export more, that international competition is stiff and that there is overcapacity in shipbuilding. While that may be the case there are still some answers and some resolutions that can be made. By the way, I will be sharing my time with the hon. member for Edmonton East.

We talk about the accelerated CCA, the capital cost allowance write-off over four years. The minister is correct in saying that is not only an accelerated write-off but in fact a very fast write-off. Most assets today are either depreciated on the basis of the life expectancy of the asset or on the basis of a certain percentage. This particular write-off of four years is a benefit to the industry.

There are research and development tax credits in the system. As the minister said before, the Export Development Corporation has loans that are very close to commercial rates. All these things are in place and should be encouraging growth in the shipbuilding industry.

Once again we ask ourselves, if these things are in place and all of these things have occurred, why the industry is not expanding but actually contracting. A broad based tax relief for all Canadians and Canadian industry is one of the major impediments to the expansion of the shipbuilding industry. Most Canadians are coming to the conclusion that we do not have a revenue problem in the country. It is an expenditure problem. It is the spending of our money in the wrong places.

The Tories say we need some relief, some loan guarantees and more taxpayers dollars in the system. I just do not think they are accurate. Accelerated capital allowance, the research and development tax credits and the Export Development Corporation loans at lower rates are what we need and on the right track.

The Tory motion actually speaks to what the party is looking at. First, it does not seem to have a policy. Second, it is counting on the government to look at policy when it is not policy that is needed. It is tax relief. Third, without that party over there talking about tax relief we will pick up the charge on that issue.

If we look at what is necessary, loan guarantees force the taxpayers to take on a financial liability that banks and venture capitalists consider too risky. That is true. We need to get back to the point where industry is confident about expansion. I know it is a change of thought and a change of process, but the only real way that can be accomplished is for the government to seriously consider broad based tax relief. Without that, I am afraid the answer to this problem will not be in the House of Commons.

As the minister also said, there are more players in this exercise than just the federal government. There are the provincial governments. The Government of Nova Scotia has a shipbuilding guarantee program. There are other players and the shipbuilders can look at how to be more competitive.

Meanwhile, while all this discussion is going on, marine workers are asking why the Tories are talking about more policy and why the government is saying that what it is doing is great and things are coming along. That is not the case. We should be saying to marine workers and to shipbuilders that effectively now we will take the surplus funds we know are in the federal government and do constructive things like tax reduction. That is what is required. That will help to move this industry along as well as many other industries.

I cannot say it any better than that. That is what the bulk of Canadian citizens are looking for today. They do not want any more subsidies. Loan guarantees mainly put the liability back on the federal government. It is time to look at the tax relief Canadians need not only as an industry but as individuals.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I listened very carefully to what the Reform member just said.

I believe his comments reflect what ever member in the House has been saying, that subsidies are out of the question. Everyone agrees on that.

He mentioned tax breaks. This is what people want also. Usually the Reform Party refers to tax breaks as incentives. However a refundable—I stress refundable—tax credit, which is one of the measures Canadian shipyard owners are asking for, is important because it is an incentive that kicks in after the work has been completed. Therefore, it makes it possible to build something that otherwise would not have been built. It brings in tax revenues as well as creating jobs.

I would like to know whether the Reform member agrees with this kind of measure.

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Speaker, it could be a measure that is looked at, but the member will have to convince me that there is a big difference between that and accelerated capital cost allowances which in effect serve the same purpose. If one works better than the other, I am certainly not opposed to it.

Two things are required to help this industry today: tax relief and the expansion of the Atlantic rim trade. If both of these issues were looked at carefully and quickly by the federal government, we could see some changes in the industry. As mentioned in the motion put forward by the Tories to develop a new national shipbuilding policy, I think we are beyond that request and well beyond that as a solution. It is not policy we need. We need broad based tax relief in some form or another.

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

Mr. Speaker, I found my colleague's remarks very interesting in light of the need to have some defined policy on this important issue particularly for the Atlantic provinces.

I know that my colleague was born and raised in the Atlantic provinces and has roots there and visits there regularly. Would the member expand on what he sees the need would be for government policy and public policy that would assist the industries in Atlantic Canada in growing and in providing the jobs and income that are needed in that part of the country?

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Speaker, policies are necessary to expand Atlantic Canada. The shipbuilding industry is only one part. One of the policies is to keep government out of it. I have seen nothing but interference in many areas in Atlantic Canada. We could talk about the gas exploration industry, mining, and the oil industry. Most industries in Atlantic Canada have been funded to the point where many of them were economic loss leaders. The best thing we could ever do in developing a policy for Atlantic Canada is to get government out of it and get industry into it.

We see problems now with Devco. Problems are already starting with Voisey's Bay. There are difficulties with the gas industry and the interference by the federal government re-routing the pipeline. Every time those folks touch something in Atlantic Canada it goes wrong and ends up being a serious problem.

My solution is to get government out of it. Let Atlantic Canada grow. It has more resources and more potential than many other parts of the country. Atlantic Canada's biggest detriment to expansion and progression is government. That is where the answer lies.

[Peter Goldring, Reform, Edmonton East, AB]

Mr. Speaker, I am pleased to speak to the motion proposed by the hon. member for Saint John. This is a votable motion as should be the case in most activities in this House whether initiated by the government or as is the case here, by an individual member.

I will be supporting this motion. My comments will serve to demonstrate how two parties with supposedly different political outlooks can arrive at an agreement as to an outcome. Where we have disagreements is with respect to the specific processes by which mutually agreed upon outcomes can be arrived at.

By this motion the hon. member seeks the approval of this House to call upon the government to develop a new national shipbuilding policy to support the revitalization of the Canadian shipbuilding industry. The member asserts in her motion that historically Canadians have been viewed as among the finest shipbuilders in the world.

The motion addressed here today involves an assumption that our current shipbuilding industry is in a somewhat spent state and hence requires revitalization. This would rank well in the annals of understatements. There is also in the hon. member's motion an implicit view that the shipbuilding excellence and related technological advancements associated with Canadian shipbuilding are both in peril. I am in agreement with these views as well.

I have been able to develop a degree of familiarity with Canada's wartime marine history. I, along with the member for Saint John, have been a staunch advocate of the position of our merchant marine veterans who seek equivalent recognition, benefits and compensation for denial of equality relative to their wartime service in defence of Canada. Twelve thousand men and women served. Over 70 ships were sunk out from under them.

If we think of the history of Canada, the history of its ships comes easily to mind, the Bluenose being the most famous of Canadian ships. In my own family history, at the turn of the century Captain Richard Goldring sailed a commercial schooner aptly named the Maple Leaf from Port Whitby, Ontario.

However, in speaking of the nature of shipbuilding in modern day commerce we are talking about ocean-going supertankers and mega passenger vessels of such size they cannot be accommodated by even the Panama Canal. Some are specifically intended for one ocean travel only. Vessels of this magnitude need to be developed and constructed by world class companies.

World class companies become so by building on their experiences. Such experience exists in the Canadian shipbuilding industry. We must develop an approach to build on such experience and to assist in the creation of world class shipbuilders that are properly reflective of our history and expertise.

We were the leaders in the construction of wooden ships. Tall ships were the daily occurrence in Quebec City and Montreal with the St. Lawrence River being the portal of entry, a route of imports and exports, both cargo and human. Immigration to Canada was the result of our shipbuilding skills. The face of our nation is very much due to our shipbuilding efforts. Most immigrants came to Canada in Canadian built ships.

What happened to cause a decline in the shipbuilding industry to its current state? I suggest that the shipbuilding industry has been lost twice in Canadian history and in both cases the loss has been primarily due to research and development deficiencies.

The first decline occurred in the transition from wooden to steel ships at the turn of the century. At the time, Canadian shipyards in Quebec and the maritimes built most ships of commerce used by England and many other countries. Then we lagged behind Britain where the steel industry was already well integrated with the shipbuilding industry.

At the time, our history was that of exporting our natural resources to be manufactured elsewhere. The one notable exception, being of course wooden shipbuilding, was where Canada excelled. The interrelationship between the steel industry and the shipbuilding industry in Canada did not occur readily. The technological transfer from wood to steel simply did not happen.

I have said that we lost our shipbuilding industry twice. The second occasion was after the second world war. During the war our shipbuilding expertise was as renowned as the member's motion would have us believe. After the war however, it seemed that once again the tendency toward looking inward and to not exploit competitive advantages took hold yet once again.

We know for example that many of the difficulties of our merchant navy veterans had to do with the fact that after the war it was assumed our shipping industry would continue to be robust and that the merchant navy veterans would have no job worries. We know that within five short years after World War II many of our merchant mariners were unemployed. Shipping interests had focused on other parts of the world, taking much of their shipbuilding needs with them.

Once again the technological transfer from war purpose vessels to commerce efficient vessels did not take place. Canada's shipyards went into decline. Canada was once a major player in the global shipbuilding industry. Over the decades the history of Canadian shipbuilding has had its ups and downs, the highest demand coming during the war years.

For every one direct job lost in the shipbuilding industry, there are two or more jobs lost in the local economy. What was once an important employer in Canada has withered to the point where we cannot even meet our own modest shipbuilding needs let alone become a player in the global market.

In my view, I would suggest in the experience of most Canadians, economies do not gain any sustaining strength through government subsidies. Government subsidies do not in the long term make any industry strong. Instead, industry must gain its strength through trading internationally in the global peacetime economy.

What is the incentive for long term research and development if the government is there to pick up, or contract, or otherwise bail you out? It should be noted that the shipbuilding industry itself contributes little to its own research and development by world standards.

I will briefly mention taxation. It would appear to be self-evident that if income taxes are higher, wage demands will be higher. We see this in the auto industry and other industries which are attempting to compete globally. What people look to is what they are netting after taxes. Gross salary is largely irrelevant other than as some misguided notion of status or position.

Without getting into great detail, I would suggest that any thought of revitalization of the shipbuilding industry has to be based on a mix of lower taxes and enhanced freedom with respect to international trade. The answer to our problems is not to be found in further government subsidies, but to level the playing field for international trade.

Our country has the raw materials. It has the ports and it has the shipyards. It has the willing capable workers. Canada even has a 75 cent dollar selling price compared to the American dollar. Why are there no sales of Canadian made ships? High taxes and trade barriers. That is why.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I am very pleased to speak after my colleague and I am happy to see he supports the motion. His position is not unanimously shared by members of his party. I hope he will be able to bring them around.

Last Saturday, as I was driving through Gaspé, on top of a hill, I came upon the village of Les Méchins, where Denise Verreault continues to run the small family shipyard. As a businesswoman in a maritime area, she decided to take matters into her own hands and develop this sector.

She has now decided to set out on a cross-Canada tour to encourage all the appropriate federal and provincial ministers to develop a genuine shipbuilding policy.

I think Mrs. Verrault would be quite proud of the motion before us. Her idea, for which she had a degree of support, has finally been taken up by others. Here is my question to my colleague. The hon. member for Lévis-et-Chutes-de-la-Chaudière has been actively supporting the shipbuilding industry. He has helped to get things moving and has made public opinion aware of this issue.

When we ask for regional economic diversification measures for regions like the Gaspé Peninsula, Les Méchins or all other Canadian regions that have what is needed for a shipbuilding industry, would the hon. member agree that the best thing we can do is to pass Bill C-493, which was introduced by the hon. member for Lévis-et-Chutes-de-la-Chaudière?

It would not provide subsidies, but tax measures to make Canadian shipbuilders more competitive internationally, a loans program with guarantees of up to 87%, just like in the United States, an Income Tax Act amendment to bring leasing rules more in line with those in the rail industry, and a refundable tax credit similar to the one in Quebec.

In this context, would these measures be in tune with his vision, because he is not looking for subsidies, but government assistance programs? That would help us to diversify our regional economies. Quebec and Canada could also regain their position on the world shipbuilding market.

[Peter Goldring, Reform, Edmonton East, AB]

Mr. Speaker, I believe the true way to develop and encourage the industry is to approach the problems. This would not necessarily be through straight subsidies.

The problems seem to be apparent. I think we could relate back to possibly the 1960s when I first was an adult and the first time I voted. It was noticeable to me at that time that the Canadian dollar was $1.10 to the American dollar and the taxation level was far lower than it is today. Yet somehow there was some help to our shipbuilding industry at that time.

These are the things that we should be addressing as well as the very significant problems of levelling the international trade situation by possibly approaching a repeal of the Jones act. It seems to give unfair discrimination against Canada to its shipbuilding industry. These are the areas we should be approaching to resolve the taxation system and levelling the playing field on international trade.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, Americans are fond of recalling their first dollar. I can recall my first dime. It was a very small shiny thing. I remember on the one side of that small shiny coin there was the head of a man. It did not interest me much and I do not think the head on that side of the coin interests me much any more, or still, I should say. Of course that was King George VI.

On the other side of the coin, on the dime, there was a picture of a ship. It was a ship in full sail coming right out of that coin. I thought that was one of the prettiest things that I had ever seen as a very small child. This is a memory that certainly predates school age. I should also tell hon. members that dime at the time bought one Coca-Cola, but that is not the reason why I remember it so well.

That little ship is still sailing on that dime, only now it is on nickel alloy instead of a sea of silver. That ship connects this debate to ourselves as Canadians.

Later, when I got a little older, I started collecting stamps. Anyone who is listening who was ever a stamp collector will remember that the 50¢ Bluenose is without any question the most beautiful stamp that Canada has ever produced. It is a classic stamp. Of course the Bluenose is that famous vessel that was built in Nova Scotia during the 19th century that won all the races and yet was a fishing vessel at the same time.

Indeed, much, much later in life I had occasion to visit a replica of the Bluenose in Toronto harbour. It was a wonderful ship. It reflects the heritage of Nova Scotia and the maritimes, because of course in the 19th century the shipbuilding industry in the maritimes, and particularly Nova Scotia, was world class. Nova Scotia was famous for its wooden ships and the Bluenose was the most classic ship ever built in Canada, for that matter.

There are other connections of the shipbuilding industry to Canada's past. I was listening to my Bloc colleagues who have taken a very active interest in this debate and I congratulate them for it because I come from a riding that is in central Ontario, just west of Hamilton, and one would think there would be no real connection with the shipbuilding industry there.

In the 17th century a very famous French explorer visited my region at the head of the lake, at Burlington Bay, and his name was La Salle. He was the explorer who actually founded Louisiana. La Salle in the 1670s explored down the Ohio River and Mississippi right down to Louisiana, to the mouth of the Mississippi, and claimed it for France.

In the 17th century the French in New France were probably the world's greatest entrepreneurs because for La Salle it was not just exploration. It was the development of the fur trade. La Salle built the very first ship on the upper Great Lakes. He built the Griffon in 1678. He built it not very far from where I live at Niagara Falls, above the falls.

That ship set sail. It was 45 tonnes, built from white pine in the area by hand. It set sail on Lake Erie and went up to Michilimackinac. In 1680 it picked up a cargo of furs to return to the port at Niagara and disappeared. It is one of the great mysteries of Canadian history, what ever happened to the Griffon . In the cold waters of Lake Ontario, Lake Michigan or Lake Huron, for that matter, there is a very good chance that the Griffon will still be on the bottom and in perfect condition.

We know this because during the war of 1812 there was a businessman in my area who built a trading ship. The area was still forest and hardly developed. It was seized by the Americans. It was armed in the war of 1812 and sank off St. Catharines during a storm. Not many years ago they discovered that ship at the bottom in perfect condition.

The history of shipbuilding in this country transcends this country. It is all across this country. In that sense I think the introduction of the motion in the House is a very appropriate thing to do because it does touch on our history.

I do have quarrel with the motion in this sense. The motion suggests that the federal government needs to develop a shipbuilding policy, as though there was not a policy at all to date, and that it should revitalize the Canadian shipbuilding industry by maintaining and advancing a degree of excellence and the technologies that Canada is famous for.

Those are very noble sounding words. I appreciate they come from a resolution that was passed at a Liberal convention in 1998. I point out that a resolution that is passed at a convention is not the same thing as bringing something before the House. If I find fault with the motion, I find fault with it because it does not suggest a significant way of addressing the problem of Canada's shipbuilding industry. I suggest the reason is because it does not deal with the terrible problems that Canada's shipbuilding industry is facing.

The member for Saint John was the lead off speaker for the Conservatives, and this is a Conservative motion. She proposed that what the government should be doing is it should be sweetening the loan support for people who are buying ships or it should change the tax laws slightly with respect to leasing and little fixes like that. That does not address the problem of 40% overcapacity in the shipbuilding industry around the world. That does not address the fact that South Korea alone has $10 billion worth of orders for 1997.

Canada is not alone with respect to a problem with its shipbuilding industry. All we have to do is search across the world wide web and what we will find is that the European Union is desperately worried about the fact that its shipyards are beginning to perish because it cannot compete on the open market with particularly South Korea and also Japan.

We are faced with an overcapacity in the shipbuilding industry, and we are faced with the Asian flu for example which has lowered the currency in South Korea enormously. They have cheap labour, cheap currency, and they have a huge shipbuilding infrastructure.

The OECD has had meetings just in the last few months in which it has tried to come to grips with this problem in the shipbuilding industry because it affects almost every country.

Brazil, Romania and Russia are complaining. Both communist China and Taiwan have very active shipbuilding industries, but no one seems to be able to compete with the South Koreans. Indeed, if we follow the Internet, there are even some complaints or some suggestions that the South Koreans are using IMF dollars to unfairly buoy up their industry. There is a problem there. When put in that context, a few tax fixes is not going to correct, not going to help, not even going to address the desperate problem that faces Canada's shipbuilding industry.

Then there is the other aspect. The other problem is that during the North American Free Trade Agreement the Tories, the former government of the party that has advanced this motion, had an opportunity to give shipbuilding the protection of the North American Free Trade Agreement, particularly by doing something about the Jones law. The Jones law is a law that forbids carriers from American ports to other American ports to use anything other than American made ships.

There is a huge amount of traffic in coastal vessels that runs up and down the American eastern seaboard. If we had managed to get only one-tenth or maybe only 1% of the shipbuilding market of that traffic, we would not be having this debate today. It was a huge failure of the free trade agreement not to include shipbuilding.

We have this dilemma. It is not a simple matter of a couple of minuscule tax fixes. That will not do any good at all. We could try it but it is not going to do any good. What the minister has said is closer to what we must do. He said that we have to put pressure on the OECD to come to terms with the unfair advantages that South Korea and Japan have been enjoying in the shipbuilding industry. We have to bring it into the international forum and make it into an even playing field.

I point out that the minister and the member opposite from the Reform Party in his last remarks during questions and comments said that maybe we have to go back to the United States and do something about the Jones law. I would say he is precisely right. We have to go back to the United States and offer it something to allow us to take part in that industry in the United States. Just a small percentage and we would be doing just fine. We have to do that. These are things perhaps that are almost wishful thinking.

As I mentioned, the minister in his remarks said that Canada is proceeding on these two avenues right now. There is no question that the federal government does have a policy, but if I may add my dime's worth to this debate I think we need to think of novel approaches as well.

I hate to bring up the Government of British Columbia but I am going to do it. The Government of British Columbia has undertaken a very controversial, if not notorious, ferry building project. In order to buoy up the industry in B.C. the Government of British Columbia undertook a project to build three fast ferries out of aluminum hulls, the idea being that hopefully they would develop new technology, create competitive vessels and develop expertise. Unfortunately there have been major cost overruns. It projected $70 million for each vessel and now the overrun is running at approximately $400 million.

That is not the kind of thing we want to see in this climate of fiscal prudence, but there is something very strong to be said for the federal government investing not only in the shipyards to produce the ships it needs but also through various technological enhancement programs or infrastructure programs. There is a lot to be said. If the industry rationalizes itself so that it comes to the federal government in a coherent fashion, perhaps we can work with the provinces and set shipbuilding along a course where we build specialized high tech ships which we can sell abroad.

Right now I do not think there is much more that we can do other than what the minister is already doing, which is pressuring the OECD to come to terms with the unfair competition that is occurring in shipbuilding across the world. We can also do something about the unfair competition in South Korea and talk again to the Americans. That is a policy. That is what we should be doing and that is what we are doing.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I get the feeling that my colleagues on the government side are going to vote against our motion.

What I would like to see is them voting for our motion and then taking the steps stated by the hon. member: to sit down with the World Trade Organization and talk over with the OECD how exactly we can change these thing. That can come from this new shipbuilding policy which we are talking about.

I want to clarify something for the member. When we talk about the new construction ships built in Canadian shipyards being excluded from the present Revenue Canada leasing regulations, what we are saying is that under the current rules, the company pays more taxes in the first several years which runs counter to the actual economies of owning and operating a ship to the useful life of the ship.

Under the proposed change that we have mentioned, the company would pay most of the taxes toward the end of the useful life of the ship. We are saying that it would get it all, but this is what the industry is saying to us.

I am asking members to assist and help us. Let us all work together to come up with a national shipbuilding policy that will help all of our people throughout Canada. I ask my colleague to look at that in a positive way.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, as I said, the matter of tax fixes is not what this is all about.

I point out that during the debate the member for Edmonton—Strathcona felt that the motion did not have any real substance. He said that the Reform Party would support it anyway because it was inoffensive.

I suggest that we in the House are not in the business of debating ideas that do not have substance because they raise false hopes. If there had been a real idea or something significant in the motion I would have supported it. As it stands, I do not expect to be able to do so.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, since the very articulate member is used to these kinds of debates, I want to ask him some specific questions.

If he remembers attending the last Liberal convention, he must remember that the Liberal Party resolution was approved by a high percentage of supporters. Did he vote in favour of the resolution at the last Liberal convention in 1998?

As a matter of principle, does the hon. member think that it is normal that, six years later, we are still waiting for the summit his party promised, in 1993, to hold within a year? Does he think it is normal for everyone, except the Minister of Industry, to agree that things are not as they should be in the shipbuilding industry, which is only operating at 40% of its capacity? Does he think it is normal to be able to do nothing and to bow down before the American giant, saying nothing can be done? Does he think it is normal?

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, as I pointed out in my speech, the minister gave the policy and we delivered. A policy is in place and it is the best policy we can have under the circumstances. This a global problem. We have delivered a policy.

If any of the members of the opposition had a new idea to add to that policy I have not so far heard it.

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, I have just two quick points.

The hon. member keeps talking, as do others on that side, about the policy, about having a policy and about the minister giving the policy. I have yet to see this policy in writing and to see exactly what it entails.

He mentioned in his speech that we should go to the Americans to see what we can give them in order to get a small piece of this business. I guess I take some offence to this idea of us always going with hat in hand to the Americans. It seems to me this is what we are doing all the time. We did it on the ethanol case. We did it when they would not allow us to launch our satellite. Bill C-55 was another example. We could go on and on with the examples of how we are constantly going with our hat in hand to the Americans.

Why can we not stand up as Canadians, develop a policy for ourselves and put something on the table with strong force rather than going to see what we can give in order that they allow us to have a part of this business?

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, this is a crisis of international sales, of shipbuilding. We cannot get into the American market and we cannot do it alone in Canada. There are no markets in Canada that will sustain our shipbuilding industry. The American market is protected because that other party over there, in that direction generally, failed to get it into the free trade agreement.

It is not a question of going hat in hand. We are now at a major disadvantage and people are suffering. We are losing one of our heritage industries because the Conservative Party or the Conservative government never took the proper steps when it arranged the free trade deal with the Americans.

[Peter Goldring, Reform, Edmonton East, AB]

Mr. Speaker, I believe the government had indicated earlier that one of the factors in the shipbuilding industry is high labour cost.

The hon. member across the way mentioned earlier the low cost of Korean labour. Could he comment on whether it is really a multiple factor on labour where we have higher income taxes, a lower productivity level or a varying productivity level that would be a factor?

The factor here of wages does not necessarily come into this discussion at all. After all, we are also competing on the world market in shipbuilding with England and Germany whose wage levels are relatively high. Could the hon. member comment on the taxation portion and productivity portion, and whether it is the actual root wage itself?

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, in his speech, this very member recalled when the Canadian dollar was worth $1.10 to the American dollar. He thought that was a happy time. Precisely the problem now is that the Korean currency is so low. It is below the Canadian dollar and below everything. It means that Korean labour, relative to North American labour, relative to Canadian labour, is very underpriced. The problem is to understand not just labour costs, but to understand the difference between the values of international currency.

[Mark Muise, Progressive Conservative, West Nova, NS]

Mr. Speaker, I listened quite intently to my hon. colleague from across the way. Yes, Nova Scotia was a fine place where ships were built, especially in the years past, but it is still a very good and strong shipbuilding place.

My concern, however, is that there is too much partisanship in this debate. This issue is something that affects Canada from coast to coast to coast. I would like to see the members across the way forget all the partisanship and work on the issue that is so very important here. A vital part of our Canadian economy is being fluffed off as something that is not important. They say that our motion does not have substance. They are the government; they should put the substance in it.

Would my hon. colleague stand up in the House and say he will work with his colleagues to get rid of the Jones Act and other items that would benefit us as Canadians?

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, all I can say is what I have said. It seems the opposition cannot come up with a better expression of a direction to take the government, the economy, the people of the maritimes and the shipbuilding industry into than a motion that has no original idea to it, and in fact was borrowed from the Liberals. When is the opposition going to come up with its own ideas?

[The Acting Speaker (Mr. McClelland)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Halifax West, Kosovo; the hon. member for Mississauga South, Kosovo.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, first of all, I want to tell you at the outset that I will be sharing my time with my hon. colleague for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.

I am very pleased to take part in this very important debate, even if it is quite technical. It is very important for the development of economically significant regions of Canada, like the maritimes and the coast of British Columbia and particularly Quebec.

I am very pleased to participate in this debate as member of Trois-Rivières, which is a maritime city, and also as labour critic, since it has an effect on the institutionalized disorder that we see in that industry. I believe there is too much reference to labour. As coast guard critic, I know that some people of the coast guard are also closely involved with the issues related to shipyards.

I will read, for the purpose of the debate, the motion introduced by the member for Saint John.

That this House calls the government to develop a new national shipbuilding policy to support the revitalisation of the Canadian shipbuilding industry by maintaining and advancing the degree of excellence and the technologies for which Canada is historically renowned, given that Canada has the longest coast line of any nation in the world and that historically Canadians are among the finest shipbuilders in the world.

I would now like to pay a very special tribute to my colleague and friend, the hon. member for Lévis-et-Chutes-de-la-Chaudière, who has done not only a remarkable job on this issue but a task that could be termed as colossal. Indeed, for more than a year, the member for Lévis-et-Chutes-de-la-Chaudière has travelled all across Canada and has met all stakeholders, builders, all shipyard operators that are members of the shipbuilders association, despite the fact that he is not all that fluent in English. Nevertheless, he managed to deal with the situation and he established excellent contacts with employers as well as with unions in the shipbuilding industry.

Through his efforts, he succeeded in bringing together, on Parliament Hill, on December 8, 1998, representatives of a large Quebec shipbuilding firm and almost all Canadian unions involved in the shipbuilding industry. According to a union representative, this was a first in Canadian history. He managed to bring together, to discuss the problems faced by shipyards, many stakeholders as closely connected to the industry as these people were. He pulled a major coup by bringing to the same table representatives from the four opposition parties, including three out of the four leaders, to make the necessary representations and put pressure on the government which, in this issue as in others, has proven to be inept. The purpose was to try to improve the way this very important industry has been treated.

This resulted in representations to the Standing Committee on Industry with a view to putting forward, through this committee, recommendations reflecting the comments or the vision of the labour representatives as expressed at this meeting. Unfortunately, in this issue as in others, the government lent a deaf ear and eventually only very reluctantly agreed to conduct a broad study, reportedly too wide focussed, on the productivity of shipyards. The timetable and specific goals of the study are said to be unclear.

This cannot be stressed often enough: it is totally nonsensical, ludicrous, and deplorable to be debating this issue today when we know how critical this industry is to Canada's economy.

Canada boasts the world's longest shoreline, three oceans—the Atlantic, the Pacific and the Arctic—and, as long as we are still part of it, the most important water route in the world, the Saint Lawrence River. In spite of all these very positive factors, shipbuilding in Canada is in a deplorable state, reportedly operating at merely 40% of its capacity.

Yet it is a high tech industry, because building ships is a complex operation. It is a category of industry that has to apply the most stringent of quality standards. It is a member of the ISO 9001, ISO 9002 club. ISO 9001 is for the aeronautical industry. This industry is governed by very demanding quality standards and the shipbuilding industry in Canada and in Quebec can hold its own with any other in the world.

This government, true to form, has been negligent. It is all very well to speak today of shipbuilding, but we know that this government has been negligent with the air transportation industry, with the rail industry, with the shipping industry, not just with shipbuilding.

Quebec has paid for that negligence. We have seen shipyards close down in Gaspé and Sorel, a small-scale one in Lévis, and Vickers in Montreal, all in the past 15 years.

I would like to return to the manpower issue. I am concerned, as I have already said, as the labour critic, by the references to labour costs. This does not hold up to analysis, according to the figures available to us. According to the 1994 figures provided to us by the shipbuilders, via the union of the marine workers federation, the CAW, shipyard labour costs $15 U.S. in Canada, while only 2 countries out of the 12 analyzed pay less than Canada: Taiwan and Greece. All the others pay more.

For example, while it costs $15 U.S. an hour in Canada, it costs $18 in Italy, $19 in France and the U.S., $24 in Norway, $27 in Japan, and $30 in Germany. These are the 1994 figures.

Thus, the argument that the industry is not competitive with other countries because labour costs are too high does not hold up to analysis.

But the best explanation for the disarray in the industry is to be found in the government's negligence. The Minister of Industry, the Minister of Finance, the Minister of Transport and the Minister for International Trade keep passing the buck to one another on this. Even the Prime Minister did not answer the letter my colleague from Lévis-et-Chutes-de-la-Chaudière sent him several months ago. The Prime Minister did not even bother to answer the letter.

In 1993, in the red book, the Liberals, and in particular the Liberal candidates from the Quebec City area, made a firm commitment to do a serious study of the issue. In March 1998, grassroots Liberals raised the issue again and asked the government to take a firm stand and take action on shipbuilding, but it has not yet done so.

Hopefully, today's debate will make the government think and take the measures needed to improve the situation of this valuable industry. The government—and I am just talking common sense here—should act to make Canada and Quebec world leaders in shipbuilding. The government should stop dragging its feet and do what needs to be done to make Quebec and Canada the world leaders they should be.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Mr. Speaker, as the Bloc Quebecois critic for transport, I am pleased to speak to the motion by the Progressive Conservatives.

It was my intent to speak much more gently about the Conservatives because I thought their motion a good one. It is, in short, a general motion. I do not think anyone opposes virtue. On the contrary, we support saintliness, without necessarily expecting to be canonized.

The Bloc Quebecois supports the motion, but it is clear from the statement by the Progressive Conservative member for Chicoutimi before oral question period, which literally incensed the Liberal government, that this member is an expert in the art of joining with the Liberals against Quebec and the Government of Quebec.

So, given the attitude of the member for Chicoutimi, and when I read the articles in the Chicoutimi daily—because the hon. member has a real in with the daily and the chief editorial writer in particular, we learned recently—I will start by saying to those watching that, in 1993 and 1997, the Bloc Quebecois has made it known that the Liberals and the Conservatives are the flip sides of the same coin.

Why am I saying they are the same? For one very simple and good reason. The entire problem in shipbuilding in Quebec started with the Conservatives. When they were in power—between 1984 and 1993—they said “The shipyards must be streamlined. Not everyone can compete. Everyone is going to have to close”. The only province to streamline its shipyards was Quebec.

The Canadian Vickers shipyard in Montreal was really flourishing. There was Marine Industries in Sorel. These two major shipyards—not to mention the little yards that closed—which employed hundreds and hundreds, indeed thousands, of workers had to close their doors because the ministers of the Conservative government said “You must streamline”. So that the only shipyard left was MIL Davie in Lauzon.

Like my parents, I have an excellent memory. On Monday, October 11, 1993, on the night of Thanksgiving Day, and a few weeks before the election, I had the honour, the pleasure and the privilege of representing my party during a public debate that was carried by Radio-Canada in the Quebec region from Portneuf to the Magdalen Islands, including Gaspé, Sept-Îles and the greater Quebec City region.

I was representing the Bloc Quebecois, and I was facing the Liberal candidate in the riding of Quebec, Jean Pelletier, who lost to my colleague for Quebec, and is presently the chief of staff of the Prime Minister of Canada. The Conservatives were represented by good old Pierre Blais, who was the Minister of Justice and the member for Bellechasse. He lost to my colleague François Langlois.

Speaking for the Conservative government, the hon. member for Bellechasse told us “We have given money to MIL Davie”. I asked him how much, and he said “$1.2 billion”. I then told Pierre Blais “During that same period when you gave $1.2 billion to MIL Davie, you handed out $11 billion to the maritimes”. During the nine years the Conservatives were in power, shipyards kept popping up from nowhere in the maritimes.

During the 1993 election campaign, the Liberal Party, with Jean Pelletier, the present chief of staff of the Prime Minister of Canada and a Liberal candidate in the riding of Quebec, was claiming that it would invest $125 million in the Quebec City port.

He went and made speeches to workers coming out of the MIL Davie shipyard. We remember that. The Liberals promised the world and a marine policy. This government has been in office since 1993. What has it done? Absolutely nothing. I have here the resolutions adopted during the convention of the Liberal Party of Canada, including one by the New Brunswick Liberal Association, which is similar—I read it earlier—in almost every respect to what the Progressive Conservative Party is proposing today.

One conclusion provides that the Liberal Party of Canada should urge the Canadian government to immediately develop a national shipbuilding policy to help that industry and thus maintain and strengthen the degree of excellence and the technologies that helped build a solid reputation which we are in danger of losing. This is a resolution from the New Brunswick Liberal Association to its own party, which is the ruling party. What are the Liberals doing? Nothing. The resolutions arising from Liberal Party conventions are not worth the paper they are written on. If I were a Liberal militant I would be distressed to see that my government ignores the recommendations of its own militants. This is unbelievable.

I want to mention something else before my time is up. When Bloc Quebecois members speak in the House, it is often said that their input is useless because they are sovereignists. The Quebec government is useless because it is a sovereignist government. Nothing good can come from Quebec City. The Minister of Human Resources Development will not let the millennium scholarships be discussed between elected people, instead of asking the president of Bell Canada to negotiate with the Minister of Education, who was democratically elected.

So, our friends opposite would have us believe that nothing worthwhile is accomplished in Quebec. I am sorry, but the government should take note of the fact that, for several years now, and particularly since 1994, when the Parti Quebecois came back in office, tax incentives have been put in place for the shipbuilding industry, and not regressive measures that will kill what is left of that industry in Quebec. On the contrary, these measures were taken to promote the development of that industry.

As for expertise, there are the folks at MIL Davie and in Les Méchins, at the the shipyard run by Mrs. Verreault, a competent businesswoman able to compete internationally. So Quebec has expertise, but tax incentives are needed to help it develop and prosper.

In 1997, the Government of Quebec announced tax incentives to stimulate the shipping industry. Among other things, it raised the refundable tax credit for shipbuilding, around since 1996, from 40% to 50%. Second, it introduced a tax credit for the conversion or major refitting of ships, and extended this measure to oil rigs.

Finally, it made some adjustments the measure to reduce capital taxes. The problem is that the Government of Canada is taxing the benefits of Quebec's tax advantages, thus cancelling out part of the positive impact of these measures.

I think the federal Minister of Finance would do better to take a look at what Minister Landry is doing in Quebec, on behalf of the Government of Quebec, not just in Mr. Landry's own personal interest, although I have great respect for the man. The Government of Quebec has shown political will.

So the Minister of Finance would do better to look at what is going on, because there is a problem. Each time we want to speak to the federal Minister of Finance about shipbuilding or the shipping industry, he has to watch what he says. Everyone knows he is a major shipowner, being the owner of Canada Steamship Lines. Our party was the first to point out that four of the ships owned by Canada Steamship Lines are registered to the Bahamas, with foreign crews, and do not pay taxes here. The Minister of Finance is not setting a good example.

In conclusion, our party will be supporting this good motion, although I must say it is somewhat general.

[André Harvey, Progressive Conservative, Chicoutimi, QC]

Mr. Speaker, first of all I would like to thank my colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans for supporting our motion that he describes as general. It is nevertheless an essential one.

I feel compelled to speak up because of his introduction and of the fact that he comes from Chicoutimi. I was brought up to think that credit had to be given where credit is due. It was therefore a pleasure for me to pay tribute at noon today to the secretary of state who has made the aluminum industry, and particularly the processing of aluminum, a priority for this government.

I can tell you that in my area it is an issue that is followed quite closely. After having seen 8,000 jobs lost in the primary aluminium sector, it is good news when we hear a person in power say “We are going to help you do the processing”. Currently, about 600,000 tonnes are processed outside of the country and the Saguenay—Lac Saint-Jean is paying for that. I am sure that the member from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans misspoke himself and I forgive him.

I would like him to tell us what he thinks of a political party which sought the approval of its members at a convention for a resolution that an opposition party copied word for word to help it out.

We thought that we would do everything in our power to help the government to support readily, in good faith and free of partisanship an initiative that could restart a major industry that has an impact on thousands of sectors, one where our technological sophistication can be of benefit to every country in the world.

The only thing we want is a fiscal policy that will be fair compared to what is done elsewhere.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Mr. Speaker, I do not want to enter into a lengthy debate with the member for Chicoutimi because I see him often in the lobby and I am sure that, in the next election campaign, I will have the opportunity to visit his riding a lot more often. Therefore, I want to save my words and my energy for the next campaign, two years from now.

When I said that the principle and the wording of this motion were general, I did not mean it in a derogatory way. On the contrary, this motion is general enough to attract broader support. I find it interesting that the researchers for the Progressive Conservative Party drew this from the resolutions adopted by the Liberal convention. This does indeed put the Liberal Party in a very bad spot.

In any case, nothing should surprise us with this government. I am certain that the left hand does not even know what the right hand is doing and that the government will reject our motion, as it usually does. According to the government, nothing that comes from the opposition can be worthwhile. So we will see what comes of this later today or next week.

[Pierre De Savoye, Bloc, Portneuf, QC]

Mr. Speaker, many many years ago, I got my first job after studying engineering at Laval University.

It was at the Lauzon shipyard, which was called at the time Davie Shipbuilding. I worked there for several months as an electrical draughtsman. At the time, more than 1,000 people worked in the shipyard. There were ships everywhere. Some were in dry docks—there was the small dry dock and the big dry dock—and some were on slipways. Shipbuilding at the time was a flourishing business.

Vickers in Montreal, another shipyard in Sorel and Davie in Lauzon all had a lot of work, building lakers for private companies and ships for the military.

How did the government reduce such a flourishing industry to what it is today, absolutely nothing? What went wrong?