House of Commons Hansard #193 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

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12:30 p.m.

Liberal

Pat O'Brien Liberal London—Fanshawe, ON

Nobody said that.

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12:30 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Yes, you did say that.

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12:30 p.m.

Liberal

Pat O'Brien Liberal London—Fanshawe, ON

I defy you to find that in

Hansard.

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12:30 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

The motion is in order and it should be supported by the House. If the government had any principles at all it would also support the motion.

The motion states:

That this House has lost confidence in the government for its failure to persuade the U.S. government to end protectionist policies that are damaging Canada's agriculture and lumber industries...

Surprise, surprise, Canadians have lost confidence. The government should visit my constituency, which is agriculturally based, and ask the people on the farm fields who are now putting their crops in whether they have confidence in the government, in the department of agriculture and in the minister. I can assure the government that the answer would be a resounding no. They have no confidence.

The government should go to the mills and the forests of British Columbia or northern Manitoba and ask the people in the schools, in the retail outlets and in the forest industry whether they have confidence in the Minister for International Trade, the government and the department. The answer would be a resounding no.

How can anyone have confidence in a government that realized softwood lumber would be a major issue but this $20 billion industry has now been virtually shut down? The government knew about it years in advance but decided to let it run its course. That is the term I heard in the last intervention. “We will let it run its course and then we will deal with the WTO”. It ran its course and right now it is having a dramatic impact on that industry.

The same thing happened in agriculture. The government let it run its course. We knew a year ago that there was a very serious problem with the U.S. farm bill. What did the minister and his department say? They said that they really did not understand the impact so they would just let it run its course and find out how to deal with it after the fact.

I must tell this House that the U.S. farm bill is having an impact on our agriculture industry right now, to the point where it may well have devastated it.

The minister of agriculture and the parliamentary secretary asked if we realized it was an election year in the United States. They said that it was really too bad that Canadian agriculture had to be impacted but wanted to know what we expected them as the government to do. They said that since it was an election year in the U.S. the U.S. would put those things into place and that Canada would simply have to stand back and enjoy it.

Well we do not have to stand back and enjoy it. We do have some solutions that we can put into place if the government has the political will to do it.

The first problem I see is that the government blames everyone else for its ineffectiveness. It claims that everyone else is at fault and even goes back to pre-1993 to blame another administration of another government.

However the biggest problem the government has is that it has lost touch with the land, with the issues and with the people.

I have a lot of respect for the parliamentary secretary, who comes from London--Fanshawe, but he probably has not seen a small rural community in western Canada for a long time. He has not seen the devastation in those communities, the boarded up windows and the people who are leaving because of the impact the U.S. farm bill has had on them.

The people around the Cabinet table do not understand primary resources. They have lost touch. The bureaucrats working in their departments right now, and I cannot say the words in the House because I will be chastized, but they do not care what is going on in those sectors.

When the bureaucrats appeared before us in committee their answers were simple. They said that what was there was there and that they could not have any more. They were not fighting for agriculture or for softwood lumber. They were simply sitting back in very comfortable positions in comfortable chairs saying “If it happens, great. If it does not, we do not care.” The problem is that they have lost touch.

No further relationships with the United States is the second problem. Politics is all about relationships. It happens here in the House. There is no science in political science. We deal with relationships.

We do not have a relationship with the United States. President Bush and his administration do not care about the Prime Minister and his government. That has been proven in many cases, not only with the war on terrorism when Prime Minister Blair was invited to Washington but also when the president visited Vincente Fox in Mexico. That proves that we are not even on the American radar screen.

I should tell members that in a previous administration prior to 1993 that was not the case.

When we have problems with trade we go there and deal with the problems. We cannot even get a meeting. The minister of agriculture could not meet with the secretary of agriculture when she was in Quebec City. That is disgusting. The minister of agriculture could not meet with the secretary of agriculture in Washington. That is disgusting.

How do we deal with issues with the U.S. farm bill when we cannot even put our positions forward? That is ineffective and that is where we are right now.

The same thing happened to the Minister for International Trade when was dealing with the softwood issue. As was mentioned by my colleague, the provinces were meeting with people down there but our own government would not go and fight our battles. It was a totally irresponsible position which is why the motion is actual truth. Canadians have lost confidence in the government because of those two issues.

The U.S. farm bill will devastate our communities. The government and certainly the parliamentary secretary of international trade do not understand some of the issues with the farm bill. The first issue is the very serious subsidy to American commodities of $180 billion. I just saw a report today that says depending on how the crops come in and what they plant that could be up to $200 billion and more, depending on how much subsidy they have to pay to their producers. It is astronomical. We as Canadians have to compete in order to keep our people in the game.

The second problem is the type of subsidy paid to what commodities. We used to have at least some specialty crops that we could depend on for some cashflows in our industry. The problem is that those specialty crops, the pulses, the legumes, the peas, unfortunately, will now be covered by subsidy in the United States. This has never been done before in history but all of a sudden Mr. Bush, in an election year, for heaven's sake, has decided to do it. Because there is an election this government will let him cover new commodities in their subsidy. Is that not wonderful? We will just stand back and let them do that. In the meantime, the producers in western and eastern Canada cannot compete.

The last and most important thing about this Draconian piece of legislation in the United States is that in two years, and I am putting everyone on notice now, the Americans will be demanding country of origin labelling. Everything that is grown, produced and raised in this country will have to be labelled Canadian under the country of origin labelling. When it goes into the retail stores in the United States with a label stating it is triple grade A American beef or triple grade A Canadian beef, which one do members think the Americans will buy? We need to stop that now.

The parliamentary secretary will probably tell us that we need to wait because it is an election year in the United States. He will probably say that we need to stand back and let the United States put in the clause but that in two years, when the clause comes in, that it will be dealt with.

We have lost confidence in the government and in those two departments. The motion should be supported and passed in the House.

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12:40 p.m.

London—Fanshawe Ontario

Liberal

Pat O'Brien LiberalParliamentary Secretary to the Minister for International Trade

Mr. Speaker, fortunately I get to speak for myself. The hon. member does not get to do it for me.

First, let me tell him that my former riding, of which he seems totally unaware, was called London--Middlesex, and 20% of my constituents are farmers. I invite him down to London, Ontario some time. The county of Middlesex surrounds the northern part of London. Elgin is to the south, Lambton is to the west and Oxford is to the east. This area has some of the most thriving, diverse agriculture in the country. I hear all the time from farmers in that area, many of them personal friends of mine, about the unfairness of this U.S. farm bill. One does not have to hail from the beautiful part of Canada, western Canada, to have some touch with agriculture. That is the first myth I wanted to debunk.

The member said that the government did not care, that nobody did anything, that nobody talked to the farmers and that nobody had any interest in the issues. That is just silly.

Last week three ministers personally travelled to western Canada. One was in a conversation by phone. We had four minister consulting with farmers in the prairie province of Saskatchewan about the crisis, the scope of it and potential help from the Canadian government.

I do not think the member is being fair at all when he says that there has been no interest from the government. He may not like the actions taken or not taken, but to say that there has been absolutely no effort and no interest is just simply the second myth I wanted to debunk.

Third, he made these comments. He quoted--

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12:40 p.m.

The Acting Speaker (Mr. Bélair)

Order, please. Let us give the hon. member a little bit of time to answer.

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12:45 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Mr. Speaker, I did not hear any question so I really have no answer.

The only thing I would like to say is that although 20% of the land in Middlesex is for agriculture, my community, which is probably more to the tune of 50% or 60%, has certainly been more affected by the farm bill than perhaps the hon. member's riding has been. I think it would be worth his while to go to some communities that have closed businesses on the main street.

I should also say that I have been invited to Middlesex. I will be there in August because a lot of people would really like to hear some solid solutions to the agriculture problem.

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12:45 p.m.

Canadian Alliance

Grant McNally Canadian Alliance Dewdney—Alouette, BC

Mr. Speaker, I know my colleague from western Canada has a number of agricultural producers in his riding. I do as well in the eastern part of my riding.

However another side of the whole debate today is the softwood lumber side of the issue. I have a number of businesses in my riding that are directly affected by this, including one that I visited last week called Chasyn Wood Technologies. It has said that it wants parliament to take all measures necessary to ensure that the Canadian independent lumber remanufacturing industry was provided protection from the onerous and unreasonable duties so as not to place the Canadian independent lumber remanufacturing industry at a competitive disadvantage to either the Canadian primary industry or the U.S. remanufacturing industry.

The company went on to say that more had be done to help the Canadian independent lumber remanufacturing industry survive, not merely just to be able to keep employees and communities on extended life support. It said that a bridging mechanism, such as a loan guarantee program, was necessary for the survival of the Canadian independent lumber remanufacturing industry.

The company went on at length to talk about what needed to be done on this issue.

I was wondering if my colleague from Brandon might be able to comment on the problems we are having with protectionist policies that are directly affecting people across the country in a number of different sectors.

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12:45 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Mr. Speaker, my colleague from Cumberland--Colchester is our expert with respect to softwood lumber although I was trying to deal specifically with agriculture.

However the remanufacturers situation the member talks about is, I am told, a very serious situation. Some of these people buy lumber and they do not know where it comes from. It could in fact be American lumber. They remanufacture it into certain products then send it back into the states and are also charged with the horrendous 27% duties. This in itself is a very specific problem that should be dealt with by the Minister for International Trade separately from the softwood lumber issue so that we could at least come up with one small solution in very difficult trade negotiations.

If the hon. member talks to the Minister for International Trade, there are not job losses. This is simply a matter of restructuring the industry. Does the member understand that? Maybe he should take that message back to Dewdney--Alouette, because that is the message we are getting from the government.

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12:45 p.m.

Canadian Alliance

Rick Casson Canadian Alliance Lethbridge, AB

Mr. Speaker, I will be splitting my time with the member for Lanark--Carleton.

I would like to congratulate the member for Vancouver Island North for bringing forward the motion today. The member has been dealing with the softwood lumber file for our party. He has done an excellent job and has earned the respect of the industry in Canada and south of the border as well for his efforts in bringing the government to understand the full ramifications of what has happened. I applaud him for that.

Over and over again we hear the minister and the parliamentary secretary say that they have worked hard particularly on the softwood lumber file. They have put their best effort forward. They have spent all the resources they have on this file.

I do not think that is much to brag about because they have come up with nothing. They have not come up with a resolution. If that is the best they can do, they had better change their tactic or yield to someone who can do better because Canadians deserve better.

The problem that really exists is the poisoned atmosphere between the administration on Parliament Hill, the Liberal government, and the Bush administration. There is no love lost between the two. It is becoming quite apparent. The fact that they cannot talk to each other is reflected in all the problems that have been created in the trade file.

I would like to focus my remarks today on the impact the country of origin labelling provisions of the U.S. farm bill would have on our agricultural sector. This is one aspect of the U.S. farm bill that is facing our producers today which could have been avoided. We tried to warn the government back in February. I brought a question to the House for the minister telling him that the country of origin labelling issue would be coming forward. It had been circulating in the beef industry in the United States for quite some time and it was put into the bill.

It states that a product must be born, raised and processed in the United States to be labelled as a product of the United States. It would affect meat, fruit, vegetables, fish and peanuts. It becomes mandatory within two years.

We feel the government needs to challenge this provision immediately. It is something that has been added to the U.S. farm bill and it is something we should have a hard look at and ensure that the WTO and NAFTA processes are put into place, and if indeed we can stop this.

Last year Canada exported $1.8 billion in beef products and another $1.7 billion in live cattle exports. Hog, live and meat, exports were worth $2 billion, vegetable exports were worth $1.6 billion and fruit exports were worth $400 million. With this country of origin labelling aspect provision being brought forward in the U.S. farm bill, all of this would be in jeopardy.

U.S. retailers and processors have stated that if this comes into effect and if it becomes mandatory the easiest way for us to work around this is to only deal with American produce and American farmers. That would immediately cut off the trade that we have created over the years with the Americans.

We have received indications that the country of origin labelling has already restricted investment in the agriculture industry in Canada. Canadian investors are so concerned with what the country of origin labelling could do to certain sectors of our agriculture industry that they have stopped building, planning and putting money into it. Therefore it is already having that kind of effect.

The threat of country of origin labelling was known long before the U.S. farm bill was signed. Despite warnings from ourselves and others the government did nothing and there it is in the U.S. farm bill, becoming mandatory within two years.

The Liberal hesitation on the softwood lumber case cost tens of thousands of Canadian jobs. That is part of the motion that we brought forward today. How will the government address the harm that has been done in the softwood lumber industry and the agricultural industry through these trade actions?

We have not heard anything from the Liberal side on that today. I do not know why the Liberals are not responding to that aspect of the motion. Maybe they will and they should. The government has gone back and forth across the country many times on agricultural issues. The time for study is over and the time to act is now.

I will offer some solutions as I wrap up. The country of origin labelling was completely avoidable. If we had shown the Americans that we were serious in opening up our border to back and forth trading, particularly in live cattle, we would have been able to avoid a lot of this.

It was the beef industry that really pushed this forward although the national beef congress in the United States reduced it from being a mandatory to a voluntary process for a couple of years. However, we should have shown some indication that we were going to implement, for one thing, the terminal feed lot protocol which allows cattle to come into Canada, be fed in Canadian feed lots and then shipped back to the United States for processing. The wording of the country of origin labelling provisions states that it has to be born, raised and processed in the United States to be able to be classified as American.

This has become an issue. It is a question we raised in the House back in February with the minister and we had no indication from him that he would do anything about it. He indicated there was a connection. He said in his remarks that there was a connection between the terminal feed lot protocol and the country of origin labelling. He was aware but was unable to resolve it, I guess, if he did raise it with secretary Veneman. He indicated that he did but there was no resolution to that.

It just shows that the Americans are not listening to our negotiators since the Bush administration took over. The relationships have been poisoned between the two governments. We have to become more forceful at the trade table or we will continue to lose on these issues and they are picking us apart.

Another part of the industry in Canada that has become successful is the pulse industry. It has done a tremendous job of expanding its industry as well as the processing that goes along with that industry. That has been targeted in this U.S. farm bill because it has seen it as being successful and it wants a piece of that action. By moving these crops into the U.S. farm bill, that were not there before, we feel is another angle the government could use to go to the WTO and to the NAFTA tribunals to challenge it and to have it reversed.

One of the things we need to be doing is to gather our partners in trade around the world and say to the Americans as a group, the Cairns group for instance, what is going on here? We do not appreciate the bill the U.S. put forward and it is ruining our industry. If Canada were to bring as much power to bear as it could then some of the poisoned relations that we have seen between ourselves and the Americans would be somewhat hidden.

We have also heard much from the industry on compensation for trade injury to the sectors of our economy that are being affected. That has not been addressed today by the government at all. It has chosen a different angle to attack us on. However I am proud of one thing we have done. Last June we submitted to the agriculture and trade minister our idea of a rapid response process for agricultural trade disputes. We acknowledge the WTO and NAFTA processes have to be gone through but we need another process that could circumvent these long and costly battles.

We presented that and I have a letter from the agriculture minister saying that is all fine and good but it is not something that the government is going to embrace. Then, lo and behold, when the government toured around on its framework for the future of agriculture, one of its recommendations is a rapid response trade resolution mechanism. It actually used the same words that we provided.

We also understand that the United States and Mexico have signed a memorandum of understanding on agricultural trade disputes. Part of it is a rapid response mechanism to circumvent some of these long and costly disputes that happened in the agriculture sector. We took this to our Canadian Alliance assembly in Edmonton in April and we were able to bring this to the floor as a resolution. It was adopted by the Canadian Alliance and will be part of our policies from hereon to state that we need to have a rapid response trade resolution mechanism in place to circumvent some of these long expensive battles that we have seen.

We have seen it in the beef industry, the potato industry and in softwood lumber. We have seen it in other agricultural products. We need to have a process in place whereby parties could come together and come to some resolution before these things turn into full blown trade wars.

The motion we brought forward today has some aspects that deal with what should be done to the injury that has been carried out to the industries of softwood lumber and agriculture. I hope we hear from the government today as to what its response is to that.

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12:55 p.m.

London—Fanshawe Ontario

Liberal

Pat O'Brien LiberalParliamentary Secretary to the Minister for International Trade

Mr. Speaker, I have two brief points and then a question. The member seems to be unaware that the Cairns Group has already issued a statement against the U.S. farm bill. He is a bit behind the times on that.

U.S. Secretary of State Veneman has said that even though the U.S. industry is against the mandatory labelling for country of origin the administration would support it. That is why advocacy is so important in the United States. That is why we have been doing that for some time.

The hon. member for Peace River in September 1998 stated that he was against renewing the softwood lumber agreement. He said it simply did not work and did not make sense. What does his colleague think about that? If renewing the softwood lumber agreement was not the answer, and we agree it was not the answer, then obviously free trade is the answer.

Since the United States will not support free trade at this time we are pursuing every legal option at the WTO and NAFTA. I do not understand what my colleague's problem is with us pursuing all these legal options.

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1 p.m.

Canadian Alliance

Rick Casson Canadian Alliance Lethbridge, AB

Mr. Speaker, the member posed a number of questions but I will address the one that referred to the member for Peace River stating that we did not desire an agreement in softwood lumber.

Our position has always been that there should be free trade in softwood lumber. That is where we stand. There has been a 30 year history of problems with these negotiated deals. Everyone and the government knew about these problems. We warned the government that this agreement was coming to an end, that something needed to be done, however it was allowed to collapse.

The government kept indicating that when it was over we were supposed to revert to free trade. That is fine, but where were the contingency plans? Where were the studies that were done to indicate the problems that would exist if indeed something like this would happen? That was certainly one of the options the government should have looked at as one of the outcomes when the agreement came to an end.

There is one thing that we keep going back to. I do not understand how the parliamentary secretary and the minister keep getting away with saying how much effort, time and resources they have thrown at the softwood lumber issue and that they are doing their jobs. The Prime Minister has talked directly to the president. All of these things are going on and absolutely nothing has happened.

We have a huge tariff against our industry. We have tens of thousands of softwood lumber workers out of work. We have no indication there will be an end to this. In my mind the full efforts of the government have utterly failed the industry and continue to do so.

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1 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, my hon. colleague mentioned my name a few minutes ago and I would like his response to the following comment.

I was the trade critic for my party from 1993 until 1998. At the time there were a number of disputes that had been ongoing in the softwood lumber industry. In fact, as my colleague stated, there have been 30 years of disputes between Canada and the United States and there have been a number of trade actions.

We were facing that potential back in 1995-96. The government of the day chose to enter into a softwood lumber agreement with the United States that would restrict the amount of product we would sell into the United States to 14.8 million board feet a year. Anything above that was penalized heavily. Everyone knew that was not the solution that needed to be adopted. The World Trade Organization had been established and that was the opportunity to take this case to the WTO to put the process in gear that would ultimately have resolved it.

Would that not have been the opportune time to resolve this case rather than wait for the softwood lumber agreement with the United States to expire, one that probably should not have been in place in the first place, and face the mess we are in now some six to seven years later?

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1 p.m.

Canadian Alliance

Rick Casson Canadian Alliance Lethbridge, AB

Mr. Speaker, I thank the member for his question. Indeed, his expertise in the trade file over the last number of years has been exceptional and we appreciate his contribution to the debate.

Absolutely, we should not sit on our hands. It was the same when the softwood lumber agreement came to an end and when the U.S. farm bill was presented and signed. We know these will happen. The Liberal government sits and waits until it happens and then cries foul because the Americans have come out with some protectionist agenda.

Certainly the Americans are wrong in what they are doing but should not our government, which is responsible for the Canadian situation, be on top of these things and be working well in advance of the implementation or conclusion of agreements to come up with a solution that would save our industries?

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1 p.m.

Canadian Alliance

Scott Reid Canadian Alliance Lanark—Carleton, ON

Mr. Speaker, the motion today deals with two issues over which we are embroiled in a trade dispute with the United States. First, it addresses the issue of softwood lumber. Second, it addresses agricultural subsidies.

I will address primarily the second issue because there is little softwood production in my riding of Lanark--Carleton. We have some hardwood production. A bit of softwood is produced coincidentally to that, particularly pine as the hardwood is collected. Two local producers, Umpherson's in Polland and Lanark Cedar, produce some softwood. However softwood is not a large industry in my neck of the woods whereas agriculture is a substantial product in Lanark--Carleton and all of eastern Ontario. It is one of the pillars of the local economy.

People may not realize it, but the House of Commons is at the centre of the most agricultural city in the entire country, a city I am proud to in part represent in parliament. More than 10,000 jobs in Ottawa alone are tied to the agricultural sector. Total production in rural parts of the city is worth $402 million according to an agricultural impact study produced in December, 2000. That is $402 million from one city alone.

Ottawa is only a fraction of Ontario. Ontario is only a fraction of Canada. This is a major Canadian industry. It is absolutely critical to the success of not merely part of the economy and those directly employed in agriculture. It is critical to the success of all of us. My riding extends into Lanark county. In Lanark and Renfrew counties outside the boundaries of the city of Ottawa there are over 7,000 jobs in the agricultural sector. That represents over 9% of all jobs and $240 million.

Agriculture in Canada faces three problems today. First, there is a long term trend toward mechanization, increased efficiency, increased productiveness and hence agricultural consolidation. There has therefore been a decrease in the number of farms and people employed directly in the agricultural industry. However there has been no decrease in production or productivity which continues to go up.

The decrease in the number of farms is due to increased efficiency. It has had an impact. By far the majority of low efficiency, low productivity farms and farmers have been forced out. Some were forced out decades ago. The people left in the agricultural sector tend to be highly efficient, highly organized and entrepreneurial.

Second, periodic agricultural crises have been caused by weather. Like skiing, entertainment, summer festivals and a number of other industries, agriculture is an industry for which weather is crucial. Sometimes people complain when I raise the legitimate concerns farmers have regarding weather. They say farmers whine a lot. If urban people listened to people in industries and businesses a bit closer to their homes they would realize they complain as much as farmers. However for farmers several years of bad weather in a row or a year of drought followed by a year of very wet weather can be a life or death matter. Something like that has happened in eastern Ontario over the last couple of years.

Third, the artificial crisis caused by the trade war between the European Union and the United States, an enormous international drama in which we are a mere bit player, is driving agricultural prices far below production prices. The devastation this is causing our agriculture industry will get worse. The worldwide crisis existed prior to the latest U.S. farm bill thanks to the unwise agricultural subsidy practices of these two great powers of the agricultural world. However the results of the farm bill will increase the impact dramatically.

Small players like Canada, Australia, New Zealand or Uruguay depend on agricultural industries but are small in comparison to the enormous production of the United States and Europe. They are facing tough times. I will try to give members an idea of how huge the production is. Although we do not think of France as an agricultural country and particularly not as a wheat growing country it nonetheless produces roughly as much wheat as Canada although admittedly not of the same quality. Our farmers have attempted as much as possible to differentiate ourselves from the bulk product produced in France. Nonetheless the huge productivity in France, subsidized by local governments, is having a tremendous impact.

The state of Kansas alone roughly equals and may exceed total Canadian production of wheat. One could find similar results in different sectors. It makes it difficult for our farmers to compete when the two enormous players start greasing up their subsidies.

Notwithstanding these factors Canada has the most efficient farming industry in the world. Although it has been a struggle we have been able to compete despite enormous subsidies elsewhere. I am sure the number has been quoted earlier in the debate but Canadian wheat producers get approximately 17% of their income in the form of government subsidies and protection. For American farmers it is 49%. For wheat farmers in the European Union it is 43%. This goes a long way toward explaining why the French produce so much wheat instead of some other product which is more naturally suited to their high intensity land.

In the face of this kind of competition and subsidy our farmers have tried to be innovative. Many Canadian farmers have changed to pulse crops, abandoning traditional and highly subsidized products in which it was becoming impossible for even the most efficient to compete. This has occurred in wide swaths of the country but particularly in eastern Ontario. To make the point I will quote the agricultural impact study I cited earlier. It states:

Growth associated with the field crop sector [in Ottawa] has been centred around increases in farms producing soybeans. Production in soybeans increased from 3,500 acres in 1986 to 20,000 acres in 1996.

The change does not occur cost free. To make the switch farmers must acquire the appropriate knowledge and supplies and sell to the appropriate persons. Sometimes equipment changes are necessary. Under the new U.S. farm bill they then get hit by an expansion of American subsidies to cover the products they had moved into to sidestep the subsidy war.

I have a background in the retail sector. It is a bit like being the local corner store when Wal-Mart gets into a battle with Loblaws over the price of toothpaste. When the local store tries to move into something else they focus on that. They are not concerned with whether they make a profit in the area. It is about predatory pricing. They are concerned with putting the local store out of the market.

Our farmers do the best they can to move out of the market and become the world's leaders in pulse crops. What happens? They get hit by American subsidies and are devastated. They get hit at a time when it is not possible to change their plans for the upcoming year. Having done everything right and become the world's leading exporters in crops like peas and lentils, some of our most efficient producers find themselves being driven out of business. Our government has been engaging in inadequate efforts to exclude from American subsidies certain Canadian crops and products that are peripheral to the ongoing trade wars. Pulse crops are a key example.

Moving back to softwood, an area I mentioned earlier is red cedar. With more effective lobbying of the United States we could have excluded red cedar from the trade bill. There was discussion of excluding it. A lobby in the United States was allied with us. With more effective efforts on our part we could have worked with our allies in the United States and excluded red cedar. It was not done. It is symptomatic of the failure of the government to be more effective in protecting our lumber producers.

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1:10 p.m.

Canadian Alliance

Philip Mayfield Canadian Alliance Cariboo—Chilcotin, BC

Mr. Speaker, I thank my hon. colleague for his comments. He said the government's response to what is happening has been inadequate. A number of details might be helpful in understanding how inadequate it has been. First, the international trade minister announced $20 million in advocacy advertisements in the United States. It is not new money. Some $17 million of it was announced prior to September 11. Another $3 million has been added. It is less than the amount planned for the landmine initiative of former foreign affairs minister Lloyd Axworthy.

Second, the natural resources minister announced $75 million in forestry funding. That is less than 3% of what is estimated to be needed. It should be $2 billion rather than $75 million.

Third, today the Prime Minister is in Rome rubbing shoulders with the president of the United States. However he says he will not have time to talk to him and will instead probably talk to the president of France.

These are indications of the attitude the government brings to a problem that is destroying our communities. I would like a response.

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1:15 p.m.

Canadian Alliance

Scott Reid Canadian Alliance Lanark—Carleton, ON

Mr. Speaker, the hon. member is speaking to the government's overall neglect of its primary duties, particularly in dealing with international trade wars.

If the Prime Minister is in Rome today rubbing shoulders with the president of France I hope he will not neglect to raise the issue of European Union crop subsidies. France is a key player. However I am not aware that it is part of his agenda.

The issue of international trade subsidies and barriers against Canadian products has not only been neglected by the Prime Minister. It is more widespread. The American political system is focused on overt and aggressive lobbying.

I will return to the issue of red cedar. While there is a strong lobby from certain lumber producing states, mainly western states and some states in the south, there is an equally strong lobby in favour of free trade which Canada could tap into. The United States has a powerful construction industry. Some people are concerned for health reasons about using pressure treated lumber for decks and other things. It is an issue close to my heart because pressure treated lumber contains arsenic and could have health effects. Cedar is a perfect replacement. There was a strong movement in the United States to exclude cedar from its overall softwood lumber tariffs and import restrictions.

I am quite confident that by working with our friends in the United States we could have found a way to do something beneficial for urban and suburban Americans, people building houses, and people looking for more reasonable housing costs to cause the adjustment to occur. Instead our producers face a tariff of over 20% on their cedar exports. It is doing damage to a number of producers in this part of Ontario and across the country. It is costing Canadians jobs.

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1:15 p.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Mr. Speaker, I listened, as did all my colleagues in the House, with rapt attention to the comments of my hon. colleague. I will follow up on the issue of the effort or lack thereof that the government has put into the trade dispute with our biggest trading partner and neighbour. Since last fall I have been urging the Prime Minister to engage personally in the file whether on the issue of farm subsidies, the steel problem, subsidies for the transportation of natural gas from Alaska, or softwood lumber.

Could my hon. colleague comment on what appears to be a complete lack of attention on the part of the Prime Minister in engaging President Bush on the file?

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1:15 p.m.

Canadian Alliance

Scott Reid Canadian Alliance Lanark—Carleton, ON

Mr. Speaker, not only is there a problem of neglect but the Prime Minister on a number of occasions has made remarks that could not conceivably have gone over well with the White House. In particular he expressed his preferences as to who would win the presidential election last year. When we think of something that would exclude one from the inner circle that does get access to the United States president, probably suggesting that he should have lost the election at the time when there was a national constitutional crisis would have been just about the worst possible item to choose.

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May 28th, 2002 / 1:20 p.m.

Calgary Southwest Alberta

Canadian Alliance

Stephen Harper Canadian AllianceLeader of the Opposition

Mr. Speaker, this will be my first speech as the leader of Her Majesty's official opposition. I took some time to look back at my other maiden speech as a new member of parliament in 1994. Then as now I was very proud to be here. I am proud of my adopted province of Alberta and proud of the people of Calgary for sending me to this parliament. I want to assure everyone who is listening that as different as my role is now and as different as my riding is, I am just as proud today as I was then.

I do not have a lot of time so I want to focus instead on the issue we chose for today's supply debate, which perhaps is the most important issue that ever faces Canada, our relationship with the United States and in particular the increasingly troubled relationship we have on the trade front.

The motion makes reference to two trade disputes, in softwood lumber and in agriculture. To this I could easily add a third, energy, the issue of pipeline movement of Alaskan gas reserves to the lower 48. I could add a fourth issue, that of border restrictions, especially in light of September 11, that are influencing our trade patterns and the very real threat that we could find ourselves outside an American security perimeter.

Before I comment further on these, I will make some observations. These are industries of massive size. I spent most of the past year travelling around the country in our leadership race dealing with many communities where these are the dominant industries and issues. I do not believe the Liberal government really understands the magnitude of these industries. Entire regions depend on these industries. Millions are directly and indirectly employed.

We face in some of these trade disputes the potential wiping out of entire regional economies. This is not something from which we in urban centres will be immune. These have important and significant linkages to our more urbanized areas.

The question we must ask is why this has occurred. Why do we find ourselves victims of protectionist, isolationist and unilateralist sentiments from the United States? Why are Canadian interests being systematically ignored in Washington?

There are many reasons. Some of them do involve, in fairness, blame on the Americans and the reality of the United States' domestic political interests, this being an important election year in the United States. There is a further reality with which the House can and should deal. That is the consistent and complete inability of the present Canadian government to make our case to American authorities, to congress and especially to the Bush administration.

The reality is that the Canadian profile in Washington is all but invisible. Let us look at the Liberal record in managing our most important international relationship. I took some time to do this. I cannot share it all with members but I examined a number of political initiatives in international affairs taken by the government over the last few years. I will not go through the list, but what stuck out, what I found to be consistently missing from the list was any reference to what is obviously our most important international relationship, the one with the United States.

In the Department of Foreign Affairs and International Trade for example, there are secretaries of state for Europe, Latin America and Asia-Pacific but there is none for the United States. Likewise if we look at the so-called team Canada and other business development trade initiatives that have been the centrepiece of the government's trade strategy, we see almost no attention paid to our most important bilateral trading relationship.

Let us look at the vaunted team Canada trade missions. Up to September 11, 2001, that important day, there had been 17 team Canada trade missions and only one of them had gone to the United States. There has been a second one since then. In November one went to Texas and California and an earlier one went to New England.

The government is certainly going to protest, arguing that trade exchanges with the U.S. do not need any support. What needs improvement is trade relations with other regions.

The point of the motion is that all is far from well in our trading relationship with the United States. The damage that has been caused and will be caused to Canadian workers as a result of the softwood lumber duties and to farmers as a result of agricultural subsidies shows that while these crises were brewing, the focus of our political leaders in the highest offices simply was not on these files. It was elsewhere.

If the Liberal government failed to stand up for Canada's trade interests with the United States after 1993, and this has been a consistent pattern, we have to ask why it failed to do that. In my view I think it is no secret that the principal reason is that the Prime Minister and the majority of senior Liberals who came to office in 1993 were not supportive of our trade relations, in particular our free trade arrangements with the United States. Let me quote the Prime Minister's own words on the matter of Canada-U.S. free trade. In November 1987 the Prime Minister noted his opposition to free trade by saying:

Canada has already given away all its bargaining chips: energy policy, foreign investment review agency, you name it, it's all gone.

What this deal has done in energy and in investment and what it will do in defining subsidies is to strike at the heart of the fabric of Canada. What this deal does is enshrine, in Canada, the Reagan view of government.

In September 1988 he said:

Removing the remaining trade tariffs between the U.S. and Canada, as proposed by the free trade agreement, would not improve Canadian business access to the U.S. market.

The Prime Minister went on and on. I could give quote after quote from the period 1987 to 1993.

As we approached the election in 1993, the election where he ultimately became Prime Minister, he continued to oppose free trade. He continued to oppose NAFTA which had recently been concluded. In fact, he said in February 1993 just before the election:

The North American Free Trade Agreement gave the government an opportunity to correct major flaws in the free trade agreement. A Liberal government will seek changes to the free trade agreement and the North American Free Trade Agreement.

The consequence of all this is that after the Prime Minister came to office in 1993, neither he nor his senior ministers as a whole were interested in building on the success represented by the FTA and NAFTA. While they did not actually seek to renegotiate either agreement in any serious way, they did not try to build on that success either. That is not surprising. The Prime Minister was never a free trader at heart. Having been forced to swallow the FTA and NAFTA, he decided simply to neglect the file entirely.

That has proven to be a grave mistake. There were issues left unresolved by those trade agreements. In fact, the most serious issues, the ones we are discussing today, were never, and certainly not at the time, fully integrated into the free trade agreements. This is where the problems have arisen.

Softwood lumber was one such issue and agriculture was another. Neither was addressed. The most senior leaders in Canada were simply uninterested in further trade liberalization.

If the government did not pursue or enhance North American free trade, what did it do? What it did as the team Canada record shows, the Prime Minister went back to the future. He tried to revive the failed trade diversification of the 1970s, the Trudeau government's so-called third option strategy, which did not work then and is not working now.

The problem is more serious. While neglect and a high degree of apathy have characterized the government's approach to our trading relations with the United States, downright hostility to the United States, anti-Americanism, has come to characterize other dimensions of Canadian policy.

We all remember the open meddling in U.S. domestic politics prior to the 2000 presidential election when the Prime Minister stated his preference with regard to the outcome of that election. Of course these pronouncements did not go unnoticed in the United States, just as they would not go unnoticed in Canada if American politicians made similar foolish observations about Canada's internal politics.

On January 22, 2001 David Jones, the former political counsellor at the U.S. embassy, a very wise individual, made some very frank public comments about Canada-U.S. relations and the Prime Minister's unfortunate tendency to shoot off at the lip in making domestic pronouncements. He said our Prime Minister exhibits “a tin ear for foreign affairs, especially those involving the United States”. It is no secret that this poisoned the relationship between the government and the new American administration.

A story in the National Post on May 14 summarized the situation. One senior insider quoted said:

We are obviously not players. He [the Prime Minister] is just not effective.

He went on to say in less charitable fashion that the Americans could not care less about the views of the current Prime Minister. This is particularly evident in President Bush's passivity in dealing with the softwood lumber dispute. This is important.

The former Canadian ambassador to Washington, Allan Gotlieb, recently wrote the following:

It is a sign of staggering ignorance for Canadians--

--and I would add especially our Prime Minister--

--to think that personal relations between the president and Prime Minister are not of unique importance. If a matter is on the president's personal agenda, there is a far better chance of a favourable outcome. If the president is concerned, word goes down to many hundreds of top loyal political appointees. The Canadian who is best placed by far to get an item on the president's personal agenda is our Prime Minister.... Without the Prime Minister in play, the president will not be in play.

Clearly, our Prime Minister has been unable, and in some cases unwilling, to advance Canadian interests with the Bush administration.

These problems in bilateral relations predate the 2000 elections. Since 1993 the government has pursued policies which have damaged our relationship with the United States. The government has consistently put the ideological agenda of the Prime Minister and other Liberal ministers ahead of real Canadian interests. Let me refer to just a few examples.

In 1998-99 Canada pushed for a review of NATO's deterrence strategy, even though it was made clear that NATO members, including the United States, Britain and France, were not interested in such a review.

In 1996-97 Canada aggressively pushed forward with the treaty to ban landmines without giving due consideration to U.S. concerns about the potential implications for its security forces in South Korea. What did we end up with? We ended up with a ban on landmines but one that few major landmine producers or users have signed.

For nine years the government has systematically neglected the Canadian forces and undermined our ability to contribute to peace enforcement and even peacekeeping operations, including recently our premature withdrawal from Afghanistan.

Most recently we have been inclined to offer knee-jerk resistance to the United States on national missile defence despite the fact that Canada is confronted by the same threats from rogue nations equipped with ballistic missiles and weapons of mass destruction as is the United States.

I can mention one other issue. The government has not adequately addressed the matter of security in the context of continental security. Because of the unreformed nature of our refugee determination system, we continue to be subject to unique internal security and continental security dangers.

I should say when I list all these things, it should not be surprising that when Canadian ministers suddenly show up in Washington and demand something be done about softwood duties or agriculture many high level American decision makers do not pay much attention.

The consequence of these actions is a loss of our sovereignty. I do not use our sovereignty the way the government uses the term. Sovereignty is not about putting a stick in someone's eye. Sovereignty is about real ability to exercise power, to have control, the ability to act. Under the government's watch, we have less freedom to manoeuvre than we ever had before. Instead of possessing real capability that is respected and valued by our allies, all we are left with is empty rhetoric and often the wrong rhetoric.

Where do we go from here? On this I will make a very controversial observation. When it comes to United States-Canada relations, the government has much to learn from former Prime Minister Brian Mulroney.

I can critique his fiscal record, I can critique his social priorities and I can critique his approach to government reform and national unity, but under Mr. Mulroney, Canada-United States relations were infinitely better than they are now. The groundwork he laid particularly in matters of trade account for progress not only in his era but some of the progress that followed in the early days of this government.

Whatever Mr. Mulroney's shortcomings, whatever his mannerisms or his peculiarities may have done to irritate so many Canadians, he understood a fundamental truth. He understood that mature and intelligent Canadian leaders must share the following perspective: the United States is our closest neighbour, our best ally, our biggest customer and our most consistent friend.

Whatever else, we forget these things at our own peril. We can and do believe that we are the best country in the world, the best place to live, and we love this land, but not only does the United States have this special relationship to us, it is the world leader when it comes to freedom and democracy. We can never allow our affections for our own country to become the basis of resentment toward the United States. This realization is both the essence of our own self-interest and a moral imperative for any Canadian leader.

If the United States prospers, we prosper. If the United States hurts or is angry, we will be hurt. If it is ever broadly attacked, we will surely be destroyed. We share a continent, an economy and much else. We cannot afford the dilettantish position of some western allies and, for that matter, of successive leaders of the Liberal Party who nurture other illusions.

What do we do to put our relationship back on track with the United States? In the short term, we need to aggressively tackle the new American protectionism and international trade bodies. The ultimate objective must be to establish clear international rules that bind ourselves, the Americans and our European trading partners. My colleagues will also detail actions we need to take as well as compensation programs that need to be undertaken while we are pursuing these things.

In the longer term, new mechanisms will have to be established to avoid the problems connected with bilateral trade in such areas as softwood lumber and agriculture. We need to give some thought to some faster and more preventive dispute settlement mechanisms in order to avoid crises like the softwood lumber situation even cropping up. We need to make a priority of co-operation with the United States on trade issues we share, rather than concentrating on those that divide us.

More broadly, we also need to create a positive bilateral environment that enables us to do more together. In that regard, because security and diplomatic issues cannot be divorced from economic matters, we must re-establish political credibility internationally and especially in the United States. We must realize that we will be totally unable to accomplish any of our goals with regard to fair and rules based trade settlement bodies without the support of the U.S. administration. We will be unable to get the U.S. administration on board unless whoever is in the White House and leading members of congress value and respect what our Prime Minister brings to the table.

This means that we need to begin by putting our own internal security house in order. We also need to make serious efforts to construct and invest in a foreign and defence policy that will give Canada effective capability commensurate with that of a G-8 nation and an effective voice overseas.

Forward movement in Canada-U.S. relations is the best way to ensure that our bilateral relations do not stagnate or suffer setbacks due to emerging irritants. This should have been clear in 1993. The work should have begun then. It did not. We are now living with the consequences in our key trading sectors.

I submit that the House can no longer have confidence in the government's management of our international trading relationship and our overall relations with the United States. Canadians require a new approach that will truly protect their interests and secure their prosperity and livelihood as well as their nation's sovereignty. That cannot occur under this government. For these reasons, I urge the House to adopt the motion before it today.

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1:35 p.m.

London—Fanshawe Ontario

Liberal

Pat O'Brien LiberalParliamentary Secretary to the Minister for International Trade

Mr. Speaker, let me take my first opportunity in the House to welcome back the Leader of the Opposition. He was elected in 1993 when I was. I wish him many, many years of success in his current job. He is happier now. The last time I saw him we talked in an elevator and he was missing home et cetera, as I think many MPs do. It is good to see him back and I wish to congratulate him.

I want to tell the House that despite the comments of the Leader of the Opposition, as late as this morning the Prime Minister again had an opportunity to raise the agricultural situation, the unacceptable farm bill and the ongoing softwood crisis with the president of the United States.

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1:35 p.m.

An hon. member

A little late.

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1:35 p.m.

Liberal

Pat O'Brien Liberal London—Fanshawe, ON

Someone on the Alliance side says it is a little late. I say he has had a chance to raise it again because he has done so repeatedly now, as have several ministers.

I just have one question for the Leader of the Opposition. Given today's motion, a rather sweeping motion that is a little off base, I wonder what his view is of a colleague of his who was the World Trade Organization spokesperson and who said on agriculture that Canada should agree to open up its now protected dairy, poultry and egg markets. He said:

It is critically important that agriculture be on the table and be totally on the table.

I am not sure that in much of Canada that would be seen as standing up for Canadian farmers. Does the Leader of the Opposition share the view of his colleague in the Alliance?

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1:40 p.m.

Canadian Alliance

Stephen Harper Canadian Alliance Calgary Southwest, AB

Mr. Speaker, I am unaware of the quotation the member has used.

Let me just respond to his preamble to start with, which is his assertion that the Prime Minister is raising these issues now. It is a little too late to raise them now. The farm bill has been signed into law. The full-fledged international subsidy war between the European Community and the United States is on and we are left out in the cold.

It does not do anything to make a flippant comment to the president of the United States at an international conference that involves other issues. To influence the United States requires a thorough and constant working of the American system of government. It is not like here. We just cannot whisper in the president's ear and expect to get a favour from a friend.

We have to understand the congressional system, we have to work that system and, as former ambassador Gotlieb indicated, we must cultivate good relationships with the president, who is, bottom line, even in that system of divided powers, by far the most important person in that political system and the one most likely, as history has shown us, to be interested in open trading relationships, especially bilateral trading relationships. That the Prime Minister should have known, because he has been around here as long as most figures of history. He should have known that is true whether there is a Republican or a Democrat in the White House, so he should not care so much which party is winning a U.S. presidential election.

Our motion is designed to suggest that the government concentrate its efforts on the areas where the subsidies are in effect, not just in the grains and oilseeds and now the pulse crops, but now where some of our livestock industry is threatened. That is where we want to focus attention.

I believe it is probably inevitable that as we try to push our trading relationship forward the United States and others will want to look at all issues that are raised by agriculture. We have to be prepared to look at options in those areas. I would concede that to the member.

This is not the time for the member to be preoccupied with things that need protecting. We have to be preoccupied with breaking into those markets and retaining the market share we have in the United States.

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1:40 p.m.

Canadian Alliance

Howard Hilstrom Canadian Alliance Selkirk—Interlake, MB

Mr. Speaker, in the Uruguay round in 1995 the Liberal government put supply management on the table. It took away the protection of the quota system and put in place a tariff system that was designed to reduce protection in the next round of talks at the WTO, which is now ongoing. It was the Liberal government that put supply management at risk and that in fact will change supply management.

My question to the leader of the official opposition is simply this: Is it better to have change and respond to economic conditions around the world and remain competitive as Canadians or to sit like the Liberals and try to freeze time and go back to the 1930s and 1940s as they would have us do?