House of Commons Hansard #27 of the 37th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was countries.

Topics

Customs Tariff
Government Orders

10:10 a.m.

Some hon. members

Agreed.

Customs Tariff
Government Orders

10:10 a.m.

The Deputy Speaker

I declare the motion carried.

(Motion agreed to)

Customs Tariff
Government Orders

10:10 a.m.

Ottawa—Vanier
Ontario

Liberal

Mauril Bélanger Deputy Leader of the Government in the House of Commons

Mr. Speaker, I believe that if you seek it you would find unanimous consent to proceed immediately to third reading of the bill.

Customs Tariff
Government Orders

10:10 a.m.

The Deputy Speaker

Is it agreed?

Customs Tariff
Government Orders

10:10 a.m.

Some hon. members

Agreed.

Customs Tariff
Government Orders

March 23rd, 2004 / 10:10 a.m.

Brome—Missisquoi
Québec

Liberal

Denis Paradis for the Minister of Finance

moved that the bill be read the third time and passed.

Mr. Speaker, I welcome the opportunity to speak at third reading of Bill C-21, an act to amend the Customs Tariff.

This bill provides for the continuation of a longstanding policy of providing preferential tariff treatment to developing and least developed countries.

I will begin my remarks today by providing the House with some background to this issue. I will then discuss the bill and why it deserves to be passed without delay.

In the mid-1960s, there was widespread recognition that preferential tariff treatment for developing countries was a means of fostering the economic growth and well-being of poorer nations.

Consequently, in 1968, it was agreed at the United Nations conference on trade and development that a system of trade preferences should be implemented for developing countries.

This decision was implemented by most industrialized countries, including Canada, who agreed to provide more favourable treatment to products imported from developing countries than to similar products from industrialized countries. Countries also agreed that the preferential tariff programs would be generalized, non-discriminatory and non-reciprocal.

It is with those principles in mind that most industrialized countries implemented preferential tariff programs benefiting the developing world.

Canada’s program, the general preferential tariff, or GPT, was implemented on July 1, 1974 and has been renewed twice, in 1984 and 1994. The more generous least developed country tariff, or LDCT, was introduced in 1983. Both programs are set to expire on June 30, 2004.

Under the GPT, the general preferential tariff, more than 180 countries and territories are entitled to zero or low tariffs on a large majority of products that are covered under the customs tariff, with the exception of some agricultural products, refined sugar, and most textiles, apparel and footwear.

Like other industrialized countries, Canada introduced a program, the LDCT, the least developed country tariff, which provides even more generous preferential treatment to goods from the world's poorest countries as designated by the United Nations and based on a number of criteria such as national income, health and education.

Since January 2003, Canada, acting on a commitment made at the 2002 G-8 summit in Kananaskis, provides complete duty-free access under this program to all imports from 48 least developed countries except for certain agricultural goods such as dairy, poultry and eggs.

Bill C-21 simply extends both preferential tariff programs in their current form for another 10 years, from July 1, 2004 to June 30, 2014, as per past practice. Extending these programs makes sense for several reasons.

First, an extension will continue a longstanding Canadian policy that is consistent with the international practice of providing preferential tariff treatment to goods from the world's poorer nations. Extending these tariff programs will simply reaffirm the government's commitment to promoting the export capability and economic growth of developing and least developed countries, the main reasons these tariff programs were established in the first place.

This brings me to the second reason for extending these programs. Continuing these programs for a fixed period of 10 years will provide certainty and predictability to the traders who use them. Exporters in developing and least developed countries will continue to benefit from the preferential access provided by the programs.

These programs have supported growth in the export sectors of many developing countries, but they still have a long way to go. Many developing countries still need preferential access to the markets of the developed world in order to improve their economic status.

Another reason to continue these programs is that they complement Canada's foreign aid policies. By allowing developing countries preferential access, we will continue Canada's tradition of assisting the developing world. We will also keep to commitments toward international development that Canada has made on many occasions in forums such as the G-8, the World Trade Organization and the United Nations.

Hon. members should note that all other major industrialized countries provide preferential access for developing and least developed countries and some, such as the United States, Japan and the European Union, have recently extended similar programs.

A final reason why extending these programs makes sense concerns their impact here at home. While these programs were mostly conceived as an economic assistance measure for developing and least developed countries, they also benefit Canadians by providing them with goods that are subject to lower rates of duty.

As a result of lower tariffs on goods from the developing world, Canadian consumers enjoy access to imported goods at competitive prices.

Also, Canadian producers who rely on goods from developing countries as inputs also benefit from the reduced tariff, which helps them reduce their production costs and hence, increase their competitiveness. Accordingly, these tariff programs contribute to the economic development of the beneficiary countries while allowing Canadians to benefit.

It is important to know, too, that under these programs, preferences can be withdrawn if they are found to be injurious to domestic producers. I want to assure the House that, where imports at a reduced tariff are found to be injurious to Canadian producers of particular goods, the government has the means to remove the lower tariff for such goods.

There is another point I want to make before closing. Not only will this bill allow for the continuation of Canada’s support for economic growth within the developing world, these programs will continue to make an important contribution to the Canadian economy.

In 2003, Canadian imports under the GPT and LDCT were valued at $9.7 billion, and these programs reduced the amount of tariffs paid by Canadian importers by approximately $273 million. I mentioned earlier that the reasons that justified the introduction of the GPT and the LDCT decades ago still remain.

The economies of many developing countries still have to make great strides if their citizens are to attain acceptable income levels. Despite the progress of the past decades, the United Nations estimates that 1.2 billion people—one-fifth of the world’s population—still live on less than US$1 a day.

Bill C-21 constitutes one substantive measure Canada can take to continue to assist the developing world in achieving the goal of poverty reduction and continues Canada’s long tradition of helping poorer nations.

In considering this bill, I encourage hon. members to keep in mind that Canada stands with all other major industrialized nations—the United States, Japan and the European Union—in supporting the developing world through preferential tariff programs.

I would also encourage hon. members to keep the following points in mind:first, that a 10-year extension of these programs is consistent with past practice and will continue to provide a predictable business environment to traders—we will know where we are going; andthat a 10-year extension of these programs will reaffirm the government’s long-term commitment to international development.

In closing, I simply want to remind the House that our colleague, the Minister of Industry, recently announced various aid measures, in particular for the Canadian textile and apparel industry, for a total of approximately $60 million over the next three years.

I encourage all hon. members to support this bill.

Customs Tariff
Government Orders

10:20 a.m.

NDP

Bill Blaikie Winnipeg—Transcona, MB

Mr. Speaker, I have a question for the hon. member related to the issue before the House. The hon. member will know that during the committee hearings on this bill, Canadian apparel manufacturers appeared as did other people from the clothing industry.

They have made a rather compelling argument that what the government is doing now through the extension of the LDC tariff without doing some other things together might constitute some harm to the industry. I think of the argument they made about reducing or eliminating tariffs on input to their industry. I think particularly of the argument of Bob Silver of Western Glove Works about the tariff on denim fabric which comes into the country. As of this spring nobody will be left in Canada who makes denim.

Who is this tariff protecting? In fact it is creating a situation, as Mr. Silver argued quite eloquently before the committee, in which he may be put in a position of making these clothes somewhere else where he can import the denim duty free. He will make the clothes in Mexico or somewhere else and then sell the clothes in Canada. As he said, it does not matter to him. He still makes money. It is Canada that loses because the jobs in Winnipeg or elsewhere are affected by the inertia of the government in not removing this tariff on inputs that no longer have domestic competition.

Canadian jobs and particularly new Canadians will be hurt. New Canadians tend to work in his industry. As he says, they are not just producing jobs, they are producing Canadians. This is the way people enter the labour market. I am asking the question because a lot of good things happen here, and they are at risk because of the government's apparent unwillingness to move fast on this.

Will the government move fast now to eliminate these tariffs on inputs that no longer have any domestic manufacturers thereof?

Customs Tariff
Government Orders

10:25 a.m.

Liberal

Denis Paradis Brome—Missisquoi, QC

Mr. Speaker, to put everything into context, these tariffs exist to help less developed countries. This has been mentioned many times. I think that Canada has to do its part.

With respect to our Canadian industry, our local industry, my hon. colleague mentioned two main components: the textile and apparel industries. A few weeks ago, our colleague, the Minister of Industry, announced specific measures totalling some $60 million over three years to help both of these sectors.

The textile industry needs assistance more in terms of funding and restructuring, while the apparel industry is looking for lower tariffs when it cannot find the raw materials it needs on the Canadian market. In light of this situation, the $60 million over three years should be divided between the textile and apparel industries.

In practical terms, there has to be consultations. They have to come together to reach an agreement. I have also had the opportunity to speak with representatives from both the textile and apparel sectors. We want to make sure our Canadian industry is not penalized because we are helping other countries.

Customs Tariff
Government Orders

10:25 a.m.

Liberal

Don Boudria Glengarry—Prescott—Russell, ON

Mr. Speaker, I would like to ask the hon. minister to be careful concerning the point our colleague from Winnipeg—Transcona has just raised. In fact, the minister himself said it well in his reply. The two parts of this large industry are far from agreeing with each other.

In my riding, we recently lost the Consoltex factory, in Alexandria. Its product is not apparel but textile. I know that these people have a very different point of view from that raised by the hon. member for Winnipeg—Transcona.

We must fulfil our international obligations, as the minister said so well, but at the same time, we must remember that the textile manufacturing industry has different interests. Canadians work in that industry, too.

It is all very well to say, in the case of one particular type of fabric, that it is no longer manufactured in Canada. But we must not forget that the clothing industry is very complicated. In fact, to a great extent, it is a kind of fashion industry, that is, it is not an essential industry. If we wore only the clothes we had to wear, rather than those we want to wear, things would be very different.

Consequently, there are substitutions among articles of clothing. Even if a certain fabric is not manufactured in Canada, people in other sectors feel the impact because, of course, another fabric could be used.

I invite the minister to proceed with caution, in the way he has explained, so that we can preserve both these industries, not only clothing but also textile, which is also very important.

Customs Tariff
Government Orders

10:30 a.m.

Liberal

Denis Paradis Brome—Missisquoi, QC

Mr. Speaker, first I would like to thank my colleague, the hon. member for Glengarry—Prescott—Russell for his remarks. I would simply add, in support of the hon. member's comments, that while they may have diverging views, the various sectors of the industry do talk to each other. Indeed, the textile and clothing sectors have meetings.

We hope that a global agreement will be reached and that the amount of some $60 million, over a three year period, can be the topic of discussions between the clothing and textile sectors. In terms of their importance in Canada, these two sectors are on an equal footing.

So, it is important that the textile and clothing sectors can talk to each other, because it is of course in our best interest to ensure that Canadians come out ahead.

Customs Tariff
Government Orders

10:30 a.m.

Canadian Alliance

Rahim Jaffer Edmonton—Strathcona, AB

Mr. Speaker, I too want to echo the concerns raised by the two members who specifically questioned the minister about the impact on the textile industry. I believe the minister may have referred to this, but I believe December 31, 2004 is the exact date when the remission orders, which applied to textile industries, will be eliminated. If remissions are removed from these various industries, the inputs they use and obtain from many countries will skyrocket because, as some of our colleagues have mentioned, they are not available in Canada. The duties on those products will go extremely high which will force prices in the country to raise to unprecedented levels. As my colleague from the NDP said, this will have a huge impact on Canadian workers.

One thing the government has an opportunity to address, given that there is goodwill to extend these preferential tariffs, is the issue of remission orders. I believe all parties are generally supporting the move to have this legislation pass. It would be good to have an indication from the Department of Finance that it will address the issue of remission orders with these industries. It would put our industry at a huge disadvantage if there were no reciprocal agreement or some sort of extension of remission orders. We have said that we would extend those for the next seven years. I believe they initially were extended in 1997.

Could the minister comment on that because I think the industry faces a huge problem?

Customs Tariff
Government Orders

10:30 a.m.

Liberal

Denis Paradis Brome—Missisquoi, QC

Mr. Speaker, I would like to quickly comment on the decision made in Kananaskis to help the least developed countries. Helping the 48 least developed countries is an important initiative because, as we know, most of these countries are in Africa.

There is also the Canada fund for Africa, which was announced last year by the Canadian government. Out of a $500 million fund, an amount of $100 million was set aside to create partnerships with Canadian businesses. The private sector is also expected to contribute an amount of $100 million which, in the end, should provide an investment fund of some $200 million.

The objective is to ensure that we provide help, particularly to the world's poorest continent, a continent where life expectancy continues to drop, while poverty is constantly on the rise. Under these circumstances, it is definitely in the interest of a number of African countries, including those that produce cotton—such as Benin for example—to associate themselves with Canadian businesses to develop their industry, as I have mentioned on several occasions.

I realize that this is not a cure-all. What we are trying to do as a government, and I think we are succeeding, is to first meet our international obligations, but also to lend a helping hand to the poorest people on the planet while protecting Canada's textile and clothing industries.

Customs Tariff
Government Orders

10:35 a.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I would like to ask the minister a question. Last week, there was talk of lifting all quotas on textile and clothing imports from China. I know that this is not strictly related to the bill before us this morning, but it is along the same lines.

When the government implements measures affecting tariff and non-tariff quotas—for example, to decrease them—does the government consider the potential impact on Quebec and Canadian companies? In particular, does it consider unfair competition from those countries? For example, it is commonly known that there are doubts about China's willingness to practise fair competition with regard to our own apparel companies, especially if quotas are lifted.

Many apparel manufacturers in my region of Saint-Hyacinthe, as in the regions of most of my colleagues, were hurt by this announcement. Already, subcontractors are looking to China, abandoning local producers to buy from countries that do not necessarily practise fair competition.

I want to ask the minister this: Does Canada consider this kind of thing? I am not talking about a mere transition policy to help companies; I am talking about ensuring that competition is truly fair. There are no problems when trade is fair. But when it is not, we do not want to pay the price of unfair competition.

Customs Tariff
Government Orders

10:35 a.m.

Liberal

Denis Paradis Brome—Missisquoi, QC

Mr. Speaker, I thank the hon. member for Saint-Hyacinthe—Bagot for this question. First, it is important to realize that the purpose of this bill is not to decrease tariffs, but renew existing tariffs for 10 years.

Second, the clothing and textile industry in Canada is asking us for help. At the same time, we are saying that a certain amount of money will be granted to the textile industry over three years and another sum of money will be available to the clothing industry. This is to determine which tariffs can be reduced in terms of the products unavailable in Canada to this industry.

Representatives from the clothing industry reminded us that these tariffs are in place to protect the Canadian industry. They must not become a type of tax or a source of revenue for the government. They must be used to protect the Canadian industry.

With that in mind, it is important to realize that high tariffs on products unavailable in Canada can be reviewed with both the clothing and textile groups with an eye to possible reductions. There is nothing specific about China. To my knowledge, China is not the focus.

I will reiterate: I am asking for support from all members so that we can renew these tariffs for 10 years as quickly as possible.

Customs Tariff
Government Orders

10:35 a.m.

Liberal

Claude Drouin Beauce, QC

Mr. Speaker, I would like to add a comment. I think that the $60 million invested by the Government of Canada is a significant amount and my hon. colleague, the minister, is aware of that. We must be vigilant. Quebec, and the Beauce in particular, is very much affected by globalization. It has an important impact on our region.

I hope that the department of industry or foreign trade will follow up on this, to ensure that jobs at home are protected and that we are in a position to allow Canadian businesses to establish partnerships with developing countries to build on the offer made here, to protect our jobs and add value to our products. In this way we will be able to get through this crisis. It is important for there to be follow-up. I am happy to see this $60 million being invested by the Canadian government.