House of Commons Hansard #141 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

Softwood Lumber
Government Orders

8:45 p.m.

Liberal

Roger Valley Kenora, ON

Mr. Chair, it is not up to me to say yes. It is up to me to put the ideas from my committee forward to the departments, and that is what I have done.

In my own defence, I have been here a little over 13 months and it is something I engaged in right away when I came here in October. We were successful in creating our caucus in March.

From what I have seen of government, we have been moving at breakneck speed since we came back and it is something we will continue to do. We will keep the pressure on this. We will try to get the ministers to announce something in the very near future. We think it is something that needs to be done right away. The industries are waiting for it and they need the support.

Softwood Lumber
Government Orders

8:45 p.m.

Liberal

Joe Comuzzi Thunder Bay—Superior North, ON

Mr. Chair, let me first compliment my colleague from Kenora—Rainy River. He has mentioned that he has been here for a short time, but he has done a tremendous job in that short period of time. He has been a very active member in our northern Ontario caucus.

As a result of being an active member and coming from an area where the forest industry is the aorta, the lifeblood, of all of northern Ontario, he took upon himself to start a caucus called the forestry caucus, embracing all the members of the House of Commons. He has been doing a marvellous job in trying to get into position to get this issue resolved.

An event has happened in the last four or five days that shows what Canada and the forest business in Canada is all about. Some of us in the House could have been as mean as some of the senators in the United States senate, like Senator Byrd and his Byrd amendment and Senator Baucus who always chastises Canadians for their role in the softwood lumber dispute. However, again Canada opened its arms at a time of distress to our friends in the United States. We never saw one piece of wood, one oriented strand board, one piece of plywood that was denied entry into the United States because our friends there needed it.

That shows the friendship Canadian citizens have for our colleagues in the United States. That is something that should never be forgotten in this dispute. They are our friends.

We do not have some friends and unfortunately we have not found a mechanism to reach those people in the United States senate where the trade disputes are being arbitrated. The administration, unfortunately, listens to some of the senators.

However, we should never lose sight of the fact that we are still the best trading partners with the United States. The citizens of the United States are the best friends, and sometimes very close family members, of the people in Canada. That in itself should prompt the United States senate to move quickly on throwing a signal to the President of the United States and his administration that this has to come to an end.

I know my colleague is in favour of a loan guarantee. He discussed it in his closing remarks. Could he explain to us again his position on a loan guarantee of 50% of what is being held by the Government of the United States to support the Canadian industry?

Softwood Lumber
Government Orders

8:50 p.m.

Liberal

Roger Valley Kenora, ON

Mr. Chair, if I have learned anything, it is because I have been listening to the member for Thunder Bay—Superior North.

We have to use all tools. If loan guarantees are what we need to do, it is something we have to propose. Fifty per cent of what is being held against our companies in the United States may be a good place to start.

Softwood Lumber
Government Orders

8:50 p.m.

Conservative

John Duncan Vancouver Island North, BC

Mr. Chair, it is very interesting to watch the member for Thunder Bay—Superior North and the member for Kenora—Rainy River freelancing on the issue of EDC loan guarantees or backing of receivables, and some applause from the Minister of Trade for that action. Maybe we can expect some action from the government after three and a half years or so of dithering and bumbling over what to do to support our industry in the face of an onslaught by the U.S. lumber lobby and the U.S. coalition.

I would like to recognize the fact that the member for Kenora—Rainy River did talk about the American consumers, the friends in the U.S. who need to be mobilized on this issue. I will recognize the fact that we have the American Consumers for Affordable Homes. The executive director and others from that organization are in Ottawa as we speak. I know they are taking in this debate tonight, and they are not very far away.

The disappointments of the Conservative Party and of my constituents and many people involved in the forestry industry across the country in the lack of leadership on this most serious trade dispute is profound. Once again, one thing that tonight has proven is that the rhetoric that emanates from the NDP members is not very helpful. Nor is the way they misrepresent for political purposes other people's constructive input.

For example, we have had a pretty clear enunciation of what it means to nominate envoys to carry on communications at the highest levels between the Prime Minister's representative and the President's representative. It is a long way from negotiation, but a very essential step.

NDP members are very much in tune with us from the standpoint that we are both extremely disappointed that it took more than two months after the August 10 extraordinary challenge decision, the final decision at NAFTA, before we had an awakening by the Prime Minister. He finally was willing to talk to the President on this dispute. By that time, much of the advantage of our long, hard fought win, which was several years in the making, culminating on August 10 and predictably in our favour, was lost.

My history on the file goes back quite a long way. I have a fairly strong memory of how the government has failed us. I would like to review that a little just to remind people, because there are some inventive imaginations and shameless storytelling that goes on.

As long ago as January 2000, I met with the Free Trade Lumber Council and the American Consumers for Affordable Homes, both in Canada and in Washington, to prepare my party for the upcoming expiry of the softwood lumber agreement, which was the quota arrangement that ran from 1996 to March 31, 2001. We had a well-enunciated position. I shopped it around for the other parties. Right up until March 31, 2001, we had no idea where the government would take us.

There was a strong suggestion that the government was going to roll over the old agreement. It was quite a victory to find out that the Liberals were not going to take that distorting quota arrangement and just roll it into another agreement.

However, there was no signal on that. As a matter of fact, every signal was that the Liberals were going to take no leadership. Their leadership position was that they were going to take no leadership. It was like the anti-leadership positioning of the Liberal Party of Canada, the Government of Canada. I can talk privately about some conversations as to how that was enunciated, but I would just as soon not embarrass those individuals right now.

After that non-rollover of the agreement, we had free trade until May 2002 when the tariffs were put on. This was very obviously going to be a long and hard fought battle. All of the rules were stacked in favour of the U.S., in some respects because of the Byrd amendment, which redistributes tariff money back to the complainant companies in the U.S. That came into effect in 2000. This was also the first time we had a lumber war under the full provisions of NAFTA.

There was some strong and serious legal thought put to where Canada would be placed over time. It was that thought which led to the 2002 proposal on loan guarantees, backed by EDC. Really what this was is EDC guaranteeing our cash deposits to tariffs as a receivable, so that creditworthy companies can retain their creditworthiness and can continue to use that receivable as an instrument for borrowing power if they should need it.

That was put forward and that is what has never actually gone anywhere with this government. It was rejected by the trade minister of the day. It was resubmitted to the current trade minister in 2004, with the response that there would be no response. It was like the no leadership leadership; there would be no response because NAFTA was still going on. At that time, we knew we were in a waiting game again. Industry knew that.

We now have a circumstance where, on September 14 of this year, after the August 10 NAFTA decision, that proposal was resubmitted to the trade minister. The signs so far are that it will not be acceptable to the government because it might ruffle some U.S. feathers. We have this indeterminate process where the government is basically saying, “We are going to come up with a package. We have no idea what the package is”. The government has had three years. I guess that is not enough time.

Why are they dismissing the EDC proposal? There is no technical reason and the Liberals do it for other sectors. They have certainly done this for Bombardier and others. We are not sure what the impediment is.

In the meantime, they have done some ad-hockery. It is the normal non-leadership leadership of the Liberals coming up with some ad hoc positioning of $50 million for an assistance package for the forest sector in the province of Quebec. Other jurisdictions have yet to see anything.

We have major challenges in the forest sector across the country. This is what people need to understand. In coastal British Columbia where I am from, there is major grief and financial hardship. There are companies that are hanging on by their fingernails.

What is going to happen, unless the government displays leadership, is that there are going to be regions pitted against regions or partial regions pitted against each other. This needs to come to an end. We are not seeing the kind of leadership we need.

Softwood Lumber
Government Orders

9 p.m.

The Chair

I see three or four members who have questions, so I will ask members to keep this short and snappy.

The hon. member for Thunder Bay--Rainy River.

Softwood Lumber
Government Orders

9 p.m.

Liberal

Ken Boshcoff Thunder Bay—Rainy River, ON

Mr. Chair, municipalities throughout Ontario have been petitioning the federal government due to the cash-strapped situation of the softwood companies. They cannot reinvest or retool and are very much concerned about the loan guarantee aspect. I know that the member for Vancouver Island North is well aware of this.

For the record, the previous questioner was from Thunder Bay—Superior North. The member in front of me is from Kenora, straight up. I am from Thunder Bay—Rainy River, where the previous member was Stan Dromisky for Thunder Bay—Atikokan. That is just a little parliamentary geography and history.

The second part of my question deals with this push from these municipalities. We are receiving many petitions and concerns. The hon. member has been to Washington many times. I have been there once, so I am vaguely familiar with the difficulty of getting our message across and with the need to get the elephant's attention, essentially.

The role of an envoy has been mentioned. I have seen how things are done in Washington and how determined, consistent and persistent we must be to get American attention and how much effort has been expended by the government. I have watched the Minister of International Trade and several other people consistently sending the same message in a very diplomatic, straightforward, logical and rational view. How would that envoy's role open more doors?

Softwood Lumber
Government Orders

9:05 p.m.

Conservative

John Duncan Vancouver Island North, BC

Mr. Chair, I heard the member's clarification on the riding names. I would like to say that I called the member for Kenora the member for Kenora—Rainy River simply because the member for Thunder Bay—Superior North called him the member for Kenora—Rainy River. That used to be the name of the riding. I am not at my normal desk and there does not happen to be a seating plan on this desk. These things happen.

However, on the questions, municipalities are an important level of government. I think they are asking some very important questions. We are finding more and more advocates that are signing on to this whole issue of EDC backing, because it treats the entire industry the same and does not pick winners and losers. It makes a neutral decision. That is the best kind of decision the government can promote. I think that is an important event.

I agree with the member that most of what the ministers and Prime Minister have been saying most recently on this issue in the Canadian context or even in the famous speech in New York is primarily seen, heard or thought about by only a Canadian audience. There has been some very strong work done by members of Parliament and some of our senators.

A group of us from Canada and U.S. were in New Brunswick on the weekend. We were with 10% of the Republican caucus, with 6 members out of about 60. I thought we made some real progress, but when I came back to Ottawa and witnessed what our non-leadership leadership was doing, I thought that all of our good work had actually dissipated within a day or two of our return because of some very unfortunate and inconsistent positioning.

Finally, on the question of the usefulness of envoys, I do not know if the member was here when the leader of the official opposition spoke earlier, but he gave an example of a time when we had a very intractable situation on acid rain. Envoys were appointed from the two governments and they came to some resolution on that very intractable situation, a resolution which is standing the test of time fairly well, so there is a living example. We think it could be very useful.

Softwood Lumber
Government Orders

9:05 p.m.

Conservative

James Lunney Nanaimo—Alberni, BC

Mr. Chair, the member mentioned disappointments and the two months that it took after the extraordinary challenges committee reported to finally get a telephone message to the Prime Minister.

I certainly want to say that the people in my riding were disappointed. They have had a lot of disappointments in the years that this file has been lingering on with so little action taken on it.

In Nanaimo--Alberni, we have the Franklin division scaled right back, the logging division, formerly of MacMillan Bloedel and then of Weyerhaeuser when it was the owner, and now of Brascan. We have lost the entire Sproat Lake division. Logging is shut down. A lot of people are at home who used to be working and gainfully employed in this industry. They are just are not working anymore. They are disappointed.

Just a few moments before the hon. member spoke, my colleagues, the members for Kenora and Thunder Bay—Atikokan, were talking. We applaud their efforts to get loan guarantees in here, but it is late in the game. These guarantees would have made a huge difference earlier, when some of our companies were much more sound. It is late in the game now.

I know the hon. member was active on this from the beginning in recommending that we take action on this. I wonder if he would care to review the earlier activity on this file when he was asking for loan guarantees way back at the beginning of this conflict.

Second, there was a comment made by one of the members from the NDP about the Byrd amendment and the moneys held back by the U.S. that have already been distributed. I think he said they have already been paid out so they cannot be receivables. I know the hon. member is knowledgeable on this file and I wonder if he would care to comment on that.

Perhaps he would also care to comment on other industries that have been supported very generously by this government while our softwood industry has been hung out to dry.

Softwood Lumber
Government Orders

9:10 p.m.

The Chair

Again I have a reminder that more people would love to ask a question.

The hon. member for Vancouver Island North.

Softwood Lumber
Government Orders

9:10 p.m.

Conservative

John Duncan Vancouver Island North, BC

Mr. Chair, I will be very quick. The first time that this was proposed, all of the opposition parties combined actually accepted our invitation to present the joint submission through a press conference on the EDC backing of these cash deposits as receivables. That occurred in 2002, but it occurred at a time when the government had a majority. There was no interest at all from the government. Now we are in a different circumstance. I think the dial is turned up a certain amount on the government.

To answer the second question on moneys that have been returned under the softwood arrangement to American industries, that amounts to about $14 million. That $14 million represents moneys collected from companies that were fed up with filling out the legal documents that were required to stay in the game of being able to eventually recover this money. There were many smaller companies involved. This is one more argument for why we need the government to provide some umbrella in terms of some way to reimburse on the legal fees front to preempt this unfair distribution of their tariffs.

Softwood Lumber
Government Orders

9:10 p.m.

Sydney—Victoria
Nova Scotia

Liberal

Mark Eyking Parliamentary Secretary to the Minister of International Trade (Emerging Markets)

Mr. Chair, I would like to comment on the speech of hon. member for Vancouver Island North. I had the pleasure of travelling with him to Washington a couple of years ago. Along with some other MPs, we had to try to open some doors in Washington and talk to some of the senators and congressmen. He knows very well how difficult it is to get their time and to put our case forward.

He says he is very much in favour of an envoy and sending an envoy to Washington. He has also stated that he is in favour of opening negotiations. I would just like to know what the clear position is. If we send an envoy to Washington, will the envoy be opening negotiations? The Leader of the Opposition says there are no negotiations.

Could I have some clarity from the member for Vancouver Island North on the exact position of the Conservatives? Are there negotiations or not?

Softwood Lumber
Government Orders

9:10 p.m.

Conservative

John Duncan Vancouver Island North, BC

Mr. Speaker, this is unbelievable. I have just gone through a whole speech in which my preamble dealt with the fact that we cannot put words in people's mouths. These envoys are to communicate at the highest level. This is not negotiations. The NDP has tried to portray them that way for its own political purposes. Now we have my colleague from the Liberal Party stating that I have said we should be negotiating. I did not say that at all. I am profoundly disappointed that this thought is being kicked around. It is obviously something that we have never stated and I refute it in every way.

Softwood Lumber
Government Orders

9:10 p.m.

Liberal

Andy Savoy Tobique—Mactaquac, NB

Mr. Chair, I am pleased to have this opportunity to speak on the Government of Canada's strategies and maritime perspective on the challenges faced by maritime lumber producers.

I come to this debate from a fairly strong background in softwood lumber and the forestry sector in general having owned a woodlot. I still own a woodlot and I worked in softwood lumber. It is something that is certainly very important to the economy in my constituency. I have many friends and neighbours who work in the industry, so the sector that is critical to not only my friends and neighbours but the economy employs about one in six people in my riding.

The Government of Canada places the highest priority on resolving the softwood lumber dispute, and so it should. Our government, as I do, recognizes the vital economic importance of the forest products sector to Canada with sales of $59 billion a year and a total of 1,200 communities across Canada entirely or heavily dependent on this sector. Forestry contributes more to our nation's surplus than the automotive, metals and fisheries industries combined.

In Atlantic Canada alone there are over 785 lumber producers and 72,000 woodlot owners. I am proud to say that I am one. They owe their livelihoods to the lumber business. In my native province of New Brunswick, it is a $670 million a year business that provides 28,000 jobs or one in eight New Brunswickers with employment. It accounts for more than half of New Brunswick's exports making our province more dependent on softwood shipments than any other province in Canada.

Underpinning the success of this industry are free, open and competitive markets for Atlantic Canada's forest products, especially in the United States, where 90% of our New Brunswick products are sold. Although Atlantic Canada was spared the one-two punch of countervailing and anti-dumping duties in the last round of U.S. trade tariffs, the anti-dumping penalty alone has had very serious consequences for our region's forestry industry and our economy.

Until this shortsighted protectionist trade action, Atlantic Canada had enjoyed free and unrestricted commerce in logs and lumber with the U.S. These duties were clearly based on politics, not proof. The U.S. has always regarded our region as a free and fair trader, acknowledging that 75% of the timber cut in the Maritimes is cut on private land. Yet, even though the region had never been accused of being unfairly subsidized by stumpage fees, our producers were still slapped with an anti-dumping penalty. The consequences have been devastating.

Everyone loses in a trade war and in my riding we have lost big. On Monday two Fraser owned company mills shut down in my riding forcing 400 people out of work. That was the same lumber mill where I started my engineering career. While working there in 1988 and 1989 in the refurbishment of that sad lumber mill, it increased production on an eight-hour shift from about 80,000 board feet to about 260,000 board feet and subsequently it has gone up to 360,000 board feet. It employs a couple of hundred people, people who I grew up with, people I worked with and people I call friends.

This has had a very devastating impact and the softwood lumber dispute was one of the reasons cited for the layoffs. These shutdowns have occurred in communities not just in New Brunswick, not just in Atlantic Canada but all across Canada. We know that. They have also occurred in Plaster Rock, New Brunswick, where the softwood dispute really dealt a blow. We need action by the U.S. and we need it now.

As the MP for Tobique—Mactaquac, where one in six jobs depends on the forestry industry, I fully support the government in its efforts to find a long term, durable solution to the problem. I must stress durable solution to the problem in order to protect our nation's lumber interests. These efforts that the government is taking are focusing on litigation, political intervention and advocacy.

On October 14, the Prime Minister raised the softwood lumber dispute with President Bush, stressing its importance to Canadians. The Prime Minister spoke out forcefully about the importance of all of the NAFTA partners living up to their obligations. This was amplified, as we all know, by his speech at the Economic Club of New York on October 6, and he will continue to do so as long as the U.S. imposed duties remain.

The Minister of International Trade has spoken with his U.S. counterpart, U.S. Trade Representative Rob Portman, on several occasions to express Canada's strong concern over U.S. intransigence on the lumber file and the need for the U.S. to comply with its NAFTA obligations. Canada will continue to raise the softwood lumber issue at the highest level of the U.S. administration.

In regard to Canada's advocacy efforts, our main goal is to foster American support for Canada's position and to remind key U.S. decision-makers that this dispute has negative implications for U.S. as well as Canadian interests.

I had the pleasure and honour of travelling to Washington on four occasions now. On each occasion I met with those interest groups to explain to them the damage that this was having not only to Canadians, to my constituents, to Atlantic Canadians, but to people in the United States as well. I explained the big impact it was having to people in the home construction industry, for example, people who are working in Home Depots across the United States and people who are being severely taxed by this dispute. By some estimates there is a $1,000 increase in the average price of a home. We have played a strong advocacy role on that front.

We are taking advantage of every opportunity to put our message and our position before American decision-makers and those who will influence the lumber file. Ambassador McKenna has been sending Canada's message loud and clear to key groups and individuals in the United States. He is saying that U.S.-imposed duty on Canadian softwood imports hurts American businesses and consumers. Countervailing and anti-dumping duties on Canadian lumber negatively affect many other American industries and workers whose businesses use lumber. These advocacy efforts inform Americans that they are paying the price in order to benefit very narrow protectionist interests.

On March 2 the Minister of International Trade headed a delegation of federal, provincial and industry officials to Washington to promote Canadian-U.S. trade and to raise awareness of this issue. As I said, Ambassador McKenna and other officials have and will continue to meet with members of Congress to press Canada's position in Washington.

Canada has been working with U.S. organizations that share our view that these duties are detrimental to Americans. We are working with the major U.S. corporations, consumer advocates including Home Depot, American Consumers for Affordable Housing, the National Association of Home Builders to name just a few. I had the pleasure of meeting with some and they truly understand Canada's position and the impact this is having in the United States.

We will continue to seek new allies as well to make Canada's view known to influential U.S. policy-makers. We are getting the message out to key American audiences who must be made aware that jobs in America's lumber-consuming industries outnumber jobs in the U.S. lumber-producing industries by 25 to 1. The restrictions on Canadian lumber imports put American value added jobs at risk.

Key American audiences must be made aware that the U.S. industry cannot, on its own, meet U.S. demand for quality structural lumber. The U.S. duties on Canadian lumber disrupt a stable supply of high quality lumber. The American public must be made aware of that $1,000 increase to the price of a new home. The government's enhanced advocacy efforts ensure we get Canada's message across to our southern neighbours that the import tax on Canadian softwood hurts Americans.

The softwood lumber dispute also threatens to undermine North America's reputation as being one of the most predictable and transparent places in the world in which to conduct business. U.S. actions damage the large and integrated North American market by compromising the rules-based framework that governs it, NAFTA.

The NAFTA dispute settlement rules must work the way they were intended. Our advocacy efforts will raise the importance of NAFTA to the United States. Ambassador McKenna will make it known to audiences that the U.S. position threatens to undermine NAFTA.

The government's advocacy efforts also include a wide range of activities that many people in this House deserve credit for, including the Canada-U.S. interparliamentary group. This group hosted in St. Andrews, New Brunswick other members of Congress to discuss softwood lumber and other issues, and they should be commended for that.

We need an agreement that respects NAFTA and then further negotiations that respect Atlantic Canada's historical exemption to U.S. trade penalties. We need a durable solution. The sooner that agreement is reached the better for companies and consumers on both sides of the border.

Softwood Lumber
Government Orders

9:20 p.m.

Bloc

Paul Crête Rivière-Du-Loup—Montmagny, QC

Mr. Chair, I am pleased to speak after my colleague from the Maritimes. I had been getting the impression, this evening, that an additional step was being added to the issue of loan guarantees. The Bloc Québécois put this on the table several years ago. Now, all the opposition parties agree on the need for such a measure in order to consolidate Canada's position.

This evening, the chair of the Liberal forestry caucus told us that, to a certain extent, he hoped that there would be loan guarantees in the plan the government proposes. I even heard him say, at the end of his remarks, that the minister was preparing to announce various measures in the near future.

I want to know my colleague's opinion as to whether this evening's debate could be used to ensure that the government will ultimately include loan guarantees in its plan.

In fact, telling the Americans to respect their NAFTA commitment should be enough, but it is not. We could also tell them that we are going to grant loan guarantees to those from whom they have withheld $5 billion, that these companies will still be around when the debate is over and we have won on the free trade issue.

Does my colleague not consider this an excellent way to show the Americans that we are serious about our position, that we are not just talking the talk, but that we can also walk the walk?

Such actions will ensure that they will not be able to win merely by resorting to delaying tactics. Is this not a good way to send them a clear message that, ultimately, we will win this battle?

Softwood Lumber
Government Orders

October 25th, 2005 / 9:25 p.m.

Liberal

Andy Savoy Tobique—Mactaquac, NB

Mr. Speaker, I thank my Bloc Québécois colleague for his question.

One of the options the member mentioned is loan guarantees. It is being considered by the forestry caucus and the member who is chairing it, whom I must commend, the member for Kenora—Rainy River, is looking at this issue. There are some aspects of loan guarantees which must be examined. For example, the issue of countervailability of loan guarantees is an issue that we know is very important in this dispute and that issue has to be examined.

The key issue is also that after the return of $3.5 billion, the disputed ADD and CVD duties, we have to negotiate a long term durable solution that addresses the root of these subsidy allegations. It has to be addressed and considered. As we know, this has been a long process. We have seen this process in place with some type of litigation against Canada since 1986. For 20 years we have seen this action.

The Maritimes have been exempt in the majority of those situations, but I think this speaks to the issue of a long term durable solution that addresses the root of a lot of these subsidy allegations.