House of Commons Hansard #52 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

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10:25 a.m.

Bloc

Pauline Picard Drummond, QC

Mr. Speaker, I thank the hon. member for Joliette for his most interesting presentation.

As we know, Canada has been dragging its feet regarding this issue. The government had 10 years to deal with the situation. We knew that, on January 1, 2005, custom duties and tariffs on all textile and clothing imports would be lifted.

When the government learned, through the headlines in the media, that our textile companies were closing, instead of coming up with an assistance plan to support them, it showed up in a panic with a series of measures which, in our opinion, are inadequate. The government will not correct this injustice by merely throwing money at the problem, in an attempt to bolster its image. Some specific measures must be taken.

Today, the media are reporting that, according to the Canadian Textiles Institute, this injustice could have been corrected by reaching an agreement on a free trade area of the Americas, to allow the free flow of goods.

I wonder if my colleague could explain to us how such an agreement could be implemented to correct the injustice done to our textile companies, in addition to the injustice suffered by the workers who are losing their jobs. These people have often worked their whole life in that industry and now they are finding themselves out of work.

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10:25 a.m.

Bloc

Pierre Paquette Joliette, QC

Mr. Speaker, I would like to thank the member for Drummond for her excellent question. It is indeed a basic issue.

The Bloc Québécois has always been fairly critical of the plan for a free trade area of the Americas, especially in social and environmental terms. In terms of trade, though, there would be obvious advantages. A good trade agreement, with strong environmental and social guarantees, would be better than what we have now.

For example, if the Government of Canada allowed Canadian textiles to be processed in the West Indies, as are American textiles currently, this processed clothing still could not enter the US market because it would not be considered to have sufficient Canadian content to be covered by the North American Free Trade Agreement. That is a problem. But it does not mean that we should not take this step immediately for the Canadian market. However, it would not enable us to enter the US market.

However, as I said, the Prime Minister announced that he was going to meet Mr. Fox and Mr. Bush in March and April. Under the Free Trade Agreement, nothing would prevent Canadian textiles processed in the West Indies from being recognized as North American in origin, just like clothing made from US textiles processed in the West Indies. This approach requires political will as well as some vision in regard to the development of our manufacturing industry, especially clothing and textiles.

The Liberals seem to be crossing out an industrial sector because of their prejudices, they are unaware of the reality, they do not want to look at the context in which problems arise. In this case, they put forward measures like those announced in December. They are a first, inadequate step toward resolving the problem.

This situation also demonstrates the urgency of reviving the negotiations on the free trade area of the Americas. This means that the Government of Canada should drop its approach of protecting investment, which can be seen wall to wall in NAFTA and under which companies have more rights than do governments. We know that people do not want this in South America.

Those primarily responsible for the current impasse in the negotiations over a free trade area are, first of all, the Canadian government and secondly the American government.

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10:30 a.m.

Conservative

David Tilson Dufferin—Caledon, ON

Mr. Speaker, I congratulate the member for Joliette for raising the issue in the House today.

It is not a new issue. It is an issue that has been around for a good number of years. The community of Huntingdon where Huntingdon Mills is located is obviously suffering a great deal by these job losses. I understand the population of Huntingdon is about 2,600 people and the loss of jobs is about half. All of us represent communities that have manufacturing industries and the magnitude of job losses is rather spectacular.

The question that I have for the member for Joliette deals with the final part of the motion that deals with a program to assist older workers. This type of job loss can be very devastating to a community. When half or all of the income is gone, depending on whether it is a single parent family, this has an effect on not only children and seniors but it can have a spin-off effect on jobs related to the industry.

For that type of magnitude I am surprised that the Bloc is zeroing in just on that one area, which is the assistance for older workers.

Companies have closed in my community and it has had an effect on everyone in the community: the retraining of people, finding jobs for people, assisting people economically to get them through that tough time.

My question for the member from the Bloc is why is he zeroing in on that one issue?

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10:30 a.m.

Bloc

Pierre Paquette Joliette, QC

Mr. Speaker, I would also like to thank the member for his question.

Huntingdon, it must be said, is just the tip of the iceberg. It stands out the most. We are talking about six companies closing in a small community. However, I would recall that there were closings in Trois-Rivières, Montmagny, Magog and Montreal. Just recently, a company closed in the Maskinongé area as well. We must be very aware of the fact that our industry has to be restructured. It cannot rest on its laurels, confident that we will protect it ad infinitum.

As we did in the past at the time of the North American Free Trade Agreement and also in previous decades, we need a program to help the industry restructure. This having been said, there will be some job losses of course, because companies are too outmoded technologically or because fewer workers than before will be needed as the result of technological innovation. A program to help older workers is one element. I emphasize this to the member, because we said: “With regard to these three elements.”

In the Bloc Québécois's proposals to the government, we also want a transfer of $200 million to the Government of Quebec—and this applies as well in the case of the other provinces—to provide occupational training programs. People will then be able to retrain or to work with the new technologies or in new occupations that will be created as this industry restructures.

So the member is quite right. This element seems essential to us. I recall that these assistance programs existed until 1997. We used them—I remember very well—in the case of the steel industry closures in the Sorel area and the mine closures in the asbestos region.

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10:35 a.m.

Bloc

Marcel Gagnon Saint-Maurice—Champlain, QC

Mr. Speaker, I do not know how much time remains for questions and comments.

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10:35 a.m.

The Deputy Speaker

We have only 40 seconds left.

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10:35 a.m.

Bloc

Marcel Gagnon Saint-Maurice—Champlain, QC

Since there are only about 40 seconds left, I will skip my turn and let the next member speak because my question would be longer than that.

We are talking about something that affects all of Quebec, but since my riding is deeply affected, I would have liked a longer discussion in this regard. I will continue with my other colleague.

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10:35 a.m.

Bloc

Pierre Paquette Joliette, QC

In the few seconds I have left, I would like to mention two things, very quickly.

First, the tariffs on imports have to be maintained. Under the WTO agreement, we have no obligation to reduce our tariffs on Chinese or Indian imports for example. They have to be maintained, because they are a very practical form of aid to our industries.

Second—and I did not have time to talk about it but I will have the opportunity to do so when I table a petition containing 13,500 signatures in connection with labelling clothing—we have to denounce the abuses and talk about the clothes that are made by children and prisoners and that are sold on the Canadian market. If consumers knew where this clothing came from, they would probably choose something made in Quebec or in Canada, or Quebec or Canadian textiles, because they know we try to give our workers the rights due them. Even if we do not always manage to do so, this is what we are aiming to do. We thus also consider the mandatory labelling of clothing something that will promote the Canadian and Quebec textile industry.

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10:35 a.m.

West Nova
Nova Scotia

Liberal

Robert Thibault Parliamentary Secretary to the Minister of Health

Mr. Speaker, it is a pleasure to speak to the motion.

I welcome the opportunity to speak on this motion today, and commend my colleagues for raising such a vital subject, one in which this government has continually seen as a priority. I regret, however, that this government cannot support this motion as written. The reason can be found in the very first line: that this House “acknowledge the inadequacy of the assistance plan for the clothing and textile industries.“

Far from an “inadequate“ plan, the December 14 announcement of new measures to make our textile and apparel industries more internationally competitive delivered. It offered tariff relief benefiting both the textile and apparel industries. It provided additional assistance funding for Canadian textile firms. And it responded to calls to extend the current duty remission orders benefiting textile and apparel manufacturers.

Those allegedly inadequate measures could be worth $600 million over the next five years. They will help Canadian companies improve their productivity and invest in new products and new markets, and they will provide them with the tools they need to compete in a changing global trade market.

This announcement also directly responds to the recommendations made by the House of Commons Standing Committee on Finance last fall. Specifically, the committee recommended extending the current duty remission orders and immediately ending tariffs on inputs not produced domestically. I could hardly call such a comprehensive package, one that explicitly responds to the concerns of the Commons finance committee, inadequate.

How specifically do these measures help these industries? Let us briefly summarize the measures announced by the government less than two months ago.

The first element of the recently announced textile and apparel package is tariff relief. The Government of Canada has eliminated tariffs on fibre and yarn imports and on imports of textile inputs used by the apparel industry, effective January 1, 2005. This single measure is worth approximately $90 million to the textile and apparel industries, every year.

The member from Joliette should remember that all apparel and textile companies can benefit from the elimination of tariffs on inputs they import. These benefits are unconditional, and apply across the country.

However, and this is a very important point, tariffs will remain on products where Canadian production can be demonstrated. The Minister of Finance has already asked the Canadian International Trade Tribunal to consult with the textile industry over the next three months to identify such products.

The textile industry now has an opportunity to provide evidence of actual production. Their input will be given great consideration in making final decisions on precisely which articles will benefit from tariff elimination. Importers will be required to pay duties while this consultation takes place and until final decisions are made regarding which imports can benefit from tariff relief. Once a final decision has been made, importers will be able to request a refund on the duties paid on these products since January 1 of this year.

Some may ask if apparel companies would be required to pay tariffs if the textile industry starts producing something that is currently not manufactured. It is a longstanding practice not to restore tariffs once they have been removed, to ensure that the tariff system is transparent and predictable.

Transparency and predictability benefit the Canadian economy by providing importing companies with the stability they need to make long-run investment decisions. Furthermore, domestic producers of goods not subject to duties know when they are entering a market that they will have to compete in a duty-free environment.

The second component of our December 14, 2004 announcement is assistance to the textile industry. The Government of Canada will provide a further $50 million in funding to the textile production efficiency component, or CANtex, over the next five years to encourage Canadian textile companies to adapt, to shift to higher value added products, focus on niche markets and improve productivity. All firms in the textile industry that make textiles for apparel use will be eligible to apply for further assistance under the enhanced CANtex initiative. I say further because this is not the first time this government has recognized the competitive challenges faced by the industry and acted.

In February 2004, for example, we provided $26.7 million to CANtex, and before that provided $33 million to the Canadian Apparel and Textile Industries Program—funding, which has been used in over 300 projects that increase productivity, lower costs, improve efficiency and identify new markets.

Mr. Speaker, the member for Joliette should recognize that this Industry Canada funding has made a difference. It is not funding designed to compensate firms having difficulty competing. It is there so that they can find their own solutions, by improving their production process, identifying emerging opportunities and purchasing the equipment that will beat their competition to market. It is designed, Mr. Speaker, to ensure our companies can take on the world and win.

The final measure deals with duty remissions. The December announcement included extensions to duty remission orders introduced seven years ago as a temporary measure to help textile and apparel firms adjust to earlier competitive pressures caused by increasing global trade. These gave companies in six textile and apparel subsectors the right to a remission of duties paid on certain imports.

Benefits have averaged $30 million annually over the past three years, with 90% of the benefits going to apparel manufacturers and the tailored collar shirts and women's wear subsectors.

These orders were set to expire on December 31, and I clearly recall many members of this House standing up and demanding that this government extend these orders and give these individual firms time to adjust.

The government heard from many firms in the apparel industry as well, which stressed the importance of the remission orders to their viability and called on the government to not let these orders abruptly expire at the end of last year.

That is exactly what we did, but we also introduced a phase-out period for these temporary measures. Firms benefiting from these orders have until the end of 2009 to adjust and to make the changes necessary to adapt to a changing trade environment.

Remission order benefits will decline to 75% of original levels in 2007, to 50% in 2008 and to 28% in 2009. They will expire completely on December 31, 2009.

In short, Mr. Speaker, in recent years, this government has repeatedly made the commitments necessary to help these companies face the competitive pressures they are dealing with. We lived up to that commitment once again on December 14, 2004.

And we will never back down on that commitment, no matter how many ill-advised motions are introduced by the opposition on “inadequate assistance” plans that are directly benefiting the workers on these companies across Canada.

There is something else missing from the member's motion today, and that is reality, the reality of a global economy that has more open markets and more trade between nations than ever before. We hide from this reality at our peril.

Clearly, Canada's textile and apparel industries face an increasingly competitive marketplace. Competition from low-wage developing countries increased this year when all countries, not just Canada, removed their quotas on textiles and apparel. This was the result of World Trade Organization negotiations 10 years ago, negotiations designed to open new trading opportunities for all countries, including Canada and, I remind members, Canadian manufacturers abroad.

As the hon. Minister of Industry said on the day these measures were announced, “There is nowhere to hide in the world of trade and textiles. The whole world is going through it right now”.

Fortunately, Canada has historically been a trading nation. Our industries recognize this even if some of their members of Parliament may not. As the Canadian Textiles Institute has concluded, the Canadian textile manufacturing industry in recent decades has transformed itself through substantial and sustained capital investment. They take such steps, Mr. Speaker, because they recognize the realities of today's global trading environment, not the trading rules of the past that the member for Joliette may pine for.

The Government of Canada understands today's realities too.

The December 2004 assistance announcement considered the risk of trade retaliation by other countries; in short, such a risk of countervailing duty measures would be low. This is a vital consideration if Canada's aim is to introduce measures to improve the competitiveness of these industries. Otherwise, the introduction of subsidy assistance measures encouraging the use of Canadian made products over imported ones, which this motion appears to be asking for, would likely be challenged by our trading partners in the World Trade Organization.

The WTO Subsidies Agreement explicitly prohibits subsidies that are contingent on import substitution. It is one more reason this motion cannot be passed as written.

The motion before us today calls for the use of safeguards provided for in trade agreements. These safeguards already exist.

Canada's trade legislation, like that of other trading nations, provides for various measures to protect domestic producers from any injury caused by import competition. The Special Import Measures Act, the Canadian International Trade Tribunal Act, the Customs Tariff and the Export and Import Permits Act together are what make this protection possible.

As well, under the World Trade Organization accession protocol, China agreed to a special textile and apparel safeguard. Under this provision, WTO members can protect their domestic textile and apparel industries from market disruption when imports from China threaten to impede the orderly development of trade in these products.

Here is how it works. If increased imports cause or threaten market disruption, domestic producers may request that the Minister of International Trade introduce the special textile and apparel safeguard. If consultations do not result in voluntary restraint, then quotas may be imposed. This special safeguard provision is in effect until the end of 2008.

My colleagues will speak further as to the numerous examples of this government's commitment to the textile and apparel industries. They will describe this country's efforts to work toward an integrated North American market for Canadian apparel and textile products and to consider any and all proposals made jointly by these two industries for new market development.

They will outline how this government continues to act to protect against illegal transshipment of imported apparel and textile products, and to respond to industry complaints regarding import injuries. They will summarize how the employment insurance program has continued to meet the needs of workers adjusting to changes in these industries. And they will elaborate on the many, many measures introduced in recent years to provide assistance whenever required to ensure these companies have the resources to compete.

These companies will have challenges, as we have seen recently, but then, they have also had to confront challenges. After all, the Canadian textile industry is one of Canada's oldest manufacturing industries, yet history shows it has evolved and modernized to the point where today it employs 50,000 Canadians across the country.

When markets for Canadian textile products change over time, these entrepreneurs adapted so that today the subsector producing textiles for apparel use comprises approximately 25% to 30% of the Canadian textile industry. Today they produce a wide array of textiles, including carpeting, industrial and specialty products, which would have been unimaginable a century ago.

Likewise, the apparel industry employs nearly 100,000 Canadians, and is centred in Canada's big cities, such as Montreal, Toronto, Winnipeg and Vancouver. The jobs it provides are often the jobs generations of new Canadians have turned towards, and today approximately 40% of apparel workers are first-generation immigrants.

I should also note that the textile tariffs paid by Canadian apparel firms, ranging from 5% to 14%, are much higher than the tariffs on inputs used by other Canadian manufacturing sectors. That is one of the reasons we introduced substantial tariff relief before Christmas.

Yes, they have faced hardship, and will continue to do so, but history says that they will make the changes necessary to continue to prosper. These are companies that can compete. They are modern and efficient. They invest in their production and are a major user of high technology. They provide quality jobs for thousands of Canadians.

They will ultimately succeed if government can provide them with the assistance that can help them compete in a world where other markets remain open to their products as well. They are more than capable of doing this, and recent years have illustrated how progressive federal economic policies can help them do that.

With government support and encouragement over the course of the last decade, Canada's textile and apparel industries have demonstrated the innovation and the investment required not only to simply survive, but to thrive in the 21st century global economy.

As a member of this government, I am proud of the steps taken to help them succeed. They are far from “inadequate”. And for those reasons I cannot support this motion.

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10:50 a.m.

Conservative

Deepak Obhrai Calgary East, AB

Mr. Speaker, I note with much interest that it is the parliamentary secretary for health who is speaking on trade issues. That is quite an interesting response from the Liberals on this very important subject.

What brings this to our attention, and the Bloc motion recognizes this, is what is happening in the domestic industry. It seems to me that the Liberal government is rushing all the time to sign these trade deals, deals that seem to be desired by the government to put its signature on trade deals without doing a deeper analysis of how they will impact the domestic market.

There is no denying the fact that as a trading nation we need to sign trade deals to protect ourselves. There is no question that with 31 million people our prosperity lies in international trade and that will have an impact on domestic markets.

However, if we look at the crises that are now taking place in the beef industry with BSE, in the softwood industry, and now in the textile industry with the closure of six plants in Quebec, we all knew that this would happen. We all knew a long time ago in the WTO negotiations that we were moving in this direction. I was at the WTO meetings in Seattle and Doha.

What I fail to understand is why the government takes stopgap measures. It makes these announcements about stopgap measures to help our local Canadians who are impacted by these trade deals. Even now, the record of this government in assisting domestic Canadians in relation to these trade agreements is not something to be proud of. Someone asked the parliamentary secretary, what is the point? Why do you want to rush into signing trade agreements when you do not really do a thorough analysis of what is happening in the domestic industry?

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10:55 a.m.

The Deputy Speaker

I remind the member to address his comments through the Chair. We will hear from the parliamentary secretary.

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10:55 a.m.

Liberal

Robert Thibault West Nova, NS

Mr. Speaker, the member for Calgary East is a lot more knowledgeable about international trade agreements than we would know by the tenor of his question. He would know that we do not rush into negotiations. He would know that these negotiations take years to achieve

. He would know that the deal that was signed 10 years ago at the World Trade Organization, which eliminates barriers this year and eliminates quotas, was negotiated over many years and was probably begun by a government previous to this one. He would know that a lot of those negotiations were done by governments, including the Canada-U.S. free trade agreement. A lot of these had come into context. Rushing into agreements I do not think is the context; it is something that is worked at over a long period of time by the international community.

He raises a couple of interesting points. He asks why the Parliamentary Secretary to the Minister of Health would be apprised of this question. I was a member of the finance committee when we made the recommendations to the Minister of Finance. I stood in the House saying that I agreed we should do this and maybe more, maybe we should go further, and I think the Minister of Finance has gone further. We asked for two items and he gave us measures worth over $600 million.

In my riding, we had three textile industries that have had difficulty. We had Dominion Textile that closed down after over 100 years in operation. It moved to Magog and then had trouble there. We lost Britex, a small specialty manufacturer that had big trouble a few years ago. Incidentally, Dominion Textile's and Britex's first bankruptcies or foreclosures were under a previous government. I think the member should know that. He should not talk about just rushing. There was a refinancing of Britex, but unfortunately it had trouble again.

I believe the measures we are taking forward are one of the things that will help companies like that succeed in the future.

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10:55 a.m.

Bloc

Alain Boire Beauharnois—Salaberry, QC

Mr. Speaker, I listened carefully to the Parliamentary Secretary to the Minister of Health and I would like to ask him a few questions.

As we well know, Canada is competing with China in the textile industry. Now, the sales of Quebec's industries are going down because they are not competitive and, consequently, they get fewer orders.

I would like the parliamentary secretary to explain how those industries can get the support of the CATIP program, for instance, since all its funds have already been distributed?

Besides, as we well know, 85% of the support available under the CANtex program is allocated to the clothing industry and 15% to textile manufacturers. This program helps businesses obtain the funding they need to buy new capital equipment.

How can one use this program when one's sales and orders are down by half? How can it be done?

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11 a.m.

Liberal

Robert Thibault West Nova, NS

Mr. Speaker, this is an extremely important question. If we wish to witness, on the long term, not only the survival but the expansion of a prosperous industry able to adapt to modern reality, protectionism has never proven to be an efficient way to reach this goal. Modernization, new technologies, capitalization, investment, market and product development are the important issues that the industry has to deal with.

In terms of investment, there are over 300 projects throughout the country where the industry works in partnership with the Government of Canada to help businesses develop and increase their competitiveness.

All sectors of Canadian industry facing modernization are going through tough times. Where there used to be thousands of mills and lumber mills, there remains only a few large companies, which are sometimes experiencing difficulty. All sectors have to deal with those issues relating to competition. I believe that the answer lies in international competition, long-term planning and modernization.

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11 a.m.

Bloc

Réal Lapierre Lévis—Bellechasse, QC

Mr. Speaker, before I begin, I would like to point out the presence today of textile and apparel workers from the Montreal area. They are here to ensure that, together, we will find better solutions to safeguard as many jobs as possible in the textile and clothing sector.

My question for the member opposite has three parts.

First, I would like to know if my hon. colleague can confirm that, when it opened the border to textile and clothing exporters, the government of the day was sufficiently prepared for the negative effect on our own industry.

Second, admittedly, there has been considerable effort made in this field. However, can he confirm that the corrective measures now in place are sufficient to deal with the disaster this has caused among manufacturers, particularly those in Quebec?

Third, in this field as in others, are the amounts set aside for research and development sufficient and suited to the change in direction that the textile and clothing sectors must make?