House of Commons Hansard #51 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was harbours.

Topics

Canada Elections Act
Government Orders

5:25 p.m.

Liberal

Alan Tonks York South—Weston, ON

Mr. Speaker, I am absolutely in favour of a level playing field, but I thought that what I had addressed was the point that I do not think it is a level playing field with respect to the ability to take out loans in the manner that has been presented in this legislation.

I think the emphasis should be on the reporting and the consequences if loans are not paid back. If there is a transparency with respect to who has loaned the money and the terms within which that must be paid back, why does it matter where it comes from if it is reported and on the record?

If that were the approach, with the emphasis on that, then I would think that through a consequential approach we would have a level playing field. I may be wrong, but at the end of the day I think that this is going to be a disincentive because it is not a level playing field for that very reason.

I believe that people should have the capacity to support the democratic process, and not with anything in mind that there would be some advantage sought from it. When they loan, if it is on the public record and it has to be paid back, why should it matter whether they are going to support a Conservative candidate, a Liberal candidate, the NDP or the Bloc?

The fact is that everyone knows and it is on the record that the money has been taken out, there is a cap on it and it has to be paid back. That is what the public wants to know.

Canada Elections Act
Government Orders

5:25 p.m.

Liberal

Judy Sgro York West, ON

Mr. Speaker, certainly the hon. member has had many years in politics. He is well aware of the difficulty of fundraising to begin with and especially now with the rules that all parliamentarians are working under.

When it comes to the whole issue of loans, does the hon. member have a concern about just who would run for leadership, no matter what party? With the kinds of rules we have, people cannot put in their own personal money either so it becomes very difficult to raise the money.

Would he have any further comments on whether this is going to discourage people who want to get involved in political life?

Canada Elections Act
Government Orders

5:25 p.m.

Liberal

Alan Tonks York South—Weston, ON

Mr. Speaker, I did not address the issue around leadership, but on the last statement with respect to encouraging people to come into public life, I think the bureaucratic regime in the bill is going to make it more difficult for people and provide less of an incentive to actively get involved in public life. I do not think that is intended by the legislation, but I think that is what is going to happen.

Kenya
Government Orders

5:25 p.m.

NDP

Alexa McDonough Halifax, NS

Mr. Speaker, I rise on a point of order. Discussions have taken place among all parties and I believe you will find consent for the following motion. I move:

Whereas Kenyan citizens voted peacefully on December 27, 2007 in Kenya's presidential election, signaling their commitment to, and confidence in, democracy;

Recognizing that urgent steps are needed to begin restoring Kenyans' faith and confidence in Kenya's democratic institutions as impartial guarantors of personal security, human rights and good governance;

Members of this House urge the government of Canada to:

Condemn the tragic loss of life and humanitarian crisis in Kenya following their December 27, 2007 election;

Support ongoing efforts by former UN Secretary-General Kofi Annan to work with relevant authorities and stakeholders to restore peace to the Republic of Kenya based on human rights and rule of law;

Work in concert with the international community using all diplomatic means to persuade relevant political actors and stakeholders to commit to a peaceful resolution to the current crisis;

Review current Canadian aid programs to Kenya in order to propose initiatives to enhance and facilitate Kenya's stabilization, reconciliation and development.

Kenya
Government Orders

5:30 p.m.

Conservative

The Acting Speaker Royal Galipeau

Does the hon. member have the unanimous consent of the House to move the motion?

Kenya
Government Orders

5:30 p.m.

Some hon. members

Agreed.

Kenya
Government Orders

5:30 p.m.

Conservative

The Acting Speaker Royal Galipeau

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Kenya
Government Orders

5:30 p.m.

Some hon. members

Agreed.

Kenya
Government Orders

5:30 p.m.

Conservative

The Acting Speaker Royal Galipeau

(Motion agreed to)

Kenya
Government Orders

5:30 p.m.

Conservative

The Acting Speaker Royal Galipeau

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Canadian Content in Public Transportation Projects
Private Members' Business

February 14th, 2008 / 5:30 p.m.

Liberal

Ken Boshcoff Thunder Bay—Rainy River, ON

moved:

Motion No. 183

That, in the opinion of the House, the government should implement a policy, which is consistent with North American Free Trade Agreement and World Trade Organization policies and guidelines, to mandate Canadian content levels for public transportation projects, and to ensure that public funds are used to provide the best value to Canadians by supporting domestic supplier and labour markets.

Mr. Speaker, it gives me great pleasure to rise today to begin debate on my private member's Motion No. 183, regarding Canadian content levels for public transportation projects.

This discussion has been a long time coming. In fact, this is the first time since the founding of this country in 1867 that domestic content levels have been discussed by the House of Commons. Clearly the conversation is long overdue.

I want to make it clear from the start that the intent of this motion is not to debate the specifics of what Canadian content levels, policies, percentages or processes should be. The wording of the motion is intentionally broad to allow for a discussion of the principle of domestic content regulations.

I hope that all parties can agree that we must do more to ensure that Canadian tax dollars are supporting Canadian manufacturers, suppliers and workers. Let us start by looking at the situation as it stands today.

Canada does not currently have any domestic content level requirements for publicly funded transportation projects. As a result, millions of taxpayers' dollars are being used to support manufacturing and to create jobs and economic growth in other countries.

For example, with the coming of the 2010 Olympics, the province of British Columbia is making a significant investment in infrastructure. As part of that process an improved rail system between downtown Vancouver and the Vancouver International Airport is under construction. It is called the Canada Line, and rightly so because the Government of Canada is providing $419 million for this $1.9 billion project. However, the railcar portion of approximately $68 million was tendered without any requirements for domestic content. It is now being built in South Korea.

In another example, York Region's Viva rapid transit system announced the expansion of its fleet in 2006 to help with increased ridership. The purchase of five new 60-foot articulated buses was awarded to Belgian bus manufacturer Van Hool. The price tag was nearly $3.9 million. Once again, the project was partially funded by federal tax dollars without any Canadian content requirement. Because of a lack of domestic content requirements, these are just two examples that resulted in nearly $72 million being spent to support workers in other countries.

In a very real sense, Canadian taxpayers paid twice: the first time with the contribution of federal tax dollars toward these projects; the second time because of the lost employment opportunities in Canada and the very real possibility that some Canadian workers were laid off or even let go permanently because of a shortage of work right here at home.

The real tragedy is that Canada is one of the only major trading countries in the world that does not have domestic content requirements for public transportation projects. This means that Canadian manufacturers and workers are placed at a significant disadvantage in the amount of work that is available from other countries. It also deprives us of an opportunity to attract investments into Canada, and hence of developing a globally competitive industrial cluster based right here. Let us look at some of the rules in some of our major trading partner countries.

In the United States the buy America act requires that 60% of the value of a public transportation project must come from within the United States. This percentage applies to all supplies and raw materials that are used in the contract. In addition, the United States requires that 100% of final assembly be done within the United States of America.

How has this legislation impacted Canadian manufacturers? In order for Canadian transit manufacturing companies to even bid on a U.S. project, they must have an assembly plant in the United States and locate U.S. based suppliers of the materials they need.

In fact, a Canadian manufacturing cluster of sorts has developed in the Plattsburgh region of New York State. Bombardier Transportation; CEIT, an equipment manufacturer; Multina, a maker of seats and interiors; PCS Technologies, a maker of communications systems; Railtech Composites, a supplier of interior devices and components; and Wadbec, a maker of brakes, air conditioning and electronic equipment have each set up operations in Plattsburgh in order to qualify for U.S. contracts. Clearly the U.S. model is an excellent example of precisely how domestic content policies help to grow a national economy.

Our other NAFTA partner has also implemented domestic content rules. In Mexico a 10% price differential benefit is given to companies that use local content of 50% or more.

Around the world we see more of the same. Domestic content levels are also enforced in China where 70% local content is required.

The 27 member countries of the European Union have very stringent rules about EU content requirements. Member countries must reject bids from companies that are not located in any EU member country or in a country with which the EU has a reciprocity agreement. In addition, a minimum of 50% of the product's value must be manufactured within the European Union.

The most severe rules are in Japan, which closes its market to any foreign country so that only Kawasaki has access to these projects.

All markets to which Canadian producers need access demand that they invest there before they sell, but in Canada, we place no such obligation on foreign producers. Indeed, if the situation does not change soon, Canadian producers may be obliged by economies of scale to supply into Canada from other jurisdictions.

As we can see, Canadian companies are at a significant disadvantage because of the lack of Canadian content requirements.

Now that I have outlined the rules of our major trading partners and how they preclude Canadian production and employment, I will take a few minutes to explain what the economic benefits of implementing domestic content levels on Canadian public transit projects would be.

As noted by the Canadian Manufacturers and Exporters in the recently released paper entitled, “Renewing Canada's Infrastructure: An Opportunity to Invest in our Future”:

The indirect, economic contribution of manufacturing and exporting companies to the Canadian economy is significant. It has been estimated that every dollar of value added by manufacturers results in $3.05 of economic activity in Canada -- the most significant multiplying factor of any Canadian economic sector.

In addition, we must consider that approximately 29% of the contract value of public transportation projects is spent directly on wages, salaries and taxable benefits, plus an additional 15% of the contract value is returned to federal and provincial governments as personal income tax revenues.

That translates into $440,000 on every $1 million of investment going back into our economy. This does not even calculate the spinoff effect of those payroll dollars to local merchants and service providers. These numbers make it very clear how we could use our tax dollars to generate employment and economic activity for Canadians. Why would we want to give this economic stimulus away?

Alternatively we can continue to send millions of these dollars to other countries, thereby allowing them to receive the benefit of employment, economic activity and tax revenue generation for their citizens.

It is not a matter of giving favours to manufacturers who are already here. Instead, it is an issue of whether or not we can emulate other countries and leverage on investments to attract global competitors to invest in the Canadian economy.

We want to use our policies to bring more bus and rail manufacturers to Canada. The right answer is abundantly clear. Canada must implement domestic content requirements.

This concept has earned substantial support across the country. The Canadian Manufacturers and Exporters, Canada's largest industry and trade association, is calling for just such a policy to support our manufacturing sector.

In 2006 the Ontario Chamber of Commerce, representing over 57,000 businesses through 160 local chambers of commerce and boards of trade, passed a resolution calling for domestic content levels.

My office has collected literally thousands of signatures in support of the motion. In addition, I receive letters of support from all across the country. William Cherry, president of Talfourd-Jones Inc. in Toronto writes:

The House endorsing this motion would send a clear signal to the government on the need to implement a Canadian content policy...as the only Bus Bumper manufacturer in Canada...you can imagine how we feel about buses being sold to Canadian transit fleets...carrying American made Bumpers paid for by Canadian tax dollars.

Jean-Pierre Baracat, vice-president of Business Development of Nova Bus in Saint-Eustache, Quebec, emailed us:

We, at Nova Bus, truly welcome your initiative and fully support this motion. To further substantiate your case, you should know that in order to be able to sell to U.S. municipalities, Nova Bus will be opening a new plant in New York state in 2009.

There are many other reasons for supporting domestic content levels as outlined by the Canadian Manufacturers and Exporters in the previously mentioned report. Some of these are as follows:

These measures reinforce the supply chains of national companies, especially small and medium-sized businesses in two ways. When governments require that a certain percentage of a given finished product's components be made domestically, it facilitates the entry of locally-based small and medium-sized manufacturers into the supply chains of major suppliers in charge of the project...The measures favour the attraction and retention of private investment...and...These measures help reach a high level of transparency in governmental tendering processes, while ensuring competition that is based on fair rules for the various vendors.

One concern that has been raised about this motion is whether NAFTA and WTO treaties allow such a policy. I make it abundantly clear that both NAFTA and WTO treaties do allow domestic content policies for transportation projects that support the national economy.

NAFTA chapter 10 reads:

1. This Chapter does not apply to procurements in respect of:

(b) urban rail and urban transportation equipment, systems, components and materials incorporated therein as well as all project related materials of iron or steel;

The World Trade Organization's agreement on public procurement reads:

1. Notwithstanding anything in these Annexes, the Agreement does not apply to procurements in respect of:

(b) urban rail and urban transportation equipment, systems, components and materials incorporated therein as well as all project related materials of iron or steel;

Let us remember that. As I have outlined previously, all other G-7 countries, all 27 European Union member countries and China already benefit from domestic content policies. It is time for Canada to stop being a doormat among our trading partners. We must stand up for our own best interest and the betterment of our citizens.

I ask fellow members of the House to support Motion No. 183 and in so doing, support the people of Canada on whose behalf we stand in these hallowed halls. Canadian taxes should support Canadian jobs and each of us has the power to ensure they do.

Canadian Content in Public Transportation Projects
Private Members' Business

5:45 p.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

Mr. Speaker, I listened with interest to the member's speech and I think the goals of his motion are certainly laudable. I have two questions.

First, does he have any idea as to how municipalities would feel about the federal government putting a restriction on their purchasing?

Second, do we have the capacity in terms of the manufacturing in Canada to ensure we would not slow down some of the municipal projects that may be going forward if we were to implement a measure like this?

Canadian Content in Public Transportation Projects
Private Members' Business

5:45 p.m.

Liberal

Ken Boshcoff Thunder Bay—Rainy River, ON

Mr. Speaker, I will answer the second question first. For municipalities, in terms of the pace of these projects, the acceleration of us being able to deliver, repair, maintain would end up being a very strong positive to municipalities. As a former mayor, councillor and the president of the Association of Municipalities of Ontario, I have been intrinsically involved in infrastructure projects and the design of those programs.

It is very important that Canada not lose its technological advantage in public transportation, which makes us vulnerable to other countries. I think of contracts that are lost within communities. Some of the members here have lost suppliers.

How does it affect municipalities? If we lose a plant of 120 full time workers with skilled trades, we lose the tax benefits, the salaries, the wages, the benefits let alone those other things that happen in terms of the suppliers and the spin-offs.

When a municipality makes the decision to go elsewhere, we lose the public transportation capability, technology, young people studying in universities and colleges, in drafting or engineering and our ability to export to other countries. What may appear on the surface to a municipality to be an immediate slight price advantage, wait until it starts paying for overseas flights to get its inspections and repairs done.

Canadian Content in Public Transportation Projects
Private Members' Business

5:45 p.m.

Conservative

Bruce Stanton Simcoe North, ON

Mr. Speaker, following along the same line of questioning, I may have shared with the hon. member that my riding had a small producer of seats for public transit projects, which closed not too long ago. Therefore, I take great interest in this topic.

Is the member looking to mandate these requirements on projects where the federal government provides funding support through some other infrastructure program? If so, what proportion of Canadian content is he looking to see in these projects?

Canadian Content in Public Transportation Projects
Private Members' Business

5:45 p.m.

Liberal

Ken Boshcoff Thunder Bay—Rainy River, ON

Mr. Speaker, in direct response to the hon. member for Simcoe North, I have not put percentages in is this because it is a fairly new concept, not only for parliamentarians but also for our public service.

Therefore, I want to ensure that we understand this fully in principle. By the federal government offering billions of dollars to municipalities in infrastructure and other funding, this is meant to generate Canadians tax dollars, multiplying not only within communities but within the nation and building us a strong public transportation infrastructure.

I believe it is a small request to ask of municipalities that if they come to us for federal support, that at the very least we can generate millions and billions more dollars throughout our nation by supporting a public transportation industry. Then we can really say “Canadian made” and feel proud of it.