House of Commons Hansard #92 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

Canada-EFTA Free Trade Agreement Implementation Act
Government Orders

10:05 a.m.

Vancouver Kingsway
B.C.

Conservative

David Emerson Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics

moved that Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to a committee.

Mr. Speaker, it is a great honour for me to stand in the House today and lead off debate on this trade agreement with the European Free Trade Association.

It is important when we debate our trade relationships to bear in mind that Canada has been, is now and always will be a highly trade dependent country. Indeed, there is probably not a member in the House or a person in Canada who is not dramatically affected by Canada's trade and Canada's trade performance.

I should note that we are unlike the United States, for example, as we are nearly two and a half times more trade dependent than the United States. We have a domestic market of 34 million people compared to nearly 400 million in the United States.

Trade is Canada's lifeblood. We can look at the forces of protectionism, which will be damaging to the United States over time if they continue, and we can see that if such forces were to be unleashed in Canada, I can assure hon. members it would be not just hurtful but devastating to Canada. Therefore, it is critically important that Canada continue to develop trade relationships such as the one we are debating today.

As you have noted, Mr. Speaker, this agreement is with four countries: Norway, Iceland, Liechtenstein and Switzerland. It is really a milestone in terms of Canadian trade policy. It is a milestone for a couple of reasons.

First, it is really our first substantial trade agreement in over a decade. Canada had a small agreement with Costa Rica in 2001, but I have to tell hon. members that the trade and investment numbers between Canada and the EFTA countries are nearly 30 times that of our relationship with Costa Rica. Really, our previous most significant trade agreement was back in 1996-97, when we made the deal with Chile.

We can look at the trade numbers and see that the combined exports and imports between Canada and the EFTA countries were over $13 billion in 2007. That is of course higher than our trade with Korea. It is a very substantial volume of trade and has grown rapidly in recent years.

When we look at foreign direct investment, we can see that two way investment flows between Canada and the EFTA countries are in the $28 billion range as of 2007. While people may make light of the fact that this is not a deal with the entire European Union, which would be our next priority on that side of the Atlantic, this is a very significant trade deal. These countries are relatively wealthy. Their GDP per capita is among the highest in the industrial world. They are technologically advanced countries. As I say, it is our first trade deal with a European bloc or country in terms of our bilateral free trade agreements.

When we look at it strategically for both countries, we can see that this is a trade deal that allows the EFTA countries to think of Canada as a gateway to the entire North American market, a market of 440 million people, and it allows Canadian businesses to look at the EFTA countries as a gateway into the European Union, because the EFTA countries do have a free trade arrangement with the European Union.

It is also important because Canada, and I think the majority of Canadians, most provinces and certainly the Government of Canada, is anxious to deepen our economic relationship with the larger European Union. To have shown that we can establish a free trade deal of the kind we have done with EFTA puts us in a very strong position to maintain and improve momentum in terms of doing a deeper trade deal with the European Union. That is a very high priority of this government.

As I look at our trade relationships, it is very important for members to recognize that we really have been on the sidelines for the better part of a decade in terms of our trade policies. We have become extremely dependent on the United States market because of NAFTA. That is all good, but for our trade it does mean that roughly 76% of our exports are going into the United States market. That is highly concentrated.

There are protectionist pressures in the United States these days, so it is critically important that we not focus just on improving NAFTA, which is a focus for us, but that we also look at diversifying our trade relationships. Other countries are doing it and they are doing it aggressively.

We can look at the United States. It has free trade agreements with 16 countries. Mexico has free trade agreements with 40 countries. Chile has trade agreements with 53 countries. Many of these countries are negotiating additional agreements as we speak.

We can look at Canada. Before this agreement, we have had free trade agreements with five countries through four agreements covering five countries. That is not good enough for a trade dependent economy like Canada's, which is why Canada is actively negotiating free trade agreements with a number of countries.

We have active trade negotiations going on with some 27 countries. When we broaden it to cover air bilaterals, investment agreements and free trade agreements, we are negotiating presently with something in the order of 100 countries.

This government is committed to a re-energized trade policy. We are moving forward aggressively to ensure that Canada is back in the game and that Canadian producers and Canadian jobs are not disadvantaged because we are sitting on the sidelines.

I would also note that on the same day we signed the EFTA agreement in Davos, Switzerland, we also concluded negotiations with Peru. That is another very significant trade agreement. It is a new generation trade agreement. When it comes before the House I will be able to explain to members some of the new and innovative elements in the agreement with Peru.

This agreement is what we call a first generation trade agreement because it was initiated roughly a decade or so ago, so it does not cover trade in services. It does not have an investment chapter, although it does have provision for those chapters to be added within the next three years.

I should say that this deal is a good one for both agricultural and non-agricultural interests in Canada. It has certain sensitivities that have been inhibiting the closure of this agreement over the years. The shipbuilding industry was one particular area in which we have had some sensitivities.

This agreement has the best provisions on shipbuilding of any free trade agreement that Canada has ever signed. The tariff phase-out is 15 years on the most sensitive products and 10 years on the next most sensitive products, and the first 3 years is a period during which there would be no tariff reductions at all.

When we combine what is in this agreement with the buy Canada shipbuilding program that the Government of Canada is bringing along, with over $8 billion in shipbuilding, and when we combine that with the replenished structured financing facility for shipbuilding, I think we are on the threshold of a renaissance in the shipbuilding industry in Canada. I think it will be very good for the shipbuilding industry.

Even today as we speak, the Davie shipyard in Quebec, which has gone through serious financial problems over the last 10 years, is now owned by a Norwegian company and its order book goes out at least five years, with many of the vessels and work being done in that shipyard being sold back into the Norwegian and European markets.

I would also note on the agriculture front that this agreement does exclude the supply managed sectors. As members know, we have committed not to put those on the table in our free trade negotiations with other countries, and we have not done so in this case.

Let me wrap up by saying that this is part of the government's approach to enhancing Canadian competitiveness and to recognizing that while we have had the strongest economy among the group of eight, certainly fiscally and economically, we do see risks on the horizon. Everyone knows there are some serious economic adjustments taking place in the United States and the rest of world. We are aggressively moving to ensure that Canada's economic performance in the long term is enhanced, because Canada's economic performance will be driven by our trade performance.

There will be no way that we can spend our way to prosperity in Canada. It does not work that way. It leaks out in terms of just enhancing imports for Canada. We have to trade. We have to export. We have to sell to other countries. Our global commerce strategy, which is part of “Advantage Canada”, is designed to do just that.

I would note that our approach is driven by the modern integrated approach to international trade which recognizes that trade today is driven by global value chains. Global value chains are driven by investment. Global value chains are driven by technology. Global value chains are driven by the movement of capital and people around the globe.

Rooting those value chains deeply into Canada is a critical part of our trade strategy, which is why our free trade agreements are important. It is important to expand our free trade agreements from goods to cover services and investment. It is important to bring air bilaterals into the mix, because if we do not have good air services between Canada and our trading partners, we cannot service and be efficient in terms of being part of global supply chains.

We are also doing investment agreements. As I noted earlier, investment agreements are critical because investment carries with it technology and opportunity in terms of driving exports and imports.

We are looking at transportation and logistics in a way that integrates this, like no other country and like never before in Canada, with our trade policy. Our transportation and logistics gateways in the Atlantic, in the Pacific, through Churchill in the north, and north and south between Ontario and Quebec and the United States, are critical elements of trade policy. Without transportation and logistics at a globally competitive level, we simply will not be a competitive trader in the world economy today.

This is part of a larger mosaic of policies that are fitting together in a comprehensive way to ensure that Canada, Canadians and our kids and grandkids have opportunities like those we have enjoyed in the past. I welcome the discussion on this agreement today.

Canada-EFTA Free Trade Agreement Implementation Act
Government Orders

10:15 a.m.

Liberal

Gerry Byrne Humber—St. Barbe—Baie Verte, NL

Mr. Speaker, I would like to congratulate the minister on certain aspects of this agreement.

However, I would like to ask him a question as well. Does this agreement with the four European continental countries involved explicitly provide a basis for those four countries that prevents them from banning seal products from their marketplace on the basis of perceptions of the animal cruelty aspects, which other European countries are currently providing? Does this agreement provide a rules-based approach that prevents those four countries from doing so?

Would the minister, in consideration of any potentially expanded European free trade agreement with other European countries, put the marker down right now that Canada will not engage in any discussions with any other European country unless they agree immediately to put into a rules-based approach that the banning of Canadian seal products would be explicitly illegal?

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10:20 a.m.

Conservative

David Emerson Vancouver Kingsway, BC

Mr. Speaker, the hon. member raises an important question for Canada. That is the number of initiatives that have been launched in Europe, in particular, where countries are attempting to ban seal product exports from their markets.

This agreement does not actually have to deal directly and explicitly with the banning of seal products because the World Trade Organization rules, in Canada's view, already prohibit that type of a ban. We are aggressively pursuing consultations and possibly will follow that up with trade actions to ensure those rules do prevent and prohibit these types of bans in the future. We have ongoing discussions with a range of countries around this very issue.

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10:20 a.m.

NDP

Jean Crowder Nanaimo—Cowichan, BC

Mr. Speaker, the government has said that shipbuilding is of strategic importance to the sovereignty of this nation. We have people like George MacPherson from the Shipyard General Workers' Federation talking about the fact that currently the shipyard industry is only operating at about a third of its capacity and that over the next 15 years it will be worth about $9 billion in Canadian jobs. The Shipbuilding Association of Canada and Irving Shipbuilding have called for a carve-out. We know that in the United States, for example, under the Jones Act, the Americans did a carve-out and were able to protect the shipbuilding industry in the U.S. Given all that, why would this minister not consider putting on the table a carve-out for the Canadian shipbuilding industry?

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10:20 a.m.

Conservative

David Emerson Vancouver Kingsway, BC

Mr. Speaker, I think I should correct the member. The United States actually does not carve shipbuilding out of its trade agreements. The United States has domestic policies that prohibit foreign-constructed vessels from plying between two U.S. ports. Canada does not have such a policy.

I would reassert that this agreement has the longest tariff phase-out of any agreement in Canada's history, in terms of the shipbuilding industry.

I would also note that the Canadian shipbuilding industry is poised for a major expansion that I believe is going to tax the capacity of Canada's shipyards. It is going to require the training of shipyard trades that will be employed in the future. The Canadian shipbuilding industry is becoming technologically sophisticated.

We have carved out the “buy Canada” privilege that we now are able to apply to ships that are purchased by the Government of Canada and its agencies. So, that is preserved. Also, when we look at the billions of dollars in ship procurement that Canada will be doing over the next few years, our shipyards are going to have all the work they can handle.

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10:20 a.m.

Liberal

Navdeep Bains Mississauga—Brampton South, ON

Mr. Speaker, I listened very carefully to the minister's remarks. I have two specific questions for the minister.

The first question is with respect to the free trade agreement itself. In his remarks he mentioned that it is simply a generation one agreement and deals strictly with goods. He alluded to the fact that in 2007 there was approximately $13 billion worth of two-way trade, in terms of goods. However, there is also tremendous opportunity in the investment regime, as well; approximately $24 billion worth of two-way investment between Canada and the EFTA countries.

Would he speak to the fact that this deal does not specifically address that and what steps is the government taking to deal with that?

The second question is with respect to the issue around shipbuilding. I think that is a very important issue that has been raised by the Liberal Party, in the Liberal caucuses; specifically, the Atlantic caucus, which is standing up for shipbuilders.

The minister has been very clear about the concerns around that, as well, but the government has only proposed a $50 million renewal of Industry Canada's structured financing facilities. Does he feel that $50 million is sufficient to help the industry transition when the tariffs are reduced?

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10:25 a.m.

Conservative

David Emerson Vancouver Kingsway, BC

Mr. Speaker, I would offer an update on the numbers on direct investment between Canada and the European Free Trade Association countries.

The numbers for 2007 now show that investments are up at $28 billion, from $24 billion in 2006. So investment is a chapter that we intend to add, as well as a chapter on trade and services. The agreement makes provision for those to be added as chapters. It also stipulates that should be done within the next three years. So, we will be working with the EFTA countries to ensure that we put those chapters in place in a timely way.

I have spoken to shipbuilding. I will say again that the Canadian shipbuilding industry is about to go through a renaissance. I think it is dinosaur thinking to build the future of an industry as potentially dynamic as shipbuilding on the kind of protectionism that we have applied in the past. It is an industry that has the capacity in certain kinds of vessels and certain technologies to be globally competitive. It is an industry that can have a long term future, not just a future that is propped by interim protectionism. It is an industry that has a future.

The structured financing facility, as the member knows, is not in my bailiwick. That is the Minister of Industry's portfolio. However, I would say that we, as a government, will be assessing that on a go-forward basis, assessing whether it is sufficient to support the global competitiveness of the shipbuilding industry. Then we will see how it looks over the next couple of years.

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10:25 a.m.

Conservative

Brian Storseth Westlock—St. Paul, AB

Mr. Speaker, as usual I will have to leave the agriculture questions to this side of the House.

As the minister knows, the agriculture industry has become increasingly reliant on trade with the United States. Our producers realize this and realize the need to look somewhere else, to be able to open markets in other places of the world. That is what they are reliant on our government doing.

I would like the minister to ensure for us that the agriculture industry is going to be a net benefactor out of this. I would like the minister to perhaps take a bit of time to talk about some of the benefits in the free trade agreement for our producers.

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10:25 a.m.

Conservative

David Emerson Vancouver Kingsway, BC

Mr. Speaker, we have made some quite significant gains in terms of the opportunities for agriculture in this agreement. Certainly, on durum wheat we are going to see some real opportunities from this agreement. Moving into crude canola, it will see some significant gains as a result of this agreement as well.

On the agri-food side, frozen french fries, beer and frozen blueberries will gain market advantage. There will be a wide range of tariff reductions on processed and frozen foods in all three markets and in other sectors as well. In the non-agricultural area there will be significant gains for a number of manufacturing producers in Canada.

This should give Canadian producers a real opportunity and more than that it gives them an opportunity to go into these markets and establish a supply chain between EFTA and Canada but also extend that supply chain into the European Union because the European Union does have a free trade agreement with the EFTA countries. It is a real opportunity for Canadian companies who are really serious about competing in the global marketplace to take a great leap forward.

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10:30 a.m.

Liberal

Navdeep Bains Mississauga—Brampton South, ON

Mr. Speaker, I take great pride in the fact that I have an opportunity today to speak to this very important bill, Bill C-55, with respect to Canada-EFTA, now referred to as CEFTA, the Canada-European free trade association agreement.

From the outset I want to indicate our party's position on this very important bill, which is that the Liberal Party supports this deal, but calls on the government to continue to monitor and consider the issues around shipbuilding and the shipbuilding industry because this is something that has been brought to our attention on numerous occasions.

We look forward to working with stakeholders in the shipbuilding industry and with the government to make sure it addresses these concerns. I will allude to some of these concerns in my remarks as well.

Before I begin, I want to take a step back and create a context for the reason why we are supporting the bill. It is very important for the members in the House to recognize that we are the party of free and fair trade. We are the party of Wilfrid Laurier. We are the party, since that time, that has expanded Canada's trade opportunities abroad. We recognize that we are a trading nation.

It was during the Liberal Party's regime that we signed and even created side agreements that were very important, beginning with NAFTA in 1994, then, as the minister alluded to, Chile and Israel in 1996, then Costa Rica in 2002. All these agreements gave Canada additional opportunities and allowed us to succeed in the international community.

Currently, under the leader of the Liberal Party, the leader of the official opposition, and understanding points of trade, we recently made an announcement. I just want to remind members about the importance of trade because as the minister alluded to, we need to look at opportunities and we need to ensure that we take advantage of the opportunities.

In my opinion I feel the government has done limited work. I understand the minister has done a lot of good work, but I think he is constrained by the Prime Minister in that the Conservatives have done very little work when it comes to Asia, for example, and that is an area where there are tremendous opportunities.

On February 20 the Liberals made an announcement to allocate $50 million for the creation of the South Asian foundation to really harness the growth potential in a booming Asian economy.

I mention this in the context that we need to look at trade from a macro level. We promote the Doha round discussions very much and we think trade is very important, but we also need to look at how we deal with an emerging Asia, how we deal with a united European Union, and how we position ourselves within North America for economic prosperity and for the opportunities that exist.

In terms of this particular free trade agreement, I would also like to remind the House that it was under the Liberal government that this initiative was started, but we recognize there were some legitimate concerns around shipbuilding, and so we worked extensively with the shipbuilders to see if those issues could be addressed.

This is a generation one agreement. It strictly deals with goods. It does not have provisions for investment or services, and those are areas where there have tremendous opportunity and potential. We need to work with that. That was the question I asked the minister earlier because I felt that it was very important and needed to be addressed.

With respect to the trade agreement, people sometimes do not recognize our trade with EFTA and how important it is, but it is actually a very important trading partner. It is Canada's fifth largest merchandising export destination. It has two-way trade of approximately $13 billion. It is a tremendous opportunity for our businesses here in Canada to export into those markets.

People sometimes underestimate their importance when we allude to some of the countries involved in this agreement: Switzerland, Liechtenstein, Iceland and Norway. People do not think of those as countries that we necessarily trade with, but we do a lot of trade, However,t more importantly, there is a lot of investment and two-way investment between those countries.

I have 2006 data with me. Investment has increased, but we actually invest around $8.4 billion into those countries and they in turn invest $15.6 billion in Canada. There is tremendous opportunity there with respect to trade. Those trade statistics allude to the importance of our trading relationship and this will enhance that relationship. However, there is a tremendous potential that exists in the service sector and the investment regime as well.

The other area that was mentioned that I thought was very important to discuss, and the member opposite mentioned it as well, is with regard to agriculture and agricultural products. This is an important issue that was raised during a committee discussion as well. When the free trade agreement was initiated and eventually signed, there were legitimate concerns around supply management.

We support this free trade agreement because it maintains the Canadian supply management program. That is very important to us. As a Liberal Party, we have been staunch defenders of this initiative and we feel supply management is very important for our domestic market.

Therefore, because of the provisions in the agreement and the fact that Canadian supply management programs are maintained, the agricultural issues by and large are addressed. This was our primary concern with respect to agriculture. We understand the importance of agriculture. We raised this issue and ensured this issue was dealt with in the appropriate fashion in the agreement.

I alluded earlier in my remarks to non-agricultural goods. I said we supported this deal but we had concerns specifically around shipbuilding and the shipbuilding industry. We are supportive of the deal because it legitimately address some of those concerns, for example, the fact that for the first three years there is no tariff reduction, which is very important for shipbuilders. Once the deal is signed, hopefully effective January 1, 2009, if all goes well, it will ultimately mean that by 2012 there will be no tariff reductions for shipbuilders.

Subsequent to that, there will be a 15 year phase-out on Canada's most sensitive vessels. Those sensitive vessels range from ferries to cruise ships to offshore supply ships to basically salvage ships. Those vessels will have a 15 year phase-out. The other vessels such as tankers, those having to do with drilling platforms, drill ships, ice breakers are given a 10 year phase-out period. Those are sufficient safeguards to allow for the reduction of shipbuilding tariffs and allow the Canadian industry the opportunity to rebuild itself in some context, to redefine itself and ensure that it can compete not only domestically, but abroad as well.

The other issue we felt was important was whether the requirements for buy in Canada procurement policy would remain intact, which was important to us. When we saw the deal, this had been maintained and honoured in the free trade agreement. There was no requirement to modify the buy in Canada procurement policy.

Therefore, not only do we have a long tariff reduction phase, but we have a buy in Canada procurement policy that is maintained and protected.

The other concern we had was with respect to the dispute mechanism and how we would deal with any disputes if they were to occur. We again have very little confidence in the government. If we take, for example, the softwood lumber agreement, or as some refer to it, the softwood sellout, that very much questions the government's judgment and the way it represents Canada.

I remind the viewers and the members in the House, that agreement cost $1 billion of Canadian taxpayer money. It left $1 billion on the table. It created a quota system in Canada. It in effect forced companies in Canada, the softwood lumber industry, to be subjected to quotas. Now we are going to the courts again with the U.S. government on these issues again. We are being sued on these matters, or being taken to court in litigation over this.

More important, the fundamental issue we had with that was we lost our sovereignty. We lost the ability to genuinely be able to create programs in Canada to work with industry, and that concerned us.

Therefore, we want to ensure the dispute mechanism does not reinvent the problems we incurred with the softwood lumber agreement. The dispute mechanism in this agreement addresses some legitimate concerns around snap-back provisions, about the fact that it will establish a joint committee to supervise the implementation of CEFTA. Disputes will be resolved through cooperation and consultation and any matter not settled in 90 days may be referred to a tribunal to interpret the agreement and determine consistency with obligations. These important provisions have been addressed in the agreement.

We support the bill. We support the free trade agreement. As I said before, we are the party of free and fair trade. Liberals understand the importance of trade and of creating opportunities for our businesses.

I want to share one small example with the House. I come from the riding of Mississauga—Brampton South, which is situated close to the airport. Many logistical companies, owners of small business and others rely on trade and look for opportunities to expand trade. It is unfortunate that the Minister of Finance is attacking Ontario. He has said not to invest in Ontario. I hope the Minister of International Trade will not follow suit and will use his better judgment.

The reason I bring that up is because Canada's trade surplus has been in decline since the Conservatives took power. Our trade surplus is shrinking each month and our export market opportunities are fairly limited. The government needs to continuously examine foreign markets to look for opportunities for our businesses, specifically small and medium sized enterprises, like the ones in my riding, that depend on trade, and create a lot of jobs and economic opportunity.

This is a first generation trade agreement. It is a step in the right direction. It addresses some legitimate concerns around agriculture, supply management, and the shipbuilding industry, but we still have some concerns.

I asked a question earlier today with respect to the structured financing facility. The shipbuilding industry is supported through Industry Canada by a $50 million renewal. This is not sufficient. The government needs to do more.

The Minister of International Trade, in his previous job as a minister in the Liberal government, was also the minister responsible for Industry Canada. He looked at this issue. I asked my question in that capacity. I wanted him to explain to the House what more was being done to help this industry in terms of financing. The minister is very optimistic about shipbuilding. He feels it is a dynamic industry with a lot of potential. I want to ensure that the minister understands we share those same concerns. There is tremendous opportunity as well in that industry. Perhaps the minister could speak to that issue and explain what more is being done to help it out.

I look forward to any questions or concerns by members opposite.

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10:40 a.m.

NDP

Paul Dewar Ottawa Centre, ON

Mr. Speaker, the member made a number of points about the government's policy on trade in general, but specifically on the proposed trade deal.

Our party has raised concerns about our shipbuilding industry, and my colleague from B.C. raised it earlier. This is not a concern for only Atlantic Canada; it is also a concern for B.C. as well. There is the potential for jobs for manufacturers right across the country in supplying parts, et cetera. In the case of B.C., we have called on the provincial government to do more.

The member talked about procurement policy. Governments can make a difference, in this case a provincial government. They can buy Canadian. They have to remember our Canada first policy. We are frustrated because we do not see that happening.

I listened carefully to the minister and to the member about the tariff phase-out. Most Canadians want to see a healthy shipbuilding industry, one that is supported by provincial governments. They want to see our Canada first policy.

Before we enter into a deal like this, should we not have a healthy, robust shipbuilding industry? Norway has done that. If we enter into a trade deal like this, it will have all the advantages and we will have all the disadvantages. As was mentioned by my colleague, we are not at full capacity. We are not buying Canada first. We need to have a healthy shipbuilding industry. Should we not focus on our shipbuilding in Canada first before we enter into a trade deal like this, particularly in light of Norway?

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10:45 a.m.

Liberal

Navdeep Bains Mississauga—Brampton South, ON

Mr. Speaker, in my opinion, many members of the House share the same concern. I know I do. Members not only from Atlantic Canada but across the country, especially from British Columbia as well, share concerns about the shipbuilding sector and the fact that the industry might be exposed to tremendous competition from EFTA countries, specifically Norway.

I am glad he mentioned Norway. That point was raised in committee on numerous occasions. We received clarification time and time again that Norway no longer had a program or a regime that provided subsidies. The concern with Norway is a legitimate concern, but it was been addressed in committee.

At the beginning of my comments, I said that we supported the agreement, but we had legitimate concerns about the need to ensure the meeting Canada's procurement policy was kept intact, which I believe it is. That is my understanding and that is what the minister and the government have said. I also said that I wanted further clarification on structured financing.

We need to pursue free trade agreements, especially with some of the challenges we face, such as the Doha development agenda. We need to create more export opportunities. With the strong Canadian dollar and the tightening of the border, we need to look at diversifying our markets. There is potential opportunity here, recognizing the concerns he has referred to with the shipbuilding. If the government could provide further clarification on a structured financing for the industry, that would definitely help the industry put itself in a competitive position going forward.

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10:45 a.m.

Liberal

Sukh Dhaliwal Newton—North Delta, BC

Mr. Speaker, I would also like to echo the comments made by the hon. member for Mississauga—Brampton South about the minister. He has done some good work. I had the opportunity to work with him when he was on the Liberal side. I congratulate him on the free trade agreement, which we have signed.

My question is around the shipbuilding industry as well. I have a concern from the perspective of B.C. The member said that it was a 15 year trade out period, but those post-Panamax cargo vessels are not part of the agreement.

Could the member explain how it would not affect British Columbia and Atlantic Canada when it comes to those ships? Also, could he explain in detail what small businesses in his riding will benefit with the trade with South Asia, so we can look forward to trade with those nations?

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10:45 a.m.

Liberal

Navdeep Bains Mississauga—Brampton South, ON

Mr. Speaker, again, I believe the member is referring to the comments I made with respect to the announcement by the leader of the official opposition, on February 20, with regard to a $50 million commitment to create a foundation to strengthen ties with Asia.

There is no doubt that the member from British Columbia is very concerned about that because British Columbia acts as a portal to Asia. It is very important for us to create strong economic opportunities. I hope the government takes those comments very seriously and understands the importance of building strong relationships with Asia.

Specifically, the questions he mentioned with regard to shipbuilding and the tariff reduction regime, I alluded to them in my remarks. I will highlight which ones are subject to a 15 year tariff reduction and which ships and vessels are subject to a 10 year tariff reduction.

Ferries and cruise ships are subject to a 15 year tariff reduction. Again, I want to preface this comment by saying that made in Canada procurement policies are protected and exempt in this agreement as well. Dredgers and salvage ships are subject to a 15 year tariff reduction. With respect to 10 year tariff reductions, this includes tankers, fishing vessels, drilling platforms, drill ships, production platforms and icebreakers.

Those are categories, If there is anything specific that the member has with regard to any particular vessel, we can always look it up to ensure it is part of the regime. If not, then I will take it into consideration and follow-up.

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10:45 a.m.

NDP

Jean Crowder Nanaimo—Cowichan, BC

Mr. Speaker, I paid close attention to the member's comments. I want to address shipbuilding, coming from British Columbia.

In the early 1980s our shipbuilding industry was very healthy. What has happened over many years of government neglect, which we can lay both at the Conservative and Liberal doors, is the shipbuilding industry has gone into crisis. We have seen shipyard after shipyard close.

The member pointed out, quite rightly, that Norway's shipbuilding industry currently is not subsidized, but it had a long period of government investment and subsidy to get it to the place where it was healthy enough to be able to stand alone.

Why would the member not support the shipbuilding industry's own request to have a carve out provision for the shipbuilding industry and then to have an effective government policy to actually support shipbuilding, particularly in view of the fact that it is of strategic national importance? Why would he not support a carve out?