House of Commons Hansard #6 of the 40th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was agreements.

Topics

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11 a.m.

Okanagan—Coquihalla
B.C.

Conservative

Stockwell Day Minister of International Trade and Minister for the Asia-Pacific Gateway

moved that Bill C-2, 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 very timely that our colleagues on all sides of the House are giving consideration to this important legislation. With regard to the actual work that has been done, people on all sides need to be congratulated for the extensive amount of work that was done to conclude the negotiations. That has taken place. The process now is it comes to Parliament for ratification.

The timing of this is really fortuitous because we are engaged right now, whether we like it or not, in a synchronized global downturn of economies and the world is gripped by this. We are looking for ways in which trade and commerce can move and sending signals that the opportunities for workers, producers and manufacturers are there. It is an important that we are seen to be pursuing this, and we are.

We understand that if we really want to protect industries within our country, if we really want to protect our workers, then what we do is we open up the doors and the opportunities for them to sell their products and services and manufacture those things which are wanted in other parts of the world.

As Canadians, as a country, we are as prosperous as we are because we are free traders. We believe in the importance and the power of doing that. As a nation, we cannot in and of ourselves consume everything we can produce. We must have ways to sell and to market not only our products but our services if we are to continue to be prosperous.

The backdrop to our discussion today is the fact that there are clouds on the horizon related to the whole issue of protectionism. Some countries possibly are reflecting that the best thing they can do is build protectionist trade walls. We know this would be a negative thing to see happen. We know history is very clear. When we look at the conglomeration of nations and how nations encourage and move along in terms of prosperity, we only have to look back to the horrific economic ramifications of the Great Depression.

In 1930, when that global economic downturn took place, some economic specialists speculated that they were facing probably a one or two year recession at the time. The United States came out famously with the Smoot-Hawley legislation that started to build a protectionist barrier. Other countries responded in kind and pretty soon around the world we had situations where countries could not sell or export the very things that were needed and that would have led to prosperity. In fact, the recession was deepened, leading to the Great Depression.

That is a 60 second summary of what took place. Therefore, it really is a backdrop of what we are talking about today and it shows the importance of moving on with this type of legislation.

Our competitors are many and are friendly allies, whether it is the United States, or Australia, or the U.K. or the EU. We are friendly nations, but we compete and do have things that we can sell back and forth and encourage our mutual prosperity.

We should be aware that in the pursuit of free trade agreements our competitors have been very busy and active. The United States just over the last short period of time has concluded some 17 free trade agreements. It is in the process of pursuing another eight. Mexico, our other partner in NAFTA, has concluded 12 free trade agreements. If we go further south in the Americas, Chile has concluded 13 free trade agreements with other countries. In fact, its 13 agreements cover 43 separate countries.

Therefore, if we look at a situation where we want to deal with a country that has a free trade agreement with somebody else, its goods and services will get into those countries tariff and barrier free. That puts our manufacturers at a serious disadvantage. We need to look at reducing those obstacles and increasing and expanding our doors of opportunity.

At what is now referred to as the Washington conference last fall, the G20 leaders made a declaration that countries should not fall back into or delve into areas of protectionism. It is called a stand still on any protectionist activity. I would suggest that a stand still is necessary, and that was endorsed by trade ministers around the world at the following discussions that took place in Peru at the Asia Pacific economic meetings. From our perspective, we are going even further than that. We are not saying stand still, we are saying move ahead and overcome the inertia that is gripping the world in terms of trade right now.

Therefore, we have before us the European free trade area agreement. When we talk about what those letters stand for, some people might think this is a deal that engages all the European community. In fact, it does not. We are talking about four very sophisticated entities: Iceland, Norway, Switzerland and tied in with that, Liechtenstein. These are modern, sophisticated entities. They say that they want to engage with us and we want to engage with them to reduce and eliminate trade barriers.

The numbers coming in at the end of 2007 for two-way trade and investment with Norway were $4.7 billion. In the summer of 2008, Norway added to that investment another $3 billion just in the areas of oil, gas and agriculture.

There is a broader platform and picture that needs to be taken into account, because we are talking about engaging these four entities. However, for us, this is an entry and lever into the broader EU community for an eventual and much hoped for Canada-EU free trade agreement. This is something we are zeroing in on, something we have been discussing for some time. The Czech Republic has the presidency of the EU for the next six months. I was in Prague last month and I talked to officials there. I made it clear that we were ambitious on that score. We made that point with the European Commission as well. On another free trade area, being the EU area, we are very ambitious and are working toward the conclusion of discussions to get a formal framework in place to start that process.

In and of itself, the so-called EFTA agreement before us today is important for the prosperity of our citizens and the four entities named. However, there is the broader context which is important to keep in mind. Clearly, consultation between us and the provinces is very important when we look at these types of agreements. The consultation process involved in the EFTA agreement was extensive, and will continue to be. We want provinces to come forward with their areas of concern and sensitivity. That has been done in this process and those have been thoroughly fleshed out and addressed to the point where we could sign the agreement.

As an example, we had concerns from the shipbuilding industry in Canada. What happens when we take away the tariffs related to shipbuilding, we open ourselves up to global competition. We believe we can rise to that competition and meet any of the challenges the world has to offer, but we looked at those sensitivities, particularly those in Quebec and other provinces with shipbuilding industries. In a spirit of co-operation and understanding, as we discussed this with our four partners on the other side of the EFTA agreement, we agreed we to look at the removal of those tariff barriers, but do it over an extended period of time, 15 years in this case related to the shipbuilding industry. Therefore, the sensitivities we hear from around our country and from various industries are taken into account as we move along this road.

It also fits with our government's global commerce strategy, as we have talked about in our comprehensive action plan in which $60 million has been committed just to the area of doing what we can in terms of our global strategy to assist manufacturers, exporters, entrepreneurs and innovators to get not just the message but the products out there in a way that gets worldwide attention and shows that Canada has something to offer, which then increases our ability to manufacture, export and to be prosperous.

We are not stopping with this agreement. We have been very clear that we have agreements now concluded with Peru and Colombia. These will eventually come to the House. We had an earlier agreement with Jordan, and there are others in process. Our officials are in discussion with South Korea, Panama, the Dominican Republic, the CARICOM nations in the Caribbean, Singapore and the group of nations called the Central American Four, being Guatemala, Honduras, Nicaragua and El Salvador. We are actively engaged to ensure we do everything globally in our commerce strategy to keep the doors open and the opportunities very much alive for Canadians.

It is not strictly on a trade side. There are other areas that have to be pursued, and we do that in concert with the trade discussions. For instance, if we are going to invest in another country, our investors and business people have to be assured that there is a platform, a framework, that offers the benefits of rule of law, respect for contract law and other similar areas. We call these our foreign investment protection agreements. It is necessary to strike these with other countries. We will never guarantee that somebody's product will sell, but we can work with another country to ensure that the investment itself is subject to certain standardized rules and certain rules of contract law and investment law, banking law and credit, so at least our investors and business people know they have a level playing field and a platform when they go into those countries.

Along with that are science and technology agreements. We have put in place these very important initiatives with a number of countries, and I signed one not long ago with Brazil, where industry and the academic communities will know we have science and technology agreements, where both governments would pool an agreed upon amount of funds and then send out a message inviting the universities or scientific communities to bid for procurement of those funds to mutually pursue areas of science and technology.

Along with those, we look at a variety of other agreements that affect our economies. Air service agreements are very important when we are talking about giving choice to consumers, but also keeping costs down in terms of transporting and shipping product.

I might add we have in our budget considerable funds, into the billions of dollars, for our great gateways in our nation for shipping, such as the Asia-Pacific gateway. We have a gateway proposal and the funds to back it up for the Atlantic region.

We are doing everything we can, on a variety of levels, to build the platforms and construct the frameworks for Canadian entrepreneurs, innovators, manufacturers and exporters in virtually any area of endeavour who feel they have something worth selling. We will never guarantee they will be able to sell that, but we can guarantee we will smooth the way as evenly as possible within the context of the various trade agreements that are signed onto globally so their products can be established and Canada can continue to be prosperous.

I arrived in Switzerland for meetings on Friday and met with the vice-president. Literally moments before my arrival the upper house had in fact passed its portion of the agreement before us today. I am certainly not saying it was my arrival that moved that along. I would not even suggest that. However, it gave me great encouragement that the Switzerland legislators were dealing with it, that they saw this as positive and that they were moving it along. I assured them that we would be going through a similar process here and that, respectfully, with the input of colleagues here, we hoped for a successful conclusion of the discussions, the ratification of the agreement in our Parliament and the ongoing prosperity of Canadians, especially in this era of global concern.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:15 a.m.

Liberal

Alan Tonks York South—Weston, ON

Mr. Speaker, on behalf of the House I would like to thank the minister for a very excellent overview with respect not only to the agreement but some of the associated issues. He has mentioned the foreign investment protection agreements. He has mentioned the science and technology agreements. He has talked about the infrastructure that we are going to invest in to make our regions more competitive.

I wonder if the minister could address two issues. The first is the matter of equity. In talking about the sense of fairness on the issue with respect to Korea, where I understand there are ongoing discussions, the automotive industry here is extremely concerned about the inequity with respect to the import of Kia and other vehicles and no reciprocity with respect to that sector.

The other question is with respect to transportation technologies. The minister talked about the agreement with Brazil, but every time we have been to the WTO in terms of access and competitiveness with respect to Bombardier and transportation products, we win those hearings but we do not seem to be able to reinforce that international agreement that there has to be fairness through the ongoing statutory and quasi-judicial processes.

I wonder if the minister could comment on those two particular areas.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:15 a.m.

Conservative

Stockwell Day Okanagan—Coquihalla, BC

Mr. Speaker, those particular questions do not refer directly to EFTA but they are important questions. They are germane to the broader discussion and I am happy to address them. I appreciate my hon. colleague raising the questions.

We are engaged in discussions with South Korea and hopefully we will move along with an eventual free trade agreement.

The issue of the 6% tariff related to vehicles is something that is being actively discussed. We are looking at the percentage of those vehicles, the impact that it would have. The exact number is relatively small vis-à-vis the rest of the market here in Canada.

That is an example of the sensitivity that has been raised. We are definitely working with our industries in discussions and we are crunching the numbers on that to see how that can be applied. We are pursuing this agreement with Korea.

I agree with my colleague, related to Brazil with whom we do not yet have a free trade agreement. If we did, then I think some of these other issues would be resolved.

It is an ongoing frustration that we will identify with another country what we might perceive as something that is heavily subsidized or even a non-tariff barrier and take it to an independent dispute mechanism to be adjudicated, get a favourable adjudication, and then find out that the other side is not that enamoured with the decision. That creates ongoing difficulties. These are the facts of life, unfortunately, in some of the areas of trade. We are very concerned about that.

We are in ongoing discussions with the company the hon. member mentioned. With respect that particular company, Bombardier, I was in India last month. It is supplying the cars and the metro system that is going to greatly assist not just the transportation system but of course the whole environmental question. Here is a Canadian company that has shown it can compete anywhere in the world. To be frustrated by a lack of follow-up when we—

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:20 a.m.

Conservative

The Deputy Speaker Andrew Scheer

Order, please. I will have to cut off the hon. minister there to allow for a few more questions. The hon. member for Burnaby—New Westminster.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:20 a.m.

NDP

Peter Julian Burnaby—New Westminster, BC

Mr. Speaker, I listened attentively to the minister. It is quite interesting that he did not actually refer to any of the specifics of the EFTA agreement, which I think is curious given that he is supposed to be promoting this agreement. I want to read into the record some of the comments that have been made around the specifics of EFTA. We have Mr. Andrew McArthur, from the Shipbuilding Association of Canada, who said in testimony to the standing committee:

From day one, we said the Norwegian industry has been totally supported by its government to build up a tremendous infrastructure. It is a good industry with a lot of government help, and now they're looking to see what else they can do. So our position from day one has been that shipbuilding should be carved out from the trade agreement.

That did not happen. We have Karl Risser, representing marine workers, who said: “What we have seen is the EFTA agreement, which we feel will further devastate the shipbuilding industry”. He goes on to say: “So this EFTA deal is a bad deal for Canada”.

We have George MacPherson, representing western marine workers and shipyard general workers, who said:

Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.

We have very clear comments on the specifics of the EFTA agreement. Is this just another softwood sellout? But this time the government is selling out the shipbuilding—

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:20 a.m.

Conservative

The Deputy Speaker Andrew Scheer

The hon. Minister of International Trade.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:20 a.m.

Conservative

Stockwell Day Okanagan—Coquihalla, BC

Mr. Speaker, let me go into some details. Usually the details at this stage and the discussion does not normally take place. We get into those as we move forward in the various stages of the bill, but I am happy to look at some of the specifics.

Just to let the member know, and I will just go on until you stop me, Mr. Speaker, there are certain vessel types that will subject to the 15 year phase-out period. This has been discussed with the industry. The tariff lines that are subject to the 15 year phase-out include tugs, ferries, cruise ships, off-shore supply vessels, cargo ships, dredgers, salvage ships and other types of stationary vessels.

Then there are some that are subject to a 10 year phase-out under this particular agreement, and those include different types of vessels and floating structures: tankers, icebreakers, small fishing vessels, drill ships, drilling platforms and production platforms. These are negotiated.

We also not only look at a long-term phase-out but we make it very clear to our domestic shipbuilding industry that we are there for them and with them in a very broad way in terms of developing the framework. I would encourage the member to get back to the people he has mentioned--

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:20 a.m.

Conservative

The Deputy Speaker Andrew Scheer

Questions and comments, the hon. member for Sherbrooke.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:20 a.m.

Bloc

Serge Cardin Sherbrooke, QC

Mr. Speaker, I have a question for the minister. We began negotiations 10 years ago. Yet, in those 10 years, the government was not able to present an economic impact study in committee. In the report, the Bloc Québécois said that the Canadian government must, without delay, implement an aggressive maritime policy to support the shipbuilding industry, while ensuring that any such strategy is in conformity with Canada's commitments at the WTO.

We know that after a three-year waiting period, there is a decrease in tariffs spread over 10 years. However, what is the government's plan to put Canada in a good position when it comes to the shipbuilding industry?

We know that Norway benefited from subsidies for many years and that it of course developed its construction expertise and performance, as well as its strong competitiveness. If the government does not want the shipbuilding industry to be ignored, it must intervene to create a maritime policy, while tariffs are decreasing, so that Canada will be competitive after that period.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:25 a.m.

Conservative

Stockwell Day Okanagan—Coquihalla, BC

Mr. Speaker, I appreciate my colleague's questions.

We are pursuing a strategy with Norway. We now have a commitment from officials in Norway that they will announce any subsidies to their shipbuilding industry. And we will pay careful attention to ensure that they are keeping their promises.

As well, we have done something for Quebec's shipbuilding industry. Two months ago, I announced that we would give Davie shipyards—a large industry that employs close to 3,000 people—and we increased—

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:25 a.m.

Conservative

The Deputy Speaker Andrew Scheer

Order. Unfortunately, the minister's time has expired for questions and comments. We will move on to resuming debate. The hon. member for Kings—Hants.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:25 a.m.

Liberal

Scott Brison Kings—Hants, NS

Mr. Speaker, I thank the minister for introducing this legislation in the House this morning.

I just returned, as did the minister, from the world economic forum in Davos, Switzerland, which is notable because it was a year ago at the world economic forum in Davos that the then minister of international trade signed the EFTA agreement.

I was at the world economic forum last year and this year, and what a difference a year makes. A year ago, everyone was talking about their optimism about continued global economic growth. Former U.S. treasury secretary John Snow was chiding Larry Summers, another former U.S. secretary, for his lack of optimism and faith in the U.S. economy to recover and to continue to grow. John Thain last year was the new CEO of Merrill Lynch, and he was the centre of very positive attention at last year's world economic forum. This year, he recently was subpoenaed.

The fact is that things have changed dramatically in terms of the global economic situation, which is one of the reasons why we as parliamentarians have a responsibility, at the committee level, to ensure due diligence as we are evaluating these types of agreements in terms of making sense for Canada.

We believe very strongly that particularly during a time of economic downturn, we have to avoid protectionist sentiment, particularly if we look at the degree to which we as a country rely and depend upon, disproportionately, the U.S. economy. During a global economic downturn, which is largely caused by the downturn in the U.S., it makes the case for diversifying our trading relationship.

We understand that. The Liberal Party is a party that believes very strongly in freer trade relationships and building freer trade. We are very concerned about what we heard at the Davos conference over the weekend. Last year it was all optimism, growth, excitement and trade liberalization. This year we heard about pessimism, recession, depression from some people, fear and protectionism.

Some of the comments I heard from U.S. legislators concerned me. There was a session on Saturday called the fight against protectionism. At that session I heard U.S. congressman Brian Baird defend the recent protectionist measures in President Obama's new stimulus package that is being debated and amended by Congress as it moves forward. He was defending those protectionist measures as making sense for the U.S. and in fact being fair and legitimate.

That raises a real concern for us. Not only do we need to diversify our trading relationship but we also have to ensure that we are making every representation we possibly can to the trade people within the Obama administration, as well as bilaterally between Canadian parliamentarians and our counterparts in the U.S., both at the congressional and senatorial levels, to ensure that we are making the case as to why protectionist measures from the U.S. against other countries can target Canada and in fact create an unintentional consequence of taking a global downturn and making it far worse.

This was of course the case back in the 1930s with the Smoot-Hawley tariff act, which took a downturn and created a long-term depression because the Americans brought in protectionist measures and other countries retaliated. At a time when we have to encourage more trade between our countries in this global hypercompetitive economy, we actually put up barriers in the 1930s that created a major depression.

We understand the need to move forward, to diversify our trading relationships, to ensure that Canadians can compete and succeed globally and that we have access to markets where we can sell our goods produced here by Canadians. It is going to be critically important in the coming weeks to make effective representations to the Obama administration and to the U.S. Congress as to why Canadian goods and services have to be exempted from U.S. protectionist measures, and perhaps even more importantly and more broadly, why these protectionist measures have a pernicious effect on global trade and as such probably do not make sense in any case. However, if the Americans will not move on some of those measures, we have to seek Canadian exemptions.

I am starting off by talking about trade issues on a macro level and I am going to zero in on EFTA in a moment, but there is real concern that on some of these trade issues the government has not successfully diversified Canada's trade relationship.

Clearly one of the greatest opportunities for Canada in the 21st century lies in tapping into the tremendous market in China. China's economy will continue to grow this year by 6% to 7%. It represents one of Canada's most exciting and dynamic trade opportunities. It represents an economy that will grow even during this global downturn.

India's economy is growing by 6% to 7%. I note with interest that the Minister of International Trade was in India recently. He obviously recognizes the importance of that trade relationship.

However, on the China issue, the reason why the government has said it has not pursued deeper relations with China, and in fact has actually hurt the China relationship by taking every possible opportunity to poke its fingers in the eyes of the Chinese government, is based on trade. My point is that this has not stopped the government from pursuing a free trade relationship with Colombia. Over the weekend at the Davos conference, I spoke with Kenneth Roth, head of Human Rights Watch, who gave me substantive, important and irrefutable evidence as to continued human rights abuses in Colombia. We know this. It is well known.

The government has to be consistent. It cannot pick favourites in terms of trade policy. If we are not going to pursue deeper relations with China, and if we in fact are going to destroy what was a very strong relationship with China on the trade and economic engagement side, then we have to be consistent. Our relationship with China goes back to Pierre Trudeau and Richard Nixon, who agreed on only one thing, engaging China, and they were right back then.

We have to be consistent and the fact is that the government has not been consistent. It has pursued an ideologically rigid perspective relative to China that has made no sense economically or on the basis of human rights. I would argue that our capacity to influence China on human rights is less now than it was three years ago when the Martin and Chrétien governments built a strong bilateral relationship with China, one that not only could augment our capacity to influence Chinese human rights but could also build tremendous prosperity and opportunity on the energy side.

That relationship could have given Canada the opportunity to become a global leader in clean energy and be China's clean energy partner. Today, not only have we destroyed that trading relationship, but it is at the point where we have also reduced and diminished our capacity to engage China on human rights issues.

Those are some of the issues. Trade policy has to be consistent. We have to be consistent in defending our national interests, our national economic interests, and our capacity to influence the world in terms of the kinds of values that we believe in as Canadians. Protecting our capacity to play a meaningful role in shaping a more peaceful and stable world where human rights are respected is critically important. Creating markets for Canadian goods and services, thereby enabling Canadians to compete and succeed globally, has to be part of our mandate in terms of the government's policies to build wealth and to shape a world where human rights are respected.

However, the government cannot pick favourites along ideological lines and achieve anything, because consistency is critical. The government has been inconsistent in terms of its approach to China and its approach to Colombia, which is absolutely opposite in terms of the approach to human rights. That is going to be an important debate to have in the coming days and weeks.

As we enter a time of significant economic turmoil, and as we see Canadian jobs being lost, we are going to have to be absolutely focused on ensuring that our industrial, trade and foreign policies are consistent and tenable. When we lose influence in the world in a place such as China, it can often mean that we will lose jobs here in Canada.

When I talk to Canadian business people who are doing business in places such as China, they say that they are seeing jobs, opportunities and deals lost because of the government's approach to China. That is going to be an important trade policy for Canada in the coming months. It is one in which we intend to engage Canadians.

Multiculturalism is viewed as a social policy in Canada. In fact, multiculturalism can be an economic policy. If we can successfully harness the tremendous entrepreneurial capacity and leadership in our multicultural communities, we can build natural bridges to the fastest growing economies in the world, such as those of China and India.

We in the Liberal Party of Canada, the party of multiculturalism, the official opposition, intend to deepen our relationships with the Chinese Canadian and Indo Canadian business communities. We intend to work with them to restore the kinds of relationships that will protect and create Canadian jobs and opportunity and strengthen our capacity to address real human rights issues outside our borders.

At the same time, we will look at issues such as the free trade agreement in Colombia. We intend on holding the government to account and want it to be as assiduous in its focus on human rights in Colombia as it seems to have tried to be in China. We want consistency on that.

Times have changed. The tone in the World Economic Forum over the weekend could not have been more different from what it was last year.

If this bill gets to the committee stage, we intend, and I am certain the government agrees, to ensure that Canadian interests are protected and to evaluate this bill, legislation and trade agreement in terms of what makes sense for the Canadian economy today.

There are some real concerns that have been raised by the shipbuilding industry. We take those concerns very seriously. The fact is that the Norwegians have subsidized their shipping industry for 30 years. During that time, they used protectionist mechanisms to avoid foreign competition against their shipbuilding industry. Those subsidies went to upgrading the Norwegian shipyards, giving the Norwegian industry a tremendous advantage.

The Canadian industry has benefited from a tariff system that has at least levelled the playing field for a period. We have to make sure that Canadian shipbuilding industry is not put at risk or imperilled unnecessarily by this legislation, this trade agreement.

We need a comprehensive shipbuilding policy in this country, one that actually helps build a world-class shipbuilding industry that can compete and succeed. We can do a number of things in terms of our industrial strategy and policy to help make this happen. As the government deals with the EFTA, I think it also has to ensure that some of these industrial policy issues are addressed, and we as the official opposition will hold the government to account on that.

For instance, the Liberal government introduced a structured financing facility program. This program helps buyers to purchase ships built in Canada by buying down the interest rate of the loan used to finance the purchase. The cost of the program was about $50 million a year and made a huge difference in terms of the capacity of buyers to buy Canadian ships. We need to ensure that this policy is meeting the needs of the Canadian shipbuilding industry today and potentially go further.

We need to ensure that our government procurement policy in terms of defence, coast guard and what we buy as a government does invest in Canadian industries and protect and create Canadian jobs. I think that is extremely important in these areas when one is talking about procurement around strategic industries such as defence, as well as on the aerospace side.

We believe very strongly in free trade and in respecting the principles of our trade agreements. Our trading partners often believe in the principles of freer trade as well, but the difference between the way our trading partners deal with their trade agreements and the way we deal with our trade agreements is that with government procurement and other approaches our trading partners go right up to the line and do everything they can to protect their domestic industry, stopping short of violating the agreements. Canada sometimes behaves a little bit like a boy scout on the trade scene by failing to actually have a procurement policy for our own departments and agencies, such as coast guard and defence, that actually helps protect and create Canadian jobs and opportunities.

We have to be consistent in that we do not let protectionism disable Canadian companies from achieving contracts internationally and hurting the whole principle of national treatment upon which our trade agreements are based. At the same time, I think it is absolutely fair to say that Canadian governments, and this Canadian government, are not doing enough to create industrial benefits here in Canada. We have heard from the aerospace industry and the defence industry that other countries, other governments, do a lot more.

In fact, that is a validator. If they are shipbuilders, defence industry players or aerospace industry players, part of the credibility they need to sell their goods internationally is to validate their goods based on whether or not their own governments are buying them. We have to ensure that our procurement policy is organized in such a way that it does not go so far as to violate the principles of our trade agreements, the letter or the law of our trade agreements, but also ensures we are not being naive.

We can sit in the House of Commons and pontificate about Adam Smith, but that does not do much to protect jobs if somebody from another country with which we have a trade agreement is eating our lunch. We have to be pragmatic as well as principled. It is a fine line, but it takes judgment and it takes a focus on Canada being a trading nation that has its eye on the world. As a small export-driven nation we need to sign trade agreements, but at the same time we need to ensure that we do not expose our domestic companies to unfair foreign competition.

That is why, when this bill gets to committee, we in the Liberal Party, the official opposition, intend to take our responsibility seriously, and I would hope legislators in the Conservative Party will as well, and ensure that we review this trade agreement in terms of ensuring that it meets the litmus test of defending Canadian jobs and at the same time is in the Canadian national interest at this time.

There are some other areas aside from procurement and the structured financing facility. There is the capital cost allowance issue and ensuring that we have the kind of writeoff of the cost to purchase Canadian vessels which will ensure that we are competitive with other countries. We have heard, for instance, that in the U.S. there are some advantages in terms of capital cost allowance and the writeoff or depreciation of vessels built there. We have to ensure that we are competitive and take every possible measure.

Another area is a procurement policy that makes sense for the Canadian shipbuilding industry and for protecting and creating Canadian jobs in shipbuilding. Also, there is the structured financing facility to ensure that this is effective. Furthermore, there are the capital cost allowance and depreciation issues. Those are the kinds of things we need to see as part of an industrial strategy around shipbuilding and will make it easier for us to say that this agreement is in fact in the interests of Canada.

There are certainly opportunities for Canada in terms of the EFTA agreement. In fact, we have a lot in common with these trading partners. We have the capacity to deepen our trade relationships and at the same time diversify our trading relationships. As I mentioned earlier, it is important that we become less dependent on purely U.S. trade, whether it is with Iceland, Liechtenstein, Norway or Switzerland. These are countries with which we share a great deal in terms of our values and our economic and political systems. Clearly, there are opportunities for us.

We need to see some of the concerns addressed, particularly around shipbuilding and the offshore industry. I see the parliamentary secretary, who is a colleague of mine from Nova Scotia. He has worked in the offshore industry. He knows that jobs are created when the offshore industry progresses. We want to see those industries protected, whether they are in Halifax or other parts of Canada.

There are opportunities on the positive side in terms of this trade agreement. Clearly, the port of Halifax, as an example, is facing huge challenges now. Deepening our trading relationship with European countries can help create opportunities as we see more trade going through the port of Halifax and other Atlantic Canadian ports.

The Atlantic gateway is a project in which we believe in investing in the infrastructure and in the capacity for us to ship our goods and to receive goods from around the world. It is important for Atlantic Canada, for western Canada, for all the ports in Canada and also for intermodal ports. There are all kinds of opportunities. We need to see the concerns addressed.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:45 a.m.

South Shore—St. Margaret's
Nova Scotia

Conservative

Gerald Keddy Parliamentary Secretary to the Minister of International Trade

Mr. Speaker, I appreciate the comments on EFTA by my colleague from Kings—Hants. I congratulate him on his new appointment as critic for international trade.

I will try to go through the couple of points I have fairly quickly because a number of members want to ask questions.

First, the member for Kings—Hants was talking about his support for free trade in general and the fact that he was urging the government to get on with more free trade agreements. Of course, he would be aware that part of the challenge before the government is that there have been no free trade agreements signed since 2001. The previous government signed agreements with Costa Rica, Chile and Israel and did not sign any after that, whereas we have signed agreements with Peru, Colombia and EFTA. Jordan has been initialized. We are working on the CA-4, that is, Guatemala, El Salvador, Nicaragua and Honduras, as well as Panama, Korea, the CARICOM nations, and Singapore. We are in exploratory talks with the European Union and with India.

On the issue of EFTA and procurement, the member is well aware that procurement has been set aside. The Canadian government has already ensured that all military vessels, all major contracts from the government, will be procured within Canada. Of course, the structural financing, the $50 million, has been put back in place. This was put in place originally by the former government. We have renewed that.

Turning directly to Canada, there are a couple of points. This agreement is worth a tremendous amount of money: $125 million to Atlantic Canada, nearly $500 million to Quebec, $4.5 billion to Ontario, $173 million--

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:45 a.m.

Conservative

The Deputy Speaker Andrew Scheer

Order. The hon. member for Kings—Hants.

Canada–EFTA Free Trade Agreement Implementation Act
Government Orders

11:45 a.m.

Liberal

Scott Brison Kings—Hants, NS

Mr. Speaker, I was certain my colleague and friend would have had a question if you had just let him go a little longer.

I appreciate his comments. He and I both represent ridings in Nova Scotia, so we share an interest in what is good for our region, what is good for our country. It will be critically important that at the committee level we hear from those people who believe that this is in the interests of Canada and why, and which sectors benefit from EFTA.

The hon. member mentioned specifically our region and what would be the gains for our region, what would be the gains to Quebec, but we also have perhaps an even greater responsibility to hear from those who believe absolutely that this will not be good for their industries.

We have to understand what ameliorative steps we can take as government in terms of other areas of government procurement, industrial strategy and other areas, where we can address those concerns. Whether it is in Saint John, Halifax, British Columbia, parts of Quebec or Newfoundland, there are shipbuilding workers who are tremendously concerned about this agreement.

At committee it will be critically important that we work together, and we perform our due diligence to ensure that across Canada this, at the end of the day, is better on a macro level--