Debates of Feb. 5th, 2009

(The House divided on the motion, which was agreed to on the following division:)

Vote #4

Ways and Means

[The Speaker, Liberal, Peter Milliken]

I declare the motion carried.

The House resumed from February 2 consideration of the motion 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.

Canada–EFTA Free Trade Agreement Implementation Act

[The Speaker, Liberal, Peter Milliken]

The House will now proceed to the taking of the deferred recorded division on the motion at the second reading stage of Bill C-2.

The hon. chief government whip is rising on a point of order.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

Mr. Speaker, I believe that if you were to seek it, you would find that there is unanimous consent to apply the results of the vote just taken to the motion for second reading of Bill C-2 with Conservative members voting yes.

[The Speaker, Liberal, Peter Milliken]

Is there unanimous consent to proceed in this way?

[Some hon. members]

Agreed.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, Liberals will be voting yes on this motion.

[Michel Guimond, Bloc, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, the members of the Bloc Quebecois will vote in favour of this motion.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, members of the NDP will be voting against the motion.

(The House divided on the motion, which was agreed to on the following division:)

Vote #5

[The Speaker, Liberal, Peter Milliken]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on International Trade.

(Bill read the second time and referred to a committee)

[The Speaker, Liberal, Peter Milliken]

I wish to inform the House that because of the recorded divisions, government orders will be extended by 12 minutes.

The House resumed consideration of the motion.

Opposition Motion—Canada-U.S. Relations

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I would like to thank all of the parliamentarians who have spoken for their contribution to the debate. I am pleased to have a chance to speak to this issue.

The motion we are debating, which the Bloc Québécois will support, reflects the urgency and gravity of the current situation. The protectionist measures in the American recovery package could have a serious impact on Quebec's economy and undermine trade agreements between the United States and its partners. The Bloc Québécois believes that the House must take a strong stand and give the government a mandate to press our case immediately and tirelessly with American authorities.

Although President Obama seems to have backed down on certain parts of the Buy American Act, the protectionist measures proposed by the United States may contain provisions to sidestep international trade agreements, such as NAFTA. For example, one clause in the Buy American Act imposes restrictions on the use of steel and steel by-products in American construction projects. Most highway infrastructure work is funded by the Federal Highway Administration, and we know that there is a big difference between the projects it funds and the direct purchases it makes. The projects it funds are subject to the Buy American Act provisions, while direct purchases are subject to NAFTA.

In practice, this distinction means that chapter 10 of NAFTA will not apply to the 80% of U.S. highway construction projects that are considered funded , and that Quebec and Canadian companies will not be entitled to the same treatment as American companies. State-level projects are not subject to NAFTA and must comply with the Buy American Act. With respect to steel, the American recovery plan has tightened the rules to make it practically impossible for Quebec companies to bid on projects. This matter is serious because the requirement to use American-sourced metal now includes all public infrastructure construction, alteration, renovation, maintenance and repair projects.

It is clear that these measures could do a lot of damage in Quebec. Our economy is very closely linked to that of the United States.

[Michel Guimond, Bloc, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, I would like to apologize to my colleague from Rimouski-Neigette—Témiscouata—Les Basques for having interrupted him. He was in the middle of a very interesting speech, but he neglected to mention to the Table and the House that he would be sharing his time with the member for Joliette.

[The Speaker, Liberal, Peter Milliken]

Thank you. I am sure that the member for Rimouski-Neigette—Témiscouata—Les Basques also appreciates this information from his whip.

He now has the floor.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I am sorry. I will learn.

As I was saying, it is obvious that these measures could be devastating for Quebec. Our economy is closely linked with that of the United States, which accounts for 57% of Quebec's exports when interprovincial trade is factored in.

In terms of international exports alone, that figure rises to 85%. Quebec has a large surplus due to its trade with the United States. In fact, Quebec sells twice as much to Americans as it buys from them. In this context, it is clear that Quebec wants trade with the United States to be as flexible as possible. A trade war, or even partially opting out of NAFTA, would not be beneficial for Quebec.

Free trade is part of the Bloc Québécois philosophy as long as the agreements are well regulated and monitored. Contrary to what the Conservatives and Liberals are suggesting, which is that Canada join in the mad dash to implement bilateral trade agreements, the Bloc Québécois is questioning the nature and the long-term impact of these agreements. It is imperative to us that, prior to signing an agreement, we take the time to evaluate the positives and negatives of the agreement for our economy.

We believe that in order for trade to be mutually beneficial, it must first be fair. A trading system that results in the exploitation of poor countries and dumping in rich countries is not viable. We cannot accept a system of free trade that would be based on the lowest common denominator. For that reason we find it difficult to understand why this government insists on signing and moving forward on the free trade agreement with Colombia in particular.

We believe that multilateral negotiations are much more advantageous for everyone. They are better monitored and generally more effective. The liberalization movement that has taken place in the world in recent years now needs to be given a more human dimension. The problem in our mind with these bilateral agreements is that they do not allow us to apply rules to civilize trade.

Most of these agreements do not contain clauses on human rights, labour rights or the environment. We believe that the government should perhaps sign better agreements rather than signing a large series of agreements that do not reflect our concerns.

In this regard, the Bloc Québécois is urging the federal government to revise its positions in trade negotiations in order to ensure that trade agreements include clauses ensuring compliance with international labour standards as well as respect for human rights and the environment.

In the end, we must continue to move forward, to improve our agreements and to increase the chances of prosperity for all. Therefore, we cannot understand why the new American administration is seeking to adopt measures that forsake our mutual commitments. This reminds us of the attitude of the previous administration which, in 2001, resorted to section 203 of the 1974 Trade Act in order to impose customs duties and a licensing system on steel imports for a period of three years. Under considerable pressure from industry representatives in Canada and Mexico, the United States decided to exempt these two NAFTA trading partners from these measures.

Nonetheless, this sparked considerable irritation throughout the entire world, and the United States was harshly criticized for this unilateral move. In the situation concerning us now, perhaps we can be made an exception to the rule once again. But the message that has already been sent should caution us against possible protectionist measures and encourage us to protect our own industries better.

The difficulties Quebec has seen in recent years prompted us to change our trade priorities. Last year, the rise in the Canadian dollar, driven by Alberta oil exports, reduced the competitiveness of Quebec businesses on the American market, while emerging countries were dominating the global market.

In this context of a deteriorating trade environment, the Bloc Québécois made accessing foreign markets our top trade priority. I would also like to point out that the Bloc is proposing important measures regarding international trade, while always keeping in mind the need for balance and healthy competition when it comes to trade.

To close, the Bloc Québécois supports the motion before us today. The Bloc Québécois prefers a diplomatic solution over legal action to resolve the difference of opinion between Canada and the United States regarding protectionism.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I want to thank my friend for his intervention and also thank him for actually supporting the motion.

Our government has done a lot of work behind the scenes to oppose the protectionist measures that the U.S. is suggesting might be implemented. In fact, there is a lot of work going on behind the scenes.

I noticed that the member acknowledged that in the province of Quebec one of the main focuses is to expand Quebec's trading opportunities to other countries around the world and not just the U.S. He also spent a lot of time attacking the very free trade agreements our government has been signing in order to expand our own national opportunities in trade around the world.

I am wondering if he is aware of the experience in Chile. I sat in on the international trade committee when the Colombia free trade agreement was being discussed. The testimony at that committee was very clear that after Chile signed its free trade agreement with Canada, its human rights record actually improved. I am wondering if the member is aware of that, and whether he would not expect the same with some of the other countries with which we have signed agreements, for example, Colombia and Peru.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, the Bloc Québécois is very aware of the importance of international trade, and our position favoured multilateralism.

The partner we are talking about is also Quebec's main trade partner, the United States. They alone account for 57% of Quebec exports, that is, one and a half times more than what goes to Canada. As for Quebec's international exports, the United States takes in 85% of those exports. Those figures show that Quebec is an irreplaceable partner for the United States.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I would like to congratulate my colleague on his first speech in the House of Commons since being elected. He did a very good job.

Earlier, the Conservative Party member said that the government had done some behind-the-scenes work. That is not surprising; it seems to come naturally. But the government might end up having one put over on it. Even if Mr. Obama says that he will soften the impact by complying with WTO rules, we know that there are loopholes in NAFTA and the WTO rules that would allow him to continue applying protectionist measures. It would be better to rely on direct diplomacy and avoid backroom deals than to end up before the courts.

My colleague had only a few seconds to touch on the Bloc Québécois' proposals for promoting international trade between Quebec and the rest of the world. I would like a little more information about that.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I thank my colleague for giving me the opportunity to elaborate on certain measures endorsed by the Bloc Québécois. These measures would modernize our trade legislation to better protect our companies from foreign dumping. These same measures would make it impossible to ignore Canadian International Trade Tribunal rulings that recommend applying safeguards. These measures would also allow workers themselves to file complaints about subsidies and dumping with the Canadian International Trade Tribunal.

Another measure would be to change Canada's negotiating position at the WTO, making social dumping its first priority and focusing on multilateral negotiations within the WTO. That is the only forum for making rules to civilize international trade.

Lastly, another way to fight social dumping is to ratify the following International Labour Organization conventions: the Abolition of Forced Labour Convention, the Right to Organise and Collective Bargaining Convention, and the Minimum Age for Admission to Employment Convention.

With these measures in place, we will have an edge in international trade.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am pleased to take part in this debate which is so important for Canada, obviously for Quebec as well, and also for our American neighbours. One of the responsibilities of the Conservative government and the Prime Minister is to ensure that both the American president and the American politicians understand this reality. Our economies are intertwined and we have no interest, none of us, in having protectionist measures such as those contained in the stimulus plan that was presented to and passed by the House of Representatives. There is also the discussion that is taking place in the Senate. We know that Senator McCain's amendment was defeated, and so we find ourselves back at square one.

I do not need to talk about the close ties between the Quebec, Canadian and American economies. My colleagues—the member for Sherbrooke in particular—covered that. However, it is important to remember that, for Quebec in particular, this trade is extremely important. Today we find ourselves in a situation where, because of Quebec's dependence on oil—which is true for the rest of Canada as well, but since Canada exports oil to the United States, it is not as obvious as in Quebec's case, since we do not produce or export oil—Quebec's trade balance, whether in terms of foreign partners or Canadian provinces, is currently running a deficit of $7 to $8 billion.

I mentioned earlier that this dependence on oil was important because it is one of the significant causes of this trade deficit. We know that our oil imports in Quebec represent nearly $6 to $7 billion, which explains a large part of the trade deficit.

Obviously, where the advantage lies is with our American partners. In fact, we in Quebec have a trade surplus with the United States of around $5 billion. If protectionist policies became the norm in the U.S., we would have an even worse problem. In fact, we already have a problem in terms of trade which is, as I have said, related to our oil dependency, but also to the fact that, for some years, the Canadian dollar was inflated, by oil exports from Alberta to the United States in particular. This inflated dollar did a considerable amount of harm to the competitive ability of manufacturers, particularly those in Quebec, but the same is true for Ontario. We amuse ourselves by repeating this, though it is far from amusing: even the government ought to have twigged to that as early as 2007.

I like saying—and again not because it is amusing, but rather because it illustrates the extent to which the government was asleep at the switch—that in the Minister of Finance's economic statement in October 2007, on page 28, there was a lovely table showing that all industrial sectors had been declining since 2005, with the exception of oil and hydrocarbons. So steps should have been taken as early as 2007, even 2006, to help the manufacturing sector. There was a refusal to take such actions, and unfortunately the budget of last week continues that tradition. Once again, there is significant aid to the automotive sector, in the form of loan guarantees, but nothing for the forestry sector and nothing, or next to nothing, for aerospace. When we think, for instance, of the $170 million over two years for all of Canada, including Quebec, for the forestry crisis, we can see that this is pretty puny as support goes. Annually, it works out to about $10 to $20 million for Quebec. That is clearly inadequate, particularly since Quebec is there the forestry crisis has hit the hardest.

It is extremely important to us for the Conservative government, the Government of Canada, to set this campaign of persuasion against protectionism as its number one priority.

We in the Bloc Québécois hope that this protection issue, which is at risk of pitting Canada against the United States, can be solved by diplomatic means, rather than through the courts.

I must say that I was somewhat surprised. When it is a matter of diplomacy, we feel that things have to go beyond a phone call from the Prime Minister to the American President—and we do not know if that call has even been made—to tell him that one of the provisions in his legislation poses a serious problem for us, and we think that it is in neither his interests or our own for that provision to be maintained. One expects the government and the Prime Minister to be extremely active on the diplomatic level. Yet we learn from a Canadian Press report that the Prime Minister of Canada called Mexican President Felipe Caldéron yesterday evening, that is on February 4. Mexico is one of the three partners in NAFTA. One of the agreements seems not to be respected by the House of Representative provisions, and it is currently under discussion in the Senate. That agreement seems to be at cross purposes with NAFTA, according to nearly all Canadian and Quebec experts. One might have thought that the Prime Minister would have been on the phone to the Mexican President as soon as the American intentions were made public, with a proposal that they join forces against this rise in U.S. protectionism. But no, it took the Prime Minister somewhere between 10 days and 2 weeks to make the call to the president of Mexico, one of the three partners in NAFTA.

I seriously wonder what the Prime Minister and the Conservative government have done to try to coordinate their actions with the Europeans. We need to remember that under the provision of the bill, which is currently before the Senate and was passed by the House of Representatives, this protectionist measure will apply not just to Canadian steel, but to all manufactured products, wherever they come from. So the Europeans, like us, have a vested interest in seeing the protectionist approach in President Obama's recovery plan disappear.

We have no evidence that the Prime Minister took the initiative to get on the phone and secure the European Union's support. Reference has been made to the World Trade Organization rules. That may be a less direct route than NAFTA, but there are provisions to prevent the use of protectionist measures. For example, I am thinking of the clause providing for reciprocity between WTO trading partners. If Canada agrees to allow American steel into our country, then the Americans have to agree to let in our steel.

These provisions must be used, not aggressively, but simply to tell the American President and American politicians that rules were created in times of economic growth to address problems during times of difficulty or crisis. Trading partners must not take the first opportunity to abandon the rules they created to manage crises, because we are in a crisis. I wholeheartedly share the opinion of the movers of the Liberal motion. Everyone knows that a rise in protectionism will only exacerbate and prolong the economic slowdown. We need to learn from the 1930s.

In closing, I want to remind this House that in the United States at present, and particularly with the new Democratic administration, there is an awareness of international trade and globalization that, unfortunately, the Conservative government does not have. I am thinking of all those measures that are needed to create a balance between healthy competition and a certain number of rights.

That may be the crux of the problem in the United States. Like many Quebeckers and Canadians and workers around the world, they felt that freer trade in recent decades benefited only people with capital and was not in workers' interests. And that has to be corrected. Unfortunately, that feeling is not reflected on the other side of the House.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, I congratulate the member on his speech. I agree with him: we can feel the optimism from the President of the United States, Mr. Obama.

However, the only thing we have to go on is the words spoken by the president in a television interview. It was not something he said in a major speech before the Senate. It was not something he said in front of the Leaders of the Senate or the House of Representatives.

Is the hon. member confident that the Obama administration will go before the Senate and the House of Representatives with those words that will ensure a period of global cooperation? Is he confident that the president will win the support of American politicians who, for the most part, are democratic but have a history of being protectionist?

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am going to be optimistic given that our own government and our own Prime Minister are attempting to convince the American president and members of Congress of the importance of this non-protectionist approach.

I am convinced that Mr. Obama will not go up to bat first if he does not believe that trading partners—whether Canada, Mexico, Japan or Europe—are firmly committed to open markets even in times of crisis.

I believe that the Canadian government has failed to apply pressure on Mr. Obama and the American legislators in order to convince them that we have the right approach.

Therefore, we must first call on the Prime Minister of Canada and the current government to apply adequate pressure. A letter—a very polite letter—from Canada's ambassador, Mr. Wilson, is not enough to convince Mr. Obama to step up to the plate and solve the problem.