House of Commons Hansard #31 of the 40th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was judges.

Topics

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

12:35 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, it is important, when we look at the context of trade, that we look at the current deals that have been signed and, as part of our due diligence, to review what is happening here.

With respect to Bill C-2, the hon. member for Burnaby—New Westminster has requested the aspects to shipbuilding be carved out, which is a normal process of trade arrangements. In fact, in the history of trade arrangements they have had these elements in a series of different ways. For example, the United States has the Jones act and procurement policies with a number of different defence contracts. It also has policies in manufacturing, for example with the bus industry, where there are provisions that require content assembly in parts manufacturing in the United States. In fact, Canadian companies had to go into the United States and open up assembly plants so they could bid and win contracts for those.

As well, the United States has a buy American clause that is part of its overall procurement policy and always has been. It reached some feverish discussion in recent months but the reality is that it has been in American law for a number of years. The clause has been part of its ordinary procurement policy and has been part of the state and municipal procurement policies.

The request that is being made here is part of negotiation tactics. Unfortunately, we have a history of bad negotiations when we look at the past Liberal government and the Conservative government. This deal here was arranged by David Emerson, a Liberal minister for the Martin administration who crossed the floor after an election and continued with his policies. One of the policies was with regard to European trade and another one was with Colombia. Another deal that has not seen the light of day, thankfully, is with Korea.

If one looks at those policies, the government offered up a significant number of different iconic Canadian industries as bait to bring in trade negotiations and then it caved and gave them away later on.

One of the reasons I have been opposed to the South Korea trade deal, which some bureaucrats will admit, is that something had to be offered up. In this agreement, the government has offered up the automotive industry. It is a terrible position to start with because one knows right away where one's negotiating strength is. Unfortunately, the government comes back with deals that really sell out certain segments of Canada's industrialized capacity.

It is important to note, for example, that the United States has its own defence procurement policy and we do not begrudge it that. We know the United States has certain aspects it wants to continue to have in its country as part of its overall strategic way to deal with civil society, as well as international affairs, which is why it has the capacity to ensure it can respond to certain things.

Sadly, Canada has done the exact opposite. We have basically abandoned any type of sectorial strategy approach and only through a budgetary process year by year scrambles around to try to find some programs or aids that come and go for the aerospace, automotive or shipbuilding industries. The government does not really create concrete plans of action.

We are looking at Norway for particular reasons in this debate because it spent over a dozen years building a shipbuilding industry through heavy subsidization and a national policy. It had over a generation of public policy geared to design and build ships. not only for its domestic industry but also international industry. When Canada enters into an agreement like this with no terms and conditions to protect Canadian industry, it is at a natural disadvantage.

I have had a chance to see some of the work that has been done with shipbuilding. I have been at the Irving yards in Halifax and have spoken with the workers. Interestingly enough, the government's position has always been the issue over labour mobility. It says that if workers cannot build ships because there is no work, then they need to go out to Alberta or somewhere else to find a job.

The first thing one may say to that, even I as a young parent, is that people will do what they need to do, there is no doubt about it. However, when we have thriving communities that will continue to be there, it is important for families to be held together, which is the creation of a bond the community requires to deal with everything, including social programs, crime, education and innovation.

It is not just about workers going away for a couple of months and returning. Canadians will do those things if they need to, as they have done in my riding, but the preference would be to have a job in their own community, especially communities that historically have been around and will be around for the foreseeable future. We should be looking at building that capacity. It is about those communities with a high industrialized component for shipbuilding, for example, as we are talking about today specifically, to be part of a program and plan to create stability. We are going to win from that.

Other organizations or other countries will not be complaining about Canada being protectionist because this is done in other countries, and that is why it is important to have this component carved out and move forward with the rest of the trade agreement that would be more balanced. It would be progressive in the sense that shipbuilding would be removed, but it is not, which, unfortunately, is why we are back here today.

I will again talk about the Navistar truck plant in Chatham, Ontario, where a $200 million defence procurement offer went out to International Truck, which is located in Chatham and in Texas, and it decided to put all the work into Texas. That is not acceptable because a number of years ago International Truck was having problems and it was given a $35 million loan guarantee and for the last several years it has been producing trucks and doing quite well. In fact, when it tried to move production to Mexico, the trucks had to come back to Chatham to be audited and repaired because the quality was not up to what the client needed.

As a Canadian politician, I do not get upset when the United States buys its trucks from Texas for its military. I understand that it has a plant with people working there. If it were going to buy trucks, it would be a good idea if it were to buy them here in Canada. We are always hopeful to gain that type of business. However, I can understand that it wants to have certain segments of its military protected to be able to do procurement there because it actually gets it. It also understands that having development capacity gives it control over who gets those at what time. It actually has that in it its contracting, which means that the United States can cut the line whenever it wants, which would reduce our capability to have our own sovereignty addressed.

It is interesting to note that the plant can produce that truck for around $800,000. With the layoff of workers about to take place, we are looking at about $17 million to $19 million in unemployment insurance benefits. This makes no sense whatsoever on an economic scale. If we were actually going to have that investment, the retooling would be done by Canadians, the equipment allotted would be Canadian and the people doing the work would be Canadians. We would have the next future base of taxation policy from those who are making money in that area contributing back to the coffers of Canada. We would have a net win. Why we would send our truck development to Texas and basically backhand Chatham, Ontario, which is struggling right now, does not make any sense.

It goes to a deeper issue that ties with the essence of shipbuilding and the history we have with the water. Canadians know we have been a maritime nation serving ourselves quite capably during the first and second world wars where we had one of the largest merchant marines and navies by the conclusion of the war. We has a real sense of pride and dignity when we were able to procure much of our own development and had the capacity to do it.

People having the type of work where they actually produce something of net value and that they can relate to is such a value added component to our society. It is an extra added benefit to those who are part of the actual experience. In terms of shipbuilding, there is that element. Similar to that, in Chatham, Ontario, it is what the Conservative government has said, which is that they will not be producing ships for our men and women serving in the military, that it will be done by someone else.

Canadians miss out on that relationship of getting up every day, going to work, getting a paycheque and contributing to the Canadian development experience. It is important for people to have a job because it gives them a meaningful sense of worth. However, the Conservatives have told them that they are not good enough, that the work will be done somewhere else.

What is so important about this debate in terms of the economics behind the shipbuilding industry and how it connects to ourselves as a people is when we see the outsourcing that is going on, which becomes very frustrating. Workers and others are starting to feel the anguish. I worry about the elements that will come next. Being from the auto sector, many of the workers are frustrated that the government is not there for them and that they are having to do things on their own.

In one of the more recent cases that we have had is the issue over Aradco. I want to congratulate Gerry Farnham, president of CAW195, and his workers who fought an American company that pulled out of Canada and left 80 families out of jobs with no severance package. The workers took it upon themselves to occupy the plant and ensure they received a better severance package, which they negotiated by themselves with no help from the government. Those people are working class heroes. They are men and women, some of whom are in single parent families, who took this action to protect themselves and their families livelihoods.

The message the government should take about what happened in that one plant at this particular time is that it must be more responsible when it has the tools and the resources behind it to make a difference in this country.

Those are the reasons we should be carving out this element and protecting our shipbuilding industry and the workers who have the skills and the training, which is important. When we look at the Aradco workers, they were some of the most productive workers but, through no fault of their own, they were usurped. It is the same for the shipbuilding industry, which has some of the best trained and most experienced workers. We will abandon them in some type of an experiment that does not make any sense.

We need to turn this around. People are looking to us and at the examples that we are setting. They are asking what can we do with their taxpaying dollars that will benefit not only just in terms of the immediacy of the tax expenditure that we are doing right now but later on in terms of public policy. That is what a national strategy for shipbuilding and an auto strategy would be and all those other things where there is value and traceable elements of where the money goes to. That is what could be done in this particular element.

Workers will continue to feel frustration as they have done everything right and then they do not have the government behind them.

It is disappointing that we are here by ourselves as New Democrats on this issue. I think we will be looking back later, not only in terms of what we have lost, but in terms of a missed opportunity to reinforce at a time when there is that motivation that should be even bigger to restart an industry and ensure it will thrive. The connection to that is critical, especially when we can look at the incredible opportunities.

We can look at the Great Lakes, not only as a treasure environmentally but also a trade corridor that is significant. The Great Lake freighters will soon need to be replaced but those will all be built in China, Norway or somewhere else when they could be built here.

Sadly, we let the shipbuilding facility at Collingwood go, but we could plan this out to ensure that Halifax, Montreal and other shipbuilding areas where we still have that capacity are preserved. For those who are not aware of it, Collingwood has now become a resort. It is a very beautiful location with a lot of positive things there but we did not plan another deep water capacity port. What we have lost now is the opportunity to have a thriving industry return.

Therefore, we need to think about that in the context of what is happening right now and, with what is going on right now, this is the perfect opportunity.

It is important to look at what the message would be for Canada if we were to carve this out. It would tell the other countries that we are interested in doing this and I do not think we would have a hostile reaction. I do not think any country would challenge us.

When we look at some of the European policies for defence and other procurement, it is quite similar. When we look at the United States, it is very clear that it has decided that it is going to have this at its capacity, and we are very much integrated with the United States.

Ironically, even as we have had some of these elements, the United States has gone to the extreme where, under the Patriot Act and other types of legislation, many Canadian workers are not eligible to work on some contracts in the United States that are defence procurement.

The United States has even challenged the workers who are part of companies that are integrated. This is going to become a bigger issue because we have a number of different procurements that are going to take place over the next few months. We will hear about some of them, including search and rescue planes that need to be replaced. There are concerns already being expressed that the government is going to skew the bidding process basically to give an Italian company the contract. It is sad, because we actually have a number of different consortiums here in Canada, with up to 50% Canadian ownership, that could do that type of work. They should be part of that process.

We are going to continue to see this type of debate emerge. This is not a one-off issue. We are going to see the return of discussion of the South Korean trade deal. That is another one that I mentioned, where the automotive aspect of it is being offered up as an element that basically could be seen as the carrot to bring us in, and then later on we suffer the consequences of that.

It is important to note also that it is not just the New Democrats here on their own who are bringing this issue forward. It is interesting, because we have not only the labour aspect, which is traditionally part of our party and our relations and so forth, but we also have the associations, as well as companies such as the Irvings.

There are some interesting quotes that have come out of this debate that really reinforce the fact that it is going to be costing us as a country a lot of jobs.

One quote is from Mary Keith, a spokeswoman for Irving Shipbuilding Inc. The company has actually put this in a release, so it is not something that was just said off the cuff or thrown out in a media comment. This is an actual release that was put out, so they thought very carefully about what they were going to say.

Ms. Keith said:

The government of Canada is continuing its 12-year history of sacrificing Canadian shipbuilding and ship operators in the establishment of free trade agreements with other nations.

International trade minister David Emerson said at the time that a free trade agreement in principle had been reached with the countries of Iceland, Norway, Switzerland and Liechtenstein.

They were looking at it through a 12-year lens when she made that comment. I think that is significant because a number of different operators or companies out there are seeing this as systemic. When we see something as systemic, we defeat the option of other people who are interested in actually investing or moving into that field.

The people making those comments are indicating that this is not just one-off bad policy from the Conservative government or the Liberals before it. What they are saying is that if people want to get into this business, they'd better buckle up, because the ones who are in it right now are completely dissatisfied with the relationship they have with the government. They feel that not only is it not neutral, it is actually against the flow.

I want to point that out because what we have happening here is a continued pattern of behaviour, the assumption that we can just reduce trade barriers or regulations, whether it be in regard to food or other types of industries such as the airline industry, and we will see natural improvements to the consumer and to civil society. That is not the case. That has not always happened.

What we need is a carrot-and-stick approach. The carrot is good public policy, and the stick is to make sure that the jobs are going to be created here, especially when taxpayers' money is involved.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

12:55 p.m.

Bloc

Guy André Bloc Berthier—Maskinongé, QC

Mr. Speaker, I was listening to my colleague speak on the motion for this bill currently before the Standing Committee on International Trade. First, I would like to know what his party proposes to support the shipbuilding industry and what are the main aspects of this bill that will support the industry.

Second, if this motion is adopted by the House and we are unable to make the government improve and provide more support for the shipbuilding industy that could be threatened by this type of agreement, should we simply forget about the agreement? It does nevertheless have certain advantages for Quebec's pharmaceutical industry. What position will the New Democratic Party take?

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, we know the industry will be abandoned in Canada. I would be surprised if the Bloc thinks if the industry has trouble later on we should not worry because the Conservatives will rescue it at the end of the day. I would be surprised if the Bloc believes that would happen, because I do not sense that from the government. Traditionally it has not been there. I would not give the Conservatives that type of credibility or that type of responsibility and think it is real.

It is important that when we have a trade agreement, it is fair and balanced. It should not be done at the expense of one particular group or segment. That is the whole point, I suppose, of a united Canada, because we can be stronger and more successful.

There is nothing wrong with carving out a piece of this deal and then negotiating a better one. There is certainly a lot of benefit from other countries when they come into the markets in Canada. It will be more balanced and fair trade. However, we cannot ignore that Norway has provided more than a decade of support for an industry that will destroy that.

I would say that the Quebec shipbuilding industry will also take a hit. It could actually be much more significant but has not been because there has not been that policy in place. I believe Quebec will suffer from that lost capacity and also potentially a shipyard closure, which has been threatened in the past. That would be a setback for the country and for Quebec.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Speaker, the member for Windsor West pointed out that essentially other countries that have tough negotiators exclude shipbuilding from agreements. The United States has done it for every single trade agreement it has signed. Essentially, under the Jones Act, it carves out shipbuilding.

Referencing the question asked by my colleague from the Bloc, the Bloc should be voting for the amendment because quite simply it means that Parliament is ensuring, essentially, that the work that was not done in the negotiation of this agreement does get done through the due diligence of parliamentarians.

The member from the Bloc knows that many of the letters that are pouring in are from Quebec shipyard workers, but it is not just shipyard workers. Sheet metal workers and boilermakers are writing to us.

I just received on my BlackBerry a message from Jim Fitzpatrick, saying:

I on behalf of my members [of the International Brotherhood of Boilermakers] totally support the exclusion of our shipbuilding industry from the EFTA agreement. We have a vibrant workforce on this beautiful west coast--

He is writing from British Columbia, as we can surmise. He continues:

--and with the unemployment as it is at the moment in our shipbuilding industry we need our government's support with regards to this issue.

We are getting hundreds of letters, emails and phone calls to MPs' offices from sheet metal workers, from boilermakers, and above all, from shipyard workers from coast to coast, and only one party is standing in the House of Commons and allowing that voice to come forward. The other three parties are completely abdicating their responsibility to Canadian workers.

I would like to ask the member for Windsor West why he thinks all these other members are forgetting about the Canadian public interest and Canadian jobs.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, quite frankly, a couple of things play into this. First, the architect of this deal was David Emerson, a Liberal. Members have quite clearly hitched the history to him. He was the architect of the softwood lumber deal, and we all know how that is working out. In fact, I was just in the United States and it was questioning Canada's deal itself. So we do not even have a set stability pattern. We basically got taken to the cleaners on that deal. Ironically, we were winning in the courts, and then we pulled defeat from the jaws of victory.

I live across from Detroit, Michigan, which is home to the Detroit Lions, so I am very familiar with that process.

That is what was done with regard to the softwood lumber deal. We see the catastrophic result of it across this country. Who can be satisfied with the status quo in the agreement?

That is part of the problem, as well as expediency. When trade agreements are signed, for some reason they are seen as elements of justification or as a process that shows maturation in a government. That is really worrisome in the sense that the symbolism of it is being presented as more important than what is going to happen to industries after they emerge in this new relationship.

I do not know why the Bloc is supporting this without at least forcing the carve-out. It makes no sense for that party to turn its back on the workers of Quebec, in particular those directly affected. Basically giving up control of the potential shipping industry for the future to other hands without having a public policy is rather peculiar.

Those are some of the reasons I think we are seeing some of the decisions being made and why we in the NDP are the only ones speaking on this issue. I have debated this a number of times and people say I am against trade and moving forward. That is the furthest thing from the truth. What we need is fair trade. This is part of negotiations that have taken place in other bills and other countries and they have those elements.

We should move forward with this, because we not only have examples we can point to, but they are right next door in the United States.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:05 p.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Speaker, I commend the member for Windsor West on his presentation this morning in the House. He certainly knows of what he speaks. He has watched the auto industry struggle through a number of difficulties over the last few years, all of it connected to so-called free trade, including the impact of the loss of the Auto Pact in Canada, not only in his own city but in cities across the country—in particular, places like Sault Ste. Marie, which provides the steel. It is all interconnected.

Having been here for four and a half years and listening to some of the discussions in the House about trade, free trade and meetings of Canadian representatives with officials from other countries about trade, it seems to me that we go to those meetings like good Boy Scouts. We are ready to throw absolutely everything on the table in order to get a deal that somebody else thinks is good for us because we have a lot of natural resources, not understanding that at the end of the day, in most instances—and I have not seen one yet where we have not—we come out the loser.

I remember standing in the House a few years ago on behalf of farmers, asking the government of the day, which was Liberal, to stand shoulder to shoulder with farmers, as we yet again caved in and provided more opportunity for foreign products to be brought in and sold in our market.

I ask the member for Windsor West to share with us a bit about the impact of the auto pact on his community and this country.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:05 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, I think the people who negotiate on our behalf either have a self-esteem problem or need to see Tony Robbins, or something. It is habitually the case that they go in with a position to give up something quite significant and we get taken advantage of. People just cannot go in there playing poker with their hands facing the opposite way and pretend and hope things are going to go right. Those types of elements cannot be given up right away.

It important that we actually set the proper policy. I have seen it with the auto industry. It is affecting the entire country right now. All we can do now is hitch on to the United States, because we have given up so much of that sovereignty. I would hate to see the shipbuilding industry suffer the same fate, because it is important not only for our national security but also for the type of work that people can do and the value-added work that goes back into the coffers of this country.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:05 p.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

Mr. Speaker, I think they are trying to influence me.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:05 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Yes, we want you to vote like us.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:05 p.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

The members of this House know the Bloc Québécois' position on this Free Trade Agreement between Canada and the States of the European Free Trade Association. In our opinion, the agreement would benefit Quebec. And knowing that the Bloc Québécois defends Quebec's interests, members understand that we will support this agreement.

Today, I would like to come back to the shipbuilding industry in particular. Some things have happened in the history of shipbuilding, and some things have not been done.

For 25 years, the Conservatives and the Liberals have shared power more or less equally. However, I would like to refer to an article that appeared in the Canadian Press on November 11, 2008 about comments made by Denise Verreault. I quote:

The president of Groupe maritime Verreault, Denise Verreault, did not mince words yesterday as she condemned what she called politicians' “lack of vision” on the marine industry.

Speaking at the Institut maritime de Rimouski..., Ms. Verreault said that “politicians could not see further than the end of their own noses or...the next election” when it came to shipping.

For more than 25 years, the CEO of this company based in Les Méchins has criticized the fact that Canada has no marine policy, even though shipping will double by 2020.

“Quite simply, there is no political will or vision. The shipping lobby is not as strong as the trucking lobby. The marine industry needs a single association that is very strong, instead of a number of groups. Our politicians think that ships are a vanishing breed and that as a mode of transportation, shipping is too slow. The hidden costs alone of just-in-time trucking are phenomenal, not to mention the environmental impacts,” said Ms. Verreault, honorary chair of the 27th funding campaign for the Institut maritime du Québec.

We can see that Ms. Verreault was talking about a 25-year period, and we can say that she was referring as much to the Conservative government as to the Liberal government of the time.

There was another very interesting article this morning in the newspapers, about comments made by the member for Bourassa. In a Canadian Press report, we can read:

But to win Quebeckers' hearts, the Liberals will have to rely on more than just their leader's relative popularity. [The member for Bourassa] therefore announced the appointment of two new campaign co-chairs: Gaspé businesswoman Denise Verreault and [other people, of course].

Should anything be inferred from what Ms. Verreault said in November 2008 and her current involvement with the Liberal Party? It is clear from her comments that she condemns the Conservative government for its lack of action with respect to the shipbuilding industry. We also know that she condemned the Liberal government of the day for its lack of action with respect to the shipbuilding industry.

At present, the fundamental problem facing the shipbuilding industry is not necessarily an international trade one, but rather a problem with the industry per se. The fact is that our industry has been neglected for many years, while other countries were heavily subsidizing theirs.

The suggested time frame in the accord is 18 years, that is an initial three year waiting period, followed by a progressive phase-out over 15 years to ensure that the trade can really be considered as free trade, with no extra costs.

What matters is to know what the Conservative government will do and, particularly, given Ms. Verreault's involvement, what the Liberals will do in the next election campaign. I want to know whether Ms. Verreault's efforts will have been all for naught, in the sense that, come an election, she will realize that the platforms include no shipbuilding policy, even though, as we know, such a policy is needed.

What I would like to hear today from Conservative members, and of course from the Liberals and even the NDP, is what they suggest as policy for the shipbuilding industry. It was primarily the shipbuilding industry that caused negotiations to last more than 10 years and people to fail to agree. What could these parties advocate or do to come up with innovative options for the shipbuilding industry? These are main points that must become clear through today's debate. We have to know what the government is going to do and what a party that, as we saw clearly on the weekend, was all energized to potentially form the next government, will commit to doing for the shipbuilding industry. Of course, we must not forget that Ms. Verreault is there, probably to provide strong suggestions.

I would still like to raise a number of points. I do not know whether I will have the time to list them all, but the Bloc has proposed a lot of things specifically to enable the shipbuilding industry to improve.

We must not forget that the shipbuilding industry has some very special features, features unique to it, which must be taken into account in working to ensure its development.

The government must realize that, because of the high cost of its products, the industry needs special financial arrangements for sales contracts. Because its products' value often constitutes the lion's share of the buyer's assets, the industry needs special financial regulations.

Because of the significant investments involved in producing the first of a line of ships, the industry must share the risks it faces in research and development and requires special credit access facilities.

There is also the matter of instability. Shipyards regularly do not operate for a number of months between contracts. Because of its instability and the high fixed costs of its considerable capitalization, the industry must have access to a substantial line of credit.

As it is also excluded from most trade agreements, the industry's international environment involves governmental subsidies, protectionism and buy-domestic policies.

Measures offering protection and support are needed to permit fair competition. Because contracts from DND and the Coast Guard are important to the industry, it needs a government purchasing policy that contributes to its development.

Since Canadian shipowners make up its main clientele, the industry needs a policy that promotes the development of domestic marine transportation, in other words, cabotage. Since the law of the sea is inadequate and does nothing to force companies to replace those dangerous, polluting scrap heaps, those poison ships, the industry therefore needs initiatives to modernize international shipping.

In order to bring in a real marine policy, the Bloc Québécois is proposing measures to ensure the development of this industry, which is of strategic importance to Quebec. It is also essential to ensure the protection and safety of the environment. Many of these measures could help the industry. I would remind the House that the federal government has not supported shipbuilding since 1988. Not only are the few aid measures still available very poorly adapted to the shipbuilding industry, but the federal government has even penalized the provinces that have instituted innovative measures, such as the refundable tax credit in Quebec, which for some years was considered by Ottawa to be taxable income under the Income Tax Act. That allowed it to claw back 20% to 25% of the assistance paid by Quebec to the industry.

In any discussion of financing, insurance or loan guarantees involved in sales contracts, it is important to note that purchasing a ship or an oil rig is a multi-million-dollar investment. Access to credit at favourable interest rates is a critical factor for the buyer. Through EDC, the federal government should set up a sales contract financing program to finance the purchase, repair and conversion of ships in Canadian shipyards. The program should provide funds for a significant portion of the value of the contract—perhaps 87.5%—at private market interest rates to low-risk companies that are in good shape. The program should be offered to both domestic and foreign buyers.

One issue is loans and loan guarantees for shipyards that have to invest or provide a financial guarantee in order to bid on new contracts. The tax rules for financial lease agreements have to be improved. We must bear in mind that under these lease agreements, the ship buyer does not take immediate possession. The buyer rents the vessel for several years and does not take possession until some time later. Because the buyer does not own the ship, tax rules allowing him or her to write off depreciation against taxable income do not apply. The government should improve the tax rules that apply to lease agreements for buyers of ships built or refurbished in Canada.

There should also be refundable tax credits for ship owners. The government should provide a tax credit to ship owners who sign shipbuilding or rebuilding contracts with Canadian shipyards. Because operating a ship is typically not profitable during the early years—all income ends up financing the initial investment—the credit should be refundable.

I want to point out that, in 1999, Antoine Dubé, who was the Bloc Québécois member for Lévis, introduced Bill C-213, which contained measures similar to those I just discussed. In 2000, after the bill was introduced, KPMG conducted a study for the Shipbuilding Association of Canada. It showed that, with respect to the 16 shipbuilding contracts between Canadian ship owners and foreign builders in 1999, these measures alone—none of them subsidies—would have, in a worst-case scenario, kept four to six contracts here in Canada, resulting in an additional $100 million to $150 million in annual sales. Their best-case scenario showed that some contracts for foreign ship owners—for the construction of drilling platforms worth from $300 million to over $1 billion—could have ended up in Canada.

The government must systematically favour Canadian companies for purchases to meet military requirements or those of the Coast Guard, and for offshore investments, drilling rigs and, eventually, wind turbines. A few announcements have been made, but more needs to be done.

In establishing its purchasing criteria, the government has to put a stop to discriminatory rules that offload transportation costs onto the shipyards, penalizing those in Quebec more than those in the maritime provinces.

It must also take measures focusing on water transport within Canada. While international seaborne shipping is growing at an exponential rate, domestic shipping, or cabotage, is growing at a slower rate. But Canadian shipping companies make much better customers for our shipyards than foreign companies. Environmentally as well as from an energy standpoint, shipping is the most logical choice and should rapidly become increasingly popular, given growing concerns about climate change and depletion of fossil fuels. In a nutshell, far from being a thing of the past, shipping is a forward-looking transportation mode.

Why do several government practices limit the development of cabotage for the transport of freight? Dredging and icebreaking expenses incurred by the government along the St. Lawrence River are entirely offloaded onto shipping companies. Conversely, the cost of maintaining roads is shared among all taxpayers, instead of being paid by truckers. Such an injustice hinders the competitive capacity of water transportation in comparison to land transportation.

The government should also eliminate the fees charged marine transportation companies that practice cabotage. It should also put in place a major investment program for port infrastructure focusing on the infrastructure needed to develop intermodal transport. In addition, the government should bring up to standard all the ports it left to crumble given that it is responsible for ensuring the best possible use of its own infrastructure. The government should also strengthen the Coastal Trading Act to support Canadian shipping and to ensure that foreign carriers that practice cabotage are subject to Canadian laws, especially those governing working conditions.

As for measures pertaining to international marine transport, we should oppose flags of convenience. Canada must ratify the UN convention on ship registration and lobby internationally for its implementation. We must fight poison ships by strengthening international marine law and creating an agency such as ICAO for marine transport.

This is not an exhaustive list, but it does show both the Conservative and Liberal members that it is possible to put in place measures to foster the development and competitiveness of the shipbuilding industry and the marine industry in general. Today, I would like to know what is the position of the Conservative, Liberal and NDP members, and the measures they are proposing to entrepreneurs and employees in the marine industry. I would like to know and I am certain that Ms. Denise Verreault would also be interested.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:25 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Speaker, personally, I very much like the hon. member for Sherbrooke. I know that if it were up to him, he would be willing to ensure that the Bloc Québécois adopted the right position. However, the Bloc leader seems to want to punish the workers in the Quebec City area. I do not know why, but I imagine it is because Quebec City rejected the Bloc Québécois. Thus, the leader of the Bloc Québécois seems to want to punish those workers, because they are asking Bloc members to support the NDP amendment.

Pierre Bérubé, a steel erector at the Davie shipyard, said:

As a worker at Davie Yards Inc., in Lévis, I wish to express my concern about the survival of the Canadian shipbuilding industry if the free trade agreement between Canada and the European Free Trade Association (EFTA) goes through.

That is why I support your efforts to exclude Canadian shipyards from that agreement.

Gaétan Sergerie, a welder at the same shipyard, said: “Like all workers at these shipyards, I am concerned about the repercussions that this free trade agreement will have on the growth of shipbuilding in Canada.”

Paul-André Brulotte, the union president, is saying exactly the same thing.

Quebeckers are asking the Bloc Québécois to support the NDP amendment. Why does the Bloc refuse to listen to them?

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:25 p.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

Mr. Speaker, we in the Bloc hear these remarks and are listening to them as well. But we must always look at the agreement that was signed. We are at the stage of implementing that agreement. What the NDP would like is to leave out shipbuilding.

As I said earlier, I do not think it is a core problem of international trade as such. Rather, I think the problem stems from a lack of desire by the Conservative government and the previous Liberal government to support this industry. The negotiating process of 10 years ago indicates that the problem was substantial, and that negotiations at the time were primarily focused on the industry, which was the stumbling block.

I repeat, if the industry is not supported, whether or not the agreement includes shipbuilding, there will be no future for shipbuilding. When entrepreneurs and skilled employees cannot succeed in this sector, there will be no future. I believe there are skilled people and dynamic entrepreneurs in this industry. And so the 18 year delay would allow them to go even further.

If the NDP put as much energy into convincing the Conservative government and perhaps one day a Liberal government, with Denise Verreault of Chantiers Verreault as the co-chair of the campaign, I am sure they could eventually persuade the government to implement a real shipbuilding policy.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:30 p.m.

NDP

Megan Leslie NDP Halifax, NS

Mr. Speaker, I agree with the hon. member and thank him for his intervention. I agree that this tariff, this one little piece in the EFTA is not going to really create a vibrant shipbuilding industry.

Recently, some of my colleagues and I met with representatives from the shipbuilding industry. They said that this 25% tariff is not going to help the industry, but taking it away, if we get rid of this, it will kill the industry as it exists now.

I agree that we need to have a full, robust shipbuilding policy, but why would this member not support the one piece that we have now that prevents pulling the plug on a dying industry. I will refer to the Breaking Through: The Canadian Shipbuilding Industry report, which I will again mention brought industry together with workers to come up with creative solutions for the shipbuilding industry. I have some excerpts from it here.

Their recommendations included: eliminating exceptions to the existing Canadian shipbuilding policies such as tariffs and federal procurement; strengthening industry and government partnerships to focus more on high prospect areas such as oil and gas; improving the planning processes on federal procurement; pressing for the elimination of foreign subsidies and unfair pricing practices by dozens of countries; designating the industry as a national priority; and promoting marine transportation as an environmentally friendly alternative to other modes of transportation.

This is part of a shipbuilding plan to save this industry. Right now we just have this one provision in front of us. My question to the member is, why would he not support an amendment that could be the base upon which we could actually build a shipbuilding plan?

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:30 p.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

Mr. Speaker, as I was saying earlier, the free trade agreement has been signed. We are at the implementation stage. If we give in to the NDP's call to remove the shipbuilding industry from the implementation bill, the agreement would automatically collapse, and negotiations would have to begin again. The fact of beginning again does not mean it would happen automatically or even that there would be a free trade agreement. It is unlikely. I have to say, and I said it earlier, and I am not ashamed to repeat it, a number of the elements of this agreement provide strong support for Quebec's development and economy.

As regards shipbuilding, there is a huge potential, as I have said. These companies could become more effective and productive even more quickly. However, there must be a degree of openness in the free trade agreement, and it must be supported by other government activities. I firmly believe that, in this, the House of Commons cannot be circumvented by the government, whether it is this party or the other in a little while. I refer again to this past weekend when people seemed very energized.

I note in closing that people were invited to testify in committee and did not appear. Even the president of Verreault shipyards was invited but she did not come. We can ask ourselves the same question that arises from the statements by our NDP colleague. Still, we must move forward and encourage the government to put measures in place.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:35 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I rise to speak to Bill C-2, the implementation of the Canada-European free trade agreement. The bill deals with a proposed arrangement between some of the European countries and Canada. The agreement was initiated nine years ago by the Liberal administration under Jean Chrétien. It came at a time when the ideology of free trade and the free market system was at its height. That is not the case today.

In the last 12 months, the world has seen a profound change. It has not yet played out completely around the world. It is a change that will lead us to make different choices in the future. It will lead us to situations where we must, in some cases, protect our industries. In many cases, Canadians will be obligated to take another look at free trade. For the purposes of preserving our economy, we will be obligated to better understand how the world will work.

That is what we are faced with today. We are not faced with the situation of nine years ago. We are not even faced with the situation of two years ago. We are faced with the situation that has come upon us today. If we look at the history of the opening of the liberalization of trade in Canada, for many years, we were under the guidance of a policy that said that good fences made good neighbours. In many cases, we understood that the situation in the world between countries was not open or equal. We were not in a position to allow free trade to take place. We needed to have tariffs and protection for our industries because the world was not the place it was 20 years previous.

When we started on the free trade talks and agreements that came along in the 1980s, we built them on the basis that we would open up the world economy. We were making trade and taking away barriers. We were going to create a level playing field around the world, where the best possible situation could arise for industry and commerce and permit an expansion of the world's economy. By and large, some of that worked and some did not work. Some of it was based on trade and some was based on technological advancement and many other factors.

However, today, we are dealing with where we are going in the future with trade. How do we set the path for our Canadian economy? We have seen that there is not likely to be less regulation, but more regulation. We are likely to pay more careful attention to how our industries work, not less attention.

Our amendment proposes to carve out the very important shipbuilding industry from the agreement. We do not see that this will work for our shipbuilding industry in the future. We do not see that free trade will make the kind of difference to our shipbuilding industry that we might have thought about 20 years ago. It is not the case today. This is why we are very interested in ensuring that our shipbuilding industry is protected and allowed to grow in a reasonable fashion.

Shipbuilding will have a place in Canada. We are a maritime nation. We have the largest coastline of any country in the world. A lot of that coastline is in my riding in the Arctic, among the Arctic islands. There is an enhanced interest in the development of arctic resources and arctic transportation and the use of the Arctic as the ice melts. With climate change, we see the opening up of the Arctic Ocean, the arctic shipping lanes and all of that.

It is imperative that Canada stays on top of Arctic marine shipping development. Right now that is in the hands of the Russians. They are the leaders in this field. Where are we? We are nowhere in it. We will enter into the next century of development in the Arctic, where marine transportation will be of the utmost importance, and we will have a shipbuilding industry that we have not supported and that we have not ensured has the opportunity to take advantage of this new and exciting area to work in, the Arctic.

That one factor should give us all pause. It should make us ask what is good for Canada, not what is good for the world, in our new opportunities in the new economy, which will have a very large Arctic base. Is it good simply to abandon the shipbuilding industry to the vagrancies of the world market to the kind of competition that can come not only from Norway and from that direction, but from the Koreans and the Chinese? Is that what we want to accomplish?

It is not simply about building ships. It is about all the ancillary things that go along with ships. If we are turning over the shipbuilding industry, we are turning over many of the components and technologies that can give Canada the edge in the new economy into which we are moving.

Therefore, what are we doing here? What are we trying to accomplish with this free trade agreement that was started nine years ago by the Chrétien Liberals, when free trade was popular? Are the two major parties, the Liberals and the Conservatives, simply caught in their past rhetoric, in their past ideas of free trade and free markets, that they cannot see what the future holds? Can they not say that this is the direction we should go in, that this is where the new economy is, that those are the things we have to protect and that those are the things we have to create.

Is that what their problem is, that their ideology has just bound them down? They used to complain that the NDP was ideologically bound by its protectionism, by its social justice, by its concerns about the environment, so that it could not be open to the development of world trade. Times are changing and we need to respond in a fashion that is acceptable and reasonable.

When the Mulroney government got us into the free trade agreement, the allegations at the time were that the free trade agreement was supported by the Conservatives and would continue to keep our dollar high. At the time, the New Democratic Party was pushing for a lower interest rate, which would help our economy. When the Liberals got in, they actually did that. They lowered the interest rate and let the dollar fall. Under the free trade agreement with the United States, we flourished. However, was it because of the free trade agreement or because of the lower dollar? Both of those factors had to come into play.

What is happening today? We are in the midst of a major global financial crisis, which we have not settled, yet we are talking about putting ourselves into more free trade agreements, when we do not understand yet what the financial situation of the world is going to be.

When it comes to currency, what is going to happen when the price of oil, inevitably in the next 12 months, starts to rise dramatically again, when the U.S. economy recovers and when the U.S. dollar starts to fall?

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:40 p.m.

Conservative

Chuck Strahl Conservative Chilliwack—Fraser Canyon, BC

That would be a terrible thing to see that recovery happen.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:40 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

It is going to be a terrible thing. I thank the Conservative Party for its comments. I am glad it agrees with me. I am glad its vision is extending past the next six months.

When the American dollar falls and the Canadian dollar inevitably rises, as it is a petrodollar and based on our resource industries, we will find ourselves in a more difficult situation with free trade.

We are going to demand protectionism for our country. When the currency situation flips around with the United States, Americans will import into our country the things we used to export to them. That will be a problem for our economy. If we do not recognize it and realize where these things will lead us, we will be in a lot of trouble. That argument fits with what we are talking about today.

A free trade agreement with Europe was initially thought up nine years ago in a different time. Let us get back to where we are today and where we need to go in the future with our shipbuilding industry. We have a shipbuilding industry that is in crisis, so let us kick the legs right out from underneath it. Let us knock it right down on the floor. That is a good idea. That makes a lot of sense. That is the kind of thinking that can really bring us forward in this world.

When the NDP stands here and fights tooth and nail for this, with the support of the whole industry, with the support of all the workers in that industry, the collective wisdom of the Liberals and Conservatives, along with the Bloc, have decided that ideology reigns. Ideology will not do it for us. We need to think about where our industry has to go. We need to support our industries in this troubled time. We cannot afford to make decisions like this. We cannot afford to cast loose a major part of the manufacturing potential along our east and west coasts, up and down our rivers. The kind of future we are going to build in our country requires us to continue to support our shipbuilding industry. We cannot give this up. By giving doing so, we are giving up a significant part of the future of those provinces and territories that rely on this industry and the products of the industry to develop the new economy to move Canada ahead.

I plead with the other parties to look at what they are doing. They should take off their blinkers and realize where we are in the world today and where we have to go.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:50 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, I have a question, but I want to clarify something that occurred earlier today.

Earlier the member for Burnaby—New Westminster asked the member for Sackville—Eastern Shore as question about what happened under the Liberals. He referred to the minister, John Manley. For the record, I was Mr. Manley's parliamentary secretary. I remember the NDP brought forward a motion in the House, which dealt with the a review on shipbuilding. Had it not been for the Liberal team, the motion would have died. Those members can make all the statements they want, but this is in the record and I challenge the member to look at it. Had the Liberals not voted in favour of the motion, the review would not have started.

Then the members referred to Mr. Tobin, who took over from Mr. Manley. I happened to be his parliamentary secretary as well. He was moving forward and was making strides until the NDP betrayed Canadians, overthrew the government, and off we went.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:50 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I enjoyed the hon. member's question, whatever it was. I have to refer to my speech. I said that if we looked backward, if we continued to think of ourselves nine years ago when we talked about trade agreements, we would not address the needs of Canadians.

When the hon. member says that the New Democratic Party may or may not have voted against a review of the shipbuilding industry and compare that to taking 25% off the tariff that protects Canadian shipbuilding in the world, he is talking about things which are not quite the same, do not have the same merit and do not have quite the same importance to our country. Could the member please look at where we are going and look at this legislation in that regard?

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:50 p.m.

NDP

Megan Leslie NDP Halifax, NS

Mr. Speaker, I have in front of me a letter from a shipyard worker. I am not sure if he is from my riding or the riding of Dartmouth, but he sent me a copy of his letter to the Prime Minister. He wrote:

As a worker employed in the shipbuilding industry for a number of years, I wish to express my concern over the EFTA trade agreement presently before Parliament.... This is an industry that, with the right support,could employ thousands of workers in this country, and provide a major part of the economic stimulus your government has been talking about for this country. To sign a trade agreement that further erodes our ability to compete makes absolutely no sense at this time.

For the first time in our history all stakeholders in the shipbuilding industry came together with the position that the EFTA trade agreement would be detrimental to our industry and “Shipbuilding” should be carved out of any such agreement.

Could the hon. member tell us of the impacts that not voting for this amendment could have on Canada's economy?

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:50 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I referred to a number of areas where I think Canada needs to make progress in developing equipment and machinery, especially for resource development in the Arctic. In the 1970s and 1980s Canada did pretty well with what it built for the north.

A primary industry like shipbuilding is not simply about building hulls and putting sails on or motors in. It is an integrated industry. It is also about the people who build all the electronics, the people who build the machinery that is used on the ships. Those industries are attached to other industries. If we take the legs out from under the electronics industry for marine use in shipbuilding, we will see a drop off in that industry and an inability of that industry to compete in other areas. Shipbuilding is the prime industry but it is surrounded by other industries. Pulling the prime industry out puts the boots to many other industries.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:50 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Speaker, I have to say, God love a Liberal. The Liberals are rising in the House to defend a report which nine years ago they did absolutely nothing on, while they are getting ready to sell out the entire shipbuilding industry in Canada. One has to have a lot of nerve to do that.

Liberal members have been besieged by hundreds of letters from shipyard workers in their ridings, boilermakers, sheet metal workers, people who depend on the shipbuilding industry and the Liberal members are giving them the backs of their hands. It is absolutely disgraceful.

The Conservatives and the Liberals are conspiring together to sell out one more industry. They did it with the softwood lumber sellout and now they are doing it with shipbuilding.

Could the hon. member for Western Arctic tell the House why the Liberals and the Conservatives always get it wrong?

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:55 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I have been in the House only three years. I have only seen the Liberals and the Conservatives get it wrong for three years. Sorry, I cannot speak to nine years ago and I really do not want to go there.

What I want is to get it right for Canada. I am speaking to this bill to try to impress upon members the need to look ahead, and not to think of ideologies other parties held so dear for many years because they thought that was the way to go. We have to consider where Canada has to go. We should not think about the past. We should think about the future.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:55 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, I want to set the record straight again.

The hon. member for Burnaby—New Westminster referred to the sellout of the lumber deal. I chaired the committee when it did the review. He was a member of the committee. All the stakeholders came before the committee and asked for financial support, which the Liberal team was ready to give. What happened? The Liberals agreed with the NDP on the 2005 budget, but the NDP went to bed with the Conservatives and the deal went down the drain. A billion dollars was left in the United States. The lumber deal went down the drain thanks to the NDP.

Canada-EFTA Free Trade Agreement Implementation ActGovernment Orders

1:55 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I really do not want to repeat myself and I do not want to go in directions we do not need to go in this House.

The issue in front of us is a 25% tariff that is going to be applied to our shipbuilding industry over the next three years. This will actually cripple the industry at a very difficult time for industry in general. What are we doing? Why are we doing something that was created by the Liberals nine years ago and carried on by the Conservative Party? What is going on in this country?