Charlie Penson

[Department of International Trade Act, February 7th, 2005]

I agree with the minister. I certainly had a chance to work with a number of trade ministers on the other side, Roy MacLaren, Sergio Marchi, Art Eggleton and now the new minister. I have enjoyed my time. On balance, the Department of International Trade has been a very good department. However, I am afraid we are missing the big picture today.

The minister has brought forward a bill to the House to split the department, and maybe that will be important. Only time will bear out whether that is. I am reserving my judgment in that area. However, unless we address some of the basic problems and look at the bigger picture, splitting the department will not be as big a panacea as some might have us believe. It seems to me that we are suffering from two huge problems in this area, one being here at home and the other being internationally. I will just take a moment to talk about the international component first.

A considerable amount of work still needs to be done in international trade to advance the cause of free markets in order to give Canadian producers opportunities to access markets in other trade walks such as the European Union. There is a real need to reduce subsidies that are being used still, particularly in agriculture but in other industries as well. There is a real need to address the issues of export subsidies being used and the huge tariffs themselves. I am concerned that Canada is not taking the kind of leadership on this that we need. It bothers me that because of some domestic politics at home, maybe we are not putting our shoulders behind the wheel to the extent we need to pry markets open.

It seems to me that the case has been well demonstrated over the last 50 years, the need and the benefits that come from opening up markets and trade liberalization. I think it is pretty clear to most people. We thought we were making progress at the Doha round with the European Union and others to stop the terrible use of subsidies and export subsidies to hurt our Canadian producers. Now we see some slippage again, and it concerns me. There is work to be done there.

Work has to be done at NAFTA. The dispute settlement mechanism we have does not serve us. We know that. It is not serving us in softwood lumber. I would submit that we have been harassed in that industry for a very long time, and that is not changing. We have to advance this thing further. We have to grow our relationship with the United States and Mexico to try to open up NAFTA to benefit Canadians.

As my colleague from Newmarket--Aurora, the critic for our party said, what is this all about? It has to serve people. If it does not benefit the average Canadian, there is no point in this whole exercise. It is not an academic process. The lives of real Canadians are on the line in terms of needing to benefit and increase the standard of living. More needs to be done at the NAFTA level.

Surely we can get past the idea of countervailing and dumping being used against us so badly. It is ironic in the extreme that Canada introduced these trade laws back over 100 years ago. Now they are being used against us so badly by a number of our trade competitors. That is another area on which work needs to be done.

I reserve probably my worst judgment for what is happening here at home. I blame the Liberal government for the public policy it has engaged in for the last several years, which has not allowed our industries to take advantage and become more competitive and productive. Although the minister wants to change the department, which may be a worthy goal, unless we get things right at home in terms of taxation policy and regulation, it is all for naught because we will not grow the industry. We need to get our tax levels down. We had numerous studies at the Department of International Trade when I was there. The industry says exactly the same thing, that Canada has lost its way. We are one of the most heavily taxed countries in the world.

We are not competitive on the effective corporate tax rate with our major trading partner, the United States. There can be a debate on that. The minister has talked about whether we should look at expanding our trade with the United States or expanding it with other countries around the world. Surely we have to look at the United States as the best potential. We share a common culture, a common language and practices, but we need to give our Canadian companies an opportunity to benefit and take advantage of things that put them in a more competitive position.

I would start with taxation policy. I hope to see it in the upcoming budget. I hope the Minister of International Trade is prodding the Minister of Finance to get our corporate tax rates down.

The capital gains tax is another one. With the capital cost allowance, we cannot write our taxes off quick enough to adapt to the new realities. A certain amount of product and equipment we use goes out of date faster, especially on the information technology side. If government does not listen, we are not competitive.

Another area the minister talked about briefly was the whole area of investment now in his department. We are lagging badly behind in terms of investment. Canada's global share of direct foreign investment has been slipping for years. We are not being seen as a friendly place to invest. We have to overcome that or else we will not get the kind of investment which brings in the new technology that we need.

Canadians are finding it more attractive to invest outside the country than at home. Surely that says something. It says a whole lot about our public policy. Why can the Liberal government not get it right? For years it has been told that we are slipping in terms of our competitive edge. Our productivity is something like 84% of that of the United States. It is not because our average workers are working any less. In fact, they are working harder. It has more to do with government policy that stands in the way of workers and companies being able to take advantage of an opportunity to invest and compete where they need.

Those are limiting factors. Unless we get it right and start to address them, they will continue to hurt us. The minister has aspirations for the new department. I wish him well. I hope that he is listening today and can convince his counterparts on the other side that they have to do something to enable the new investment in the new department to find the groundwork and bear the fruit. Unless we do that, I am afraid this is all for naught and splitting the department will really be nothing more than just another side to a bureaucracy in the next few years.

With that, let us look forward to the next opportunities to make some changes in NAFTA. Every five years we have a chance to sit down and review the NAFTA agreement. I know the minister was not there the last time, but we did not take advantage of that. We did not look at some of the things that were wrong with the agreement or those things that we could have done better. I was really disappointed.

I know the government wants to protect certain industries, but it does not fit with the concept of free trade. It seems to me that we have to do a better job. If something is not working, we have to work with our counterparts in the United States and Mexico to do it better so we will all benefit. We have to get a better relationship with our major trading partner and move this portfolio forward in the interest of the living standards of all Canadians.

[Department of International Trade Act, February 7th, 2005]

Madam Speaker, I would like to thank my colleague, the critic for international trade, the member for Newmarket--Aurora, for her excellent speech and the opportunity to share my thoughts today in this important area.

The member for Newmarket--Aurora brings some international experience to this portfolio. It is very important to look from where other countries see Canada's position. She is able to share that aspect with us from the vantage point of her position as manager of an international company.

I am happy to take part in this debate. I did serve as the international trade critic for about eight years for our party.

[Food and Drugs Act, February 7th, 2005]

Mr. Speaker, what I heard was that you called for yeas but you did not call for nays.

[Petitions, February 4th, 2005]

Mr. Speaker, I have one petition to present today. It has been signed by 199 people from the Peace River riding. The petitioners ask the Government of Canada not to collaborate with the Americans to build their ballistic missile defence shield.

[Budget Implementation Act, 2004, No. 2, February 4th, 2005]

Mr. Speaker, I would like to remind the member that this is the budget implementation bill that we are talking about for last year's budget. He seems to be talking about the upcoming budget. I guess we would all like that opportunity, but I want to remind him that he is speaking about last year's budget.

[Supply, February 3rd, 2005]

Mr. Speaker, I would be happy to do that.

Regardless of what kind of program is put into effect, there are difficulties with it. It has been subject to the same problems like the old GRIP, which essentially meant that if a farmer grew wheat year after year, he could make more money farming the program than he could farming other commodities that were not covered under other programs. It does not matter. No matter how well intentioned these programs may be, they are of a supplementary nature by their very description and necessity.

It seems to me that the minister is right. We have to get more money out of the marketplace. That is clear. That used to be the case. We used to export products to Britain. Canada was the biggest supplier of wheat to Britain for a long period of time. We have lost that market because other trade blocs have moved inward. The European Union for example basically does not allow any imports of products. Worse than that, it is using export subsidies to get rid of its overages every year.

There was some hope for a while that the European Union was going to move for trade liberalization and stop export subsidies, but as we see again this year it intends to use massive export subsidies to buy market shares, and that is really going to hurt us.

For example, if Canada were to tell Algeria that it had good quality wheat for sale for $120 a tonne, and the European Union with its export subsidies told Algeria it would sell it for $60 a tonne, there is no magic in knowing who would get the sale. While it is not an exact displacement in volume, it is enough to distort the market and it has been for a long time.

That is what I am talking about when I say we cannot compete with the treasury of the European Union with 500 million people to support it. We have to have some sanity in the market.

In other trade areas we have been able to get tariffs and subsidies down worldwide. Right after the second world war people decided that they had to do something that would stop the causes of the Great Depression and the war. They introduced international institutions such as the United Nations, the World Bank, the International Monetary Fund, the general agreement on tariffs and trade which evolved into the World Trade Organization. Those institutions gave a great deal of assistance. Agriculture has largely stayed outside that system, but we are trying to get changes.

Canada has taken a very strange position. We are asking for trade liberalizations or access into other countries' markets, and we are telling those countries that they cannot have access into our markets in some other products. It is pretty dyslexic and it hurts our position. Basically it takes our position off the table and other countries say we have nothing to contribute.

That is what I offer by way of answer to the minister.

[Supply, February 3rd, 2005]

Mr. Speaker, I will be sharing my time with the member for Saskatoon—Rosetown—Biggar.

This is an important debate. It is one of many debates on the important subject of agriculture in which I have taken part since I was elected as the member of Parliament for Peace River in 1993. I have to say that while we are talking about the CAIS program today, it could be about the FIDP, NISA or GRIP programs; we have gone through them all in agriculture.

I have to say that yes, there are problems with this program that have to be addressed, but there is a much more fundamental problem in agriculture. It goes back to what kind of value we give our farmers, what kind of value we give our food security and our whole agriculture industry. Do we need an agriculture industry or not? That is what Canadians have to address because I see an industry slipping away from us. As slowly and surely as the sun is going to rise tomorrow, this industry is going to be gone.

I have to confess that I have a bit of a conflict. We have an over 2,000 acre farm in Alberta. My son and his wife, and my youngest daughter and her husband are farming that operation. They are having very difficult times. All four of the individuals are working off farm. That is not an uncommon situation in agriculture in this country.

When I started farming in 1968 about 17% of Canadians' disposable income went toward paying for their food supply. It was very low even at that time. There were lots of countries where 50% of disposable income went toward paying for food. Now it has dropped to something like 7%.

Canadians have to think about whether they want an agriculture industry or not. This is more than just a partisan issue. This issue is fundamental to how Canada develops because I will put it to you, Mr. Speaker, that any civilization that does not look after its basic industries and does not recognize their importance has no future.

We can look at any great civilization in the past. My wife and I spent some time in Spain this winter. Even the Moors who invaded that area in the ninth century had to have their food supply secure before they could embark on any of their great adventures. Whether it was building universities or churches, the arts or whatever it was that they wanted to accomplish, it could not take place until they had secured their food supply.

Some argue that we have a secure food supply in Canada. We produce a lot; however, we import a lot of food as well. Probably we are a net importer of food. Everything is going fine. That may be the case today, but it may not always be the case. What if we had a massive change in our currency rates as we have seen fluctuations in the past, our producers fall by the wayside and we have to start importing food into the country in a much more massive way than we do today? What if the exchange rates change again and all of a sudden food becomes very expensive? Then Canadians are going to ask us what we were thinking, why did we not look after this industry? They are going to blame us. All of us have to share in the dilemma that we have.

Let me talk about my own family history. My family came from the highlands in Scotland. They were driven out during the clearances. The clearances were when the lords owned the land and there were tenant farmers. They were part of my history. The lords decided that they could graze sheep and it would be much better than growing grain on the small parcels of land. While they may have been right, it caused massive disruption to the people living in those areas, depopulation in fact. All kinds of people came to Canada as a result of the clearances.

My family came to a little place called Vernon, Ontario, just 30 miles south of here. They had a small farm. They saw it as an opportunity, but it was not big enough. There was a lot of Canadian Shield. When the plough was put in the ground it hit rock more often than soil so they moved on. They moved out to the Peace River country in Alberta because there was an opportunity for land. They did that in 1910. The farm that we have in our family is almost 100 years old. That is the case with many people who farm today.

I saw something different from what they saw. They were looking for and saw opportunity, the potential to realize what they could develop. They were very good at it. They were very good at building their farms and exporting grain and food products all around the world, but something has changed. Canadians no longer value their farmers.

I predict as surely as I am standing here that the agricultural industry will not be able to survive the current assault on it. It will simply not be able to survive.

I have all kinds of neighbours and friends. I can give the House an example. After I was first elected in 1993, a young lady phoned me and she was crying. She asked me if I could do something because Farm Credit was taking their land away. She told me about their situation and I said that I would certainly look into it and see what I could do. It turned out that they were further behind in their payments than she had told me. I could see no hope for them. I had to phone her and tell her that I did not think they would be able to make it, that all they would be doing was paying interest.

They were good farmers. They were third generation farmers in an area of the Peace River country. These people had come from Quebec and settled in an area north of us. They were very good farmers, but they were losing their place. That young couple had to move on.

I saw that young lady last year, but I did not know who she was. She came up to me and said that she just wanted to thank me for what I had done for them. I asked what that was. She said that I had advised them that they would probably need to move on to some other industry. She said that they gave up the farm and it was like an elephant had been taken off their backs. They now have nine to five jobs. That is happening all over the country, but who will produce the food in the next generation?

I challenge the government and all parties in the House to give more thought to where we are going in this agricultural industry. On the trade side we know that subsidies worldwide are beating us up, but there are things we could do. We could reduce or take off the excise tax on farm fuel. We could take the excise tax off fertilizer. We could give tax breaks to farmers who are buying equipment. Those are things that are within our control.

We could be much more aggressive on the trade front internationally and talk to trade blocs like the European Union. We must tell them that their policies are driving our farmers out of business, and that if they continue to do that, we will have to take action against some of their products. We have been too timid on that front. It is hurting us a lot.

Our farmers can produce with anybody in the world on the basis of production and competitiveness, but they cannot compete with the treasury of the European Union with 500 million people to support it, and they cannot compete with the treasury of the United States. We simply have to lend them a hand. They cannot make those arguments for themselves. They expect their government to do it and the government has been far too timid.

It is time to step up to the plate. Otherwise we will lose a very important part that will affect our ability to grow as a country and develop, because I do not think any great civilization can exist if it does not have security of its own food supply. That is where we are going today.

[Finance, February 3rd, 2005]

Mr. Speaker, could the Minister of Finance inform the House when his government intends to bring down the 2005 budget?

[Committees of the House, November 30th, 2004]

Mr. Speaker, the member for Edmonton--Leduc and I have worked on the industry committee for quite some time. We understand how the tariff and the duty system works. What has been missing in this debate today is the fact that this duty that the industry is asking to have remitted is really just a tax on the industry. It is collected by the Canadian government because we have high tariffs on a lot of the products coming in.

One way of dealing with this would be through duty remissions. We all agree that is the most immediate thing that has to happen. However, in the long term, would it not be better to work with other like-minded countries at the World Trade Organization and reduce the tariffs on these kinds of industries so that we do not have the artificial barriers, and let the market take its course?

I would also ask the member for Edmonton--Leduc, is it necessary to make adjustments like we did in the free trade agreement with the United States for some of the industries that were hurt? Would that not be a better approach? Could we reduce the tariffs, phase them out, and make the adjustments to allow those industries to eventually make their own choices?

[Committees of the House, November 30th, 2004]

Mr. Speaker, I listened with a great deal of interest to the hon. member speak about the need for the duty remissions. I am one of those on the Standing Committee on Finance who made the recommendation to the minister to have these remissions put back in place for the garment industry.

I find it passing strange that the market is not allowed to work here. What the member is asking for and what all of us on the committee were asking for was essentially that the government not collect tax against this industry in the form of tariffs or duties.

It raises an obvious question considering how serious the problem is for the garment industry. I think the member made the point very strongly that there are a lot of jobs at stake. It raises the question of why we would we charge these duties to begin with.

I think it is a very strong case for letting the market work in the fashion that only the market can work. We know that that there are very low tariffs or duties on most industrial goods now worldwide, especially after the end of the second world war and with the introduction of the General Agreement on Tariffs and Trade and what has evolved into the World Trade Organization. I think tariffs are now in the range of 2% or 3% worldwide.

Agriculture is one big exception to that. A number of people want to have those tariffs reduced as well, to allow the market to function properly in that sector. The textile industry is another. The point made by the member today really illustrates that something gets really out of whack when a member has to stand up and say that our industry needs to be pardoned so we need to make this exemption for it.

Common sense needs to prevail. We should not charge the duties to begin with. We should remove the tariffs. That would be a common sense approach and it has been recognized worldwide by 160 member countries, I think, that are working to try to reduce tariffs worldwide. Does the member not think it would be better in this particular case to just remove those tariffs altogether?