Charlie Penson

[General Agreement On Tariffs And Trade, May 2nd, 1994]

Mr. Speaker, my question is for the Prime Minister.

The latest media report suggests that President Clinton has now publicly taken the side of the American farmers in the durum wheat dispute. Given that the United States' own international trade commission has scoffed at the unsupported allegations of unfair Canadian trade practices, will the Prime Minister personally contact President Clinton? Will he ask him to rise above domestic politics and take a leadership role in the interest of free trade?

[Supply, April 28th, 1994]

Mr. Speaker, I would like to thank the member for Mackenzie for those questions.

First of all I believe that deregulation in the transportation industry is necessary. We have to have a very practical solution to movement of products. They should move by whatever method is the cheapest form and they should move in whatever route is the most direct and cheapest.

I think when he talked about the hopper cars going into the United States and the turnaround time, part of the reason for that is the very regulated system we have with the crow rate where we have seen grain going as far out as Thunder Bay and then back into Saskatchewan and crossing the border. That does not make any sense at all.

I believe we have to look at practical solutions to problems so that Canadians can face the reality of the nineties and adapt to the new trade environment.

In terms of high tariffs and why I am critical of the high tariffs, I believe these tariffs are put in place as an adjustment process to let our industries adapt over a reasonable period of time from a system of supply management with a lot of regulation to free trade. I think that can be done fairly quickly. These tariffs are set probably high on both sides of the border, but that does not excuse either side.

It is in our interests when we have just signed a trade deal with the United States and Mexico that says we want to move to free trade among all three countries in a short period of time to phase these out very quickly.

[Supply, April 28th, 1994]

Mr. Speaker, I certainly welcome this opportunity to speak on this very important issue of agriculture.

My family and I are actively involved in operating a 1,100 acre grain farm in northern Alberta and so agriculture is very near and dear to my heart. Agriculture is important to my riding of Peace River as well because it is a very large industry. No one has any doubt that agriculture is crucial to Canada.

Although Canadian farmers have been hard hit with a trade war that has lasted many years, in 1992 alone we still managed to export over $12 billion of agriculture commodities. Wheat and other cereals are our leading exports, with principal destinations being China, Korea and Japan. Live animals, meat and meat products are also important, with exports bound for the United States and Japan. Oilseeds, mostly canola, go mostly to Japan in raw form and to the United States in the form of processed oil.

In 1991 a total of 867,000 people resided on farms in Canada and total receipts from those farming operations came to $23 billion. We also know that agriculture has one of the highest spinoffs in terms of job creation.

Today we are being asked to condemn this government for its inaction with respect to the agriculture sector which is presently being confronted with the largest restructuring it has faced in the last 30 years.

Restructuring is something that agriculture and farmers are familiar with and has happened since Canada has been inhabited. My response to this question is yes, the government can do more. However, in the area of trade we have made a very good start even though it is only a start.

Canada is a trading nation. One out of every four jobs in this country can be linked to trade. Therefore we must push for trade liberalization both at home and abroad. This means moving beyond what has been negotiated at the first phase of GATT. We must work within the World Trade Organization to lower remaining trade barriers at a faster pace so that those sectors that have natural advantages can compete and win markets without the support of the treasuries of those countries.

We welcome the agricultural trade rules that GATT has brought us. Let us examine some of those rules.

Number one, overall tariffs on agriculture goods will be reduced by 36 per cent with a minimum reduction of 15 per cent for each specific product. Implementation will take place between 1995 and the year 2000 in six equal annual steps.

Number two, countries will be compelled to reduce internal support of their agricultural industries by up to 20 per cent over six years where such support has the effect of distorting trade. Countries will be committed to reducing export subsidy expenditures by 36 per cent and reducing the volume of subsidized exports by 21 per cent over the next six years.

Supply managed products will now be subject to tariff barriers instead of quota restrictions. It is true that the supply managed sectors need protection for a time to adjust to the free market conditions. I would think that 10 years should be quite enough time for that adjustment process to take place.

It was evident at the GATT negotiations that Canada had no support for article XI. The world has moved beyond that. We are

looking for liberalized trade throughout the world and Canada simply could not sustain any argument for article XI support.

My concern is that having set our tariffs for certain products at excessively high levels, we are inviting challenges from our trading partners. Let me give members a run through on a quick list. We have set our tariffs on eggs at 192 per cent; yogurt, 279 per cent; chicken, 280 per cent; milk, 283 per cent; ice cream, 326 per cent; and butter, 351 per cent.

I would like to elaborate a little on that last tariff. The domestic price of butter in the United States is $1.54 per kilogram. Once transportation and the 351 per cent tariff are added and the American dollar is converted to Canadian, that same kilogram of butter will cost $10.15 in Canada. That compares with the Canadian support price of $5.32.

The tariff makes American butter almost twice the price of Canadian butter. Is this not overkill? Is this not a reeling example of overtariffication? Obviously the tariff is way out of line. It is obvious we will not see any trade in butter for many years to come. Yes, let us help the supply managed sector move toward becoming a self-sustaining industry but let us be fair and not jeopardize the trading opportunities of those agriculture sectors that are competitive by suggesting blatantly high tariff rates for dairy and poultry products.

I suspect the true test of these high tariffs may come from our own Canadian consumers. Why should they stand for excessively high prices? Furthermore, high tariffs seem to be a contradiction to the spirit of the North American free trade agreement whose benefits Canadian consumers are eagerly awaiting.

I would like to talk a bit about the grain industry which I believe will see slow but steady improvement. Here we must push for a faster action to reduce overproduction, subsidies and import quotas worldwide. As an example, western durum wheat farmers are now facing restrictive import quotas from the Americans who accuse us of subsidizing our wheat exports.

The truth is that on four separate occasions a binational panel has dismissed these allegations by the United States. It is the American's own export enhancement program which encourages exports of Canadian wheat to other countries which is at fault. This program has left the Americans with shortages which Canadian wheat fills. Now American farmers are crying that Canadian grain has filled their terminals.

This is the exact type of program that has so devastated the agriculture industries in countries like Australia, Argentina and Canada that had the small treasuries and cannot back their farmers up to the degree that they do in Europe and the United States.

I believe governments must move quickly to free trade. Otherwise the initial optimism of the GATT signing will be lost. The big challenge for the new World Trade Organization which replaces the GATT in January will be to define what happens at the end of the first six years. I say that our goals should be to strive for a no subsidies, no trade barrier situation in a total time frame of 10 years.

Unfortunately there is no time to address other important issues in detail. I know that my colleagues here are going to be speaking about some of those issues, although I do want to touch on them briefly.

However, we have to have a responsive, deregulated transportation system in Canada. I also believe the Canadian Wheat Board should have a democratically elected board of governors and a system that is market driven.

Canadian farmers are hard working, proud people who would rather receive their income from the marketplace than from government subsidies. Our farmers offer the Canadian public a quality product and the security of a reasonably priced food. Canadian farmers have a worldwide reputation for supplying quality products.

What do farmers want from our government? They expect protection from unfair trade practices of our competitors. They want the protection of fair trade rules throughout the world. They want our government to push to reduce subsidies worldwide so that they can benefit from free trade. They want governments to live within their means which will lead to lower taxes and lower input costs. Finally, they want governments to reduce regulations and unnecessary programs.

I believe Canadian farmers can compete anywhere in the world, given a fair opportunity. I believe our Canadian farmers will adapt and prosper under the new trade environment. I believe they do not need more than 10 years to make these necessary adjustments.

[Sahtu Dene And Metis Land Claim Settlement Act, April 25th, 1994]

Mr. Speaker, I am going to give the member for Dauphin-Swan River a break.

I wonder if she might not agree that the degree of compensation seems to be setting a very high precedent in terms of what the compensation level is.

[Crown Liability And Proceedings Act, April 22nd, 1994]

Mr. Speaker, today we are taking a last look at Bill C-4 as it gets third reading.

This bill was introduced by the government on January 26 and I spoke to it at length a few days later. At that time I said the Reform Party supported this bill although we did have some concerns about there being fair representation on the panel. We also wondered whether there should be an appeal process. These concerns were addressed to our satisfaction in committee.

I can now say that I and the Reform Party fully support this bill which will bring into Canadian law an enforcement mechanism established under the NAFTA side agreements on environmental and labour co-operation.

In the area of environmental co-operation we will be assured that there will be strengthened environmental co-operation in North America. We will be assured of sustainable development on a continental basis and of effective compliance with domestic and environmental law.

In the area of labour co-operation we look forward to improved working conditions and living standards in Canada, the United States and Mexico, and the protection, enhancement and enforcement of basic workers' rights.

The trade pacts we have signed recently are of crucial importance to Canada since they help us gain better access to foreign markets. The sooner we get these trade pacts implemented the better.

Naturally there will be irritants as these agreements become operational. These will have to be addressed as they come up and I am confident they will do so.

We are doing the right thing by passing the bill quickly and moving on with the implementation of NAFTA. However there is still much work for the government to do to make it possible for business to take advantage of these trade opportunities.

The most important one is to reduce government spending so that we can eventually begin to lower taxes in Canada, which is among the highest taxed countries in the industrial world.

The second one is to eliminate the many interprovincial trade barriers that exist in Canada. I know these trade barriers are being discussed among federal and provincial governments now. I urge these governments to move quickly and without hesitation in these areas.

We are making great strides in securing our prosperity by making trade deals abroad. Let us see whether we have the same resolve to make the same breakthrough at home.

Canada is a trading nation. We support the bill and hope that we will benefit from the many opportunities this trade deal brings to Canadians.

(Motion agreed to, bill read the third time and passed.)

[Unemployment Insurance Act, April 21st, 1994]

Mr. Speaker, I appreciate the opportunity to rise on such an important occasion to speak about unemployment insurance.

I recently spent two weeks in my riding. People are concerned about the high cost of unemployment insurance to Canada, not only to employees and employers but to the taxpayer. They are concerned about abuse of the system. I have seen some of that abuse firsthand.

Abuse of the UI system results in higher costs for employees, employers and our entire tax system. It results in higher costs of goods and services. Removing the safeguard that is in place regarding spouses paying each other has the potential for a tremendous abuse problem in the future. I see it rising very greatly if we remove this safeguard.

I recognize that if spouses are not allowed to collect benefits on an arm's length transaction they should not be expected to pay premiums either. We do have a problem here that needs to be addressed but let us address it directly and not try to do an end run on the problem. There are other people who have to pay premiums. Although I am a farmer I worked off the farm for some time. I had to pay premiums and never could collect. That needs to be addressed.

If spouses are not allowed to collect because they do not qualify under the arm's length test, let us introduce a bill to deal directly with the problem. This discriminatory practice should not be continued.

The government has promised to bring in a review of the entire unemployment insurance program. It is a welcome review, one for which the people of Canada have been waiting for a long time. Let us listen to what Canadians have to say in these hearings on this issue as well as others. I believe they are going to be telling us that they want to stop abuse of the system.

We have young people in Canada who have never seen either parent bring home a pay cheque or hold a real job other than one through unemployment insurance. I say that is a tragedy. A program that was started with very good intentions, to provide help for people in time of temporary crisis, has become a way of life for a lot of people. We see it continuing from generation to generation.

This practice has to be stopped not just for the taxpayers but for those very young people who are going to fall into that same cycle. It is not conducive to good self-worth and the sooner we end that practice, the better. I am concerned that by removing the safeguard that has been put in place to stop abuse in the case of spouses employing each other will just add to that further abuse. Therefore, I cannot support this bill. I encourage members in this House to vote it down. A new bill should be

introduced to deal with the problem where spouses have to pay premiums when they are not allowed to collect.

I believe there is good intent here but it is misdirected. I certainly do not want to encourage any more abuse of our unemployment insurance system than we have now. Let us have a good thorough airing of this problem and the hearings that are going to be conducted throughout the country through the unemployment insurance review. I suggest we wait for that to happen.

[Wheat Exports, April 19th, 1994]

Mr. Speaker, my supplementary question is for the same minister.

Many concerned Canadian wheat farmers feel they are doing a good job, are being competitive and have adjusted to the new reality of free trade. Would the minister allay the fears of wheat farmers by saying that their interests will not be traded off to

protect supply management in order to cut a deal with the United States in this area?

[Wheat Exports, April 19th, 1994]

Mr. Speaker, I would like to interrupt the theatre that is going on here to actually ask a question of the Minister for International Trade.

First, I would like to take a little different tact and congratulate the Minister for International Trade on the successful signing of the GATT in Morocco. While in Morocco the minister said that he would not yield to pressure from the United States on the question of Canadian wheat exports.

Is the minister willing to hold his ground until the world trade organization is up and running and let it decide that our wheat exports are not unfairly subsidized?

[Canadian Foreign Policy, March 15th, 1994]

Madam Speaker, I would like to thank the member for that very important question. I certainly see there is some expertise there.

My view is they should make representations to the committee in the same way as other witnesses do. The problem I have is that they are not elected officials. There certainly is merit in having their input because they do have a great amount of expertise and knowledge. Perhaps that is one way to accommodate that.

[Canadian Foreign Policy, March 15th, 1994]

Madam Speaker, I welcome the review of Canada's foreign policy and international trade. I anticipate that we are going to have a great deal of interest in the review process and I encourage Canadians from coast to coast to be part of that greater debate.

The upcoming national policy forum is both timely and important. The cold war has ended. The foreign policy of many countries is drifting and needs to be reviewed. Most industrial countries are reviewing their policy on foreign affairs as a result of what has happened in a rapidly changing world.

I have concerns about the foreign policy, specifically CIDA. We will have speakers later today who will deal specifically with that so I will comment mainly in the area of international trade.

International trade perspective to me means opportunities to develop our trade with other countries. It means opportunities for our businesses to take advantage of these important trading deals that we have just concluded.

One such opportunity is the expanding trade with Mexico through NAFTA. I look forward to Canada participating in that very important trade pact as well as the discussion that is going to take place about the expansion of NAFTA. As we know, Chile is one of the countries that is looking to expand or to become part of the NAFTA arrangement. I would encourage our trading partners to accept Chile as part of this greater trading pact.

Currently 80 per cent of our exports are to the United States, our most important trading partner. I want to emphasize that we do not want to lose the United States as our most important trading partner. I think it is a natural relationship that is going to continue. But I do think we have to look for new opportunities as well.

New opportunities exist in southeast Asia where dynamic growth is being experienced. Growth forecasts for this area are in excess of 8 per cent annually. That compares with less than 3 per cent for OECD countries. Southeast Asia is the one place in the world where trade is booming.

Canada is well positioned to export to this area. Our western provinces, particularly British Columbia, have a natural advantage in water transportation, a very cheap method of transportation.

Canada has already had some success in selling into the Pacific area. Japan is our second most important trading partner and South Korea, of course, rates right up there as number six. Among the top 25 markets for Canadian goods are six nations from southeast Asia: Singapore, China, Taiwan, Hong Kong, Indonesia and Thailand. However, our total merchandise exports to these six countries only amounts to 2.7 per cent of Canada's total trade. I see this as being a real area for growth opportunity for Canada. We can and should be doing better in this area.

We have a large untapped resource. I am talking specifically about the one million Canadians of Asian origin who possess knowledge of the language and the culture. They know what the consumer habits are in these countries. They know the business norms, the conventions that need to take place. They often have family ties in that region. This invaluable knowledge is not found in a textbook, but it is very real and should be used.

We could be looking at encouraging Asian language training in our universities and encouraging our businesses to support that. We should also be looking at encouraging our trade department to hire more people with a background in that area to take advantage of these natural ties.

I want to speak specifically about some projections from Canadian business. The Canadian Cattle Commission is a good example of an organization that plans to take advantage of this very rich trading area. It estimates that by the year 2000, which is only six years away, exports will increase twelvefold to this area, from 6,000 tonnes to 75,000 tonnes of beef annually.

The Canadian Wheat Board is projecting steady growth in that area. South Korea now accounts for a significant amount of our feed grains.

Canada is a trading nation. Twenty-five per cent of our gross domestic product is accountable to our exports in goods and services and that sustains over two million jobs in Canada.

Our present recovery is being led by solid increases in our export trade. Canada has a very good reputation as a leader in the trade area. Our Department of Foreign Affairs and International Trade has been doing an excellent job of developing markets

abroad. Canada gained a good reputation as a leader in helping to establish the GATT after World War II and now the new world trade organization.

I believe the trade component of the Department of Foreign Affairs and International Trade should not be downsized. It should be streamlined to become more cost effective. We need a strong department promoting Canadian interests abroad. That is one way we are going to continue to grow.

We heard the minister speak this morning about the review that is under way in the department. I encourage him in that review. I would also like to encourage him to make our business community, our private sector, more a part of our trade organization. It should be taken into account in a lot higher degree.

New emphasis should be placed on putting in place people of Asian background specifically in our trade department, as I said, to promote trade in southeast Asia. Opening trade consulates in emerging countries such as southeast Asia should be examined. The joint ventures that were talked about earlier today I would certainly encourage in order to make it the most cost effective method of promoting our interests abroad.

Problems at home must be corrected before we can be effective traders. We cannot expect our businesses to operate with one hand tied behind their backs. If we cannot give our industries a fair chance to compete our efforts are really futile. Our companies, small, medium and large which have to break into and develop these foreign markets cannot do so effectively. They are hampered by disappointing results at home because our government will not act responsibly on fiscal management.

Taxes must be reduced. Deficits must be eliminated and government overspending must be stopped. A greater emphasis has to be placed on removing internal trade barriers. We have to create the proper climate in Canada to promote business. I believe that we must put into place realistic tariffs so that we do not invite challenges from our trading partners as a result of the very important negotiations concluded at GATT.

In closing, I would certainly welcome a review of our foreign policy, our defence policy and our trade policy. These are all happening at the same time.

There is merit in having some joint meetings of defence and foreign affairs in order to dovetail these as much as possible. It is very important because the policies we are putting in place this year will determine where we stand as a nation when we reach the 21st century.

In my mind it is a very important review. I look forward to the process. I hope that as many Canadians as possible will participate in this review.

I also have some concerns, as does my colleague, as to the make-up of the joint committee. I look forward to travelling across the country and taking this hearing process to the very people who have to make representations instead of having them come to Ottawa. That is a very important part of this process as well.

In closing this is a very important time in Canada's history, with the two reviews that are going on. It is not an easy time. All countries are facing some kind of a review as a result of what is happening internationally with globalization. I hope we can meet that challenge.