Bill C-364 (Historical)

Trade Compensation Act

An Act to provide compensation to Canadian industry associations and to Canadian exporters who incur financial losses as a result of unjustified restrictive trade actions by foreign governments which are signatories to trade agreements involving Canadian products

Trade Compensation Act

[Deepak Obhrai, Conservative, Calgary East, AB]

Mr. Speaker, it is a pleasure to speak to this private members' bill brought forward by my friend, the member for Fort McMurray—Athabasca.

Bill C-364 is about giving compensation to Canadian companies that incur financial losses as a result of unjustified and restrictive trade actions by foreign governments that are signatories to trade agreements involving Canadian products.

We all know that Canada is a trading nation. Close to half of our GDP is from international trade. It is very important for us to have a rules based system to ensure that we, with a smaller population, do have access to world markets, but under a fair trade system.

For that reason, the Canadian government, including the opposition, have always been fighting to ensure we have what we call fair trading rules. Therefore we give a high level of support to the WTO and to other trade agreements. It is our desire to carry on with these free trade agreements which we are now conducting with Japan and which we hope in the future to conduct with India as well.

I have attended the WTO meetings in Seattle and Doha in the past to ensure that Canada was well represented and to ensure we received a fair rules based system for our Canadian exporters and for our markets.

Hopefully, my colleague from Macleod will be going to Hong Kong for the next WTO meeting, even if the election is on the horizon. It is important for Canada's voice to be heard there. My colleague from Macleod has done a tremendous job in ensuring Canada is heard. I hope he does go there and brings Canada's voice to the WTO meeting.

There is no question that protectionism is growing around the world and it keeps growing. Even with the WTO meeting, we can see that the agricultural subsidies that are being given by the European Union and the U.S.A. are under scrutiny and attack by everyone because it distorts the market.

Canada is trying to get a rules based system. What about the Third World countries that cannot get a rules based system? These countries rely on the WTO. Henceforth, they are demanding at the WTO to have agricultural subsidies removed in order to have fair trade.

Canada has announced that it will be forgiving debt to Third World countries. Canada has announced that it is giving foreign aid and that it is raising its foreign aid commitment, but at the same time it is not opening up the market. I am happy to say that Canada has opened up that market but other countries in the European Union have not opened up their markets.

I watched a documentary recently on Lake Victoria in East Africa, the country from which I come, and the huge amount of fish that is caught that cannot be exported to the European Union due to restrictive measures. Just imagine what would happen if all this fish could be exported to the European Union. We could see the whole economic condition change. These people would not then be needing any foreign aid because they would be able to compete on the world market and go on with their business.

As a member of Parliament I have sat for eight years on the foreign affairs committee. I have seen countries not open up their markets. It is very difficult to get countries to open up their market because of national interests and the domestic markets.

When NAFTA was signed we thought we had a great agreement. We went around the world saying that NAFTA was the kind of agreement countries should have for a free trade agreement. We touted NAFTA as one of those excellent trade agreements that a country could have. Lo and behold, the ruling on the softwood lumber that the U.S.A. is ignoring now has come as a deep shock to everyone here who has been fighting for free trade.

Mr. Bush himself has been saying that he loves free trade. Everybody has been saying they love free trade. It is quite interesting that he was in Buenos Aires recently talking about the free trade of the Americas and yet we have a free trade agreement with him and he is having difficulty even fulfilling that portion of the agreement.

One may ask why we would extend more free trade agreements, why anybody would put credence into the U.S.A. opening up its markets when it cannot even fulfill the NAFTA agreement, which was unanimous on softwood lumber. Today speakers have all identified what has happened with softwood lumber and all the duties that the U.S. is getting.

That leads us to the main point, which is where does the burden fall? The burden should fall on the Government of Canada. The Government of Canada should be fighting for these trade agreements that we sign and stand up for them. Unfortunately, it falls on Canadian companies to take up the legal challenges. It falls on Canadian companies to pay these duties which are now under dispute.

Today, on the eve of the election, an announcement was made that the federal Liberals are going to do something about softwood lumber. We are talking about the duties. It is amazing that an announcement is made on the eve of a general election. It is also after pressure was applied by the three opposition parties. They said that they wanted a definite response from the government and wanted to see what it has done. As we know, all three of them agreed on that.

Nevertheless, there is this business of making promises at election time, getting elected and then not keeping the promises, which is what the Liberal Party has been doing for many years. We see a repetition of the same thing. It is making promises.

What we need is legislation not promises. We need legislation that will address this deficiency that exists, which is how long Canadian companies can carry the burden of what we sign with the U.S. Once we sign these free trade agreements we come across these restrictive practices, which will keep coming no matter what.

This is something we will always fight in domestic markets to international markets. These disputes are going to keep coming so we need a mechanism in place so that industry, government, everybody involved has a cohesive approach to address this issue when these things arise. We should never be caught again with what happened with softwood lumber. We sat down and agreed to NAFTA. Now we find that one partner of NAFTA is not adhering to the decision that it agreed to sign.

I was in Calgary when the President of Mexico was there and he agreed with us too. However, combining Mexico and Canada, we still do not have the huge power that the U.S.A. has, which is the reason NAFTA was established.

What do we do? We are bringing in legislation to ensure that Canadian companies do not suffer unnecessarily or do not go under while these wars are taking place, while we are fighting these things through tribunals, court actions and all the mechanisms that we are establishing in the international market to ensure there is a good rules based system that is applicable to everyone so that we are not bullied by a larger economy, which is always the case.

I just came back from a trade mission in Central Europe, which has just joined the European Union which has again become a large economic block. On one side we have the U.S. market, which is a large economic block, and on the other we have the European Union, which is a large economic block. Therefore we need to ensure that we have mechanisms to help us fight.

In conclusion, I am very happy that my friend brought the bill forward and that the matter can be resolved and sent to the Standing Committee on Foreign Affairs and International Trade.

[Loyola Hearn, Conservative, St. John's South, NL]

Mr. Speaker, it is a pleasure to participate in the debate on Bill C-364. One reason why I want to speak on this is it has been put forth by the hard-working member for Fort McMurray—Athabasca.

One might ask what is the connection between the member for St. John's South—Mount Pearl and the member for Fort McMurray—Athabasca. There are very few Newfoundlanders and Labradorians who do not have someone in Fort McMurray. Because of what has happened in our own province over the years, due to government neglect and mismanagement, many of our young people have had to leave and go west. Fort McMurray is the third largest Newfoundland community. That will give members an idea of how many of our people are in Fort McMurray. Any interests which the member for Fort McMurray has, is an interest for the people of Newfoundland and Labrador.

The other question people might ask is why am I speaking to the bill. Even though it does not mention softwood lumber, most of us are aware that the big issue around which the legislation is built is the softwood lumber dispute and the shafting the producers and exporters have had because of government inaction.

I do not have a lot of softwood exporters or producers in my riding. It is more or less an urban riding now. When I had the rural section of it, we did not have many trees and the ones we had certainly were not very big. It has not been an issue with which I have had direct contact. However, we have many softwood producers as well as exporters in the province. Mainly they are in the area of two Liberal members of Parliament, and I will not draw attention to them. They are in Newfoundland and Labrador today making a political announcement on infrastructure, one that was made in Newfoundland and Labrador about a month ago. When an election is coming, Liberals love to make the same announcement twice, maybe three times or four times.

The funny thing about today is when the two members arrived in Newfoundland and Labrador to make the announcement, they arrived independent of each other, each not knowing the other was coming. Apparently both showed up to make the same big announcement. On our local stations this evening there is quite a story on how the members of Parliament could not get their act together.

Since they could not be here, someone has to stand up for Newfoundland and Labrador. We have found that is common practice.

The major concern the bill points to is the period after having signed a free trade agreement, an agreement which the government opposite said originally it would never support. When free trade was introduced by the Mulroney government, the Liberals at the time not only said they would not support it, they said that if were ever elected, there would be no free trade. We all know they said the same thing about GST.

They were elected, and we have free trade and GST. It is a good thing we do. These days the only thing the Liberals can crow about is the fact that we have a surplus. We have had one for a few years. Looking ahead, if the Liberals do not squander it all, which they are certainly doing these days, we will continue to have a surplus. However, they talk about the great fiscal policies.

We know how we really got the surplus. The surplus came to us because of three programs, the main one being free trade. There is no one in the country who doubts that free trade gave us most of the money that we now receive. Second, is the GST, and no one likes it. The government was going to get rid of it, but it brought in a lot of money. It helped balance the budget.

We on this side of the House, leading into the Christmas season, cannot take all the credit for bringing in the plan to address the major deficit of the past, a deficit we inherited from the Trudeau government, which grew when interest rates went up over 20%. However, we had the plan. It was free trade and GST, and it addressed the deficit.

Let us give the Liberals credit for their contribution. They also contributed to creating the surplus. They cut social programs. That was their major contribution to the deficit. All we have to do is look at what happened to our health and education transfers over the years under the Liberal government. The social programs across the country have been cut and cut. Now in the last few days we have seen billions of dollars going back into them without any management plan.

Having given the Liberals all the credit they are due, let us look at the situation at hand.

Producers and exporters have an amount of $5 billion sitting outside their pockets and outside the country, which they should have if there were any leadership by the government or any international presence. We are a joke on the international stage.

I want to get away from the softwood lumber issue for a minute because everybody else is talking about it, about duties and about the lack of ability by government to get the countries which have signed the NAFTA, the United States in this case, to live up the agreement. It is inconceivable. It just lack of leadership.

Let us go to another issue. Back about four years ago, we on this side of the House, and some of us down in the corner at the time, consistently asked the international trade minister when he would address the upcoming softwood lumber negotiations. He would say, and the record will show, that we should worry about it, that Canada had never lost an international ruling. It was not going to be an issue. Suddenly, the time period was up. What happened? All we have to do is ask our exporters and our producers. The government fiddled while Rome was burning.

At the same time, we also asked him questions about the tariff on shrimp going into the European market. If Canadian shrimp is cooked and peeled here, when it is sent to the European markets, it is subjected to a 20% tariff. One might say that the Europeans can afford it. If that were all there was to it, it would not be problem. The problem is in our kindness we give huge allocations of shrimp to the same European countries that are blocking our excess to the markets. They can go home duty free and put their shrimp into the same markets we sell our shrimp at 20% less than we can do it. Every time the quotas off our coast are increased, Canada is the major beneficiary, but the foreign countries get a quota also.

The thing about Canada is we fish what we are given. They fish sometimes up to 10 times as much as they are given. Last year when Denmark was given a quota, it used the objection procedures and said that it did not accept that. It said that it would fish 10 times more than it was given. The Danish fished seven times more, and that is on paper. We can imagine how much they really fished.

What is happening to Danish shrimp? It is going into the European markets. Who is really blocking Canada? Who is really trying to ensure that 20% tariff stays? The Danish. What are we doing about it? There are people in the country who could say what we are more quickly and in fewer words. However, we are doing absolutely nothing. It is the same thing we are doing about the softwood lumber. We are showing no presence on the international stage. We are becoming the laughing stock of the world, and our people are the ones who are suffering.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am happy to have the opportunity to speak in the debate on Bill C-364, the trade compensation act. I want to compliment the member from northern Alberta for introducing this bill. It is an important contribution to the discussion that we have had around the softwood lumber dispute. In the first hour of debate our party's trade critic spoke in favour of this bill.

The bill is an act to provide compensation to Canadian industry associations and Canadian exporters who incur financial loss as a result of unjustified restrictive trade actions by foreign governments which are signatories to trade agreements involving Canadian products. It is in response to the softwood lumber situation that we have had recently in Canada.

Unfortunately, Canadians have seen that the Liberal government has done nothing to resolve the softwood lumber dispute. It has hung workers and their families out to dry. It has hung Canadian communities out to dry. It has hung exporters and industry associations out to dry with the legal expenses they have incurred over this dispute.

Four million dollars a day bleeds to the U.S. due to the illegal tariffs imposed on Canadian lumber. This is not a new occurrence; it has been going on for years. Over $5 billion has been illegally collected by the United States, despite Canada having won judgment after judgment, including NAFTA's binding dispute resolution mechanism.

It is not just an issue of timeliness in trade negotiations, as the parliamentary secretary would like us to believe. It is a question of whether or not these agreements are working at all to the benefit of Canadians, or working as they were intended to work.

We have also heard concerns that the Liberal government may be prepared to bargain away some of that $5 billion to negotiate with the Americans on the issue of how much is exactly owed to Canadians because of this dispute. It is appalling if that willingness is there. That money is owed to Canadians and should be paid. This agreement should be made to work the way it was intended to work.

We have heard that exporters and industry associations have had to ante up $350 million for their legal fees because of this dispute. We agree that assistance should be offered to them given this extraordinary situation, given the U.S.'s intransigence on the issues around softwood lumber and given the inaction of the Liberal government.

It was only today, days before the fall of the Liberal government, that an aid package was announced around softwood lumber. Unfortunately, it is too little, too late. It is hard to believe that this dispute has gone on for years, that it has affected communities the way it has, that it has affected workers the way it has, that it has affected businesses the way it has, and it was only today, days before the fall of the government, that we heard about some measures to deal with the situation. That is not acceptable. This has been an urgent priority for many Canadians, particularly British Columbians. To have it ignored until this late time is absolutely unacceptable. It is another reason that I think British Columbians, and not just members of the opposition here in the House, lack confidence in the government,.

British Columbia has been hard hit by the softwood lumber dispute. As I said, jobs have been lost. I heard the other day from a member of the B.C. legislature that at least 17 mills have closed recently. Family incomes have been shattered. There has been economic fallout for other businesses. The economic well-being of many communities in the interior of British Columbia depend on the lumber industry. We have seen those businesses badly affected by this dispute.

What did the Liberals do? They made a few phone calls, after taking months to find the President's number. President Bush did not get a phone call for many months. Many times in the House members of the opposition rose to urge the Prime Minister to take some action. He put off that phone call for many months. He could not find the phone number, I suppose.

What is the Prime Minister doing now? He said that he raised the issue with the President and that he raised it at the recent APEC meeting. What is doing now? He is threatening more talk. As my leader said in the House the other day, it seems the only weapon the Liberals have to wield in this dispute with the United States is a broken record that threatens more talk and the same talk over and over again.

That is just not acceptable. The people in British Columbia know this is not an acceptable way of resolving this dispute. People in British Columbia have close ties to the United States. They know what it means to live next door to the U.S. They want action. They are not afraid of standing up to the Americans and saying that this situation is unacceptable. They are not afraid of taking some action that would press the Americans and show them that we are serious about this. British Columbians are not afraid, for instance, of a levy on our energy exports. They know that would get the attention of the Americans in this dispute.

People in British Columbia also are not afraid of raising the whole issue of the takeover of Terasen gas utility by the Americans and putting some restrictions on that. We have the third largest utility in Canada being taken over by Kinder Morgan, an American company, without a protest from Canada. That is despite the fact that over 8,000 British Columbians wrote to the B.C. Utilities Commission to raise serious questions about the takeover of this company, a company that was for many years a public company in British Columbia. For many years, it was prevented from being owned by foreign interests. That was all changed by the current B.C. Liberal government.

Those who wrote to the B.C. Utilities Commission called for action on this and for public hearings. The B.C. Utilities Commission dismissed all their questions and refused to hold public hearings.

We were hopeful that the federal government, through Investment Canada, through the Foreign Investment Review Agency, might take some action as well, but alas, it too caved and said that there was no reason this takeover should not go ahead. It is typical. Eleven thousand takeovers have happened with absolutely no action by Investment Canada. I guess it was a false hope on our part that maybe at this point it would have found the courage to act on behalf of Canadians and in the interests of Canadians.

Many Canadians are worried about this takeover, not only because Terasen is the major oil and gas pipeline and a major provider of gas to over 800,000 customers in B.C. and Alberta. They also are worried because of its interest in water systems in our municipalities. Terasen owns the municipal water systems in over a dozen municipalities in Canada, notably those in Calgary and Kelowna. Many British Columbians and Canadians are worried about the foothold a foreign-owned company, Kinder Morgan, would have on our water systems in Canada and what that would mean in terms of free trade and control of our water resource.

Very serious issues surround the takeover of Terasen. We have protested it in the New Democratic Party. Many British Columbians have protested it. The NDP caucus in the B.C. legislature has worked hard on this and has protested it there. We believe this is one of the areas where our government could have chosen to exercise some pressure on the United States. That pressure could have led to a resolution of the problems on softwood lumber. Without some kind of action on the part of Canada, more than just talk, the Americans will not budge. We all know that is the reality of our relationship with the United States.

Last summer the NDP asked that Parliament to be recalled early to deal with the crisis in softwood lumber. We were prepared to come back from our constituencies to get to work here in the House to resolve this issue. The Liberals rejected that suggestion and nothing was done.

We called for energy levies and nothing was done. We called for an end to the NAFTA-plus negotiations. We are in a situation where the government is actively negotiating an extension of the NAFTA. What kind of craziness is that, when the current agreement is not working for Canadians in such a dramatic fashion?

We believe the bill is an important contribution to the whole discussion around the softwood lumber dispute and that it makes an important suggestion about how assistance might properly be provided to companies that are badly affected by this. We are prepared to see that go forward and be discussed further.

[Paul Crête, Bloc, Rivière-Du-Loup—Montmagny, QC]

Mr. Speaker, I will begin by repeating that the Bloc Québécois is in favour of the adoption of Bill C-364. In fact, if there has been one aspect of the federal government's action in the softwood lumber crisis that has been worthwhile, namely the legal preparations for eventually winning the case, there has also been an aspect that is far less worthwhile: the federal government's reluctance to provide the companies with any proper help and support.

The hon. member's initiative is part of the remedy to that.

There is a need to send a clear message to all countries. In this case, it would apply to the Americans and the softwood lumber crisis. If they decide to go against international agreements, they will find their way blocked, as far as Canada is concerned, by a government that will defend the industries in the country that is affected and will make sure they are protected. That is the message from the government that I would have liked to see before, and am glad to find in the bill the hon. member has just introduced.

It is along the same lines as today's announcement by the federal government. There was a lot of extremely negative reaction to that. One article has as its headline “Forest industry aid program more than disappointing”. It goes on:

Guy Chevrette, CEO of the Quebec Forestry Industry Council is extremely disappointed with the forest industry aid program announced today by the [naming the Prime Minister of Canada] government .

Mr. Chevrette is quoted as saying “It would appear that the Canadian government has still not grasped how precarious the financial situation of the Quebec forest industry is. In excess of $330 million has been collected illegally by the United States every year since May 2002.”

In line with this bill, we need to send a message to the Americans that we will, unequivocally, defend our industry.

In the same vein, we would have expected the federal government to provide loan guarantees for the total amount the companies have paid to the Americans, who received that money illegally. As far as the NAFTA panel is concerned, the Americans finally decided to comply, but without giving the money back. This is yet another indication that they want the debate to drag on, thereby ensuring that at the end of the day, there will be fewer and fewer Quebec and Canadian companies left.

Even if we win the legal battle, even if we achieve a return to free trade on softwood lumber, there will no longer be any companies left to celebrate.

In this vein, we wanted to see up to $5 billion in loan guarantees. As the Quebec forest industry council said:

The Council finds that this decision sends the wrong message to the Americans, suggesting that Canada believes it can recover only $800 million of the $5 billion collected at the border.

We see what a negative impact the federal government's rather petty approach has on what remains the most important point of the negotiation, namely, recovering the $5 billion illegally collected by the Americans. To ensure this is done, that a firm position is taken during the negotiation on this money, there should have been loan guarantees for the total amount. There also should have been a bill, like the one we have today, stating that if the U.S. government or any other government in the world does not respect decisions made by international agreement, we will protect the affected industry and come to its defence after that country has shown it failed to respect the international agreement.

The Americans have made a decision to respect the panel, but there is still no decision to ensure that we will recover the $5 billion. We absolutely must move forward in that direction. For Quebec alone we are talking about $1.2 billion paid to the Americans, while today the federal government has announced loan guarantees for only $150 million.

It is as though they have decided to keep the companies afloat, but not to give them a serious hand. There are other aspects of the program that might be interesting in today's announcement, but the urgency of the moment, the urgency I felt at the meetings I had, the contact I had with industry people, with small, medium and big companies affected by the softwood lumber crisis, is that hard cash is needed as soon as possible to help our companies breathe and get through this crisis. In the same way today, the debate shows that the government is still nervous about the Conservative bill. In its action plan it has the same logic and is very nervous.

We should also look at the statements made on this initiative. The Quebec government made such a statement and said that, in its opinion, the assistance plan announced by the federal government for the softwood lumber industry is inadequate. The economic development, innovation and exports minister, Claude Béchard, hopes that the door will remain open in Ottawa, even after the federal election, so that Quebec can get more.

We feel a deep dissatisfaction about the announcement that was just made. We have been engaged in this dispute with the Americans for a number of years. We know that we have a good case and a good legal defence. However, we still do not have adequate financial support. Today again, we do not see this will, because the government refuses to pass the bill now before us, and because the program it unveiled today is clearly inadequate.

Several months ago, it was announced that legal costs would be covered, but we are still not able to do that. When a nice political statement is made, such as announcing that the associations' legal costs will be covered, among other measures, it provides some oxygen. Then, month after month we expect a cheque that never comes. In the end, there is no assistance. No support is provided.

Even though a plan was announced, we are forced to raise the issue again today because industry people are still waiting for something in writing to take to their bankers, confirming that the government is guaranteeing that the legal costs will be covered. This way, they could ask them to give them a chance with their lines of credit. We are still waiting for that announcement to be made.

It is obvious that the Quebec forestry industry and the Government of Quebec are disappointed. They are not happy with the action plan announced by the federal government. For one thing, it came too late. We had to stay on its case for more than two years. The Bloc Québécois has asked for a plan repeatedly in this House. I have lost count of the number of questions we have put—20, 25, 30 or 50 perhaps—to have the government provide loan guarantees. Finally, it is announced that guarantees will be provided, but only to the tune of $800 million on a total of $5 billion; that is 16%. For each $100 in duties paid to the U.S., the Canadian government will guarantee $16. This will leave $84 unguaranteed.

During the negotiations that will take place to recover that money, the Americans will realize that the Canadian government does not want to take risks. It expects to get $800 million out of $5 billion, and to recover 16% of the money. The Americans may adopt an inflexible position and say that they will not pay the $5 billion, or that they will not even pay 50% of that amount. Ultimately, that position would be very damaging, considering there is no reason why that money should remain in the Americans' pockets.

I will conclude by saying that the hon. member's initiative deserves to be supported. The government should have taken into consideration all the suggestions made to help the industry much sooner, and it should also have taken into consideration the questions that we kept repeating in the House. For a long time, we were told that loan guarantees could not be provided, that this could not be done because it was not legal and it would violate international agreements. It does not violate international agreements. The government decided to do it, but not to the degree that is required. In the same spirit, it should have adopted the bill.

The Bloc Québécois supports the bill before us today. It provides an additional tool that would allow our softwood industry to get by. The industry really needs this measure. Today, in light of its reaction to the federal assistance plan that was announced, we can see that this plan is not satisfactory to the industry. It will not allow it to make it through the crisis without being hurt. This will result in less money spent on research and development, reduced competitiveness and fewer jobs.

By the end of the crisis we will have won our case, and while we may congratulate ourselves then, there will not be any company or workers around to benefit from that victory. This is why we should pass the bill that is now before the House.

[Dan McTeague, Liberal, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I want to take the time to acknowledge the ruling that you have just made. For that reason, of course, the position of the government is upheld, and indeed, this is a matter that would require an expenditure issue, a money bill. Therefore, the bill will not go beyond this one hour of debate.

At the same time I want to recognize my colleague, the hon. Parliamentary Secretary to the Minister of International Trade, who is also the member of Parliament for Sydney—Victoria. I have been with him for some time here and I know that he has been extremely able in terms of opening new markets and opportunities for Canadian business. His work, often done in other fields and jurisdictions, has indeed borne much fruit for labourers, individuals and small companies right across this country. I think Parliament owes him a very strong vote of thanks for the work he has done.

I am pleased to take part in today's debate on Bill C-364, which is, as you have stated, an act to provide compensation to Canadian industry associations and exporters who incur financial losses as a result of unjustified restrictive trade actions by foreign governments which are signatories to trade agreements involving Canadian products.

I would also like to use my time to respond to some of the statements already made by certain opposition members during the first hour of debate on the bill. As we know, the bill would provide compensation to Canadian industry associations and exporters that incur financial losses as a result of unjustified restrictive trade actions by foreign governments which are signatories to trade agreements with Canada.

On that point, I am obviously very pleased with the initiative by the government, the Minister of Trade and the Prime Minister on the question of softwood lumber. It would appear that our plotting has certainly been very successful and will continue to be so.

Mr. Speaker, I speak with some certainty in saying that you understand this industry perhaps better than most in Parliament.

It is for those reasons that this is indeed good news for that sector and for trade.

As we know, there are two components of the bill. The first would require the federal government to defray legal expenses incurred by the private sector in instances where a foreign state restricts Canadian exports in a manner that is found to contravene any bilateral or multilateral agreement. The second component proposes that the government provide loan guarantees to cover deposits, sureties or bonds that may be required of Canadian exporters by the foreign state, pending the final determination of a tribunal.

As I have mentioned, my colleague, the Parliamentary Secretary to the Minister of International Trade, stated during the first hour of debate on October 19 that the federal government appreciates the concerns relating to legal costs associated with the defence of Canadian interests in these trade disputes. The Government of Canada understands that costs associated with the defence of trade cases, particularly legal expenses, are often significant.

The complexities of issues entrenched in trade disputes, along with the number of parties involved in such cases, are all factors that can contribute inexorably to increased legal costs. There should be no doubt that this government is unequivocally committed to representing and actively defending Canadian interests in all and any international trade fora. We do so every day.

We devote considerable financial and human resources to fostering a domestic environment conducive to the development and maintenance of consultative domestic networks. These networks allow stakeholders a voice in the determination of the Canadian response to unjustifiable trade restrictions by foreign governments and we cannot and should not underestimate the valuable work and role of Canadian representatives abroad in the defence of our national Canadian trade interests.

I can assure members that Canadian trade officials in our embassies and missions abroad work very hard to represent trade interests. Targeted advocacy campaigns and meeting with foreign decision makers, the business community and local media are just some of the daily tasks executed by our representatives abroad. Their objective is clear: to advocate and foster positions favourable to Canada.

I would like now to respond to some of the statements made by my hon. colleagues across the floor when this issue was debated in October. I was somewhat surprised when the member for Fort McMurray—Athabasca stated that it was about time that the federal government “spent some attention on softwood lumber and other issues of trade dispute”. As was mentioned earlier, this issue is now well on its way to being resolved as a result of what the government has done.

By our actions, we have made it crystal clear that the softwood lumber dispute is a top priority for the government. The Government of Canada is exploring every possible option with a view to resolving the dispute, including litigation, high level political intervention and advocacy.

As the hon. member knows, the Prime Minister has raised the issue with President Bush at every opportunity, including most recently on November 18 during the meeting of the Asia-Pacific Economic Cooperation group, APEC, in Busan, Korea.

We certainly understand and are very sympathetic to the adverse impact of U.S. duties on Canadian companies, workers and communities. This is why the Government of Canada is committed to continue working with our industry and the provinces to press the United States to live up to its trade obligations.

This collaborative work is also done on behalf of other Canadian industries that are subject to unjustified restrictive trade measures. For example, when the United States initiated trade investigations against Canadian exports of wheat or some live swine, or when the United States blocked Canadian exports of beef, the government took action.

To say, then, that the government has “ignored” Canadian stakeholders involved in trade disputes would obviously be wrong. In fact, it would be the exact opposite.

I do indeed agree with the hon. member for Fort McMurray—Athabasca when he states that Canada is a trading nation. I could not agree more with him when he states that “the Canadian government has a clear duty...to take every step available in law to protect our export industries and our trade”.

We have done so and this government will continue to do so. However, the hon. member and other members of the opposition parties seem to send contradictory messages when discussing the bill. On the one hand, the member for Fort McMurray—Athabasca has stated that “legal bills to date...are $350 million and are escalating by $100 million a year”. Then he stated that Bill C-364 “...likely will not cost the taxpayers any money at all, either in the short term or the long term”. Clearly with your ruling today, Mr. Speaker, I think that is certainly put to rest.

Unless I have misread Bill C-364, it is the hon. member's expectation that the bill would cover at least part of the legal costs incurred by the Canadian softwood lumber industry.

Of course, I am not trying here to downgrade the importance of the backdrop of Bill C-364, nor am I attempting to diminish the concerns associated with legal expenses in these kinds of trade disputes. The federal government also incurs legal expenses, but we believe that there are more effective and efficient ways to assist industries involved in trade disputes.

One example is the recently announced CAN-Trade initiative, in which the government reaffirmed its commitment to fostering jobs, economic growth and sustainable prosperity.

There are four major thrusts to this initiative. First is to strengthen and expand Canada's bilateral and multilateral framework and advocacy efforts. This will include promoting a successful completion of the Doha negotiations of the World Trade Organization, defending Canadian rights through NAFTA and the WTO, and developing, of course, new trade and investment policy tools and instruments.

The CAN-Trade initiative is about being aggressive and proactive with respect to targeted advocacy work in our new key and emerging markets. To this end, an additional $12 million is proposed to broaden Canada's advocacy efforts in key markets, including through activities aimed at establishing institutional linkages and joint research in support of Canada's trade and economic interests.

International trade is a priority to the government and we continue to demonstrate this by our actions.

The federal government works with all Canadian interested stakeholders, both in Canada and abroad, toward a strong and unified position.

Are there unexpected delays in trade disputes? Yes.

Would we like to see the dispute settlement process work in a more timely fashion? Of course.

This is precisely why senior officials of all three NAFTA countries are discussing ways to improve the functioning of chapter 19.

Members may recall that the Prime Minister made Canada's concerns regarding this issue clear to President Bush during the president's visit in November 2004.

Let me assure this House, members and the Canadian public that the government will continue to work diligently and responsibly in defending Canadian trade interests involved in trade disputes.

Finally, the Government of Canada will continue to cooperate with domestic stakeholders toward strong and unified positions and will continue to be an active player within NAFTA and the WTO to clarify and improve the rules governing all international trade.

[The Deputy Speaker]

I would like to make a ruling on Bill C-364, the trade compensation act. I am prepared to rule on the point of order raised by the parliamentary secretary to the government House leader on October 19, 2005, concerning Bill C-364, the trade compensation act.

At the outset I would like to thank the parliamentary secretary for having raised this important issue concerning the financial prerogative of the Crown. I would also like to thank the hon. members for Vancouver Island North and for Fort McMurray—Athabasca for their interventions on this matter.

Bill C-364 proposes that the Minister of Finance shall compensate any Canadian exporter of Canadian goods exported to a foreign state for the loss incurred as a result of any unjustified restrictive trade actions by the government of that state.

The parliamentary secretary pointed out that clause 3 of the bill requires the Minister of Finance to pay all reasonable legal expenses of exporters and industry associations and would therefore require a royal recommendation.

In rebuttal, the member for Fort McMurray--Athabasca argued that such funding was already authorized since the Minister of International Trade announced on April 15, 2005, in a press release that “funding will be provided to offset legal expenses incurred in defending Canadian interests against U.S. trade actions in the softwood lumber trade dispute”.

The Chair would comment that while funding may have been made available for a specific purpose by the Minister of International Trade, Bill C-364 is proposing an expenditure of public funds for a general purpose that is new. Despite what provisions may appear in other acts, the Chair is of the view that such a statutory initiative as expressed in Bill C-364 would have to be accompanied by a recommendation from the Crown as it mandates a new expenditure of public funds.

In his point of order, the parliamentary secretary also stated that clause 4 obliges the minister to provide loan guarantees whenever a deposit, surety or bond must be posted by an exporter or an industry association pending resolution of a dispute by a tribunal and that such a provision requires a royal recommendation.

The member for Vancouver Island North argued that the loan guarantee only commits the government to back a loan in that it does not result in public funds being actually removed from the consolidated revenue fund.

It is important to note, however, that if such a loan defaulted, the Crown would be responsible for paying the debt. For this reason, the bill requires a royal recommendation as it mandates a new expenditure of public funds by imposing this liability upon the consolidated revenue fund.

Consequently, I must conclude that Bill C-364 requires a royal recommendation.

The member for Fort McMurray--Athabasca said on November 14 that this does not prevent debate from continuing at second reading or prevent the bill from being considered in committee or at report stage if the House so decides. He is absolutely correct in this respect. However, the purpose of my decision today is clarify the requirement for a royal recommendation before third reading.

Accordingly, due to provisions which authorize spending, the Chair will decline to put the question on third reading of this bill in its present form unless a royal recommendation is received.

Points of Order

[Brian Jean, Conservative, Athabasca, AB]

Mr. Speaker, on October 19 the Parliamentary Secretary to the Leader of the Government in the House of Commons raised a point of order to question whether or not Bill C-364 required a royal recommendation, and I would like to respond to that.

The Standing Orders were revised in 1994 to remove the requirement that a royal recommendation had to be provided to the House at the time of introduce of bills.

On page 897 of Marleau and Montpetit, it states:

--since 1994, a private Member may introduce a public bill containing provisions requiring the expenditure of public funds provided that a royal recommendation is obtained by a Minister before the bill is read a third time and passed.

Marleau and Montpetit provides an example of this happening. Bill C-216, an act to amend the Unemployment Insurance Act, had been reported back to the House from committee on June 16, 1994 and debate at the third reading stage began on December 6, 1994.

The bill was given royal assent on March 26, 1995, more than nine months after it was reported back to the House from committee.

A royal recommendation clearly can be provided after the bill has been introduced so long as it is provided before the bill is read a third time and passed by the House. It does not prevent the bill from being debated at second reading, referred to a committee for study or allow for amendments to be proposed. As such, the motion of the parliamentary secretary with respect, Mr. Speaker, is premature.

The parliamentary secretary also argued that Bill C-364, the trade compensation act, clause 3, constituted an appropriation for an entirely new purpose which was not already legislatively authorized.

The Minister of International Trade, on April 15, announced funding for the softwood lumber industry associations in the amount of $20 million and before that in the amount of $15 million. It may be argued that such spending then, Mr. Speaker, is already legislatively authorized.

Under clause 4 of the bill, which refers to loan guarantees, it also may be argued that the government by way of the Business Development Bank of Canada already provides loan guarantees in similar circumstances such as this bill proposes.

I submit, with respect, that the parliamentary secretary is premature, first, with his objection to the bill. Second, it is arguable that the bill may not even need a royal recommendation.

These concerns however, notwithstanding the above, can be addressed at the committee level and amendments may be brought forward such that the bill may not require a royal recommendation.

I also have written to the minister to seek the support for a royal recommendation should it be required. I am confident, Mr. Speaker, that once the House sends the bill to committee and the minister sees the support for the legislation, the government will gladly furnish a royal recommendation if required before it is read a third time and passed.

Softwood Lumber

[Brian Jean, Conservative, Athabasca, AB]

Mr. Speaker, this Hallowe'en the scariest thing we have in Canada is the government's trade policy and the lack of action of our Prime Minister in the softwood lumber dispute.

In the last few months, the Prime Minister's policy has changed no less than five times. At first we were negotiating with the United States, then we pulled out of negotiations and then we were not negotiating with the Americans. Suddenly he was prepared to negotiate with them, and now, of course, the Prime Minister is not prepared to negotiate with them.

I have two questions for everyone in the chamber. After last week, will the Prime Minister have any time to resolve the softwood lumber dispute? After last week, will the president have any time to resolve the softwood lumber issue?

Bill C-364, the trade compensation act, would solve this dispute. It would keep Canadian industry alive and send a strong signal to the United States that Canada supports its industries, all of this with a minimum cost to taxpayers.

The bill is a vote for exporters, for softwood lumber producers, for farmers and for manufacturers, for everyone in Canada. The bill is fair, it is good business and it must go through for our industry to survive.

[Brian Jean, Conservative, Athabasca, AB]

Madam Chair, I have one question for my friend. Obviously he is aware that Bill C-364, my private member's bill, was introduced in April and last week came before the House for second reading. Of course we were all caught unawares when we saw the deputy government House leader standing up and trying to rule that this particular bill would be out of order.

It is a trade compensation act, of course, which would provide exactly what we are seeking today and what would help industry. That is, of course, the repayment of legal fees, which I would suggest the government is obligated to pay anyway. The other part of the bill is the loan guarantees, which would keep our industry afloat and which are so desperately needed.

We have heard some speculation about why the government would not support this particular bill. The government is actually trying to stop it before it has any chance at all to get out of the gate, so to speak. I am curious to hear my friend's comments on that particular issue.

I have heard that there is a political motive to stop this bill, especially because of the impact it would have specifically in Quebec and northern Ontario, being a Conservative private member's bill, and there are the ramifications that may have for the Liberal Party. I would be interested in hearing his comments on that.

Trade Compensation Act

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I rise as well, as trade critic for the New Democratic Party, to speak in favour of this important private member's bill, Bill C-364.

Like the previous speakers, the member for Joliette and the member for Fort McMurray—Athabasca, I regret that this measure is necessary, but it is necessary because Parliament has to act where the government has not acted. That is the reality.

We need to support our softwood lumber industry. We know that the softwood lumber industry is bleeding $4 million a day in punitive tariffs. This affects my home province of British Columbia more than any other province in this country.

We are talking about lost jobs. We are talking about punitive tariffs of $4 million a day. Five billion dollars now is gone in punitive tariffs to Washington. Much of that money has disappeared entirely through the Byrd amendment. It has already been paid out. Millions of dollars have been paid out to American competitors through this unjust amendment, yet the government has done absolutely nothing.

We are talking about $5 billion in punitive tariffs. We also know that the legal costs are mounting rapidly. The softwood lumber industry has assumed over $350 million in associated legal costs around this same issue.

The House has to take action because the government has done nothing. The House has to take action because people are hurting in communities across the country. The softwood lumber industry is hurting. We have lost billions of dollars in punitive tariffs and hundreds of millions of dollars in legal fees and yet the government has refused to act.

I would like to put my remarks in context by talking a bit about the history of both the free trade agreement and NAFTA. I think it is important to talk about the origins of this agreement, going back to 1989 with the FTA and 1993 with NAFTA.

At that time, we sat down with the Americans to negotiate a dispute settlement mechanism that would make sense. The objective of the Canadian government in those negotiations was to have a dispute settlement mechanism that would be binding on the United States. In return, we saw the Americans looking, in those same negotiations, to have privileged access to our energy resources.

As members know, we have the largest energy reserves in the world. For the Americans to put that negotiating point forward is understandable. What is not understandable is that we gave that privileged access to our energy resources in return for a dispute settlement mechanism which for all intents and purposes has been ripped up by the Bush administration. Yet our government has done nothing.

At this time, it means that most of our resources, our natural gas and oil, are actually being shipped to the United States. The proportionality aspects of NAFTA mean that we are obliged to continue to send those energy resources to the United States even in the event of a national emergency and a national shortage.

It also means, as I know members are well aware and as the Globe and Mail profiled yesterday, that if we choose to send our energy resources to another market, we actually have to reduce Canadian supply in order to do that. The proportionality aspects of NAFTA demand that we continue to send the same proportion of energy resources to the United States that we have over a preceding 36 month period.

We are in a situation now where we have what the Canadian government negotiated. In this corner of the House, the New Democratic Party had raised concerns about the agreement and our giveaways, even at that time. Suffice it to say, we are now in the context where the dispute settlement mechanism is dead. It has been ripped up. The binding obligations that should have taken effect in August of 2005 have not. The softwood lumber industry is now left essentially an orphan because of the federal Liberal government not acting in this context.

I would like to touch on what the impacts have been on Canadian families. We often talk about softwood lumber. Certainly most recently we have talked about the impact on the industry, but it is important to note what we have seen since 1989 in 80% of Canadian families, or in other words, in four of the five quintiles. Normally when Statistics Canada profiles Canadian families, it divides them into quintiles, into 20% of the population: the lowest income 20%, the next to lowest 20%, the middle income 20%, the upper income 20% and then the highest income 20%.

Statistics Canada has produced a study recently, but since 1989, over the first 15 years of the FTA and NAFTA, in four of the five quintiles we have actually seen a decline in real income of Canadian families. We are not talking about prosperity. We are talking about the fact that the incomes of the lowest income Canadians have eroded in real terms since 1989 by up to 15%.

Those of us who go out into our communities and knock on doors—and I certainly do that in my communities of Burnaby and New Westminster as often as I can—have heard anecdotally about how families are hurting, how it is becoming more and more difficult to make ends meet and how the extra costs we are seeing are making it very difficult for families to get by. The surprising reality is that Canadians with the lowest incomes have seen a dramatic fall in income since 1989.

That is not all. Let us look at the next lowest and the middle income Canadians. Those families have also seen a dramatic drop in their real income. They are trying to get by on fewer financial resources than existed 15 years ago.

For the upper middle class, the fourth quintile, there has been absolutely no improvement in real income over a 15 year period. From 1989 there has been no improvement. Their incomes have stagnated. Costs have risen, as we know, while their real incomes have had absolutely no improvement.

Who has profited from the trade policy of the Liberal government? Upper income Canadians. The wealthy in Canada have seen their incomes rise by 12% to 15%.

It is important to note this.

The failed trade policy that we see is the result of a number of factors. Yes, there has been inaction by the Liberal government on these important trade files. We could mention the textile industry, but tonight we are talking about softwood.

Most Canadian families are struggling to get by with fewer financial resources than they had 15 years ago, yet we have the largest energy reserves in the world and we have an export surplus which we know is due to the fact that we have resources the rest of the world would love to have and would dearly love to trade with us.

Coming back to recent days, what happened? Two months ago the dispute settlement mechanism was ripped up. It took two months for the Prime Minister to make a phone call, which has been the only action undertaken in the 60 days since the ripping up of the dispute settlement mechanism, that binding obligation under NAFTA. That is indisputable. There is no question that there is an obligation. It is binding. It is clear.

Yet in two months we have seen a phone call and a lot of spin and speeches. My goodness, the industry minister was beside himself, saying the Liberals would take the Americans into the boards. We have seen the result. Not only have they not taken the Americans into the boards, they are not even on the ice. They are hiding in the dressing room.

When Canadian jobs are at risk, where communities across the country are suffering and where real family income has dropped, the Liberals have done nothing except make a phone call.

Very clearly, given the Liberals' complete and utter failure to deal with the issue of softwood lumber in any meaningful way, the New Democratic Party has been putting forth suggestions. We called for a recall of Parliament. We were told it would be considered, but it was not. After a lot of dithering, Parliament was not recalled even though this issue is crucial to the Canadian economy.

We have called for export levies on energy resources, given that we have the largest reserves in the world. There has been no response from the government.

We have also called for a halt to the NAFTA-plus negotiations. What a mixed message: we are saying on the one hand that NAFTA is not working, that there is a real problem here and that dispute settlement has been ripped up, and on the other hand, the Liberal government is sitting down every day and negotiating lower standards in areas like food safety and air safety.

The Liberals call it “harmonization”, but it is lower standards. It is saying to Canadians that our higher standards will now be lowered to what Washington tells us it wants to have through NAFTA-plus.

We need to take action and, fortunately, this private member's bill is a first step in the action this Parliament needs to take in the absence of any action from the government.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, first, I would like to congratulate the member for Fort McMurray—Athabasca on introducing Bill C-364. In fact, the Bloc Québécois was working on a similar bill. In that sense, from the outset, I can tell him that we will be supporting his bill over the next few months.

Clearly, the hon. member introduced Bill C-364 with the current lumber crisis in mind. Nevertheless, we are perceptive, and we can see that trade disputes are on the rise, particularly with our neighbours to the south. So, while set in a context coloured by the current impasse in the softwood lumber dispute, the scope of this bill should extend to other areas.

Take the pork industry, for example, which is regularly the victim of trade harassment. We might also think of the steel industry, where they have run into problems regularly. There is the dairy sector, which has been constantly attacked by the U.S., New Zealand and Australia.

All this to say that, while it deals with a situation that we cannot ignore, namely the softwood lumber dispute, one of the great strengths of this bill is that it is not sector specific. It applies to any sector affected by unjustified trade actions. In that sense, it is perfectly in keeping with Canada's international trade obligations.

I think it is important to point out that this is a bill which concerns all export sectors, and not just one in particular. It is very clear that, if passed, as we hope it will, this bill could benefit the softwood lumber industry.

It also seems to me that it should be emphasized that Bill C-364 is not related to export. It does not deal with export assistance, but rather with assistance made necessary by unjustified duties levied by a foreign country. With respect to softwood lumber, the foreign country is the United States. But it could very well happen that the European Union or other jurisdictions might implement protectionist trade policies resulting in situations where the provisions contained in this legislation would apply.

It must also be pointed out that this is nothing but common sense. The government has, moreover, announced on several occasions that it was thinking along those lines. I clearly remember, when the Minister of Foreign Affairs was Minister of International Trade, he announced, jointly with the Minister of Industry of the day—Mr. Manley if I am not mistaken—phase one of an aid package for the communities affected by the softwood lumber crisis, and a second for the companies and associations engaged in the dispute.

There was phase one, the $356 million we are tired of hearing about constantly from the present Minister of International Trade. I would remind hon. members that the $356 million was not specifically for the softwood lumber industry itself but for the affected communities. Hon. members will also realize that this money was spent in 2003, and now here we are with 2005 nearly over and the Liberals keep throwing back at us that figure for a program that dates back nearly three years now.

What is more, of that $356 million, and this is admitted by the Minister of International Trade himself, in a document he has sent to me, an excerpt from an article he placed in June 25th's Le Soleil , he states that only $15 million was allocated to the softwood lumber associations. Yet they are trying to convince us that help has been given to the industry and to the companies that are struggling.

Then there was phase one of the help with legal fees. If I remember correctly, that amount was $14 million, and then another $20 million was announced last April. This is just peanuts compared to the $350 million to $400 million the associations and companies have had to spend to defend themselves against the Americans' claims.

The government knows very well that something has to be done about the legal fees, and what it has done is insufficient. It has just done a bit of window-dressing. The bill will quite simply force the government to assume its responsibilities, responsibilities it claims to want to assume, but in actual fact is not doing. The same thing goes for the loan guarantees as well.

In the debate that we had, the former Minister of International Trade, who is now the Minister of Foreign Affairs, had suggested that the government would help businesses to get through this crisis. American authorities have illegally levied $5 billion in countervailing duties. Businesses have to pay these duties. It means reduced cash flow, fewer investments and fewer jobs.

And it is not over. President Bush's stubbornness, his refusal to follow through on the August 10 ruling of the extraordinary challenge committee, has forced softwood lumber businesses to go before American courts. We know that this procedure can take about two years. As the member mentioned earlier, we know full well that our businesses will have to pay $2 billion extra in countervailing duties to export their products to the United States, that is a total of $7 billion. It is important to understand the scope of this amount. Currently, duties stand at $5 billion.

Today, Carl Grenier, vice-president of the Free Trade Lumber Council, presented to the Toronto Economic Club the figures compiled by Price Waterhouse. These $5 billion collected in countervailing duties at the U.S. border currently represent three times the net revenues generated in the past three years by the 12 largest companies in the forestry sector.

In a few weeks, or a few months, some will be surprised that large companies will have gone bankrupt. I can already see the minister responsible for economic development or the industry minister telling us they will address the issue. Bill C-364 seeks to prevent these bankruptcies and avoid having a situation where the government would have to spend even more. This bill is not about spending. The hon. member was very clear on this. I want to repeat what was said. These are loan guarantees. There is absolutely no cost to the taxpayer. In this sense, the Liberal claim to the effect that the bill requires a royal recommendation appears totally ill-founded. We are not talking about contributions, but about loans that will be repaid when we manage to recover these $5 billion. It will be the same thing regarding other disputes that may affect us in the coming years.

I also want to go back to the first segment of the assistance provided to communities. We asked the government repeatedly when it would implement a loan guarantee program such as the one at Export Development Canada. We are not reinventing the wheel. We now know that the $5 billion in countervailing duties is money owed to Canadian and Quebec companies by U.S. authorities. The courts have issued all their rulings. We are now at the end of the legal process. As soon as the Americans decide to fulfill their international obligations under NAFTA, that money will be used to repay the loan guarantees.

Every time I ask him the question, the Minister of International Trade says that the government helped the industry by allocating $356 million. I will explain what this money was used for in Lanaudière—and I will drop a few of the investment projects because I am running out of time. This $356 million helped start up an ecological aquaponic farm that produces trout and lettuce. This does not have much to do with softwood lumber. A positive pressure vertical wind tunnel was built for individuals wanting to experience free fall. This is a far cry from softwood lumber. A commercial laundromat was set up, the productivity of a numbered company was improved and the possibility of developing a golf course was explored. It is true that there are trees around this golf course, but we usually try not to cut too many of them down in order to maintain the idyllic look of the course.

In light of this government's lack of responsibility, the hon. member did well to introduce Bill C-364, but it should not have come down to this. The government should have assumed its responsibilities in accordance with international rules. However, it does not want to. The opposition parties—I hope the NDP will also support this bill—will force this Liberal government to assume its responsibilities and help our businesses and industries that are suffering from commercial harassment. We must provide concrete help to our businesses and our softwood lumber industry. They are at the end of their rope and need help that complies with our international obligations.

I absolutely do not understand why the Liberals are being so stubborn in refusing a proposal that makes such good sense. They should have already implemented such a measure a number of years ago or at least a number of months ago.

[Mark Eyking, Liberal, Parliamentary Secretary to the Minister of International Trade (Emerging Markets)]

Mr. Speaker, the trade compensation act proposes that the federal government provides compensation to Canadian industry associations or Canadian exporters who incur financial losses as a result of unjustifiable trade restrictive measures taken by foreign states which are signatories to trade agreements with our country.

Bill C-364 has two specific components. First, it would require the federal government to pay legal expenses incurred by Canadian industry associations or exporters in instances where a foreign state restricts Canadian exports in a manner that is found to contravene any bilateral or multilateral trade agreement between Canada and a government or state. It appears that the determination of whether a trade action is justified or not would be made by a tribunal established under the relevant bilateral or multilateral trade agreement.

The second component of the bill proposes that the government provides loan guarantees to cover deposits, sureties or bonds that may be required of Canadian exporters by the foreign state. Specifically, the bill stipulates that:

If the government of a foreign state requires that a Canadian exporter or a Canadian industry association deposit an amount of money with that government or post a surety or bond pending the final determination of a matter by the tribunal...the Minister [of Finance] shall provide a loan guarantee to the exporter or association in respect of that deposit, surety or bond.

When the hon. member for Fort McMurray—Athabasca tabled the bill he stated:

This bill is directed primarily toward those exporters who deal with foreign powers, specifically in this case toward farmers, on BSE, and toward softwood lumber.

Members of the House are quite aware that trade and all aspects of international commerce represent an important cornerstone of Canada's prosperity and economic success. With over $491 billion in exports of goods and services and over $437 billion in imports of goods and services in 2004, the role of international trade, and more precisely, unfettered trade, cannot be underestimated. This is precisely why the government is dedicated to further expansion of the defence of Canadian trade interests.

The government understands and appreciates the costs associated with the defence of trade disputes. Legal costs involved in trade disputes are often quite high. The length of disputes and the often numerous parties involved can explain why legal expenses can be significant.

That said, it has been the longstanding policy of the federal government not to accede to requests from Canadian industries for financial assistance to cover legal costs that they incur related to trade actions taken by trading partners. This policy reflects the extensive role of the federal government in matters of international trade. This role and expense incurred by the government must be understood. Like industry associations and Canadian exporters and like provincial governments with stakes in international trade disputes, the federal government also secures the service of legal counsel to assist in the defence of Canadian interests during trade disputes.

However the work of the government in this regard does not stop here, quite to the contrary.

The federal government devotes substantial financial and human resources to the defence and the representation of Canadian trade interests. This is particularly the case when a foreign state restricts or threatens to unjustifiably restrict trade.

There is no doubt that a unified Canadian position through collaborative work with all interested stakeholders represents the best tool in advancing Canadian interests at the international level. It is in recognition of this fact that the government has instituted over the years various consultative networks. These networks ensure that all stakeholders have the opportunity to work with the government in the defence of Canadian interests.

To begin, several federal departments are involved in international trade matters, including International Trade Canada, the Department of Finance, Agriculture and Agri-Food Canada and Industry Canada, just to name a few. They work in a concerted effort to ensure that the agreed international trade rules are respected.

In addition, the federal government coordinates closely with other Canadian parties, including provincial governments, industry associations and companies, for one common objective, to represent vigorously and champion Canadian trade interests in the face of unjustified measures. It is through these various established consultative channels that we can explore all feasible avenues and assess all available options in the representation of Canadian interests in trade disputes.

These joint efforts have allowed the carrying out of focused advocacy campaigns aimed at fostering support for Canada's position in other countries. They have also contributed to informing and persuading key decision makers in other countries to adopt and promote a position that is favourable to our country.

It is in this context that the role of Canadian embassies and offices abroad are so essential. Our foreign representatives monitor and send reports to Ottawa on a daily basis. Any intelligence that could strengthen the future advocacy group is provided. They meet with decision makers at every level of government and establish contact with industry leaders, particularly those allied to Canadian interests, to promote Canadian objectives and to collaborate and pursue extending awareness and perspectives favourable to Canadian interests.

Furthermore, the government is firmly of the view that fair and enforceable international trade rules provide Canada's business community with the environment in which commerce can flourish.

I believe the hon. members of the House can all agree that these rules foster healthy trading relationships which in turn help the initiation of new disputes between partners.

The evolution of the trade rules over the past 50 years has not only contributed to Canada's prosperity but, just as important, these rules have helped to address trade irritants before they developed into disputes.

Nonetheless, we recognize the current rules governing international trade are not perfect. That is why our government dedicates considerable resources to ensuring that the integrity of international trade rules are upheld.

It is in this context that Canada is an active player in the current WTO Doha negotiations. Our objective in these negotiations is to advance new proposals with the purpose of clarifying and imposing existing trade rules and dispute settlements and procedures. Clearer and more transparent rules will not eliminate trade disputes but they will certainly help to avoid and to reduce their occurrence.

As a party to numerous international disputes, the federal government fully understands and appreciates the costs involved in such disputes. We remain committed to defending Canada's international trade rights. The government will continue to work in concert with domestic stakeholders to pursue targeted advocacy efforts in foreign markets when they are necessary for the defence and resolution of trade disputes.

Finally, Canada will continue to push in the context of the WTO negotiations for clearer and improved trade rules with a view to providing a more predictable environment for commerce to flourish so as to reduce, to the extent possible, trade disputes between countries.

However for the government to formalize the funding program to compensate legal costs incurred by private organizations would not be the most effective and efficient use of our resources.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am glad this debate is before the House tonight. I hope it will continue. I believe Bill C-364 is an important bill that should be sent to committee to be discussed further and in greater detail.

This is an industry and these are communities that have been hit particularly hard by the inaction of the Liberal government to deal with the problems of NAFTA and the problems that the Americans have set up for us in that arrangement.

It is important that we go forward with this and have a thorough debate. It probably needs some safeguards, but in principle it is an important discussion to have.

Would the member support a broader discussion about legal aid in Canada, since we are talking about legal aid to corporations? Would he support the idea that the federal government should be supporting individual Canadians who often have to forgo a legal remedy because they cannot afford to have their matters solved in court or cannot afford representation in court?

For instance, should a woman living on a low income not have legal aid support when she has to go to court to discuss a divorce or a custody arrangement? Should people living in poverty not have access to that same kind of support that is so important for this industry?

[Brian Jean, Conservative, Athabasca, AB]

moved that Bill C-364, An Act to provide compensation to Canadian industry associations and to Canadian exporters who incur financial losses as a result of unjustified restrictive trade actions by foreign governments which are signatories to trade agreements involving Canadian products, be read the second time and referred to a committee.

Mr. Speaker, I am glad I got the government's attention on this particular matter. It is about time it spent some attention on softwood lumber and other issues of trade disputes.

I am from a small city in northern Alberta, a city I am privileged to represent which, believe it or not, has over 98% of Canada's oil. It is a major contributor to the tax base of Canada. Unfortunately, our roads are falling apart. People in my riding, my friends and my family, cannot even afford to rent or own houses in the riding. Our hospital is going to operate with a $13 million deficit this year to provide quality health services to workers from every province in Canada. Indeed our national highway that leads into my community is referred to by those brave enough to travel on it as the national highway of death.

The citizens in my riding are actually responsible for more than $3 billion of money that goes to the federal government and we receive a pittance back from the Liberal government for the safety, health and comfort of our citizens. I would suggest in travelling this country that our infrastructure in that area and our quality of life is as bad, if not worse, than anywhere in the rest of Canada. This is not fair and the Liberal government should be ashamed of leaving our infrastructure in that shape.

What is even more unfair is the response the Liberal government has had to trade disputes with other nations. As we have seen again, it is trying to stop something that would actually help industry in this country and promote jobs. That is why today I am very proud to sponsor my private member's Bill C-364, the trade compensation act, which will hopefully not only support Canadian exporters, but will also put an end to Liberal incompetence and Canadian economic fears that take place in our marketplace.

I am simply a small-town Alberta Conservative and like my Conservative colleagues who are beside and around me today, I am anxious to stand and fight for softwood producers from Quebec, cattle exporters from Manitoba and all Canadian workers, industry and exporters, which have been so often ignored by the Liberal government.

Canada is a trading nation. We are a nation of traders and have been for centuries. Our success is dependent on trade and the success of our trade agreements with other nations. Days, months and even years are spent negotiating trade agreements with other nations and finalizing these agreements. Millions of Canadian tax dollars are spent on doing this, but what is the use of all this work by the people doing it and all this investment of tax dollars if nothing is done by the government to enforce the terms of those trade agreements? What happens when those agreements are not worth the paper they are written on? What kind of investment is that if the Liberal government does not enforce the terms of those agreements? How can we ask Canadians involved with international trade to have any confidence in the government if the government will not stand up for trade?

The gross lack of support is felt at every level of our economy throughout Canada from the producer to the manufacturer, to the mom and pop shops, to the retail stores, to every sector of our communities. No one is exempt from the negative effect of having our international trade agreements not adhered to.

We are a trading nation. The question is, does the Liberal government have any credibility domestically to protect Canadian industry? Obviously by looking at our trade record over the last 10 years and the government's performance, the answer to that is no. We do not have any credibility and no belief in the government's protecting our industry.

The dire need for the trade compensation act, this particular bill, was obviously necessary in April and the government could have brought up any objection it had at that time, but it did not. It waited until the 12th hour, as usual, to come up with any objection. Now we are in an emergency situation. Our industries are collapsing and something must be done.

On August 10 an extraordinary challenge committee, convened under NAFTA at the request of the United States, formally and unanimously rejected the U.S. challenge of an earlier NAFTA decision which ruled for Canada, giving Canada the final victory in the softwood lumber dispute. Almost immediately the United States government said that it did not intend to comply with this ruling. This was a final unappealable NAFTA decision.

What is the government's response when industry asks for even a little help to even out the playing field? I have a letter from the Minister of International Trade to Tembec Inc., a Montreal based company, and I quote from paragraph 2:

We have reviewed your request for recognition of the duty cash deposits as receivables. The government is of the view that, in order for such sums to be considered receivables, they must involve a contractual obligation by one party to pay another party.

Maybe the minister should read the North American Free Trade Agreement. It is an agreement. The panel was clear. The decision was clear. The money is owed and it is owed to Canadian industries.

Clearly, enforcement of the terms and conditions of NAFTA must be argued persuasively, vigorously and consistently at every level. This is where the purpose of this bill, the trade compensation act, comes into play. The government, obviously in this case especially, must be forced to take aggressive action to defend and protect our industries.

I would submit today that the Canadian government has a clear duty, I would even submit it has a fiduciary duty, to take every step available in law to protect our export industries and our trade. We should never again see the trade harassment that we have seen over the last years in our cattle industry, in our wheat industry, and of course in our softwood lumber industry.

NAFTA provides specifically for trade disputes to be resolved within a maximum of 315 days from start to finish, less than a year. Had the Canadian government pursued the softwood trade dispute vigorously, we would now have it settled and Canadians would have back in their pockets the $5 billion that is currently being held by the U.S. The government has not been doing enough. In fact, I would suggest the Liberal government has been doing nothing.

Let me give an example of how this lack of caring and lack of action from the Liberal government affects an average softwood producer in Canada. The province of Quebec is the second largest exporter of softwood lumber. For every $1 million of wood sold, the exporters have not received up to $270,000. Twenty-seven per cent of their sales are held by the United States, collected in illegal tariffs. What has the government done? Nothing.

While this money sits in a bank account in the U.S., companies in all parts of Canada are going out of business. Workers, the very backbone of the Canadian economy, are out of work and whole towns are suffering unnecessarily. Shame. Workers in Quebec, British Columbia, the Maritimes and Alberta are losing jobs and money. Businesses are closing their doors because of high legal bills, and up to 27% of all their sales to the United States are being kept and are not coming back to Canada to create more jobs to support the families of those workers.

Legal bills to date, believe it or not, are $350 million and are escalating by $100 million a year. These are paid for by Canadian companies. The U.S. is currently holding $5 billion paid for by Canadian companies. This is all because the Liberal government refuses to act to protect Canadians and their families. This is where the money ultimately goes, back to the families.

I believe that Bill C-364 would provide needed support for such industries as softwood lumber, agriculture, textiles, and yes, even oil and gas. Most important, Bill C-364 would also send a powerful signal to the United States and any other government that is going to impose unjust restrictions on our trade. It would send a clear message that Canada is finally getting serious about supporting our industry when it is subjected to unwarranted and repeated attacks on legitimate trade pursuant to international agreements such as the North American Free Trade Agreement.

This is not just a fight about softwood lumber. It is a fight to protect chapter 19 of NAFTA and the NAFTA itself. The burden of this fight up to now has not been borne by the government. It has been borne by the softwood producers across Canada. It is shameful. Make no mistake about it, if we do nothing and we continue to allow foreign countries to ignore their own laws such as in this case and to ignore NAFTA, then chapter 19 and the NAFTA will be lost forever.

The North American Free Trade Agreement is the single best trade agreement ever signed in the world. Every advantage is Canada's and Canada's workers, but that is only if this agreement is respected and obeyed in law and in spirit by the United States, Canada and Mexico. Why would it be obeyed if the government does nothing to enforce the terms of this agreement?

The bill would do two things. First, if the federal government is not prepared to fight for Canadian industry and enforce the terms of an international agreement that it previously negotiated and, quite frankly, should support, then the federal government would have to reimburse industry for any reasonable legal expenses incurred by that industry or business in litigating an unjust trade restriction by a foreign power. Second, the government would provide loan guarantees to industries that were being unjustly taxed by foreign countries in the amount of the tariff held by that foreign power.

It is real money that is held somewhere else. This is simply a guarantee on those loans.Take for example the Quebec corporation that I used previously. Since the United States is holding $270,000 of that $1 million in sales, this company under this bill could borrow money against that accounts receivable. It could continue its operations, pay its employees and perhaps expand its operations in some places which have been so hurt over the last 10 years in softwood.

In the case of the softwood dispute with the United States, $5 billion immediately would come back into the Canadian economy. That is where it should have been in the first place if the federal government were doing its job.

Currently, there are companies in Quebec, not 1,000 miles from where I stand today, that may or may not be in business in six months and may or may not be able to continue to employ Canadians and keep towns alive. If the government and the Prime Minister continue to dither and do nothing, this is exactly what will happen. Here is the government's chance to support the bill, to support the trade compensation act.

Who supports the bill? My fax has not stopped. I have a letter supporting the principles of Bill C-364 signed by the BC Lumber Trade Council, the Ontario Forest Industry Association, the Alberta Forest Products Association, the Ontario Lumber Manufacturers' Association, the Free Trade Lumber Council and the Quebec Forest Industry Council.

I have a letters from the office of the mayor from the township of Chapeau, Ontario, from Northern Wood of Thunder Bay, Ontario, from Tembec of Bolton, Ontario, from La Crete Sawmills Ltd. of Alberta, from Marathon Pulp Inc. of Ontario, from the city of Thunder Bay, from Downie Timber Ltd. of British Columbia, from I.S. Wight & Sons, a trucking company of British Columbia and even from employees of wood companies, all supporting my bill.

What does the government do? It tries to throw it out before it even has a chance to get on its feet. The Liberal pattern of doing nothing has been more than 10 years in the making and it has now come to a head.

We are no longer seeing a fight to regain free access for Canadian lumber to the U.S. market. Rather it is whether the Canadian government will allow the U.S. government to renege on commitments it made during the free trade negotiations more than 20 years ago.

I am told, and I have no doubt about it after reading the NAFTA agreement, that without the provisions of chapter 19 Canada would not have signed the NAFTA agreement, and the government does nothing to enforce those terms. It is shameful.

The Prime Minister, during his U.S. visit, was clear enough in his speech to the Economic Club two weeks ago, but he clearly failed to sway President Bush during their brief telephone conversation last Friday. That is no surprise. It is too little, too late.

This should be the campaign slogan for the Liberal Party during the next election: too little, too late. It is standard practice.

We all know actions speak louder than words. Bill C-364, which today the government tried to quash before it started, proves to Canadians, from Quebec to British Columbia, that the Conservative Party cares and that we are prepared to put taxpayer money where our mouth is. We are prepared to fight for Canadian exporters to keep Canadian jobs in Canada.

The bill is not a subsidy. It likely will not cost the taxpayers any money at all, either in the short term or the long term. It is even likely that the government would break even. This is Parliament's responsibility. We here in the House have a responsibility to see that no matter what government is in power it will represent Canadians and Canadian industries and will provide industry with real support, not a fast phone call, not cheap talk and not political grandstanding five years after it was necessary.

The Government of Canada has a clear duty, in fact, a fiduciary duty to step in and provide loan guarantees for these companies and repay the legal fees that they had a responsibility to incur in the first place.

It is time to show the world that Canadian parliamentarians, we in the House, will stand up for Canadian industry. We will fight to protect Canadian sovereignty, which in the end Canadian sovereignty is what is ultimately at stake if our government continues to dither and continues to live by the motto “Too little, too late”.

Please support Bill C-364, the Canadian Trade Compensation Act, and help Canadian industry help Canadian workers

Points of Order

[Dominic LeBlanc, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I have been advised by the Table that perhaps I could make a very brief point of order with respect to private member's Bill C-364, which is coming up shortly. That way we will not take time from the private members' business period.

I am rising on a point of order as to whether or not Bill C-364 requires a royal recommendation. I will be suggesting two reasons why Bill C-364 should require a royal recommendation.

First, it clearly contemplates a new and distinct charge. Clause 3 states that the Minister of Finance “shall pay” all legal expenses incurred by importers. Such payments would be made out of the consolidated revenue fund, which is the definition of appropriation under section 2 of the Financial Administration Act. Furthermore, this appropriation would be for an entirely new purpose, which is not already legislatively authorized. The Speaker ruled on May 9 that:

—a royal recommendation is required not only in the case where more money is being appropriated, but also in the case where the authorization to spend for a specific purpose is being significantly altered.

Second, clause 4 of the bill provides that “the Minister shall provide a loan guarantee” to exporters or associations in respect of a deposit, surety or bond that they must post to a foreign state. This guarantee creates another liability on the public revenue that is clearly a new and distinct charge for a new legislative purpose. It is the equivalent of a loan and if there is a default on the part of the exporter for whose benefit the guarantee was provided, it would definitely amount to the spending of public money.

Mr. Speaker, your predecessor, Deputy Speaker Francis, at page 9052 of the April 7, 1981 Hansard stated:

It is obvious that one of our most basic and fundamental procedures is that only a minister of the Crown may originate legislation which proposes a charge upon the revenue and this can be done only when accompanied by a recommendation from the governor general.

Mr. Speaker, it is for these reasons that I urge you and hope that you will rule that Bill C-364 does in fact require a royal recommendation.