Bill C-21 (Historical)

An Act to amend the Customs Tariff

Customs Tariff

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

Madam Speaker, I am informing you from the outset that I have no intention of splitting my time with anyone. I should normally use all the time that is allocated to me.

First, I want to say that the Bloc Quebecois will support this legislation. Bill C-21 seeks to extend, to June 30, 2014, those sections of the Customs Tariff that allow Canada to provide preferential tariff to imports from countries that are members of the World Trade Organization, and to imports from the least developed countries.

The Bloc Quebecois will support this legislation because we simply cannot disagree with it. To oppose it would be tantamount to reneging on our international commitments, including with the World Trade Organization. This would also be tantamount to reneging on our international commitments in the area of development assistance, particularly those made by Canada in Kananaskis regarding Africa. I will get back to this later on.

A few moments ago, my hon. colleague from the Canadian Alliance referred to the impacts of globalization. Heaven knows, globalization has many impacts, both positive and negative. As I said yesterday, in another speech, it is not about being for or against globalization. It is about benefiting from it while simultaneously trying to limit the negative impacts of the totally unavoidable phenomenon of globalization to which we must adapt.

As I also mentioned yesterday, the leader of the Bloc Quebecois has repeatedly said that asking if we are for or against globalization is a bit like asking, each and every day of our lives, if we want the earth to stop turning. We must deal with this phenomenon and try to benefit from it as much as possible and to limit its negative impacts.

There are benefits to globalization, of course, both for industrialized countries like our own and for developing countries that want to use globalization as a stepping stone to gain access to the international trade network. The bill before the House will give developing countries, those less developed, easier access to the international trading network.

However, there are also negative impacts. Earlier, I heard the Secretary of State for Financial Institutions say, at the end of his speech, that he will soon be announcing adjustment or assistance measures for the soft sectors of the Canadian economy that are hard hit by globalization, like the textile, footwear and apparel industries. Good. However, I happen to remember that, when we talked about the advisability for Canada to sign NAFTA, those who were against argued that it would have a negative impact on a number of manufacturing sectors in Canada and in Quebec.

They asked, demanded and begged the government for adjustment measures, not only for the workers in such industries, but also for the industries themselves. In fact, globalization does not necessarily mean that we must write off all manufacturing operations in industrialized countries. Globalization simply means that we must change, reorient and modernize our sectors and our economic niches.

When we talk about manufacturing industries, we must remember that we benefit from a certain number of advantages, such as the presence of significant capital and of technology that can be used to manufacture high value added products.

Instead of producing clothes just to be producing clothes, we have the technology and the capital that we could use, for example, to produce clothing and textiles in the health or food sectors, where we could carve out niches that would be unique to Canada.

Coming back to the speech by our colleague, the Minister of State for Financial Institutions, who said, nearly two decades later, that measures are needed to support the manufacturing industry in the textile and clothing sector, we would have expected the government to have taken action well before now.

The negative impacts are already being felt in our ridings and our communities. Very recently, a business in my riding, Genfoot Lafayette, which has been operating in Contrecoeur for over 100 years and makes the famous Kamik boots, announced that it will be closing its doors at the end of this week to move its operations—at least the production that was done in Contrecoeur—to the People's Republic of China.

What did this government do? Absolutely nothing. In the meantime, businesses are closing and workers in our communities are losing their jobs. At Genfoot Lafayette, we are talking about nearly 200 workers, many of whom are women over 50 who will have great difficulty finding another job. These workers are losing their jobs, and the government has no programs in place to assist them.

This government withdrew from the program for older worker adjustment, thereby adding to their plight. I hope that the Minister of Human Resources Development will agree, at the request of the Quebec minister responsible for employment and social solidarity, to renew the pilot project, which is helping—although not to any great degree, but helping nonetheless—place older workers in new jobs. There is still no news from the government in this regard.

Given the almost total lack of measures to help workers in soft sectors such as textile, apparel and footwear manufacturing, for example, the government must, at the very least, commit to rapidly renewing POWA to help the older workers at Contrecoeur who will lose their jobs by the end of this week.

It goes on. A company in Drummondville has closed its doors. It was not a Mickey Mouse operation. We are talking about a company that makes designer jeans closing its doors. Several hundred employees in Drummondville are going to lose their jobs.

What does this government do? It tells us that it will eventually come up with assistance measures for the textile, apparel and footwear industries. They should have thought about that in 1988, 1989 and 1990. It is now 2004, and the government is saying it still needs to think about it. In the meantime, jobs are being lost.

Of course, there are negative impacts from globalization, but there are, as I mentioned earlier, positive ones as well. We have to be consistent in honouring our international commitments with members of the World Trade Organization, and also in our relationship with a number of least developed countries and the 49 least developed countries on the UN list, including 34 African countries. We all know about Canada's commitment to African countries. We must therefore support this legislation.

I have statistics that were quoted in 1994 by my colleague Philippe Paré, who was the member for Louis-Hébert at the time. I must say this is a step back in time for me because, in 1994, I spoke to the bill for renewing preferential tariffs until the end of June 2004. My point is that the amount of money developing countries are losing because of protectionism in industrialized countries is much greater than any development aid.

This is an important and positive measure for developing countries. We have to vote in favour of this legislation.

[Deepak Obhrai, Canadian Alliance, Calgary East, AB]

Madam Speaker, it is a pleasure to speak to Bill C-21, an act to amend the customs tariff.

The minister of state articulated the need to extend this program, which has been in existence for some time and will come to an end on June 30, 2004. He gave his Liberal spin on it, indicating that it would help everybody in the Third World developing countries. He said that we should continue with it.

We in the Conservative Party agree with the minister and will support the bill because of another aspect. If we do not support the bill, then there could be the possibility of no tariffs and this would result in our markets being flooded by uncontrolled goods coming into the country, which would impact Canadian jobs.

We need a regime of controlled access, giving preferential treatment to developing countries and the least developed countries as well as ensuring that our markets open up slowly to foreign goods, while at the same time taking advantage of it.

We are more in line with having what we call free trade agreements. In light of the fact that the WTO talks in Cancun collapsed, it becomes more important for the world trading regime to consider what to do about tariffs. That is critically important because, in globalization, all studies have indicated that a reduction of tariffs in foreign trade is beneficial to everybody, including Canada.

I will be splitting my time, Madam Speaker, with my colleague from Edmonton--Strathcona.

It is important to understand that a country like Canada, which is based on exports and has a GDP of 48%, now close to 45%, has a regime that regulates international trade. We would like to see this being done under the guise of free trade agreements or special agreements with other countries that would benefit our exporters, benefit other consumers and benefit other countries as well as, with lower tariffs thereby giving an advantage to everyone.

As things stand right now, due to the collapse of the WTO talks in Cancun, we do not know where the world trading regime will go. For that reason, we will support this bill because we need a regime that will control the flow of goods until we know the outcome of the WTO talks, should they carry on and what agreements will come into play.

We are talking about two tariffs, the GPT, or the general preferential tariff, and the least developed country tariff.

I think I have articulated the reasons why we will support the bill. In short, until the outcome of the WTO talks and other tariff regimes on controlling the flow of goods come into play, will support the bill.

[Denis Paradis, Liberal, for the Minister of Finance]

moved:

That Bill C-21, an act to amend the Customs Tariff, be referred forthwith to the Standing Committee on Finance.

Mr. Speaker, it is my pleasure to speak today about Bill C-21, an act to amend the Customs Tariff. I also welcome the opportunity to support the motion that this legislation be referred to committee.

Briefly, this bill provides for the continuation of a longstanding policy of providing preferential tariff treatment to developing and least developed countries.

The two tariff programs in question—the General Preferential Tariff (GPT) and the Least Developed Country Tariff (LDCT)—are implemented through the Customs Tariff Act and are set to expire on June 30, 2004.

This bill proposes that the programs be extended for another 10 years, from July 1, 2004, to June 30, 2014, as per past practice.

Before discussing the bill, I first want to provide some background, which will help to put these measures in context.

During the mid-1960s there was a growing recognition that preferential trade treatment for developing countries was a means of fostering growth and the well-being of poorer nations.

Following a recommendation by a United Nations conference on trade and development, developed countries implemented unilateral tariff preferences for goods originating from developing countries in order to help them increase their export earnings and stimulate their economic growth.

Canada's general preferential tariffs program, the GPT, was implemented on July 1, 1974, for a 10 year period and has been renewed twice since then, in 1984 and 1994. As indicated, it is now set to expire on June 30, 2004.

Under the GPT, more than 180 countries and territories are entitled to zero or low tariffs on a range of products that are covered under the customs tariff, with the exception of some agricultural products, refined sugar and most textiles, apparel and footwear.

In 2003, Canadian imports under the GPT were valued at $9.3 billion and accounted for 2.8% of total Canadian imports.

In 1983, Canada introduced the Least Developed Country Tariff—or LDCT—in an effort to provide even more generous preferential tariff treatment to goods from the world’s poorest countries, as designated by the United Nations based on a number of criteria such as national income, health and education. This program also expires on June 30, 2004, as I stated before.

Since January 2003, the government, acting on a commitment made at the 2002 G-8 Summit in Kananaskis, provides complete duty-free access under this program to all imports from 48 least developed countries, except for certain agricultural goods such as dairy, poultry and eggs.

In 2003, Canadian imports under the LDCT were valued at $408 million, accounting for 0.12% of total Canadian imports.

I have provided some background to these two programs. Now, I would like to explain why they should be extended.

To begin, extending the GPT and LDCT for another 10 years reaffirms the government’s commitment to promoting the export capability and economic growth of developing and least developed countries—the main reason these programs were initially established.

It also provides a predictable business environment to traders using these programs, both in the developing world and here in Canada.As well, an extension would be consistent with the practice of other developed countries, such as the United States, members of the European Union and Japan, who also continue to have similar programs.

Further, continuing these two longstanding unilateral preferential tariff programs sends a positive message to beneficiary countries who see such programs as an important factor in encouraging their development.

The decision on whether to extend the GPT and the LDCT affects a number of stakeholders.

First, it affects the exporters in developing and least developed countries that benefit from the preferential access provided by the two programs. The premise that originally led to the establishment of preferential tariff programs--that they would encourage and increase exports from developing and least developed countries and hence stimulate economic growth--still holds today.

Various studies by international organizations such as the International Monetary Fund and the World Bank support the principle that export expansion contributes to economic growth.

While these programs clearly benefit developing and least developed countries, Canadians also benefit from them. As a result of lower tariffs on goods from the developing world, Canadian consumers enjoy access to imported goods at competitive prices and will continue to do so if these programs are extended.

In addition, Canadian producers will continue to benefit from the reduced tariffs on inputs they import from the developing world and use in production of goods in Canada, which ultimately increases the competitiveness of Canadian industry.

If these programs were not extended, the increased duty costs incurred by Canadian importers and consumers would be approximately $272.8 million. Not continuing these programs would also raise questions about Canada's commitments to international development.

As noted earlier, all other major industrialized countries provide preferential access for developing and least developed countries, and some, such as the United States, Japan and the European Union, have extended similar programs in recent years. As such, not extending the GPT and LDCT would isolate Canada internationally.

Continuing these programs would also be consistent with our commitments to assist developing and least developed countries. These commitments have been reiterated on many occasions in fora such as the G-8, the World Trade Organization and the United Nations. Clearly, letting these programs expire could negatively affect Canada’s image internationally.

The reasons that justified the introduction of the GPT and the LDCT decades ago still remain.

The economies of many developing countries have still to make great strides if their citizens are to attain acceptable income levels. This bill constitutes one substantive measure Canada can take to continue to assist the developing world in achieving this goal, and continues Canada’s tradition of assisting the developing world.

In considering this bill, I encourage hon. members to keep in mind that Canada stands with all other major industrialized nations—the United States, Japan and the European Union—in supporting the developing world through such programs.

Before closing, let me review the advantages of extending the GPT and LDCT for an additional 10 years.

First, Canada would continue a longstanding international practice of providing preferential tariff treatment to goods from the world’s poorer nations.

Second, continuing the programs for a fixed period of 10 years will provide certainty and predictability to traders using them in Canada and in the developing and least developed countries.

Third, continuing the programs complements Canada’s foreign aid policies.

Finally, while these programs were mostly conceived as an economic assistance measure for developing and least developed countries, they also benefit Canadians by providing them with goods that are subject to lower rates of duty.

A 10 year extension of these programs is consistent with past practice, provides a predictable business environment to traders and reaffirms the government's long term commitment to international development.

In conclusion, the government is aware of the situation in the clothing and textile industry and is currently looking at additional measures to support the industry.

Federal-Provincial Fiscal Arrangements Act

[The Speaker]

At the request of the Liberal Party whip, the division is deferred until 5:15 p.m. today.

Bill C-21. On the Order: Government Orders

February 24, 2004—The Minister of Finance—Second reading and reference to the Standing Committee on Finance of Bill C-21, an act to amend the Customs Tariff.

Business of the House

[Jacques Saada, Liberal, Leader of the Government in the House of Commons and Minister responsible for Democratic Reform]

Madam Speaker, I would just like to bring to your attention that Bill C-21 will be referred to committee before second reading.

Customs Tariff

[Reg Alcock, Liberal, for the Minister of Finance]

moved for leave to introduce Bill C-21, an act to amend the Customs Tariff.

(Motions deemed adopted, bill read the first time and printed)