Bill C-24 (Historical)

Softwood Lumber Products Export Charge Act, 2006

An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence

The purpose of this enactment is to implement some of Canada’s obligations under the Softwood Lumber Agreement between the Government of Canada and the Government of the United States, by imposing a charge on exports of certain softwood lumber products to the United States and on refunds of certain duty deposits paid to the United States and by amending certain Acts, including the Export and Import Permits Act. The charge on exports will take effect on October 12, 2006 and will be payable by exporters of softwood lumber products. The enactment also authorizes certain payments to be made.

Softwood Lumber Products Export Charge Act, 2006

[Gary Lunn, Conservative, Minister of Natural Resources]

Mr. Speaker, I too want to commend the hon. member. Many times in the House he has voted on principle and he has obviously voted on principle by supporting the softwood lumber agreement. The member, obviously, has great experience on this file.

Now that this softwood lumber dispute will be resolved in the coming months, what suggestions and ideas could my colleague provide with respect to best helping the forestry sector move forward to ensure that we see a revitalization of the industry and improve its competitiveness in today's market?

[Joe Comuzzi, Liberal, Thunder Bay—Superior North, ON]

Mr. Speaker, one would almost think I wrote the question for the minister because I have the answer for him, but he did not.

In my judgment, which goes to the heart of every community, especially in the forestry industry or the single industry communities, when we come from a smaller community, other people are making decisions on our behalf.

After the experience in the softwood lumber industry, which has affected all of Canada, I would like to see each community taking over more of its own decision-making. It is important for a single industry community to have some direct control over the cost of energy and the cost of fibre. When communities realize that they do have some say in energy, in fibre and in other costs, we will begin to see the forestry business in Canada get back on a solid footing, whether it is softwood, kraft or newsprint. We would then get local representation at the table bargaining, rather than some steel company in Pittsburgh, Pennsylvania, dictating what the forestry industry in northern Ontario or northern British Columbia should be doing. When we get those three components in place we will start to see a rebirth of the forestry industry.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I commend the member for Thunder Bay—Superior North, because what I heard from him is compassion for the families in his constituency.

In northern Ontario, as well as many communities in Canada, there are single industry communities. What happened after the mine closed in my father's community in Kirkland Lake? Families were hurt irreparably. The real estate dropped in price. People who worked in the same place for their entire lives lost their retirement savings, their self-esteem after the job losses and had social problems with unemployment. From his speech, I can tell that the hon. member is really listening to his constituents.

If this deal does not go through, which is what the NDP is pushing for, what is the hon. member hearing from the families in his riding? What would be the outcome for them if this did not go through?

[Joe Comuzzi, Liberal, Thunder Bay—Superior North, ON]

Mr. Speaker, I appreciate the hypothetical question. If the deal did not go through, I am glad we do not have to face what we would have to do. However, I have to be very frank that we were at the edge of the cliff and I did not like looking down and I did not want to go back to those families. Cascades closed down in the last six months. Red Rock closed down about three or four months ago and we are trying to revive it. It is really very difficult on the families.

I hope the government passes the older worker adjustment program very soon. It is difficult for people who have worked in a mill for 25 or 30 years. They are at an age where they cannot be retrained because by the time they are retrained they are close to retirement. They need a bridge from what they are getting now through their pension plan and so on to carry them over to their retirement.

We developed the older worker adjustment program some 12 or 13 years ago with the present government members. The sooner the government implements that the better off these people will be because there still has to be a soft landing for some of these people in the forestry industry in Canada to help them over the hurdle.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, it is a great pleasure for me to rise in the House today to speak to Bill C-24 which will implement Canada's obligations under the recently signed softwood lumber agreement.

Two weeks ago, the hon. Minister of International Trade joined with his American counterpart to sign the softwood lumber agreement. I have been in the House for almost 13 years and for all the time I have been here this softwood lumber issue has been a real serious bone of contention between the United States and Canada. It has been a serious irritant between our two countries and it has affected not only the lumber industry but trade generally in a very negative fashion between our two countries.

I am delighted to see this agreement finally reached. For those who have been following this dispute, I am sure many of us really thought it would be something we would never see in our time in politics, certainly in my case, or in our lifetime. There simply had not been any progress made on this issue until the past few months when our trade minister and the Prime Minister, and our Canadian Ambassador to the United States took this issue and paid special attention to it and finally made things happen.

Is everyone in the industry happy with this agreement? Absolutely not. There could never be an agreement quite frankly which would satisfy everyone in the industry, but does the industry recognize that this deal is a good deal? Yes, it does. It realizes that it is simply better than anything that has been talked about in the past seriously and certainly anything that has been agreed to in the past.

This agreement has left Canada's lumber industry, which has been in an extremely unstable position for a long time, finally with an agreement that it can count on for the next several years. I am delighted to be here speaking to the implementation of the bill which would actually implement this agreement.

Working with our American counterparts, Canada's new government was able to accomplish something that governments have not been able to accomplish in the past and this agreement is one which is highly favourable to Canada and to Canadian industry. Some others in the House have talked about the specifics of that. Some others have certainly talked about the importance of the money which will flow to the industry at a time when the industry is having serious problems. Lumber prices have dropped quite dramatically and the industry is in trouble. We recognize this. A lot of jobs depend on this industry.

This is an issue which is not just talking about the financial situation or finances, it is talking about jobs in the softwood lumber industry. There are tens of thousands of jobs in this industry and this agreement will allow most of those jobs to be kept where otherwise they would not, they would be lost. This is an agreement which is clearly good for the softwood lumber industry. It is good for the lumber communities, for workers in those communities, and it is good for our country. The softwood lumber industry is a huge industry in this country. The importance of this industry is not to be understated.

This agreement ends costly litigation which has been going on for the 13 years I have been in the House. It ends that costly litigation. It takes our lumber producers out of the courts and provides stability for the industry and it returns $4.4 billion roughly to Canadian businesses, to companies involved in the softwood lumber industry.

As I said, it is such a vital time for the industry, a time when the industry is in a serious state of decline with prices declining, many companies on the brink. I would suggest that this money will keep many of those companies from going out of business and those jobs being lost.

Clearly, this is a good agreement for Canada. Bill C-24 will allow Canada to fully implement its commitments under the softwood lumber agreement. That is what Bill C-24 is all about. As anyone watching would know, it is not about rewriting a deal. That is not on the table. The deal has been signed. The deal has been finalized. This is simply about implementation. Both governments have agreed to this deal. It is an agreement between Canada and the United States. This is about the implementation of the deal.

Bill C-24 will permit the government to impose a charge on the export of certain softwood lumber products to the United States and on refunds of duty deposits paid to the United States, to authorize payments to amend the Export and Import Permits Act and to amend other acts as a consequence of this deal. That is what this agreement is all about, to make it clear.

When listening to some others in the House and their presentations, we would never know that. Members would think that this bill was somehow about the agreement itself, about renegotiating the deal. Of course, that is not at all what it is about. That is not on the table. That is not going to happen. It is a good deal. I think we should be delighted that that is not going to happen.

As parliamentarians consider the merits of this bill, I would ask that they also consider the alternative to this agreement. This is something that I think is worth every one of us considering. The fact is we do not have to look too far into the past to see what life would be like without this agreement.

Our lumber producers have spent the better part of the last two decades engaged in a number of drawn out legal battles with the United States. We have had some that have said that we are going to win these and we should go ahead. I will talk a little bit about that in just a minute.

These members have missed firsthand the deep influence of the protectionist voices in the United States. They know the toll, both human and financial, that this dispute has taken. These long drawn out battles have had an extremely negative impact on the industry. Despite the clear cost of letting this agreement slide, some will continue to say that Canada was on the verge of a complete legal victory and should continue down the path of litigation.

Let me be clear on this point, even if, and it is a big if, even if Canada were to be ultimately successful when it comes to litigation, the United States industry could file a petition and request the imposition of new duty orders immediately thereafter. If we were successful in this round, the Americans would refile and would continue with the litigation.

I might add that this possibility was raised by the U.S. trade representative Susan Schwab herself when she was in Ottawa to sign this agreement. It has been raised by many others in the past. We have seen from the history of what has happened over the past two decades that the Americans would do that. That is exactly what could happen.

Any members of the House who are suggesting that we should just carry it through and finish with this agreement, and we will win and we will get all the money back, the $4.4 billion plus almost another billion dollars, they are not being realistic. I would ask parliamentarians to consider those people working in lumber communities right across this country, to consider what taking this risk and what taking this course of action would do to them, and what they would prefer, a continuation of this dispute, all the time, effort and money that this path requires, or the practical and immediate solution offered by this hard won agreement.

I would ask the members of this House to carefully consider these two alternatives. Those are the only alternatives. They are the only real alternatives that are before this House, to either take this deal, which is a deal many in the industry have said is not exactly what we want. It is not a perfect deal and we know that, but it is a good deal. It is good for the industry, good for companies involved, good for workers and good for the country. So do we take that deal, or do we take our chances on litigation? I would suggest that continuing litigation is really good for lawyers, but it is good for no one else.

I would say that the odds are extremely high that the litigation would continue for some time down the road, new challenges would be brought forth, and in the end we would have an industry in turmoil. I would suggest that a lot of companies would go out of business over the next year or two under that scenario, and this agreement will prevent that for many of them. Because of that, this deal will save a lot of jobs for people in the softwood lumber industry.

After careful consideration of the facts, I am confident that parliamentarians will come to the same conclusion that the provinces and the industry have come to, and that certainly I and members of my party have come to, that this agreement is in fact the best option for our country.

Today I ask all members of the House to support Bill C-24. This bill will help us to write the final chapter in this dispute. It will put it behind us and get us back to the business of making a more competitive North America and a more competitive and prosperous Canada for generations to come. That is what this deal will do.

For members who are talking like they will not be supporting the deal, I am confident that after they have talked to people in the industry in their areas and considered the consequences of this not going through, we will get enough support in the House. I am confident that this implementation legislation will pass and we will move on to some other critical issues facing our country right now, issues that we should be dealing with on an urgent basis.

I am looking forward to any questions that members opposite may have.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I have listened to the Conservative member’s speech and I am perplexed by what he had to say.

I find it hard to understand why he says today that this is the best possible agreement. It may be a good agreement, in the circumstances we find ourselves in. However, I do not understand why, last October, the same party was calling on the party in power to give loan guarantees. But as soon as it is in power, it is no longer talking about giving loan guarantees.

I do not know where it got its mandate to negotiate on behalf of the industry. I cannot understand why an industry would have given this government a mandate to negotiate and then leave a billion dollars on the table. And $500 million will be paid directly to the White House. The Americans will have 18 months in which they can go back on the agreement, and we are told that it may work for a year or two and we will start the process over again of going back to hearings to win the case. I think we should have been able to see the case through. The dispute is not over and will not be over, because in 18 months it may start all over again. If we had been able to see the case through, we could have put an end to it once and for all. As well, all of the tribunals say that there was no such thing in this agreement and that softwood lumber was not subsidized by Canada. I think that much is clear.

I do not understand why we did not see the case through. That is my question. Where did these people get their mandate to negotiate on behalf of the industry? I understand that the industry in Quebec is asking that this agreement be signed, now that they find themselves up against the wall, with no money left and no people left.

I think that the government could have supported the industry, here in Quebec, and the Canadian softwood lumber industry. It did not do that and has allowed the Americans to control our forests.

For any government that represents its country’s industries, it is unacceptable to allow another country to dictate how things will be done in an agreement, in addition to leaving a billion dollars on the table, money that belongs not to the government, but rather to the industry. I think that the government has exceeded its mandate and that it would have been just, reasonable and fair to the Canadian softwood industry to give it the loan guarantees and to continue the battle so that one day it would be over.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, I would suggest that much of the member's question was answered in my presentation and in presentations made by other members.

I want to point out that it is not $1 billion that is left on the table. Certainly part of that $1 billion has been allocated to what we believe are noble purposes. Canada quite happily supported some of those. Let us make that clear.

It is interesting that the main argument the member made against signing this deal is that the Americans may cancel it down the road. There is a contradiction in what he is saying. He is saying it is not a good deal, but he is concerned about having it cancelled. That contradiction is just so blatant and so odd. If it is a bad deal, why would he be concerned about cancelling it?

The member knows extremely well, as do the companies in his constituency, that this is a good deal. It is a good deal for the softwood lumber industry. It is certainly a good deal for the workers, who will be able to keep their jobs. It is a good deal for the country. That is why he is concerned about cancellation.

The cancellation issue is a good question and I am glad the member brought it up. It is not going to happen. The only time there was a cancellation in the past was the cancellation by the Canadian government. That is what happened to the last softwood lumber deal.

This deal is a much better deal. It is a longer term deal. I believe that before the end of this deal we will have a solution that will carry on indefinitely, because we have set up the mechanism for making adjustments to the deal along the way. I chair the trade committee. I am sure the parliamentary secretary, the trade minister and the committee will work on making the bilateral council work. The bilateral council can make changes to the deal. We will make it work. We will make it a deal that will be better at the end than it is right now, and it is a good deal right now.

The member's concern about cancellation is a legitimate one, but it simply is not going to happen.

This is a deal between two governments. This deal cannot be cancelled by industry in the United States. If that were the case, then the member's concern would be legitimate. But it is not. It is a deal that can only be cancelled, on the appropriate notice, by one government or the other. That notice is adequate for the industry to deal with it. It simply is not going to happen. The member can rest assured that this deal will be in place for seven years, maybe nine. I believe probably changes will be made to allow it to go well beyond that.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I read recently that a beaver bites off its own testicles when it is threatened. If this is true, then I suppose the beaver is a fitting symbol if not for Canada, then for recent governments of Canada which, when faced with serious bullying and threatened and backed into a corner, have carved off pieces of Canada and voluntarily and unilaterally dismantled aspects of Canada that we value. I will give my colleague an example and ask for his views on it.

Is he and other members aware that under the current deal the supposedly sovereign nation Canada signed on to an unprecedented clause in the agreement that would require provinces to vet any changes in forest policy with Washington? I do not know if people are clear on this. We have surrendered the right to make our own internal domestic changes to foreign policy to Washington. We have to ask for Washington's permission. Maybe that is not biting off one's own testicles, but it is certainly hiving off an aspect of Canadian sovereignty.

Is the member aware that this is the second time a Conservative government has done this? In 1986 under the GATT, Canada was on the verge of winning a ruling from GATT on unfair duties assigned by the U.S. The prime minister of the day, Brian Mulroney, was so eager to make the case that we had to have a free trade agreement he aborted the appeal to GATT even though we were winning, even though this was something we won, and buried the results until after the free trade agreement was announced. This is the second time a Conservative government has yielded to this kind of bullying.

I would ask for my colleague's comments.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, I certainly will not be commenting on the actions of any particular beaver or anything like that. I do not know about that. I will have to take the member's word for it.

What I will say is that the member's suggestion that we could ever end the litigation within my lifetime is simply naïve. It would not happen. It is not a real option, nor is a completely free trade agreement in softwood lumber with the United States. It is not on the table and is not going to happen. It is a naïve position to take. I would love that to happen. I would love it to happen in agriculture. It would solve most of the problems that farmers have. It would solve a lot of the problems that the softwood lumber industry has, but it is naïve, it is not realistic and it is not going to happen. Let us just put that issue aside and deal with reality.

The member suggested that by signing this deal Canada is giving up sovereignty. That is simply not the case. The reality is that if there are some major changes, for example if there are problems in the industry that require a high level of harvesting, and we have seen that with the pine beetle, it allows the flexibility to deal with that. It is as good as we could possible have it. The deal shows its flexibility. I think the member has defeated his own argument in that area.

[The Acting Speaker, Royal Galipeau]

We have now debated on Bill C-24 actually for 20 minutes in excess of five hours, so from this moment henceforth all further interventions will be for 10 minutes plus five minutes for questions.

I now recognize the hon. member for Richmond.

[Raymond Chan, Liberal, Richmond, BC]

Mr. Speaker, the Conservative government is set to ratify a softwood lumber agreement that is simply bad for Canada.

After removing all the support from the lumber industry by eliminating the loan guarantee, the Conservative government is trying to force companies to accept this flawed deal.

I cannot in good conscience support a deal that relinquishes $1 billion to the American government and the American lumber industry, one that gives Canada's lumber companies an ultimatum to comply or be heavily taxed, one that sets a dangerous precedent that seriously undermines our rules based trading relationship with the United States. This agreement is simply not good enough for the Canadian lumber industry or Canadians.

The softwood lumber agreement is a prime example of the government's willingness to accept mediocre deals from the U.S. rather than stand up for Canadians. Since when did giving up $1 billion to the United States equate to a good deal for Canada? Since when did bullying Canadian companies to take this deal or face a 19% penalty tax equate to standing up for Canadians?

The fact is this deal leaves $500 million in the hands of the American lumber industry which it can use to attack the Canadian industry by undercutting our prices or by launching future lawsuits. This deal gives the American government roughly $450 million of the illegally imposed duties. This deal creates an export tax that is actually higher than the current U.S. duty. This deal has anti-surge provisions which will deprive the Canadian industry of the flexibility to deal with unexpected situations like the pine beetle infestations. This deal abandons each of our legal victories under the rules of international trade in exchange for only 24 months of peace.

The fact is this deal is a bad deal for the Canadian lumber industry as it sells out Canadian interests for political expediency and the Conservative election checklist.

I want the House, the lumber industry and all other industries in Canada to take a look at the larger picture that is at stake here. This Conservative softwood lumber agreement sets a dangerous legal precedent.

By ratifying this agreement the Conservative government sacrifices Canada's credibility and the credibility of the dispute resolution provisions of NAFTA.

By ratifying this agreement the Conservative government is encouraging other U.S. sectors to ignore trade rules and instead seek political decisions that will act in their favour.

By ratifying this agreement the Conservative government will create more trade uncertainty which seriously undermines Canada's international position in the export market and inhibits investment in our forestry sector.

By ratifying this agreement the Conservative government is saying that it is okay to force a 19% penalty tax on companies that are unwilling to sign on to this agreement.

By ratifying this agreement the Conservative government is saying to Canadian industries that they must accept this deal or the government will abandon them.

This deal carries with it the potential to establish Canada's long term trading relationship with the United States. Do we want that relationship to be based on selling out Canadian companies and accepting less than 100% refunds or should the Canadian government establish a relationship that sends out a clear message, a message that says the Canadian government will fight for the rights of our companies.

Sadly this deal says to Canadians that losing $1 billion to the American government and the lumber industry is okay. That is not good enough for me. I stand here to fight for a better deal for Canada's lumber industry, a deal that does not bully companies into a flawed agreement.

Canadian companies have the legal right to the full repayment of the illegally imposed import duties and the right to opt out of the Conservative softwood lumber agreement.

Forestry companies should be able to pursue their legal rights, both under NAFTA and in our domestic courts. The government should be there to support these companies, not dictate to them.

The government should immediately make loan guarantees available to these companies so as to provide them with the credit worthiness that they will need to enable them to reclaim the money owed to them. From the onset, Conservative the softwood lumber agreement has been more about politics than what is best for Canada and our producers.

The government owes it to Canadians to achieve nothing less than what it promised: free trade and 100% refund. The Liberal Party has long been a staunch supporter of the lumber industry. We are steadfast in our commitment to a resolution of the softwood dispute that is based on the rule of law in international trade and one that seeks full compensation of the $5 billion in illegal lumber duties.

We call for the American government to fulfill its NAFTA commitments so as to lawfully resolve this dispute and set a clear precedent that Canada stands behind our industries.

The Liberal Party believes in a long term solution to the softwood lumber dispute. This is why we have developed and proposed a supplementary aid package that better meets the needs of the industry. This package is modelled on the very same package that was introduced by the former Liberal industry minister, David Emerson. This industry--

[The Acting Speaker, Royal Galipeau]

The hon. member is experienced in the House and knows that he cannot identify other members by their given names, but by their constituencies or their office.

[Raymond Chan, Liberal, Richmond, BC]

Mr. Speaker, this industry needs a better deal and investment in the long term forestry strategy that helps build a profitable and sustainable industry. This is why I cannot support this agreement. I want a better deal for Canadians.

[James Moore, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics]

Mr. Speaker, I appreciated the comments from my colleague from Richmond. He is a good friend of mine. I notice he did his part for the softwood lumber industry by having every sentence on a separate sheet paper.

My question is a B.C. focused question with regard to this deal. He used very strong language in his presentation. I know the member from West Vancouver has also used very strong language with this deal in terms of what it means to British Columbia and what it means to our future.

B.C. Liberal Premier Gordon Campbell is in Ottawa right now. He arrived yesterday and gave a great speech yesterday to the Canadian Club of Ottawa. He is still in town today, meeting with our government and with members of all parties on the softwood lumber deal.

Gordon Campbell supports the softwood lumber deal. Finance Minister Carole Taylor, a federal Liberal out of B.C., supports the deal. Rich Coleman, the minister of forests, supports this deal. The Liberal MLA from the member's Richmond riding, Linda Reid, and others support this deal. They believe it is in the best interests of his constituents and in the province of British Columbia.

Is Gordon Campbell abandoning British Columbia? Does Gordon Campbell not know what is in the best interests of B.C.? Does Gordon Campbell not know what is in the best interests of the softwood industry? If he is going to vote against this deal, if he is going to continue with the language he has been using, he must believe that Gordon Campbell does not know what is in the best interests of B.C.

I look forward to hearing his answer and whether he believes that Gordon Campbell knows less than he does about what is in the best interests of B.C.

[Raymond Chan, Liberal, Richmond, BC]

Mr. Speaker, the problem is that the provincial government has no choice. The Government of Canada, under the Conservative leadership, has abandoned the industry. It has withdrawn all the support, the loan guarantees that are so important in this battle with the Americans on this issue. The government denied its support to the industry and in effect, if it does not support this deal, it will be hung out to dry. The industry has no other methods of staying in the battle.

A few weeks ago, Premier Gordon Campbell issued a statement to support the deal. He outlined all the difficulties with the agreement and asked the federal government to renegotiate. The government turned him down. It turned down every request from the provincial government and the industry.

I have talked to people in the industry in my riding. They are telling me that, with the price going down as it is, with this agreement, they will be facing a tax duty that is higher than what it is today. The court has ruled that the Americans cannot charge more than 10.8% on our exports, but this deal would allow the Americans to set a 15% tax duty on our exports. With the price going down, companies have no means to survive. They have no choice but to be bullied into accepting the deal.

It is amazing that the federal government, the Conservative Party, is now blaming the provincial government for this deal. The provincial government is not at the negotiating table. The federal government has negotiated this deal and it is forcing and bullying the provincial governments and the industries to accept the deal, and that is the sad part of that government.