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

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Speaker, I have been listening to this debate with quite a bit of interest. I wonder if my hon. friend, the member for Richmond, listened to the remarks from one of his colleagues in the Liberal caucus, the member for Thunder Bay—Superior North, about how this would impact his riding and how the Conservative government's agreement with the United States has impacted it.

Does he understand just how many individual jobs are being saved in ridings such as his colleague's from the Liberal Party?

Another question is this. It is not between $4 billion and $5 billion. It is between $4 billion and zero. With this agreement, the Conservative government got the industry $4 billion--

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Five billion dollars Canadian.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

--that is $5 billion Canadian. Does the hon. member not agree that this is better than zero? With the promised litigation, even after we win a couple more rounds, this would have continued on and on.

[Raymond Chan, Liberal, Richmond, BC]

Mr. Speaker, the fact is we were winning in the court and producing results. This is why the tax rates have been reduced. The court forced it to be reduced down to 10.8%.

The problem is we are not saving jobs. I bet with the member opposite that there will be layoffs. Industries already have to restructure because of the possibility of this agreement being passed. Many jobs will be lost, and I will bet that this will be true.

[Betty Hinton, Conservative, Parliamentary Secretary to the Minister of Veterans Affairs]

Mr. Speaker, it is a pleasure to rise in the House today to talk about the softwood lumber agreement and add my support to Bill C-24, which will bring it to life. I ask all members of the House to join me in supporting it.

As the Minister of International Trade indicated in his speech yesterday, the softwood agreement is good for industry, good for lumber communities and good for Canada. This is particularly true in my riding of Kamloops—Thompson—Cariboo, which relies heavily on the softwood lumber industry.

This agreement eliminates U.S. duties, ends costly litigation, takes our lumber producers out of the courts, provides stability for industry and returns more than $5 billion. It is a practical and flexible agreement that ends the dispute on terms that are highly favourable to Canada and will put Canada and the U.S. back on track for making North America more competitive for the future.

I am pleased to note that the agreement has won a wide base of support from both industry and the provinces. There are a number of good reasons for this support, but perhaps one of the more significant reasons is that this agreement respects the diversity of Canada's lumber industry.

As the House knows, the lumber industry across the country is varied and different regions have unique challenges and opportunities. Today I would like to highlight some of the regional benefits of the agreement and explain how it responds to a wide variety of needs across the country.

First, the agreement gives provinces flexibility in choosing the border measure that best suits their particular economic needs. Exporters will pay an import charge when lumber prices are at or below U.S. $355 per thousand board feet. When prices reach this threshold, Canadian regions, as defined in the agreement, the B.C. coast, the B.C. interior, Alberta, Saskatchewan, Manitoba, Ontario and Quebec, can select one of the following two export charge regimes: option A, an export charge with the charge varying with price; or option B, an export charge plus volume restraint, where both the rate and volume restraint vary with the price.

This innovative mechanism will allow provinces to choose the export charge that is right for their individual economic and commercial situation. I should point out that funds collected under either option will stay in Canada.

Provinces and industry also asked for flexibility in export quota rules to be able to meet their U.S. customers' requirements. In response, the government negotiated provisions allowing companies to carry forward or carry back up to 12% of their monthly export quota volume from the previous or next month. This is a significant improvement over the current environment.

Under the current system, the duties imposed by the U.S. are reassessed annually. The industry never knows from year to year what duty rate will apply. Under the agreement, they will know and can take full advantage of a stable, predictable business environment.

The agreement also contains a provision allowing provinces to seek an exit from the border measures based on a process to be developed by Canada and the U.S. in full consultation with provinces within 18 months of the agreement entering into force.

It provides for reduced export charges when other lumber producing countries significantly increase their exports to the U.S. at Canada's expense.

It protects provincial jurisdiction in undertaking forest management policy reforms, including updates and modifications to their systems, actions or programs for environmental protection, and providing compensation to first nations to address claims.

It includes an innovative mechanism to ensure that the $4.4 billion U.S. in returned duties will be back in the hands of our exporters within weeks of the agreement's entry into force. It also ensures that independent lumber remanufacturers, which do not hold tenure and are independent from tenure holders, do not have to pay an export charge on the value-added component of their products. This represents a significant improvement in treatment compared to previous agreements.

In addition to these benefits and the flexibility built in for provinces, the agreement also addresses region specific concerns that were raised by different provinces and stakeholders throughout the negotiation process.

For example, the agreement provides a limit on the export charge imposed on high value lumber products such as western red cedar lumber, which is primarily produced on the B.C. coast.

Through the agreement's anti-circumvention provisions, it also recognizes the importance of B.C.'s forest policy. B.C.'s market pricing system and any updates or modifications to the system have been given a full exemption under this agreement.

In response to Canadian industry concerns regarding the exemption of coastal logs and lumber and running rules that govern the administration of export measures, the U.S. has also confirmed that it is prepared to engage in early discussions to ensure the agreement operates in a commercially viable manner.

The agreement also directly responds to concerns expressed by Quebec, Atlantic Canada and the territories.

For instance, the border measures will not apply to the export of lumber products manufactured at Quebec border mills, a key position supported by the government of Quebec and its industry. In fact, the government achieved exclusions from border measures for a total of 32 companies in Quebec and Ontario, including the Quebec border mills.

The agreement ensures that lumber produced from logs harvested in the Atlantic provinces which are certified by the Maritime Lumber Bureau will not be subject to border measures. It ensures that lumber produced in the Atlantic provinces from logs harvested in the state of Maine is exempt from the border measures, a key component of bilateral trade in that region.

Also, it exempts from border measures lumber produced in the territories.

These elements of the agreement respond directly to the concerns raised by the provinces and industry throughout the negotiation period. They have helped garner a broad, substantial base of approval for this agreement in regions across Canada.

I am proud to lend my support to this hard-won agreement and to Bill C-24, which will bring it into force. Today I ask my fellow parliamentarians to do the same.

In conclusion, let me echo the words of Premier Gordon Campbell from my home province of British Columbia:

It's time for the costly litigation and instability experienced over the last decade to end and for a new chapter in British Columbia's ongoing forestry revitalization to begin.

I could not agree more.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, earlier, I listened to the Liberal member asking for loan guarantees and saying that the Conservatives should have given them. I must point out that the Liberals had the opportunity to do the same thing, that is to provide loan guarantees, and they never did. That the Conservatives have not done so either is another story. I do not understand why they wanted to negotiate— I spoke about that previously.

When we talk about leaving a billion dollars on the table, it must be remembered that $500 million of that amount will be paid to the American softwood lumber industry. Personally, if someone were negotiating on my behalf with a third party over my money, and if that money were paid to the other party, the one who started the dispute, I would not be happy. It would be as though I were robbed in my own home, as though, like everyone else, I knew who the robber was and as though a Conservative member negotiated with the robber and told him he could keep the television set and the cutlery. They did the same thing. The Conservatives were elected and they stuck their nose in this issue. There remains $500 million for the softwood lumber industry and $500 million handed over to the White House, which can do whatever it wants with that money. Everything is fine; and they say that it is a good agreement. Really. Where are we headed? If we agree to a loss every time the Conservatives negotiate on behalf of Canadian companies, we will be in the hole in no time at all.

As far as the agreement is concerned, I admit that in fact the Quebec industry has agreed to sign the agreement, but the dispute results from the inaction of the Liberals and the Conservatives, who failed to provide loan guarantees to firms in the industry. Now, the Conservatives are giving them back their own money and in addition they are leaving a billion dollars of industry money with the Americans. I do not know where they are heading, but if that is the way they want to negotiate, we will not be negotiating for long.

Can the Conservative member think of any other solutions, such as POWA? When I mention POWA, I am not thinking only of softwood lumber but of all Quebec and Canadian industries. Because of the Conservative government's inertia, there is no such program for the industry.They want to allow free enterprise. Considering the 90¢ dollar and the 94.3% increase in the cost of gasoline, electricity and propane gas, we have a small problem with free enterprise. If they leave industry to fend for itself, we will soon be without industry in Quebec and Ontario. Moreover, with respect to negotiators like those opposite, we can do without them.

[Betty Hinton, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I always enjoy any remarks from passionate members of the House of Commons. The member who just spoke is obviously one of those very passionate members.

I do not remember hearing an exact question, but I do remember thinking to myself that he sounded an awful lot like a lawyer for a moment, because only the lawyers are going to benefit from this going on and on.

In the meantime, there are going to be communities, families and whole areas of the country that will be totally devastated. The longer this goes on, the longer the opportunity is there for big companies to do what I call the Pac-Man game. They come along and gobble up all the little companies and pretty soon those little companies that used to be the mainstay of small communities and were considered players in the industry suddenly have disappeared.

I am not certain if the member opposite has ever had any experience in negotiations, but I have. In negotiations, there is give and take. The rule of thumb is that one side asks for the moon and the other side offers the dirt on the floor. Somewhere in between an acceptable agreement is found, one that actually benefits both sides, and everyone walks away, saves face for another day, and we go on to do what we are supposed to be doing.

In the case of this lumber agreement, there are a couple of things that the member opposite is mistaken about. We are not leaving money in the hands of the United States. There is actually going to be a group of people from both Canada and the U.S. who will use part of that money to which the member referred.

[Robert Vincent, Bloc, Shefford, QC]

Fifty million, that is it.

[Betty Hinton, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I would ask the member to hold his passion. I am trying to answer him as best I can. When we negotiate a deal, as we did in this case, and we get more than 83% of what we asked for, that is really good negotiation.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, it is with considerable frustration that I join this debate concerning the bill on the softwood lumber agreement with the Americans.

Let us recall the free trade crusade initiated by the former Liberal government. It said: “We are going to win the legal battle and in the end we are going to impose free trade for softwood lumber”.

However, the Liberal government and the Conservatives, who later took their place, forgot one important thing, namely helping and supporting the forest industry and the forest sector workers, for example, with guaranteed loan programs, which we asked for for nearly 36 months before the agreement.

We listened to the entire softwood lumber industry, which told us that this sort of assistance was what was required for us to come out winners in the end and have free trade, because we were going to win the legal battle.

The governments stubbornly did not grant this assistance and today we have before us an agreement with the Americans that is very frustrating. The outcome is nothing to celebrate. There is no glory to be had from it.

Obviously the Americans won with their strategy designed to drag out the dispute as long as possible. Today we are faced with an agreement that the Quebec's industry and unions are asking us to support, because they lack the financial resources to weather the crisis, because the federal government did not do its work when it was time.

Now the agreement is before us. It will not settle the crisis once and for all, but it makes it possible to recover a significant share of the amounts paid by the Canadians to the Americans. In this regard, the Bloc Québécois has a very responsible attitude. We must not forget that, without its support for the agreement, we would be looking at an election right now. There would not be an agreement and the entire forest industry would be left to its own devices, as would the workers.

God knows we need security in this sector nowadays. We saw it again yesterday in the news on Radio-Canada: the forest industry is in a crisis throughout Canada.

The softwood lumber agreement with the Americans is only a small part of the solution to this issue. It buys us some time for a while, but other forms of action are also required.

The Bloc Québécois decided, as a responsible party, to support the agreement because we absolutely have to have some help so that our companies can keep their heads above water, continue to operate and keep job losses to a minimum. At the same time, though, an assistance plan is needed to help the industry. In this regard, the Conservative government has proved itself so far to be flagrantly irresponsible. They went to negotiate with the Americans and came back with an agreement that is not very good but which we have no other choice than to accept. On the other hand, though, they close their ears and turn a blind eye to the problems of the forest industry, which has appealed repeatedly to the governments in both Quebec City and Ottawa to do something and hopefully institute an action plan that could help it.

In my riding, whether in Saint-Pamphile or Saint-Just-de-Bretenières, we cut American wood. This agreement will ensure that these people are not affected by the imposition of duties. From their perspective, therefore, there is a significant gain. It is the same in L'Isle-Verte. Les Produits Forestiers Dubé cuts wood in a private forest and will be exempted from duties. So there is a benefit here too.

More broadly in my region, a company like Groupe G.D.S., which is a solid firm that been around for a number of years, unfortunately has severe financial problems, largely because the softwood lumber crisis was allowed to drag on for too long and there was no well structured assistance plan to help the industry.

I remember four years ago when the debate was at its height. We received requests for loan guarantees from executives at G.D.S. But the government never provided them. The result is that the company is now under the protection of the Bankruptcy Act because of this situation.

So we have to sign this agreement, and I challenge NDP and Liberal candidates everywhere in Quebec to go around the forest towns during the next election campaign claiming that we should not have signed the agreement. Actually, I would tell these candidates not to go to these towns because they may have a problem getting out in one piece.

These parties have acted irresponsibly, as has the Conservative Party if there is no assistance plan. If they confine themselves just to signing the agreement, we will not have what we need and the companies will close all the same.

The Liberals and the New Democrats will say that the agreement should not have been signed because, ultimately, the result is the same. To remedy the situation, to get back on track, we need an assistance plan, like the plan proposed by the Bloc Québécois. It contains some fifteen proposals. Let us quickly review a few of them. First, it proposes an income support program for older workers employed in the softwood lumber industry, and in all manufacturing industries, as well. In Quebec industry as a whole, people 55, 56 or 57 years old are being laid off today. They have no chance of finding other jobs and we are still waiting for the program that is going to allow them to bridge the gap until they retire.

As members of Parliament, we have pension funds. When we leave our job after a certain number of years, this provides a reasonable way to bridge the gap. We must not imagine that everyone is in that situation. People who have worked in a plant for 25 or 30 or 35 years find themselves, at the end of the line, with a maximum of 45 weeks of employment insurance, and then it is over. And yet those people have paid in for 25 or 30 or 35 years and have never claimed employment insurance benefits. We need an assistance program for older workers.

We are asking for an economic diversification program for forestry-dependent communities. The Minister of the Economic Development Agency of Canada for the Regions of Quebec has just announced an $80 million program. If we dig a bit deeper, we see that there is not one cent of new money in that figure. They have brushed off the suit and turned the jacket inside out, and handed it back to us. There is nothing new, nothing in addition. This is not what we need. We need real action with additional money to allow for economic diversification in our regions.

In this plan, we are also asking for special tax status for the 128,000 owners of private woodlots in Quebec. That is the only way to consolidate our forestry industry. We are also asking for accelerated depreciation on equipment. That is important, because the companies are going to be getting $4 billion that the Americans will be giving back to them. They will have to pay their debts and lines of credit with that money, but with the rest they must be able to buy the equipment they need to get back in the race and be able to compete with the Americans. We believe that improving the tax treatment in terms of depreciation is the kind of help they need. I think this is a useful, constructive and dynamic proposal, and the Conservative government should include it in its program.

We are also talking about financial compensation for maintaining the forest access roads. In the United States, forest access roads are maintained by the army on the pretext that this is a matter of security, so that tanks can get through. We could have a plan that would allow us to help our industry get re-established by doing this too.

We are also proposing a program to stimulate innovation and improve productivity in the forestry industry.

This is a set of measures that we need. The softwood lumber agreement signed with the Americans is going to provide for reimbursement of $4 billion. But that will have to be supported by other measures. These measures are not superfluous, they are essential so that the forestry industry can get through the crisis it is currently experiencing.

This is obvious to the people who represent rural ridings. It can be seen in industrial villages today. Yesterday, we saw reports about some villages in Abitibi. The same thing could have happened in my riding. If there is no assistance plan to help these industries get through the current forestry crisis, then in six months or a year or two years we are going to continue seeing villages close down.

I know this is diametrically opposed to the approach of the current Minister of Industry. He believes that only the marketplace counts and that the state should not intervene. The cuts announced yesterday to the Technology Partnerships Canada program bear witness to this. However, I urge all his colleagues to make the minister understand that fundamental ideological principles have no place in this issue. We must find appropriate solutions to the problems that arise. In terms of developing the forestry industry, we expect the federal government to provide an action plan that will enable our communities to rebuild, to make it through the current difficulties and to continue to contribute to the Quebec and Canadian economies as they did in the past.

It is true that the natural resources sector and the forestry sector have been impacted by the new economy and the energy sector. However, we should never forget that this basic resource makes it possible for people to live in these areas and represents the lifeblood of communities. It also provides employment to those who are not necessarily very educated but who are vital to any economy, whether that of Quebec, Canada or North America.

Given the situation, yes, the Bloc Québécois will act responsibly and vote in favour of the agreement. However, it expects the Conservative government to have the same sense of responsibility and to come up with an assistance plan for the forestry industry, a plan necessary for the recovery of the forestry industry.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I want to commend my colleague, the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup for his speech on softwood lumber. I think he was quite thorough. The Conservative member said earlier that 83% of Canada's forestry industry's money is coming back to it and the other 17% is going to the Americans. If that is how the Conservative member used to negotiate, I am glad she did not have a hand in this negotiation.

After making the Canadian and Quebec industries lose money, does the government intend to implement new strategies? We see that the Bloc Québécois has proposed alternative measures to support the industry. It is not just a matter of negotiating and pulling out. There also needs to be a new plan.

I would like the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup to say a few words about other ways that could help the Quebec and Canadian industries get new machinery and develop new procedures.

I recently read that an older worker support program would be implemented but that it would not apply to the softwood lumber sector. In my opinion, this should go further.

The hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup spoke earlier of the Minister of Industry's inertia, which did not help the industries and allowed free enterprise to rule. Can the hon. member tell us what concrete measures the Conservative government should apply in order to support the softwood lumber industry?

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I want to thank my colleague for his very wise comments.

First the Conservative government needs to acknowledge that this agreement is not perfect and that it has flaws. In my opinion, no Canadian would voluntarily give $1 billion to the Americans, $500 million of which will be allocated to the U.S. softwood lumber industry so that it can compete with us. This is one of the flaws of the agreement. That does not mean it should not be signed. It means there is a major flaw in the agreement.

However, it is in response to these flaws that an assistance plan comes into play. With such flaws, there needs to be compensation that allows our industry to face increased, somewhat undue, competition, which was financed with our very own money.

Our assistance plan suggests offering preferential tax treatment for the $4.3 billion of countervailing duties and anti-dumping charges that will be reimbursed by the U.S. authorities, in order to take into account the loss the companies have suffered.

This money will be refunded to companies early in December and will be considered revenue. It is being repaid at a time when the Canadian dollar is worth 90¢ American, whereas the payment to the Americans was made when the Canadian dollar was worth 65¢ American, which means that the companies are losing out.

Yesterday, we saw that the Conservative government can announce sudden cuts at the same time as it announces last year's $12 billion surplus. When making economic statements, the Conservative government could decide to give our industries a break by allowing them to declare the revenue for the year in which they paid out the amounts to the Americans. These companies must not suffer an additional loss with the repayment in 2006, when they paid these amounts in 2003, 2004 and 2005.

This is the sort of practical measure we would like to see for the industry. For the sake of older workers, we also hope that the Conservative government will realize that the agreement it signed will continue to have a highly detrimental impact on the economy, the forestry industry and the rest of the manufacturing sector.

It would therefore be appropriate to table a plan to help older workers who lose their jobs. Such a plan would cost $75 million annually, but Canada had a $12 billion surplus last year. This is disproportionate when we consider the individuals who are suffering the consequences of the softwood lumber crisis. The worker in St-Pamphile did not cause the crisis, the federal government did, in the way it negotiated with the Americans.

In the end, the government is forcing us to signed a flawed agreement. But plant workers and their families will suffer the consequences of that agreement every day. That is why our repeated calls for an older worker assistance program are appropriate and justified. It is time for the Conservative government to put older workers front and centre in an assistance plan for the entire forestry industry, in order to deal with this crisis.

[Roger Valley, Liberal, Kenora, ON]

Mr. Speaker, thank you for the opportunity to speak on this important issue, the softwood lumber agreement, or should I say disagreement.

I had the opportunity to listen to the Minister of International Trade start off the debate in the House yesterday. I heard, as all Canadians did, how the agreement in his opinion would provide for years of stability and again in his opinion we would have eight or nine years of harmony and stability in our industry. To me that is a joke. I do not know if the minister was guessing, praying or just dreaming.

Thankfully, the next speaker was the member for Beauséjour and he put some facts on the table, facts like how the government left over $1 billion of Canadian companies' money in the hands of those who started and perpetuated the lumber trade dispute. What a sellout. Even worse than a sellout, we have to pay for being right. We are financing the very groups that caused all the problems. What a sad day for Canadian companies to have to pay those groups that do not want free trade in the lumber market.

All Canadian companies wanted was fair and open access to the markets of our largest and closest trading partner, our friends in the United States. To be sold out and then threatened by our own government shows just how desperate the government is to ram through this project.

Before I continue, I would like to make it clear that I believe that industry especially in my riding needs some of this money. There are people in my riding who feel we should take this deal. They are scared for their immediate future in an industry that is evermore precarious.

People in Kenora riding also recognize that this is a bad deal. I am voicing their frustration that the government was unable to deliver a better deal for their families. I am against supporting this deal because I have to stand up for the people who have been forced to take it.

Canada has repeatedly won favourable rulings at WTO and NAFTA. We are members of these international trade tribunals to ensure that trading practices are executed in a fair manner. We have a responsibility to accept the decisions that tribunals make, as does any other member, including the United States. By accepting a deal that is contrary to the rulings that have been made, our credibility and standing will be seriously undermined in any future trade disputes.

The forestry industry is the most important industry for the people of Kenora riding. Our communities are dependent upon these jobs. Just as they are dependent, our communities are devastated when the industry is in decline.

The industry has been faced with many obstacles. Very high energy costs, transportation costs because of the huge distances we have to travel, and the lack of ability to invest in research and development are just some of the examples. With those obstacles came job loss. In December last year the Abitibi mill in Kenora was shut down causing a loss of over 450 jobs. Days later, hundreds of jobs were lost in my home community of Dryden. These are jobs lost in a community where there is only one industry. It is totally devastating to the community.

Our way of life is in jeopardy in northern Ontario. We need the federal government to step up and stand up for us, not sell us out at any cost to get a photo op with the American president.

One of the biggest challenges our industry has faced is the softwood lumber dispute. As I have said before in the House, the forestry industry in my part of the world is an integrated industry. Every type of mill, be it a sawmill, pulp and paper mill, or value added, depends on the others for success. When the sawmill operations were forced to pay the illegal tariff, the financial repercussions rippled throughout the industry and throughout the communities.

We have been negotiating this deal for years. In that time the effects of the tariff have devastated every sector of the industry. The money that the industry receives from this deal will only go so far. The federal government must recognize the industry needs more support, more assistance simply than the money that is being returned to them. Many of our mills have not had equipment upgrades in years and they are unable to look beyond the current markets they access for new ones. They have been financially choked to the point where they are desperate. What does our government offer them? A bad deal, “take it or we will impose a 19% export tax and crush the rest of your company”.

We must look beyond the optics of the negotiation of the deal and look at the industry in its entirety. That is what the former Liberal government did. It recognized the softwood lumber dispute was only part of the problem and it set out an aggressive plan to help the industry overcome some of the other obstacles caused directly and indirectly by the dispute.

We must help the industry enhance its competitiveness. Funding research and development initiatives is key. Considering the growing bioeconomy, this is the opportunity for the Canadian industry to be a world leader with support from its federal government.

We must support companies that are willing to expand their operations. The Kenora Forest Products sawmill for example has been working hard to create more jobs in its plant in order to assist the community impacted by other mill closures. The Prendivilles are community leaders and they want to help Kenora. They are ready to accept this so-called deal because it is this or nothing. What kind of choice is that for a government to force on a hard hit community?

We must also support economic diversification projects for communities with a dependence on this industry considering the tough times they are having. The mayor and city councillors in Kenora along with other stakeholders have worked tirelessly to develop an action plan to help Kenora's economy. The city has enormous potential in other economic endeavours but requires the full support of the federal government to achieve its goals.

The industry is already at a disadvantage and now the government will force the deal on Canadian lumber producers that again will see $500 million left in the hands of the American lumber industry; those very people who lobbied and were successful against ours. That is not to mention that if a company decides not to support this deal, it will in fact face a 19% levy on all refunded duty deposits.

Without the return of 100% of money taken by the American government and the commitment by the Conservative government to assist the entire industry long term, more jobs will be lost. This take it or leave it attitude will hurt confidence in the sector. What other industry in Canada has had to put up with the heavy hand of the government that says it is this way or no way? Whose side is the government on, the Canadian industry or the American lumber lobby?

Northern Ontario is a very beautiful, wild and abundant place. We work hard, we play hard, and we want the best for our families, for our communities and for our country. Give us the support and the tools to build our industries. Give us the confidence that our government will defend our rights to manage our forests for our future, not sell us out to lobby groups funded by our own money.

In northern Ontario we want a softwood lumber agreement that protects us, our future and our forests. In this agreement we have nothing, nothing but more problems in the future, less control of our forests and our industry, and clearly a government that will sell us out.

I cannot support this deal knowing that more jobs will be lost. I cannot support this deal knowing that we are selling out to the American lumber lobby. I cannot support this deal knowing that hundreds of millions of dollars will be left in the United States in the very hands of the people who did this to us. I will not support this deal because I need to stand up for the workers in the communities of Kenora riding.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I listened with interest to my colleague's comments.

Perfect deals exist in dreams. There is an old Japanese proverb that says “vision without action equals daydreams”. I think the member opposite and perhaps his party have been daydreaming since the time that they were prepared to accept a deal that was much less beneficial to the industry than the deal that we have negotiated.

Even if Canada were ultimately successful in this round of litigation, which is far from a certainty, without a negotiated agreement, does the hon. member not realize that the very next day that U.S. interests could very easily launch another set of suits that would delay this again? We would be facing an interminable list of these kinds of actions without a negotiated agreement, which we have today and which is better than the one that the Liberals were prepared to accept not that long ago.

[Roger Valley, Liberal, Kenora, ON]

Mr. Speaker, part of the challenge in politics is to make sure one does not believe one's own press releases. That is clearly happening on the other side of the House because this deal is not better than what we had before.

We have been successful in winning many times at the tribunals. The courts believed in what we were doing.

I want to explain for a minute that the softwood lumber dispute was not the majority of trade in Canada. The vast majority of trade in Canada is very successful. However, when two good friends and family, like Canada and the United States, have a disagreement they have to go somewhere to get it solved. We had to go to the courts.

We were rapidly nearing the end of the first test case. Once we had a decision on it, on which we had been successful every bit of the way and once we had a decision on that, we were going to fare far better in any future cases. However, when friends cannot get along, we had to get someone to help us and that was the courts.