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

[The Acting Speaker, Royal Galipeau]

I recognize the hon. member for Winnipeg Centre, mindful of the fact that there is another questioner. We have three minutes for two questions and two answers.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I will try to be brief.

I first want to thank my colleague, the member for Kenora, for the courageous position that he has taken. I know the impact that softwood lumber squabbles have had on the riding of Kenora. I know the Prendiville family. I know the industry in that area that neighbours so closely my own province of Manitoba. I also know that my colleague, the member for Kenora, is a trapper.

Earlier, I used the analogy that I read somewhere that a beaver when cornered or when trapped chews off its own testicles. I use the analogy that while the beaver is certainly an apt symbol for Canada in that way because successive Tory governments when backed into a corner and bullied by the Americans have bit off big chunks of Canadian sovereignty as they have with the deal signed today.

I ask my colleague, as a trapper, does he know for a fact if this is true, that a beaver will bite off its own testicles? And, does he think the analogy is appropriate and accurate that the Conservatives are biting off big chunks of their ability to defend themselves when they signed this softwood lumber deal?

[Roger Valley, Liberal, Kenora, ON]

Mr. Speaker, this is a very serious place and I try to remain serious at all times, so I will be careful as to how I answer this question.

We talk about desperation and this was a government that was desperate to get a deal. Many years ago when the free trade agreement was negotiated, we saw a prime minister intervene directly and was not able to get the deal we needed in softwood lumber. Again at this point we see a Conservative Prime Minister that is desperate to have a deal done. He has an agreement and made a deal that is going to hurt us in the future. It is not going to protect our sovereignty or our ability to decide the future of our forests with sustainability in mind.

[Blair Wilson, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, I know my colleague, the hon. member for Kenora, takes the discussions and debates here seriously and I know he cares deeply about his constituency as well. What are the people in his riding saying? What are the employees and employers in the softwood lumber industry in his riding telling him to do with this deal?

[Roger Valley, Liberal, Kenora, ON]

Mr. Speaker, when I meet people on the street, they are not upset with the Americans in any way. In my part of the country there is a lot of tourism traffic and business for the Americans. People do not blame the Americans for this deal. They blame the Conservative government for not standing up for us and not protecting us.

One of the most basic values was getting the money back. This money was collected illegally, these billions of dollars. The government should not brag about getting 83% back. That is not a good deal. We needed 100%. We needed to ensure we brought this money back to Canada to provide jobs in the future, to allow companies to grow and expand, and use technology to enhance what we do in northern Ontario.

It is not a good deal. The people on the street are mad, but they are mad at the Conservative government.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, it is an honour and a privilege to rise in the House this afternoon to speak to Bill C-24. I know I only have a short time to address the bill. I want to speak about the myth that the status quo will suffice.

The status quo will not suffice. It is simply not enough that Canada is right. Canada wins the disputes and the tribunals find in our favour again and again. In practical terms, being right is an anti-victory if it does not bring resolution. What good is it if we win the battle but lose the war? Without this agreement we have no resolution.

The opposition is suggesting that the status quo will suffice. The status quo does not suffice for this government. Canada's new government has opted for moving forward. It has opted for an agreement that spells an end to the status quo, an agreement that returns over 80% of losses to be invested back into our industry, instead of the millions more that will leave Canada if the current situation prevails.

I applaud and accolade the Prime Minister, Minister of Industry, and the Minister of International Trade who have worked so hard to develop this agreement. I know the ministers have taken a lot of heat over this. I want to personally thank the minister on behalf of all Canadians. He has shown that his diligence, wisdom and expertise has shone brightly for all Canadians. We should all be proud of him.

The government has opted for an agreement and a future that will allow our lumber producers to get on with business free from non-stop litigation, which to many is an American pastime. If anyone has ever studied south of the 49th parallel, they will understand that Americans take their lawyers and litigation very seriously. I think it is just a road to nowhere to continue that path.

Members on the other side called the agreement a sellout. The real sellouts are those who opt to do nothing. The hard fact is that the future of our lumber industry is in trade and the stronger trade agreements we have the more stable our industry will be.

Business cannot survive on a diet of hope. Business relies on stability and certainty. Like it or not, wish for a perfect world, but this agreement will keep industries from shutting down. The agreement keeps people working, puts food on the tables and that is no myth.

As the member of Parliament for Kelowna—Lake Country in beautiful British Columbia, I am acutely aware of the importance of moving forward on softwood lumber. This agreement has been accepted by the province of British Columbia, by the minister of forests, by the lumber producers in my riding and, more importantly, my constituents have overwhelmingly supported this agreement. It is time to move forward. The opposition sits in the House and says it had no choice, that they were abandoned by the government. This is absolutely false.

As a matter of fact, I sat in a meeting this morning with Premier Campbell of British Columbia. I did not get the impression that he would say B.C. was forced to support this agreement nor that he had no choice. Premier Campbell was very happy. He got everything that he was looking for as far as a negotiated settlement. In a perfect world we like a perfect deal, but Premier Campbell being a realist knows this is great for British Columbia and all of Canada.

Premier Campbell worked actively to ensure that this agreement would serve B.C. lumber producers very effectively. I would like to thank Premier Campbell for his efforts as well. The fact is that B.C. is on side. B.C. is interested in strengthening freer trade and our softwood lumber industry. Unlike the opposition, B.C. wants to move forward.

It is time that Liberal and NDP members get behind B.C. Some 57% of Canada's lumber exports to the United States come from British Columbia. It is time these members got behind our communities and the lumber producers that employ them. In my riding alone there are over 1,000 people directly employed by the softwood lumber industry. Kelowna—Lake Country is in the heart of Canada's softwood industry. My riding is situated in southern British Columbia and the producers in my riding typically export between 70% to 80% of the product south of the border.

Kelowna falls under the Okanagan timber supply area which has an AAC or an allowable annual cut of almost 3 million cubic metres. This comprises 6.9% of British Columbia's total AAC.

Tolko Industries, which I would also like to congratulate on celebrating its 50th anniversary this year, produces 144 million board feet annually. Gorman Bros. Lumber, which is across the lake in Westbank, has an annual capacity of 96 million board feet. We also have a mill, Oyama Forest Products, and it has annual estimated capacity of about 4.8 million board feet.

These numbers are from 2001, but they at least demonstrate a capacity of over 249 million board feet being produced locally. When we compare this to the 21.5 billion board feet a year Canada exports to the United States, we find that the Kelowna--Lake Country area produces almost 1% of Canada's total softwood exports. This is to say nothing of the additional Tolko veneer and plywood plant, which has an annual capacity of some 280 million square feet.

Therefore, I can speak confidently about the effects of this agreement on my constituents, and the effects will be positive.

Canada has worked closely with provinces and industry stakeholders throughout the softwood lumber dispute to secure a durable agreement with the United States that promotes a stable bilateral trade agreement in which Canada's softwood lumber exporters and industry can profit and prosper. The agreement has that stability and certainty the industry is looking for. It will see a return of most of their duties collected on softwood lumber. As I said, that will be over 80%.

The agreement maximizes the benefits to the Canadian industry and the workers and communities that depend upon it. That is the bottom line: the people of our ridings across the country. The 308 of us here represent the workers, their families and the industry.

The agreement will be for a term of seven years with an option to renew for two additional years. The legal text specifies those lumber products that will be subject to any export measures.

The agreement includes the full and complete revocation of the U.S. countervailing and anti-dumping duties and the return of over $4 billion in duties collected by the United States since 2002 through a deposits mechanism that will ensure companies receive this money as quickly as possible. Once again, our new government is creating ways of trying to bring that money back into the industry's hands as soon as possible.

The agreement includes the safeguarding of the provinces' ability to manage their forest services and a choice for provinces of the border measure that best addresses their individual economic and commercial situations. The key word there is “choice”. Also included is the establishment of a range of initiatives to enhance binational cooperation and the development of a North American lumber industry.

The softwood lumber agreement is good for Canada and good for the softwood lumber industry. The agreement eliminates U.S. duties, returns more than $4.3 billion to producers, provides stability for industry, and brings an end to this long-running dispute and costly litigation between Canada and the United States. The return of more than $4 billion U.S. marks a significant infusion of capital for the industry and will benefit workers and communities.

Canada and the United States can now turn the page on this dispute and we can direct our full attention to building a stronger, more competitive North America. That is the key. We can move forward now. We can turn the page and continue to move forward rather than hashing out the dithering that went on in regard to this file for the last 13 years and specifically for the last five years.

In closing, I agree with Tolko president and chief executive officer Mr. Al Thorlakson, who said:

This Agreement is a long way from perfect, but the realities of the U.S. industry and the U.S. marketplace have to be considered.

Once again, he is a realist. We are living in a real world. We do not have a perfect world and we have to come to a compromise. It reminds me of Preston Manning, who sat in this House for many years, and of his perspective on Canadians and working on and negotiating deals. He once said, “Why did the Canadian cross the road? It was to get to the middle”.

I think this agreement is a great compromise for Canadians and North Americans in general. We can work in harmony together as we move forward.

Canadian companies can compete and outperform American producers. This is because of the quality and abundance of our timber resources as well as the ingenuity, efficiency and dedication of our rank and file workers. Our softwood lumber companies, because of the past five years, have been forced to be leaner and more efficient. With this agreement about to be implemented, I am fully confident in the upcoming prosperity for our forestry sector.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Mr. Speaker, I listened with enthusiasm. I wanted to make sure that I caught as much as I could of the words from my colleague across the floor.

Canadians across the country have said that the new Conservative Party is a principled party, a party of law and order. Maybe the member could tell us where he sees the law and order in this, in giving up so much money. Also, where is the principle and how is it upheld when so many tribunals and trade panels have ruled in our favour?

How are the Conservatives defending that when they are looking at being so principled and a law and order party?

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, that is a great question from the hon. member opposite. I also congratulate him on his appointment as vice-chair of our international trade committee, where we have been able to discuss this for many hours and listen to witnesses from across the country.

The fact is that Canada's new government, under the leadership of our Prime Minister, has indicated that we will move toward freer and fairer trade. That is exactly what this agreement does, with over 81% coming back into the pockets of the industry, providing certainty and stability. It provides what is needed by the industry.

We have the support from the major industry producer provinces across the country. We have the industry onside. We have the constituents onside. I do not understand why the member opposite would not be onside.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, seeing as my colleague from the Conservatives who was speaking is from B.C., I wonder if he is aware of a Vancouver Sun article published earlier this year. It leaked the details of a leaked letter from the Bush administration to the U.S. lumber lobby. In it, the American administration confirmed that its objective was to hobble the Canadian industry for seven years. That was a letter from the Bush administration to the U.S. lumber lobby, printed in the Vancouver Sun, which admits that the American administration confirmed that its objective was to hobble the Canadian industry for seven years.

I am wondering how a representative from an area that relies on lumber can simply be cooperating with this agreement when the best interests of Canada are not at stake here. The best interests of the Americans are being served.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, it is a privilege to answer that question. First of all, we have a very reliable research and development department. We do not rely on the media for the information. I spent over a decade working in the media. We cannot always believe everything we hear on TV or read in the paper.

Here are the facts. We have over 81% of the money going back into the industry. We have the industry onside, as well as the governments of B.C., Ontario, Quebec and the Atlantic provinces. We have over 90% of the industry onside. We are providing that certainty and stability for the industry. That is how I can support this deal.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, there has been a suggestion that the industry was bullied into accepting this deal after initially rejecting it. The industry minister himself warned the softwood lumber companies that they should either take the deal or the government would walk away from them. In fact, the government said that loan guarantees put in place before the last election would be taken off the table. The government demonstrated that it would punish companies that refused to sign on to the agreement. It also includes a 19% levy on all refunded duty deposits.

There seem to be some indications that there was some bullying on this sellout. Could the member confirm that in fact those conditions were presented to the softwood lumber industry?

[The Acting Speaker, Royal Galipeau]

The hon. member for Kelowna--Lake Country has less than half a minute.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, very briefly, we had industry consultation from across this country. We heard anybody who wanted to come to the committee. We heard from every witness on both sides of the issue. I have met with individuals, groups and organizations. There was no indication at any time that they did not have any consultation.

All I can say is that this deal, with 81% going back to the industry, is far better than the agreement the member opposite in the previous government--

[The Acting Speaker, Royal Galipeau]

Resuming debate, the hon. member for Brant.

[Lloyd St. Amand, Liberal, Brant, ON]

Mr. Speaker, I am pleased to have an opportunity to speak to Bill C-24, a bill that has been described in various ways and in particular has been described as essentially the best deal under the circumstances.

This was definitely not the best deal under the circumstances for both parties, though it could forcefully and persuasively be suggested that it is truly the best deal in any and all circumstances for the United States. It is not the best deal for our Canadian industry and justifiably and not unfairly can be described as a capitulation on the part of our government to forces within the U.S. industry and within the U.S. government.

What is abundantly clear and beyond dispute is that the United States improperly imposed duties in excess of $5 billion, and the negotiated settlement will return to Canadian producers, whose hands are entirely clean, only 80¢ on every dollar or some $4 billion.

If we were negotiating with an impecunious party, receiving only 80¢ back when fully one dollar is owed may be considered a good deal, arguably the best deal under the circumstances. However, in spite of the fact that President Bush, due to providing tax cuts for the wealthiest and due further to his ill-advised war on Iraq, is running annual deficits of some $500 billion, with the result that the U.S. debt is in the trillions of dollars, to the best of my knowledge the fact remains that the United States is not an impoverished or impecunious party. Simply put, it has the means to pay back every dollar which is owed by it and this deal allows it to wiggle out of its obligations and, again, to repay only $4 billion of the more than $5.2 billion owed.

How that partial repayment to Canadians can be described as “the best deal in the circumstances” makes no logical sense. Of the $1.2 billion that will be kept--kept in my view improperly--by the Americans, fully $500 million will remain in the hands of the U.S. lumber industry and a further $500 million will remain in the hands of the U.S. government.

Our government, unhappily, has seen fit to abandon or to ignore all of the legal victories we have achieved under the rules of international trade. We have essentially given up $1.2 billion to the United States in exchange for, at best, 18 months of relative peace or relative harmony within the industry.

We should certainly be concerned about other industries, manufacturing or otherwise, which will then seek recourse under NAFTA. It is quite likely that other U.S. sectors will seek political alternatives in order to get around the clear rules of free trade. We have been bullied into this settlement by the Americans, and at some point the bully needs to be confronted, to be challenged, or we will be bullied again.

Canada's legal position was very strong. It was supported or confirmed by numerous decisions of international trade law tribunals and domestic courts, both here in Canada and also in the United States. It is most regrettable that the government has bullied Canadian industry with an ultimatum, saying that it must accept this deal, flawed as it is, or the government will abandon it. I am referring, of course, to the fact that loan guarantees, which were put in place before the last election, were taken off the table and the government threatened to abandon the industry if it chose to pursue its legal rights instead of accepting the deal.

The deal is flawed in various respects, including the fact that it directly abandons our long-held position that our softwood industry is not subsidized. The deal further creates an export tax, which is actually higher than U.S. duties. That is, the government intends to impose substantial crippling export duties on softwood, which will add billions to the government's general revenue stream within the next few years but will be punitive indeed for our producers.

The Liberal Party is committed to helping the softwood lumber industry. Our priority is to truly assist the industry on both a long and a short term basis, and not to be bullied by or capitulate to the American government or to the American industry.

We are proposing a supplementary aid package that would result in, first, the provision of $200 million over two years to enhance the forest industries' competitive position, to improve its environmental performance and to take advantage of the growing bioeconomy; second, the provision of $40 million over two years to improve the overall performance of the national forest innovative system; and third, the provision of $100 million over two years to support economic diversification and capacity building in those communities affected by job losses in the forest industry.