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

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, the riding of Saint-Maurice—Champlain, which I represent in this House, has been particularly affected by the softwood lumber dispute that has been going on for many years. Indeed, forestry operations are the cornerstone of economic development for many municipalities in my riding.

I am talking about the whole area surrounding the town of La Tuque, including obviously Parent, Trois-Rives, Saint-Roch-de-Mékinac and Saint-Joseph-de-Mékinac, Saint-Tite, Sainte-Thècle, Notre-Dame-de-Montauban, Saint-Séverin and Saint-Adelphe—all towns and villages where companies working in the softwood lumber industry are located. I say this to emphasize the extent to which Bill C-24 will have an impact on the future of those communities, on tens of thousands of workers, and the thousands of families that depend on the decisions that we make in this House.

Considering the great importance of this issue for all the people whom I am pledged to properly represent, I decided to carry out my own consultations this past July and August among the various companies affected by the provisions of the softwood lumber agreement that was reached on July 1, 2006, by the international trade ministers of Canada and the United States. I consulted companies such as Abitibi-Consolidated, in particular La Tuque Forestry Products, Shermag, Commonwealth Plywood, Gérard Crête et fils, as well as the Groupe Rémabec. These consultations brought out several points.

First, the softwood lumber industry in general and its companies have been greatly harmed by the countervailing duties imposed by the United States since 2002. Second, the federal government has not provided sufficient support, neither the previous Liberal government nor the Conservative government. There have been no loan guarantees despite all the promises made in recent years, which has further weakened the companies in their dealings with the Americans. Third, many bankruptcies could have been avoided if those loan guarantees had been provided. Fourth, we have won most of the court challenges but the Americans took no account of the decisions in our favour and continued litigation at another level. We won there as well but in the final analysis it was an unending cycle.

For all of these reasons, the lawyers representing many of these companies would have advised their firms not to accept the agreement. However, at the same time—I was told very clearly—the bankers for those same companies told them that they would have to accept this settlement because they were in a precarious financial situation. They desperately needed to quickly recover the funds paid out in countervailing duties, even though they amounted to only 81% of the total paid.

For all these reasons, and even though all the companies I talked to say that this is not necessarily a good agreement—they know it, and I will come back to that—they are asking me to vote for the agreement, because they are barely getting by and any delay could lead to more bankruptcies and more job losses in the short term.

In light of all these factors, I will therefore vote for this bill. But I still want to point out once again that these companies might have made quite a different choice if the Conservative and Liberal governments had supported them properly when they needed support. That would have levelled the playing field and shown the Americans that Quebec and Canadian companies were not in the fight alone.

Now, looking at all of Quebec—not just La Mauricie, as I have just done—I can say beyond all doubt that the situation is the same everywhere. The industry in Quebec is accepting this agreement reluctantly, because it can no longer defend itself. The softwood lumber dispute has weakened the economies of many areas of Quebec. The lack of support from the Liberals and Conservatives has caused many companies to close their doors. Others have declared bankruptcy. Thousands of jobs have been lost. The human drama resulting from these unfortunate situations could have been prevented if only those who had promised loan guarantees had kept their promises.

I said earlier that companies are accepting this bad deal reluctantly. In fact, they feel forced to accept it because, in many cases, they cannot wait any longer.

They are not agreeing gladly to leave so much money—$1 billion—in the Bush administration's coffers. They are not happy to be accepting an agreement that does nothing to resolve many problems that have plagued the industry for years: lack of investment in research and development, lack of adequate market diversification programs and lack of support for new equipment purchases.

Since this agreement does not solve all the problems, the government will have to make a commitment to put in place a series of measures to mitigate the negative effects caused by this long-lasting dispute in Quebec.

The Bloc Québécois therefore proposes several such measures, including an income support program for older people; an economic diversification program for the communities that depend on forest resources; an increase in the funding for the Canadian model forest program run by Forestry Canada; a special tax status for the 128,000 private woodlot owners in Quebec; special tax treatment for the $4.3 billion in countervailing and antidumping duties to be refunded by the American authorities so as to take account of the financial damage suffered by these companies; an acceleration in equipment amortization; a program to stimulate innovation in the forest industry and improve its productivity; a market diversification and lumber marketing program; and financial compensation for maintenance of the forest network. It is important for these measures to be put in place as of this fall.

There is another important element to consider in connection with BillC-24, and that is the monitoring of the much too rigid export quotas currently proposed. In fact the companies will be very limited in their use of unused quotas since the agreement provides that transfers will be limited to just two consecutive months.

In view of the cyclical nature of supply and demand in softwood lumber, such a provision does not at all meet the need for flexibility on the part of both the industry and consumers. This very rigid aspect of the agreement will have to be relaxed at meetings of the binational council.

In this regard, on June 13, in this House, the Minister of International Trade said to my colleague, the member for Joliette, that the agreement would not contain a rigid cap on export quotas.

I also wish to point out that the duration of the agreement is something else that weakens it, since one clause provides that, after just 18 months, the agreement may be terminated on six months’ advance notice.

In short, the agreement will ensure trade peace for three years and will help the industry in the short and medium term, but only in the current context, in which it is on life-support. We note also that the government has given up in this regard since, last summer, it was talking about a firm seven-year agreement.

Furthermore, we have before us a theoretical agreement because it cannot come into effect until all the cases currently before the courts are withdrawn. But if the cases brought before the courts by companies under section 11 of NAFTA are not withdrawn, it means that the agreement is not valid, even if the bill is approved. If this were to happen, the government would very quickly have to put in place a guaranteed loan program, as it has already promised by the way.

In conclusion, I specify that I will vote in favour of bill C-24, not because it is about a sound trade agreement—because in numerous respects, it is quite the opposite—but because the workers of Saint-Maurice—Champlain and the companies who employ them cannot afford to wait any longer.

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

Mr. Speaker, it is great to have the opportunity to speak to Bill C-24, the softwood lumber products export charge act, that implements the softwood lumber agreement between Canada and the United States. This agreement is very important to people in my constituency in Burnaby, B.C. and to people all over British Columbia and all over Canada, so I am very glad to stand today to discuss it.

The bottom line is that this is a bad deal. It is a bad deal for Burnaby. It is a bad deal for British Columbia and it is a bad deal for Canada.

We have heard from various corners of this House over the last few days the various rationalizations of this bad deal. From the corner over here where the Bloc sits, we have heard that it is an imperfect deal. When I heard some of the members from the Bloc speaking to this, I saw people who were bowed, who caved, and who did not feel comfortable about their own position. To say that it is imperfect is a huge understatement.

I heard from the government's corner, members from British Columbia who said that this was the best possible deal. That sure falls short of saying it was a good deal, but it also again belies this real discomfort with the kind of legislation that we are dealing with and it masks the fact that it is a bad deal. It is a bad deal, plain and simple, and it is a sellout of Canada.

This deal came at a time when Canada was on the verge of winning after a long legal process. We had won every single step of the way, holding the Americans to agreements they signed with Canada. What could be more important than to stand up for those agreements that had our signatures and their signatures on them?

The Tembec case, for instance, was subject to only one final appeal and the extraordinary challenges committee judgment would have come out in August. We were in a position to win both of them. There was no question about that. In fact, members do not have to believe me, they just need to listen to the testimony of the Canadian ambassador to Washington, Michael Wilson, who this summer pointed out before the Standing Committee on Foreign Affairs and International Trade that there were no appeals on the extraordinary challenges committee judgment and there is no appeal on the Tembec case after the ruling was made.

Rather than a victory, we have this deal. I have heard it said in this corner of the House that this is the government snatching defeat from the jaws of victory. How does this represent Canada at all? We were winning every step of the way and now we have this bad deal, and such a deal it is.

A key feature of this deal is that Canada has to give up $1 billion in illegally collected levies to the United States. All the way through the legal process, it was shown that these duties and levies were illegally collected and now with this deal, we give that $1 billion to the United States. This $1 billion was collected from Canadian companies, causing them incredible hardship. It is money that was also taken from Canadian workers, Canadian families and Canadian communities, and B.C. communities have been extremely hard hit through all of this.

Why, when Canada was on the verge of victory, would the Conservatives sign off on the important principles at stake and give the Americans $1 billion to boot? We have lost the principle about the importance of our trade agreements with the United States. We have lost the principle about using the mechanisms that hold us to account on those agreements. We have lost the argument about protecting our softwood lumber industry, and we give the Americans $1 billion to boot.

We have to consider too, how is that money going to be used? We know for a fact that $500 million of it, half of it, is going directly to the US Coalition for Fair Lumber Imports. Who are they? They are the very people who initiated and pursued the attack on the Canadian softwood lumber industry. They initiated all of this in the first place and now we are giving them $500 million. We know they ran out of money and now, thanks to the Conservatives, we are refilling their war chest, funding their litigation and lobbying for years to come.

Do we really think they will not use it? The question is when, not if, they are going to use it. Will it take two years? Will it take nine years? There is no question that they are going to use that money again against our industry.

Given that tendency, which industry is next? Now that we have caved on softwood lumber, we know that other industries are in the sights of the Americans. What aspect of our trade policy will they attack next? What protectionist is planning an assault on another Canadian industry? Which of our natural resources will they seek to scoop up next?

I think some of us in this corner believe that the Wheat Board is the next thing that is in the sight of the Americans. We know and we have heard from farmers all across Canada about the importance of the Wheat Board and the fact that they feel that it is the next thing in the sights of protectionist Americans. We have to stand up and fight for the Wheat Board. It has brought stability and a stable income to Canadian farmers.

It is ironic that we sit here today discussing an agreement that would give U.S. lobbyists a half a billion dollar fund for legal challenges to our industries two days after the Conservative government announced that it was cutting the Canadian court challenges program. This is a modest $5.6 million program that allowed the most vulnerable and disenfranchised in our society along with disadvantaged Canadians and minority groups the ability to challenge decisions and policies of the Canadian government.

We have seen in the past the importance of this for language rights in Canada, for equality rights for the gay and lesbian community, for citizenship rights, and for other minority rights in Canada. Now the program is gone.

It seems that the Conservatives cannot help our own people ensure their place in Canadian society, but we can give 80 times the money that was in the court challenges program to the Americans who want to circumvent the trade agreements that they have signed with Canada and want to ruin Canadian industry.

The Conservatives cut Canada's human rights related court challenges program and they fund a new half a billion dollar court challenges program for Americans to use against Canada. It is a shame. It does not make sense. If for no other reason this bill should not be supported on that basis.

Let us look at the other half a billion dollars that the Conservatives are allowing the Americans to keep. Where does it go? It goes directly to the White House for the use of President Bush. The official agreement says that this money will be used for:

(a) educational and charitable causes in timber-reliant communities;

(b) low-income housing and disaster relief;

(c) educational and public-interest projects addressing:

(i) forest management issues--

That sounds great.

Let us hear what Frances Russell said about this $450 million in the Winnipeg Free Press. She said:

Fully $450 million of the $1.3 billion in illegal duties the Americans will get to keep will grease re-election wheels for protectionist Republicans facing tough fights in upcoming midterm congressional elections. Canada's timber industry will thus be forced to subsidize an ongoing, illicit, attack on itself. All with the explicit consent of the Canadian government.

Well, the Conservatives may consent to this, the Bloc may consent to this, but New Democrats will not.

American negotiators have taken care of American workers. Let us say that even if the $450 million was used in a completely altruistic fashion and went as the agreement indicates, where is the support for Canadian companies, Canadian workers, and Canadian communities devastated by this agreement? It is not to be found in this deal.

There is $4 billion coming back to Canada, but there is no requirement for reinvestment in Canadian communities, reinvestment in the Canadian industry, and there is a fear that much of that money will go to fund investment by those same companies in investment in the United States. That is not acceptable either.

Even the Bloc members, who are concerned about the displacement of workers because of this crisis, are left to raise over and over again, pleading with the Conservatives to announce something that will assist them because it just is not in the deal. I do not think anyone needs a second reason to vote against Bill C-24, but there it is.

Two days ago I was in the House to hear my colleague, the member for Burnaby—New Westminster and our representative on the international trade committee, speak to this issue. He outlined many of the key problems with this deal. They include that the U.S. only has to allege non-compliance with Canada to get out of the deal.

In clause 10, the imposition of a 15% export tax as of October 1 amounts to double taxation above and beyond current anti-dumping and countervailing duties.

In clause 18 there is a new special punitive tax originally designed to hit those companies that are standing up for Canadian rights and responsibilities under NAFTA and who will choose to continue litigation, but now everyone faces that tax. When added to the export development charge, all companies will end up paying 37% and they will have to pay up front.

Clause 48 imposes a six year burden of record keeping on companies, increasing their administrative burden.

Clause 77 states that warrants are no longer needed to enter softwood businesses when issues of enforcement of the act are pursued. These are harsh measures against companies. I think they violate fundamental rights.

In clause 89, it is as blank cheque to the minister to demand payment from companies with no appeal mechanism. What happens in the event of a calculation problem? Too bad. There is no appeal.

In clause 95, directors of companies will now be individually responsible and there is no appeal process. It goes on and on.

Let me just finish by giving the final word for the Prime Minister. In the House on October 25, 2005, he said:

Most recently, the NAFTA extraordinary challenges panel ruled that there was no basis for these duties, but the United States has so far refused to accept the outcome and has asked Canada to negotiate a further settlement. Let me repeat what I have said before, and let me be as clear as I can. This is not a time for negotiation. It is a time for compliance.

At the time, we thought he meant the Americans had to comply with the court decisions. Unfortunately, it appears that he really meant that Canadians had to comply with the whims of the American industry and the whims of American protectionists.

It is just not acceptable. It is a bad deal. We must vote against the legislation.

The House resumed from September 26 consideration of the motion that Bill C-24, 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, be read the second time and referred to a committee, of the amendment and of the amendment to the amendment.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I have very much looked forward to my time to enter this debate. For a lot of members of this House, but now fewer and fewer of them, the ability to speak on the experience of watching what mills in their ridings have gone through in the last five to ten years is difficult. It is an extrapolation of the idea. It is an imagination of what it is for communities when they are faced with such trying times.

The reason that there are now fewer members of Parliament who have had that experience is that there are fewer mills across this country. In my region alone, not 30 years ago, there were 280 independently operated sawmills. The consolidation has left us with three or maybe four significant mills after all that time.

It is important for Canadians to understand the context of this deal. Many Canadians, particularly those living in urban ridings, may not have come to appreciate the magnitude of the destruction to the basis of our rural economy over the last decade. Not only have these illegal and punitive duties been slapped on by our American counterparts, but there has been huge devastation to the industry in an amalgamation process that has left small and medium operators completely out of the picture.

As I was saying to a colleague earlier, there are so many aspects to the so-called deal we are looking at today that it is amazing a sellout takes this many pages to be written. I would think that the words “100% total capitulation” would have taken a page to a page and half at most, but I suppose that a lot of legal text and jargon was necessary to keep government lawyers funded.

For far too long, the communities I represent have been suffering under a burden of neglect by the previous Liberal government. Just when things were as bad as they could be, a pine beetle epidemic has swept across our region and now is heading over the Rockies. Unfortunately, the rest of Canada may come to appreciate what it is to watch entire forests devastated.

We have a provincial Liberal government in Victoria that is interested only in massive raw log exports, which does little. For people who are not familiar with the industry, let me say we truly know that the best and greatest advantage and benefit to chopping down a tree is what is done with it once it hits the ground. We simply must manufacture and add value. We have talked about this. Every politician across this country who is dealing with primary resources in any way, shape or form says that we need to transform our economy to add further value to the resources we are endowed with, to the endowment this country has.

Yet the government is forcing industry, the provinces and various players to sign on to a deal that works in a direction that is opposite to the investment needed to actually add value to that wood. In cahoots with the Liberal government in British Columbia, it continues to raise the number and the amount of raw log exports that leave our region. When those logs leave, so too do the jobs.

For small communities in the hinterlands of Canada, there is a struggle to understand why so little attention is paid to them. These communities understand that they might not have the great subway systems, huge art galleries, and the scatterings and smatterings of MPs around every street corner that Toronto, Vancouver and Montreal do, but they cannot understand why, after having contributed so much to the wealth of this nation, they are given so little due and so little attention.

Let us get to the deal itself, for while it is complex, the reading is fine and the conclusions are disturbing. Bill C-24 continues the unfortunate legacy of sell-offs and sellouts that Conservative governments have left Canada with.

The government initially went to the table for the FTA and then NAFTA. In that negotiation, the Americans wanted access to our energy. That was one of the clear negotiating pieces of the American interests. We know this because the negotiators who were at that table have since written books, essays and discourses on what it was like to be there.

I remember one chief American negotiator calling it not so much a negotiation as a capitulation and a dictation from the American side. The Americans were dictating to us. They wanted access to Canada's vast energy resources. Energy resources were clearly seen as something important for the growth of the U.S. economy, but Canada was reluctant, knowing how important these energy resources were for our own growth. The trade-off became that the Americans would offer us a dispute resolution panel because they understood that the two negotiating partners were not in balance, that one was clearly economically stronger than the other, with the Americans having a larger, more powerful and protected market.

A dispute resolution panel was established to allow us to settle our disputes and now we have a deal that takes that dispute resolution panel and tosses it out the window. It simply says that when we win, when we are right, in fact we lose and we are wrong. All it takes is a certain amount of political pressure and opportunism by a government for us to get the short end of the stick one more time.

Oftentimes the government will try to talk about certainty and that the industry is looking for certainty. The investments that the softwood industry has to make are large and expensive and can only be paid off over a certain amount of time. Certainty for their products is important and yet, having just cut a cheque for $450 million to put into the war chest of the lobbyists who first launched this agreement against us, leaving over $400 million in the coffers of the very same people who are fighting and illegally pushing the U.S. Congress and Senate to put tariffs on our own duties, we have ensured anything but certainty. We have ensured that this fight will continue another day, because what else is one going to do with $450 million, if one is a lobbyist for the U.S. softwood industry, other than go after the Canadian industry and ensure that a fair fight cannot be fought?

We have also left half a billion dollars for President Bush's electoral campaign in November. I am not sure if such a sizeable cheque has ever been written by a Canadian government to assist a Republican president, but certainly the Americans are thankful. This is money well needed by an administration in the United States that is on the verge of bankrupting its own nation. It is so-called conservative economics at play once again.

What about the money returning to Canada? I have spoken with some of the CEOs who have been advocating for this deal and I asked them what encouragement the Canadian government gave them to take the 80% of the money that will be returned and actually invest it in Canada. Their reply was that the government had given them no encouragement to invest a single dollar in Canada.

While the money is supposed to be returning, many of these companies involved in this negotiation, due to the consolidation that has happened in this industry for the last decade or more, work both sides of the border. They have plants and operations on both sides of the border. Canadians need to ask themselves, if a company has mills both in Washington state and in British Columbia, why would it process a stick of wood in B.C. if it can move it across the border as a raw log and avoid the punitive tariff that our own government is placing upon a processed piece of timber or product. Why would anyone invest a nickel in an operation where they eventually will be punished for processing that wood?

It has created a disincentive for Canadian and multinational firms that operate in Canada and actually invest in Canada and create the types of jobs that we all hope for, for all these communities that have been through so much over the last number of years.

As time runs down, it is important to talk about the producers who are actually affected. I am thinking of a sawmill in one of my communities, which is Terrace, that has been through much. It is struggling to get reasonable access to timber to provide 60 or 120 jobs. For a community of 10,000 people that has struggled so much with an absolutely disastrous housing market and little space and room for companies to invest, this was important. They are looking at this deal as a small producer and wondering where they are in this.

A second important piece of what we have capitulated here is a basic notion of sovereignty, about how it is that we manage the forestry sector. Every member of Parliament will know that it is now provincial jurisdiction. The provinces decide how and where to cut wood and under what stipulations. However, in Article XVIII of the agreement, neither party shall take action that circumvents or offsets the commitments set out in this agreement and specifically any change in a provincial timber pricing or forest management system as it existed on April 27, 2006.

It is black and white. Washington has the ability to dictate terms over the provincial government's own jurisdiction, which our own federal government does not have.

What is important is that the system and the sellout that has been signed determines the cap by region and once that cap is broken then the duties start to increase and the tariffs and penalties go up. When a company chooses to flood any particular region with wood, it will punish a company that chooses not to. This is collectivism gone wrong. It is insane. How can we punish a company down the road that is actually abiding by the law when it is a larger company, which is what it will be, that wishes to glut the market?

This is a bad deal for communities and a bad deal for Canada.

[Brent St. Denis, Liberal, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, it is an honour for me to participate with my colleagues in the debate on Bill C-24, a bill which has very steep consequences for many forest communities across the country.

In my large riding of Algoma—Manitoulin—Kapuskasing, the forest industry is located along highway 11, whether they are sawmills, pulp and paper mills or panel board plants in Hearst, Kapuskasing or Smooth Rock Falls or workers who live in the small villages in between. On highway 17, there is a pulp and paper plant in Espanola, a sawmill in Nairn or Thessalon, forestry workers and logging companies between Thessalon and Espanola, including Elliot Lake, Iron Bridge and Blind River.

These are communities like others across the country that are facing very difficult times, as some of my colleagues have talked about, with energy costs, exchange rates, even government regulation, and the competing demands for the forests and competition from other countries where forest fibres are very inexpensive. All these things and other factors combine to make it very difficult to operate, to be a worker, small business or contractor in the forestry sector. That is why it has been a real challenge for me to try to understand why the government came up with the deal that it did with the U.S.

The Liberals were in office until January for some 12 and a half years and were actually making considerable progress on that file. It is my understanding that in November, prior to the election being called with the help of the Bloc and NDP supporting the Conservatives, it was possible to have an agreement with the U.S. Whether it was better or worse I am not sure, but a deal was possible at that time and would not have been satisfactory to our communities and to the industry, so the government declined to proceed.

Instead, it took the advice of stakeholders. When people were asked if they wanted to settle with the U.S. industry, if they wanted to compromise the gains they had made, if they wanted to give away progress under the free trade agreements or, rather, pursue their legal rights in the courts, under the NAFTA trade panels or the WTO and negotiate, almost exclusively stakeholders, workers and companies said no. They did not want to negotiate, give away what they had gained in their efforts to find softwood trade peace with the U.S. They wanted a solution which was based in the law and due process.

We were getting there and in fact decisions, even since the government came to office, have proven the correctness of that position to follow due process and get what is right under the law and according to trade agreements. The government, sadly, has rushed to find something maybe to make the Americans happy.

I do not want to be too cynical, so I will not go beyond saying that much, but in a rush to find a solution, any solution it seemed, it was prepared to give away all the progress that was made. That is among the many difficulties in this agreement and one of the hardest things to take. Why give away so much progress?

Let me comment further by saying that I have talked to a lot of people in my riding. One person was Guy Bourgouin, president of the Steelworkers local 12995 in Kapuskasing, who wrote in a letter to me in late August:

However, despite this continuing success,--

The success I referred to:

--Canada appears to have capitulated to American demands. Under the proposed deal we are still faced with restrictions on our access to the US market in the form of a tax and/or quota, we are agreeing to allow American oversight of our provincial forest policies, and we are leaving a billion dollars of illegally collected tariffs south of the border. To top it all off, there is nothing in the agreement to ensure the stability of employment in the forest sector or the ongoing viability of forest dependent communities.

Guy Bourguoin in Kapuskasing, president of that local, has summarized it very well. As well, I have talked to René Fontaine, the former Liberal cabinet minister in Ontario, who is so passionate about our forestry sector needing a good deal with the Americans, not this bad deal.

When we consider this deal, if there is one thing among the many measures that we would put at the top of the list of things required, it is stability, at least stability. It is the idea that the deal is bad, but if businesses at least could count on the bad deal for seven to nine years, maybe they could survive. The fact is that this deal can be cancelled by either side, Canada or the U.S., after 23 months. That is not stability. That is not what the industry needs as a top priority.

Yes, we have heard about some U.S. assurances in a letter, assurances that the U.S. will not just casually cancel a deal after roughly two years. What does a commitment like that mean? Our friends to the south went to war in Iraq claiming weapons of mass destruction. They had no evidence for that. So how do we accept some assurance, based on the letter, that they will not cancel this deal after two years? I am sorry with respect to our neighbours to the south who are our friends and our allies, but as neighbours we do expect to be treated fairly. Sadly, we are not.

Let me pick out a few other points that Guy Bourgouin raised in his letter. Let us talk about the over $1 billion that has been left south of the border and which, as some of my colleagues have already pointed out, is being shared. Half of it will go to the industry.

We can be sure that at least some of it will find its way into a legal trust fund for some future challenge once this deal unravels. Those who challenge this deal will be well prepared when it comes to paying for lawyers, court fees, research and so on, whereas our industry has been told by the new government, so new that it is possibly too inexperienced to really understand when it has negotiated a bad deal, that our industry will not be prepared financially to fight back when the other side has a part or all of half a billion dollars to fight with.

The other half-billion is going to be administered through the White House, ostensibly delivering programs, maybe housing, and promoting the use of lumber.

How many among us would actually believe that any of that promotion is going to be of much use to the Canadian industry? I doubt very much that any of it will be of benefit. We are told that the Prime Minister's Office will be consulted on the programs. I will wait to learn if that is actually the case, but I doubt it very much.

There are mid-term elections coming up in the U.S. I suspect that the money will find its way into districts where the Republicans need some help. There is no interest on the side of the U.S. in using that money to help Canadian industry produce lumber here and sell it in the U.S.

I wonder if the stability of this deal depends upon one side or the other determining after two years whether it should abrogate the deal or not. Who is going to make the decision to abrogate the deal? It is not going to be this side. It is going to be the U.S. side. Our side wants stability. Our industry members are fair traders and they are not subsidized.

My colleague from Etobicoke North mentioned the natural advantage. Do we challenge the U.S. because it has more sunlight in a year due to the climate? No, that is its natural advantage.

We have a natural advantage that we are proud of. We have great workers in the industry and great communities, and we deserve a much better deal than we have been shown here.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Speaker, today I will speak about the softwood lumber agreement, an agreement signed by Ottawa and Washington.

The agreement reached by the Canadian and American governments is not the agreement of the century. I am certain that several MPs have had the opportunity in the past few months to meet members of the forestry industry who told them that an agreement had to be signed because they were on the brink of disaster. What must be understood is that the industry had no choice. The agreement concluded on July 1 was not a good agreement, but the forestry industry could not afford to wait any longer.

If the Bloc Québécois supports this agreement, it is because it is acting responsibly towards the thousands of sawmill workers. However, as a result of consultations in the past few months with the industry concerned, we have come to realize that the structural crisis of the softwood lumber industry cannot be remedied by the softwood lumber agreement alone.

Both the Liberal and the Conservative governments caused incredible harm by not supporting the softwood lumber industry in recent years. No company can emerge from a four-year trade crisis and hope that all will return to normal. It is even worse when an entire sector of the economy is in trouble.

Over the past four years, a number of companies working in the forest industry have closed their doors, and this deal does nothing to ensure the sustainability and survival of the industry. The industry is still in bad shape, so it is up to the government to implement a series of measures to help forestry companies that are facing serious difficulties.

During the dispute, that is, since 2002, 17,000 jobs were lost in Quebec. As you may know, in Quebec, forestry is the main employer in 260 communities. In 134 of them, 100% of jobs are in forestry. Consequently, it is important to ensure the viability of this industry.

Quebec is the second-largest exporter of softwood lumber to the United States. Fifty per cent of the province's lumber is exported south of the border. Now that important measures have been implemented with respect to softwood lumber, particularly with respect to quotas, a lot of companies have begun to rationalize their workforce in light of the agreement. I say “quotas” because it seems that Quebec will choose one of two options—either option A, a tax percentage, or option B, fixed quotas.

This is therefore a worrisome situation for thousands of workers. Given the growing supply of wood from China and new conditions in the industry, many companies will have to lay a lot of people off over the next few months.

Over the past few years, this crisis has had a dramatic impact on some communities in my riding, Chicoutimi—Le Fjord. One of the largest forestry cooperatives in Quebec, located in Laterrière, went bankrupt in December 2004. The bankruptcy indirectly impacted on many sawmills in Saguenay—Lac-Saint-Jean. Some shut down for a few weeks, while others closed their doors for good. That is what happened with the Produits forestiers Saguenay sawmill in La Baie. In March, it decided to close the mill a year earlier than planned for economic reasons.

In addition, since the softwood lumber agreement was reached July 1, several sawmills in Saguenay—Lac-Saint-Jean have continued to have financial difficulties.

To cite only a few examples, in early September, the Bowater mill at Saint-Félicien was forced to lay off 140 employees for an indefinite period. As well, one million dollars are needed to get the Coopérative forestière de Girardville back on its feet. For its part, the PFS mill at Petit-Saguenay has just reopened its doors after being closed for a month, two weeks more than initially planned. In addition, because of current market difficulties, the mill has decided to do away with a second shift. These are just some examples. However, a great many mills, such as the PH Lemay mill and the Péribonka mill have been affected by the crisis during the past few months.

The softwood lumber crisis has caused the loss of 3,000 jobs—yes, I said 3,000 direct jobs—in Saguenay—Lac-Saint-Jean, and the situation is getting worse.

I would simply like to give one last example to illustrate the general situation. Three weeks ago, the sawmills at Saint-Félicien and Dolbeau-Mistassini shut down for an indefinite period in order to reduce financial losses. As a result, the company was forced to lay off some 350 employees of the two mills. One of the spokesmen for the mills made the following comment, which sums up the situation very well:

We are going through an unprecedented crisis and it is difficult to meet the conditions for profitability. Like all the other forestry companies, we have no choice but to reorganize our activities or mills in order to remain competitive.

That comment sums up the situation concerning the softwood lumber crisis.

The root cause of the problem is still there. The situation will continue to get worse if measures are not introduced quickly. The problem is aggravated in the regions outside the large centres and we cannot close our eyes to this problem.

There are many reasons why the socio-economic problems are worse in the regions. The main reason is that the forest industry plays such a major role in many communities. For workers in the regions, the forestry crisis, combined with cuts to employment insurance in recent years, has worsened the economic situation. Many employees affected by this dispute have been left without income and have been forced to leave the region.

Between 1994 and 2004, cuts to employment insurance resulted in a direct and indirect loss of $875 million for the entire Saguenay—Lac-Saint-Jean region. This was due to the numerous cuts in the employment insurance program.

When we look at data for my riding of Chicoutimi—Le Fjord in particular, based on the cuts to employment insurance in the past few years, we can say that the population was directly denied some $221 million during those years.

We are proposing other measures to this government, namely the implementation of POWA, an income support program for workers who were part of massive layoffs.

In closing, I also want to point out that Bill C-24 does not resolve the structural problems of the market. In the coming months, measures will have to be implemented to prevent the forestry sector from collapsing. It is important that all stakeholders take action to maintain and consolidate the forest industry because many jobs in the resource regions depend on this sector of activity.

To that end, the Lac-Saint-Jean-Est RCM passed a resolution on September 19. I will close by urging the federal government to provide more support to the forest industry. I hope the government will implement measures that will help forestry workers and the industry.

The House resumed consideration of the motion that Bill C-24, 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, be read the second time and referred to a committee, of the amendment and of the amendment to the amendment.

[The Acting Speaker, Conservative, Royal Galipeau]

It is unfortunate that I must interrupt the hon. member but the time allotted for government orders has now expired. When we next return to the debate on Bill C-24 there will be four minutes left for the member.

[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.

[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.

[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.

[The Acting Speaker, Conservative, 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.

[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.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I am pleased to speak today about Bill C-24, Softwood Lumber Products Export Charge Act, 2006.

The purpose of the bill is to give effect to the softwood lumber agreement that the Conservative minority government and the Bush administration reached on July 1. The bill sets terms and conditions for the repayment of countervailing and anti-dumping duties to companies. It also sets terms and conditions for the return to Washington of the billion dollars that Quebec and Canadian companies have to leave on the table.

Lastly, this legislation sets trade barriers that will govern the softwood lumber trade between Canada and the United States, including the export tax and export permits, and authorizes the payment of export tax revenue to the provinces.

As some of my colleagues have already stated, the Bloc Québécois will vote in favour of Bill C-24, but without enthusiasm.

It is important to remember that the industry stated nearly unanimously that this agreement was not satisfactory. However, given the catastrophic situation in which the Quebec and Canadian forestry industry finds itself, the industry concluded that it was better to accept this bad deal than to continue fighting in the courts.

The unreasonable attitude of the Conservative minority government, in its refusal to listen and support the interests of our industry, certainly contributed to weakening the industry and forcing it to accept this agreement.

Unlike the Conservatives, we consulted the industries and the workers in Quebec's forestry sector. We came to the conclusion that we had no choice but to accept this agreement because this industry had its back to the wall and could not keep up the fight. With no support from this government and a number of its businesses in serious financial difficulty, the industry and representatives of the forestry workers reluctantly chose to accept this agreement and thereby recoup some of the countervailing duties and anti-dumping charges it paid to Washington.

Let us not forget that it was our industries' money that was paid out and is being given back. They asked us to support this agreement and we will do so. To do otherwise would have been irresponsible of the Bloc Québécois and disrespectful to our industries' requests.

When we look at how the negotiations have unfolded since it was announced on July 1 that a deal had been reached, we can understand how the Conservative government's attitude toward the forestry industry and workers leaves a bad taste.

On July 1, 2006, when the international trade ministers from Canada and the United States initialled the text of the agreement to indicate that their governments approved it, something absolutely unbelievable happened. The Conservative government had not even consulted the industry before initialling the text of the final agreement. The industry ended up with an agreement signed by a government that had not even checked whether the industry was happy with it.

We quickly noticed, when the Standing Committee on International Trade met this summer, to what extent a number of Quebec's and Canada's forestry industries and unions were unhappy with the softwood lumber agreement reached between the Conservative government and the Bush administration. It is not surprising that several of them considered this agreement incomplete and asked for improvements to it.

Unfortunately, this government did not see the importance of the demands and needs being expressed, and decided not to provide them with help or support.

Instead of giving the industry ultimatums, and stubbornly imposing a botched agreement, the Conservative government should have endorsed the industry's requests for improvement and thrown all its weight into efforts to obtain those improvements.

Instead, this government decided to back the industry into a corner and force it to accept this agreement with the Bush administration, the Conservative Party's new best friend. It is obvious, I think, that the government was much more sensitive to other interests and more anxious to please them than to serve the interests of our industries and workers. Yet the improvements requested by our forest industries and unions were perfectly legitimate and deserved to be considered.

I would like to talk briefly about some of the improvements requested in particular by the Quebec Forest Industry Council. One of the council’s concerns had to do with making the export charges and quotas more flexible, that is to say, Option B. The industry in Quebec was quite rightly concerned that the agreement provided for monthly quotas—one-twelfth of the annual quota. In case of major shipments, the restrictions on exceeding their monthly quotas were so tight that companies might not be able to honour their contract or even reach their full annual quota.

It is important to remember that the construction industry is cyclical and lumber deliveries can easily vary considerably from month to month. Unfortunately, this issue was not resolved and the government has not made any particular commitments. At best, the binational council that is supposed to oversee the agreement will deal with this. The Bloc Québécois hopes that the government will attempt to make the monthly export ceilings more flexible through the binational council.

The Forest Industry Council raised other concerns about the termination clause. The agreement is theoretically for seven years and can be extended for another two years if both countries agree. At least that is what the agreement in principle said. To the surprise of many, however, the final text says that Washington can end the agreement at any time after it has been in effect for 18 months by providing six months' notice, as the hon. member for Shefford pointed out in his last question.

If the agreement is cancelled, the U.S. government cannot institute procedures to impose antidumping and countervailing duties for a period of one year. This means that the industry is assured of only three years of trade peace. We are far from the lasting trade peace claimed by the minority Conservative government. It is easy to see why the industry was so concerned about this provision in view of the fact that it is leaving a billion dollars on the table in order to obtain lasting peace. But the final agreement does not guarantee it.

It is very apparent, therefore, that the concerns raised by the Quebec Forest Industry Council in particular were perfectly legitimate and deserved to be taken seriously by the government.

This morning, the Quebec Forest Industry Council also raised the problem of Asian competition that is going to challenge our softwood lumber industry and hurt our companies.

I have spoken about the fact that the attitude of the Conservative government had left a bitter taste with many people. I listened with interest to the hon. members from the Liberal Party and I must confess that their remarks also left me puzzled. From the start of this dispute in 2002, the Bloc Québécois called for the introduction of a support program that provided loan guarantees to enable companies to avoid bankruptcy. For more than four years, the Liberal government, like the Conservatives now, refused to do so. During the last election campaign however the Conservatives made a promise to issue loan guarantees for companies.

I imagine that the Liberals, now that they are in opposition, have begun to see all the damage they caused because of their lack of political will, while the Conservatives have probably forgotten the promises they made during the election campaign.

For those of us in the Bloc Québécois, only sovereignty will enable us to be masters of our own economy.

In addition, our plan also proposed measures for greater flexibility of employment insurance to facilitate access and extend the benefit period to ensure income for workers affected by this crisis. Our plan offered support for transition programs to encourage new directions in the Quebec forest industry.

Finally, the Bloc Québécois called for Ottawa to assume the legal costs of the companies who were victims of this legal harassment by the United States. Those costs to date have exceeded $350 million. It has never been proven that our softwood lumber was subsidized or that we engaged in dumping.

We are convinced that these measures would have enabled those workers and industries to survive this dispute. If the Bloc Québécois supports the agreement, it is not because we believe it is a good one. It is only because the industry no longer has any choice and has asked us to support this agreement.

The government—as we saw this morning in the media—has a surplus of $13 billion, which will be applied against the debt. Not one cent will be spent to support our industries, either in textiles, furniture or softwood lumber. The government is too far removed from the needs of the people.

Between 2002 and 2005, more than 10,000 Quebec workers were affected, sometimes permanently. Recently, the situation has again deteriorated.

According to data from the Quebec Forest Industry Council, no fewer than 7,000 jobs have been lost in the forestry and furniture industries since April 2005, while another 5,000 jobs continue to be threatened. Business failures have multiplied and those companies that have survived are in serious financial difficulty.

Considering these figures and the attitude of the federal government, we understand why the industry had no other choice and has decided to stop fighting in the courts and to accept this agreement.

Contrary to what the Conservatives say, the Bloc Québécois is convinced that even though the bill must be adopted, the government cannot claim to have solved the problems that the industry is facing.

The industry is having structural problems and the softwood lumber agreement does not solve them. Moreover, the president of the FTQ, Henri Massé, has clearly indicated that, in view of this agreement, the Conservatives now have an obligation to take real action to help the industry get through the major crisis it has been going through for many years.

This is why the Bloc Québécois wants the federal government—this fall—to present a series of measures to help the forest industry, which is facing serious difficulties at the very time it is emerging from a lengthy trade dispute in a weakened state. The measures would also support the furniture industry before it gets caught up in a catastrophe it cannot get out of—like the textile industry.

In particular, these measures include an income support program for older workers. Such a program would be designed for workers aged 55 who are unable to re-enter the work force and were victims of mass layoffs. It will bridge the period between employment insurance and pension for numerous people who have been victims of the softwood lumber crisis.

Also, the measures we are putting forward contain proposals directed towards the communities.

We are proposing an increase in the community economic adjustment initiative for forest-dependent communities. We believe, however, that such funds should be transferred to the Government of Quebec to avoid overlapping and so that the program is better adapted to Quebec’s needs and so that it is, of course, closer to these needs. We have seen how removed Ottawa is from the industries’ needs.

This program should be accompanied by an increase in the funding for Canada's Model Forest Program run by the Canadian Forest Service and special tax status for the 128,000 owners of private woodlots in Quebec.

Finally, we are proposing a series of measures to help businesses. These measures include a special tax treatment for the $4.3 billion in countervailing and anti-dumping duties that will be refunded by the American authorities to take into account the damage suffered by the companies; a program to stimulate innovation within the forest industry and improve its productivity; and policies designed to support diversification of the markets and marketing of wood.

Some of these measures will become pointless if they are not presented this year and if they are not supported by the minority Conservative government and by all representatives in this House.

As everyone knows, this year is a decisive one for the forest industry. Let us hope that this time the government will pay attention and will take advantage of its economic and fiscal update to announce these measures.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of International Cooperation]

Mr. Speaker, it is a great pleasure to rise in the House today to talk about Bill C-24, which will implement Canada's obligations under the softwood lumber agreement. I ask all members of the House to recognize and support this bill.

Clearly, this softwood lumber agreement is good for industry, good for lumber communities and good for Canada. The previous member spoke about examples within his riding that speak volumes to how good a deal this is and how it will support local industry. It eliminates punitive U.S. duties. It ends costly litigation which has gone on for far too long.

I have listened to many members in the House during this debate talk about how close we were to an agreement, that with one more judge's ruling we would have it beat. My argument to that is that I have met lawyers whose entire careers have been based on negotiating softwood lumber.

Under this agreement the U.S. will immediately dismiss all trade actions against our companies. It takes our lumber producers out of the courts and puts them back where they belong, in communities across this country, growing their enterprises and contributing to Canada's economy.

It provides stability for an industry hit hard by years of trade action and drawn out litigation. For the next seven to nine years no border measures will be imposed when lumber prices are above $355 per thousand board feet.

When prices drop below this threshold, the agreement gives provinces the flexibility to choose the border measures most beneficial to their economic situation. I should add that all export charge revenues collected by the Government of Canada through these border measures will stay in Canada, in direct contrast to what these lumber companies have been facing up until now.

The agreement returns more than $4.4 billion U.S., a significant infusion of capital for the lumber industry and the workers and communities that rely on it. We have even developed a unique deposits mechanism to ensure that lumber companies receive their money as quickly as possible, within four to eight weeks of filling out and returning the necessary legal and administrative documents after the agreement enters into force.

This is an agreement to be proud of. It is a practical and flexible agreement that ends this long-standing dispute on terms that are highly favourable to Canada. Moreover, it directly responds to the specific issues and concerns raised by industry and the provinces. For instance, it recognizes provincial market based reforms and preserves provincial authority to manage their forest resources as they see fit.

It also excludes from border measures the Atlantic provinces and the territories and 32 companies, including Quebec border mills that were found by the U.S. Department of Commerce not to be subsidized. It ensures that independent lumber remanufacturers do not have to pay an export charge on the value added component of their products. It establishes a process for Canada and the U.S., in consultation with the provinces, to determine the steps regions can take to qualify for exemption from the border measures.

I am pleased to say that the agreement has the support of two national governments and all the key lumber producing provinces, as well as an overwhelming majority of industry players. The next step belongs to parliamentarians.

Bill C-24 will implement Canada's commitments under this agreement. In particular, it provides authority to impose export charges when lumber prices are below $355 per thousand board feet and it gives provinces the flexibility they need to choose the right border option for their economic situation.

The bill also seeks to amend parts of the Export and Import Permits Act to bring into operation the mechanisms we need to meet our commitments under the agreement.

I am happy to be part of a government that has done, in short order, what no other government could: put an end to this dispute and start directing our full attention to building a stronger, more competitive North America. I would ask all members of the House to join me in supporting this bill and putting this dispute behind us.