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

[Maxime Bernier, Conservative, Minister of Industry]

Mr. Speaker, I would like to inform you that I am going to share my time with the hon. member for Simcoe—Grey.

It is my pleasure to rise today in the House on Bill C-24. I want to ask all the hon. members in the House to join me in supporting this bill. Why? As most of my colleagues have pointed out here in the House today, the softwood lumber agreement benefits the industry, consumers and Canada as a whole. It is a practical, flexible agreement that puts an end to the trade disputes that have been going on for years and provides the softwood lumber industry with access to the U.S. market on very favourable terms.

The agreement eliminates the punitive American duties, puts an end to costly legal proceedings, and gets our softwood lumber producers out of the courts. Since 2002, this dispute has cost more than $35 million in fees that the Government of Canada has paid to help the softwood lumber industry fight this battle.

Now we have an agreement that will bring stability and recover more than $5 billion in duties that have been levied. I am proud to be part of a government that has found a solution that will give Canada and the United States a future opportunity to make North America more competitive in this sector.

I would like to explain briefly today how the concerns that the industry expressed during our consultations in the summer have been met in the agreement. We had the good fortune of being able to build on a strong Canadian position developed with the cooperation and contributions of the provinces and the industry. Ultimately, an agreement was reached of which all Canadians can be proud.

How were the concerns of the industry and the provinces taken into account? From the outset, they wanted the government to negotiate an agreement that would ensure repayment of the duties that had been collected. The industry asked the government and me personally, from the moment the new government came to power, to negotiate a real agreement with the Americans.

This objective has been achieved. Under the agreement, more than $5 billion Canadian will be returned to the industry by the end of this session. They asked that their deposits be returned quickly. They will be. Why? Because we developed a unique mechanism through Export Development Canada that will ensure that the money is repaid to our exporters in the weeks after the agreement comes into effect, that is to say, in the first few weeks after next October 1. This process will be much faster than the usual process, which was the American process under which people could have waited as long as two and a half years to get their money back if we had not included a quick repayment process in the agreement.

The government also managed to get an exemption from the border measures for the Atlantic provinces and the territories, as well as 32 companies including sawmills in Quebec, sawmills close to the border, that the U.S. Commerce Department did not consider subsidized. Among these sawmills are several in my own riding of Beauce.

The provinces and the industry have also called for flexibility in the regulations related to export quotas in order to respond to the needs of their American customers. As a result, our new government negotiated provisions that allow companies to carry forward up to 12% of the volume of their export quota from the previous month to the following month.

The provinces and the industry also asked for an agreement that ensures stability and predictability. I am pleased to tell you that this objective has been achieved. The agreement covers a period of seven years or up to nine years, if the parties wish to extend the agreement by an additional two years. During this time, the United States cannot intervene in the courts and it cannot apply other trade remedies. This will provide Canadian companies with a significant period of stability in which to invest in their businesses and to become more competitive. They asked for an agreement that gave the provinces the latitude necessary to manage their forest. We achieved that objective. We have negotiated anti-circumvention provisions that fully protect provincial forestry management policies, including complete exemption for the new market-based pricing plan in British Columbia.

This is an initiative that promotes management of the environment. It provides for payments to respond to the claims of First Nations and measures that are specific to the forest industry.

Following a meeting on August 9 with CEOs of the forest industry, additional clarification has been made to the agreement. Specifically, maintenance of the status quo in terms of American trade remedies for a period of 12 months at the end of the agreement. The cancellation notice period has also been adjusted to provide for a 12-month status quo period in the event that the United States requests a quick cancellation of the agreement.

We are pleased to announce that the United States has provided a parallel letter to this agreement, and these clarifications respond to the concerns of the government and the industry. This letter confirms that the Canadian industry will be well protected and that the duration of the agreement will be a minimum of seven years. All of these elements of the agreement respond directly to the concerns raised by the provinces and the industry during the negotiations.

As a consequence, I am pleased to say that the agreement enjoys broad support, both in Quebec and all across Canada. More than 90% of the industry is in favour of the agreement and, in Quebec, a major union, the FTQ, supports the agreement.

Given that level of approval, I am proud to lend my support to this agreement and to C-24, which will make the legislative amendments necessary to bring the agreement into force. I ask all honourable members to join with me in supporting this bill and to join us in our mission of making Canada a more competitive and more prosperous country.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, three minutes is not a lot of time. I have reviewed the botched legislation, Bill C-24, and the mistakes that the government has made on that bill.

I would like to come back to the principle of the softwood sellout itself. Then, before I sit down, I will be offering an amendment to the amendment offered by the member for Beauséjour.

The following issues are issues that are addressed in the softwood selloff. First, and this is one of the dozens of reasons why members of this House should be voting against it, it is based on the falsehood that Canadian softwood lumber is subsidized. We are erasing four and a half years of legal victories. If we enact this legislation, any industry, not only our softwood industry, will have to start over to re-establish that jurisprudence.

The Americans are able through this mechanism to erase all of our legal victories when we are two legal hurdles short of winning a final and complete victory that establishes the jurisprudence. The sellout gives away $500 million to the American coalition. It has already indicated it is going to use that legally to attack us again. It was dry. It had no money left. It could not continue litigation, despite the government's incredibly absurd protestations to the contrary. Now we are giving them half a billion bucks to come at us again. We might as well have a “kick me” sign on the back of every single Conservative MP who votes for this. It is absolutely absurd.

Through this sellout, we are giving $450 million to the Bush administration. Through testimony this summer we found out this is unprecedented since the Richard Nixon committee to re-elect the president that the White House has had $450 million to dispense to grease the political wheels of the Republican Party. Obviously, that does not concern Conservative MPs. It does concern Canadians. This sellout can be cancelled at any time. The Americans can keep the billion dollars and run.

As we have pointed out consistently throughout the summer, clause 34 allows the Americans simply to allege non-compliance by Canada and cancel at any time. I could go on and on.

The principle is not only are we selling out our softwood industry but we are selling out any other Canadian industry that wants to use dispute settlement. The Americans clearly, two weeks ago, signalled that they are coming at us. They see that big “kick me” sign on the back of Conservative MPs and they have said they are going to appeal the notorious Byrd amendment. They are going to appeal it because this government has shown such incredible weakness.

I will move the subamendment. I move:

And that the amendment be amended by adding immediately after the end of the amendment:

specifically because it fails to immediately provide loan guarantees to softwood companies, because it fails to unsuspend outstanding litigation which is almost concluded and which Canada stands to win, and because it punishes companies by imposing questionable double taxation, a provision which was not in the agreement signed by the Minister of International Trade.

We will continue to fight this because this is bad for Canada, and this is bad for softwood and any other 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, and of the amendment.

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, and of the amendment.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, quite frankly, I was not expecting a debate on the amendment proposed by the hon. member for Beauséjour. I do not have the French version of that amendment. Nevertheless, what I would like to say applies to this debate.

As we know, on April 27, 2006, Canada and the United States announced that a framework agreement had been reached to resolve the softwood lumber dispute. The official text of the agreement, which had been initialed by the two countries on July 1, 2006, and signed on September 12, 2006, gave rise to Bill C-24. I will spare Parliament the official title of the bill, since it lists practically every aspect of the bill. I will proceed in a simpler fashion. It is known as the Softwood Lumber Products Export Charge Act, 2006.

I would like to briefly remind the House that we have been selling softwood lumber to the United States for a very long time. Except for a very short period during the 1929 crisis, our wood has always entered the United States duty free. Since the early 1980s, the lumber trade has been a steady source of conflict, the U.S. lumber lobby becoming increasingly protectionist and uncompromising.

On May 22, 2002, after an investigation using methods invalidated by international tribunals, the United States accused Canadian producers of being subsidized and Canadian exporters of dumping on the U.S. market and thereby damaging the American industry.

Before the Free Trade Agreement with the United States, the industry had to go before American courts, which often played favourites. The Free Trade Agreement and the North American Free Trade Agreement contained bilateral dispute resolution mechanisms—more impartial courts and disputes had to be resolved within 10 months.

The softwood lumber dispute has been going on now for 40 months. It is the longest trade dispute that has arisen between Canada and the United States since the Free Trade Agreement was concluded almost 18 years ago.

The NAFTA panel clearly decided that Canadian lumber was not subsidized, contrary to the American allegations. After using all possible stall tactics, Washington decided for the first time since the Free Trade Agreement was signed in 1988 not to bow to a final NAFTA panel decision. The Canadian industry had to turn to the American courts in order to force the United States to abide by its own laws. This leap 20 years backward in time raises the question of whether the agreement is worth anything at all.

During all that time after May 2002, the Bloc Québécois demanded an assistance plan for the softwood lumber industry—something that the federal government, whether Liberal or Conservative, always opposed.

The Liberals said over and over that they would never yield to the American demands, while turning a blind eye all that time to the dire straits in which the industry found itself and refusing to set up an assistance plan. They have opened the door, now, to the request for loan guarantees that the Bloc Québécois has been making, even though they said that they opposed them so long as they were in power.

The Conservatives, for their part, promised in their 2006 election platform—which was not so long ago—never to submit to the American demands because the United States should “abide by the NAFTA ruling”. More importantly yet, they promised to “provide real help for Canadian and Quebec workers and businesses coping with illegal American trade actions” —a promise that they certainly failed to keep.

The attitude of the federal government, whether Liberal or Conservative, leaves a bitter taste. In failing to support the industry, the federal government has greatly weakened it and forced it to accept this agreement under heavy threat.

In Quebec, more than 7,000 jobs have been lost in the forest industry since April 2005 and 5,000 others are in danger, according to the Quebec Forest Industry Council. The forest is the main employer in 260 towns and villages in Quebec, and in 134 of them, it accounts for 100% of the jobs.

Bill C-24 contains legislation implementing the July 1 softwood lumber agreement between the Canadian and American governments. Its provisions will all come into effect on October 1, 2006. If the bill has not passed by that time, its provisions will be retroactive to October 1, 2006.

The bill would introduce a system of controls on exports in the softwood lumber industry. What is surprising, these controls would take the form of amendments to the Export and Import Permits Act, an act that is generally used to control trade in weapons and dangerous substances and to restrict trade with countries that are subject to economic and military sanctions. In this case, it is Canadians and Quebeckers who are subject to the restrictions provided in this bill.

In the case of Quebec, which has chosen a lower export tax and capped exports, it is necessary to obtain a licence or export permit. The basis for allocating export quotas is not set out in the bill; it will be determined by regulation. Quebec has proposed that 94% of quotas should be allocated to companies on the basis of past exports, and that the remaining six per cent be allocated on the basis of first come, first served.

Quotas allocated on a monthly basis create a great deal of uncertainty in the industry. This issue has not been resolved. Of course, there is a group representing both countries and the Bloc Québécois hopes that the government will try to relax the monthly export ceilings by means of the regulations.

How can you ask a company to plan its procurements or its sales on an annual basis? Should it simply be a blind division by 12, regardless of the season or regardless of conditions in the construction industry?

The bill also proposes a tax of up to five per cent when there are export limits, but it could be as much as three times higher for exports from provinces where there is no export ceiling.

The rate of the tax would vary depending on the price of lumber. The lower the price, the higher the tax. The amount of the export tax that would be refunded to the provinces represents another important factor. The bill also provides that with the removal of the countervailing and anti-dumping duty orders, the government will proceed with reimbursement of $5.4 billion illegally withheld by the United States.

Canadian companies will be entitled to 81% of the countervailing and anti-dumping duties currently held by Washington. In reality, that represents about 65% of the amount that these companies have paid, taking into account variations in the exchange rate over the past four years. What would have been 63¢ in the beginning now equals 90¢. Previously, one American dollar was worth $1.59 Canadian; today it is $1.11 Canadian for one U.S. dollar.

The excess duties paid should be refunded within six months of the coming into effect of the agreement. In the Office of the Minister of International Trade, it is expected that more time will be needed.

The companies that have signed the agreement will receive their refunds through Export Development Canada (EDC). They will first receive 90%, and then the rest once the calculations have been completed.

The companies that opt out of the agreement have not assigned their rights to the federal government. They will be refunded directly by Washington. The agreement provides that refunds will be taxed at about 19%. Of course this has been strongly criticized. Who would have imagined that these companies might end up with a bonus for not signing an agreement?

Because of the irremediable damage caused to the industry, an entire clause of the bill is dedicated to provisions respecting companies that did not survive the conflict because the federal government did not implement a loan guarantee program.

The game is not over. Actually this agreement is still theoretical because it cannot come into effect until all the complaints currently before the courts—both international and American—have been withdrawn, and this is not yet so.

Furthermore, Washington can terminate the agreement as of the 18th month after it comes into effect, on six months’ advance notice. We are a long way from a lasting agreement.

Washington provided for the possibilityof excluding a province from the application of export restrictions if its forest policies change.

So the industry is experiencing quite a lot of insecurity. I have made a list of some elements, and they will be studied in depth in committee so that we have some certainty and not just a few elements on which we cannot rely.

In the end, who really comes out the winner in this agreement? Of the $5.4 billion held in Washington, the Canadian companies will receive about $4.4 billion. The American companies that instigated the conflict, however, will get $500 million. A fund of $50 million will go to initiatives aimed to promote the use of wood in both residential and commercial sectors. This fund will be managed by Canadian and American companies. Left to the discretion of the American government will be $450 million, an unexpected windfall for the Republican Party, just in time for the mid-term elections.

For Quebec this means the imposition of quotas, for which the terms and conditions of assignment are not set by law, but by regulation. This is another a grey area. Of the 34% of the American market that will be accessible to the Canadian market, 7% will go to Quebec, or 20%, instead of 27% of the average Canadian exports in the past 20 years. At present, these are at 17% because of the competition of the Canadian and Quebec markets.

With the quota method, Quebec companies will be able to export one twelfth of the annual quota per month and have only some leeway based on the quota for the previous or the next month. Only those amounts will be transferable. This inflexible approach is not advantageous given the cyclical nature of the industry.

For all intents and purposes there are two big winners: the Americans—both government and corporations—and the Prime Minister, who has made a friend of G. W. Bush.

As for what the main stakeholders have to say, the Bloc Québécois consulted the forestry industry and workers over the summer. We heard the same thing everywhere: their backs are to the wall. Although this agreement is objectionable, the industry does not have the luxury of time. The industry is almost unanimous in stating that this agreement is unsatisfactory but it is at the end of its rope.

It is interesting to note that the Conservative government did not consult the industry prior to signing the text of the agreement, even though this agreement governs the distribution of money that really belongs to the industry.

Thus, the Bloc Québécois accepts Bill C-24 with little enthusiasm. The reality is quite simple: the free trade agreement no longer applies to softwood lumber.

We know that there have been a number of requests for assistance from the forestry industry, which is experiencing serious difficulties just as it is emerging, in a weakened position, from a long trade dispute. Several of these requests date back to 2002 and could have guaranteed the survival of some companies that have now closed their doors.

A multitude of actions could have been brought forward, brought into play to support workers, for example, income support programs for older workers. The amount disbursed—about $75 million to help older workers who lose their jobs—would have been minimal in comparison to the $1 billion paid to the United States.

Communities dependent on the forestry industry need programs to diversify their economies, a special tax status for 128,000 private woodlot owners in Quebec, and increased funding for the Canadian Forest Service's Model Forest Program.

Companies need the following measures: special tax treatment for the $4.3 billion in countervailing and anti-dumping duties that the American authorities will pay back, to make up for the losses companies have suffered; faster amortization on equipment; a program to promote innovation in the forest industry and improve productivity; a market diversification and wood marketing program; and financial compensation for maintaining the forest road network.

We know that large forestry companies have to maintain, at their own expense, major road networks that are also used by the public. The government should also provide support for this. There are many other possible measures, such as research and development credits.

Speed is of the essence, because some of these measures will become irrelevant if they are not introduced this year, which is a pivotal year for the industry. Many companies are still on the verge of closing, even though they will receive a portion of the money they invested. In some cases, it really is too late.

If the assistance plan the Bloc Québécois has been calling for since 2002 had been put in place, many workers in Quebec would still have a job in the forestry sector today.

This time, does the Conservative government plan to keep its 2006 election promise to “provide real help for Canadian workers and businesses coping with illegal American trade actions”, or is it waiting for this industry to die while it waits for the Americans to deign to pay companies what they have coming to them: a mere 65% of what they paid out, which the NAFTA tribunal deemed 100% illegal?

To sum up, I think—and nearly everyone agrees—that this agreement does not live up to the forest industry's expectations. In all probability, no one would have accepted this agreement if people had been in a positive financial situation. But neither the Liberal nor Conservative governments were willing to keep companies financially afloat during the dispute with the United States. The Liberal and Conservative federal governments are to blame for this situation.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Speaker, it is with some disappointment that I rise today to speak to 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.

In the last election campaign, there was very little discussion of softwood lumber. We thought, and a cursory look at the platforms would indicate, that there was very little difference in the positions of the Liberal and Conservative Parties in the last election.

Liberals campaigned on the following platform:

The recent string of NAFTA decisions in Canada’s favour continue to be valid and must be respected—the United States remains legally obligated to revoke the tariffs and refund, with interest, all duties collected, totalling more than $5 billion. A Liberal government will continue to wage a vigorous legal and political fight with the US government and industry and will continue to consult with the provinces and Canadian industry on the best way to achieve a final and lasting solution.

Page 19 of the Conservative platform says:

A Conservative government will: Demand that the U.S. government play by the rules on softwood lumber. The U.S. must abide by the NAFTA ruling on softwood lumber, repeal the Byrd Amendment, and return the more than $5 billion in illegal softwood lumber tariffs to Canadian producers.

Today we not only have the Conservative government breaking that very election promise, but it is going so far as to legislate its betrayal of the lumber industry, of local communities and workers, not to mention the Canadian electorate.

Despite the strength of our legal position, supported by numerous decisions of international trade tribunals and domestic courts both in Canada and the United States, the government rushed negotiations with an artificial timeline set to maximize the cynical political advantage for the Conservative Party. The Conservative agenda was put ahead of the interests of an industry, which is a significant element of the industrial strength of every region of Canada.

When the Prime Minister stood in the House last spring and outlined the parameters of the agreement with the Americans, he provided very little detail to the House. As we know and as our leader said at the time, the devil is in the details. What little we did know then was enough to convince us that this was a bad deal for Canada and a good deal for the American government and lumber industry.

It was clear on April 27 that the Prime Minister was abandoning Canada's position, pursued by successive Canadian governments and upheld by trade panels at both NAFTA and the World Trade Organization, that our softwood industry was not subsidized. This decision destroys the credibility of the dispute resolution provisions of NAFTA.

The repercussions of this capitulation will be felt not just in the future disputes surrounding the softwood lumber industry, but by many other industries that may face similar allegations from American competitors. It could also encourage other U.S. sectors to ignore trade rules and seek, instead, political decisions in their favour, resulting in increased trade uncertainty, seriously inhibiting investment in key Canadian export industries.

Do not just take our word for it. The Prime Minister has betrayed what he said when he told the Canadian people:

If the rules are simply ignored, then the very basis of a rule-based system is threatened and the future of all Canada-U.S. trading relations could be profoundly affected.

We also predicted in April that we would see draconian measures in the agreement that would punish our industry the minute market conditions in the United States deteriorated. Today, in Bill C-24, we see the creation of an export tax that, at current price levels, is actually higher than the U.S. duties currently being collected. Along with this export tax comes an unfair and unprecedented tax regime that will place a huge administrative burden on Canadian producers. At a time when they are having difficulty meeting their own payroll, the government is forcing them to hire more accountants and auditors.

When the Prime Minister stood in the House in April, we knew that he had left more than $1 billion on the negotiating table, that $1 billion belonging to Canadian companies. We anticipated that this money would end up in the pockets of American lumber barons, who have been constantly harassing the Canadian industry.

Once again we were right, only this time the Prime Minister threw in a wrinkle. The agreement gives $500 million to the American lumber industry to use to fund legal and political attacks against the Canadian industry. Apparently that was not good enough. Instead, another $500 million was left with the White House, in a time when we are heading into the run up for very difficult fall elections, all of this for 24 months of managed trade.

The government has acted in a high handed way with the Canadian industry, giving it an ultimatum, “Accept this deal or the government will abandon you”. The Prime Minister has given it a choice between a bad deal and the back of his hand. Loan guarantees put in place before the last election were taken off the table and the Conservatives threatened to abandon the industry if it chose pursuing its legal rights over accepting a bad deal.

The Conservative government has demonstrated that it will in fact punish the companies that have refused to sign on to this agreement. This includes the imposition of a 19% levy on all refunded duty deposits on the holdout companies. The Liberals believe the government should immediately cease this harassment and treat these companies with the fairness and respect that they are owed.

The Liberal Party has always been committed to supporting our softwood lumber industry. That is why we have proposed a supplementary aid package, modeled on the package put forward by the former Liberal industry minister, the member for Vancouver Kingsway, which includes: $200 million over two years to enhance the forest industry's competitive position, improve its environmental performance and take advantage of growing bio-economies; $40 million over two years to improve the overall performance of the national forest innovation system; $30 million over two years to improve the competitiveness of the workforce, promote upgrading of workplace skills and provide assistance to older workers impacted by forest industry layoffs; and $100 million over two years to support economic diversification and capacity building in communities affected by job losses in the forestry industry.

It is enormously important to support the communities that will be affected not only by this agreement, but by the forestry industry in general.

Communities in Atlantic Canada, in Quebec, in rural regions everywhere—often on the coasts—are affected by this industry to a disturbing extent.

The price of gas, the value of the Canadian dollar, and ultimately the price of softwood lumber on the American market are major factors and they are all behind the rather major crisis that industry is experiencing at present.

That is why we consider it to be so important that the government support not only those industries, but also the workers and communities. They are the ones who will ultimately pay the price for a bad agreement and for a global situation that will certainly lead to layoffs and serious trouble for some companies.

We had also proposed $30 million over two years to develop new markets for Canadian wood products and $200 million over two years to fight the spread of the pine beetle in British Columbia and Alberta forests.

Some forestry industry companies may opt not to sign on to the softwood lumber agreement and will continue to pursue their legal rights both under NAFTA and under domestic courts. The government should immediately make loan guarantees available to them to provide them with the creditworthiness so they will be able to fight to maintain their legal rights before the process simply runs over them, as dictated by the government.

The Canadian forestry industry is facing many difficult years ahead. It will be a difficult winter in this sector. As I said a minute ago, the high value of the dollar, the high cost of energy, the declining price for softwood lumber are among real dangers on the horizon for this industry. That is why we believe the government needs to stand by the industry and not simply bulldoze them into an agreement that many of them have said they would not sign otherwise.

As I said earlier, workers and communities are in urgent need of this government’s support. The industry is already under enormous pressure and needs our government’s basic support.

The minister correctly noted in his comments that the Atlantic provinces benefit from an exemption under this agreement. This was an essential part of the softwood lumber agreements negotiated over the last quarter century because the exemption in Atlantic Canada is based on a different forestry management regime where the vast majority of the land on which lumber is cut, on which logs are harvested, is owned by private landowners.

As the minister noted in his comments correctly, this distinguishes the Atlantic provinces from other provinces where unfair allegations have been made surrounding Crown land, leases, and the cost of stumpage.

The exemption that Atlantic Canada has historically enjoyed is not thanks to the actions of any government but because the American coalition did not petition the U.S. commerce department with allegations of subsidy against the four Atlantic provinces. This is why, in my view, the Maritime Lumber Bureau has done a wonderful job over the last number of years in maintaining this exemption in front of the American courts, in front of the American lumber coalition, and the American government.

Companies in my own riding like Delco Forest Products, for example, or Westwood Industries, or Goguen Lumber are small family businesses that employ hundreds of people in my riding. JD Irving has sawmills in my riding. Hundreds of people are employed in this important industry, and the exemption that Atlantic Canada has always enjoyed is the result of a much different system of land ownership.

That is why, if we are going to be sincere, we have to admit that the exemption that the government has claimed for Atlantic Canada has existed for a quarter of a century and not because of any political intervention from a previous Conservative government when Mr. Mulroney was prime minister or previous Liberal governments. It has existed because, in fact, the land ownership system differentiates to a great extent the four Atlantic provinces from other Canadian provinces.

As I also said earlier, we find this debate difficult because we believe that the government should have supported the industry, should have offered loan guarantees for companies that asked for assistance, and should have continued to pursue the legal route, which, we sincerely believe, would have led to a final decision to settle this question once and for all.

In conclusion, I would like to move the following amendment. I move:

That the motion be amended by deleting all of the words after the word “That” and by substituting the following:

This House declines to proceed with 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, because it opposes the principle of the bill, which is to abrogate the North American Free Trade Agreement, to condone illegal conduct by Americans, to encourage further violations of the North American Free Trade Agreement and to undermine the Canadian softwood sector by leaving at least $1 billion in illegally collected duties in American hands, by failing to provide open market access for Canadian producers, by permitting the United States to escape its obligations within three years, by failing to provide necessary support to Canadian workers, employers and communities in the softwood sector and by imposing coercive and punitive taxation in order to crush dissent with this policy.

[David Emerson, Conservative, Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics]

moved 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.

Mr. Speaker, it is a great honour today to speak to the legislation to enable the Government of Canada to implement the softwood lumber agreement reached this past summer with the United States. Softwood lumber for Canadian softwood lumber producers has been an industry that has been plagued by trade disputes, border measures and various types of trade harassment for basically a quarter of a century.

The agreement will provide stability and dispute-free market access to the United States market. It will provide stability for a period of at least eight to nine years. I also believe it will provide a trajectory for the evolution of the softwood lumber industry to a world of complete free trade. This is not unlike what happened in the automotive industry in the 1960s and 1970s where a sector, which was once subject to significant protection, gradually, through a sector specific agreement, evolved into a successful sector that is subject to almost complete free trade today.

I would ask hon. members to consider the softwood lumber agreement, not in the context of whether this is better than or as good as complete free trade. We know the answer to that. What we also know is that complete free trade is not the option that we have before us. It has not been the option for the last 24 years and it is not the option today. We are not one legal victory away from free trade.

In fact, when we look at the softwood lumber industry, it is a highly cyclical industry. We have just been through a very positive part of the cycle. We are now going into a negative part of the cycle where lumber prices will be lower than their normal trend price. During the low part of the cycle, trade actions not only proliferate, they become more robust. In this softwood lumber dispute, we are dealing with not just countervailing duties based on allegations of subsidies of Canadian softwood lumber producers, we are also dealing with anti-dumping duties.

When we get into a weak market, the ability of American protectionists to launch new cases or to raise the duty rates on existing cases, it becomes much more severe, much more difficult and much more problematic. Without this agreement we would be looking at a difficult period of trade litigation over the months and years ahead.

Let us talk about the agreement for a moment and some of the highlights of the agreement. The agreement is long term in nature. It provides for eight to nine years of dispute free trade with the United States. During good lumber markets, which, based on the history of the last 10 years, would be about 50% of the time or maybe a little bit more, we would have complete free trade. There would be no border measures, no quotas and no export taxes.

We are also looking at an agreement that puts much needed cash into the hands of companies, businesses and communities. Under this agreement, 81% of the duties on deposit with the United States would come back to Canadian companies. That is more than 5 billion Canadian dollars coming back into companies at a time when they badly need the cash and badly need to invest in their businesses.

In addition, as a Canadian initiative and as part of the agreement, we have included an accelerated deposit recovery mechanism. Through the Export Development Corporation of Canada, producers will be able to obtain their cash deposit within four to eight weeks of them filing their documents with Export Development Canada. That is compared to a normal time period that could take in excess of six months, possibly more than two years, to recover deposits through the U.S. customs.

The agreement has major exemptions in it. The entire Atlantic Canadian industry would be exempt from any border measures under the agreement which includes dumping duties. As hon. members will know, unlike previous trade disputes, Atlantic Canadian companies, while they have not been subject to countervailing duties, have been subject to dumping duties. Dumping duties are pernicious in weak markets. Dumping duties grow. An administrative review indicates that dumping duties will grow this fall. Even if we continue to win current litigation, that litigation will be appealed. Dumping duties will continue to be applied and Canadian companies, including those in Atlantic Canada, would be subject to continuing trade harassment. The territories, Yukon, Northwest Territories and Nunavut, are also exempt from the provisions of the agreement, with no border measures there.

A very important part of the agreement is the unprecedented protection of provincial forest policies as a result of the agreement. In the past, what is called anti-circumvention language in past agreements had basically prevented provincial governments from implementing changes in forest policies and, indeed, any measure that a province would take under past agreements that had the effect of reducing timber stumpage, would have been subject to countervail and would have been a circumvention of the last softwood lumber agreement.

In the agreement, those policies are protected. We can in fact have a market based timber pricing system, as has been implemented in British Columbia, that now will be protected. Timber prices can go up when markets are good and timber prices can go down when markets are bad. Timber prices can also reflect conditions such as an export tax, an exchange rate change, hydro rates or any other kind of economic circumstance that changes the value of timber. The agreement protects those policies that allow timber pricing mechanisms to play their role as shock absorbers as we go through the vagaries of the lumber market and those factors which affect it.

The agreement also provides flexibility. In that part of the market when prices are low, the agreement provides provinces with significant flexibility as to how they wish to implement the agreement. In some parts of the country there will be a desire to restrict volume because they are actually reducing their allowable cut for other reasons. In provinces like Quebec, in a weak market they can pay duties no higher than 5% and complement that by reductions in volume shipped into the U.S. market.

In other regions, such as British Columbia, we have the option of not reducing our volume but paying a higher export tax, which is what the province of British Columbia and certain other provinces wanted. They wanted that flexibility built into the agreement and it is built into the agreement. We now have the ability, in different parts of the country where the industry is subject to different factors, to respond quite differently to the circumstances of a weak lumber market.

To the degree that there are export taxes collected, those revenues are not going to go into the U.S. treasury. Those revenues are going to stay here in Canada. They are to go back to the provinces where the lumber originated. Again, this will continue to protect Canadian companies, Canadian governments and Canadian economic interests.

Let us talk about dispute resolution. Many members of the House have spoken about chapter 19 of NAFTA, often critically and with some valid issues to be dealt with over time in regard to chapter 19, but this agreement provides a separate dispute resolution mechanism. That dispute resolution mechanism will deal quickly and in a binding way with issues that come up in the context of this softwood lumber agreement. So again, we have improved our position in terms of dispute resolution.

On termination, we have heard people speak about the need for a termination clause. Some have said we should not have a termination clause. Some have said we should have a long termination clause. We have negotiated in this agreement the best and most secure termination language in any trade agreement that Canada or the United States has.

In fact, one cannot terminate this agreement for 18 months. After 18 months, there must be six months' notice. After the six months' notice there is a 12-month standstill during which no trade action can be brought against Canadian companies. This six months' notice and 12-month standstill will continue through the agreement. At the end of the seventh year, if the United States were not to renew this agreement for the full nine years, the 12-month standstill would continue to apply. In effect, at a minimum, we get eight years of dispute-free trade.

This agreement will evolve. It is not going to be a static agreement.

There are mechanisms built into this agreement that will allow government-to-government committees to work on critical policy issues to improve the agreement, to look at issues like the British Columbia coastal industry and the issue with respect to exports of lumber from logs harvested off private lands. It will deal with issues of running rules to ensure that the agreement operates in a commercially viable manner. And it will give a very clear and immediate focus to what we call off-ramps.

Government-to-government discussions will look at the policy changes that provincial governments can put in place to find relief from the measures included in this softwood lumber agreement. That is a very important part of this agreement, because it will allow the agreement to be improved and to migrate gradually to full free trade over time.

There is also a binational mechanism at the industry level so industry can work together to determine how better to improve the competitiveness and the market position of the North American softwood lumber industry. Again, the analogy to autos or the steel sector, where the sector gradually evolves to full free trade, is readily apparent.

This is an agreement that is good for Atlantic Canada. It will give the provinces of Atlantic Canada full exemption. It will get them away from the threat of dumping duties that are sure to grow and become much more burdensome going forward without this agreement.

This agreement will be good for Quebec. It meets Quebec's needs in terms of the option and the kind of agreement Quebec was seeking to best support its industry. And let us remember that 32 border mills in Quebec will be completely exempt from border measures under this agreement.

Again, Ontario is supportive. There is an option that meets Ontario's needs.

It is the same thing for the Prairies.

British Columbia is very well positioned under this agreement. It is well positioned because the number one issue that British Columbia had was to protect its new regulatory measures for timber pricing and forest management in British Columbia. Those policies have been fully protected under this agreement.

British Columbia is now able to have a market-based timber pricing system. Timber prices will go up and down to reflect the true economics of doing business in the U.S. market. That is something we have never had before.

Remanners will be better off. They will not be charged any duties on the value added portion of their production.

High value producers will be better off because there will be a $500 limit over which duties will not be increased beyond that which would apply to a $500 per 1,000 board foot product.

This is a good deal and it has broad support from both industry and provinces. Over 90% of the industry, when polled in August, said it supported this agreement. Companies are now coming in and working with us. They are very happy with the work we are doing toward implementation of this agreement. They are working with us, not against us. They believe this is an agreement that will enable them to get back to managing their businesses, building their companies, and supporting the communities and the jobs in those communities.

It also clears the table for Canada to get back to doing business in North America, to get back to rectifying some of the issues that need to be addressed in Canada's best interest as we strengthen and improve the workings of the North American Free Trade Agreement.

I would remiss if I did not pay tribute to the people who have worked so hard and have been so dedicated in bringing this agreement about.

Without the Prime Minister's intervention at the very highest levels to set a new tone to make sure that Canada was able to do business in a way that would benefit Canadians, without that new tone, this agreement could not have happened.

It could not have happened without Ambassador Wilson and the good work that he and Claude Carrière in the embassy in Washington did in the negotiation of this agreement.

Ambassador Wilkins, the U.S. ambassador to Canada, has been very supportive, very helpful and a very constructive participant.

My colleague, the Minister of Industry, has been a very strong contributor to the work that has gone into this agreement.

As for my own staff, my deputy minister, Marie-Lucie Morin, has been a stellar contributor to this agreement. Andrea Lyon in my department has been tireless. She spent her whole spring and her whole summer, right into the fall, doing nothing but this.

The Export Development Corporation of Canada has been stellar in cooperating and providing for an accelerated mechanism for refund of deposits.

I call on members to support this agreement, to support the stability and the ability to grow and develop the softwood lumber industry. Let us get back to business. Let us get back to protecting and creating jobs and getting investment back into the forest industry and all those communities that depend on it.

Emergency Management Act

[Réal Ménard, Bloc, Hochelaga, QC]

Mr. Speaker, it is with pleasure that I rise to speak to Bill C-12. This is a moment I have been eagerly awaiting, for I am well aware that in the world in which we now live, the issue of emergencies certainly demands the attention of legislators.

Just earlier, I was pondering the fact that, even in the 1800s, people were trying to regulate emergencies with the Quarantine Act. Why did they attempt to use this act in part to regulate emergencies? Because disease was surely the greatest threat to human communities, to the human condition about which Malraux spoke to us with such talent. I am sure, Mr. Speaker, that you are an enthusiast of Malraux. I know your erudition, and even your epicurean side. Of course, if we are talking about the 16th, 17th or 18th centuries, the spread of disease could not possibly be compared with the SARS crisis that we experienced, for example. And for once, the federal government was in a field of jurisdiction that belonged to it alone, under a class of subject enumerated in the Constitution.

When we speak of emergencies, the word “emergency” is in itself open to many meanings. What does it mean when we speak of emergencies? Are we talking about disease, the unleashed forces of nature, public transit, natural catastrophes, the overflowing of the Red River, the pollution in the big cities, terrorist attacks? Terrorism is a real fact of our collective life.

If I may digress, for a parliament and a parliamentarian, the end can never justify the means. One can never say, on account of some context one considers extraordinary, that one is going to take certain actions prejudicial to personal freedoms. In any case, you know how the Bloc Québécois is. If there is one party in this House that could hold a set of scales in its hands, with a centre of gravity that can balance human rights with necessary protection of the community, that party is surely the Bloc Québécois. How could we not be disturbed by Bill C-24, and its successor Bill C-36 on anti-terrorist measures. The government was trying to plagiarize the previous government, and it plagiarized certain provisions of the Patriot Act, tabled by the Bush administration. Incidentally, it will be with great interest that we shall read the judgment to be rendered shortly on the security certificates.

I know that some of my caucus colleagues, and in particular our immigration and public safety critics, have a lot of reasons to be worried. I would ask you the question, Mr. Speaker. Is it acceptable, in a country that adheres to the rule of law, for a person to be subject to arrest without warrant, arbitrarily detained, and not have access to the complete evidence in his or her court file? Do we not learn in our law schools that it is important to have a just and fair trial? Are we not in the post-Stinchcombe era? The Supreme Court has given judgment on this point. My colleague from Marc-Aurèle-Fortin is aware of that. Stinchcombe requires that all evidence be disclosed. That is surprising, because Stinchcombe involved a tax fraud matter, if I recall correctly.

In any case emergencies cover a range of situations: SARS, overflowing rivers, terrorism, or mass transit.

We know that in some democracies, the evil hand of certain groups has used mass transit to spread toxic substances. Plainly it is a concern of governments, I would even say their duty, to have evacuation and emergency plans.

Let us ask the question: is this primarily the responsibility of the federal government? That question arises in the case before us. This is not a case involving quarantine, an epidemic or virology.

The bill says:

This enactment provides for a national emergency management system that strengthens Canada’s capacity to protect Canadians.

Obviously, when we read the bill, we can say that it is reasonable for the federal government, in the departments for which that government is responsible, to have an emergency plan. We therefore understand that it is reasonable for there to be a plan for public safety, health, national defence, or any other example that my colleagues may bring to my attention.

Closer to home, I know that on Parliament Hill, the Board of Internal Economy, of which the various party whips are members, thinks about how to ensure that the Hill is safer. There have been very few unfortunate incidents, but still, there have been a few.

In fact, there is a new Sergeant-at-Arms in the House. I would like to wish him success in the responsibilities of his position. He is the person who is responsible for the safety of parliamentarians.

In the British parliamentary tradition, the distance between the opposition and the government is two and a half sword lengths. Why? Because when Parliament was first created, when the institution of Parliament was created in the United Kingdom, the monarch stood in fear of members of Parliament. That is the source of the tradition, when the Speaker is elected, of dragging him or her by the arm while being met with resistance. That is because some of the speakers, in some of the Parliaments of Great Britain, who were called burgesses, were beheaded when the king did not agree with them.

So as not to wander too far afield, let us come back to the Sergeant-at-Arms. He is responsible for parliamentarians’ safety, and in emergencies he must arrange for the Hill to be evacuated.

I would like to give you an example of a traumatic event that I experienced personally. Every member of this House is familiar with my sturdiness, physical strength and self-discipline. Then there is the President of the United States, who thinks he is the master of any house he happens to be in. When President Bush visited the Hill, some parliamentarians, including me, were not allowed access to the Hill. My colleague from Saint-Lambert was also denied access to the Hill. Why? Not because the constables prevented us from entering. After all, their kindness is known to us all. They were not the ones who denied us entry. It was security personnel outside Parliament who stopped us; they went about it quite rudely, I might add. Such events prompt us to think about how we might react in an emergency that forced us to evacuate the building rapidly.

I know that Board of Internal Economy members, including the whips, have discussed this issue.

So, yes, we have to have emergency measures in place in our large communities, especially in big cities. Emergencies can be caused by natural disasters, terrorist attacks on public transportation or, of course, disease. Obviously, we do not deal with disease as we did in the 15th, 16th and 17th centuries, but imagine the impact of a virus spreading through our communities. Even in our modern society, we have come to realize that hospitals are not always a safe haven. We do not think that going to the hospital can make us sick. I feel comfortable talking about this before the member for Québec because I know she is as healthy as a horse, but people sure do not expect to get sick when they go to the hospital.

We recently learned that some hospitals in Canada were vectors of contamination. This is one of the emergencies for which we must plan.

Although the Bloc Québécois agrees with this bill in principle, we have some concerns. First is the issue of respecting provincial responsibilities. A national emergency should never mean there is just one government. We are long past the time of the Rowell-Sirois commission. We are not in an apprehended war situation. As elected members of the Bloc Québécois, as representatives of the people of Quebec, we must never act as though there were just one government.

The National Assembly, whose first speaker was Mr. Panet—if I recall correctly—is one of the oldest Parliaments in North America. A number of years ago, it passed its own public safety plan. And who was the author of this important plan that respects decentralization, a plan whose goal was to have the regional county municipalities, the municipalities and the health care system work together? When we think of emergencies, these are the players we want to see promote a common vision.

The National Assembly was the first francophone Parliament in North America. It was led by Speaker Panet and founded under the Constitutional Act, 1791, with ministerial responsibility introduced in 1848. It used to be referred to as the Salon de la race, but that expression is no longer used. It passed its public safety plan. We are most privileged to have among us the author of the plan, none other than the hon. member for Marc-Aurèle-Fortin, who was the public safety minister at the time and who served the Government of Quebec well.

Softwood Lumber Products Export Charge Act, 2006

[David Emerson, Conservative, Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics]

moved for leave to introduce 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.

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