Mr. Speaker, it is a great pleasure to rise in the House today to report on the deliberations in the Standing Committee on International Trade on Bill C-24 to implement Canada's obligations under the softwood lumber agreement.
I would like to start by thanking the committee for its close study of the bill. The members worked hard across all party lines to put forward amendments that took into account the concerns of industry and the pressing need to implement the bill in a very timely fashion. It was truly a team effort. I know I speak for all members on this side of the House when I express our gratitude for the energy and ideas brought to bear on the bill. I am confident that their collective contributions and amendments have helped to clarify important elements of the bill.
Today I would like to update the House on the amendments approved by the committee.
The first amendment stems directly from a request from the Maritime Lumber Bureau. The bureau represents lumber companies throughout Atlantic Canada. As members know, the softwood lumber agreement already excludes Atlantic provinces from an export charge. This reflects a long-standing history whereby these provinces have been excluded from U.S. trade action.
Bill C-24 included provisions respecting the exclusion of the Atlantic provinces. However, the bureau wanted to ensure that this exclusion was further clarified in the bill. Therefore, led by the government and in particular the member for Cumberland—Colchester—Musquodoboit Valley, the committee discussed and passed this important amendment.
This clarification leaves no doubt that exports from the Atlantic provinces are excluded from the export charge and that a charge will only be imposed if there is a circumvention of the agreement. It also brings other exclusions, those of the territories and the included companies into the same clause. To ensure the proper functioning of the Atlantic Canada exclusion, the government will be proposing a few technical amendments to the bill at report stage.
Our colleagues from the Bloc Québécois proposed amendments that stemmed from concerns expressed by the Quebec Forest Industry Council. The first is a proposed amendment to clarify the timing with respect to the date of shipment for exports sent by rail to the U.S. Second is a proposed amendment to further clarify the definition of FOB value, which is the freight on board cargo, in the legislation. As with the Atlantic exclusions, these amendments directly address the concerns of the lumber industry.
The next amendment concerns independent remanufacturers. As the House knows, the softwood lumber agreement ensures that independent lumber remanufacturers will not have to pay an export charge on the value added component of their products. In fact, this was an essential component of Canada's position throughout the negotiations and in direct response to industry requests. However, the industry asked for further clarity. Therefore, the bill, with the government's amendments at report stage, will make clear how the independent remanufacturer will be treated and certified.
The government also put forward a number of amendments to reflect the agreement's entry into force date of October 12, 2006.
These proposed amendments, while relatively minor in nature, will give our lumber exporters an added measure of certainty and predictability to go forward and plan for the future. Indeed, time is of the essence for the bill. Canada's lumber industry is facing a number of challenges. Lumber prices are at the low end of their cycle and production costs are rising. Combine these challenges with the continued strength of our dollar and we can begin to understand what our industry is up against.
That is why, as the amended bill makes it through the House, we should remind ourselves of the importance of moving it through in a timely manner. Our lumber companies need the stability, predictability and cash that the agreement provides.
The agreement eliminates punitive U.S. duties. It ends the costly litigation, which has gone on for far too long. Under the 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 the country, growing their enterprises and contributing to Canada's economy. It provides stability for 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 flexibility to choose the border measures that most benefit 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 and not end up in the U.S. treasury, which was the case before.
The agreement returns more than $5 billion Canadian to companies, a significant infusion of capital for the lumber industry and the workers in more than 300 communities across Canada who depend upon it.
I am happy to report that the Export Development Canada duty refund mechanism, which we developed to expedite refunds to companies, is ahead of schedule. More than $1.8 billion has already been dispersed to companies, and Export Development Canada will continue to make expedited refunds over the coming weeks.
While the money is good news in itself, we must also consider what this money represents for the forest workers and the communities. The badly needed cash provided by the agreement will help our lumber producers reinvest in their enterprises, improve efficiency and weather the current downturn in lumber prices. Most important, it will let them do so in a stable and predictable trade environment.
We cannot overestimate the importance of this kind of stable environment to our lumber industry. Along with the refunded cash, the stability and predictable environment created by the agreement will allow lumber companies to make long term plans and grow. It will also put us on the right path toward fostering further development and integration of a stronger North American lumber market, one where Canadian companies can play an essential and leading role.
Contrast this positive new environment with what life was like before the 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. They know that just because we win one battle, it does not mean we win the war.
Our victories in a number of trade courts, including NAFTA and the WTO, were simply appealed by the U.S., costing millions in legal fees and creating much uncertainty for the industry. In fact, some estimates pegged the total cost of fighting these battles for governments and individual lumber companies alike at over $300 million since 2002. The enormity of these fees stands as a testament to the high price of continuing with the strategy built entirely around litigation.
When I hear calls to continue litigation, I remind people of the steep price of taking this path and the extremely uncertain outcome waiting at the other end. This is a case where there is simply no trade peace waiting for us. There is only continued litigation, crushing legal fees and punishing U.S. duties.
Therefore, I would ask all members to carefully consider the cost of turning our backs on this agreement. Ask the lumber companies that are getting over $5 billion Canadian back to reinvest in their enterprises and weather the tough economic times in which they find themselves. Ask the major lumber producing provinces that join the overwhelming majority of industry in supporting the agreement. Finally, ask the hundreds of thousands of people in lumber producing provinces across the country who rely upon a stable and predictable trade environment for their livelihoods. Ask them if they would like to turn back the clocks to a time when this agreement did not exist.
The government believes our lumber communities have suffered long enough. We believe they need the stability and resources that the agreement provides. We believe the agreement is the single best way forward for our softwood lumber industry and the over 300,000 Canadians who rely upon it.
I am confident that the majority of parliamentarians agree with this assessment. Therefore, I ask for their support of the amended Bill C-24, and I thank them very much.
