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

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member will understand that if we are talking about the American document, it is in U.S. dollars, but if the member is telling me it is $4.5 billion in Canadian dollars converted, that is fine.

Basically, for argument's sake, there is $1 billion left on the table. That $1 billion is not going where one would think it would go. In fact half of it, half a billion dollars is actually going to the U.S. lumber industry lobbyists who are going to use that half a billion dollars to fight us any other time something comes up in the future. Does that not give them an advantage? The U.S. softwood lumber industry all of a sudden is going to have $500 million to fight future disagreements that may come up.

The balance of the money that they are not going to give us back is basically going to George Bush and he will be able to do with it whatever he wants. He probably is going to invest the money in Iraq.

Why is it that the minister who has been the continuity on this entire file would take the industry down a road that he was not prepared to fight to the finish? He was not prepared to stand up for the softwood industry from the beginning to the end. He bailed out. That is why we call it a softwood sellout.

I understand the industry has been shafted by the Conservative government, totally shafted. People in the industry are not getting all their money back and any money they get from this settlement is going to be turned over to the banks to repay the loans they had to take to go through this process that the minister sucked them into. That is what it turns out to be.

I have great sympathy for people in the softwood lumber industry. They cannot even count on the leadership of the government and particularly the minister to be with them. What did he do afterward? He came into the House and said, “Take the deal. If you don't take the deal, we are not with you any more”. It is like Allstate when someone has an accident, “Sorry, not with you any more”.

It led some in the industry into basic bankruptcy in many cases and now for the government to say, “We are not with you. If you decide to further pursue your legal options, do not even count on the Government of Canada to be by your side. Do not even count on the Government of Canada to be there to provide loan guarantees. As a matter of fact, we will look for other ways to make sure that your life is uncomfortable”.

When the Conservative Government of Canada threatens the softwood industry, all I can say is shame on the government, shame on the government.

This is an issue of trade. Trade issues will arise. Maybe we have to reaffirm our commitment to free trade agreements and to the support of dispute resolution mechanisms that we will not abandon so that we do not give false hope to any industry which is caught in the same regard.

This is a short term deal. It is not going to provide security or stability for the industry for the long term. It is less than 24 months. On top of that, what does it mean in the future? Who is going to respect NAFTA in the future if they know all they have to do is spend more money?

[The Deputy Speaker, Bill Blaikie]

Order. The hon. member's time has expired and just at the right moment. There will be time left for questions and comments, but we are now at the time for statements by members.

The House resumed from September 29 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 Speaker, Peter Milliken]

When this matter was last before the House, the hon. member for Mississauga South had the floor. There were five minutes remaining in the time for questions and comments following the hon. member's remarks.

I therefore call for questions or comments. The hon. member for Windsor West.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a privilege to ask my colleague a question in starting the debate this morning.

One of the things that is important to remember about Bill C-24 and the subamendment from our colleague, the member for Burnaby—New Westminster, is that this affects a whole series of trade agreements with ourselves and the United States.

Does the hon. member believe that this sets a precedent? What we have here is basically the hijacking of a trade agreement that we have with the United States where a set of rules have been put in place and those rules are now being altered unilaterally by one side and now, with complicity, the government.

Does the hon. member feel that it will affect future trading relations under this current agreement?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I tend to agree with the member that what has happened on the softwood deal, where we have a minister in the previous government being the same minister in the current government on one side he was fighting to the finish utilizing the NAFTA and WTO rulings as well as relying on the dispute resolution mechanism to help us to deal with these.

Now he has abandoned it totally and he has abandoned the industry. What is worse, now we have a situation where not only has he threatened those who have not signed on to the deal, he has also said that the government will make their lives uncomfortable. We have also found out that if others choose to pursue their legal rights, this may jeopardize the current deal.

Therefore, I would think that this whole softwood sell-out has been a boondoggle right from the beginning. The government should be ashamed of itself for not standing with the softwood industry rather than threatening it.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I appreciate having had the opportunity to listen to the debate over the last number of days on Bill C-24, the softwood lumber agreement. A number of members have spoken about the impact on their own communities of job losses and the impact on their local economies. This is something that needs to be brought to the forefront.

One of the concerns we have about the bill is that it is not based on any kind of coherent industrial strategy. We have an agreement that basically violates all the procedures and processes that we have in place under our trade agreements and it puts people's backs to the wall in terms of signing it, but it is not part of any coherent strategy that is based on sustainability, on value added jobs and on ensuring the strength of local economies.

I would like the hon. member to comment on that in terms of how this is an isolated agreement that is not connected to a broader industrial strategy that is needed in this country.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I also have some grave concerns about the impact on other trade arrangements. This has obviously not worked because the government has not supported the process.

However, I think it is even worse than that. We all know that the deal was not supported by the industry some time ago and all of a sudden there is a mysterious flip-flop to taking a cash settlement which left a billion dollars on the table to the benefit of the U.S. industry and to the U.S. government.

Could it be that the change of position has to do with the government's preponderance of decisions it is taking, which seem to be following an American policy rather than a Canadian policy, the republicanization of Canadian policy? Whether it be foreign or economic policy, there is a litany of examples. I think it is time the Conservative government was exposed to its beholdenness to George Bush.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a privilege to speak to Bill C-24, the softwood lumber sellout deal, as it is known across the country. We have heard a lot of discussion in this chamber about the bill. I would like to first thank my colleague, the member for Burnaby—New Westminster, who has done an incredible job and put a lot of hard work into this file as well as other trade files that are important for Canadian jobs, which is what this is about.

This is Canadian jobs, cultures and communities that will be grievously affected by unfair trading practices. This is a trade crime that is being perpetrated on this country and facilitated by the current government.

I will begin by reading a quote from the House of Commons Debates that we had about this issue over a number of years in this chamber:

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.

The right hon. Prime Minister made those comments and then he flip-flopped on his position. It is an unconscionable dodging of accountability. We have a Prime Minister who gave his word to Canadians that he would live up to ensuring that Canada and its trade agreements would be effectively moved forward through the negotiation settlement that we had under NAFTA and free trade and he has abandoned that.

It is also important to note, not only for members in the chamber but for experts and panel members abroad, that those who have been affected by this issue have come in and made comments. I would like to read a comment made by Frank Dottori, co-chair of the Canadian Free Trade Lumber Council, an advocacy group representing Canadian lumber companies. He says:

We expect our government to help us fight U.S. protectionist forces, and get our industry a long-term solution.

I have another comment by BMO Nesbitt Burns analyst, Stephen Atkinson:

Why would you give 22 per cent to your competition? This money belongs to the companies and their shareholders, and the Canadian government is giving it away.

It is a broad range of people in Canadian society, whether it be the workers who are affected, whether it be industry analysts or whether it be advocacy groups that are rejecting this deal.

It is important in the context of our greater trade relations with the United States.

When I first came to this chamber in 2002, I remember participating in a softwood lumber lobby. We went to Washington to talk with a number of different analysts, advocacy groups and organizations, as well as different members of Congress and of the Senate about the harmful practice this was having on the Canadian industry and how unfair it was.

People need to understand, going back to that time then and to this date now, that many groups and organizations support the Canadian position. The Canadian position that should be from the House of Commons is that of a fair trading relationship with the United States and we have an injurious affection. However, it has been the high-powered ranking lobbyists, a select few from Congress and the Senate, who have driven the White House in this direction. We have many American friends who understand this is hurting both of our nations.

I do not care if the current Minister of International Trade is a Liberal or a Conservative and whether his position flip-flops just like he does on parties. What we need is a cessation of this legislation, the introduction of supports and the continuation of a fair settlement. This is not just about what we gave up in the past, which I will discuss later, but also where we go in the future with our trading relations and how it affects Canadian jobs.

I come from an area of the country that has flourished in many respects but which has struggled in relation to the auto industry. In 1965, Canada negotiated an auto pact with the United States that was based upon fair trade between our countries. It was one that benefited both countries and one that had a lot of strengths that developed, not only the automotive industry in Canada, across Ontario and other parts of our country, but even in American counterpart jurisdictions like Michigan and a whole series of other states. It also led to other industries, for example, the tool and die industry, the mould making industry, all of those technical innovation industries that are responsible for Canadian economic development. It was a fair trade deal that was set up with rules and those rules were respected.

What ends up happening? We enter into NAFTA, and the free trade agreement later on, and we lose a ruling that kills our auto pact. Since that time we have struggled. We have diminished market share. We have had a whole bunch of obstructions put in place that are difficult to compete against. We have lost a very good trade agreement that was a great success for Canada. It paid millions into our coffers on an annual basis through taxation, it provided good jobs for families and it provided innovation in our schools and universities. We gave that up because we played by the rules.

What do we have now? We have an agreement where the Americans have decided unilaterally that they will not accept panel after panel rulings in favour of Canada. We have continued to have success through this difficult process, a process that has required Canadian politicians and governing bodies to support the industry during these harmful times, but one with the goal at the end of the day of having a fair trade agreement and a settlement that makes sense of the trade agreement we have signed.

What the government is saying right now is that the Americans do not have to play by the rules because if they are tough enough and their lobbyists are powerful enough, Canada will capitulate, not just in terms of a settlement that has a series of clauses that are harmful for communities and industries across this country, but also in cold, hard cash. Canada is giving away over a billion dollars.

Some of that money will be given directly to American lumber associations so they can compete against Canadian companies. Other money will go into a discretionary fund at the White House that does not even have to go back to Congress for it to decide how it will be spent. It is unconscionable. The money should go back to the people who paid it out, and those are our companies in the industry that have been harmfully hurt during this practice.

The government's response to those who have been critical of this has been unacceptable. Basically, it has used strong arm tactics and it has made sure that those who are speaking out will be injuriously affected. It will not provide loan guarantees and it will not assist companies to move their rights through the court process, which they are entitled to do under this agreement. It is unacceptable.

I am greatly concerned as to where the minister is going in terms of other international agreements and trade policies.

I know the trade committee met this summer because we were concerned about what the minister was doing on the fair trade with Korea file. There is nothing fair about that file. We have been objecting to it since day one. We are hoping other members join us in that fight.

However, back in June, the member for Burnaby—New Westminster tabled a report in committee showing that if we were to go ahead with this particular agreement we would lose more auto jobs. It is not just the fact that the minister has a bad deal set up for Bill C-24, it is also his competency and his motivation in where he is moving. It gets to a broader picture of this.

Why are we actually doing these things? The study, which the committee was asked to table, did not come out until three months later. It was not until the CAW published its own studies on Korea free trade and how it would affect the industry that the government finally released the report that shows there will be major injurious effects from both files. This file right here shows it is not healthy and that it is not a good trade agreement for the Canadian government.

What is the motivation? I think the motivation is simply politics. It is politics to appease the American side so that the government can claim that it is close to the United States and actually get results, despite what it sells off to them, but also on the Korea trade file, it is politics when it is showing that the government will get a trade agreement with Korea at the expense of Canadians.

I know I am out of time but I do want to impress upon Canadians that this is a precedent setting thing. It is not just about softwood. Even if some communities do not have a softwood industry, they will be affected in the future because this gives a green light for the minister to sell out other industries. Whether it is auto, steel or farming communities, it allows the rules to be taken out of the equation, not just by those who are perpetrating against us but by our government that is supposed to be protecting us.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, yesterday I read in one of the papers that the EDC was asking the recipients of the duties that were held to have them signed over to the EDC as part of this deal. What does he make of this? Does he not feel, as do other Canadians, that there is something suspicious about this? The EDC wants the lumber people to sign over their receivables so that it can continue this process. Is there a hidden message there somewhere?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the government has asked the companies to put a gun to their head. Now it is asking them to load it. It is unacceptable.

The EDC does not support what should happen, and that is the facilitation of our trade. It is just another good example of the fact that there is no support for the industry. The strong-arm tactics of the government have been reprehensible. We are talking about a government that is supposed to be business friendly. To use these tactics is deplorable. It is not acceptable and it sends a bad message for other industries.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I thank the member for Windsor West for his historical comments. It is worth remembering what happened around the auto pact. Canada played by the rules and lost the auto pact as a result of that, and we saw the impact.

There are a lot of ironies in the softwood lumber agreement. Originally, the NDP did not support NAFTA, but we believe, since it is in place, that we should play by the rules. We would like to see that change, but those mechanisms exist for dispute resolution. Yet we have a softwood lumber agreement that is completely negating those rules.

Could the member for Windsor West elaborate on the impact on the loss of jobs? I know he is experiencing that with the auto sector in his community. Now we have a whole new chapter, the lumber industry, which is about to stamped on. Thousands more workers stand to lose their jobs as a result of a very bad agreement and the fact that Canada capitulated and allowed the agreement to go ahead.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the member for Vancouver East brings up a very important point. At the end of the day, this is about jobs and communities. These jobs and communities are often very much dependent upon each other for success. We have seen this all over the country, where we witness towns and communities in crisis.

It is important to note that the government still has yet to come forward with a sectorial strategy on anything. The previous administration talked about it for the auto, aerospace and textiles industries, but never did anything. Now the current government, with this deal, is saying that if the U.S. does not want to play by the rules, Canada is going to agree. It is not going to play by the rules. By not doing so, there will be injurious effects to the industry and the communities. There is no sectorial strategy. Why is there no strategy for the communities that will be affected? Why is there no plan to help?

The very least the government could do is set a sectorial strategy for the industry to help those who will be punished by its bad decision. Instead, the government is saying that this is the deal, live with it and it will move on. It may be good for the government, but it is bad for others. That is not acceptable.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, there is some fine print with regard to the deal, particularly with regard to those softwood lumber producers who still wish to pursue their legal right, their recourse through the courts. It appears there is a possibility that they may in fact scuttle the deal. This is a question that has not been answered directly by the government.

Why do we proceed to debate the ways and means motion, which may not be relevant if the reports are true? Maybe the government should be called upon to explain what the delay is in the payments and whether there is any basis to the allegations that producers, who wish to pursue their legal rights, may kill the deal.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the hon. member has it exactly right. It is a significant problem and it perplexes me as to why the government would want to pursue it in such a hostile fashion.

I think it is part of a larger agenda to get some political points, whether it this one, or dismantling the Wheat Board, or attacking the auto and shipbuilding industries by coming forward with a creative free trade deal. All those things are thrown up in the air to confuse the public and to move forward for the government's own political agenda. At the same time, it is not dealing with the outright facts. It is not even answering a simple question. Is this all for not because the courts are going to decide?