Bill C-24 (Historical)

Softwood Lumber Products Export Charge Act, 2006

An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence

The purpose of this enactment is to implement some of Canada’s obligations under the Softwood Lumber Agreement between the Government of Canada and the Government of the United States, by imposing a charge on exports of certain softwood lumber products to the United States and on refunds of certain duty deposits paid to the United States and by amending certain Acts, including the Export and Import Permits Act. The charge on exports will take effect on October 12, 2006 and will be payable by exporters of softwood lumber products. The enactment also authorizes certain payments to be made.

Softwood Lumber Products Export Charge Act, 2006

[The Speaker, Peter Milliken]

I appreciate the intervention of both the hon. member for Vancouver East and the hon. chief government whip. In the circumstances, what happened is the hon. member stood up before all the yeas in fact had been counted and was obviously getting up on a point of order because she said she was not counted that way. I recognized her because I thought there was some irregularity.

Having pointed out what happened, the votes have been taken. We will hear the result of the vote and then I will hear the hon. member for Vancouver East if she wishes to make a submission that there be additional votes counted. I think that is the normal way we would do this. I am sure the House will look favourably on her request in the circumstances.

(The House divided on the amendment, which was negatived on the following division:)

Vote #41

[The Speaker, Peter Milliken]

I declare the amendment lost.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I rise on a point of order. Clearly the NDP had intended to vote for this amendment. Sometimes things happen very quickly and I believe in the past we have taken this into consideration. The NDP members are here and we are in support of this amendment, so we would ask the House to consider that the NDP be recorded as having voted in favour of this amendment. We would ask that of the House.

[The Speaker, Peter Milliken]

Is it agreed?

[Some hon. members]

No.

[The Speaker, Peter Milliken]

I am afraid there is no consent. I think it would be difficult in the circumstances to make other arrangements, so I am afraid the request is denied.

The House resumed from October 16, 2006, 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.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I begin by thanking the hon. member for Vancouver Kingsway, the Minister of International Trade, for the leadership he has provided on the issue of softwood lumber. It is clear that on this side of the House we have consistently sought to represent the national interest. The leadership which our new Conservative government has shown on this file is a demonstration of a government that protects the interests of those who depend on their government to provide guidance and direction.

I am very pleased to represent the softwood lumber producers not only of my riding of Renfrew—Nipissing—Pembroke and eastern Ontario, but of all of Ontario in this debate.

Until recently, rural Ontario has had the voice of only two members when the policy of antagonizing our largest trading partner was put in place by the old government. Softwood lumber producers and workers are still feeling the repercussions of those disastrous days before.

I am pleased to be joined by many other voices on this side of the House who are not afraid to speak up for Ontario. The time has come to settle.

I have listened very closely to the interventions of members from Ontario who do not represent those areas of the province that have suffered as a result of the softwood lumber dispute. If those members could see the disruption of life in a household of a sole breadwinner where there is no other employment in a remote community, those members might understand why our new Conservative government put such a high premium on resolving the softwood lumber dispute.

Frankly, I am surprised by members from northern Ontario, such as the member for Thunder Bay—Rainy River, who decided to play politics with the future livelihood of forestry workers in their ridings. There is a time for politics and there is a time for statesmanship. I applaud the member for Sault Ste. Marie when he acknowledged the benefits of the Free Trade Agreement which have been brought to the forestry industry, particularly to northern Ontario. Take the next step. I ask those members to think about the workers in their ridings who will benefit from this agreement when we vote on accepting this implementing legislation.

Considering the volume of trade between Canada and the United States, it is an accomplishment that there are so few trade disputes that do arise from time to time between our countries. Therefore, it was important for our new Conservative government to act and to resolve the softwood lumber dispute.

I appreciate that those softwood lumber workers who have recently experienced job loss look to our government for leadership. If only an agreement had been reached sooner, maybe those workers would not be in the position of being unemployed today.

It is totally insensitive to the plight of the unemployed softwood lumber workers to suggest that they should wait for a ruling that may or may not come, leaving their fate in the hands of some lawyers who have a vested interest in prolonging a dispute rather than seeing it resolved.

Our new Conservative government exchanged uncertainty for certainty, and certainty is what pays the bills.

It is my privilege to speak today as the member of Parliament for a riding where men still work the forest. I recognize the hardships that have been faced by the workers and their families as a result of the softwood lumber dispute.

While it may have been politically expedient for the old government and its left-wing supporters to sacrifice the workers and their families as they prolonged a dispute that in the end would have produced only losers, as we say in Renfrew County and in some other parts of Canada, it was time to either fish or cut bait.

Communities that are dependent on the lumber industry do not have the luxury of waiting for a room full of big city lawyers getting rich on endless litigation to finally say, “We have had enough. Let's settle”.

Jobs have been disappearing at an alarming rate in rural Ontario. The need to keep jobs in the lumber industry to maintain our way of life is paramount.

The softwood lumber industry in my riding is characterized by small operations, many of them family owned, and by people who are not looking for handouts, just fair treatment.

The old government's softwood lumber policy caused significant unemployment in my riding. Worried softwood lumber producers called my office on a regular basis with the hope that the softwood lumber dispute was over. Families with their principal breadwinner unemployed wonder how they are going to survive this coming winter. In rural areas jobs are hard to come by.

Ben Hokum and Son Ltd. in Killaloe; Murray Brothers in Madawaska; McRae Lumber in Whitney; Heideman and Sons in Eganville; D and S Calver Lumber near Pembroke; Gulick Forest Products and Thomas J. Newman Limited in Palmer Rapids; and Bell Lumber in Renfrew are just a few of the businesses in my riding affected directly or indirectly by this softwood lumber dispute.

It is clear this softwood lumber crisis could have been avoided. We all knew the softwood lumber agreement would expire when it did. If the previous government had been paying the slightest attention, it would have known that the American lumber industry was pushing for countervailing duties.

There was some idle talk about building alliances with American consumers and other interested groups to fight the countervailing duty imposed on our industry, but like all the talk on climate change, the old government was all talk and no action.

Softwood lumber is big business in Ontario, exporting $2 billion worth of goods annually and employing 20,000 people directly, many of whom work in eastern Ontario. The gross regional income of the central and eastern Ontario economy is $5 billion annually in the forestry industry alone. The region employs 133,000 people.

In the Ottawa Valley the forest industry supports nearly 4,500 jobs. That translates into 2,055 direct jobs, over 1,000 indirect regional jobs and another 1,295 indirect provincial jobs. Primary wood manufacturing is over 10 times the provincial average. In actual dollars and cents, our forest industry output is $294 million annually. I can identify over 100 forest product companies that make their home in Renfrew County.

What is even more important in this debate over softwood lumber is how it was affecting our trading relationship with the United States. For value added products, the United States market is number one in Ontario. More than half of all forest products in Ontario are exported.

Members will understand why we on this side of the House use the term crisis when we refer to the state of the Canadian softwood lumber industry.

Those products have the largest export market in the United States. Exports from Ontario have increased by more than 100% since 1991.

The United States' construction industry is worth nearly $700 billion U.S. every year, and it will continue to be the focus of Canadian wood product shipments.

It was imperative that our new government respect the special trading relationship we have had in the past and prioritize the need to resolve this trade dispute.

I urge all members to set politics aside and pass this legislation as quickly as possible.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, I listened with great interest to the hon. member's remarks. I would like to explore some of those remarks, more specifically, the logic that underlies the message the hon. member is sending.

The hon. member seems to be saying that when we are involved in a court case and we are up against a bigger, wealthier opponent, that we should give in as fast as possible, get the best deal that we can possibly get, and cut and run and get out of there. Not only should the weaker party give in and get out with the best deal they can but no one should help them financially to stand up for their rights.

Does the hon. member not see a parallel between her government's position on softwood lumber and her government's position on the court challenges program, where it is abolishing a program that is meant to give financial support to weaker, smaller parties that are standing up to the status quo to have their rights respected?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, the return of more than $4.4 billion U.S. marks a significant infusion of capital for the industry and will benefit workers and communities across Canada.

Even if Canada were ultimately successful in this round of litigation without a negotiated agreement, the U.S. lumber lobby could still launch a new case against imports of Canadian softwood lumber the following day starting a brand new lumber dispute. This agreement prevents that.

To those who continue to say that Canada was on the verge of a complete legal victory, the implications of continued litigation need to be more clearly understood. Even if Canada were to be ultimately successful in litigation, the U.S. industry could file a petition and request the imposition of new duty orders immediately thereafter. Meanwhile, the stability and predictability would continue to elude our softwood lumber industry.

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

Mr. Speaker, I applaud the member for her courage because she is one of the few Conservative members who is actually willing to speak to this embarrassing, botched agreement, and Bill C-24 in the House of Commons.

We know the Conservative government is invoking closure and shutting down debate on this because it is so embarrassed by what has happened in the past week. However, this member has spoken up and I admire her courage. I know that 123 of her colleagues are going to refuse to speak to this because they are embarrassed, and they know that they have botched it and they dropped the ball.

What happened this week? Twofold. First, we have seen almost 3,000 jobs evaporate because of this agreement. In the first week of its implementation there are job losses in British Columbia, Saskatchewan, Ontario and Quebec. Right across the board it has been a complete disaster.

Second, last Friday the Court of International Trade ruled. We get every single penny back. That is its final judgment and the government was trying to stop that judgment from occurring.

So why are we giving away a billion dollars? Obviously, the member's notes were written before these two events, but I would like to ask this question. In light of the fact that we are now entitled officially, in the final decision of the Court of International Trade, to every single cent back and in light of the disastrous job losses in this past week, is the member willing now to revise her position? How does she justify to her constituents giving away a billion dollars when we do not have to?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I am extremely proud of the work that the international trade minister has done in obtaining the $4.4 billion back that had been paid in countervailing duties. This hard won agreement offers a practical and immediate solution, one that is supported by the major lumber producing provinces and a clear majority of the industry. This agreement is the best option for Canada.

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

Mr. Speaker, I stand today to continue the debate and discuss a unique event in Canadian history.

Never before has a Government of Canada snatched defeat from the jaws of victory like this minority Conservative government has with the Canada-U.S. softwood sellout. Never before has a government fought a trade dispute in the courts, won every single case, and then turned around and dismissed these victories. Never before has a government thrown the rule of law completely out the window.

Never before has a government given up our leverage in our negotiations before making an agreement. Never before has a minister caved in to meet an artificial timeline that was of his own making. Never before has a minister bullied our own industries to please the United States. Never before has Canada witnessed a government that has gone to bat for political expediency instead of going to bat for hard-working Canadians.

Simply put, this softwood lumber deal is not a deal at all. It is a complete sell out.

Last Friday, the U.S. Court of International Trade ruled that Canadians are entitled to the return of every single penny of our $5.3 billion that was illegally imposed by the United States and that we have free entry of our product into its markets. We finally have the United States in its own courts, so why is the government wiping away five years of legal victory? Why are we foregoing $1 billion of the total duty owed and agreeing to a new border charge that can be as high as 22.5%?

This deal reeks either of complete incompetence or of complete inexperience, and I fear it reeks of both. The agreement that the minority Conservative government has rammed down Canadians' throats makes a mockery of free trade and turns over our domestic sovereignty to the United States of America. It also creates a sliding scale export tax that at current price levels is actually higher than the current U.S. duties, 22.5% versus the 8.5% that we were previously paying versus the 0% that we would have been paying after last Friday.

This agreement also abandons all our legal victories and gives up, as I said, $1 billion to secure the peace. How long are we securing the peace for? For as much or as only two years.

This agreement also seeds our decisions over domestic resource management to the United States. Now Washington will be calling the shots in our very own forests. It caps the share of the American softwood market at 30% when in fact the previous Liberal government turned down a cap of 34%. This deal is actually worse than the deal we previously declined.

This agreement also contains anti-surge provisions that cripple the ability of our forest industry to deal with unexpected circumstances such as the rise of the pine beetle infestation in British Columbia. It exposes firms to needless uncertainty by agreeing to a monthly measurement for surge protection when U.S. demand is highly variable on a monthly basis.

The agreement encourages other sectors to seek political decisions to get protection from Canadian industries, all but guaranteeing more disputes in the future.

It gets worse. Not only are we giving up more than $1 billion, but we are returning over half this money, $500 million, to the very U.S. lumber industry that we are engaged with, money that it will use down the road to attack Canadian industry.

Even American lawyers think the floor crossing minister was suckered in this deal. The inexperienced, incompetent Conservative government took the terms of the surrender and now Canadians will have to pay the price. They will have to pay the price in lost jobs, lost hope, and devastated world communities.

This deal was botched by the member for Vancouver Kingsway and, sadly, it was botched badly. Now our forestry industry, our forestry workers, and our Canadian communities will have to pay the price.

Over 360,000 Canadians are employed in the softwood industry. We have a well-earned international reputation for the quality of our wood and our products. It is not an easy time. They are also facing pressure from a high Canadian dollar, high energy prices, lower housing starts in the United States, and a shrinking demand for global newsprint.

This deal, I am afraid, will only worsen their plight, and has in fact already directly caused the layoff of thousands of workers in just the past 30 days.

Industry associations warned us that this Conservative deal would cause a disaster. The Ontario Forest Industry Association estimates that it would cause 10% of the industry to lose jobs, and we are well on our way. The Bank of Montreal expects more shutdowns of both pulp and paper and sawmill facilities. The Independent Lumber Remanufacturers Association warns that this deal would all but destroy this sector.

To add insult to injury, the minority Conservative government has continued to bully our industries into submission. The Prime Minister has backed Canadian softwood industry representatives into a corner and left them with no choice but to cede to this flawed deal.

There is a better way, however. We do have a choice. Canadians and this Parliament can say no this botched deal, and that is what we should have done from the start.

We should see our NAFTA challenge through to the end, as it has last Friday. We should implement an aid package immediately that will invest in improving our industry's competitive position, that will invest in skills of our workforce, and will work to develop new overseas markets for our wood products.

The Liberal Party cannot support this deal in good conscience, not when the Conservative government leaves $1 billion on the table, restricts our future free trade with the United States, and results in thousands of layoffs instantaneously.

It is our duty as the official opposition to stand up for the interests of the Canadian lumber producers, for the 360,000 employees, and for the interests of all Canadians.

We stand opposed to the minority Conservative government's humiliating surrender and we oppose this weak deal to which it shamefully has capitulated.

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

Mr. Speaker, we know that the Conservative government has invoked closure and is shutting down debate in this House. We also know that Conservatives are refusing to speak to the softwood lumber agreement because they are so embarrassed by it.

In fact, there are 123 Conservative sheep that will refuse to speak to it, despite the catastrophic job losses we have seen in the past week in Saskatchewan, British Columbia, Ontario and Quebec. There were nearly 3,000 jobs lost in the first week of this bad deal's implementation.

We also heard last Friday the Court of International Trade say that we have the right to every single penny back on the money that was illegally taken. We are giving away $1 billion for nothing.

I would like to ask the member two questions. First, how does he react to the fact that we won in the Court of International Trade and we should get every single penny back? The only thing stopping us is the Conservatives and the Bloc working together to try to ram this bad deal through.

Second, given the fact that the Liberals and the trade committee stopped the hearings that were to take place across the country to hear from the public on this bad deal, would he be prepared to bring forward, with his colleagues, an actual proposal for hearings so that the international trade committee could go across the country and hear from the public on this issue?