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

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, there are two key areas that the NDP finds fault with in Bill C-24. The first is the money that was left on the table, the billion dollars that could have been rightfully returned back to the softwood lumber producers.

My colleague is saying that is the past and ancient history. In actual fact we have now financed the next attack of the American softwood lumber producers on Canadian softwood lumber producers because my colleague should not think for a minute that this is the end of the harassment by the Americans. This deal does not protect Canadian producers adequately.

The second objection the NDP has, which I cited earlier, is the whole issue of forfeiting our Canadian sovereignty in the administration of our own softwood lumber industry. I am sure my colleague would agree with me that the notion is fundamentally reprehensible that some other country should dictate to the province of Quebec how it manages its softwood lumber industry in that province. It is an affront to Canadian sovereignty. It is an affront to the jurisdictional sovereignty of the province of Quebec that it would now have to have any of these changes vetted through Washington before it would be allowed to change.

That means a change in stumpage fees, a change in cutting rights, or a change in the way that the forest is managed and administered would now have to be cleared through Washington. The Americans will try to ensure that this does not constitute any kind of a subsidy because in their minds almost everything that Canada does to look after our own best interests constitutes a subsidy.

We are damaged. We are suffering on two fronts: first, the pure financial aspect that we have $1 billion less to create jobs and to revitalize our industry, money that our softwood lumber industry players could have used to reinvest, retool, and use in research and development; and second, this affront to Canadian sovereignty that the Americans will now dictate how we manage our assets in the forestry industry.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, for the past year since this deal was put together we have been stuck on this figure of $5.1 billion or $5.2 billion. Does my colleague not agree that if this money was set a year ago, there should be some interest that would have accumulated by now? Does the member find it interesting that the figure is not changing? If he does not want us to forfeit our sovereignty with respect to the lumber industry, why is the New Democratic Party supporting this bill?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, perhaps my colleague was not here for the earlier part of my speech. The NDP is not supporting the bill. The NDP is vehemently opposed to Bill C-24. In fact, my colleague from Burnaby--New Westminster was the sole voice on the standing committee that objected in the strongest possible terms to having this very flawed piece of legislation rammed down our throats.

Perhaps I misspoke or perhaps my colleague did not hear me clearly, but let me phrase it for him one more time. The NDP is opposed to Bill C-24. We will vote against it because we believe that we left $1 billion on the table, notwithstanding the very real point my colleague raises about there not even being any interest on that money. It is in actual fact the $5.3 billion of illegal duties taken by the United States. If we add even a nominal rate of interest, it is actually much more money than that currently.

We believe that $500 million that is going to the U.S. Coalition for Fair Lumber Imports will be used to launch the next volley of assault toward the Canadian softwood lumber producers. In other words, we are financing through our own money that was taken from us illegally the next trade challenge against us.

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

Mr. Speaker, I am going to use the few minutes available to me to offer a brief summary of the situation as it relates to the softwood lumber agreement signed on July 1, between Ottawa and Washington.

As everyone knows, we have not been too eager to support Bill C-24. I come from a region, Saguenay—Lac-Saint-Jean, that has been greatly affected by the softwood lumber crisis in recent years. That is in fact the reason why I wanted to talk about this issue again today.

Many of my colleagues from Quebec are going through a similar situation. In our respective regions, when the sawmill shuts down, the entire local economy is affected.

For example, the municipality of Ferland-et-Boilleau, in my riding, falls into the one-industry category, because 80% of local jobs depend on that economic activity. Obviously, the problems the forestry industry has been experiencing for several years have had major economic and social consequences for that municipality.

The situation is not rosy for the forestry sector. This agreement is only one step in the right direction. Once again, last weekend, the municipality of Normandin in Lac-Saint-Jean watched as Gémofor sought the protection of the Bankruptcy and Insolvency Act. I would point out that Gémofor employed nearly 150 men and women. The uncomfortable situation the company now finds itself in is not encouraging for the people in that community.

These are just a few examples. But a large number of sawmills, like P.H. Lemay and Péribonka, have been affected by the crisis in recent months.

At present, the government seems to be wanting to wait for the market to sort itself out while abandoning hundreds of businesses to their fate. This is a dangerous game because a number of rural regions could see their economies completely wiped out by this kind of decision.

This industry is indeed on its last gasp, at the end of its rope. It would be better to accept this bad agreement than to risk losing those businesses. Now that the agreement has been ratified, it is up to the government to put a set of measures in place as quickly as possible to assist the softwood lumber industry, which is facing serious difficulties at the very moment when it has been weakened by a lengthy trade dispute.

The industry needs immediate assistance to avoid these plants having to bear the costs of the federal government’s failure to support them.

I had the opportunity to speak on this subject in September and I would once again like to refer to some statistics that prove the new agreement is not enough to ensure the survival of the forestry sector. In early September, the Bowater sawmill at Saint-Félicien was forced to lay off 140 employees for an indefinite period.

The Coopérative forestière de Girardville announced that an investment of a million dollars would be needed to restart its operations.

Finally, the PFS sawmill in Petit-Saguenay is due to re-open its doors after initially shutting down for what was expected to be two weeks. Meanwhile, the sawmill has decided to discontinue its second work shift due to market difficulties.

These are just some examples of what is happening in many municipalities in Quebec and across Canada.

Although it is a statistic that I have already referred to in this House, I would like to mention it again. The softwood lumber crisis led to the loss of 3,000 jobs in my region of Saguenay—Lac-Saint-Jean—yes, 3,000 direct jobs —and the situation continues to get worse.

We are living through a crisis without precedent and the conditions for profitable operation are very difficult. A good number of forestry companies will have no other choice than to restructure or to realign their activities or their plants in order to remain competitive.

The root cause of the problem remains intact. The situation will continue to get worse if quick action is not taken. The problem is most acute in the resource regions of Quebec and it is difficult to close our eyes to this situation.

For several years, the Bloc Québécois has been calling for the introduction of a support program for older workers. The Bloc Québécois has intervened three times in the House of Commons to demand the implementation of a new POWA.

Unfortunately, the announcement of the Conservative program in October turned out to be worse than we feared because the assistance is not immediate and takes the form of a two-year pilot project that is under-funded and does not respond to the needs of older workers.

Indeed, a large part of the program consists solely in helping workers retrain. When an entire community suffers the hardship of a massive layoff, real action has to be taken. Regrettably, workers who are more than 55 years old and have difficulty finding another job cannot benefit from such a program.

That is why the Bloc Québécois believes that now that we have accepted a sellout agreement, it is incumbent on the government to put in place programs that will enable communities and companies that depend on the forests to diversify their economies.

The Bloc Québécois proposes to increase the budget that the federal government allocates for economic diversification of forestry regions. It also proposes that the funds be transferred to the Government of Quebec to avoid duplication of effort. Consequently, we are talking about a sum of $50 million over three years, strictly for Quebec. The federal government has the means to assist an economy that greatly needs support.

In closing, I would like to point out that Bill C-24 does not solve the structural problems in the market. In the coming months, measures must be introduced to avoid a collapse of the forestry sector. Moreover, I hope the minister will act on the resolution from the RCM of Lac-Saint-Jean-Est, in my region of Saguenay—Lac-Saint-Jean. The resolution adopted in September calls on the federal government to provide greater support to the forest industry.

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

Mr. Speaker, I represent a northern Ontario riding. It has been a very distressful number of years for the forestry industry, not only in northern Ontario but throughout Canada as well as in the area in Quebec from where the Bloc member comes.

When I look at the impact of the troubles we have had with our American neighbours in Chapleau, Hearst, Opasatika, Thessalon, White River, Espanola, Nairn and many other communities, I cannot help but think this deal was supposed to bring improvements to the trading relationship in softwood lumber between our two countries.

The day before the deal came into effect, we had a tariff of between 10% and 11%. The day after the deal was signed, the export tax went up to about 15%. When it was a tariff, at least there was a chance the industry could get that money back. Court cases and panel decisions, time after time, had decided in Canada's favour. When it is an export tax, there is no chance that money can come back to the industry, according to the very agreement itself.

I understand the member feels the need to support this deal, but I and our party do not. It is a terrible deal for Canada and for northern Ontario. However, I understand the exigencies of the situation as he sees them.

Could he explain, as best he can, how going from a 10% or 11% tariff to a 15% export tax is better for the forestry industry?

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

Mr. Speaker, I want to thank my colleague for his question. I see that the situation in his region is similar to the situation of a number of companies in my region of Saguenay-Lac-Saint-Jean.

The softwood lumber industry in Quebec and in my region is currently on its last legs because of the large amounts of money withheld as a result of the tax imposed by the Americans. This money will be given back to the companies and will inject a bit of money into the softwood lumber industry.

However, the minority Conservative government absolutely has to introduce measures. It is not enough to give back some of the money withheld because of this American tax. An assistance program is needed.

In my riding, for example, there are a number of small companies, and the softwood lumber industry is the main industry in town. I was giving the example of Fernand-et-Boileau where 80% of the jobs depended on this industry. That is why assistance is needed in these communities.

Assistance also needs to be given to the companies that work in this sector and to the companies that have had to resort to mass layoffs and close their doors.

That is why we are calling on the government to implement programs for older workers and for the communities, in order to get the softwood lumber industry back on its feet.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, when one looks at the deal and the way it was brought about, it lends one to believe that perhaps there is a strategy in place that is larger, and that is to integrate the Canadian economy into the American economy.

In Canada we have done some pretty unique and creative things to protect industrial sectors, particularly in Quebec. A number of government run, controlled and often funded organizations are put together by people in the different sectors. This allows them to have some control over their livelihoods, the future of their communities and the resources used to feed their industries. I am thinking particularly of the Wheat Board and the fact that the government wants to do away with that vehicle.

Are we seeing a pattern or trend that will finally have the Canadian economy totally integrated into the American economy, if we continue down this road?

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

Mr. Speaker, certainly, with NAFTA, the American and Canadian economies are perhaps not integrated, but facilitated. We also have to recognize that, at least in Quebec, a high percentage of companies export goods and services to the United States. In that sense, trade between Canada and the United States is highly developed.

Since we are talking about softwood lumber, it also would have been nice if there had not been all those constraints and taxes. Unfortunately, this dispute led to a misunderstanding by the Americans and an unacceptable situation for us, in that our companies and the softwood lumber industry were subjected to American anti-dumping taxes.

That is why we went to court, where we won on several occasions. Later, an agreement was reached. We feel that it is not the best possible agreement, as it involves compromises. It could be called a sellout agreement. But because of the situation of the softwood lumber industry in Quebec, we had to support the agreement, because the industry was at the end of its rope. The agreement was a way of giving the industry back most of the money it was owed.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, millions of trees in my area are being damaged as a result of a spruce beetle infestation. This is happening in other parts of Canada as well because of global warming. Vast quantities of trees have to be cut down rapidly.

There is an anti-surge mechanism in this agreement. If the market is flooded, another tax will kick in. This is bad for Canadians. If these trees are not cut down, they will rot in a few years and they are lost. Therefore, Canada is either going to lose all this lumber or we are going to have a huge unfair tax put on us.

What does the member think about that?

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

Mr. Speaker, the member is raising a problem that is being felt particularly in the western provinces, such as British Columbia, I believe. The softwood lumber industry in Quebec supports this agreement. Before we stated our position, my party, my colleagues, my leader and I consulted the softwood lumber industry, unions and all the industry stakeholders. They recommended that we support this agreement, even though we felt it was a sellout and was not the ideal way to rectify the situation.

The Bloc adopted that position because it is a democratic party and the consultations produced that result.

[The Acting Speaker, Andrew Scheer]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Andrew Scheer]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Andrew Scheer]

All those in favour of the motion will please say yea.