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

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I am sure the public watching this are aware, by the comments made by the minister, of how important it is to avoid litigation unnecessarily and understand the implications with respect to the industry.

However, there must be another huge body of opinion that is concerned with the issues of precedence and rule of law and the notion that in a relationship with another country, a country with which we have 85% of our exports, we not find ourselves where there is no respect for that rule of law, sliding in that slippery slope on grease skids, and where there is retaliation in other sectors. I can see a large body of opinion looking at it this way, if there is not the kind of natural justice that comes along with the respect for the law.

We have gone through international tribunals. We finished with another international tribunal, the International Court of Appeal. It was my recollection that there was an attempt, without prejudice, to go through the American justice system, the courts of appeal, with respect to finding precedence whereby we could get a decision in the American courts.

Was that pursued? As we speak, is there any opportunity to pursue that? I think I have indicated how important it is to our public to be responsive and responsible to what precedent this might create in other sectors in the future?

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Mr. Speaker, the real concern I have is the Canadian industry interests that have pursued their interests at the U.S. Court of International Trade. If they continue to pursue that, then they cannot sign on to this agreement, and will be hit by this punitive 17% extra tax.

I put this back into the realm of the unpleasant word, bullying, to force the industry to come together whether they may think it is in their bests interests for themselves, their communities and their workers or not. That is part of the dark side of this and the reason why this debate is so important in the House this week.

[Randy Kamp, Conservative, Parliamentary Secretary to the Minister of Fisheries and Oceans]

Mr. Speaker, it is a pleasure to speak to Bill C-24 which will implement Canada's obligations under the softwood lumber agreement. Let me say right off the top that I urge all members of the House to support this bill.

The main point I would like to make is a simple one, that the softwood lumber agreement is good for industry, it is good for lumber communities and it is good for Canada. It is an agreement that, as we have been saying here, enjoys a broad base of support. It is an agreement that brings many benefits to our lumber industry. It is an agreement that will help us take the next steps in building a stronger economic future for Canadians and Americans alike.

Let me start by saying that the agreement did not come about by itself. It is the result of a strong Canadian position, one forged with the active involvement of industry and provinces.

In fact, in direct response to industry concerns, the agreement contains two important clarifications. One is a 12 month standstill period upon expiry of the agreement, under which the U.S. cannot bring new trade action against Canadian softwood producers. There is also a requirement for a six month notice period if either party wants to terminate the agreement--of course, we do not expect that to happen--also with a 12 month standstill period if the U.S. should terminate the agreement early.

In response to Canadian industry concerns regarding the exemption of coastal logs and lumber, the U.S. has also confirmed that it is prepared to engage in early bilateral discussions to ensure the agreement operates in a commercially viable manner.

The agreement also stems from the dedication of countless officials across government and on both sides of the border.

Ambassador Wilson and Ambassador Wilkins and their staff here in Ottawa and Washington deserve our thanks for their hard work and steadfast commitment. We owe a great debt to the member for Vancouver Kingsway, our Minister of International Trade, for finally bringing this agreement to completion.

The provinces along with our softwood lumber industry were instrumental in shaping Canada's negotiating position. The premiers of British Columbia, Quebec and Ontario in particular deserve our appreciation for their ability to see beyond partisan concerns and add their support to our efforts to put an end to this dispute.

Most significantly the agreement is the result of a new tone at the top. When our Prime Minister met with President Bush in Cancun earlier this year, they decided to give solving this issue the momentum it deserved. Thanks to their efforts and leadership we are now able to turn the page on this dispute.

This is an agreement to be proud of. It is a practical and flexible agreement that ends this long-standing dispute on terms that are highly favourable to Canada.

Frankly, I am having a hard time understanding why all B.C. MPs are not supporting this agreement. The Liberal government of British Columbia supports the agreement. In fact, B.C. forestry minister Rich Coleman asked the opposition to support the agreement. How could B.C. Liberal and NDP MPs vote against it?

The majority of the industry in B.C. supports the agreement. How could B.C. MPs not support this agreement?

The Liberals were negotiating a bad deal for Canada, especially for British Columbia. They were ready to sign a deal and only backed off so that they could run an anti-American election campaign, a campaign that did not work.

Moreover, the agreement directly responds to specific issues and concerns raised by industry and provinces. For instance, it recognizes provincial market based reforms and preserves provincial authority to manage their forest resources as they see fit.

It contains an anti-circumvention clause, a clause intended to prevent either government from taking action to circumvent or offset commitments made in the agreement. For example, grants or other benefits to producers or exporters of softwood lumber products are not allowed because they would offset border measures. But a number of measures are explicitly cited as not constituting circumvention.

For example, provincial timber pricing or forest management systems as they existed as of July 1, 2006, including any modifications or updates that maintain or improve the extent to which stumpage charges reflect market conditions, including pricing and costs are excluded.

Fluctuations in stumpage charges that result from such modifications or updates resulting from changes in market conditions or other factors that affect the value of the province's timber, such as transportation costs, exchange rates and timber quality and natural harvesting conditions do not constitute circumvention.

Actions or programs for the purpose of forest or environmental management, protection or conservation, including actions or programs to reduce wildfire risk, protect watersheds, protect, restore and enhance forest ecosystems do not constitute circumvention.

Payments or other compensation to first nations for the purposes of addressing or settling claims also are not subject to circumvention.

Note that with respect to British Columbia, the market pricing system will be considered a provincial timber or forest management system that existed as of July 1, 2006. The protection of the management system in B.C. has always been B.C.'s most important issue. At the insistence of Canada, these protections were included in the agreement.

I am happy to say that the agreement enjoys the support not only of our two national governments but also the clear majority of lumber companies and lumber producing provinces. In short, it will put an end to this long-standing dispute and begin building a brighter future for Canada's lumber industry and the 300 mill communities and 300,000 forestry workers and their families who rely on it.

The next step belongs to parliamentarians. I encourage them all to support it. As parliamentarians consider the merits of this bill, I would also ask that they consider the alternative to this agreement. It would not be a bright future. They have been there before. They have seen the toll, both human and financial, that this dispute has taken and we need to bring an end to this.

After careful consideration of the facts, I am confident that parliamentarians will come to the same conclusion that the provinces and industry have, that this agreement is the best option for Canada. I ask all members of the House to support this bill.

The House resumed from September 25 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.

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, I am glad to have this opportunity today to talk about my concerns and the concerns of so many others in my riding that have been expressed to me about how this softwood lumber deal is bad for Canada.

I think everyone wants a softwood lumber deal, but the tariffs and the court challenges that have been plaguing the softwood industry for many years now have had a negative effect on forest dependent communities in my riding and across this country, and they were court challenges that the Canadian industry won over and over again.

The Conservatives campaigned on getting tough with the Americans, on standing up for Canada and Canadian interests, but instead they got tough with Canadian lumber companies. With the signing of this deal, they have negotiated away all of Canada's wins at the NAFTA tribunal and have put workers and communities in jeopardy.

Canadians should be very worried about this deal and what it means, not just for the softwood industry, but for all industry. When the U.S. can take Canada to court and it is proved that Canada is innocent at every level of appeal and tribunal, that Canada does not subsidize the softwood industry, and still the Government of Canada signs off on a deal that gives away the very thing we won, full compensation, the precedent this sets must have implications for every industry in this country that does business south of the border.

How can anyone agree to a precedent such as this? It sells out our ability and our credibility in the international courts, not to mention world public opinion.

This deal leaves more than $1 billion on the table. That is a lot of money. That money should be coming back to Canadian softwood lumber companies to invest here in impacted forest communities. Because of the length of time during which the softwood crisis has dragged on and because of inaction by the previous government, forest communities have suffered. There has been a serious under-investment in mills in this country because it is cheaper to send raw logs across the border than to pay the tariffs on processed lumber.

In my riding on Vancouver Island North, where I have heard very little support for this deal, workers, community leaders and small lumber companies are telling me that this deal will spell the end of their existence. Without the prospect of seeing a 100% return of the illegally taken tariffs, no hope of loan guarantees and, if a company does not sign on to this deal, a 19% levy, they are feeling pressure to support this softwood sellout.

The NDP called on the government for loan guarantees for affected companies to get them through the litigation process that they were on the verge of winning. Loan guarantees would have allowed cash-strapped companies to continue operating to possibly upgrade their mills instead of downsizing and maybe shutting down, but the government refused to assist those companies. In so doing, it refused to assist the workers and the communities in which they live.

When it becomes cheaper for the industry to export raw logs to the U.S. than to process them into lumber in our small communities, it effectively closes those mills, mills that provided good paying, family supporting jobs in coastal communities. There is nothing in the softwood deal which will ensure that mills will once again flourish, and communities along with them.

Not only are the lumber mills disappearing, but pulp mills are having a hard time getting fibre to make their product. Fibre in the form of wood chips from sawmills used to be plentiful and easily accessible, but with the closure of those mills not any more. Pulp and paper operations have to seek out fibre supplies from outside the province and the country, in fact sometimes buying the very wood chips of logs milled in the U.S. that grew in the same area as the pulp mill. It makes no sense.

The value added sector in this country is quickly disappearing and the government is doing nothing to stop the export of raw logs and processing jobs.

How do I tell those workers and those communities affected by this deal that it is in their best interest when we all know it is not?

The fact that over a billion dollars is not coming back to Canada is one thing, but let us take a look at where it is going and what it could be used for. Of the billion dollars Canada's softwood industry workers and communities will never see, $500 million will go to subsidize the U.S. Coalition for Fair Lumber Imports.

Canada is giving away $500 million to the very aggressor of this trade war, which purported unfairly that our industry was subsidized, to use against us in the future. If ever there were a schoolyard bully in this situation, and there seem to be two, the U.S. Coalition for Fair Lumber Imports is one of them.

As for the other $450 million, that is going directly to the George Bush administration to use at its discretion without congress approval or accountability. How can anyone justify it, no matter what it might be used for?

The other bully in this situation is the Conservative government, which is giving away Canadian dollars to the U.S. even though the Canadian softwood lumber industry won every NAFTA dispute and was awarded full compensation. It is like taking lunch money from little kids and giving it to the bullies who beat them up at recess so the bullies can buy bigger sticks to whack them in the future. How can this possibly be good for Canada? How is this fair?

The government may say that it has the support of industry and the provinces, but much of that support was conditional and the provinces were pressured to sign on. We know that less than 95% of the companies signed on by the government's due date. Much of that support was on the condition that the government in fact met its 95% threshold.

That did not stop the government from implementing punitive taxes of 19% on those who refused to sign up, another bullying tactic. It says that if they do not sign up and give 20% of company returns away, the government will take it away when they win 100% at litigation. How is that showing support for industry? That 19% just might be the straw that breaks the camel's back for some in the industry, yet the government will not support them with a process that they have every right to engage in and were about to win.

Then there is the issue of stability and certainty for the softwood lumber industry. The government has said that this deal will give seven to nine years of certainty in the industry, but if we look closely at this deal we see that it can be unilaterally cancelled at any time after just 18 months. Therefore, it does not provide predictability or stability to the softwood lumber industry.

The U.S. can also terminate the agreement immediately if it feels that Canada has not complied with the terms. Given its track record of imposing illegal tariffs in the first place, how can we be sure that the U.S. will not unilaterally decide to end the deal, regardless of a side letter that says it will not casually terminate it? There is no guarantee. Unfortunately, because of the events of the last several years, it will be difficult to trust the U.S. Coalition for Fair Lumber Imports once it has that $500 million of our money.

Supporting Bill C-24 means we would be voting confidence in the government. We are not prepared to do that, since we are not convinced that this deal is the best deal we can get. If the government had let the extraordinary challenge committee review panel do its job, instead of cancelling it, Canada would have won once and for all a 100% return of the illegally taken tariffs and all that money would now be flowing back to Canadian industry, communities and workers, not into the pockets of U.S. lobbyists and George Bush.

By undercutting our legal victories, the government has set a dangerous precedent that Canada will capitulate to American industry despite having a winning case. This precedent is as troubling for the lumber sector as it is for any other industrial sector. This deal is a betrayal of resource communities in British Columbia and across Canada.

In fact, just yesterday the government added to its list of betrayals of resource communities by cutting over $11 million from the pine beetle initiative. Ironically, on the same day, the government produced a press release saying the beetle knows no bounds and is threatening the boreal forest.

Also, $20 million has been cut from the DFO, money that could have been used for enhancement, enforcement and upgrading infrastructure.

The government has also cut money from western diversification, money that has not yet been allocated. The government is calling it unused program funding, but it is hard to allocate funding when everything is frozen.

It is an ongoing list. These betrayals of rural communities are becoming a shameful pattern in this minority Parliament. The sooner it ends, the better off Canada will be.

I have said it before and I will say it again: this is the same bad deal that was introduced months ago. It is the same bad deal that workers refused to support because they know their jobs are at stake. It is the same bad deal that industry refused to support until it was bullied by the government into signing on. It is the same bad deal that the NDP did not support in the beginning and will not support in the end.

It is our job as members of Parliament to defend Canadian interests, to defend Canadian jobs, and to defend Canadian communities, not sell them out.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the fact of the matter is that both the NAFTA and WTO panels have ruled continually that our softwood industry has not been subsidized. In fact, the current provisions of Bill C-24 are going to create an export tax that at current price levels will actually be higher than current U.S. duties. It also would create a problem down the road, obviously, with regard to future deals.

Does the member have the same view we do that this is a sellout and that the industry has been bullied into switching its position from being opposed initially and then suddenly miraculously and out of the blue turning around and deciding to go for this sellout?

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, to reiterate much of what I said in my recent remarks, yes, I absolutely agree that this deal is a sellout. It is a sellout on so many different levels that it is unconscionable anyone could present it in this House and then support it.

We are talking about $1 billion that should be reinvested in Canada. We are only going to see half of it. Where does that $1 billion go? What is it going to be used for? It is a sellout on that point.

It is also a sellout of jobs and a sellout of small communities. I feel the effect of this in my riding, where so many small resource-based communities depend on the forestry sector for their livelihood. They are disappearing. They are losing their tax base. They are losing workers at an alarming rate. It is unconscionable that anyone could support a deal that sells out workers on this scale.

This deal also sells out the industry at so many levels. Industry knows this is not a good deal. Small industry especially is going to get gobbled up by larger corporations that do business on both sides of the border. We are then going to see our future in the export of raw logs disappear, because it is going to be cheaper for corporations to take those logs to the U.S. to be milled instead of processing them here in Canada where they should be processed.

This deal is a sellout in so many ways. I thank the hon. member for his support.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, first of all, being a part of the new Government of Canada, I am very proud of this deal. This deal offers stability. It offers a stable, practical, immediate solution. The member says this is a sellout. This is not a sellout. This deal is actually supported by the major lumber producing provinces and a clear majority of the industry.

I come from Oshawa, where we are known for quality hard work and are proud of our communities. Because of the softwood lumber dispute, communities are failing. Mills are closing and thousands of jobs are being lost. Families are being challenged. Their finances are in jeopardy and mortgage payments are not being made.

This is a negotiated settlement as opposed to continued, prolonged litigation. The NDP fails to see the human cost of this continued litigation. The hon. member says her party wants loan guarantees. This deal gives producers back their own money, a far superior solution. By not supporting this deal, the NDP is guaranteeing more job losses and litigation.

What will that NDP member say to the thousands of workers and the thousands of families who are on the verge of losing their future right now if this deal does not go through?

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, I absolutely feel the effects of the softwood lumber crisis in my communities but I do not think it will end with the signing of this deal. In fact, it will probably get worse, which is what small industry in my riding is telling me.

As far as stability goes, 18 months is not a very long time. Eighteen months is the amount of time that it will take for either party to possibly end this deal and it can be unilaterally ended at any time by the U.S if it feels that Canada is not complying. As I have said before, how can we trust the lumber lobby in the U.S. when it has taken us to task over and over again saying that we had illegal tariffs when we did not?

[Helena Guergis, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, if the premier of her province is asking her to vote in favour of this legislation, why is the member choosing to ignore that request? Why is she choosing to ignore that 90% of the industry is in support of the deal and wants the deal?

A lot of the comments she has made today about the state of the situation of our softwood lumber industry in Canada are a direct result of the past 13 years and the inability of the previous Liberal government to come to the industry's aid, to help it with the issues and to actually reach an agreement. It is this Conservative government that was able to negotiate a deal, which our Minister of International Trade, having been on the other side before, knows full well surpasses anything that the previous Liberal government had on the table.

I am curious to know why the hon. member is ignoring what her province is asking her to do in support of this agreement.

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, I do not agree with anything that the hon. parliamentary secretary said.

Ninety per cent of the industry in British Columbia was bullied and did not support this deal and yet the Gordon Campbell government in British Columbia did support it in the early days. It was only after the industry was pressured that it came on board and supported it.

Again, it comes right down to the fact that the industry knows that this is not a good deal, that there is no stability and that it is a sellout. It is loath to support it but it feels that it has no other option because of the bullying tactics of the government.

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

Mr. Speaker, I thank the member for her very well thought out presentation on the softwood sellout. She is part of an NDP caucus that is the only caucus actively opposing this sellout and all the negative repercussions to the softwood industry and the softwood communities across the country.

I would like to ask the member a question about what just transpired at the international trade committee, where the three other parties from the other sides of the House refused to hold hearings to actually get from the softwood communities that are impacted the kind of feedback about how this bill would impact them negatively and what alternatives the government should be looking at.

The Bloc just cancelled the sessions that were supposed to take place in Saguenay—Lac-Saint-Jean. Saguenay is the area most affected by this bill, yet the Bloc just cancelled the sessions. The Bloc said it was not interested in consulting Quebeckers.

The Liberals just killed the hearings that were going to be held in northern Ontario, when we know that northern Ontario is most impacted by this, and the Conservatives wanted to kill the hearings in British Columbia. We understand why. It is obviously because they are scared that British Columbians might actually find out what is in the deal. The more British Columbians know, the less likely they are to vote Conservative.

Since the NDP is the only party standing up for the majority of Canadians who oppose this sellout, why does the NDP need to carry the ball for the entire country? Why are the other three other parties letting this country down?

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, the NDP seems to be the only party opposing so many things that are going on with the government because we are the real opposition in this minority Parliament.

Going back to the member's points on the hearings, it is amazing that this is going ahead without hearing from people in the industry, from communities and from workers across the country who are adversely affected by this deal. If the hearings keep getting cancelled, which is just wrong, we will never hear those voices. It would have been better, in a matter of process, to put off the vote on the deal until we had heard from Canadians across this country about the impacts, so they could have a broader understanding of what this holds for their future.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I am pleased to participate in this debate for many reasons, aside from the fact that the deal is a bad deal. I will explain why I and the Liberal Party believe it is a bad deal.

There is an historical side to this. I cannot help but open with a comment because of the closing comment that was just made by the member from the NDP saying that it was the only party that stood for this. That is absolute rubbish. That is wrong and unfair, and I will explain why.

I had the honour, if I may say, to chair the subcommittee on international trade, trade disputes and investments for Canada under the Standing Committee on Foreign Affairs and International Development. We put together a report. The most in-depth issue we covered was that of the softwood lumber dispute. We heard witness after witness.

What is odd is that the New Democratic Party is trying to portray to the nation that nobody cared. Mr. Speaker, you know very well that we were close to making this deal work.

I will outline the witnesses who came before the committee. We had people from the Canadian Lumber Trade Alliance, the Free Trade Lumber Council, the Québec Forest Industry Council and the Department of International Trade. We heard from Mr. Grenier as an individual and people from Cassels Brocks & Blackwell as a firm specializing in international trade. We had people from the University of Ottawa. We heard from Mr. Donald McRae, Professor of Business and Trade Law, and from people with the B.C. Lumber Trade Council, Canfor Corporation, West Fraser Timber Co. Ltd., Weyerhaeuser, and the list goes on.

Those individuals, on behalf of their companies, said that they appreciated the support that the then Liberal government was providing but that they needed more financial support to see this through until the end. They knew they were right and that the ruling would be in their favour. In the committee report, which was brushed aside, was the recommendation that the government would provide the needed support that the industry was asking for.

What happened? The NDP forced a premature election and everything went down the drain. That is my comment on the NDP. My colleague from British Columbia knows very well that we worked together.

Why is this deal a bad deal? Recently I just happened to read an article that states:

“Non-profit bodies to manage softwood proceeds”, U.S. says.

It goes on to say that over half a billion Canadian dollars will go to various non-profit organizations for housing, et cetera.

I would not mind having that half a billion dollars here in Canada for people who need affordable housing, for seniors or for students to pay for post-secondary education. We do not know where the other half a billion dollars will go.

It says in this article that a couple of weeks ago several Washington trade lawyers told the Toronto Star that they were worried that the nature of the agreement would allow President Bush and his administration to direct the money to districts where republican politicians are in trouble in this fall's election. Where will the other half a billion dollars go? We do not know and that is Canadian money.

We know, through the dispute mechanism, that tariffs were lowered. When people say that this is a good deal and Canadians want it, that is hogwash. Canadians do not want it.

Not only is the government muzzling the industry, but it states here that--and I always tend to put my statements forward not because of what I say but because of what others say in bringing the facts forward--“Ottawa”, meaning the new Conservative government, “plans to tax holdouts”. In other words, if people do not agree with the government, this is what it will do to them. It says:

The federal government plans to levy a 19 per cent special tax on lumber companies that withhold their cooperation with the newly signed softwood lumber deal with the United States.

I am dumbfounded. I have never heard of this before. The government is saying that if a company does not agree it will be punished worse than it was being punished by the Americans. That does not make sense.

We are supposedly trying to resolve this issue for which we have been in the right ruling after ruling. This is the importance the Americans put on this issue. We have a picture here. Delegates at the signing of the softwood lumber deal in Ottawa yesterday included the Minister of International Trade and the Minister of Industry. Canada sent two senior ministers. The Americans were kind enough to send their trade representative. What an honour. Why did Canada not send its trade representative? That is the importance the Americans put on this issue.

What is wrong with this deal? The deal sends a wrong signal. It sets a precedent. In putting together the report that I showed the House, we also put a report together on emerging markets. Part of the discussion within that report was how Canada could protect Canadian companies and investors that do business with the international community. We need to ensure that the mechanism is there so that when Canadians go abroad their investments and efforts are protected.

Surely we would think that a nation such as the United States of America living in the 21st century would adhere to rules and regulations. This is all we asked for, nothing more and nothing less.

Some people said that this half a billion dollars would go to support the unfortunate incident of the Katrina disaster. I remember the day, and I know you were there as well, Mr. Speaker, when we went out and in just over an hour and half during the noon hour we raised I believe about $120,000 that would go to the Red Cross relief for the Katrina disaster. Canadians know how to show our brotherly love and our support for our neighbours to the south. In times of need, no matter where it is around the world, we have been there and I am confident we will continue to be there.

Therefore, I do not buy the argument that the Americans fouled up with trailers sitting in parks somewhere in the United States. If that country blundered and wasted over $1.5 billion that it cannot allocate for, that is their problem.

What this softwood lumber deal is saying is that the Americans have stolen $5.4 billion from Canadians. The courts have now ruled in Canada's favour but the Americans will only give Canada $4 billion of that money back. I thought we lived in a civil society that was governed by rules and regulations. I thought the NAFTA deal was there to ensure it was a free, transparent and equal trade process. The deal we have before us, where Canadians in the industry have been muzzled, it is not a free, transparent and equal trade process.

I have another concern about the Minister of International Trade and the Department of International Trade. We know very well that in the last Parliament, when our party put forth a motion to create the Department of International Trade, the Conservatives voted against it. That party did not want a Department of International Trade to exist.

Nevertheless, after the deal was signed with the trade commissioner from the United States, the minister appeared on television with Mr. Newman in a segment called Politics. When Mr. Newman asked the trade minister how this would unravel, he had some very ambiguous responses. He could not really give him an answer. However, of all the answers he could give, and the one that stuck in my mind, was, “How are we in Canada going to get our money back?” He could answer that. He mumbled and jumbled about EDC, about borrowing from here and getting from money there.

On behalf of each and every Canadian, because these are Canadian dollars, I want to ensure, as soon as possible, that the $4 billion cheque is handed over because I am suspicious that money will not be there. The government will borrow through different government organizations, EDC, insurance, et cetera and Canadians will never know if that money was indeed returned. I challenge the new government, as it wishes to be called, to show Canadians that the cheque has arrived in Canada. I am willing to bet a dime for a dollar, and I am not a betting man, that the money will never arrive in Canada.

It is a sad day in terms of our trade partnership with the United States. What members have talked about in the report is the abuse that is to unfold. We get elected to this honourable House because we are supposedly forward looking people. We can be creative. We can bring ideas. We can look to the future. We all bring respective experience, applied in this chamber, so we can fine tune our system and create a better environment for our citizenry. That is why this deal sends the wrong signal for the future. If the government can do that today with the lumber industry, then who says to every Canadian that it will not do it tomorrow and anything else?

One of the members on the committee at that time was quite upset and rebutted in a way that she was, in essence, to some degree criticized. Today we can say that was unfortunate because she was right. All members on the committee said that we had to take a tough position. When our men and women are needed in the theatre in Afghanistan, we say that Canadians can do it. Of course we can do it, and we have showed our toughness there. We will continue to show our toughness. Why can we not show our toughness in this instance? We have a product that is in demand. We managed to invest in our mills and make them modern, effective and efficient and put out a product that is very competitive. Why should we then be paying the price for it? I do not think that is right.

I will review some of the comments in the report. Mr. Potter, who came before the committee, said:

What we now have is the U.S. administration saying that because you are a privileged NAFTA partner, you will be treated less well than if you were Korea. If you were Korea and did it under their domestic tribunals and won, you'd get your money back. But because you're a privileged NAFTA partner the U.S. is going to keep your money, and not only keep it but give it to your competitors, by the way. That hardly seems very principled

This is not coming from members of Parliament where people could say we are being biased and political and trying to rally the troops. This is from witnesses from the industry. We were simply hearing testimony. Another witness said:

If the U.S. parties succeed in obtaining even part of these deposits, the U.S. will have a great incentive to launch new litigation, because even if it loses a case, it will be rewarded twice—once by the investigation itself, which is a costly and time-consuming impediment to Canadian lumber exporters, and then by the illegal distribution of duty deposits, which actually belong to us, the competitors in Canada.

This is testimony. This is quoting the professionals in the industry.

I come from a community in the greater city of Toronto, Scarborough. It does not have a lumber industry, but does it affect me? Yes it does. It affects me in the businesses that run in my community, but it does not affect me as it affects other communities across our country, in British Columbia, Ontario, Quebec and in other provinces.

It affects me as an individual, as a Canadian, and I speak on behalf of my constituents and I believe I speak on behalf of all Canadians. My rights are impeded upon. We have an American partner and we have a deal. The Americans have decided, in the middle of the game, to change the rules to suit them. Yet again they come back and say that they know they are wrong, that all the rulings have been in our favour but that does not matter.

It typifies what has happened in the United States in the last several years. It is either “my way or the highway”. No wonder there seems to be such an anger on the international scene. They go to the United Nations and bring forward a resolution. They force the mechanism to seek compliance and enforcement of a resolution. They are right in doing so, but the question is, what has happened to so many other resolutions in years past on other issues?

There were other resolutions in years past, whether it be on the Cyprus issue, on the Palestinian issue, on so many issues. Why did we not ask for enforcement and compliance on those issues?

The question becomes this. Why are we not asking for enforcement and compliance of the rulings from the trade courts? The courts are there to govern us as a civil society. They are not courts or panels that favour Canadians or favour the Americans. They are independent. They are occupied by professionals who know the industry.

I am not expert on the lumber industry, but I have certainly heard enough testimony from the presentations of so many witnesses to try to understand the industry. One thing I understood over and over again was that we were right. Canadians did not subsidize. Canadians did not cheat. We did not have to cheat. We have a good product, we have a competitive product and we were doing our job as anyone else would.

My concerns are many. First and foremost, it is unfair that this industry has been muzzled. I know we have all followed it closely. We heard reports of backroom get togethers. We heard of muzzling, as I pointed out, and to tax the smaller players in the industry upwards to 19%, which is unheard of. We hear that the money will be spent not here in Canada but in the United States. Maybe the Americans have a problem because they are reaching record deficits and they are scrambling for money. I do not know. Our country over the past 12 to 13 years has put its house in order, has managed to provide surpluses and balanced budgets. Our trade increased, although most recently I was upset because I also heard that our trade surplus was unfortunately dropping. The record deficits in the United States to some degree will affect us as well at some point in time.

Therefore, what is the remedy? In my humble opinion, the remedy was, and should be, that we should have stood firm as a nation, as we have stood firm in many other situations, and said that we were right because the courts ruled in our favour.

The new government came here with a law and order attitude. This is a law and order attitude. It believes in the courts as do I. We all believe in the judiciary. The judiciary and the courts ruled. If the government believes in what it says, it should stand firm with the rulings of the courts and say that it wants all the money back.

My concern is this. I do not believe the Americans will cut a cheque for $4.7-something-billion to Canadians. It will go through different circles. Canadians will lose sight of it eventually. They will not even know what has happened. I heard that on Politics with Mr. Newman. I challenge the minister and ask him to give Canadians a clear accountability of where that money will come from.

[Helena Guergis, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, I point out that the Liberal Party seems to be all over the map on the softwood lumber deal.

We have some members voting for it, some who have the courage, and some who have been around long enough to know that this is a great deal for Canada, that it is time we put things behind us and work together with the United States to build a stronger softwood lumber industry.

The hon. member speaks of numerous witnesses who came before the trade committee when he was a participant. As a parliamentary secretary, I sit on the trade committee. We have had numerous witnesses come before us. Every witness has told us that they can no longer continue in the state they are in. They must have a deal, they must have stability and they need predictability. Many of them are on the verge of going bankrupt. Many of them have been gobbled up by the larger industry. This deal provides the stability for which they have been looking.

The hon. member also talked about litigation. I do not know if he has a crystal ball, but I do not. Perhaps we could win this final court case, but there is nothing to say that we will. The U.S. lumber coalition has told us clearly that there will be more litigation without this deal. Without coming to a final settlement, they are going to launch more lawsuits.

He commented on the duties. He said that with this agreement and the export tax that we would be introducing, they would be paying more with the new deal than they were now. That is not true. An administrative review is expected this fall and we will see that go up to possibly 14%. Without this deal, we will have continued litigation. We will also have new duties, which could be as high as 20%.

The hon. member is forgetting the simple fact of the matter. This has gone on for 24 years, and there is no end to litigation. There is only an end to litigation with this deal, which will give us stability for seven to nine years with a possibility of having it even longer with the binational council working together to build a stronger industry.

Could he comment on that, please?