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

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of International Cooperation]

Mr. Speaker, it is a great pleasure to rise in the House today to talk about Bill C-24, which will implement Canada's obligations under the softwood lumber agreement. I ask all members of the House to recognize and support this bill.

Clearly, this softwood lumber agreement is good for industry, good for lumber communities and good for Canada. The previous member spoke about examples within his riding that speak volumes to how good a deal this is and how it will support local industry. It eliminates punitive U.S. duties. It ends costly litigation which has gone on for far too long.

I have listened to many members in the House during this debate talk about how close we were to an agreement, that with one more judge's ruling we would have it beat. My argument to that is that I have met lawyers whose entire careers have been based on negotiating softwood lumber.

Under this agreement the U.S. will immediately dismiss all trade actions against our companies. It takes our lumber producers out of the courts and puts them back where they belong, in communities across this country, growing their enterprises and contributing to Canada's economy.

It provides stability for an industry hit hard by years of trade action and drawn out litigation. For the next seven to nine years no border measures will be imposed when lumber prices are above $355 per thousand board feet.

When prices drop below this threshold, the agreement gives provinces the flexibility to choose the border measures most beneficial to their economic situation. I should add that all export charge revenues collected by the Government of Canada through these border measures will stay in Canada, in direct contrast to what these lumber companies have been facing up until now.

The agreement returns more than $4.4 billion U.S., a significant infusion of capital for the lumber industry and the workers and communities that rely on it. We have even developed a unique deposits mechanism to ensure that lumber companies receive their money as quickly as possible, within four to eight weeks of filling out and returning the necessary legal and administrative documents after the agreement enters into force.

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

It also excludes from border measures the Atlantic provinces and the territories and 32 companies, including Quebec border mills that were found by the U.S. Department of Commerce not to be subsidized. It ensures that independent lumber remanufacturers do not have to pay an export charge on the value added component of their products. It establishes a process for Canada and the U.S., in consultation with the provinces, to determine the steps regions can take to qualify for exemption from the border measures.

I am pleased to say that the agreement has the support of two national governments and all the key lumber producing provinces, as well as an overwhelming majority of industry players. The next step belongs to parliamentarians.

Bill C-24 will implement Canada's commitments under this agreement. In particular, it provides authority to impose export charges when lumber prices are below $355 per thousand board feet and it gives provinces the flexibility they need to choose the right border option for their economic situation.

The bill also seeks to amend parts of the Export and Import Permits Act to bring into operation the mechanisms we need to meet our commitments under the agreement.

I am happy to be part of a government that has done, in short order, what no other government could: put an end to this dispute and start directing our full attention to building a stronger, more competitive North America. I would ask all members of the House to join me in supporting this bill and putting this dispute behind us.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I have heard that speech at least 10 times in this debate. Those members are passing it around.

Notwithstanding that, the member will know that this bill would create an export tax that at current price levels is actually higher than the U.S. duties. Let us think about that. This is short term gain for long term pain.

The issue here is the fact that the industry has been bullied. It was a sellout and the industry has been bullied. I want to give some examples to the House.

The government offered an ultimatum to the industry. The industry minister told the industry to either accept the deal or the government would abandon it. That is exactly what the minister said. He said the industry would be on its own if it did not accept this deal. He went on, saying that loan guarantees put in place before the last election were taken off the table. Now that is a real bone for businesses to chew on.

Actually, suddenly it was that if the government wanted to put the industry in jeopardy, it just needed to threaten the industry. It said it would take loan guarantees off the table. Then the government threatened to abandon the industry if it chose to pursue its legal rights. Whatever happened to the opportunity for businesses to express themselves? Some of those in the industry will continue to pursue their legal rights over accepting this deal.

The government has also demonstrated that it will punish companies in the industry that refuse to sign this deal. Now that sounds like good leadership from a government. This includes the imposition of a 19% levy on all refunded duty deposits on the holdout companies.

This is not a government that is representing the interests of the industry. This is a bully government. This is a government that has sold out. It is ignoring the NAFTA and WTO trade panel decisions. This is a very bad deal.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, the hon. member has brought up some very interesting words. Let me work a bit with the hon. member's words, if I may. The hon. member refers to the industry being bullied. I would prefer to refer to this government as bullish. We are bullish on softwood. We think it has a future. We know that it now has a future. Yes, this government is bullish. It is bullish on the Canadian economy and the softwood lumber industry is a fundamental piece of our economy.

The member talked about abandonment. That is what we heard from the industry in committee appearances. Businesses in the industry told the committee that the previous Liberal government had abandoned them. The Liberals allowed them to have to take this dispute to court. The former Liberal government was never there to provide the leadership to bring a settlement to this industry, so the industry had to litigate. One of the first things this new Conservative government did, even though we had not been in power very long, was to bring an end to this longstanding dispute that frankly was going nowhere under Liberal leadership.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, as I have only one minute, I will be brief.

The Conservative member mentioned earlier that the agreement would run for nine years. What he forgot to say—and I would like him to elaborate on this—is that the final wording contains a clause that allows Washington to terminate the agreement at any time after 18 months. It seems to me that we do not often hear about that. It is all well and good to say that we have a nine-year agreement, that we will be able to do something and that industries in Quebec will be able to continue doing business with the United States, but after 18 months, Washington can terminate this agreement. What does the hon. member think of that?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I would like to clarify that. Most people understand that in international agreements the standard length of an agreement, the standard opportunity length of time for any agreement to be opted out of, if I may term it that way, is six months.

I think we did exceptionally well to get this length of agreement so that this industry has some strength and something on which to base its future monetary investments. It is a seven to nine year agreement. That is better than most industries have to base their forward decisions on and to base their investments on. I think this is an excellent negotiation on behalf of this new Conservative government.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I am pleased to speak today about Bill C-24, Softwood Lumber Products Export Charge Act, 2006.

The purpose of the bill is to give effect to the softwood lumber agreement that the Conservative minority government and the Bush administration reached on July 1. The bill sets terms and conditions for the repayment of countervailing and anti-dumping duties to companies. It also sets terms and conditions for the return to Washington of the billion dollars that Quebec and Canadian companies have to leave on the table.

Lastly, this legislation sets trade barriers that will govern the softwood lumber trade between Canada and the United States, including the export tax and export permits, and authorizes the payment of export tax revenue to the provinces.

As some of my colleagues have already stated, the Bloc Québécois will vote in favour of Bill C-24, but without enthusiasm.

It is important to remember that the industry stated nearly unanimously that this agreement was not satisfactory. However, given the catastrophic situation in which the Quebec and Canadian forestry industry finds itself, the industry concluded that it was better to accept this bad deal than to continue fighting in the courts.

The unreasonable attitude of the Conservative minority government, in its refusal to listen and support the interests of our industry, certainly contributed to weakening the industry and forcing it to accept this agreement.

Unlike the Conservatives, we consulted the industries and the workers in Quebec's forestry sector. We came to the conclusion that we had no choice but to accept this agreement because this industry had its back to the wall and could not keep up the fight. With no support from this government and a number of its businesses in serious financial difficulty, the industry and representatives of the forestry workers reluctantly chose to accept this agreement and thereby recoup some of the countervailing duties and anti-dumping charges it paid to Washington.

Let us not forget that it was our industries' money that was paid out and is being given back. They asked us to support this agreement and we will do so. To do otherwise would have been irresponsible of the Bloc Québécois and disrespectful to our industries' requests.

When we look at how the negotiations have unfolded since it was announced on July 1 that a deal had been reached, we can understand how the Conservative government's attitude toward the forestry industry and workers leaves a bad taste.

On July 1, 2006, when the international trade ministers from Canada and the United States initialled the text of the agreement to indicate that their governments approved it, something absolutely unbelievable happened. The Conservative government had not even consulted the industry before initialling the text of the final agreement. The industry ended up with an agreement signed by a government that had not even checked whether the industry was happy with it.

We quickly noticed, when the Standing Committee on International Trade met this summer, to what extent a number of Quebec's and Canada's forestry industries and unions were unhappy with the softwood lumber agreement reached between the Conservative government and the Bush administration. It is not surprising that several of them considered this agreement incomplete and asked for improvements to it.

Unfortunately, this government did not see the importance of the demands and needs being expressed, and decided not to provide them with help or support.

Instead of giving the industry ultimatums, and stubbornly imposing a botched agreement, the Conservative government should have endorsed the industry's requests for improvement and thrown all its weight into efforts to obtain those improvements.

Instead, this government decided to back the industry into a corner and force it to accept this agreement with the Bush administration, the Conservative Party's new best friend. It is obvious, I think, that the government was much more sensitive to other interests and more anxious to please them than to serve the interests of our industries and workers. Yet the improvements requested by our forest industries and unions were perfectly legitimate and deserved to be considered.

I would like to talk briefly about some of the improvements requested in particular by the Quebec Forest Industry Council. One of the council’s concerns had to do with making the export charges and quotas more flexible, that is to say, Option B. The industry in Quebec was quite rightly concerned that the agreement provided for monthly quotas—one-twelfth of the annual quota. In case of major shipments, the restrictions on exceeding their monthly quotas were so tight that companies might not be able to honour their contract or even reach their full annual quota.

It is important to remember that the construction industry is cyclical and lumber deliveries can easily vary considerably from month to month. Unfortunately, this issue was not resolved and the government has not made any particular commitments. At best, the binational council that is supposed to oversee the agreement will deal with this. The Bloc Québécois hopes that the government will attempt to make the monthly export ceilings more flexible through the binational council.

The Forest Industry Council raised other concerns about the termination clause. The agreement is theoretically for seven years and can be extended for another two years if both countries agree. At least that is what the agreement in principle said. To the surprise of many, however, the final text says that Washington can end the agreement at any time after it has been in effect for 18 months by providing six months' notice, as the hon. member for Shefford pointed out in his last question.

If the agreement is cancelled, the U.S. government cannot institute procedures to impose antidumping and countervailing duties for a period of one year. This means that the industry is assured of only three years of trade peace. We are far from the lasting trade peace claimed by the minority Conservative government. It is easy to see why the industry was so concerned about this provision in view of the fact that it is leaving a billion dollars on the table in order to obtain lasting peace. But the final agreement does not guarantee it.

It is very apparent, therefore, that the concerns raised by the Quebec Forest Industry Council in particular were perfectly legitimate and deserved to be taken seriously by the government.

This morning, the Quebec Forest Industry Council also raised the problem of Asian competition that is going to challenge our softwood lumber industry and hurt our companies.

I have spoken about the fact that the attitude of the Conservative government had left a bitter taste with many people. I listened with interest to the hon. members from the Liberal Party and I must confess that their remarks also left me puzzled. From the start of this dispute in 2002, the Bloc Québécois called for the introduction of a support program that provided loan guarantees to enable companies to avoid bankruptcy. For more than four years, the Liberal government, like the Conservatives now, refused to do so. During the last election campaign however the Conservatives made a promise to issue loan guarantees for companies.

I imagine that the Liberals, now that they are in opposition, have begun to see all the damage they caused because of their lack of political will, while the Conservatives have probably forgotten the promises they made during the election campaign.

For those of us in the Bloc Québécois, only sovereignty will enable us to be masters of our own economy.

In addition, our plan also proposed measures for greater flexibility of employment insurance to facilitate access and extend the benefit period to ensure income for workers affected by this crisis. Our plan offered support for transition programs to encourage new directions in the Quebec forest industry.

Finally, the Bloc Québécois called for Ottawa to assume the legal costs of the companies who were victims of this legal harassment by the United States. Those costs to date have exceeded $350 million. It has never been proven that our softwood lumber was subsidized or that we engaged in dumping.

We are convinced that these measures would have enabled those workers and industries to survive this dispute. If the Bloc Québécois supports the agreement, it is not because we believe it is a good one. It is only because the industry no longer has any choice and has asked us to support this agreement.

The government—as we saw this morning in the media—has a surplus of $13 billion, which will be applied against the debt. Not one cent will be spent to support our industries, either in textiles, furniture or softwood lumber. The government is too far removed from the needs of the people.

Between 2002 and 2005, more than 10,000 Quebec workers were affected, sometimes permanently. Recently, the situation has again deteriorated.

According to data from the Quebec Forest Industry Council, no fewer than 7,000 jobs have been lost in the forestry and furniture industries since April 2005, while another 5,000 jobs continue to be threatened. Business failures have multiplied and those companies that have survived are in serious financial difficulty.

Considering these figures and the attitude of the federal government, we understand why the industry had no other choice and has decided to stop fighting in the courts and to accept this agreement.

Contrary to what the Conservatives say, the Bloc Québécois is convinced that even though the bill must be adopted, the government cannot claim to have solved the problems that the industry is facing.

The industry is having structural problems and the softwood lumber agreement does not solve them. Moreover, the president of the FTQ, Henri Massé, has clearly indicated that, in view of this agreement, the Conservatives now have an obligation to take real action to help the industry get through the major crisis it has been going through for many years.

This is why the Bloc Québécois wants the federal government—this fall—to present a series of measures to help the forest industry, which is facing serious difficulties at the very time it is emerging from a lengthy trade dispute in a weakened state. The measures would also support the furniture industry before it gets caught up in a catastrophe it cannot get out of—like the textile industry.

In particular, these measures include an income support program for older workers. Such a program would be designed for workers aged 55 who are unable to re-enter the work force and were victims of mass layoffs. It will bridge the period between employment insurance and pension for numerous people who have been victims of the softwood lumber crisis.

Also, the measures we are putting forward contain proposals directed towards the communities.

We are proposing an increase in the community economic adjustment initiative for forest-dependent communities. We believe, however, that such funds should be transferred to the Government of Quebec to avoid overlapping and so that the program is better adapted to Quebec’s needs and so that it is, of course, closer to these needs. We have seen how removed Ottawa is from the industries’ needs.

This program should be accompanied by an increase in the funding for Canada's Model Forest Program run by the Canadian Forest Service and special tax status for the 128,000 owners of private woodlots in Quebec.

Finally, we are proposing a series of measures to help businesses. These measures include a special tax treatment for the $4.3 billion in countervailing and anti-dumping duties that will be refunded by the American authorities to take into account the damage suffered by the companies; a program to stimulate innovation within the forest industry and improve its productivity; and policies designed to support diversification of the markets and marketing of wood.

Some of these measures will become pointless if they are not presented this year and if they are not supported by the minority Conservative government and by all representatives in this House.

As everyone knows, this year is a decisive one for the forest industry. Let us hope that this time the government will pay attention and will take advantage of its economic and fiscal update to announce these measures.

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

Mr. Speaker, I appreciate the good work that the member does as we sit together on the international trade committee. I know that he, like our Conservative government, has been very focused on small families, the communities, the industry, and those who have been devastated by this dispute. I do want to thank him for the good work that he does do at committee on behalf of his constituents and on behalf of those in the softwood lumber industry.

The member did pass some comments though, suggesting that perhaps we as a Conservative government did not keep our promise. We did keep our promise. We made a commitment to be there for the softwood lumber industry during the election and that is exactly what we did. We delivered this deal. We delivered the return of $5 billion in Canadian dollars back into the industry. The industry has told the government that it can no longer continue, that it has been devastated by the lack of support from the previous Liberal government over 13 years. Now we see a return of money coming into the industry.

In the past we have also heard this member advocate for loan guarantees. I want to comment on loan guarantees for a moment. We are giving back to the industry its own money. It is by far better than just saying “here is some more debt for the industry. Let us give the softwood industry another loan to keep its head above water”.

I was a small business person and I was raised in a small business family of over 40 years, I can say right now I would rather have my own money back. The industry would rather have its own money back, so it can reinvest and go forward.

Would the hon. member comment and actually see a benefit in returning the industry's own money, rather than continuing to give it further debt?

I would also like to speak a little bit about next steps at committee and next steps for our government. The hon. member has rightfully talked about that we do need to look to the future. Our Minister of International Trade and our Prime Minister have made a commitment to do that.

Within this agreement there is a binational council where there will be representatives from both Canada and the United States who will work together over the next seven to nine years to build and go beyond the next seven to nine years, but to even talk about how we can fine tune the agreement.

I am hoping that at committee we will be able to sit down and work very closely together on how this council will play out and what its role will be. Some of the things that the council's initiatives could include are expanding the market for wood products and the non-residential construction market, developing new methods and markets for the use of wood, and defending wood use in existing residential markets.

The council would talk about where the softwood lumber industry will go into the future jointly, build trust between the two countries, build a strong industry, so that when other countries try to come in and bring in their exports that we are looking out for Canada's industry, as well as the North American industry as a whole. If the hon. would care to comment and perhaps let me know if he is willing to work together at committee to see if we can go forward, I would appreciate that.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I appreciate the question from the Conservative member for Simcoe—Grey who sits with me on the committee, even though we are do not always have the same points of view.

I would nevertheless like to clarify some of the member's comments. She talks about money being returned to the industry as though this money were a gift. It is not a gift; the industry paid this money in countervailing duties.

Court decisions were all in favour of Quebec and Canadian companies. The Americans were not able to demonstrate that our softwood lumber was actually subsidized and that we were dumping our goods. It is understandable that we support this agreement. It is as if workers who have been on strike for several months return to work after losing ground in the areas of working conditions and benefits.

The industry is not satisfied with this agreement but it does not have a choice and that is why the Quebec industry took a stand. It has been bled to death, it has lost thousands of jobs and mills are closing.

Therefore the Bloc Québécois is asking members to support this agreement. The government refers to it as a seven-to-nine-year agreement. We will keep our fingers crossed because we know it could be a $1 billion loss, for an agreement that lasts only 18 to 24 months. That would be a catastrophe for the forestry industry.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Mr. Speaker, I have a question for my hon. colleague. It has been quoted that 90% of the industry is in favour of this agreement. The last time I read the agreement there were 32 litigations against the American government. Those companies would have to sign off before the agreement takes effect. If we look at only 32, 90% of 32 is about 27 or 28. That leaves about three or four litigants outside the panel.

I would like to ask the member what he would think of the current new government looking after 90% of Canadians as opposed to 100% of Canadians. Is it the government's responsibility to look after everyone or only 90% of the Canadian population?

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I would like to thank my colleague for his question. As he pointed out, we are talking about 90%. I think the Prime Minister said in the House that the industry, by and large, supported the agreement but that 10% had not yet decided. Undecided parties will be subject to a punitive tax for failing to sign on to the agreement. In answer to your question, I think it should be 100%.

The first thing we need to do is listen to the industries. With all due respect for the member who asked the question, what the Conservative minority government has not done—and what the Liberals failed to do for years—is listen to the needs of all industries involved. This is why it has come down to this agreement, which is unsatisfactory for 100% of the industries.

Here in Ottawa, we are accumulating billions of dollars in surpluses, while the provinces are being bled to death. We have the means to support the industry because there is plenty of money here in Ottawa. Yet we refuse to help. Loan guarantees would hardly have cost a fortune. We could have enabled the industries to turn things around and helped them in their legal proceedings. We did not. In the end, we are signing an agreement that will hurt the entire softwood lumber industry. Yes, 90% of the industry supports the agreement, but it does so against its will because it had no other choice.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, those of us on the NDP benches cannot understand how the members of the Bloc can vote for this bill. There is any number of good reasons, which I do not have time to go through, but there is one reason I am not sure that even my colleagues are aware of.

I know that my colleagues from the Bloc are very concerned about issues of jurisdiction and even sovereignty. In actual fact, when this deal is ratified there would be an unprecedented clause which would require provinces to first clear any changes to forestry policy with Washington, not with the Government of Canada but with Washington. The Province of Quebec, if it were interested in changing its own forestry policy, would have to ask permission from the United States government first.

Does the member not think that is an affront to Canadian sovereignty and an affront to the sovereignty of the Province of Quebec to have its jurisdiction trampled upon? Should that alone not be reason enough for my colleagues to get angry and vote against this softwood lumber sellout?

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, the NDP member does not understand why the Bloc Québécois is voting in favour of this agreement, despite its convictions. The NDP does not understand why it has never managed to have a member elected in Quebec. That is because their party does not listen to the Quebec industries and the people of Quebec. That is why the member does not understand—and I can see he does not understand—and that is why the NDP has no seats in Quebec.

The Bloc Québécois consulted Quebec businesses. We participated in the debate. We know that the anti-circumvention clause could be harmful to our industry.

The president of the Quebec Forest Industry Council, Guy Chevrette, is very structured in his thinking. He has analyzed every angle of this agreement. We know how a sovereignist government could get trapped in the management of our forests but, of course, we would be very careful. This is why the binational committee would play a role. If, at any time, the Americans were to invest more in our forest policy, Quebec could, at that time, terminate its part of the contract.

I would point out to the NDP member that this is another reason for our desire for sovereignty. To be master of our own international agreements that are not now in Quebec's best interest would be another reason.

We saw how Ottawa managed the softwood lumber crisis. The government has billions of surplus dollars that we Quebeckers have sent to Ottawa, and that will not come back to us. When we need our money to support our industries, we do not have it.

I would tell the NDP member that this is why the Bloc Québécois, while awaiting Quebec sovereignty, must make concessions and must listen to its industries.

He can rest assured that we will make certain, within the binational committee, that this agreement harms Quebec industries as little as possible by continuing to listen to them.

[Joe Comuzzi, Liberal, Thunder Bay—Superior North, ON]

Mr. Speaker, I represent a riding that has over 50% of the product of softwood lumber within the confines of my riding. Therefore, I trust I am qualified to make some of the remarks that I am planning to make today.

I have phrased my remarks around what I call a tale of two cities. More precisely, I think this is a story of two small, single industry towns in northern Ontario, Schreiber and Terrace Bay, about 10 miles apart. They are on the Trans-Canada Highway and border the north shore of Lake Superior.

Although I use those two communities as examples, I think that I am also talking about 350 other communities right across this country that are dependent on the forestry industry and are single industry towns. When I talk of Schreiber and Terrace Bay, it is not exclusive.

Both are majestic little communities in a wonderful setting with all of the natural beauty of any community located in this scenic area. Schreiber had its genesis about 100 years ago as a railway town and has serviced the CPR since that time. Even today the CPR passes through Schreiber, but with a greatly reduced labour force. Some years ago, Schreiber relied on several mining companies, which were successful for a short time, but when the mines were depleted they closed and the miners and their families left the community, leaving only one major industry, that being Kimberly-Clark, a producer of kraft paper.

The reason for Terrace Bay's existence was the Kimberly-Clark organization in the United States. Its most famous product, as we well know, is Kleenex. The raw material, known as kraft, was produced in Terrace Bay. Kimberly-Clark decided to build this plant on the north shore of Lake Superior right after the second world war, mainly because there was an abundance of natural resources, with plenty of trees and a lot of water, which were so necessary.

Terrace Bay became the showplace on the north shore, an almost perfect single industry mill town employing almost 1,000 men and women from Schreiber and Terrace Bay. Terrace Bay developed because of this a great school system, a small well-run hospital, beautiful parks, a hockey rink, which we know is so important to every small town, a curling rink and a community hall. It developed a devoted and dedicated town council to run its affairs. There was everything a small community needed. Terrace Bay became home to many families. After working there throughout their careers, as in Schreiber, the people decided to retire there to stay in Terrace Bay and they left their assets within the community.

Kimberly-Clark, over the 50 years it operated, was an enlightened and empathetic employer and kept investing in the progress of the mill over those 50 years. As it is in all businesses, the forestry industry was going through some change. There was a marketing change. Costs were increasing. There was an ownership change. There was more offshore competition. About five years ago, Kimberly-Clark decided to sell its Terrace Bay operation to Neenah Paper. Neenah Paper was a company with its head office in Atlanta, Georgia.

Neenah ran the Kimberly-Clark operation for about five years. Then its board of directors decided to sell the Terrace Bay operation. It was not a good time to sell the forestry business. Markets were being devastated with high costs, offshore competition, the high cost of fibre and the high cost of energy. The value of the Canadian dollar was going up, making our product less competitive.

Although there was interest shown by the softwood producers, they were having their own problems of liquidity and were fighting for survival because of the ongoing softwood lumber dispute with the United States. Most of the softwood industry in Canada was simply out of money and had exhausted all lines of credit with the banks.

About a year ago, Neenah Paper announced, because it could not find a buyer, that it would permanently close the Kimberly-Clark paper mill in Terrace Bay and issued layoff notices to its employees in both Terrace Bay and Schreiber.

Devastation and despair settled into those communities. Men and women who had worked for years were out of a job. They had absolutely no prospects of any future jobs in those particular areas. Some left the communities for prosperity in Alberta and some returned.

The town councils, led by able, competent mayors, Mike King in Terrace Bay and Donald McArthur in Schreiber, did everything within their power to keep these communities together. We owe both mayors a tremendous vote of appreciation and gratitude. Can anyone imagine trying to run a small community where the largest property owners are vacating? How do they continue to provide the services, education, health care, policing, maintenance and public utilities without a proper tax base?

The residents of those communities, from firsthand knowledge, were devastated. Their life savings, mostly in the homes they had bought over the years, were now worth a small fraction of their original cost. Unfortunately, even if they wanted to sell their homes, there were no buyers within these communities. Everything they had worked for all their lives was lost. It was a disaster.

About six months ago there was a glimmer of hope. The government announced a break in the longstanding softwood lumber dispute with the United States and began negotiating a settlement with our friends in the United States. It stopped the lengthy, expensive litigation process and decided to negotiate a deal, a return to the softwood lumber producers in Canada of almost 80% of the $5.2 billion paid by the Canadian producers to the Americans.

On the announcement of that, private negotiations were resumed between Neenah Paper and a company called Buchanan Forest Products, which owns several mills, the largest softwood producer in Ontario as a matter of fact and the largest private employer of men and women in northern Ontario. The rest is history.

Last Thursday the Buchanan group of companies officially took ownership of Neenah Paper in Terrace Bay. Last Saturday, for the first time in six months, the first shipment of Kraft left Terrace Bay and was shipped to the United States. Orders are starting to come in on a daily basis.

The first shipment left after six months. It was a sight to behold, with the Ontario minister of natural resources present, the family owners, Kenny and Ken Buchanan, and their board of directors, made up of local people with a local interest, Russell York , Yves Fricot, Wolf Garrick and Hartley Multimacki all on board. All the inside workers at this mill were present at the opening of this mill.

There were tears of joy. I have never seen this in my life. There were tears of joy at the opening of the new mill in this single industry town. This would not have happened without the agreement with the United States on softwood lumber. That is why, along with some other reasons, I supported, voted for, still approve of and will continue to vote in favour of the softwood lumber agreement with the United States.

I am very proud to have represented the overwhelming desire of the constituents I represent in Schreiber, Terrace Bay and, indeed, throughout northern Ontario.

My only hope is that some of that same good fortune that we have experienced in Schreiber and Terrace Bay, because of the industriousness of these folks and the willingness to negotiate, will happen in the other 350 communities across the country that depend on the forestry industry for support and for existence.

That is the end of my story on the Tale of Two Cities.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, as the hon. member knows, his comments are reflected in the sentiments shared by our party and by the Government of Canada.

I thank him for his courage in standing up in support of this softwood lumber agreement against some considerable opposition, not only from other opposition parties but from within his own party as well. Members of his community can be proud of him. He is actually doing what MPs should be doing, which is standing up for the interests of their residents and their working families.

I trust that the prospect of recovering from the devastation of the lumber dispute will carry over into many other communities across Canada that depend on the softwood lumber industry for their survival.

It has been suggested by many that somehow Canada simply has to win a couple of more appeals and court battles and the United States will cave in and gladly return the outstanding duties, which are well over $5 billion U.S. It has also been suggested that this softwood lumber agreement is unnecessary because we would receive immediate compliance from the United States and that it would cooperate with us. I take a different view.

If the softwood lumber agreement did not carry in this House, would my colleague expect our neighbours to the south to quickly return the outstanding duties if the next couple of court decisions go Canada's way?

[Joe Comuzzi, Liberal, Thunder Bay—Superior North, ON]

Mr. Speaker, I have worked on the softwood lumber file for the last 10 years. At one time I was as optimistic as everyone in the House that we would eventually win at the World Trade Organization under section 19 of the NAFTA. As it turns out, we were not going to win. We could not continue to negotiate because our companies could no longer exist because they were out of money and had no more bank credit. The government had to make this deal. It is unfortunate, because I would have liked to have seen a better resolution, but we were faced with making this decision now.

The member asked a very important question. I think we should broaden our horizons, having gone through this softwood lumber dispute, and take a closer look at the NAFTA, especially the dispute resolution mechanism under section 19 which favours the Americans. Decisions are made under American law. After this debate is over, we should be applying our minds to correcting that situation.

To answer the question by an NDP member a short while ago about what will happen the next time if it is a steel dispute or something else we do not know about, let us really put our minds to getting this section straightened out so that NAFTA will be operative as it should have been when it was first signed.