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.

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

On Bill C-24, clause 11, what we have is a series of rates and punitive charges that are applied to softwood companies. On October 13, the United States Court of International Trade ruled on the softwood dispute. It was something, of course, Mr. Chair, that the Canadian government endeavoured to prevent, unbelievably. It endeavoured to intervene in a court of law to stop Canada from winning. Here is the judgment that was delivered on October 13 by Justice Restani, Justice Barzilay, and Justice Eaton in the Court of International Trade in New York City.

Accordingly, all of Plaintiffs’

--that's Canadians--

unliquidated entries, including those entered before, on, and after November 4, 2004, must be liquidated in accordance with the final negative decision of the NAFTA panel. Judgment shall be entered accordingly.

Mr. Chair, what we have is a final victory in the Court of International Trade. It is an enforceable decision, and we have seen, Mr. Chair, that U.S. Customs and Border Protection are now paying out 100% dollars to Canadian softwood companies. We have the judgment that completely obliterates any need, if ever there was one, to capitulate as we did this summer in the softwood lumber agreement, reflected in Bill C-24. We have a legal case that is binding and is allowing those moneys to come back into Canada now, and what we are considering here is the imposition of punitive taxes. It's absolutely unbelievable, Mr. Chair, that we would impose on our softwood industry punitive tariffs when we know that we have won in the Court of International Trade and we know that Customs and Border Protection in the United States, despite the government's pretensions that it would take two years to make those payments, is actually making the payments now. It started last Friday. Those first cheques went out.

Why are we penalizing our softwood industry? Why are we insisting that somehow they have to pay these punitive self-imposed tariffs when we know very well that we do not have to do this? We have seen massive job losses, Mr. Chair, in the last few weeks--nearly 4,000 jobs have been lost across this country--because these punitive tariffs mean lost jobs. This was a badly botched negotiation. It was unnecessary. We won in a court despite the fact that the Canadian government intervened to stop us from getting the remedy. We have no reason to impose this penalty and we should act accordingly.

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

I haven't spoken to it. What we've had is clarification from the panel. We know now that this is in order. As a result of that, I would like to speak to it now that it has been found to be in order, and I thank you for that.

I think this gets to the crux of what we are doing here today, Mr. Chair, which is to try to endeavour to lessen the series of penalties that are imposed upon Canadian softwood producers right across the board: eighteen months in prison for countermanding in any way Bill C-24; exceptional powers to go in and interfere with directors of companies and to interfere with trust funds they may have set up at any time in their lives. These are all issues that are front and centre in how we approach Bill C-24.

Now we have a situation where in the agreement itself we have simply, and I'll state it for the record: “Canada shall retroactively” impose on the entities or entities responsible for any excess shipments from the Maritimes a charge equal to “$C X, where X is determined according to the following formula”.

The formula--

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

Thank you very much, Mr. Chair.

I'm pleased to now speak on the new clause 10.1. I think it is still the same confusing way of putting into place the numbering system for these new clauses. Though I disagree with the way the clause and numbering system is being put together, I do support the principle of what we are adopting.

I wanted to speak more specifically about northern areas, particularly the Yukon, the Northwest Territories, and Nunavut. I must say that despite the fact that we have improved this aspect of Bill C-24 to a certain extent, we still have a way to go, Mr. Chair. What we have is a situation with the softwood industry that is incipient, to say the least.

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

Thank you very much, Mr. Chair.

The problem we're having here is that we're complicating even further clause 10. As we initially talked about, clause 10 was botched in the drafting. We had very clearly, from the text of the softwood lumber agreement, an exclusion of the Maritimes from the provisions of the softwood lumber agreement. That's something that is historical. That's something that has been established over time. And I think it's fair to say that this is something that all four parties around this table have supported.

So having that exemption from the historical litigation that has occurred around softwood lumber over the last few years, and that was only resolved on October 13 with our final victory in the Court of International Trade, that has now led to U.S. Customs and Border Protection starting to pay back 100% dollars to the companies, which renders Bill C-24

obsolete, most definitely.

The historical Maritimes exclusion was not moved from the softwood lumber agreement to Bill C-24. Now we have a situation where we're endeavouring to fix this.

In a sense, with the wording of both CPC-2 and L-2, which we support in their essentials, we're still in a situation where we're referring back to the clause 10 we have crafted--which is, to say the least, somewhat contradictory in terms of what we have, or what we would be adding, in new clause 10.1. Effectively we're endeavouring to build into that a clause that refers to the specific maritime exclusion--Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador--and also exports from the Yukon Territory, the Northwest Territories, and Nunavut Territory.

It's very clear, Mr. Chair, that this is something that would need to be clarified as well in terms of subamendments.

By referring to clause 10 here, I think we would muddy the waters even further. In endeavouring to fix that particular clause by referring back to clause 10--we're now creating new clause 10.1--what we are doing is putting into place a series of building blocks of confusion, a labyrinth. If we are creating new clause 10.1, it stands on its own to refer to the exports of softwood lumber products excluded from the charge, specifically the four Atlantic Canadian provinces and our three northern territories.

As Mr. Jean mentioned when he moved the subamendment, as was right for him to do, by having that wording in there--Mr. Menzies referred to this as well--what we're doing is adding further confusion to the overall thrust of clause 10 and new clause 10.1 and how they interact.

I'm concerned about that confusion. I'm concerned about--

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Thank you very much, Mr. Chair.

We do not support this amendment. Canada and the United States agreed to change the effective date of the softwood lumber agreement from October 1 to October 12. It is therefore necessary to make several amendments to Bill C-24 to ensure that Canada meets its obligations to collect the charge as of October 12. The proposed amendment would establish November 1 as the effective date when Canada would begin collection of the charge. The government's motion would establish the correct date of October 12. So we do not support this amendment.

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

Thank you, Mr. Chair.

Despite the fact that I disagree with a lot of your rulings, you are on your toes as well today, though I would appreciate a little more respect for the time allocation.

Coming back to this in clause 10, it is an amendment of the initial date that is contained within the softwood agreement and in Bill C-24. What we have right now, Mr. Chair, is a date set at September 30, 2006. There is no doubt that this date has to be changed. What is the logical date that would need to be put in that is not going to be harmful to softwood communities across the country?

Mr. Chair, what has indeed happened, as we saw with the incredible confusion around mid-October, is that the AD and CV duties continued to be collected at the border in the United States past the “put into effect” date of the softwood lumber agreement.

Even though we have not adopted this legislation, it's important for folks to note that this government has just rammed in a deal, even though it's unravelling as we speak. The reality is that this was imposed when the date for the actual putting into effect of the agreement came. There were two duties being levied, and depending on whom you speak to, that continued for a number of days. As you know, we raised these questions at the committee hearings when the government officials were here, to find out exactly what the last date was that the illegal AD and CV duties were collected. We do not know at this point when those double duty collections actually ended, Mr. Chair.

Because of that, and because of the incredible strain that softwood companies have been under, what we need to do is set a date that actually respects their ability to work through the process, their ability as companies to try to right the wrongs of this egregiously bad agreement. The date that makes sense is the end of October.

To this day, we don't know exactly when the AD and CV duty collection ended. We do know when the duty collection started for these self-imposed penalties that are actually higher than the illegal American tariffs. We went from a 10.8% tariff to a 15% tariff overnight, Mr. Chair, and we saw what the results of that were: thousands of lost jobs.

In Abitibi-Témiscamingue, the Saguenay—Lac-Saint-Jean regions, and on the North Shore, some 1,700 jobs have been lost in one week alone. Across the country, 4,000 jobs have been lost since this Agreement came into effect.

This disastrous result is due to the badly botched...

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

I'm aware of that, Mr. Chair.

I like to clarify these things, even if you do punish members who ask questions of the panel or who ask questions of you for clarification. This is legislation that has enormous consequences. We've seen that in clause 6. I think it is to the shame of the committee that 11 of the 12 members did not understand what they were voting on, that essentially what we were doing is taking the legal victories that we had and turning them around into legal language that is actually a net loss for Canada.

When we go to clause 10, Mr. Chair, the NDP has been supporting for some time the Maritime exclusion. We were surprised and dismayed that in the drafting of this bill, as with the other errors that we have already seen in clause 6, an egregious error, clause 10 was very clearly a massive drafting error. There is no doubt about that, in the same way the softwood sellout was done rapidly and poorly and resulted in strong capitulation.

We see in Bill C-24 that the drafting was done so rapidly that the Maritime exclusion became a nil-level exemption. It was something that could have come back later on, because it was included within the text of Bill C-24. And because of the vagueness of the language, it could come back to bite the Maritime lumber industry significantly. So, Mr. Chair, there is no doubt that this needs to be substantially amended; it needs to be fixed.

The problem we're having as a committee, Mr. Chair, is that this is only one of a whole host of problems that exist and that the members of the lumber community want to see addressed. The problem is, Mr. Chair, as a committee we're not hearing from any of those. We've had one day of witnesses, and once those witnesses started to raise these serious concerns, the committee shut down any possibility of having other interventions. Again this morning, with the first nations, shut them down. We don't want to hear from them.

The Maritime lumber exclusion is only one of a host of problems with Bill C-24.

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

I just have had very clear confirmation, Mr. Chair, of why this process is not working. We've had two interventions, from the Conservative Party and from the Bloc, who seemingly are completely unaware of the capitulation that is made by referring to clause 6 in this manner.

What we are doing is saying that regardless of whether or not they treat each other at arm's length, the related persons are deemed not to deal with each other at arm's length. This is something that has been a major issue in British Columbia, and yet we've had an amendment that was important and endorsed by many of the lumber industry in British Columbia, because of their concerns that this definition is the United States' definition of arm's-length transaction rather than the Canadian definition, thrown aside without any due consideration.

We've been dealing for five and a half hours with this bill. This is the first major case where we have a major capitulation that the government is refusing to bend on.

It is a definition that has consequences, Mr. Chair—enormous consequences, because what we're doing is throwing away our legal victories. We fought for this principle at the WTO; we fought for it at NAFTA. Now, in subclauses 6(1) and 6(2), what we are doing, essentially, is throwing away those legal victories.

Mr. Chair, there is no more potent and visible example of why this process of ramrodding through this entire bill in the course of a day does not make sense than this one in clause 6, where, after years of legal victory at the WTO—and the Liberals should know this, because they were in government at the time—and at NAFTA, we are simply, in the course of a few minutes, throwing all that away and putting into legislation a definition that now confirms what the coalition has been saying all along about Canadian companies: that it doesn't matter if you've been treating that related person at arm's length; what it means now is, according to the Canadian government, full capitulation—we'll simply take the American definition.

This has consequences not only for this bill. It's not at all clear whether this bill will even go through, as the deal falls apart. Only 25% of the companies have signed on. That tells you something, Mr. Chair: this badly botched bill is going down. But if we adopt this in legislation, you can bet your bottom dollar, Mr. Chair, the coalition will be coming back and pointing to this—this work done at 10:20 in the morning on a Tuesday, as we ramrod through Bill C-24—and they'll be pointing to it as an example that Canada accepts the American definition of what constitutes arm's-length transaction.

So here we have parties all uniting to sell out Canada's interest--

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

Thank you, Mr. Chair.

I would like to speak against this latest chapter in railroading. Mr. Chair, what we saw last Thursday and what we're seeing today is the railroading through of legislation that has profound consequences for the softwood industry and for softwood communities across the country.

We're looking at a situation in which, on October 13, we won the victory in the Court of International Trade. As of last Friday, Mr. Chair, what we've seen is that Customs and Border Protection is now paying out 100% dollars to the companies that have not signed on to the government's botched arrangement. So we have companies that have arranged through EDC and are actually having deductions made from their moneys that they shouldn't have to have made because we won October 13 and because there are 100% dollars coming back.

We don't have to give away $1 billion. We don't have to impose these handcuffs on our softwood industry. We have to go very carefully in considering Bill C-24 clause by clause.

We've had only one day of witnesses, Mr. Chair. Again, we've had the refusal on behalf of this committee to hear witnesses, even though we've had witnesses from across the country indicating very clearly that they want to be heard by this committee. It is incumbent upon us to be very careful and to be very responsible when we are moving to consider the clause-by-clause amendments.

Mr. Chair, what we have here before us is something that would put us out of sequence. The Atlantic exemption is something the NDP fought for. I was very happy to see the comments by Monsieur LeBlanc in today's newspaper, talking about the fact that the NDP's work last Thursday helped contribute to pushing the government to repair at least that portion of Bill C-24.

The normal process of clause-by-clause amendment, as you well know, Mr. Chair, is sequential. It is done that way, sequentially, so that, assuming the drafting has been done right, we can work through the bill clause by clause, moving from one clause to the next one that is related. By doing this, we are throwing that sequence out. We are throwing out the sequence that has been established by the bill. I believe it is going to lead to further confusion, Mr. Chair, as we continue on into the evening and the early morning hours tomorrow and as folks get tired.

Definitively, this is not the way to approach legislation, especially legislation that has such a profound consequence on the lives of Canadians in softwood communities across the country. If we're going out of sequence, what we're essentially doing is throwing a monkey wrench into our own functioning as a committee. We then come back to what is out of sequence, and I can predict right now, Mr. Chair, that we're going to have difficulties. People are going to be unaware of where we are. There's not going to be the consideration that needs to be taken.

Thank you, Mr. Chair.

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

Mr. Chair, it is very clear that the motion that we adopted does not preclude motions being raised at the beginning of this meeting, and this is directly related to Bill C-24. The First Nations Leadership Council has directly requested to appear before the committee on Bill C-24.

[The Chair, Conservative, Leon Benoit]

I have ruled this out of order. In the motion we passed we said, “That clause-by-clause consideration of Bill C-24 be completed before considering any other committee business”. This is other committee business, Mr. Julian.

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

I would like to move that the BC First Nations Forestry Council be invited to testify before this committee. I will speak to the motion.

As you know, Mr. Chair, this week the BC First Nations Forestry Council, which is an organization sanctioned by the B.C. First Nations Leadership Council, representing virtually all B.C. first nations, heard that the Standing Committee on International Trade was moving forward to clause-by-clause consideration of Bill C-24.

[The Chair, Conservative, Leon Benoit]

Good morning, everyone. We're here this morning, honourable members, to proceed with clause-by-clause consideration of Bill C-24.

As members are aware, the committee adopted a motion at its meeting of October 31, 2006, to limit the amount of time allotted for the consideration of this bill. Pursuant to the third paragraph of the motion we will first vote on all of the clauses that do not have any proposed amendments. These clauses are 7, 8, 9, 16, 20, 21, 22, 27, 29, 30, 31, 35 to 39, 42 to 47, 51, 52, 53, 58 to 63, 71, 74, 79, 80, 85, 90, 91, 92, 97, 101, 102, 103, 110, 112, 115 to 119, and 121 to 125.

On the other clauses of the bill for which we have received amendments, each member may speak once to each amendment for no more than three minutes. Since subamendments are amendments to amendments, each member may also speak once to each subamendment for three minutes.

After all of the amendments to a clause have been adopted, each member may speak once to the clause, amended or not, for a total of three minutes. Should there be any motions moved related to this bill, each member may only speak once for three minutes. Motions not related to the bill cannot be moved.

The motion states that the committee must finish consideration of the bill before the end of the day, and the end of the day is midnight. Therefore, should we get toward the end of the day, I will use my discretion on how long I believe it'll take to vote on the remaining amendments. We'll start doing that at the time that seems appropriate to ensure that we are finished by midnight, should we be approaching midnight. I remind all members that 12 noon would work fine too.

Let's start with the procedure. We're going—

Mr. Julian.

Standing Committee on International Trade

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

Mr. Speaker, I would like to comment too and maybe help give you some insight into the proceedings that led up to this intervention by the hon. member. The committee adopted the said motion in a recorded vote. I would suggest that this is absolutely parliamentary procedure. If the hon. member had been serious about actually discussing Bill C-24, as the rest of us were trying to do, he might not have spent four and a half hours filibustering committee.

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

Mr. Speaker, I am rising on a point of order that stems from a meeting of the Standing Committee on International Trade held last Thursday, November 2.

Subject to the interpretation of the Speaker, I know that he cited, in relation to a question that was asked by my colleague, the hon. member for Burnaby—Douglas, in a point of order that was raised on October 6, that in relation to legislation before the House in relation to committee members, the House of Commons Procedure and Practice indicates that the Chair will become involved if the question at issue is whether a committee has exceeded its powers in its clause by clause review of a bill.

Mr. Speaker, as you know, Bill C-24, the softwood lumber bill, is before that committee.

Last Thursday, the committee adopted a motion that reads as follows: “That the total number of minutes of debate per amendment per member be limited up to a maximum of three minutes; that three minutes per member also be allotted to the clause, amended or not; that the committee finish clause-by-clause consideration for Bill C-24 by the end of the day on Tuesday, November 7, 2006; that all clauses that have no proposals for amendment be voted on together in one vote at the start of the meeting on Tuesday, November 7, 2006; that Bill C-24 be reported back to the House on Thursday, November 9 or as soon as possible; that the clause-by-clause consideration of Bill C-24 be completed before considering any other committee business; and that any debate on motions related to Bill C-24 be limited to three minutes per person, per motion”.

Considering that two clauses certainly go beyond the mandate that was given by the House to the Standing Committee on International Trade, that is, limiting the total number of minutes of debate per amendment to a maximum of three minutes, which is unprecedented, as you know, Mr. Speaker, in parliamentary history, and also that all clauses that have no proposals for amendment be voted on together in one vote at the start of the meeting on Tuesday, November 7, 2006, it gives rise to my point of order.

It is unbelievable that this might happen, but my point of order consists of the fact that the mandate that was given by the House to the committee was to consider, clause by clause, the extensive number of clauses of Bill C-24. There are over 110 clauses of that particular bill, and we now have, in a very real sense, an inability to consider it clause by clause and an inability to propose the amendments. As we know very well, Marleau and Montpetit, at page 874, state, “Motions to amend a clause of a bill do not require notice”.

To this extent, there were no instructions from the House that actually provided that guideline to the committee, and we now have no opportunity for amendments on all of the clauses that might be pushed forward tomorrow morning. We also have a very strict limitation on the ability to improve what is, in my opinion, an extremely flawed bill.

Mr. Speaker, as I mentioned earlier, on October 6, you said that when we talk about clause by clause review of a particular bill, you have the right and the ability to intervene as far as a committee is concerned.

Going back to precedents, I cite from Marleau and Montpetit, footnote 400, which references the minutes of the Standing Committee on Industry, March 23, 1999, meeting 104:

In 1990, following a lengthy examination of Bill C-62, An Act to amend the Excise Tax Act, the Criminal Code, the Customs Act, the Customs Tariff, the Excise Act, the Income Tax Act, the Statistics Act, and the Tax Court of Canada Act, the Chair of the Finance Committee unilaterally terminated debate on a motion to limit further debate and set out a schedule allotting time for the remainder of the Committee’s consideration of the Bill. The Chair’s decision was appealed and sustained by the Committee.

Similar action took place last Thursday, November 2 at the Standing Committee on International Trade.

Further to that notice in Marleau and Montpetit, it states:

The Committee subsequently made a report to the House outlining its concerns about the manner in which debate had been limited and asking that the matter be referred to the Standing Committee on Privileges and Elections.

Today that committee is the Standing Committee on Procedure and House Affairs. It continues:

The House concurred in the report... After study, the Privileges and Elections Committee suggested that Standing Order 78 (time allocation) was the appropriate vehicle to use when proposing a limit on committee consideration of a bill.

Standing Order 78(1) states:

When a Minister of the Crown, from his or her place in the House, states that there is agreement among the representatives of all parties to allot a specified number of days or hours to the proceedings at one or more stages of any public bill, the Minister may propose a motion, without notice, setting forth the terms of such agreed allocation; and every such motion shall be decided forthwith, without debate or amendment.

We have a situation whereby a committee has clearly arbitrarily set the most severe limits in Parliament's history on discussion of this bill. The committee has not received those instructions from the House of Commons. Very clearly, precedent shows that when a committee goes beyond what instructions were given to it, the House must provide that direction. So I would ask, Mr. Speaker, that in light of this draconian motion of closure that is being imposed on the Standing Committee on International Trade, you would request of the Chair of the standing committee not to proceed forthwith tomorrow morning, but rather to hold off until you, as Speaker of the House, can make an appropriate ruling in regard to this very draconian abuse of parliamentary privilege.