Bill C-411 (Historical)

An Act to amend the Special Import Measures Act (domestic prices)

This enactment sets out the conditions required for deeming whether domestic prices in a country are substantially determined by the government of that country and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market.

Opposition Motion—Manufacturing and Forestry

[Richard Nadeau, Bloc, Gatineau, QC]

Mr. Speaker, I will be sharing my time with the member for Chicoutimi—Le Fjord.

It is my duty to rise today to address the situation in the manufacturing and forestry sectors. In my country, Quebec, these sectors are going through a serious crisis. In my area and in my riding of Gatineau, in the Outaouais region, we can feel their pain.

At the Domtar plant located in Gatineau, in the Outaouais region, there are only 70 active workers remaining to provide electric, steam and sewer services to the neighbouring Kruger plant. At the end of October, 180 out of the 250 Domtar employees were laid off. They were producing coated paper for magazines.

The union and the revitalization committee are continuing to work relentlessly to get this federal government to help the plant keep its machinery operational, so that an eventual buyer can take over and restart production, and thus, give back jobs to the papermakers who were cut loose last month. They are asking that the federal government help that plant as it did the Davie shipbuilding plant in Lauzon, near Quebec City, in the early 2000s, by keeping the machinery up to standard. That was successful over there, and the Davie Shipyard was revitalized. We wish the same for Domtar in Gatineau.

Incidentally, the Minister of Industry will meet later today with union representatives from that plant, namely Gene Hartley and Gérard Carrière, as well as myself. We will try to enlist the support of the current government in our efforts, as the workers from Davie, in Lauzon, did. I cannot imagine the Domtar plant in Gatineau shutting down completely. The 400 employees of the Kruger plant, also in Gatineau, which depends on the three services Domtar continues to provide, might also fall victim to the current crisis in the paper industry.

I think of the Bowater plant, located in my riding. This paper plant employed 1,450 workers in 1991. Today, there are only 425. Last March, 171 papermakers were laid off. As Gaston Carrière, union leader and president of Local 142 of the Communications, Energy and Paperworkers Union of Canada, pointed out, in February 2007, the multinational announced to the employees operating machine No. 3 that the machine would be temporarily idled for 30 days. One week before production was to resume, Bowater announced that machine No. 3 would be idled indefinitely.

At a press conference in June 2007, Mr. Carrière said he saw employees with 25 to 30 years of service in tears. In this case, the Conservative government's program for older workers did not pay a single cent to those individuals. It is a trumped-up program whose criteria are so strict that one would have to live on Saturn to access it.

That is the current state of the manufacturing and forestry crisis. It is extremely difficult for the workers who have been affected, as well as their family and community. The Bloc Québécois would like to play an active role in boosting these industrial sectors. This is why I support the motion put forth by my colleague, the Bloc Québécois' industry critic, the hon. member for Trois-Rivières:

That, in the opinion of the House, the government should immediately establish a series of measures to help the manufacturing and forestry sectors hard hit by the rising dollar and increased competition from new players in the field of low-cost mass production, specifically including a program to support businesses that wish to update their production facilities, a series of investments and tax measures to support research and development in the industry, the re-establishment of an economic diversification program for forestry regions similar to the one that the Conservatives abolished, a review of the trade laws to better protect our companies against unfair competition, and better financial support of workers affected by the crisis in the manufacturing sector.

Like the Standing Committee on Industry, Science and Technology, the Bloc Québécois believes that by taking no action, the Conservative Party is part of the problem, not part of the solution.

Here are some solutions the Bloc Québécois has come up with: support the workers hit by the crisis; create an income support program for older workers, to enable workers aged 55 to 64 who cannot be retrained and who are victims of massive layoffs to bridge the gap between employment insurance and their pension fund; make substantial improvements in the employment insurance program by increasing the accessibility period by five weeks for all regions, regardless of the unemployment rate; raise the benefit rate from 55% to 60% and base the benefit calculation on the best 12 weeks; eliminate the waiting period and reduce the minimum number of insurable hours required to qualify for benefits to 360; create financial tools to encourage companies to invest and modernize, such as a program of loans and loan guarantees to help companies modernize. These loans, which would be made available to companies at the market rate for financially healthy companies, would be especially useful to companies in financial difficulty that cannot easily borrow on private markets or have to pay a risk premium, which adds to their interest charges.

Introducing this program would mean lower interest rates for companies that are investing. While the higher dollar should let companies renew their production equipment at a low cost, they simply do not have the ready cash to invest.

As well, companies need better tax support for research, development and innovation. The government needs to expand the types of eligible expenses by including the costs of obtaining patents or the costs of training employees who are working on innovative projects.

The Research and Development Tax Credit must be made refundable so that businesses will benefit from it even though they are at the development stage and do not make any profit.

A program must be established to provide support for the production of energy and ethanol fuels using forest waste. Besides contributing to the reduction of greenhouse gases, such a program would allow forest-dependent businesses to have additional revenue coming from the sale of energy and to spend less for petroleum fuel.

Fixed greenhouse gas reduction targets must quickly be set in order for a carbon credit exchange market to be established. I would like to point out that aluminum smelters and forest-dependent businesses have made important efforts to reduce their greenhouse gas emissions.

Let us also think about modernizing the trade legislation to better protect businesses against unfair competition. The Canadian antidumping legislation goes back to the Cold War era and is completely outdated in the present context, particularly as we face the competition from China. It is urgent to get the Canadian trade legislation up to par with other industrialized countries, especially the United States and the European Union countries. The member for Terrebonne—Blainville has in fact introduced Bill C-411 for the benefit of all Quebecers and Canadians.

That is what the Bloc Québécois is proposing. It is proposing solutions to major problems. All that is missing now is the political will. On our side, we have the will. We raise these issues and we manage to meet with citizens suffering from crisis such as the one we are facing now, in the forestry and manufacturing sectors among others.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I have a question for the member, who is a new member of the Standing Committee on International Trade.

What does he think of the current situation when he is being told that 130,000 manufacturing jobs have been lost in Quebec since December 31, 2002 and, of that number, 65,000 have been lost since the Conservatives came to power? He is telling us that his government has done everything possible to help the forestry and manufacturing sectors as a whole.

What concrete policies have been implemented since the Conservatives came to power? I repeat, of the 130,000 lost jobs, 65,000 have been lost since the Conservatives took office.

I would also like to draw to his attention Bill C-411, which was brought forward by my colleague from Terrebonne—Blainville. This bill sets out criteria to identify dumping by countries that send their products to us. It is aimed at helping us adjust to both American and European policies and limit dumping in Quebec and Canada.

I would like to know what the Secretary of State for International Trade intends to do in order to stop the loss of jobs in the manufacturing and forestry sectors.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

moved:

That, in the opinion of the House, the government should immediately establish a series of measures to help the manufacturing and forestry sectors hard hit by the rising dollar and increased competition from new players in the field of low-cost mass production, specifically including a program to support businesses that wish to update their production facilities, a series of investments and tax measures to support research and development in the industry, the re-establishment of an economic diversification program for forestry regions similar to the one that the Conservatives abolished, a review of the trade laws to better protect our companies against unfair competition, and better financial support of workers affected by the crisis in the manufacturing sector.

Mr. Speaker, I will be sharing my time with the hon. member for Shefford.

The crisis affecting the forestry and manufacturing sectors is unprecedented. This is, without question, the worst crisis we have ever experienced. All industry stakeholders agree on this. What we need is action. Everyone agrees that the situation cannot go on like this—everyone except the Conservative government. It alone is happy with a laissez-faire approach. It is content to give tax breaks to the rich western oil and gas companies, while Quebec's manufacturing and forestry sectors are facing a crisis.

Here are some facts: since December 31, 2002, 135,000 manufacturing jobs have been lost in Quebec, which translates into one in five workers. Since the Conservatives came to power in 2006, 65,000 jobs have been lost. Approximately half of the 275,000 jobs lost in Canada during this period were jobs in Quebec. Every one cent increase in the value of the Canadian dollar against the American dollar threatens 19,000 manufacturing jobs.

Let us now turn to the forestry sector. Between May 2002 and April 2005, a total of 10,000 jobs in the sawmills and paper plants were lost. The forestry sector represents nearly 100,000 jobs in 240 towns and villages in Quebec that are today threatened by decline. The urgent need for action is obvious. Every 1¢ increase represents $500 million in lost revenue for the forestry industry in Canada. The Forest Industry Council estimates the loss at $150 million for Quebec. I repeat: the situation is serious. It threatens the industrial base of our economy. That is why the Bloc Québécois is using this opposition day to remind the Conservative government that urgent action is needed.

We know there are problems. The Standing Committee on Industry, Science and Technology spent nearly a year studying various recommendations. It submitted a report in February 2007. After all those hearings, the Standing Committee on Industry, Science and Technology made 22 recommendations. Of those 22 recommendations, the Conservative government agreed only to the accelerated capital cost allowance, which actually helps Alberta’s industries and damages Quebec’s economy. As a result, in proposing this motion, the Bloc wants measures to be taken immediately.

We have solutions. We have proposals. The first proposal for solving this crisis is to implement a program to support businesses that wish to update their production facilities. We have to implement a program of loans and loan guarantees to help businesses modernize. We know that these businesses are in bad financial shape. We know how hard they are finding it to borrow on the markets, which means they have to pay a risk premium, and so the interest they pay goes up. The government has to help these businesses. It must guarantee loans for such businesses, so they will be able to update their production facilities, to modernize, and so be able to get through the current crisis.

We are also proposing a series of investments and tax measures to support research and development. The government has to improve the fiscal support provided for research and development and for innovation in business. It has to expand the types of expenditures that are eligible, for example by including the cost of obtaining patents or the cost of training people to work on innovative projects. The government has to make the research and development tax credit a refundable credit. Certainly there is no point in giving tax cuts to businesses that are not making profits. Giving businesses that invest in research and development refundable tax credits, however, is a large part of the solution.

The federal government has to support research; it must cancel the cuts it has made to the Technology Partnerships Canada and instead increase its funding and reinvigorate all of the leading edge sectors that the Conservatives have abandoned. Leading edge sectors like pharmaceuticals, environmental technologies, new materials and new production technologies have been left to their own devices. Contrary to what the government claims, tax cuts are not the solution to every problem.

Another solution would be to bring back an economic diversification program for the forestry regions similar to the one that the Conservative government cut.

As a member from a resource region myself, I know very well what difficulties a region can face when its main source of economic activity disintegrates. The Bloc is going to pay particular attention, therefore, to the resource regions affected by the current crisis in the forest industry which desperately need to diversify their industrial base in order to deal with the situation.

We should bring back a support program to help diversify the regional economies that have been hit hard by the downturn in the forest industry. There should be tax breaks for companies that operate in resource regions. Among other things, we should encourage companies to help skilled workers find employment in the regions. There should be a program to support the production of energy and ethanol from the forest industry's waste.

The Minister of the Economic Development Agency of Canada for the Regions of Quebec cancelled the special program we used to have specifically for the regions affected by the crisis in the forest industry. That is the government’s laissez-faire policy. There was nothing on this in the Speech from the Throne or in the finance minister’s economic statement. There is an urgent need for action.

Our trade legislation also needs to be revised in order to protect our companies better against unfair competition. Canada’s anti-dumping legislation goes back to the days of the cold war and is completely out of touch with the new realities, especially the emerging economies and China. There is an urgent need to put Canadian trade law on the same footing as the trade law of the other industrialized countries, particularly the United States and the countries of the European Union. That is what the hon. member for Terrebonne—Blainville has proposed in Bill C-411, An Act to amend the Special Import Measures Act (domestic prices). We will return to that later.

The Conservatives have decided not to make use of the trade legislation that makes it possible to provide temporary protection for our companies and gives them time to adjust to the new realities and modernize. We can only dream of a government with some vision that would protect the jobs in our districts.

The final element is financial support for the workers affected by the crisis in manufacturing. Employment in this sector has been devastated. Some 135,000 manufacturing jobs have been lost in Quebec, or the equivalent of one worker in five since December 31, 2002. Quebec has been especially hard hit by the slump, and the arrival of the Conservative government has only made things worse. Since January 2006, about 65,000 manufacturing jobs have been lost.

Given the situation, the government must revisit its position on enhancing the employment insurance program. The Bloc has been proposing for years that real improvements be made to the employment insurance program and, in particular, that the benefit period be increased by five weeks for all regions, no matter what the rate of unemployment. Benefits must be increased from 55% to 60% with the calculation based on the 12 best weeks. The qualifying period should be eliminated and the minimum number of insurable hours needed to qualify should be reduced to 360 hours.

Employment insurance is a right, not a privilege. Workers and companies pay for employment insurance. Together, they establish measures to meet needs in the event of difficult times. We are now in difficult times, but the employment insurance program is nowhere in sight. Furthermore, what are we to make of the lack of a program for older workers who have been the victims of massive layoffs? My colleagues will tackle this later. This is a very important element.

The Bloc Québécois is well rooted in its communities. The Bloc Québécois supports Quebeckers, who are seeking solutions and a resolution to this major crisis for Quebec. Therefore, with this opposition day, we must convince the government that there is an urgent need for action. The future of our communities is at stake.

It is very urgent that action be taken and I urge all my colleagues in this House to vote in favour of this motion.

Opposition Motion--The Economy

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I would like to thank my colleague for his question. First of all, I would like to tell him that I am sure that the Conservative members and government carefully read the 22 recommendations in the committee's report. However, I think that the Conservative government suffers from Alzheimer's—it does not remember either.

As for emerging countries in Asia or elsewhere, my colleague, the member for Terrebonne—Blainville, introduced Bill C-411, An Act to amend the Special Import Measures Act (domestic prices). The purpose of this bill is to control the dumping of Asian products taking place.

Special Import Measures Act

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, it is my honour to rise to speak to the private member's bill tabled by the member for Terrebonne—Blainville.

Bill C-411 proposes an amendment to section 20 of the Special Import Measures Act, which would set out the conditions required for deeming whether domestic prices in a country are substantially determined by the government of that country and whether there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market.

I will take this opportunity to briefly outline the key aspects of Canada's trade remedy system, of which the Special Import Measures Act, or SIMA, is the principal legal instrument.

SIMA governs the application of anti-dumping and countervailing duties to imports of dumped or subsidized goods that are found to cause injury to domestic producers. In just a quick primer, anti-dumping duties are additional duties designed to offset an exporter's underpricing in an importing country's market, whereas countervailing duties are designed to offset the effects of foreign subsidies on imported products.

Under SIMA, a Canadian industry is entitled to trade remedy protection if it is established, through a formal investigation, that the imports are being dumped or subsidized and that such has caused or threatens to cause injury. In such a case, definitive anti-dumping or countervailing duties are normally levied on all imported goods for a period of five years, with the possibility of an extension if Canada's administrating authorities, the Canada Border Services Agency and the Canadian International Trade Tribunal, determine that there is likely to be a continuation or a recurrence of dumping or subsidization and injury if the duties are removed.

Canada operates in a bifurcated trade remedies system under SIMA. The Canada Border Services Agency is responsible for initiating investigations and making preliminary and final determinations respecting dumping and/or subsidizing or the goods in question. The Canadian International Trade Tribunal, a quasi-judicial body, is responsible for determining whether the dumped or subsidized goods have caused or threatened to cause injury to a Canadian industry.

SIMA implements Canada's rights and obligations under two World Trade Organization agreements: the WTO anti-dumping agreement and the WTO agreement on subsidies and countervailing measures. Key provisions of these agreements include methods for determining the existence of dumping and countervailing subsidies, requirements for the initiation of investigations, obligations respecting the procedural fairness, the duration of orders and transparency in decision-making. In addition, these agreements set out the economic factors to be considered in determining whether injury exists and whether or not such injury is caused by dumping or subsidized imports.

I will take this opportunity to describe another important component of Canada's trade remedy system, safeguard measures.

Canada, like many trading nations, has legislation that allows the application of important safeguard measures to protect domestic producers that have suffered or are threatened by serious injury from increased levels of fairly traded imports. This legislation implements Canada's rights and obligations under the World Trade Organization agreement on safeguards, which establishes the conditions for applying important safeguard measures as well as notification in consultation procedures for safeguard inquiries and measures.

The CITT conducts important safeguard inquiries under the authority of the act. While the CITT may initiate import safeguard inquiries following a complaint by domestic producers, the government may also direct the tribunal to conduct important safeguard inquiries.

In a global safeguard inquiry, the CITT considers the effects of imports from all sources on domestic producers. The object of the inquiry is to determine whether a product is being imported into Canada in such increased quantities and under such conditions as to cause, or threaten to cause, serious injury to domestic producers of like or directly competitive goods.

If the CITT makes an injury determination, the government may apply important safeguard measures in the form of surtaxes under the customs tariff or in the form of quantitative restrictions under the Export and Import Permits Act.

There is another type of safeguard mechanism available to Canadian industry that applies only to goods imported from China. This safeguard came into effect on September 30, 2002, to implement the safeguard provisions of the 2001 protocol on the accession of China to the World Trade Organization.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, this evening I would like to discuss Bill C-411. I would like to thank my colleague from Terrebonne—Blainville for introducing this bill.

I want to talk about this bill in the context of the throne speech debate, a debate in which the Conservative Party has placed itself on a pedestal and the Liberal Party is bowing down before it.

Despite these peculiar circumstances, we still want to work for Quebec and for Canada; we want to save jobs in Quebec and in Canada.

Nevertheless, I would like to say a few words about the Speech from the Throne. The government claims to be concerned about the crisis, but it has not proposed any real action to revive the industry, nor has it come up with an assistance program for older workers who have been laid off.

I would like to quote part of the Speech from the Throne:

Our government will stand up for Canada’s traditional industries. Key sectors including forestry, fisheries, manufacturing and tourism are facing challenges. Our government has taken action to support workers as these industries adjust to global conditions and will continue to do so in the next session.

Who does the government think it is fooling when it says things like that in the Speech from the Throne? It has done nothing at all about the crisis in the forestry industry. We know exactly what it did.

Even though the courts ruled in Canada's favour with respect to the forestry industry, the Conservatives still paid the United States so that the destruction of the industry could go on.

I would also like to mention the report tabled by the Standing Committee on International Trade several months ago. The report urged the government to lift all barriers to free trade with China even though Quebec imports ten times more goods from China than it exports to China. The report recommends weakening trade laws to make things easier for importers and ignores the fact that producers are currently suffering from fierce and often unfair competition. The government wanted to bring down supply management in agricultural industries even though the system assures farmers of a decent income at no cost to consumers or the government.

With respect to supply management, I will come back to the Speech from the Throne in a future debate in an effort to clarify the government's hidden agenda.

Supply management is very important to Quebec in the manufacturing sector. Manufactured goods account for 60% of its GDP and 85% of its exports. In Alberta, for instance, manufacturing accounts for only 6.7% of GDP. There are obviously some Conservative members who do not want the legislation on special import measures changed in order to help our companies survive under particularly trying circumstances. It is true that things are difficult all over the world, but that is no reason to let people get away with unfair and even illegal practices.

Earlier I heard the Secretary of State say that he was mostly concerned about people who import. He wants to see Canadian importers paying as little as possible, even if the prices are illegal and unfair and a result of dumping by certain emerging countries. All we want is to ensure that the rules of the game are clear, honest and transparent. There are some countries that practice dumping and we should ensure that this practice is clearly identified and steps are taken here to impose countervailing duties on dumping.

The United States accused us of dumping and unfair practices in the case of softwood lumber. We paid duties. But we were found to be in the right. We were not dumping. Unfortunately, though, we are the victims of dumping in Canada and Quebec.

Both the parliamentary secretary and the Liberal Party representative told us that we should just use what already exists and the companies should just go out and defend themselves.

Our hon. colleague from Shefford gave a good example, the Raleigh bicycle case. The International Trade Tribunal found that the company was right and that there was dumping. The industry minister at the time, just before becoming Minister of International Affairs, simply said that it was not very serious, this company and its jobs were not very important, there was no problem and people would just get to pay less for their bicycles. I repeat: these are unfair, illegal practices.

The government is making itself complicit, therefore, in these practices. I even suppose they would be prepared to use such practices themselves, although we would obviously be opposed.

We must recognize that Canada is not alone in this. It seems that the government does not want to play by the same rules as other countries. We need only look to the United States or the European Union, which apply similar criteria. In fact, rather than having 17 goods subject to anti-dumping measures, as Canada does, these countries have three times that number. I do not know how many different products China manufactures, but 17 is not very many.

More stringent criteria are needed to demonstrate a willingness to identify these dumping practices. It goes without saying that jobs must be protected. We are not talking about protecting them for all eternity, but a responsible government—or one that claims to be—must provide these industries with the means to develop, to compete with other countries and to increase their productivity. Thus, policies must be developed while these countervailing duties, these antidumping duties, are in place.

It is obvious that the government does not wish to move in that direction. However, we must stop underestimating the fair value of goods.

As I said earlier, Bill C-411 lists the criteria to be used in determining whether a business is really growing in a market-based economy. We know that China had a command economy for some time. Then China joined the WTO and there was talk of a transitional market. Canada hastened to recognize it as a market-based economy. Now it is letting things slide and is reluctant to establish the criteria that would enable us to identify products that have been dumped on the market.

Instances of commercial dumping can be proven if solid criteria, such as those proposed here, are in place. However, there is something even worse. The Conservative government is way behind on this issue and so are the Liberals. Social dumping scorns human rights and is heedless of the environment, and we have to start thinking about it now. We have a long way to go, and that is what I want to talk to the government about: social dumping.

The government has to start trying to understand that commercial dumping is happening. It has to pass Bill C-411 so that we can have solid criteria that will help businesses in Canada and Quebec.

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

Mr. Speaker, I am pleased to rise to speak to Bill C-411, introduced by the member for Terrebonne—Blainville. This is a very important bill to deal with what is really going on in the main areas affected.

The currently reality in the manufacturing sector cannot be ignored. Earlier, the Conservatives and the Liberals said that this was not a problem and that they would stay on the same course. To do so would mean ignoring the reality facing workers across Canada.

The NDP will be supporting this bill because we understand that there is a manufacturing crisis going on in this country right now.

I would like to preface my comments in English by quoting somebody who spoke in the House in regard to this very issue of dumping cheap imports and the loss of Canadian jobs that result. I will read it verbatim:

A Conservative government would stand up for Canadian workers and work proactively through international trade policies to ensure Canada competes on a level playing field.

That was said just before the last election in regard to protecting against the dumping of cheap imports and the loss of Canadian jobs that resulted. Who said that? It was the Parliamentary Secretary to the Minister of International Trade, the same individual who just a few minutes ago stood up in this House and said that we do not need to do this, that we have to review SIMA because it is difficult and complicated. Before the last election he was not saying that. He was saying exactly the contrary. He was saying that there is a crisis in manufacturing jobs, that there is a problem. It is important for the Canadian public to understand what the Conservatives said before the election and what they are saying now. He said, “A Conservative government would stand up for Canadian workers”.

I could not agree more with the comment from the Parliamentary Secretary to the Minister of International Trade except that the new government is acting exactly like the old government. It is doing exactly the same thing as the Liberals did while jobs are hemorrhaging out of this country.

In the textile and clothing industry alone, 50,000 jobs have been lost in the last five years. That is why the Conservatives made that commitment. The situation is no better. In fact, it is worse.

For the Conservatives now to say that it is very complicated, as the Liberals said before, just shows that there is not a whole lot of difference between the Liberal Party and the Conservative Party when it comes to governing. Perhaps that is why so many people, including those in Outremont, Quebec, are looking to the NDP, because we are actually in favour of taking action to protect Canadian jobs.

Fifty thousand jobs in the textile and clothing industry have been lost. I wear proudly my Canadian-made suit. I wonder how many members from the Conservative Party are wearing Canadian-made suits.

Let us look right across the country at the number of jobs that have been lost.

Between 2002 and 2007, nearly 300,000 manufacturing jobs have been lost. That means 300,000 families have lost a breadwinner, and the Conservatives say it is complicated and difficult and they cannot take any action. Those 300,000 families have lost a breadwinner because of the inaction of the Liberals and the inaction of the Conservatives.

We disagree when the government says it cannot take action and stop the dumping of imports. A framework has to be put into place. The government has to take action. A Liberal member said we should not tell government agencies how to do their job. Those agencies are not doing their job and that is the problem. That is why we have lost hundreds of thousands of manufacturing jobs.

What has been the result? Just two weeks ago we saw figures from Statistics Canada. The Parliamentary Secretary to the Minister of International Trade knows these figures very well because I told him. I mentioned them at the international trade committee, not with any effect yet, but I am hoping to convince Conservatives that they cannot just keep doing things the way the Liberals did.

Since 1989, with the loss of those hundreds of thousands of manufacturing jobs, two-thirds of Canadian families, 66% of Canadian families, have actually seen their real incomes go down, not up. They are actually earning less. We have seen overtime go up over one-third. Canadians are working longer hours. We have seen the debt load of the average Canadian family almost double.

Since 1989, since the signing of the Canada-U.S. Free Trade Agreement, middle class families have actually lost one week of salary on average across the country. Lower middle class families have lost two weeks of salary. The poorest of Canadian families have seen their incomes collapse. They have lost six weeks of salary.

Canadian families are struggling more and more with less and less money in their pockets. Their real incomes have fallen for the exact reason that the good quality jobs are being washed away. Jobs are hemorrhaging out of this country and neither the Liberals nor the Conservatives have been willing to do even one thing to take action to address this crucial issue.

We are talking about Quebec, we are talking about Ontario, we are talking about British Columbia and other provinces across the country where this hemorrhaging of good jobs has led to a fall in real incomes for most Canadian families. Why would a government not then say that very clearly we have an income crisis and a job crisis when it comes to quality jobs? People are working part time and in temporary jobs. They are trying to make ends meet that way. We have a prosperity gulf, an income crisis in this country and yet the Conservatives continue to say that we simply cannot do anything to address this issue.

I come back to Bill C-411. Essentially the bill puts into place some additional mechanisms to ensure that we have protection against the dumping of cheap imports. If we look at the criteria, it is quite clear that these are market driven definitions.

The NDP is very clear that there are some areas that should not be in the market at all. We believe in public health care and reinforcing our public health care system. We believe very strongly in that. That is why we have the quality of public health care that we have today in Canada. It is because of Tommy Douglas and because of the work of the NDP. Without the NDP, we would have no public health care in this country, and like the U.S., we would be spending twice as much per capita for a system that would leave millions of Canadians with absolutely no health care protection whatsoever.

We believe there are areas that need to be protected by the public sector, but we also believe that there is a role for the private sector. When there are market driven mechanisms for certain private sector instruments, we support the market. Yet the Conservatives and Liberals are saying that they do not support those market mechanisms, that somehow they cannot provide market based definitions for the dumping of cheap imports.

We have an anomaly here. The NDP is standing up defending the market and Canadian jobs and the Conservatives and Liberals are saying, “No, we cannot have market based definitions to protect Canada against dumping”. They are of one mind. We have seen this with the throne speech. The Conservatives and Liberals sound alike and they think alike. They do the same things and essentially in both cases they are refusing to apply market based mechanisms to ensure that we are protecting Canadian jobs against the dumping that is taking place.

Here is the paradox. We have a manufacturing job crisis. Hundreds of thousands of jobs have been lost. We have an income crisis. Most Canadian families, two-thirds of those that are watching us tonight, have actually seen their real incomes fall since 1989, since the signing of the Canada-U.S. Free Trade Agreement. CanWest Global may disagree, but that is the reality which Statistics Canada tells us about. Most Canadian families have seen their incomes fall and yet the Conservatives and Liberals want to do their favourite action, their favourite remedy, which is to do nothing.

We in this corner of the House in the NDP, in our growing caucus, believe we have to do something and we have to apply these market based mechanisms as defined in Bill C-411 to protect Canadian jobs, Canadian workers and Canadian communities. That is why we are supporting this legislation.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-411, An Act to amend the Special Import Measures Act (domestic prices), which is commonly referred to as SIMA.

The mover of the bill raised some very important questions with which parliamentarians must deal with from time to time. To give some indication of that, the implications to Quebec have been very serious in some areas, particularly, as she mentioned, textiles, garments, furniture, bicycles and forestry and the tens of thousands of jobs being lost as a consequence of activity with regard to the importation of goods and the competition.

She talked very well about the whole concept of dumping, which is an illegal activity where a country will actually export goods to Canada at a price that is less than its own production costs, which obviously puts our own producers at a significant disadvantage.

Clearly that kind of activity could be extremely damaging to Canada if we did not have rules, regulations and legislation to guide us in determining whether that kind of activity exists. We do in fact have it and the Special Import Measures Act is the instrument.

The particular section which the member wants to deal with, and I think it is important simply for the information of members and those who are watching, is section 20(1) in the Special Import Measures Act.

Let me just review a couple of things and members will see how this is a very complicated area. It states:

Where goods sold to an importer in Canada are shipped directly to Canada

(a) from a prescribed country where, in the opinion of the President--

--and “the President” refers to the president of the Canada Border Services Agency--:

--domestic prices are substantially determined by the government of that country and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market, or

Therefore, as a principle, are we having dumping at a price lower than production would be an example.

Also, it covers coming:

(b) from any other country where, in the opinion of the President,

(i) the government of that country has a monopoly or substantial monopoly in its export trade, and

(ii) domestic prices are substantially determined by the government of that country and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market,

Those are the principles that must guide the president of CBSA.

I asked for some information about the specifics.

I should elaborate on the Special Import Measures Act. SIMA provides for the rules and the procedures for anti-dumping and countervailing duty actions under Canadian domestic law. The act is designed to provide protection to Canadian producers who are being harmed or injured by dumping or subsidizing goods imported into Canada. The member has raised a number of examples affecting Quebec industries.

I should also mention that I had the same situation in my own riding where back in 2004 there was an investigation with regard to the importation of bicycles from China which were hurting the bicycle industry. We have a thriving bicycle industry in my area.

The SIMA is administered by the Canada Border Services Agency and the Canadian International Trade Tribunal. The Canada Border Services Agency conducts investigations into dumping and subsidies and implements duties on dumped or some subsidized goods. That is its job.

The CITT, the Canadian International Trade Tribunal, conducts inquiries on the harm to Canadian businesses and industries from dumping and subsidies on imported goods.

The investigations are initiated after a formal complaint by a Canadian producer or group of producers. Inquiries are initiated after a formal complaint by a Canadian producer or group of producers and the recommendation comes from the president of the Canada Border Services Agency.

The determination of dumping or subsidies is based on a baseline price for similar goods. The baseline is called “normal value” and that is defined in some detail in the Special Import Measures Act. It is used by both the CBSA and the CITT during their investigations and inquiries. SIMA contains extensive rules for determining normal value, which are found in sections 15 to 23.1 and sections 29 to 30 of the act.

Bill C-411, introduced by the member to amend the Special Import Measures Act, changes the rules for determining normal value where an export monopoly exists in the exporting country for the good. Specifically, the bill deems foreign countries to have an export monopoly if certain criteria are not met. This bill changes the criteria and is proposing certain conditions that in fact change the definition of normal value.

The bill states in clause 2 that the lack of any of the factors listed will result in the country being deemed to be an export monopoly. This amendment would prevent these countries from being used as a reference for determining normal value and would allow the CBSA or the CITT to utilize the formula in paragraph 20(1)(c) for determining normal value.

I could probably put on the record some of the other details, but suffice it to say that this is not a simple matter, as members can see. We are not talking about a linear industry. We are not talking about just one sector of the economy. We are talking about the vast trade relationship that we have with countries around the world. Canada is a very active trader.

Let me simply summarize by saying that the bill seeks to codify conditions used to determine if an export monopoly exists in a given country. It does this by outlining five conditions which if they were not met would automatically result in a country being deemed to be an export monopoly.

This bill in fact is not necessary. I know the member has heard this before. The bill the member has put forward is redundant because it seeks to tell the president of the Canada Border Services Agency how to do his job. The president of the CBSA is the one who currently makes these determinations under the existing legislation called SIMA.

The categories are broad and could conceivably result in almost any country being designated as having an export monopoly. This includes the United States and the European Union, which the CBSA already relies on to determine normal value and normal market prices. This again impairs the ability of the CBSA and the Canadian International Trade Tribunal to do their jobs.

The legislation clearly lays out their authorities to protect the interests of businesses, but it is up to the businesses and groups of producers to make their case to have the prescribed investigation and inquiries made to determine under the legislation whether or not there is a matter of dumping to be addressed.

The concerns that the bill purports to address can already be addressed through a variety of mechanisms, including existing trade agreements and in trade tribunals. These issues are better addressed during trade negotiations.

Therefore, the Liberal Party is not going to be able to support this bill. We have always advocated that trade agreements are the way to seek a fair balance. We understand the importance of real free trade, which is why we are advocating that the government ensure that the proposed South Korea free trade deal effectively eliminate non-tariff and regulatory barriers that keep Canadian manufacturers, specifically in the automotive sector, from having open market access.

Although we will not be supporting the bill, I want to congratulate the member for bringing forward to the House yet another important matter in regard to which it is the responsibility of parliamentarians to inform themselves about and to assure their constituents and their businesses that there are rules in place and that we will respond where there is an investigation or inquiry that identifies areas where there is anti-dumping activity that hurts Canadian business.

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

Mr. Speaker, I thank the House for the opportunity to comment on the private member's bill tabled by the member for Terrebonne—Blainville calling on the government to amend the Special Import Measures Act.

The bill proposes an amendment to section 20 of the Special Import Measures Act. The amendment would set out the conditions required for deeming whether domestic prices in a country are substantially determined by the government of that country and whether there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market.

The Special Import Measures Act, or SIMA, is Canada's principal legal instrument that governs the application of anti-dumping and countervailing duties to imports of dumped or subsidized goods that are found to cause injury to domestic producers.

Under SIMA, a Canadian industry is entitled to trade remedy protection if it is established through a formal investigation that the imports are being dumped or subsidized and that the dumping or subsidizing has caused or threatens to cause injury to that industry.

In such a case, definitive anti-dumping or countervailing duties are normally levied on all imported subject goods for a period of five years, with the possibility of an extension if Canada's administrating authorities, those being the Canada Border Services Agency and the Canadian International Trade Tribunal, determine that there is likely to be a continuation or a recurrence of dumping or subsidization and injury if the duties are removed.

SIMA implements Canada's rights and obligations under two WTO agreements: the anti-dumping agreement and an agreement on subsidies and countervailing measures.

Key provisions of these agreements include methods for determining the existence of dumping and countervailable subsidies, requirements for the initiation of investigations, obligations respecting procedural fairness, the duration of orders and the transparency in the decision making.

In addition, these agreements set out the economic factors to be considered in determining whether injury exists and whether or not such injury is caused by dumped or subsidized imports.

As originally drafted in 1984, SIMA represents a balance of interests between those parties requiring protection from injuriously dumped or subsidized imports and those requiring secure access to imports to ensure profitability for their economic activities.

The importance of this balance between imports and production concerns continues to be relevant as the dependence of Canadian manufacturers on imported inputs has increased substantially since 1984.

Today, imported inputs make up 34% of the content of goods manufactured in Canada.

When SIMA was reviewed by the subcommittees of the Standing Committee on Finance and the Standing Committee on Foreign Affairs and International Trade in 1996, the subcommittees' conclusion was that the basic circumstances that motivated Canada to establish SIMA continued to exist; that is to say, the law provides basic protection to Canadian producers while limiting unnecessary collateral damage to downstream users of the products in question.

During the 1996 review of SIMA, a large number of interested parties representing a wide cross-section of the Canadian economy appeared before the subcommittees to present their views. The witnesses commented on whether the legislation continued to adequately serve Canada's national economic interests, including industries that benefit from trade remedy protection and industry associations that must import goods as a normal course of business.

Following the completion of this review, Canadian industries also took advantage of the opportunity to make their views on these issues known to the government in the context of the Doha round of trade negotiations at the WTO.

As part of the extensive consultation process related to the WTO, the government received 23 submissions from industry and provincial governments that provided input for developing Canada's position on the negotiations, which aim to clarify and improve disciplines related to the WTO anti-dumping and subsidy agreements.

The government takes the consultation process very seriously an regularly updates industry on the status of negotiations. Extensive consultations are critical for developing and maintaining an effective multilateral negotiating position and are equally important in the consideration of unilateral changes to Canada's domestic trade laws.

In fact, the government has recently received recommendations from two parliamentary standing committees that call for the government to conduct a review of Canada's trade remedy system. The first recommendation came in the February 2007 report of the Standing Committee on Industry, Science and Technology entitled “Manufacturing: Moving Forward--Rising to the Challenge”.

Two of the recommendations were trade policy related, one of which recommended that the government conduct an internal review of Canadian anti-dumping countervail and safeguard policies, practices and their applications to ensure that Canada's trade remedy laws and practices remain current and effective.

This review would also include comparisons with other WTO members such as the EU and the U.S. This recommendation was based on the standing committee's observation that the growing economies of countries such as China and India represent a challenge for Canadian producers to both their domestic and American export markets. As well, the standing committee noted the concern expressed by some industries regarding an apparent divergence between Canadian trade law and its application, and it believed more information was required. This led to the recommendation for a review of Canada's trade remedy system.

Following this report came an April 2007 report of the Standing Committee on International Trade entitled “Ten Steps to a Better Trade Policy”. Among the recommendations in the report was a call for the government to immediately review its trade remedy system to ensure that critically valued imports, needed as inputs by companies who subsequently export products out of the country, are not unnecessarily blocked.

The standing committee was told that Canada's trade remedy system needs a different mindset, that is not to assume that all imports from China are bad because for some manufacturers such imports are critical. In fact, one witness noted that, “it’s the only way they’re going to be in the game.”

The government intends to table responses to these recommendations shortly. It is interesting that these standing committees made identical recommendations within two months of each other, namely that the government conduct a review of Canada's trade remedy system. However, these recommendations were made for quite different reasons.

The industry committee recommends a review to ensure that Canada's trade remedy system remains effective to deal with dumped or subsidized imports. The international trade committee recommends a review to ensure that Canadian manufacturers have stable and predictable access to global supply chains.

Although these two standing committees had opposing views on the role and impact of Canada's trade remedy system on Canadian manufacturers, they made identical recommendations. Because they agree that the government must consider the trade remedy system as a whole and to take into account the view of all stakeholders before considering changes to the system, the government supports the view of the standing committees that all stakeholders must have an opportunity to put forth their views on the legislation as a whole.

SIMA has been amended several times to reflect changes in international agreements and to implement the recommendations of the 1996 parliamentary review. However, there has never been an amendment to a single provision of the legislation without broader consideration being taken into account.

Bill C-411 would have us take a piecemeal approach to the Special Import Measures Act that would be contrary to ensuring this law reflects a proper balance of interests.

[Raymond Gravel, Bloc, Repentigny, QC]

Mr. Speaker, I want to congratulate my colleague from Terrebonne—Blainville for introducing a bill that is especially important to many manufacturing companies in the riding of Shefford, including Raleigh, which makes bicycles.

Raleigh spent hundreds of thousands of dollars to defend its dumping complaint before the Canadian International Trade Tribunal, which finally recommended a surtax on bicycle imports from China. Yet, as with other CITT decisions, the Minister of Finance did not budge.

What could Bill C-411 do for a company like Raleigh?

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

moved that Bill C-411, An Act to amend the Special Import Measures Act (domestic prices), be read the second time and referred to a committee.

Mr. Speaker, Bill C-411, which I am introducing today at second reading, sets out criteria that we hope will make it easier to detect dumping and will provide better protection for Canadian businesses.

Competition in the business environment has changed enormously in recent years, and the manufacturing sector has been hard hit. The rise in value of the dollar is an aggravating factor that has dealt a serious blow to Quebec's economy. However, we believe that increasing competition from Asia is the main factor in the distress of many of our companies.

Between 2001 and 2006, Chinese imports to Canada nearly tripled, going from $12 billion to $32 billion. What is more, Canada now has a $26 billion trade deficit with China. In Quebec, traditional industries are suffering the most from Asian competition right now. Chinese textile and clothing imports have risen eightfold, furniture imports have increased sixfold and bicycle imports have grown fivefold. Needless to say, our traditional industries are suffering and job losses are multiplying.

The government is doing nothing to help these companies, and the manufacturing sector is being devastated. Between 2003 and 2006, 100,000 manufacturing jobs disappeared in Quebec. In 2006 alone, the first year this government was in power, 35,000 jobs were lost in Quebec's manufacturing sector. And 2007 is shaping up to be even worse. Quebec had 29,000 fewer manufacturing jobs at the end of February than it had at the beginning of January this year.

The more traditional sectors were the hardest hit, including the clothing industry, which has lost almost half of its workers since 2000. The textile industry has lost a quarter of its employees since 2000. The furniture industry has also had a 22% drop in its workforce, and the forest industry has lost 10,000 jobs since April 2005 alone.

Currently, the industry is being left to fend for itself. This is the policy of this Conservative government, at a time when the industry is experiencing terrible difficulties.

Programs for the textile and clothing industries were cut from the budget in 2006. The main federal support program for research and development called Technology Partnerships Canada came to an end on December 31. The Conservatives claimed it was because of administrative problems, even though analyses confirmed that all these programs were very effective.

As for trade laws, the Conservatives decided not to implement the laws that would temporarily protect our companies and give them time to adapt to the new environment and to modernize.

As the members of the Standing Committee on Industry unanimously agreed in February 2007, trade laws must genuinely protect businesses from unfair competition, which is called dumping.

The Bloc Québécois has decided to propose a series of measures for Quebec industries that are facing the biggest challenges: the furniture, textile, clothing, forest and aerospace industries, the marine industry and high-tech industries in general.

I will backtrack a little in order to explain what dumping means.

Dumping is an unfair and illegal trade practice by which a company exports a product at a price that is lower than the normal production cost or lower than the price at which it is sold within the exporting country. When a business adopts practices of this nature, it must expect some countries to impose anti-dumping duties in order to counter such unfair practices.

How do we measure dumping? Generally, to determine if a foreign company is practising dumping, we must look at the price at which the product is sold within its own market. If the product's selling price is lower here, this constitutes dumping. We must be careful: this practice is only valuable if the fair price can really be identified. We can also ask the company to turn over its books and total all its costs in order to determine of the sale price reflects the production cost. Once again, this way of proceeding is only valuable if the production costs are accurate. They can be altered by government intervention in production costs. For example, an intervention might involve the government paying for the electricity needed to manufacture the product.

When the bank is government owned and gives a loan at a prime rate, or if the currency is artificially devalued—we need only think of the Chinese yuan, which is 40% lower than its real, normal value, specifically to help Chinese companies export their products—or when the books do not account for all the normal costs because of inadequate accounting practices, in these instances it is pointless to look at their accounting books.

Also, when various government practices play a role in altering the data, we will not necessarily be able to calculate the fair price. These practices could involve devaluing the dollar, indirect assistance or assistance to the business' subcontractors. We must look further. This is what bill C-411 proposes.

The United States and the European Union do more than just look to see whether the Chinese government is directly involved in setting prices on products, which is what the Government of Canada does. The U.S. and the EU have issued a series of criteria to assess whether the practices of the Chinese government falsify the costs and the prices. In particular, they look at the value of the currency. As I was saying earlier, it is widely known that the yuan is deliberately devalued to artificially lower the prices of Chinese exports. The regulations in China are also considered, but they know full well that these are not always on par with universally recognized regulations. This practice allows the Chinese to hide data. The U.S. and the EU go much further and do more investigating. The production cost and the input cost to manufacture a product can be artificially lowered if the supplier of the raw materials or parts is a government corporation. Thus, the EU and the U.S. evaluate the suppliers. While Canada imposes anti-dumping tax on only 17 Chinese products, the United States taxes 53. While the European Union taxes 49 products, Canada carries on with its 17 little Chinese products only and these products enter freely here in Canada.

Bill C-411 is based on legislation in effect in the United States and in Europe and lays out criteria to be taken into account to assess whether there is dumping, which we hope will better protect Quebec and Canada's businesses from the illegal practice of dumping.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

moved for leave to introduce C-411, An Act to amend the Special Import Measures Act (domestic prices).

Mr. Speaker, it is my privilege to table a bill to amend the Special Import Measures Act.

Canadian trade legislation is outdated, and it does not adequately protect manufacturing companies when they are victims of unfair competition. The proposed legislation will set out the conditions required for deeming whether domestic prices in a country are substantially determined by the government of that country and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market.

We know that among the prohibited activities is dumping, or selling a product for less than its fair value. The passing of this bill will help set out what exactly is dumping, and how to calculate it.

By passing this bill, the Canadian parliament will update trade legislation, give a helping hand to companies suffering from the explosion of imports from emerging economies, help limit the damage caused by the laissez-faire attitude of the government, which has abandoned our manufacturing industry, and surely help save a number of jobs.

(Motions deemed adopted, bill read the first time and printed)