Bill C-55 (Historical)

Canada-EFTA Free Trade Agreement Implementation Act

An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation

This enactment implements the Free Trade Agreement and the bilateral agreements between Canada and the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation signed at Davos on January 26, 2008.
The general provisions of the enactment specify that no recourse may be taken on the basis of the provisions of Part 1 of the enactment or any order made under that Part, or the provisions of the Free Trade Agreement or the bilateral agreements themselves, without the consent of the Attorney General for Canada.
Part 1 of the enactment approves the Free Trade Agreement and the bilateral agreements and provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional aspects of the Free Trade Agreement and the power of the Governor in Council to make regulations for carrying out the provisions of the enactment.
Part 2 of the enactment amends existing laws in order to bring them into conformity with Canada’s obligations under the Free Trade Agreement and the bilateral agreements.
Part 3 of the enactment provides for its coming into force.

Canada-EFTA Free Trade Agreement Implementation Act

[David Emerson, Conservative, Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics]

moved that Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to a committee.

Mr. Speaker, it is a great honour for me to stand in the House today and lead off debate on this trade agreement with the European Free Trade Association.

It is important when we debate our trade relationships to bear in mind that Canada has been, is now and always will be a highly trade dependent country. Indeed, there is probably not a member in the House or a person in Canada who is not dramatically affected by Canada's trade and Canada's trade performance.

I should note that we are unlike the United States, for example, as we are nearly two and a half times more trade dependent than the United States. We have a domestic market of 34 million people compared to nearly 400 million in the United States.

Trade is Canada's lifeblood. We can look at the forces of protectionism, which will be damaging to the United States over time if they continue, and we can see that if such forces were to be unleashed in Canada, I can assure hon. members it would be not just hurtful but devastating to Canada. Therefore, it is critically important that Canada continue to develop trade relationships such as the one we are debating today.

As you have noted, Mr. Speaker, this agreement is with four countries: Norway, Iceland, Liechtenstein and Switzerland. It is really a milestone in terms of Canadian trade policy. It is a milestone for a couple of reasons.

First, it is really our first substantial trade agreement in over a decade. Canada had a small agreement with Costa Rica in 2001, but I have to tell hon. members that the trade and investment numbers between Canada and the EFTA countries are nearly 30 times that of our relationship with Costa Rica. Really, our previous most significant trade agreement was back in 1996-97, when we made the deal with Chile.

We can look at the trade numbers and see that the combined exports and imports between Canada and the EFTA countries were over $13 billion in 2007. That is of course higher than our trade with Korea. It is a very substantial volume of trade and has grown rapidly in recent years.

When we look at foreign direct investment, we can see that two way investment flows between Canada and the EFTA countries are in the $28 billion range as of 2007. While people may make light of the fact that this is not a deal with the entire European Union, which would be our next priority on that side of the Atlantic, this is a very significant trade deal. These countries are relatively wealthy. Their GDP per capita is among the highest in the industrial world. They are technologically advanced countries. As I say, it is our first trade deal with a European bloc or country in terms of our bilateral free trade agreements.

When we look at it strategically for both countries, we can see that this is a trade deal that allows the EFTA countries to think of Canada as a gateway to the entire North American market, a market of 440 million people, and it allows Canadian businesses to look at the EFTA countries as a gateway into the European Union, because the EFTA countries do have a free trade arrangement with the European Union.

It is also important because Canada, and I think the majority of Canadians, most provinces and certainly the Government of Canada, is anxious to deepen our economic relationship with the larger European Union. To have shown that we can establish a free trade deal of the kind we have done with EFTA puts us in a very strong position to maintain and improve momentum in terms of doing a deeper trade deal with the European Union. That is a very high priority of this government.

As I look at our trade relationships, it is very important for members to recognize that we really have been on the sidelines for the better part of a decade in terms of our trade policies. We have become extremely dependent on the United States market because of NAFTA. That is all good, but for our trade it does mean that roughly 76% of our exports are going into the United States market. That is highly concentrated.

There are protectionist pressures in the United States these days, so it is critically important that we not focus just on improving NAFTA, which is a focus for us, but that we also look at diversifying our trade relationships. Other countries are doing it and they are doing it aggressively.

We can look at the United States. It has free trade agreements with 16 countries. Mexico has free trade agreements with 40 countries. Chile has trade agreements with 53 countries. Many of these countries are negotiating additional agreements as we speak.

We can look at Canada. Before this agreement, we have had free trade agreements with five countries through four agreements covering five countries. That is not good enough for a trade dependent economy like Canada's, which is why Canada is actively negotiating free trade agreements with a number of countries.

We have active trade negotiations going on with some 27 countries. When we broaden it to cover air bilaterals, investment agreements and free trade agreements, we are negotiating presently with something in the order of 100 countries.

This government is committed to a re-energized trade policy. We are moving forward aggressively to ensure that Canada is back in the game and that Canadian producers and Canadian jobs are not disadvantaged because we are sitting on the sidelines.

I would also note that on the same day we signed the EFTA agreement in Davos, Switzerland, we also concluded negotiations with Peru. That is another very significant trade agreement. It is a new generation trade agreement. When it comes before the House I will be able to explain to members some of the new and innovative elements in the agreement with Peru.

This agreement is what we call a first generation trade agreement because it was initiated roughly a decade or so ago, so it does not cover trade in services. It does not have an investment chapter, although it does have provision for those chapters to be added within the next three years.

I should say that this deal is a good one for both agricultural and non-agricultural interests in Canada. It has certain sensitivities that have been inhibiting the closure of this agreement over the years. The shipbuilding industry was one particular area in which we have had some sensitivities.

This agreement has the best provisions on shipbuilding of any free trade agreement that Canada has ever signed. The tariff phase-out is 15 years on the most sensitive products and 10 years on the next most sensitive products, and the first 3 years is a period during which there would be no tariff reductions at all.

When we combine what is in this agreement with the buy Canada shipbuilding program that the Government of Canada is bringing along, with over $8 billion in shipbuilding, and when we combine that with the replenished structured financing facility for shipbuilding, I think we are on the threshold of a renaissance in the shipbuilding industry in Canada. I think it will be very good for the shipbuilding industry.

Even today as we speak, the Davie shipyard in Quebec, which has gone through serious financial problems over the last 10 years, is now owned by a Norwegian company and its order book goes out at least five years, with many of the vessels and work being done in that shipyard being sold back into the Norwegian and European markets.

I would also note on the agriculture front that this agreement does exclude the supply managed sectors. As members know, we have committed not to put those on the table in our free trade negotiations with other countries, and we have not done so in this case.

Let me wrap up by saying that this is part of the government's approach to enhancing Canadian competitiveness and to recognizing that while we have had the strongest economy among the group of eight, certainly fiscally and economically, we do see risks on the horizon. Everyone knows there are some serious economic adjustments taking place in the United States and the rest of world. We are aggressively moving to ensure that Canada's economic performance in the long term is enhanced, because Canada's economic performance will be driven by our trade performance.

There will be no way that we can spend our way to prosperity in Canada. It does not work that way. It leaks out in terms of just enhancing imports for Canada. We have to trade. We have to export. We have to sell to other countries. Our global commerce strategy, which is part of “Advantage Canada”, is designed to do just that.

I would note that our approach is driven by the modern integrated approach to international trade which recognizes that trade today is driven by global value chains. Global value chains are driven by investment. Global value chains are driven by technology. Global value chains are driven by the movement of capital and people around the globe.

Rooting those value chains deeply into Canada is a critical part of our trade strategy, which is why our free trade agreements are important. It is important to expand our free trade agreements from goods to cover services and investment. It is important to bring air bilaterals into the mix, because if we do not have good air services between Canada and our trading partners, we cannot service and be efficient in terms of being part of global supply chains.

We are also doing investment agreements. As I noted earlier, investment agreements are critical because investment carries with it technology and opportunity in terms of driving exports and imports.

We are looking at transportation and logistics in a way that integrates this, like no other country and like never before in Canada, with our trade policy. Our transportation and logistics gateways in the Atlantic, in the Pacific, through Churchill in the north, and north and south between Ontario and Quebec and the United States, are critical elements of trade policy. Without transportation and logistics at a globally competitive level, we simply will not be a competitive trader in the world economy today.

This is part of a larger mosaic of policies that are fitting together in a comprehensive way to ensure that Canada, Canadians and our kids and grandkids have opportunities like those we have enjoyed in the past. I welcome the discussion on this agreement today.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, I would like to congratulate the minister on certain aspects of this agreement.

However, I would like to ask him a question as well. Does this agreement with the four European continental countries involved explicitly provide a basis for those four countries that prevents them from banning seal products from their marketplace on the basis of perceptions of the animal cruelty aspects, which other European countries are currently providing? Does this agreement provide a rules-based approach that prevents those four countries from doing so?

Would the minister, in consideration of any potentially expanded European free trade agreement with other European countries, put the marker down right now that Canada will not engage in any discussions with any other European country unless they agree immediately to put into a rules-based approach that the banning of Canadian seal products would be explicitly illegal?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Mr. Speaker, the hon. member raises an important question for Canada. That is the number of initiatives that have been launched in Europe, in particular, where countries are attempting to ban seal product exports from their markets.

This agreement does not actually have to deal directly and explicitly with the banning of seal products because the World Trade Organization rules, in Canada's view, already prohibit that type of a ban. We are aggressively pursuing consultations and possibly will follow that up with trade actions to ensure those rules do prevent and prohibit these types of bans in the future. We have ongoing discussions with a range of countries around this very issue.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, the government has said that shipbuilding is of strategic importance to the sovereignty of this nation. We have people like George MacPherson from the Shipyard General Workers' Federation talking about the fact that currently the shipyard industry is only operating at about a third of its capacity and that over the next 15 years it will be worth about $9 billion in Canadian jobs. The Shipbuilding Association of Canada and Irving Shipbuilding have called for a carve-out. We know that in the United States, for example, under the Jones Act, the Americans did a carve-out and were able to protect the shipbuilding industry in the U.S. Given all that, why would this minister not consider putting on the table a carve-out for the Canadian shipbuilding industry?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Mr. Speaker, I think I should correct the member. The United States actually does not carve shipbuilding out of its trade agreements. The United States has domestic policies that prohibit foreign-constructed vessels from plying between two U.S. ports. Canada does not have such a policy.

I would reassert that this agreement has the longest tariff phase-out of any agreement in Canada's history, in terms of the shipbuilding industry.

I would also note that the Canadian shipbuilding industry is poised for a major expansion that I believe is going to tax the capacity of Canada's shipyards. It is going to require the training of shipyard trades that will be employed in the future. The Canadian shipbuilding industry is becoming technologically sophisticated.

We have carved out the “buy Canada” privilege that we now are able to apply to ships that are purchased by the Government of Canada and its agencies. So, that is preserved. Also, when we look at the billions of dollars in ship procurement that Canada will be doing over the next few years, our shipyards are going to have all the work they can handle.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, I listened very carefully to the minister's remarks. I have two specific questions for the minister.

The first question is with respect to the free trade agreement itself. In his remarks he mentioned that it is simply a generation one agreement and deals strictly with goods. He alluded to the fact that in 2007 there was approximately $13 billion worth of two-way trade, in terms of goods. However, there is also tremendous opportunity in the investment regime, as well; approximately $24 billion worth of two-way investment between Canada and the EFTA countries.

Would he speak to the fact that this deal does not specifically address that and what steps is the government taking to deal with that?

The second question is with respect to the issue around shipbuilding. I think that is a very important issue that has been raised by the Liberal Party, in the Liberal caucuses; specifically, the Atlantic caucus, which is standing up for shipbuilders.

The minister has been very clear about the concerns around that, as well, but the government has only proposed a $50 million renewal of Industry Canada's structured financing facilities. Does he feel that $50 million is sufficient to help the industry transition when the tariffs are reduced?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Mr. Speaker, I would offer an update on the numbers on direct investment between Canada and the European Free Trade Association countries.

The numbers for 2007 now show that investments are up at $28 billion, from $24 billion in 2006. So investment is a chapter that we intend to add, as well as a chapter on trade and services. The agreement makes provision for those to be added as chapters. It also stipulates that should be done within the next three years. So, we will be working with the EFTA countries to ensure that we put those chapters in place in a timely way.

I have spoken to shipbuilding. I will say again that the Canadian shipbuilding industry is about to go through a renaissance. I think it is dinosaur thinking to build the future of an industry as potentially dynamic as shipbuilding on the kind of protectionism that we have applied in the past. It is an industry that has the capacity in certain kinds of vessels and certain technologies to be globally competitive. It is an industry that can have a long term future, not just a future that is propped by interim protectionism. It is an industry that has a future.

The structured financing facility, as the member knows, is not in my bailiwick. That is the Minister of Industry's portfolio. However, I would say that we, as a government, will be assessing that on a go-forward basis, assessing whether it is sufficient to support the global competitiveness of the shipbuilding industry. Then we will see how it looks over the next couple of years.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Mr. Speaker, as usual I will have to leave the agriculture questions to this side of the House.

As the minister knows, the agriculture industry has become increasingly reliant on trade with the United States. Our producers realize this and realize the need to look somewhere else, to be able to open markets in other places of the world. That is what they are reliant on our government doing.

I would like the minister to ensure for us that the agriculture industry is going to be a net benefactor out of this. I would like the minister to perhaps take a bit of time to talk about some of the benefits in the free trade agreement for our producers.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Mr. Speaker, we have made some quite significant gains in terms of the opportunities for agriculture in this agreement. Certainly, on durum wheat we are going to see some real opportunities from this agreement. Moving into crude canola, it will see some significant gains as a result of this agreement as well.

On the agri-food side, frozen french fries, beer and frozen blueberries will gain market advantage. There will be a wide range of tariff reductions on processed and frozen foods in all three markets and in other sectors as well. In the non-agricultural area there will be significant gains for a number of manufacturing producers in Canada.

This should give Canadian producers a real opportunity and more than that it gives them an opportunity to go into these markets and establish a supply chain between EFTA and Canada but also extend that supply chain into the European Union because the European Union does have a free trade agreement with the EFTA countries. It is a real opportunity for Canadian companies who are really serious about competing in the global marketplace to take a great leap forward.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, I take great pride in the fact that I have an opportunity today to speak to this very important bill, Bill C-55, with respect to Canada-EFTA, now referred to as CEFTA, the Canada-European free trade association agreement.

From the outset I want to indicate our party's position on this very important bill, which is that the Liberal Party supports this deal, but calls on the government to continue to monitor and consider the issues around shipbuilding and the shipbuilding industry because this is something that has been brought to our attention on numerous occasions.

We look forward to working with stakeholders in the shipbuilding industry and with the government to make sure it addresses these concerns. I will allude to some of these concerns in my remarks as well.

Before I begin, I want to take a step back and create a context for the reason why we are supporting the bill. It is very important for the members in the House to recognize that we are the party of free and fair trade. We are the party of Wilfrid Laurier. We are the party, since that time, that has expanded Canada's trade opportunities abroad. We recognize that we are a trading nation.

It was during the Liberal Party's regime that we signed and even created side agreements that were very important, beginning with NAFTA in 1994, then, as the minister alluded to, Chile and Israel in 1996, then Costa Rica in 2002. All these agreements gave Canada additional opportunities and allowed us to succeed in the international community.

Currently, under the leader of the Liberal Party, the leader of the official opposition, and understanding points of trade, we recently made an announcement. I just want to remind members about the importance of trade because as the minister alluded to, we need to look at opportunities and we need to ensure that we take advantage of the opportunities.

In my opinion I feel the government has done limited work. I understand the minister has done a lot of good work, but I think he is constrained by the Prime Minister in that the Conservatives have done very little work when it comes to Asia, for example, and that is an area where there are tremendous opportunities.

On February 20 the Liberals made an announcement to allocate $50 million for the creation of the South Asian foundation to really harness the growth potential in a booming Asian economy.

I mention this in the context that we need to look at trade from a macro level. We promote the Doha round discussions very much and we think trade is very important, but we also need to look at how we deal with an emerging Asia, how we deal with a united European Union, and how we position ourselves within North America for economic prosperity and for the opportunities that exist.

In terms of this particular free trade agreement, I would also like to remind the House that it was under the Liberal government that this initiative was started, but we recognize there were some legitimate concerns around shipbuilding, and so we worked extensively with the shipbuilders to see if those issues could be addressed.

This is a generation one agreement. It strictly deals with goods. It does not have provisions for investment or services, and those are areas where there have tremendous opportunity and potential. We need to work with that. That was the question I asked the minister earlier because I felt that it was very important and needed to be addressed.

With respect to the trade agreement, people sometimes do not recognize our trade with EFTA and how important it is, but it is actually a very important trading partner. It is Canada's fifth largest merchandising export destination. It has two-way trade of approximately $13 billion. It is a tremendous opportunity for our businesses here in Canada to export into those markets.

People sometimes underestimate their importance when we allude to some of the countries involved in this agreement: Switzerland, Liechtenstein, Iceland and Norway. People do not think of those as countries that we necessarily trade with, but we do a lot of trade, However,t more importantly, there is a lot of investment and two-way investment between those countries.

I have 2006 data with me. Investment has increased, but we actually invest around $8.4 billion into those countries and they in turn invest $15.6 billion in Canada. There is tremendous opportunity there with respect to trade. Those trade statistics allude to the importance of our trading relationship and this will enhance that relationship. However, there is a tremendous potential that exists in the service sector and the investment regime as well.

The other area that was mentioned that I thought was very important to discuss, and the member opposite mentioned it as well, is with regard to agriculture and agricultural products. This is an important issue that was raised during a committee discussion as well. When the free trade agreement was initiated and eventually signed, there were legitimate concerns around supply management.

We support this free trade agreement because it maintains the Canadian supply management program. That is very important to us. As a Liberal Party, we have been staunch defenders of this initiative and we feel supply management is very important for our domestic market.

Therefore, because of the provisions in the agreement and the fact that Canadian supply management programs are maintained, the agricultural issues by and large are addressed. This was our primary concern with respect to agriculture. We understand the importance of agriculture. We raised this issue and ensured this issue was dealt with in the appropriate fashion in the agreement.

I alluded earlier in my remarks to non-agricultural goods. I said we supported this deal but we had concerns specifically around shipbuilding and the shipbuilding industry. We are supportive of the deal because it legitimately address some of those concerns, for example, the fact that for the first three years there is no tariff reduction, which is very important for shipbuilders. Once the deal is signed, hopefully effective January 1, 2009, if all goes well, it will ultimately mean that by 2012 there will be no tariff reductions for shipbuilders.

Subsequent to that, there will be a 15 year phase-out on Canada's most sensitive vessels. Those sensitive vessels range from ferries to cruise ships to offshore supply ships to basically salvage ships. Those vessels will have a 15 year phase-out. The other vessels such as tankers, those having to do with drilling platforms, drill ships, ice breakers are given a 10 year phase-out period. Those are sufficient safeguards to allow for the reduction of shipbuilding tariffs and allow the Canadian industry the opportunity to rebuild itself in some context, to redefine itself and ensure that it can compete not only domestically, but abroad as well.

The other issue we felt was important was whether the requirements for buy in Canada procurement policy would remain intact, which was important to us. When we saw the deal, this had been maintained and honoured in the free trade agreement. There was no requirement to modify the buy in Canada procurement policy.

Therefore, not only do we have a long tariff reduction phase, but we have a buy in Canada procurement policy that is maintained and protected.

The other concern we had was with respect to the dispute mechanism and how we would deal with any disputes if they were to occur. We again have very little confidence in the government. If we take, for example, the softwood lumber agreement, or as some refer to it, the softwood sellout, that very much questions the government's judgment and the way it represents Canada.

I remind the viewers and the members in the House, that agreement cost $1 billion of Canadian taxpayer money. It left $1 billion on the table. It created a quota system in Canada. It in effect forced companies in Canada, the softwood lumber industry, to be subjected to quotas. Now we are going to the courts again with the U.S. government on these issues again. We are being sued on these matters, or being taken to court in litigation over this.

More important, the fundamental issue we had with that was we lost our sovereignty. We lost the ability to genuinely be able to create programs in Canada to work with industry, and that concerned us.

Therefore, we want to ensure the dispute mechanism does not reinvent the problems we incurred with the softwood lumber agreement. The dispute mechanism in this agreement addresses some legitimate concerns around snap-back provisions, about the fact that it will establish a joint committee to supervise the implementation of CEFTA. Disputes will be resolved through cooperation and consultation and any matter not settled in 90 days may be referred to a tribunal to interpret the agreement and determine consistency with obligations. These important provisions have been addressed in the agreement.

We support the bill. We support the free trade agreement. As I said before, we are the party of free and fair trade. Liberals understand the importance of trade and of creating opportunities for our businesses.

I want to share one small example with the House. I come from the riding of Mississauga—Brampton South, which is situated close to the airport. Many logistical companies, owners of small business and others rely on trade and look for opportunities to expand trade. It is unfortunate that the Minister of Finance is attacking Ontario. He has said not to invest in Ontario. I hope the Minister of International Trade will not follow suit and will use his better judgment.

The reason I bring that up is because Canada's trade surplus has been in decline since the Conservatives took power. Our trade surplus is shrinking each month and our export market opportunities are fairly limited. The government needs to continuously examine foreign markets to look for opportunities for our businesses, specifically small and medium sized enterprises, like the ones in my riding, that depend on trade, and create a lot of jobs and economic opportunity.

This is a first generation trade agreement. It is a step in the right direction. It addresses some legitimate concerns around agriculture, supply management, and the shipbuilding industry, but we still have some concerns.

I asked a question earlier today with respect to the structured financing facility. The shipbuilding industry is supported through Industry Canada by a $50 million renewal. This is not sufficient. The government needs to do more.

The Minister of International Trade, in his previous job as a minister in the Liberal government, was also the minister responsible for Industry Canada. He looked at this issue. I asked my question in that capacity. I wanted him to explain to the House what more was being done to help this industry in terms of financing. The minister is very optimistic about shipbuilding. He feels it is a dynamic industry with a lot of potential. I want to ensure that the minister understands we share those same concerns. There is tremendous opportunity as well in that industry. Perhaps the minister could speak to that issue and explain what more is being done to help it out.

I look forward to any questions or concerns by members opposite.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, the member made a number of points about the government's policy on trade in general, but specifically on the proposed trade deal.

Our party has raised concerns about our shipbuilding industry, and my colleague from B.C. raised it earlier. This is not a concern for only Atlantic Canada; it is also a concern for B.C. as well. There is the potential for jobs for manufacturers right across the country in supplying parts, et cetera. In the case of B.C., we have called on the provincial government to do more.

The member talked about procurement policy. Governments can make a difference, in this case a provincial government. They can buy Canadian. They have to remember our Canada first policy. We are frustrated because we do not see that happening.

I listened carefully to the minister and to the member about the tariff phase-out. Most Canadians want to see a healthy shipbuilding industry, one that is supported by provincial governments. They want to see our Canada first policy.

Before we enter into a deal like this, should we not have a healthy, robust shipbuilding industry? Norway has done that. If we enter into a trade deal like this, it will have all the advantages and we will have all the disadvantages. As was mentioned by my colleague, we are not at full capacity. We are not buying Canada first. We need to have a healthy shipbuilding industry. Should we not focus on our shipbuilding in Canada first before we enter into a trade deal like this, particularly in light of Norway?

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, in my opinion, many members of the House share the same concern. I know I do. Members not only from Atlantic Canada but across the country, especially from British Columbia as well, share concerns about the shipbuilding sector and the fact that the industry might be exposed to tremendous competition from EFTA countries, specifically Norway.

I am glad he mentioned Norway. That point was raised in committee on numerous occasions. We received clarification time and time again that Norway no longer had a program or a regime that provided subsidies. The concern with Norway is a legitimate concern, but it was been addressed in committee.

At the beginning of my comments, I said that we supported the agreement, but we had legitimate concerns about the need to ensure the meeting Canada's procurement policy was kept intact, which I believe it is. That is my understanding and that is what the minister and the government have said. I also said that I wanted further clarification on structured financing.

We need to pursue free trade agreements, especially with some of the challenges we face, such as the Doha development agenda. We need to create more export opportunities. With the strong Canadian dollar and the tightening of the border, we need to look at diversifying our markets. There is potential opportunity here, recognizing the concerns he has referred to with the shipbuilding. If the government could provide further clarification on a structured financing for the industry, that would definitely help the industry put itself in a competitive position going forward.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, I would also like to echo the comments made by the hon. member for Mississauga—Brampton South about the minister. He has done some good work. I had the opportunity to work with him when he was on the Liberal side. I congratulate him on the free trade agreement, which we have signed.

My question is around the shipbuilding industry as well. I have a concern from the perspective of B.C. The member said that it was a 15 year trade out period, but those post-Panamax cargo vessels are not part of the agreement.

Could the member explain how it would not affect British Columbia and Atlantic Canada when it comes to those ships? Also, could he explain in detail what small businesses in his riding will benefit with the trade with South Asia, so we can look forward to trade with those nations?

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, again, I believe the member is referring to the comments I made with respect to the announcement by the leader of the official opposition, on February 20, with regard to a $50 million commitment to create a foundation to strengthen ties with Asia.

There is no doubt that the member from British Columbia is very concerned about that because British Columbia acts as a portal to Asia. It is very important for us to create strong economic opportunities. I hope the government takes those comments very seriously and understands the importance of building strong relationships with Asia.

Specifically, the questions he mentioned with regard to shipbuilding and the tariff reduction regime, I alluded to them in my remarks. I will highlight which ones are subject to a 15 year tariff reduction and which ships and vessels are subject to a 10 year tariff reduction.

Ferries and cruise ships are subject to a 15 year tariff reduction. Again, I want to preface this comment by saying that made in Canada procurement policies are protected and exempt in this agreement as well. Dredgers and salvage ships are subject to a 15 year tariff reduction. With respect to 10 year tariff reductions, this includes tankers, fishing vessels, drilling platforms, drill ships, production platforms and icebreakers.

Those are categories, If there is anything specific that the member has with regard to any particular vessel, we can always look it up to ensure it is part of the regime. If not, then I will take it into consideration and follow-up.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I paid close attention to the member's comments. I want to address shipbuilding, coming from British Columbia.

In the early 1980s our shipbuilding industry was very healthy. What has happened over many years of government neglect, which we can lay both at the Conservative and Liberal doors, is the shipbuilding industry has gone into crisis. We have seen shipyard after shipyard close.

The member pointed out, quite rightly, that Norway's shipbuilding industry currently is not subsidized, but it had a long period of government investment and subsidy to get it to the place where it was healthy enough to be able to stand alone.

Why would the member not support the shipbuilding industry's own request to have a carve out provision for the shipbuilding industry and then to have an effective government policy to actually support shipbuilding, particularly in view of the fact that it is of strategic national importance? Why would he not support a carve out?

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Speaker, when we pursue free trade agreements, it is a two way negotiation process, a give and take. The fact that there are long tariff reductions, a made in Canada procurement policy, that supply management is protected and that for the first three years there is no tariff reduction, all these very much play into our national interests, and they were addressed in the free trade agreement.

I share the member's concern with respect to shipbuilding. The government has done very little to develop a comprehensive plan to deal with our domestic shipbuilding industry and to create a long term strategic initiative and partnership with the shipbuilding industry so it will be able to compete. Norway is a very good example because it did subsidize. There is no doubt that it no longer provides subsidies now but it did subsidized before, which allowed its shipbuilding industry to be in a competitive position.

The onus and responsibility now lies with the current government to put together a plan for not only structured financing but a more comprehensive plan that can position our industry, once the tariffs are reduced, especially when the tariff reduction starts in 2012, to be on an equal and competitive footing. Even though the subsidies no longer exist today in Norway, there is no doubt that the subsidies in the past have put it in a more favourable position. Therefore, I do very much recognize the member's concerns.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I rise today to speak about the proposed free trade agreement with Switzerland, Norway, Liechtenstein and Iceland, the members of the European Free Trade Association. I am speaking on behalf of all the Bloc members and would like to acknowledge in particular the contributions of the members for Sherbrooke and Berthier—Maskinongé to the Standing Committee on International Trade, which has studied the proposed agreement and the free trade agreement.

The Bloc believes that this is a good free trade agreement that deserves to be supported. Moreover, we believe that Quebec will benefit a great deal from this agreement.

For example, the pharmaceutical industry in Quebec, like the industry in Switzerland, is very healthy. We can therefore expedite trade and perhaps pave the way for more and more transactions. To penetrate the American market, Swiss pharmaceutical companies might be tempted to produce drugs here, which presents an attractive opportunity for us.

We would remind this House that Quebec is the home of the brand name drug industry in Canada because of its pool of skilled researchers and its tax breaks. For Quebec this agreement will pave the way for new business opportunities.

The agreement facilitates trade between a company and its subsidiaries and is likely to mean new investments in the pharmaceutical industry in Quebec. That is good news.

Let us turn our attention now to Norway. Nickel accounts for over 80% of our exports to that country. The largest mine in Canada and the third largest in the world is owned by the Swiss company Xstrata and is located in Ungava. This agreement may also have benefits on that front.

Let us continue our tour of the countries with a stop in Iceland. Aluminum is our main export to Iceland. Aluminum production is also concentrated in Quebec.

Overall, this is an attractive agreement. I would also say it does not have the same drawbacks as previous agreements.

For example, NAFTA and the agreements with Costa Rica and Chile all contain what could be called bad clauses on investments that give companies the right to sue a government that adopts measures that would reduce their profits. This sort of provision is not found in the agreement with the EFTA. Consequently, the free trade agreement with Europe, at least this part of Europe, is worthwhile. There will be no sword of Damocles hanging over our heads, because this agreement does not contain any such clauses.

Furthermore, the agreement only covers goods and not services. It will not create competition with public services, whether they are offered by the state or not, since they will not be covered. Similarly, banks providing financial services will not be in competition with Switzerland, which is known to have a very solid and very discreet banking system, and Liechtenstein, which is a true haven for the financial world when it comes to taxation and anonymity. We are already having enough problems with Barbados without adding any more. It would be best if the agreement did not allow this type of exchange.

For government procurement it is the same thing. The government is still free to favour domestic procurement, subject to the WTO agreement on government contracts. It would be somewhat ridiculous for the government to negotiate room to manoeuvre and then decide not to use it. It is imperative that the federal government, which is the largest purchaser of goods and services in Canada, favour suppliers here and consider the potential spinoffs from its purchases.

We have another absolutely ridiculous example. Canadian athletes will be dressed in material that is made in China. There should have been a different solution. We could call this an obvious and quite unacceptable lack of pride. This is outside the limits of the agreement before us, but I wanted to mention it anyway. When we look at an agreement like this, we have to look at what it will allow us to do. This agreement does not allow for such an absurd possibility.

The whole issue of agriculture is a concern that a number of MPs have mentioned in this House. Supply management is not affected by this agreement. The Bloc Québécois motion passed here in 2005 has become the cornerstone of the Canadian government's position on protecting supply management. We are very proud of that and we hope things will continue this way.

We are just as proud of the fact that the supply management model is being developed throughout the southern countries. It may be part of the solution to the food crisis. The more countries that use this type of system, the less agriculture will be subjected to traditional trade patterns. Thus, it will be possible to provide better protection that will allow both communities and producers to be well served in terms of agricultural production.

This agreement ensures that supply management will not be affected. That is another reason that the Bloc Québécois likes this agreement.

This agreement will make it possible to implement bilateral agricultural agreements as add-ons to the free trade agreement. We will see how this will come together. Bilateral agreements will not necessarily have a huge impact on Quebec agriculture, because milk proteins are excluded from the agreement and the tariff quotas and over-quota tariffs remain unchanged. In short, supply managed products will be protected.

However, there is one sector where this agreement would be good, although the federal government will really have to go out of its way to make a sustained effort. I am talking about the issue of support for shipyards. A number of members in this House have brought this up this morning. As a member of the maritime caucus, I know that there have been questions. They have been handled in an acceptable fashion in the agreement, but that does not mean that the Canadian government will not have to have a more aggressive and constructive policy on shipyards. In fact, we have some concerns.

For example, imported vessels are currently subject to a 25% tariff. Under the agreement, these tariffs will gradually decrease over three years, and will be completely eliminated in 15 years. In the future, in 15 or 20 years, we do not want to see a whole industrial sector disappear, as was the case with the textile sector. We know that the government needs to take action now to ensure that once this all disappears, our industries in this sector will be competitive.

Our shipyards are currently less modern than Norwegian shipyards, for example. They are in worse condition. So some things will need to be renewed, since Norway has invested heavily in modernizing its shipyards, while ours have been completely abandoned by the government.

[The Deputy Speaker, NDP, Bill Blaikie]

Order, please. It is now time for statements by members. The hon. member will have 13 minutes left for his speech.

The member for Saskatoon—Rosetown—Biggar.

The House resumed consideration of the motion that Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to a committee.

[The Acting Speaker, Conservative, Royal Galipeau]

When we were discussing Bill C-55, the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup had 13 minutes to finish his speech. He now has the floor.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I want to reiterate that the debate concerns the proposed free trade agreement between Canada and the European Free Trade Association, which is made up of Switzerland, Norway, Liechtenstein and Iceland. The Bloc Québécois is in favour of this bill and the agreement.

In the first part of my speech, I talked about how the agreement could mean attractive opportunities for the pharmaceutical industry in Quebec. The same is true of the nickel sector, especially for one mine in Ungava, in Quebec. The agreement could also benefit aluminum exports to Iceland. Consequently, Quebec is very interested in seeing this agreement implemented.

Moreover, we have ascertained that the agreement will have no impact on agricultural supply management. The existing systems in Quebec and Canada can be maintained.

However, at the end of my speech, just before question period, I made the point that the federal government will have to take far more aggressive steps to support the shipbuilding industry once this free trade agreement takes effect. The agreement provides that tariffs will decrease over 15 years.

I believe that the shipbuilding industry in Norway, in particular, is much better equipped today than Canada's. Canada has abandoned the shipyards. The industry was not really given the tools to grow.

In that context, I would like to point out that one recommendation in the report presented by the Standing Committee on International Trade was adopted by that committee. It had been proposed by the hon. members for Sherbrooke and Berthier—Maskinongé from the Bloc Québécois, our two spokespeople in this matter. They did their work in a very conscientious manner and got support from the committee on the following motion:

The Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.

The purpose of the motion is to raise a red flag. Indeed, the free trade agreement is desirable. However, in practice, for the marine industry the government truly has to make a significant shift and implement a support strategy for the shipbuilding industry.

This currently does not exist and our shipyards have often been left to fend for themselves over the past few years. We are seeing the results of that. It is possible to have a healthy and competitive shipbuilding industry, but we have to have a policy to that effect. That is no reason not to support the free trade agreement with European countries.

We are sending a message to all of Europe. The agreement I am currently referring to is the agreement between Canada and the European Free Trade Association, which includes Switzerland, Norway, Liechtenstein and Iceland. It is important to note that these are countries Quebec does a lot of trade with. However, this now suggests that the real target should be signing a free trade agreement with the European Union that will help achieve results for all our exchanges with Europe.

For example, the four countries involved in the current agreement represent 12 million people and roughly 1% of Canadian exports. With the European Union, it would be 495 million inhabitants who generate 31% of global GDP. In fact, the European Union is currently the strongest economic power in the world.

Every day we are painfully becoming more aware that our economy is far too dependent on that of the United States. When there is a downturn in consumerism such as we are seeing now in the United States, when we see that the Americans are committing a lot of money to the war in Iraq, when we see the commercial paper crisis, when we see the economic slowdown in the United States, when we see the obvious aggression of emerging countries such as India and China, we can see that it is getting more and more difficult to keep our place in the American market.

This agreement gives us an opportunity to move forward and guarantee that we have access to Europe.

The current free trade agreement indicates that we are moving in the right direction. We should have a similar agreement for the entire European Union, but we do not. We believe that the federal government should speed up its attempts to access Europe so that we can arrive at an even more significant agreement that will give the best possible results.

This is the reality. We have lost 150,000 manufacturing jobs in five years, more than 80,00 of which were lost since the Conservatives came to power. They follow the laissez-faire doctrine, meaning that the market regulates everything, but that does not mean that we should not be open to new markets, as we would be with the free trade agreement we are talking about today, and of course a more widespread agreement with the whole of Europe. The European Union is absolutely essential to diversifying our markets and reducing our dependency on the United States. The fact that Canada has not yet signed a free trade agreement with the European Union considerably diminishes the competitiveness of our businesses on the European market.

At this point in my speech, I would like to say that the Canadian government must realize that it is essential to move forward on environmental issues. Other countries must see that we are respecting Kyoto, and that we will be firmly committed to Kyoto plus, which will be developed at the Copenhagen conference next year. As it stands, we could end up paying export taxes because the international community does not recognize that we have made an adequate effort on environmental issues. The government will have to be tougher and much more active in this respect, and it will have to recognize that sustainable development is not only good for the environment, but it is also good for the economy. Canada is not currently a leader, as it could have been if it had truly decided to accept Kyoto, to implement it and to create resources more quickly, such as a carbon exchange, so that we could reap all the necessary benefits.

Let us go back to the possibility of a free trade agreement with Europe. With the rise of the petrodollar, European companies have tended to open subsidiaries in the United States and leave out Canada. That is another reason why it would be a good idea to sign a free trade agreement with all of Europe.

Canada's share of direct European investments in North America dropped from 3% in 1992 to 1% in 2004. The alarm bells are ringing. We need to change our attitude, we need to change the way we do things, and we need to come to an agreement with all of Europe, like the one we are debating today, as quickly as possible. It would be to Quebec's and Canada's advantage to sign and implement an agreement as soon as possible.

I should also point out that the European Union and Mexico have had a free trade agreement in place since 2000. As such, if a Canadian company is doing business in Mexico, it is in that company's best interest to relocate more of its production to Mexico because it can access both the European and U.S. markets, which it cannot do if it keeps its production in Quebec. It is important to both companies and workers for the federal government to change its attitude and speed things up in terms of opening up markets. Being open to globalization when the conditions are right means that our companies have to be in a competitive position. We have to give them the fiscal tools they need, and we have to give them the tools they need to access the market.

The example I just gave is the best one. A Quebec company does not have the same access to the European market as a Mexican company, and companies in Mexico have access to both North American and European markets. This is an aberration that should be rectified as soon as possible.

Quebec would be the first to benefit from a free trade agreement with Europe. The Bloc Québécois has been promoting this for some time now. We proposed it as part of our election platform and our political agenda. We believe that if we persevere in this file as we have in others, we will eventually get a free trade agreement with Europe.

For example, 70% of the people who work for French companies in Canada are from Quebec, as are 37% of those who work for U.K. companies here and 35% of those who work for German companies here. In contrast, just 20% of people working for U.S. companies in Canada are Quebeckers. The Government of Quebec has been working with companies since the Quiet Revolution, and that is a major advantage when it comes time to seek out European investment. We have everything we need to become the bridgehead for European investment in America.

Thus, we see what the prevailing spirit was when the free trade agreement was signed with the United States, the agreement that later became NAFTA. Thanks to that spirit, Quebeckers rallied behind their leaders who wanted to implement free trade. Quebec has benefited from this free trade. Unfortunately, market conditions have changed considerably. Since the markets have opened up to China and other countries around the world, we are now facing a new reality. This reality calls for new tools for international trade. Free trade agreements are the best example.

Today, the Bloc Québécois is very pleased to support Bill C-55, which would implement the Free Trade Agreement between Canada and the EFTA, that is, the European Free Trade Association, consisting of Iceland, Liechtenstein, Norway and Switzerland.

We believe this is a step towards adopting such an agreement with Europe as a whole. Quebec is open to this position and hopes to see it come to fruition. Quebec as a whole shares this desire to move forward on such agreements. We hope the federal government will pick up the pace and conclude an agreement with the European Union. That would be the best way to diversify our economy, which really needs a boost, due to the slowdown in the American economy and the emergence of new competition from China.

I am pleased to confirm once again that the Bloc Québécois supports this free trade agreement and hopes to see it implemented as soon as possible. It will be beneficial for businesses and workers in Quebec.

[The Acting Speaker, Conservative, Royal Galipeau]

Before I go to questions and comments, I would like to thank the hon. member for Vancouver Quadra for maintaining order and decorum in the House over the last several minutes. Questions and comments.

Resuming debate, the hon. member for Halifax.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I am pleased this afternoon to have an opportunity to speak to Bill C-55.

I was in the House earlier today when the minister of trade made his very enthusiastic uncritical comments in support of the bill that is before us. I listened very carefully to what the minister of trade had to say about what the impact of Bill C-55 if implemented in its current form would be on the shipbuilding industry of this country.

I expected that he would speak in an informed way about what are some very serious concerns which are widely shared not just by a small corner of this House, not just by 30 New Democrat members of Parliament, but by a great many people across this country, particularly on both coasts, in terms of the very worrisome impact this free trade deal will have on the shipbuilding industry. Far from hearing him give appropriate attention to the very legitimate concerns that are widely shared and widely expressed, he more or less dismissed those concerns. I do not want to misrepresent him in any way, but I think he referred to them as certain sensitivities. He said there were certain sensitivities that had arisen in regard to shipbuilding.

I do not know the minister of trade personally, but I have to say that is one of the world's greatest understatements. Perhaps he is prone to understatement, I do not know, but it certainly does not do justice and it does not deal fairly with what are very deeply rooted concerns. From my point of view and that of the New Democratic caucus, these are well-founded concerns about what the impact of this deal, if it goes ahead unamended, will be on thousands of jobs in this country.

Having said that, there is a very unhappy history, one that is very much shared by and is the joint responsibility of a succession of Conservative, Liberal and Conservative governments. There has been a complete failure by any of those governments over the decades to put in place the kind of comprehensive, coherent, national shipbuilding policy that would have served this country so much better than the kind of fits and starts, piecemeal approach to shipbuilding. It has often been an approach that has been based more on short term electoral considerations than on the very fundamental issues that underlie the need for a comprehensive national shipbuilding policy.

My own experience and exposure to the inadequate responses of the succession of governments began when I was leader of the New Democratic Party in Nova Scotia. There were very real, well-founded concerns about the impact of that lack of a national shipbuilding policy in my own riding in Halifax. At that time I was proud to represent the riding of Halifax Fairview, and before that, Halifax Chebucto. Both of those provincial ridings were very much impacted by the policy, or more accurately, the absence of a national shipbuilding policy. That had an impact on the Halifax shipyards. We have systematically allowed that to happen in this country. Other countries, and one most notable in the context of this debate is Norway, have understood that there cannot be a sound, competitive shipbuilding industry if there is not a net comprehensive national policy.

I recall attending federal NDP conventions in the early 1990s. I think 1991 was one of the occasions when I was part of crafting and piloting through a very comprehensive policy that was adopted by the New Democratic Party. We called for that national shipbuilding policy. Before I ever came to Ottawa and continuing since I entered this chamber in 1997, the New Democratic Party has been very consistent and very persistent in continuing to press for that national shipbuilding policy.

We still do not have it. When the Minister of International Trade refers to “certain sensitivities”, his words, with respect to the disastrous impact that this trade deal, unamended, could have on our shipbuilding industry, he is being extremely insensitive to both that pathetic history of governments of his party's stripe and of the Liberals in not securing a sound base for a robust shipbuilding industry that can continue to compete in today's world.

There is absolutely nothing wrong with our current shipbuilders and our current shipyard workers in terms of their ability to compete, but we have had such a fits and starts approach to this industry that what has effectively happened is that Norway foremost, but other countries as well, has invested in a smart, orderly and far-sighted way in its shipbuilding industry. It has in the process established itself as a competitor that will be a huge winner from the trade deal that is before us. I say good for it.

Some people ask, what is wrong with New Democrats? After all Norway has had a proud tradition of being a social democratic country committed to high wages, committed to practically the whole range of policy objectives that the current government and the Liberal government before it completely pushed aside as not the domain of government intervention. In fact in Norway the government has intervened in a very smart way to build up its shipbuilding capacity, to train, to invest in the hardware, software and infrastructure needed, in the tax policies and so on.

It is not some kind of unexpected development that Canada finds itself at such a disadvantage in relation to competing with a country like Norway. What is unexpected, but I suppose we should come to expect it, what is absolutely unacceptable and impossible to understand for a lot of people whose jobs are at stake is what on earth Canada has been doing in the meantime that has allowed us to be so vulnerable.

It is not just New Democrats who are speaking out on this, although before I go to some of the other voices and some of the other interests very much concerned about the devastation in the shipbuilding industry that can result from this trade deal, I want to take this opportunity to pay tribute to my colleague from Sackville—Eastern Shore, who is not able to be here today. I have to say that if he had been in the House to hear the minister talk about certain sensitivities, I think he probably would have had a heart attack. In fact, he had an accident and because of his injury was in hospital yesterday being operated on, and therefore, he was not able to be here today. He has never failed to take a stand on behalf of the shipbuilders and the shipyard workers in this country from the day he entered public life.

It is not just the Nova Scotian members of Parliament in the New Democratic caucus who have been very vocal, knowledgeable and persistent in putting forward their concerns. There are several members from British Columbia. For example, there is the member for Nanaimo—Cowichan. The Nanaimo shipyards are very important to the local economy and obviously for local jobs. There is the member for Victoria. In Victoria the Esquimalt dry dock is very important. The Lower Mainland and the Vancouver members all have expressed their concerns articulately. However, it is not just New Democrats who have spoken out.

I would like to read briefly from some of the testimony before the parliamentary committee when Karl Risser, president of Local 1, which was originally the Marine Workers' Federation but is now affiliated with the Canadian Auto Workers Shipbuilding, appeared before the committee. He did so not just on behalf of the proud members who have a long history with the Marine Workers' Federation and today are affiliated with CAW, but also on behalf of the Shipbuilding, Waterways and Marine Workers Council that has done a lot of collaboration and coordination around its concerns about this impending devastation to the shipbuilding industry. He stated in committee:

I am here on behalf of the workers in the marine sector...to express our opposition to this agreement. Canadian shipbuilders find themselves competing for work in domestic and international markets on far from a level ground. Other governments, Norway for one, have supported the shipbuilding industries for years and have built them into powers, while Canada has not. We have had little protection, and what little protection we have left is a 25% tariff on imported vessels into Canada, which is being washed away by government daily through agreements such as this and the exemptions being negotiated with companies.

I will not go on at length, but he makes the important point that ministers of defence over the years have acknowledged how important shipbuilding is to our defence. I know there are some members who will rush forward in this context and ask what my concern is now because we have some important new shipbuilding activity happening with respect to the submarine refits and to the frigates. That is absolutely true and it is very welcome, and I acknowledge that, but with respect to defence and shipbuilding, there has never been a comprehensive approach taken to this and, therefore, we have not had orderly procurement nor long term planning and investments. We have had major investments into important contracts from time to time but then just a drought for very long periods.

Someone who is not familiar with the shipbuilding industry may say that it is not the government's problem. Do we want the government investing and awarding contracts to shipyards to build naval vessels that we do not need? No, but that is not the point. The reason we need a comprehensive national shipbuilding policy is because of the very heavy investment of public dollars into contracts that are awarded for naval vessels and, most recently, major contracts with respect to frigates and subs. Without a comprehensive national shipbuilding policy, all that investment would fall idle if we did not have a commitment to Canadian shipbuilding of non-defence vessels.

It is not surprising that a lot of concern has been expressed. Unwisely, the government felt that, because of opposition from the existing shipyards and in the absence of a national shipbuilding policy, which, understandably, marine and shipyard workers across the country will be very opposed to, it could award the major contracts for both the frigate and the submarine refits and that would shut them up. It felt that would keep them busy in the short term and that they would not dare speak out because they would be so grateful.

However, what they understand, what they committed to and what they lobbied a long time for was not just the immediate investment in contracts that would benefit them individually as workers or their families, but they had pleaded the case and put forward comprehensive proposals for what a national shipbuilding policy should look like and they still do not have it.

Therefore, there are major concerns about what will happen to our shipyards and to the jobs of our shipyard workers over time.

The point was made that Norway should be the kind of country with which we would welcome entering into trade deals, and that is true, but that does not mean we can turn our backs on the legitimate problems that have arisen, not because of what it is looking for but because of what we have failed to do in terms or appropriate investments.

As I indicated, many other people have expressed concerns about the impact of this. Some may suggest that it only affects the shipyard workers. However, in his testimony before the committee, the president of the Shipyard General Workers' Federation in British Columbia stated:

The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.

Is it only the workers who have spoken out? No it is not.

In his testimony before committee, Andrew McArthur, speaking on behalf of the Shipbuilding Association of Canada but long-associated with Irving Shipbuilding Inc. and now in retirement, said:

So our position from day one has been that shipbuilding should be carved out from the trade agreement. We butted our heads against a brick wall for quite a number of years on that and we were told there is no carve-out. If the Americans, under the Jones Act, can carve out shipbuilding from NAFTA and other free trade agreements, as I believe the Americans are doing today with Korea, or have done, why can Canada not do the same? ...We have to do something to ensure shipbuilding continues. The easiest thing is to carve it out from EFTA. And if you do one thing, convince your colleagues in government to extend the ship financing facility, make it available to Canadian owners in combination with the accelerated capital cost allowance, and you will have as vibrant an industry as exists

However, what has not happened is the kind of response to the expert advice given by those involved in the shipbuilding industry and by the concerns put forward by the shipyard workers themselves.

I want to come back to where the Liberals stand on this. I could not help but think how consistent they have been, and they are consistent if nothing else, on the budget, on the extension of the Afghan counter-insurgency mission and with regard to climate change. They have railed against them, have talked about the problems with them and then have voted for them or did not vote at all.

Today we heard the trade critic for the Liberals say that they really had concerns about shipbuilding. He knows the problems and spoke a bit about them but then said that they would monitor the effect of this on the shipbuilding industry.

In conclusion, I want to indicate that the New Democratic Party cannot support this bill without a carve out for the shipbuilding industry and without any indication that some of the agricultural implications have been adequately addressed.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, I listened to the hon. member as she spoke about her objection to this great free trade agreement that we are debating now and which looks as though it will come to fruition.

I listened with interest to her criticism of the shipbuilding aspect of it but I also listened when the minister spoke about the agreement and the protection put in it to protect, for many years, our shipbuilding industry.

However, I find it rather curious that here we are creating hundreds of thousands of jobs and perhaps millions of man-hours for people who work in an industry that we all know was at risk, and, in one particular case, the Davie Yards, which was in financial distress and has been for some time, how this bodes well for the health of that particular industry.

I do not know how the member can construe the tremendous investment by the Minister of National Defence and the procurement by the Canadian government with regard to defence contracts, in particular, the refurbishing of our fleet, to be a negative. My goodness, I do not know how this could be a negative. It actually bodes well for employment and the long term viability of our shipbuilding industry.

Why does the hon. member and her party, time and time again, vote against the very thing that creates employment and brings back vitality to that industry?

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I do not want to be argumentative. I do not know whether the member was in the chamber when I spoke but if he was, he either did not listen to what I said, which is his prerogative, or he did listen and knows that he has completely misrepresented what I said.

I said, in no uncertain terms, that it does bode well in the short term for jobs in shipbuilding. I made that very clear. I complimented the government on that and acknowledged that was so.

What I went on to say, however, which he chose to either disregard or misrepresent, which is not quite within the rules, is not what he said. He said that I had suggested that this was a negative thing and that I did not acknowledge that the implications for shipbuilding in the short term were positive. I do acknowledge that, but the present government, like the Liberals before it, has only a short term view of these things.

If he wants to know why we cannot support this bill unamended, it is because a carve out of the shipbuilding industry would have done nothing to damage the prospects for the jobs that are now going to be generated by the new refurbishing of our fleets. Therefore, a very simple carve out would have made a great deal of difference. We will continue to fight for that. We believe that was what was needed and without it we will not be able to vote for it.

[Gerald Keddy, Conservative, Parliamentary Secretary to the Minister of the Atlantic Canada Opportunities Agency and to the Minister of International Trade]

Mr. Speaker, I was listening to the discussion of the hon. member for Halifax on what was said, or what was not said, or what might have been said, and quite frankly I am a bit confused.

However, what I am not confused about is the fact that this is a good treaty. It is a good FTA for Canada. It is a good FTA for the European nations. It opens up prospects for a wider market for goods. Anytime we can sell our goods in Canada, because we are an exporting nation, that means jobs and opportunities for Canadians, for workers, whether they are unionized or non-unionized. It is a good thing for Canada.

For the shipbuilding industry in particular, there are 15 years of protection in this treaty. That is the most protection of any FTA we have signed. For three of those years, the protection is at its current level. That is the most effort any government has ever made to protect any particular industry under a free trade agreement.

I would go a step further than that. The Norwegians have just purchased the Davie yard in Quebec. It looks now as if that yard will be profitable, with a lot of jobs and a lot of opportunity for the workforce in Quebec. I am not sure, without a foreign buyer, if this would have happened. I am not sure if that yard would have remained viable.

It is worth discussing. Would the NDP rather see our shipbuilding industry die a slow and painful death and see us lose those high paying, well qualified jobs in this country? That is the direction in which the shipbuilding industry was headed.

This government has done more than any previous government to support shipbuilding, first of all under this agreement, and second, with our frigate program. The Minister of National Defence and the Minister of Public Works recently announced $549 million for the Halifax shipyards and $351 million for the Victoria shipyards, respectively, for a refit of Canada's frigate fleet. This is part of $3.2 billion that is going to be spent on refurbishing our fleet in Canada.

At the end of the day, this is a good agreement for shipbuilding. That is the area she wants to talk about. In that area alone, this is a good agreement.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, we will just respectfully have to agree to disagree. A great many people in this country, from Newfoundland through to British Columbia, who have decades of experience and an in-depth knowledge of the shipbuilding industry, happen not to agree with the government on this and we happen to agree with them.

One of the reasons, if he wants to know why there is such concern, is that when there were a lot of concerns about the Jones act in the U.S. being exempted from NAFTA and a lot of people in the shipbuilding industry were saying that it was really going to be a blow to the industry, the Conservatives said, “No, this is a great deal”. The Liberals said they were opposed to it, but then they signed it anyway when they got into government. The Conservatives said it was a great deal and there was no problem, but of course we know that is not true.

Let me again quote Andrew McArthur, one of the foremost authorities. I do not have time to quote him at length, but he made it absolutely clear that NAFTA had been a disaster when he said:

Looking at NAFTA, we feel we were sold down the river. We cannot build for American shipowners, but American shipbuilders can build for Canadian shipowners....

They are suspicious. In the short term, they understand, as I have acknowledged, that the refurbishing of the fleet is a very positive thing for the existing shipbuilding industry, but it does not provide what they said was essential: if not a carve-out, then a clear, comprehensive, national shipbuilding policy. We still do not have it. On that basis, they and we cannot support this flawed agreement.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, I rise today to speak on Bill C-55, which would implement the free trade agreement that Canada has negotiated with the European Free Trade Association, which is composed of Norway, Switzerland, Iceland and Liechtenstein.

It marks the successful end of nine years of negotiations. This process began under the leadership of the former Liberal government and represents a significant achievement for Canada as a trading nation. It secures free trade with our fifth largest merchandise export destination.

Canada has always been a trading nation. From the early days of fur and fish to the present, when a remarkable 90% of our gross national product is attributable to exports and imports, Canadians have relied on international trade to bolster our economy.

Trade is the way of the future. The ratio of world exports to GDP has more than doubled since 1950.

This agreement is a proud achievement for our trading nation.

That being said, I share the legitimate concerns of our country's shipbuilding industry, and I have been careful to examine the provisions affecting that industry before offering my support.

The EFTA agreement strikes a balanced approach by providing new and important market access for Canada's exporters, while also ensuring that an important domestic industry is protected against unfair competition from Norway. Norway subsidized its shipbuilders and built up a tremendous shipbuilding infrastructure, growing the industry into a world leader. However, Norway eliminated its subsidies in 2005 and has no plans to reintroduce them in the future.

Nonetheless, the effect of this buildup still gives the Norwegian industry an advantage. As responsible legislators, we must be careful to ensure that this advantage does not allow it to compete unfairly against our own shipbuilders.

The EFTA agreement provides several protections against this historical advantage. First, it phases out tariffs on ship imports over 15 years, the second longest phase-out ever negotiated in a free trade agreement. This is also the longest tariff phase-out that Canada has ever negotiated. Our negotiators are to be commended for this achievement.

Furthermore, if imports from EFTA countries cause harm to our Canadian shipbuilders during that time, we can revert our tariffs to the pre-free trade tariff rate for up to three years.

This two-pronged approach provides important protection and a long transition period for our shipbuilders. This is the fairest, most balanced deal that can be achieved in the real world.

The only exception to these rules is for the largest type of ships, the post-panamax cargo ships, which is not a size of vessel that our shipyards can produce.

These provisions are critical. A carve-out option for these ships, as suggested by my hon. colleagues in the NDP, was a huge stumbling block to making this important agreement a reality.

All of this is not to say that shipbuilders will not see some benefits as well. Earlier, the NDP member for Halifax in fact said that the shipbuilding industry in British Columbia and Atlantic Canada will see some benefits from this agreement.

The buy Canada procurement policy for ships will not be threatened by this agreement, and shipbuilding is also being supported through a $50 million renewal of Industry Canada's structured financing facility.

The objective of the program is to stimulate demand for Canadian-built vessels and increase innovation in our shipyards. It has been able to attract foreign buyers to Canadian shipyards, and the $50 million reinvestment is an important part of continuing this trend.

We should also note that the EFTA agreement presents no threat to our agricultural supply management system. This system is specifically exempted in this agreement.

In my remaining time, I want to talk about the benefits of the trade agreement with EFTA.

The European Free Trade Association is a significant bloc of countries when it comes to their combined economic strength. They are our fifth largest export destination in the world and our twelfth largest destination for foreign direct investment.

Canadian exporters and producers will benefit considerably through the reduction and elimination of tariffs under this agreement. Benefits include the elimination of duties on all non-agricultural goods, the elimination or reduction of tariffs on selected agricultural products, and a level playing field with the European Union exporters in EFTA markets.

There are many farm owners and workers in my community who will be pleased to know that this agreement also eliminates the EFTA countries' agricultural export subsidies for products covered by the agreement. A significant number of agrifood products will receive tariff treatment no less favourable than the tariff treatment accorded to the European Union for the same goods. This is an important competitive gain for our farmers.

The agreement itself is a first generation agreement: it focuses on tariff elimination and trade in goods. Unlike NAFTA, the agreement does not include provisions on investment, services or intellectual property.

The focus on goods is justified. The activities of goods producers account for roughly one-third of total value-added of all industries in the Canadian economy. Between 1997 and 2004, the GDP growth for goods producers averaged 3% per year.

These exclusions have made it an easier deal to secure. However, these provisions should remain long term goals for Canada.

We need to secure provisions on services in the future. Services are the fastest growing part of the economy. Services are things that we cannot drop on our foot. Service producers account for two-thirds of industry-based GDP.

We also need to negotiate agreements on investment. Canadians need to be able to invest abroad with the full confidence that they will be treated equally to domestic producers. If they are not, they need the ability to seek legal solutions.

Finally, we will also need to secure an agreement on intellectual property. An intellectual property policy provides the foundation for investment and growth opportunities in the knowledge-based economy. When we look at our future generation, if we have to compete with giant markets like China and India, we will have to be a self-sustained knowledge-based economy here in Canada.

The free trade agreement with EFTA does not cover safeguards, anti-dumping and countervailing duties, which will continue to be addressed at the World Trade Organization. However, there are provisions that will allow these issues to be revisited after three years, leading to more negotiations and potential gains later on.

The EFTA agreement also has a strategic importance that cannot be discounted. It shows the European Union that we are a serious and important partner, which will help our hope to eventually secure free trade with the European Union.

Yet, the EFTA countries are important in their own right. There has been significant growth in our exports to them, with the past few years showing an amazing 27.6% annual increase in merchandise exports. They are an important market for Canadian natural resources, industrial products and forestry products.

The EFTA countries are also our seventh largest source of imports, including medical products, chemicals and machinery. My colleagues may not be surprised to know that Switzerland is also a key supplier of clocks and chocolate to Canada.

There is also strong foreign direct investment between both sides of this new agreement. Canadian direct investment abroad within these four countries totalled $8.4 billion in 2006. Similarly, Canada is an attractive place for foreign direct investment from EFTA. In 2006, the EFTA bloc invested a total of $15.6 billion in Canada, which was up an unbelievable $9.7 billion from 2004.

This agreement is also welcomed from the point of view of the relationship with Europe more widely. We have found common ground with four European countries. My daughter is currently studying medicine at a school in Europe.

As I go on with this case, I can see that we have a market that we should also be looking forward to because of the strength that the European Union brings to this agreement. We can have a marketplace to go to. This should also help us to find common ground with a much larger and more diverse European Union in the future. The EFTA agreement is an important stepping stone on the path to a Canada-European Union free trade agreement.

Other immediate advantages also include opportunities for trade diversification and enhanced industrial cooperation. We will also have a leg up on the U.S., which has yet to sign such an agreement with EFTA. It also keeps Canada ahead of China, which is already negotiating its own free trade agreement, and India, which is expected to begin negotiations this year.

The Liberal Party supports the broad, multilateral process of trade liberalization under the World Trade Organization. Securing equal access to all countries is ideal. It is especially important for countries where it would be difficult for Canada to get a deal with on the same terms, or even at all, due to our relative size.

Multilateral, non-discriminatory trade liberalization is the ideal. However, given what we are currently experiencing, the multilateral process is often cumbersome and slow. Regional trade agreements, like the one concluded between Canada and the EFTA, can be good and useful supplements to the multilateral process.

Finally, the agreement also has symbolic importance: it increases investor confidence, even without provisions on investment in the deal.

Culturally, Canada shares close ties with the EFTA countries. The largest Icelandic population outside Iceland is in Canada, estimated at more than 100,000 people. Large numbers of Canadians hail from the other member countries of the EFTA. Our countries share the values of democracy, freedom, human rights, freedom of expression and free market economies. We have so much in common with these countries.

Canada is a trading nation and the Liberal Party is the party of free trade. The EFTA agreement is an important agreement and it represents a launching pad to larger trade possibilities down the road. This is a trading relationship that every member in this House should rise to support. I thank the House for giving me the opportunity to share my views. I welcome questions from hon. members.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I am pleased to rise in the House today to speak to Bill C-55, the Canada-EFTA free trade agreement.

As other members in the House have pointed out, this agreement has been in discussions for a long time. In fact, the European Free Trade Association and Canada first started their negotiations under the Liberals in 1997 but, ironically, it stalled in the year 2000 over shipbuilding issues. Here we are once again, in 2008, talking about concerns over the shipbuilding issues.

There are a number of good reasons why New Democrats have raised concerns about this agreement. Part of it is about the track record of the current Conservative government. All we have to do is look to the softwood sellout and look at the impact of what is happening in ridings from coast to coast to coast around the softwood agreement and some of the subsequent impacts on forestry policy. What we do not have, of course, is any kind of national strategy around forestry.

In addition, in the House today the government was talking about 22,000 jobs being created but what it failed to say is that the jobless rate rose in April to 6.1% and, in fact, manufacturing continued to decline in April with losses in Ontario and British Columbia. The number of factory workers has decreased by 112,000 since April 2007, according to Statistics Canada.

I want to return to forestry for one second because it directly relates to what we are seeing in the shipbuilding sector. With the government's policies around softwood and raw log exports, because of course it has a federal role, what we have seen particularly in British Columbia and my riding of Nanaimo—Cowichan is one sawmill after another close. This has had an impact on the pulp and paper industry because it does not have access to fibre supply.

An article by the Canadian Centre for Policy Alternatives in June 2007 stated:

Numerous opportunities to generate jobs from forest resources are routinely squandered. Absent much-needed provincial forest policy reforms, the situation is poised to get worse.

This short paper addresses two of the more troubling trends plaguing the coastal industry – rising log exports and mounting wood waste...The cost of not turning those logs into lumber and other wood products here in BC was the loss of an estimated 5,872 jobs in 2005 and 5,756 jobs in 2006.

I know we are talking about a free trade agreement and shipbuilding, so I want to turn my attention to shipbuilding. But I think the record in the forestry sector is an important one to note in the House because it directly relates to trade agreements.

The government is saying, “Trust us. We have built in a 15 year window to protect the shipbuilding industry. Just trust us that somehow or other our workers and communities will survive throughout this”. Because the softwood agreement is so fresh in people's memories, it is very difficult to believe that the government will put the measures in place that will actually protect the shipbuilding industry.

In the early 1980s, the shipbuilding industry was a robust industry in Canada and there were a number of shipyards from coast to coast that were very successful, but in the mid-1980s, 1986 or thereabouts, we started to see a rationalization in the shipbuilding industry.

I want to acknowledge the member for Sackville—Eastern Shore. We all know that any time a question comes up in the House with regard to industrial strategy in this country, the member for Sackville—Eastern Shore will remind members that we must put shipbuilding into that context. Although he has been tireless with his advocacy for this, the government and the former Liberal government simply failed to do that.

I also want to mention the member for Halifax who acknowledged the fact that some work has been done to shore up, so to speak, the shipbuilding industry over the last while. However, we do not have a long term sustainable plan. The government itself has acknowledged the critical role that shipbuilding plays in terms of our sovereignty. Yet, it simply has not put the effort into developing that plan.

When the NDP expressed its concerns about the lack of carve-out provisions in this particular agreement, this position was not developed in isolation. This position was developed in conjunction with the industry and the trade unions.

The board of directors from the Shipbuilding Association of Canada and the Canadian Auto Workers Union came before the committee and talked about some elements that they saw as being essential to be included.

We are not just opposing the agreement. We are proposing solutions in conjunction with people who are on the ground in this industry. They have asked for a carve out, saying that shipbuilding must be excluded from the agreement. They said that the federal government should immediately help put together a structured financing facility and an accelerated capital cost allowance for the industry.

Earlier when we heard the minister speak, I put a question to him about the Jones act and the minister said that it was domestic policy. Let me talk about the Jones act for one second.

The U.S. has always refused to repeal the Jones act. It is legislation that has been in place since 1920. It was legislation that was deliberately developed to protect U.S. capacity to produce commercial ships. The Jones act requires that commerce between U.S. ports on the inland and intercoastal waterways be reserved for vessels that are U.S. built, U.S. owned, registered under U.S. law and U.S. manned. In addition to that, and the minister said that this was domestic policy, the U.S. has also refused to include shipbuilding under NAFTA and has implemented in recent years a heavily subsidized naval reconstruction program.

If the United States, and many members of the House will tout it as the bastion of free enterprise, could see fit to work to protect its shipbuilding industry, surely Canada could do the same thing. This is even more critical in light of the sovereignty issue, but also we have the longest coastline in the world. We should have a vibrant and healthy shipbuilding industry, and it should be everything from small pleasure craft right the way up to the large vessels.

I talked earlier about some of the closures. I come from British Columbia and although this was a provincial government decision, we all know that many times provincial government decisions are influenced by policy at the federal government level.

I want to read from a press release of December 13, 2007, from the B.C. Federation of Labour. It said:

While B.C. Ferries holds a $60,000 party in Germany for 3,000 people on Friday, there will be no celebrating the launch of the first three German-built Super-C Class ferries that have cost the province 3,500 direct and indirect jobs and the loss of $542 million in investment.

That release was put out by the B.C. Shipyard General Workers' Federation.

About the B.C. Ferries' tendering, the Canadian Centre for Policy Alternatives said:

Buying Canadian is no longer procurement policy—at least in British Columbia....If BC shipyards do not receive a significant portion of BC Ferries vessel refits and replacement work over the next five years it is doubtful that a single major shipyard will survive—a substantial de-industralization of the BC economy.

Why would the provincial government choose to forfeit a significant tool of industrial development and throw out its ability to use a major crown corporation to support local well-paying jobs?

Further on down in the article it talks about this being:

—simplistic bottom line economics—search the world for ferry bargains. This approach fails to recognize the spin-off benefits to the BC economy of local procurement. Assuming $175 million is spent in BC on ferry refits and a small new vessel over the next five years, these benefits include 1,500 person years of employment, a $78 million increase in household income, a $101 million increase in provincial GDP, and a $32 million return to government revenues.

Those were 2002 numbers so we can only imagine that those numbers would have substantially increased over the last few years.

What we see in British Columbia is a growing income gap. We have a province that is reeling not only from forestry, but from the lack of attention and investment in the shipbuilding sector. In July 2007 the B.C. shipyard workers put out another release. It said:

BC Shipyard Workers Federation says federal Conservative government betraying shipbuilding industry—free trade deal between Canada and European Free Trade Association expected today could throw away thousands of jobs and hundreds of million of investment in BC and Canada.

George MacPherson, president of the shipyard workers, said:

—a federal announcement today to add $50 million over three years to a Canadian shipbuilding financing program is money previously removed from the same program and won't do much to protect the industry.

Therefore, we have this shell game again, where money is taken away, then it is given back and another press release comes out from the government to talk about how wonderful it is.

MacPherson said:

British Columbia has already lost nearly $1 billion worth of shipbuilding work because BC Ferries is constructing several new ferries in Germany...

A national strategic policy development is required, which supports the shipbuilding industry. When the government talks about a 15 year window to do that, it needs to move on it now. In fact, the U.K. has a shipbuilding strategy. I want to read a couple of points from it because these are things that Canada could building on. Its Defence Industrial Strategy: Defence White Paper, of December 2005, stated:

—it is a high priority for the UK to retain the suite of capabilities required to design complex ships and submarines, from concept to point of build; and the complementary skills to manage the build, integration, assurance, test, acceptance, support and upgrade of maritime platforms through-life;...We also need to retain the ability to maintain and support the Navy....To sustain this requires a minimum ability to build as well as integrate complex ships in the UK, not least to develop the workforce, and to adjust first-of-class designs as they develop.

Surely Canada could learn from other nations that have really made efforts to protect their shipbuilding industry.

Again, earlier today people talked about the fact that Norway did not currently subsidize its industry. It does not subsidize its industry because the government of Norway, over a number of years, put subsidies in place, developed a long term industrial strategy and looked at training and support of the workforce.

We would expect to see that kind of initiative from the government. Because people keep talking about how long a time span 15 years is, what should be done is the carve out should happen so those plans can be put in place and our shipbuilding industry can build on its already considerable strength, because we are world class shipbuilders. However, we need to ensure we invigorate and support that industry.

I would argue it is even more important we carve it out and ensure that we put those supports in place.

The member for Halifax mentioned this, but I want to re-emphasize it. The president of the Shipyard General Workers' Federation of British Columbia said:

The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.

Again, that is the labour side of it.

Let us talk about the president of the Shipyard Association of Canada, who retired from Irving Shipbuilding Inc. He said:

So our position from day one has been that shipbuilding should be carved out from the trade agreement. We butted our heads against a brick wall for quite a number of years on that and we were told there is no carve-out. If the Americans, under the Jones Act, can carve out shipbuilding from NAFTA and other free trade agreements, as I believe the Americans are doing today with Korea, or have done, why can Canada not do the same?

We have to do something to ensure shipbuilding continues. The easiest thing is to carve it out from EFTA. And if you do one thing, convince your colleagues in government to extend the ship financing facility, make it available to Canadian owners in combination with the accelerated capital cost allowance, and you will have as vibrant an industry as exists.

It is very important that we continue to push for an amendment of this agreement which carves out shipbuilding to ensure our industry stays viable.

[The Acting Speaker, Conservative, Royal Galipeau]

It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

When we return to the study of Bill C-55, there will be six minutes left for the hon. member for Nanaimo—Cowichan as the time allotted for questions and comments.

The House resumed from May 9 consideration of the motion that C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to committee.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I was caught off guard because I thought there would be someone speaking before me.

Bill C-55 would implement the Free Trade Agreement with the European Free Trade Association. The Bloc Québécois will be in favour of Bill C-55 primarily because this agreement does not have the same flaws as some previous agreements. There is also the fact that it does not affect supply management in the agricultural sector.

Obviously, one important point has to do with shipyards, but another is the fact that what is really at stake is the European Union. I will provide some context for the Bloc's position on this agreement, or rather the supplementary opinion of the Bloc Québécois. I will conclude with a caution about free trade agreements throughout the world.

The international economy is currently in an era of globalization. Multinational companies and big businesses are practically in a mad dash to make money from situations all over the world. They are making profits from the working conditions, human rights conditions and environmental conditions in various countries.

A closer look reveals that there are plenty of multilateral agreements. The WTO has 152 member nations, while the UN has 192. In 1955, the WTO had 89 members and the UN had 76. Twenty years later, in 1975, 157 countries belonged to the WTO and 144 to the UN. Today, the UN has 192 member countries and the WTO has 152. It seems that a lot of countries have signed on to multilateral agreements.

In the current context, however, particularly in the context of WTO negotiations—the Doha round, to be precise—more and more countries are taking part in the headlong race to sign bilateral free trade agreements. Nearly 200 countries want to sign free trade agreements—bilateral ones, of course.

At some point, Canada wants to sign as many as possible. It is hoping to sign agreements with close to 200 countries, and each of those 200 countries wants to sign agreements that will benefit them. We all know that for an economic transaction to work, both parties have to win. That is not always the case, but most people try to win most of the time. In many cases, a country might have general considerations that are not industry-specific.

That is the spirit in which Canada has signed some agreements and is negotiating others. We find such agreements perplexing. For example, consider an agreement that is currently being negotiated and that Canada would like to sign as soon as possible: the agreement with Colombia, a country with a deplorable human rights record.

I would like to go back to the European Free Trade Association, which is an association of four countries: Switzerland, Norway, Liechtenstein and Iceland. We believe it is a good agreement because, for one thing, Quebec stands to benefit the most.

Take the example of Switzerland, which has a very vigorous pharmaceutical industry producing brand-name drugs. Prescription drugs account for 40% of Canadian exports to Switzerland and 50% of imports. To break into the American market, Swiss pharmaceutical companies might think about manufacturing drugs here in Quebec, or rather on the other side of the river, to be more precise.

In addiction, the mecca of brand-name drugs, with its pool of skilled researchers and advantageous tax rules, is Quebec. So a free trade agreement to facilitate trade between a corporation and its subsidiaries would likely bring new investments in the pharmaceutical industry in Quebec.

As for Norway, nickel accounts for over 80% of what we export there. The biggest mine in Canada, ranking third in the world, is in Quebec, in Ungava, owned by the Swiss company Xstrata. Our leading export to Iceland is aluminum. There again, production is concentrated in Quebec.

I was saying earlier that we were also in favour of this agreement because it did not have the same flaws as other agreements Canada has signed in the past. For example, NAFTA, the agreement with Costa Rica and the agreement with Chile all contain a bad chapter on investments that gives corporations the right to bring proceedings directly against a government if it adopts measures that reduce their profits.

There are no such provisions in the agreement with the European Free Trade Association. The agreement with that association covers only goods, and not services. So there is nothing that will mean we have to open up competition in public services, whether they are delivered by the government or not, since they are not covered. Similarly, financial services and banks will not be exposed to competition from Switzerland, which has a very solid and also very discreet banking system.

Liechtenstein is a veritable paradise for the financial world because of its tax system and bank secrecy. That country, with its population of 35,000, has no fewer than 74,000 corporations, primarily financial. In fact, the Prince of Liechtenstein himself owns the largest bank in the country.

The same thing is true for government procurement. The government will continue to be completely free to give preference to procurement here, subject to the WTO agreement on public procurement. Obviously it would be somewhat ridiculous for the government to negotiate latitude for itself and then decide not to use it actively. We fervently hope that the federal government, the largest purchaser of goods and services in Canada, will give preference to suppliers here and think about the benefits that flow from its purchases.

I started out by saying we would support it because when it comes to agriculture, supply management is not affected. Bill C-55 also allows for implementation of the bilateral agricultural agreements in addition to the free trade agreement with the European association. Those agreements, which are no threat to supply management, will have no great impact on agriculture in Quebec. Milk proteins are excluded from the agreement. The tariff quotas and over-quota tariffs remain unchanged. In other words, products that are under supply management are still protected. In fact, it is mainly the west that will benefit from the agricultural agreements because they provide for freer trade in certain grains, but the impact will not be significant.

There is some concern in relation to shipyards. We know that a policy to provide for support and development in that industry is needed quickly. That is the main point on which concerns could be expressed.

Naturally, we have concerns about the future of our shipyards. At present, imported vessels are subject to a 25% tariff. Under the agreement, these tariffs will gradually decrease over three years and will be completely eliminated in 15 years.

However, our shipyards are far less modern and in much worse condition than Norwegian shipyards. Norway has made massive investments in modernizing its shipyards, whereas the federal government has completed abandoned ours. If our borders were opened wide tomorrow morning, our shipyards could disappear.

For economic, strategic and environmental reasons, we must have shipyards. Imagine the risks to Quebec if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, the world's foremost waterway?

For years the Bloc has been calling for a real marine policy, and for years the government has been dragging its feet. Now that the agreement has been signed, time is of the essence. A policy to support our shipyards is urgently needed. Moreover, this is the only recommendation in the report of the Standing Committee on International Trade on the free trade agreement between Canada and the European Free Trade Association. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic and deputy critic. It reads as follows:

Therefore, the Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.

This is practically the only major recommendation in the report. The Conservative policy of leaving companies to fend for themselves could be disastrous for shipyards. We expect the government to give up its bad policy, and we call on it to table a real policy, by the end of the year, to support and develop the shipbuilding industry.

Given the urgency, we will not be content with fine talk, something the government specializes in. This time, we will not be content with rhetoric. We need a real policy that covers all aspects of the industry.

The four member countries of the association offer good opportunities for Canada and Quebec. They represent a total population of roughly 12 million inhabitants. These are economically sound countries. The GDP per capita is $60,000 in Switzerland, $82,000 in Norway, $62,214 in Liechtenstein and $60,000 in Iceland. Canada's is $44,389.

This is a good endeavour. Somewhere at the end of the tunnel, we can see a dim light. Does the Conservative government intend to drop the philosophy it might have had during previous negotiations? This is a good endeavour. The outlook is good, but there are far higher stakes for a number of industries in Quebec and Canada, namely the European Union.

We see the government putting its energy into free trade agreements, like the ones with the European association and Colombia. The agreement with Colombia has not been ratified by the U.S. Congress for human rights reasons, but Canada is proceeding with the negotiations. In fact, two weeks ago, we went to Colombia and Panama.

We have heard witnesses and met with government representatives, people from non governmental organizations, unions and businesspeople.

Of course there have been some improvements, but there is still a nagging doubt. Without prejudging the Bloc Québécois position in these negotiations, there are nonetheless some points that need to be considered. In today's context, as far as international agreements are concerned, whether they are multilateral or bilateral, there is a growing sense that certain elements need to be incorporated into various trade agreements.

In the context of the European Free Trade Association, there are no cases of exploitation of people or workers. As far as the environment is concerned, some countries are cited as models. Nevertheless, the international economic movement is expressing its will to include in trade agreements such elements as human rights, labour rights and environmental aspects. These elements will increasingly have to be incorporated into agreements and will have to be assessed according to the situation in each country.

A country is responsible for distributing wealth among its population. Canada has not set the best example because, in 1989, this House unanimously adopted a motion whereby Canada was committed to the elimination of poverty in 10 years. That was almost 20 years ago and we now have more poverty than at that time and the gap between rich and poor is widening. Yet, it is a governmental responsibility.

On the international scene, governments will also have to give greater consideration to this international responsibility towards countries with much bleaker economic situations than ours. This responsibility must be reflected in agreements by including provisions covering human rights, labour law and the environment, of course.

Let us return to the main issue, that is the European Union. A free trade agreement with Switzerland, Norway, Iceland, and Liechtenstein is quite positive but we must be aware of the limits of this agreement. The total population of these countries is about 12 million and they account for 1% of Canadian exports.

The real opportunity lies with the European Union. With a population of 495 million generating 31% of global GDP, the European Union is the global economic powerhouse.

Canada is far too dependent on the United States, which has accounted for more than 85% of our exports; today, that figure stands at 79%.

That is the warning I wanted to convey. We should remember the committee's recommendations contained in the Bloc Québécois Supplementary Report. I would advise the Conservative government to truly realize that it must now follow the new direction being laid out—and it is unfolding quickly—and which consists of including employment rights, human rights, environmental considerations and even, in the near future, food sovereignty in bilateral agreements. This should also be adopted by the WTO.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, I am quite happy to engage in the debate today on Bill C-55. It is actually a happy event. It is a trade agreement and my party, the Liberal Party, is in the normal flow of events very supportive of trade and has been for all 140-some odd years of our country's existence.

Before I get into remarks on this actual trade bill, a related matter has to do with what we can call ratification. I recall when the current government took office there was some talk, in fact I believe there was a statement, that the government would be submitting international treaties to the House for some informal ratification. It certainly was not a formal statutory required ratification, but I am not too sure whether the government has forgotten about that or whether it is going to live up to its commitment or not.

However, in this particular case, the treaty that has been entered into by Canada requires legislation that has to come to the House in any event, so there certainly is not a practical need for any kind of an informal or specific ratification. I wanted to put on the record that the announcement by the government that it would embark on this ratification mechanism was quite a significant change in the parliamentary process.

I will give credit to the government for that. We have not yet seen the fruits of that announcement. It has not played out the way we believed it would, however, I want to remind the government that it did make the commitment and while government officials in the Department of Foreign Affairs and International Trade are probably squirming with that commitment, that is the way I believe the House is headed and the government has certainly reflected that in its announcement. I encourage the government to live up to its commitment.

Now, I will revert to this trade bill. As previous speakers have said, this is a new trade agreement which Canada has entered into with four European countries. It is a happy event with the trading stars of five countries coming into alignment with all of the countries potentially benefiting from the freer trade and access provided for in this treaty.

There is something actually quite grand happening in Europe which most of us and the world are aware of. But after some thousand years of conflict and fighting, killing, burning, looting, shifting of borders, and tribal inter-tribal conflicts, Europe, after the last war, came together and decided to form a union, and to adopt mechanisms which would pre-empt and get rid of this sordid history of war and conflict. It is succeeding beyond the dreams of most people who lived through the horrors of the first half of the 20th century.

The European Union has adopted models for trade, international relations, monetary and fiscal matters, criminal law, the environment, and certainly succeeding in making the EU a new focus for global presence. I was going to use the word “power”, but there is more going here than just that. The EU is certainly a focal point for economic and political leadership in the world. Recently, at a meeting Europe of course is grappling with what we sometimes call multiculturalism. We can see dozens and dozens of cultures and languages in Europe, not so much coming together, but living together, interspersing, accommodating and flowering, and that is all happening in Europe now, as much as it is happening in Canada. In fact, I heard the Europeans refer to the Canadian model of multiculturalism when they were looking for a kind of a road map as to how to handle many of their internal issues involving culture, language, religion, heritage and preserving these things.

The European Union has approximately 20 to 30 countries and it is a market of about half a billion people. The EU and the countries we are dealing with here is a part of the world that is highly educated and very well off. The point I want to make is that the four countries we are dealing with are not in the EU. They are interspersed throughout the geography of the European Union but they are not actually members. For their own reasons they are not a part of the European Union. Those four countries are Norway, Liechtenstein, Switzerland and Iceland.

Those particular countries, while they may each individually seem small, are actually a fairly significant group of traders with Canada. As I said, my party is usually very keen to endorse, support and promote improved trading relationships around the world, and I know the current government is following a similar policy.

We are a big exporting country. We would like to have access to as many world markets as we can gain access to. I should say that in this particular set of circumstances as we enter into this trade agreement and change our domestic laws to align with the treaty, and they are minor adjustments, not major ones, but as we do this, one of the issues we do not have in this particular trade agreement is the potential problem of having a trade agreement with a country that has a labour force that is very inexpensive and has low labour wage rates. We do not have that issue here because these European countries all have fairly standard European level wage rate structures.

If we were doing a trade agreement with a country that had very low labour wage rates, organized labour and labour generally here in Canada would have some concerns. Those types of arrangements often involve significant adjustments in the marketplace with one country making use of the relatively valuable low wage labour rates in the other party to the treaty. In this case, those adjustments are not present. The labour wage rates are pretty typical and similar to those in Canada.

Some people will wonder what we are really dealing with here. We are talking theory; we are talking some money, but what are we talking about when we are talking about trade with these countries.

In this particular case Canada exports to these four countries which call themselves the European Free Trade Association. This is what we in Canada sell to them: pharmaceuticals, copper, nickel, machinery, precious stones, metals, medical devices, aluminum, aerospace products, pulp and paper, organic chemicals, autos and auto parts, art and antiques. That is a pretty eclectic list. What do we buy from them? Not the same type of things. We buy specific types of mineral fuels, pharmaceuticals, chemicals, machinery, medical and optical instruments, clocks and all those expensive watches that we see in the jewellery stores at the malls. A lot of those come from these countries in Europe.

We have a great trading relationship. In 2007 we sold to them about $5.1 billion worth of merchandise trade and they sold to us approximately $7.4 billion of merchandise trade. There is lots of other trade going on as well in agricultural goods and in services.

There is investment moving around. In 2006 Canada invested $8.4 billion in these countries and the four of them invested $15.6 billion in Canada. There is a fairly healthy foreign direct investment movement going on here. I think Canadians should be aware of that. Our entrepreneurs and our investors do not only invest in Canada, but Canada now is a capital exporting nation. We invest in businesses, places and countries all over the world. That may scare some people, but many of us have pension plans and I think it should be reassuring that Canada's investments now span the world, at least the investments of individuals and of our pension plans, and on a global scale, our pension plans are looking rather large.

There are some highlights that I want to mention for the record. There are special provisions in this trade agreement. Do not forget that this agreement has been negotiated and there were some Canadian interests that needed to be recognized in the agreement, just as there were interests of these four countries that had to be recognized.

The first one has to do with agriculture. As we all know, Canada has a fairly robust system of supply management for many agricultural products. We think this has served our country well, domestically and internationally. There is some debate about some components of our supply management system here in Canada, but generally, I think the agricultural community believes that it has served us well.

When we enter into a trade agreement such as this, it is necessary to take some steps to protect the supply management system we have here, because supply management is not total unrestricted free internal trade; it is a supply managed pricing and supply. The countries with which we trade want to know, are we really free traders with the market governing freely or do we have a supply management system. In this particular treaty, for those countries themselves that have some supply management mechanisms as well, we have recognized the Canadian supply management system in agriculture and it will carry on unimpaired by the provisions of this trade agreement. That should be good news that makes entering into the treaty a lot easier.

The second is in terms of shipbuilding. Canada's shipbuilding industry has been under pressure economically for many years now. Many members of the House ensure that their remarks and their work in Parliament are calculated to support and sustain the shipbuilding industry where it carries on in Canada.

This treaty, therefore, had to be adapted to ensure that our Canadian shipbuilding industry was reasonably protected. The means chosen for that involves tariffication, putting tariffs on ships that would come into Canada from these countries. I am sure that Liechtenstein does not have much of a shipbuilding industry, being landlocked in the European Alps, but I know that Norway does and I think Iceland does.

We have created a very long period of tariffication for different types of ships, which runs 10 to 15 years. For 10 to 15 years after this treaty is put in place there will be protective tariffs for the Canadian shipbuilding industry. At the end of 10 or 15 years, however, those tariffs must come to an end. They will be tapered off. Our Canadian shipbuilding industry must compete with these other countries, but there is 10 to 15 years of adjustment. That is good news for our shipbuilding industry.

The third component that was added is a component one finds often in trade agreements like this. It is called a snap back provision. I believe that in most treaties it is invoked unilaterally. It is there to protect areas of the domestic market where there is a serious threat by the import of a foreign product.

Where there is a threat, perhaps by very low predatory pricing or dumping of a product from outside Canada in Canada, Canada would have the ability under this agreement to adopt the snap back provision which would reimpose a tariff. We have to keep in mind that this is a free trade agreement where there are no tariffs. If there were a dumping situation and a serious threat to a Canadian industry, Canada could reimpose a tariff up to the level of what is called most favoured nation. That tariff would be reimposed to protect, for a period of time, against the unanticipated threat from this offshore dumped product, merchandise, whatever it might be.

Those are the three specific provisions. In retrospect, it looks like this trade agreement was actually quite easily reached. However, let the record show that it took 10 years to put it together. Negotiations on this trade agreement began in 1998 and were completed in 2007, and we are now moving to implement the completed treaty.

In the view of this particular member and my party, on balance this trade agreement is a keeper. It is a good one. It will serve our country well. It will serve the four countries of the European Free Trade Association well. Our trade showing will undoubtedly increase and improve. Exports, jobs, and prosperity in all the countries will undoubtedly improve.

We are planning to vote in favour of the bill.

[Denise Savoie, NDP, Victoria, BC]

Mr. Speaker, as a member of Parliament who represents a coastal city, I am keenly aware that Canada has the largest coastline in the world and yet has no strategy for its shipbuilding sector. This sector is very important in my riding.

I listened carefully to the hon. member and he seems satisfied with the tariffication system that is being proposed in this agreement over a 15 year period. Given that the United States has managed to carve out shipbuilding from NAFTA through the Jones Act, I am wondering why he thinks that what we have managed to negotiate is adequate, given what the Americans have insisted on to protect their shipbuilding industry. It seems to me that after that period of time there would be absolutely no protection. In the meantime, there seems to be no strategy to develop and support our shipbuilding industry.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, the hon. member is quite right. The protection in this trade agreement would only last for 10 or 15 years, depending on the type of ships involved in the shipbuilding. However, there is no solution. If one is going to have a free trade agreement, that means we need to have free trade. This particular provision is an exception. The 15-year adjustment period is quite a lot longer than would be normal in a treaty scenario.

The member's offering as a solution is the Jones act, which the Americans adopted many years ago. The solution for her and her party may be to join the U.S.A. and live under the auspices of the Jones act. The Jones act solution would not be available to Canada in this scenario. She has reflected on the need for a strategy. Either we are going to build ships in Canada or we are not. She is quite right when she says that the government will need to ensure it has some kind of a strategy as we move through the next 10 or 15 years.

We must keep in mind that these provisions only apply to these four countries. The Canadian shipbuilding industry currently is having to compete globally with shipbuilding nations around the world. It is a fact that while our people build very high quality ships, it is very difficult for them to compete with some of the low wage labour scenarios in many of the countries around the world.

There is not a simple solution. It does require government leadership and government-led strategy in relation to the several parts of Canada where ships are built. However, I do not believe we can piggyback that issue and look to this particular agreement to solve that broader problem.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I would like to ask the hon. member a question about the shipbuilding industry.

The negotiations started in 1998 and finished ten years later, that is to say, early this year. The Liberals were around for eight of these ten years. It is well known that Norway provided huge subsidies to its shipbuilding industry. Now we know that all duties and tariffs will be eliminated over a period of 10 to 15 years.

If we do not want the shipbuilding industry to disappear along with the tariffs that are currently imposed, the government will have to adopt a strategy to re-invigorate and modernize the shipbuilding sector and give it the capacity to face the competition that will increase as duties and tariffs decline.

Since we are in a political situation where the government could change after the next election, would a future Liberal government be prepared to promise that the shipbuilding sector will get the support it needs to strengthen its infrastructure and ensure it will remain competitive in 15 years?

The Bloc Québécois wants to see a formal shipbuilding policy in accordance, of course, with what the WTO allows. There is room for things to be done. Can we expect a possible Liberal government over the next few months to make promises in this regard?

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, the hon. member is somehow suggesting that this particular trade agreement does a wraparound policy around all of our shipbuilding policies, or the lack thereof, in Canada. In fact, this treaty only concerns the four countries involved, one or two of which may produce ships. We need to make an adjustment with respect to those one or two marketplaces.

As he has pointed out, if Norway heavily subsidizes its shipbuilding, Norway will need to deal with that same adjustment period vis-à-vis Canada. If a country heavily subsidizes a production, the other party to the treaty will then point it out as a countervailing situation and then a countervailing duty will be invoked. Therefore, Norway, similarly, must make an adjustment.

What is happening is that all the countries to these trade agreements are signalling the end of subsidies.

We have made an exception for supply management in the agricultural sector. However, in shipbuilding, if we cannot subsidize but we can have tariffs, we get rid of the tariffs. If the other country cannot have tariffs and cannot subsidize, then we are on a level playing field.

Both Norway and Canada will need to have strategic plans in place, either to keep their shipbuilding, let it go or modify it so it can live on in the face of intense global competition from low wage countries.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I would like all the same to reassure the hon. member. If the negotiations were very drawn-out, it was precisely because Norway used to provide heavy subsidies to its shipbuilding industry. The reason why the negotiations have finally reached a conclusion is that we are told—and our negotiators have confirmed—that Norway does not provide subsidies any longer.

We are obviously not going to start providing subsidies that are not allowed by the WTO. However, there are many things that can be done, including loan guarantees, better tax rules on leases, refundable tax credits for shipowners, measures based on maritime transport, and something like a Buy Canadian act for the shipbuilding industry.

I want some confirmations. Apart from the subsidies that used to be available in Norway, what would a Liberal government do tomorrow morning to help develop the shipbuilding industry and strengthen its infrastructure?

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, as much as the member had difficulty cramming 50 years of wisdom into the last minute of his speech, I will have difficulty cramming into 30 seconds what the Liberal Party might or might not do in relation to a shipbuilding strategy in Canada.

Suffice it to say that all parties possess and have this additional baggage of a need to deal with our Canadian shipbuilding industry. The issue here today is the adoption of this treaty. I appreciate the member wants to hear the Liberal Party's position. However, the current government policy may or may not come up, which I am sure it will, during the foreseeable upcoming election campaign.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, on behalf of the NDP, I am happy to join in the debate on Bill C-55.

What I understand from the speeches of my colleagues from Scarborough—Rouge River and Sherbrooke is that the NDP might be the only party standing in opposition to Bill C-55, the enabling legislation for the Canada-European free trade association agreement.

We in the NDP have some compelling reasons to oppose this legislation, most of which have been cited by the other opposition critics, and yet they still seem fit to support the bill even though they have raised very legitimate concerns about its shortcomings and potential hazards in the context of the shipbuilding industry in Canada, or what is left of it, and in agriculture.

As my colleague from the Bloc pointed out, the supply management of our agricultural products is important to our Canadian agricultural-industrial strategy and we do not want to do anything that will jeopardize, undermine or diminish, in any way, our commitment to supply management.

I point out to my colleague that this particular bill was criticized heavily by Mr. Terry Pugh, the executive director of the National Farmers Union, because he noticed that the provisions of the agreement concerning agriculture defer to the World Trade Organization's principles and mechanisms if there is arbitration or a disagreement.

We know the World Trade Organization's view on supply management and we do not trust its dispute mechanism when it comes to maintaining the strength and integrity of the Canadian supply management, be it the Canadian Wheat Board or supply management in various sectors in the province of Quebec. I would have thought that alone would be reason enough for my colleagues in the Bloc to oppose the adoption of this enabling legislation.

Until the shipbuilding provision was carved out and until the provision of using the WTO's dispute mechanism was pulled out, the NDP was not prepared to support this bill, and we maintain that principle today. We are not alone in that. Even though there are a few people who agree, apparently, in the House of Commons today in standing up for the Canadian shipbuilding industry and supply management, there are important third party validators in civil society who have made their opinions known at the committee and who spoke very well in defence of the NDP's stated position that we cannot support this legislation as it stands currently.

I will get into detailed specifics about the bill in a moment but I want to express my bewilderment over how it was that Canada abandoned and walked away from shipbuilding as a key industrial sector that we want to promote, support and maintain. What gang of chimpanzees decided that Canada should get out of shipbuilding? It seems to me that was the policy decision that was made.

I was the head of the Carpenters' Union in my home province of Manitoba and I know, from the history of my union, that in the 1940s, 1950s and 1960s the Carpenters' Union had 30,000 members working in the Burrard Dry Dock shipyards alone in downtown Vancouver. Those were 30,000 good paying union jobs in my union alone. That does not include the marine workers, the boilermakers, the ironworkers or the other tradespeople who were involved in the fitting out and production of ships in British Columbia.

My colleague from Victoria has tried to defend what is left of the shipbuilding industry in her coastal city. We had a burgeoning shipbuilding industry in this country. We were at the leading edge. At the Burrard Dry Dock alone, where my colleagues in the United Brotherhood of Carpenters and Joiners worked, they were producing a ship a week for the convoy to support Great Britain during the second world war, the merchant marine supply ships. The Burrard Dry Dock was setting the industry standard in the massive production of a certain category of ships that today cannot be built in Canada. That was 60 years ago.

We were at the leading edge, but by somebody's design, by some convoluted pretzel logic, somebody in the policy and decision making area of the federal government decided that shipbuilding was not really an industry in which we wanted to specialize as a nation. Maybe that someone had a grandiose idea that we would go on to more high tech industries or into the knowledge industry sector.

That is all well and good, but we should not think for a minute that shipbuilding is some smokestack blue-collar industry that is obsolete. It is not. Anyone who has ever been to Norway, as I have, would know that in Oslo the slips and the shipyards that build some of the world's finest ships are in a state of the art, computerized, high tech facility. It is on a par with the technology associated with the Canadarm in the robotics and magnificence of the machinery.

I have been to Lévis in Quebec, where there has been a fabulous tradition of shipbuilding throughout the 1800s and 1900s right up to today. If that were prioritized and nurtured the way other industry sectors have been, Canada would be right up there with Norway, Korea and Japan as one of the leading shipbuilding countries in the world.

However, there was a policy decision made many years ago to abandon that sector. People said, “Our kids do not want to work on those dirty tradesmen types of jobs, so we will move on to other types of work”. That was a tragic mistake.

No one can claim ignorance on this, because they have been reminded time and time again that abandoning the shipbuilding sector was a mistake. This bill that we are debating today compounds that mistake. It adds insult to injury in terms of abandoning that important sector.

Yesterday we sat in the House and listened to the president of the Ukraine outline the many bold, courageous moves that his struggling, burgeoning and newly independent country is going through. One of the things he focused on in his speech is how proud Ukraine is of the inroads it is making in getting competitive in shipbuilding.

Ukraine will be surpassing Canada in shipbuilding capacity and capability, because its government, through what I would argue is bold leadership on this front at least, has targeted shipbuilding as one of the industry sectors that it intends to promote.

We have a lot more shoreline than the Ukraine. We have deep sea ports in three oceans, including the port at Churchill, Manitoba. Of all countries, Canada should be at the leading edge of the shipbuilding industry. We are being left in the dust.

Members have talked about phasing out the tariffs on shipbuilding in order to enable and facilitate trade with these countries in this free trade agreement. Some have said that Norway has phased out its subsidies and is willing to drop its tariffs and therefore it is a fair trade relationship with a comparable country with high wages, et cetera. I am willing to admit that it is a social democratic country with a high wage, high cost economy similar to Canada's. That is a level playing field.

However, where it is not a level playing field is that Norway's shipbuilding industry was very heavily subsidized right up until the year 2000, when shipbuilders could stand on their own two feet and they did not need that subsidy any longer. We cannot compare that with the industry in Canada, which has been starved and systematically dismantled and is a mere shadow of its former self.

I argue that our shipbuilding industry cannot stand in fair competition with an industry that was nurtured, developed and fed for many years by public subsidy until the year 2000 and now is a successful, burgeoning, contemporary industry sector. It is folly to not acknowledge the inequity in these two businesses in these two countries as an example.

I said at the outset that the NDP is not alone in its opposition to this particular free trade agreement. While it has few supporters in the House, it seems, and our arguments have not moved MPs of other parties off their positions to support our position, there are many important third parties in civil society who validate and support the NDP's position.

Let me mention one. It is perhaps no surprise that the president of the Shipyard General Workers' Federation of British Columbia, Mr. George MacPherson, says:

The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.

Les Holloway, the Atlantic Canadian director of the Canadian Auto Workers and an outspoken champion of the shipbuilding industry, has made representations many times at committees before Parliament and before the House of Commons and said to the international trade committee that it “should not recommend this Free Trade Agreement without first recommending that the federal government first address the issues facing the shipbuilding industry that would allow the industry to compete in a fair and equitable manner with” these new trading partners.

That in and of itself, I would have thought, should have motivated my colleagues from the Bloc to say that this bill in its current form is not acceptable until some of these very real concerns are addressed.

Andrew McArthur, from the Shipbuilding Association of Canada and the Irving Shipbuilding yards, said before the Standing Committee on International Trade on April 2:

--our position from day one has been that shipbuilding should be carved out of this trade agreement. We butted our heads against a brick wall for quite a number of years on that and we were told there is no carve-out. If the Americans, under the Jones Act, can carve out shipbuilding from NAFTA and other free trade agreements, as I believe the Americans are doing today with Korea, or have done, why can Canada not do the same?

That is a legitimate question. The Americans are better negotiators than we are. Their negotiating stance is from a position of strength. They have decided that they are going to protect their shipbuilding industry under the Jones act. Eleven separate times, the Americans have challenged the Canadian Wheat Board as being somehow an unfair trade subsidy or advantage. We have never challenged the Jones act even though it is protectionism pure and simple, in its purest form.

I remember going down to Washington to argue with American senators on trade related issues. One time, in fact, it was on Devils Lake. One senator put it very succinctly to me and Mr. Lloyd Axworthy, who was the minister of foreign affairs at the time. We were sitting around a table with that American senator, who looked us in the eye and said, “Son, if it ever comes down to what is good for you and what is good for us, we are going to do what is good for us. Thanks for coming”. Then he showed us the door.

That is the bargaining stance of the Americans. The bargaining stance of Canadians seems to be one of weakness. We are lucky to get out of the room with some dignity after what we leave on the table.

I am no stranger to negotiations. I have negotiated collective agreements for the better part of my adult life. I know that we do not always get everything we want at the bargaining table, but I also know that we do not fold when issues of key importance to us are still on the table and there are still steps to be taken.

I put it to the House that there are still options for Canada if we want to make a statement about the integrity and the strength of our shipbuilding industry.

Mr. McArthur from the Irving Shipbuilding company also said:

We have to do something to ensure shipbuilding continues. The easiest thing is to carve it out from EFTA...if you do one thing, convince your colleagues in government to extend the ship financing facility, make it available to Canadian owners in combination with the accelerated capital cost allowance, and you will have as vibrant an industry as exists.

The capital cost allowance is something with which we are all familiar, something that is touted when it comes to promoting and supporting other industry sectors.

Those are two simple key recommendations that would be a vote of confidence in our industry instead of cutting it adrift and abandoning it to other actors and other players in other countries.

I was surprised at some of the things my colleague from Scarborough—Rouge River was saying. He said that we have to put in place these free trade agreements with no tariffs and barriers because we need to be able to compete with these countries of low wages and low costs that may be able to produce ships at a cheaper rate.

Korea is no longer considered a low wage, low cost country. Norway has a higher average industrial wage than Canada does. The people we have to worry about competing with are not, frankly, the low wage, low cost actors in this particular competitive environment.

Let us listen to what Karl Risser Jr., president, Halifax Local 1, Canadian Auto Workers Shipbuilding, Waterways and Marine Workers Council, said before the Standing Committee on International Trade. He said:

I am here on behalf of the workers in the marine sector of our union to express our opposition to this agreement. Canadian shipbuilders find themselves competing for work in domestic and international markets on far from a level [playing field]...Other governments, Norway for one, have supported their shipbuilding industries for years and have built them into [key] powers, while Canada has not. We have had little protection, and what little protection we have left is a 25% tariff on imported vessels into Canada, which is being washed away by government daily through agreements such as this and the exemptions being negotiated with companies.

Why are we giving this away? To what end? What greater power are we serving here? It boggles my mind. Mine is not a very scientific, professional or academic approach but a gut feeling that we are making a tragic mistake. I despair sometimes. Where are my kids going to work if Canada does not build anything any more, if everything is built somewhere else? Are we willing to abandon those key manufacturing sectors so lightly and so readily?

Karl Risser Jr. ends his comments by saying:

So this EFTA deal is a bad deal for Canada. I'd love to see someone answer the question, what is Canada going to get out of this agreement? I know we're going to destroy our shipbuilding industry, a multi-billion-dollar industry in Canada. It's on its last legs now and needs a real boost. We have that opportunity in front of us, but whether we take it or not is the question.

He closes by saying:

Again, the one question I have is, what is the benefit to Canada from this agreement? The last thing I would like to ask is, will this agreement be put before Parliament, as [the current Minister of Foreign Affairs] has said, for a full debate and vote?

I guess his question is answered. We are here for a full debate. We are not here in quite the context that we were told we would be when it came to free trade agreements and some of the points of concern that have been raised regarding the process, as we were told.

I do have some comments and notes to make on that subject. We are not entirely satisfied that free trade agreements are getting quite the vetting that was committed to us over the years. This debate today is still subject to the fact that the government “may” bring it before the House of Commons and “may” put it to a vote. I do not know at this stage what we can do to satisfy ourselves that the concerns of Canadians are being met in the context of at least the shipbuilding industry.

Second, with what time I have left, I would like to express again our concerns in the context of the integrity of supply management in this country, which is put in jeopardy by the dispute mechanism stipulated in this free trade agreement. If the government is going to subject disputes over supply management to the WTO, which we know is no friend of supply management, then the National Farmers Union and its counterparts in the province of Quebec would have serious concerns.

For those two reasons alone, we feel confident that we are doing the right thing in voicing our opposition to this bill. We are not opposed to free trade. We are not opposed to fair trade, especially with countries that are virtually our equals in terms of economies.

With social democratic countries such as Norway, I believe there should be a free movement of goods and services and products, but we should not trade away the farm. We do not have to be Jack and the Beanstalk here, where we trade the family cow for three beans, none of which may actually sprout. With that analogy, I will end my remarks.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, I want to begin my remarks by endorsing the remarks that the hon. member made in relation to Parliament's unmatured role in ratifying or consenting to treaties entered into by the Government of Canada. Up to now, of course, when a treaty was entered into by Canada with another country, if there was no change to our domestic law, there was no need for the government to bring the matter to Parliament at all, and the treaty was entered into, signed, executed and parliamentarians would just be spectators.

In this particular case, entering into the treaty requires some adjustment to our domestic laws, therefore not the treaty itself but the changes to our domestic laws have to be presented to Parliament, and we now have the opportunity to comment on the overall treaty.

The hon. member, in talking about how agricultural products are dealt with under this treaty, treated the subject area a little bit like it was a zero sum game. In every trade treaty like this there are undoubtedly winners, losers, and an adjustment period as the two or more economies adjust to the new trade environment.

Would the member not agree that even with an adjustment where there might be some losers, there are always winners and in fact it is not a zero sum game? In fact, a trade treaty almost always brings about a quantum jump in overall trade where there is growth and many more winners offsetting whatever people have been harmed by the adjustment phase, even though these treaties try to protect those who are potentially harmed in the adjustment phase.

Would the member not agree that with this treaty, if it is adopted by Parliament, the House and the Senate, that there will be a lot more winners, that all of us will win?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I did state clearly in my comments that the NDP is not opposed to free trade or fair trade as our members would rather see it. We are just simply cautious because our experience has been such that we have put our hand on the stove more than once and we are being asked to put it on again in our view.

My colleague did raise the point that we are still not satisfied that these treaties are in fact not being brought to Parliament in the manner that we expected. International treaties are now tabled in the House for a 21 day period during which the House may discuss, debate or hold a vote. A copy of the treaty with an explanatory note is distributed to each MP and after the 21 days the government decides whether or not to ratify the treaty.

In the end the government still retains complete control over the process. That is not quite what we envisioned when we said that it should be up to Parliament to decide if we are going to enter into these international treaties dealing with trade because they are significant in terms of shaping the industrial development of our country.

We argue that treaties that exclude certain industry sectors will in fact shape our progress in that sector, such as shipbuilding. Therefore, we should have an opportunity to ratify or not this process in a greater way than we do.

My colleague had something to say about my remarks regarding how this free trade agreement would deal with agriculture et cetera. I remind him the profound effect that free trade agreements can have on industry sectors such as agriculture and the analogy that I have used is the ink was no sooner dry on the Canada-U.S. Free Trade Agreement than the Americans were filing unfair trade challenges at the Canadian Wheat Board. They tried 11 separate times to dismantle the Canadian Wheat Board by trade challenges. They put our Wheat Board under incredible stress and pressure that it is still suffering under today.

The Americans are lucky because they finally found a government willing to do their dirty work for them, what they were unable to do through the FTA and NAFTA. Believe me it was one of their designs and they had their sites set on the Canadian Wheat Board as they were sitting at the table. Simon Reisman did not have a chance because the American negotiators in the free trade agreements knew exactly what they wanted and they put in place, they believed, the provisions to do it. The Canadian Wheat Board has been hanging on by the skin of its teeth through these 11 separate trade challenges. Now, as I say, the Government of Canada is going to do it for them.

The reason I raise this is this particular agreement has a dispute mechanism that goes to the WTO in the event of trade challenges. The WTO is no friend of supply management. That in itself is worrisome enough that we believe this package should be opposed.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I can assure the member for Winnipeg Centre that I was also there when we welcomed the representatives of the shipbuilding industry. They were in favour of two important elements concerning phasing out tariffs. There were two conditions.

Of course, there was accelerated capital cost allowance and, through EDC, there was financing, insurance and loan guarantees related to the sales agreements. As much as possible, the government needs to be firmly committed to Quebec- and Canadian-made products for its military needs, coast guard needs or offshore investments.

Now is the chance for the member to question the government and the current Minister of Foreign Affairs, who was formerly the Minister of International Trade, to ensure they are committed to supporting the shipbuilding industry in Canada and Quebec. I think that action can be taken, and that the government should not ignore or be unresponsive to the expectations of the shipbuilding industry. I am convinced that the government needs to be realistic and commit to respecting these elements in order to protect the shipbuilding industry.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I know there is very little time, so I will simply say briefly that people are judged by what they do, not by what they say. I do not understand how the member can hold those views about the failures of this bill to support the shipbuilding industry and then support the treaty.

I would remind him again that my union, the United Brotherhood of Carpenters, used to have 30,000 members building ships in the Burrard Dry Dock shipyards of Vancouver alone. That was how important shipbuilding was to the union that I represent and the people of Vancouver. That is 30,000 good paying unionized jobs in an industry sector that specialized in high tech and was certainly a modern shipyard.

As I said, it compares with the Canadarm in terms of the robotics and the specialization associated with building these big post-Panamax tankers that make the House of Commons look tiny. We could probably fit three House of Commons chambers in one of these ships. By supporting this bill we abandon even further the shipbuilding industry.

We have an opportunity here to make a statement, that the House of Commons is seized of the issue of the survival of the shipbuilding industry. By voting for this bill and supporting it, we are saying that we are not interested in that industry any more. Maybe there will be jobs created at Wal-Mart for our kids to work, but there sure will not be any in the shipbuilding industry.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, before I begin my remarks, let me say how delighted I am to speak on this issue. I think all members of Parliament, however they feel on this issue, whether they are in favour of it or against it, I am sure are quite pleased that we have an opportunity to debate this before this House.

It was not too long ago, and it still is to an extent today, that free trade agreements and trade agreements had been the exclusive domain at the executive branch. I think it is a positive step that the government has put forward this before this House. Bill C-55, the European free trade association agreement, is certainly an agreement worthy of debate in this House and also, I think, worthy of support because we are talking about some of the most ideal friends and countries with which we could possibly trade.

Obviously, some of us have concerns when we do trade with certain countries that have issues of human rights. This is not the case. These are, in fact, countries in Europe that we can certainly do business with because they have a proud history defending human rights as western democratic countries. They share the values that Canada and Canadians have.

Throughout our history, Canada has always been a nation of traders. From the fur traders of the early years of Canadian history to the current day when we sell the world everything from energy products to high tech products, our prosperity is dependent on our ability to trade.

In the early days of Canada, in 1867, when we founded this country, and before the Treaty of Westminster, the predominant trading partner for Canada was Great Britain. Today, 80% of our trade is done with our American partners. Diversity in trade is going to be extremely important as we get into a more competitive world.

I think that this particular deal, the European Free Trade Association agreement, is a great opportunity for all of us to broaden the trading partners that we have, and also the trading agreements that we have in place to ensure that we, as Canadians, benefit from the whole process of trade with countries in Europe.

It is important to remember that as a nation of approximately 34 million people, from the very beginning, Canada has relied upon trade for our prosperity and for our continued growth, both in terms of economics and population. We are a country blessed with resources of wealth and a labour force that is second to none in the world.

Our GDP is valued in excess of $1.4 trillion, creating a per capita wealth of over $38,000 per person. Our purchasing power as a nation is over $1.2 trillion. We export over 2.2 million barrels of oil per day. We export over 100 billion cubic metres of natural gas. We export aircraft, automobiles, industrial goods, plastics, timber and aluminum, to name but a few products.

Today, as we talk about the ever-increasing price of gasoline and the cost of a barrel of oil constantly going up, there are concerns about how this will impact on our economy.

Canada is certainly blessed with an abundance of natural resources and we are an energy super house, to say the least, because these are very valued commodities throughout the world at the moment. Canada is certainly benefiting and as we see today, the rising dollar in this country is having some positive effects and also some negative effects.

Some members in this House and I certainly have spoken before of the issues of concern in relation to the manufacturing sector. We are, of course, concerned about the loss of jobs in the manufacturing sector. Yesterday, it was reported in the news that today more people are working in the service sector than in the manufacturing sector.

Some people might say this is a positive things, however, others are really concerned. I would say the one issue of concern, specifically, is not just the loss of manufacturing jobs, which I think is so critical and important to this country, but it is also the fact that we are losing good-paying jobs as well.

The manufacturing sector pays twice what the average person is making in the service sector, and the service sector also has very few benefits offered to individuals and their families. This is of grave concern to all of us. We have to pay special attention to those issues of concern.

Total exports each year account for over $440 billion. What does all this mean to us as parliamentarians and, more important, to Canadians across our country who work each day to build prosperous lives for themselves and for their families?

Simply put, the future prosperity of Canada is dependent upon trade and our trading relationships as much as it was in the early days of settlement of this country. The most profound difference is that in the early days of settlement in Canada almost all trade was targeted locally or within the context of colonial realities. In later days, trade with Britain and within the context of the Commonwealth was very much the primary reality we faced as a country.

Few would argue that the world is a very different place, not only from the time of the early settlers hundreds of years ago, but from the world we knew less than 50 or even 20 years ago.There are a few realities that we as a nation must recognize and address. They are the emerging markets of Asia, the powerhouse economies of China, India and Brazil that will continue to grow and to impact upon the world economy.

We all know that Canada in the late 1980s entered into negotiations with the United States that saw the creation of the North American Free Trade Agreement. There are areas of the agreement that continue to cause us concern, but the reality is that our trade with the United States represents over 80% of our trade with the world. The reality is that under NAFTA Canada enjoys a substantial trade surplus with its trading partner, the United States. Possible changes to NAFTA are a debate for another day but the point is that in negotiating this agreement it was clear that new economic realities exist in the world and we must be in our best position to deal with them.

The European Free Trade Association agreement we are debating today may not appear to represent an enormous part of our economy. In fact, the European free trade agreement countries are the fifth largest merchandise exports for Canada.

There are some key points that need to be addressed and also to be highlighted on this particular bill. This bill eliminates duties on non-agricultural goods and selected agricultural products, giving Canadian exports better access to Canada's fifth largest merchandise export destination. It lays the groundwork for a more comprehensive agreement on service and investment with European free trade agreement countries as well as free trade talks with the broader European Union.

The bill addresses concerns regarding the shipbuilding sector by obtaining the longest tariff phase-out for any agreement with developed nations: 15 years for the most sensitive vessels and 10 years for other sensitive vessels, with known tariff reductions for the first three years. Shipbuilding is also supported through a $50 million renewal of Industry Canada's structured financing facility.

A snap back provision exists, raising tariff levels to the most favoured nation rate for up to three years if the agreement results in serious threats to domestic industry. A process for binding arbitration is also laid out. Canadian agricultural supply management and buy Canada government procurement programs are protected.

The European free trade countries, as I stated before, are the world's 14th largest merchandise traders and Canada's fifth largest merchandise export destinations. Two-way Canada-EFTA non-agricultural merchandise trade amounted to $12.6 billion in 2007. Canadian exports to the European free trade market amounted to $5.1 billion, as of 2007. It included some very important materials, such as nickel, copper, pharmaceuticals, machinery, precious stones and metals, medical devices, aluminum, aerospace products, pulp and paper, organic chemicals, autos and parts, art and antiques. There is a broad perspective of things that we are trading with the Europeans already and we expect this to grow with this particular agreement.

Canadian imports from the European Free Trade Association countries amounted to about $7.4 billion in 2007. These imports include mineral fuel, pharmaceuticals, organic chemicals, machinery, medical and optical instruments, and clocks and watches. Canadian foreign direct investment in the overall EFTA market was about $8.4 billion in 2006 and direct investment in Canada from the EFTA market was about $15.6 billion in 2006. We are talking about very large sums of money.

It is also important to note the reactions of some of the stakeholders. Some concerns have been raised and it is important to highlight what some of the stakeholders are saying. Despite the protections given in the agreement, there is still fear that the shipbuilding industry may be unable to compete under these terms and may result in significant job losses. That is an issue that needs to be addressed.

There are some provisions in here that address those concerns, but the government has to take those issues seriously. It must make sure that the shipbuilding industry is protected in whatever way possible, not just through these agreements but also through financial incentives that are needed to maintain that vital industry for Canada. We as a country should take very seriously the manufacturing sector and the shipbuilding industry.

The National Farmers Union believes that the agreement will negatively impact supply management by undermining Canada's position at the World Trade Organization. None of the supply management groups have indicated any concerns. One sector which is likely to feel the most effect is dairy, however, Dairy Farmers of Canada was consulted and has expressed no concerns. These are issues that need to be put on the table.

As I mentioned before, we are talking about an agreement the history of which goes back to 1998 when the Liberal government under Jean Chrétien first began negotiating this agreement. The agreement was signed on January 26, 2008 in Switzerland. It was tabled in Parliament on February 14, 2008. A committee reviewed the agreement and reported to the House on April 7, and now we are debating this government bill to enact it in legislation.

Of all the agreements we have spoken to in the past, this one deals with countries of like mind, countries for which we have a lot of respect and with which we have built long term alliances over many years. There are many historic and cultural ties that bind Canada and those European nations.

We have also seen the birth of the European common market, which has been a huge success. It has brought countries that at one time were in poverty into first world status and improved the quality of life of all people who live in those countries. The European Union has done a magnificent job of raising the standard of living of all Europeans, creating a common market that has been a huge success.

Every day I read about what is taking place in Europe. There was a major meeting to sign the treaty of Lisbon. Once it has been voted on by the parliaments in Europe and comes to fruition, it will certainly solidify a truly great united nations of Europe, if we could call it that.

It is a great leap of faith for all of these countries to work together. It is something they realized they had to do because of some of the strifes and wars that had taken place in the past, but also, the European nations realize this is a new reality that is important for the 21st century.

We here in Canada are quite pleased with the development that is taking place in Europe. We certainly want to solidify our ties not only socially, but also economically. This particular agreement that has been put forward will go a long way to doing that.

I am pleased to lend my support, notwithstanding the fact that there are still some concerns out there. I am not unsympathetic to those concerns. Those concerns need to be addressed. There are different mechanisms that can be put in place. It is beholden upon the government to do so and make sure that our sectors and industries are protected.

At the end of the day we want to ensure the well-being of all Canadians to make sure that they have a decent job and earn a decent wage. We want fair trade, as has been talked about. Fair trade is the important ingredient to make sure that these agreements stand the test of time and that they produce positive results for all Canadians.

I am delighted to once again state how pleased I am that this bill is before this House and that the executive has allowed Parliament to have a debate on a trade agreement.

[Denise Savoie, NDP, Victoria, BC]

Mr. Speaker, the hon. member seems to have glossed over the issue of supply management. He said that dairy farmers, for example, were consulted and were not concerned. He said he is supportive of fair trade, but he and his party seem to be advocating free trade. I do not know if he missed the comment from the National Farmers Union before the standing committee, where it stated that the most critical and highly negative aspect of this deal from its point of view is its impact on supply management, for example in the dairy industry, by eliminating the import tariff.

It seems to me that supply management should be part of the architecture of fair trade, to help ensure food supply and food safety around the world. It is really key to the model upon which cooperative agricultural trade should be built.

I am wondering if the member would comment on that, because in this agreement, although it has some positive aspects, we seem to be certainly going away from supply management. It has no resemblance to the fair trade practices that he referred to.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, I take the member's concerns about supply management in particular in relation to food supply and safety. I think all of us as parliamentarians should be greatly concerned about those issues. I believe that in my remarks I also mentioned that there were some concerns. I did not say there were no concerns. Specifically, concerns were raised by the National Farmers Union, but I also did say that Dairy Farmers of Canada was consulted and expressed no concerns. This is the information that I received. I believe it is still accurate. I take note of what the member has stated. I think these are issues of concern.

Overall there is no such a thing as a perfect deal. Deals take many years to negotiate. There are many issues on the table. Not every sector is going to be 100% satisfied with any deal that Canada signs with another country, be it even countries in Europe specifically.

As I have mentioned, I think that certain countries in the European Union would be ideal partners for Canada. They have an incredible record in terms of human rights protections and fighting for social justice. There are many governments in Europe which have social democratic governments as well and which fought very hard for issues such as equality and human rights. They obviously are in agreement with this particular agreement. We have to understand there is a commonality that we share.

I think this agreement is a positive one, notwithstanding that there are some concerns. As I said, if the government gets together and tries to put investments into the right markets, it can alleviate some of those concerns and pressures that some of those sectors might feel from the agreement. In totality the agreement is not perfect, but it is a positive step forward.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, what hope or indication does my colleague have from the government that it would introduce a shipbuilding policy or change its process right now? The current budget that his party is supporting does not have any of those mechanisms in there. In fact, it reduces the capital cost reduction allowance. It is eliminating that and phasing it out over the next three years. It is doing the exact opposite.

Maybe the member could educate us in terms of what specific things the Conservatives are doing to give him hope that they would actually address this issue.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, hope is an important thing. I certainly believe there is a possibility that the government would react in a positive manner to address issues raised, not just by shipbuilding associations and the shipbuilding industry, but also by the manufacturing industry.

However, the present government will not be in power forever. I hope the new government, the Liberal government, will enact some of those measures.

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

Mr. Speaker, it is with keen interest that I join the debate today on Bill C-55, which would implement the free trade agreement between Canada and the European Free Trade Association. The association is made up of four countries: Norway, Iceland, Liechtenstein and Switzerland.

To begin, I want to reiterate that after responsible analysis the Bloc Québécois will support this bill, which we believe, in general, offers promising economic trade opportunities for Quebec that are worth pointing out. However, there are also some concerns that my colleagues have mentioned and that we share.

We all know that Quebec is a trading nation. Many of our companies, especially those operating in leading-edge sectors, rely on exports to ensure their growth. That is important. International exports represent almost one-third of Quebec’s GDP. If we include trade with Canada's provinces, Quebec’s exports represented about 50% of its GDP in 2006.

In trading terms, Quebec is far too dependent on American markets. Indeed, nearly 85% of our current exports go to the United States. Given the slowdown in the American economy that we are now witnessing, the rise in the Canadian dollar and the aggressive tactics of emerging countries such as China and India, we are finding it increasingly difficult to maintain our market share with our neighbours to the south. The results have been significant for Quebec. More than 150,000 manufacturing jobs have been lost in the past five years, including more than 80,000 since the advent of the Conservative government and its laissez-faire doctrine.

The riding that I represent, Berthier—Maskinongé, has been severely affected by the loss of jobs in the furniture and textile industries. If our trading opportunities were more diversified and we were less dependent on the United States, our manufacturing sector would not be so threatened. This is why this free trade agreement with the European association deserves to be explored and, indeed, to be supported.

For example, as is the case in Quebec, the brand name pharmaceutical industry is very strong in Switzerland. Quebec is the Canadian leader in the field of brand name drugs because of its pool of skilled researchers and its favourable tax system. One can easily imagine, and we even hope, that Swiss pharmaceutical companies could be tempted to produce their drugs in Quebec as a way of gaining easier access to the American market. We will strongly encourage that idea, which would result in new investments in Quebec. That is one of the main reasons why we support this bill.

If we look at the case of Norway, nickel accounts for more than 80% of Canadian exports to that country. The largest mine in Canada, and the third biggest in the world, is located in the Ungava region of Quebec and is owned by a Swiss company. This agreement can provide significant benefits for Quebec.

That is another reason why we support this agreement.

As I already said, we will support this agreement because it gives Quebec some good opportunities and the Bloc Québécois is here primarily to defend the interests of Quebec.

This agreement also has the advantage of not containing the same kinds of shortcomings as some other accords. For example, in contrast to NAFTA, the agreements with Costa Rica and Chile have a bad chapter on investment, as we know very well, which gives companies the right to sue a government that adopts measures that could reduce their profits. There are no such provisions in the agreement with the European Free Trade Association. The Bloc Québécois is very happy about that. These countries have a basic respect for human rights and the rights of working people and that is another reason why we support this agreement.

In addition, the agreement with the European Free Trade Association covers only goods and not services. Nothing would force us, therefore, to open public services to competition, whether provided by the government or not, because they are not included in the agreement.

Similarly, financial services and banks will not be exposed to competition from Switzerland, which has a very strong banking system.

It is the same with government procurement. The government remains perfectly free to purchase in Canada, subject to the WTO agreement on government procurement. This is an indispensable aspect of any kind of trade agreement.

I would also like to mention agriculture. Our colleagues in the NDP seem to have some concerns in this regard. I want to speak more especially about supply management, which is very important to Quebec and the riding of Berthier—Maskinongé that I have the honour of representing.

We all remember it was the Bloc Québécois that got a motion passed in 2005 requiring the full maintenance of supply management. We have been assured by agriculture officials in Quebec that this agreement does not derogate from supply management and does not contradict it or call it into question.

We are very proud of this motion and will continue to defend it because we think that farmers and consumers are best served by this system. We are satisfied with the bilateral agreements on agriculture because products subject to supply management remain protected.

The in-quota tariff is eliminated of course under the agricultural agreement with Switzerland, but it applies only to the part of the market already covered by imports, or 5%. The elimination of this tariff will therefore have only a marginal effect on our dairy farmers because the tariff rate quotas and the over-quota tariffs remain the same. It is important for this to remain as is, especially since milk proteins are excluded from the agreement. This is another essential provision for keeping our agriculture strong.

The fact that the 7% tariff is eliminated under this agreement makes it all the more necessary, however, for the federal government to remain adamant at the WTO that supply management is simply not negotiable. The Bloc Québécois will continue to demand a full defence of supply management at the WTO.

This being said, we have some concerns about what the agreement means to the future of our shipyards. Imported ships are currently subject to a 25% tariff. Under this agreement, the tariffs will gradually start dropping in three years and will be eliminated in 15. I heard the international trade minister boasting about the fact that his government had managed to negotiate this 15-year adjustment period.

I think the minister must be aware that the adjustment period provided for in the agreement will be useful only if it is accompanied by vigorous adjustment and modernization programs for shipyards.

Otherwise, it will just slow the decline of our industry. Norway has grasped this quite well, by the way.

In Canada, the federal government, be it Liberal or Conservative, has done nothing to support our shipbuilding industry. It has not supported shipbuilding since 1988. This is really a shame, given all the subsidies that are currently being handed out to the oil industry, which makes exorbitant profits.

As well, not only are the few aid measures still available very poorly adapted to the shipbuilding industry, but the federal government has even penalized the provinces that have instituted innovative measures, such as the refundable tax credit in Quebec, which for some years was considered by Ottawa to be taxable income under the Income Tax Act. That allowed it to claw back 20% to 25% of the assistance that Quebec paid to the shipbuilding industry. Unbelievable but true.

So today, some of our shipyards are having trouble and are not really very competitive. This kind of policy has to be shelved. We have to provide more support for our shipbuilding industry.

Because it receives support from its government, the industry in Norway is productive and competitive today. And now the Norwegian government is working to open up new foreign markets for it.

The Conservatives’ policy, which amounts to leaving companies to their own devices, could be very harmful to our shipbuilding industry. We have 10 to 15 years to get back on track and implement programs to support our industry.

In the case of the manufacturing sector, we can see how Conservative inaction has led to the loss of thousands of jobs. We should learn that lesson when it comes to the shipbuilding industry. So we are calling on the federal government to abandon its laissez-faire policy and put forward a policy to support and develop the shipbuilding industry quickly. The Bloc Québécois has been calling for this for several years now.

In fact, this is the motion that I introduced at the Standing Committee on International Trade, on behalf of the Bloc Québécois, and that received support there:

The Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.

The motion was supported by all members of the committee, but only after some discussion and some hesitation. I think it is important in this context.

We have to support our industry. We have 10 to 15 years, depending on the type of ship, to support the industry. It is therefore time for action.

In this motion we are telling this government that it has to act and put forward a comprehensive strategy to support the shipbuilding industry, because the Conservatives’ bad industrial policy must not be allowed to result in a bad trade policy.

Laissez-faire has produced no results for several years, and it is time for action. This government has the resources. The strategy should facilitate access to capital for the industry, stimulate investment, give preference to local suppliers in public procurement and of course encourage shipowners to buy their ships here at home.

When shipyard representatives appeared before the committee, they reiterated that they wanted a program to facilitate accelerated amortization that buyers of Canadian ships could use, and a structured financing mechanism.

On the question of support for struggling industries, the Conservative government is practising a hands-off, laissez-faire policy, as I said earlier, a free enterprise policy: free trade will solve everything, all by itself. That is not true.

In the case of shipyards, as in the case of manufacturing, where we have lost many jobs, we believe this policy is quite simply irresponsible.

We know how the Americans and the Europeans support their industries. We need to do the same so that we can become more competitive. That is why the Bloc Québécois will press the government to quickly introduce a series of measures to promote the development of our shipbuilding industry. I ask the opposition parties here to support us.

In closing, even though we support this agreement, we need to be aware that its impact will still be limited. The four members of the association represent nearly 12 million people and account for roughly 1% of Canadian exports. The real trade issue is the European Union. With its 495 million inhabitants who generate 31% of global gross domestic product, the European Union is the world's leading economic power. We believe that Canada should be pursuing a free trade agreement with the European Union.

As we know, Canada's petrodollar has risen substantially in value against the American dollar, which has led to a major crisis in the manufacturing industry. What people may not know is that the dollar has gone up in value much less against the Euro. As I said earlier, if our trade were more diverse and our exports less focused on the United States, our manufacturing sector would be much stronger and more robust. The European Union is an essential trading partner.

Moreover, a free trade agreement with the European Union would have benefits in terms of investment. Together with NAFTA, the agreement would make it attractive for European companies to use Quebec and Canada as their gateway to the North American market and consequently to move some of their production there. We will support such a free trade agreement. As nearly 40% of European investments in Canada are in Quebec, it would certainly be a desirable location for European companies that want to invest in North America.

We hope that the federal government will quickly reach an agreement with the European Union, because it would be the best way to diversify our economy and reduce our heavy dependence on the American market.

I am willing to answer any questions hon. members might have.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, my colleague spoke of how the government should be focusing on negotiating a free trade agreement with the European Union. I have a question for him on this. We are already part of NAFTA, which includes Canada, the United States and Mexico. This creates distortions because Mexico has a free trade agreement with the European Union.

Companies in Quebec, including Bombardier, currently have plants in Mexico. Bombardier has a small problem with regard to competition because it can export its product duty free from Mexico, while in Quebec and Canada it cannot export to the European Union without having to pay $800 or the equivalent in duties.

As far as employment is concerned, however, the company is managing quite well considering its performance, its modern equipment, and so on. It can be competitive in terms of its labour force. When it comes to duties, however, it cannot. We agree with the need for a free trade agreement with the European Free Trade Association, but I think there is an urgent need to negotiate an agreement with the European Union.

I would like my colleague to provide more information on this.

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

Mr. Speaker, I thank my colleague for his question.

As he was saying, the European Union is a market of capital importance to Quebec and Canada. If we do not have an agreement with the European Union, companies will be tempted to move to countries that have access to the European Union. In that respect, the hon. member for Sherbrooke is right.

Concluding a trade agreement with the European Union should be a priority. If we do not have a trade agreement with the EU, in the coming years we will see companies move to countries that have signed such agreements in order to access this huge market.

One of the priorities of parliamentarians would be to work on establishing an agreement with the European Union. This agreement with the European Free Trade Association is a step in the right direction.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I really enjoy discussing things with my colleague from the Standing Committee on International Trade because of his expertise, his experience and his knowledge.

Businesses in his riding have suffered quite a bit from the Conservative ideology that we have seen in recent years. In his presentation, he mentioned the loss of 150,000 jobs in Quebec, including 80,000 lost since the Conservative regime began.

We are concerned about two factors, as we indicated in our supplementary opinion in the report: supply management and the shipbuilding industry.

My hon. colleague will recall that when we met with representatives from the shipbuilding industry, two important points were raised. One was the accelerated capital cost allowance that the Conservative government readily granted to the oil industry. The shipbuilding industry deserves the same.

The NDP member mentioned it earlier. In the west, the shipbuilding industry represented nearly 31,000 jobs. There are far fewer today. This industry deserves to be supported, however, as it was subsidized in Norway for many years. Businesses have had the time to modernize, restructure and build a strong, lucrative industry.

In the meantime, this government has long since abandoned all types of subsidies. Yet no one is asking for subsidies for the shipbuilding industry, but rather assistance that could be in the form of accelerated capital cost allowance, as mentioned by industry representatives, or loans, loan guarantees or funding through EDC. These are all possibilities.

I would like to know if my colleague believes that the Conservative government will take the necessary action to help the industry develop. People are demanding it. It is possible for the government to do something about this.

I wonder if my hon. colleague can tell us how we can incite the government to do something. Do we have to go as far as replacing the Conservatives with the Liberals, if the Liberals believe in it? For eight years, the Liberals took part in free trade agreement negotiations with the European Free Trade Association. If changes had to be made, which of the two parties would be most likely to implement such measures?

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

Mr. Speaker, once again, I would like to thank my colleague for his question.

In response to his concern about shipbuilding, for some time now, the Bloc Québécois has been urging the government to bring in a real marine policy to ensure the development of this industry, which is of strategic importance to Quebec and essential to the protection and environmental safety of the river. As others have pointed out today, the federal government stopped subsidizing the industry in 1988. The government stopped subsidizing it, so Quebec brought in tax credits for the industry, but the federal government clawed back between 20% and 25% of the money allocated to support Quebec's shipbuilding industry. Shame on the government, with its multi-billion dollar surplus, for not offering more support to this industry.

To answer my colleague, the Conservative Party will have to understand this eventually. The government saw what happened in the manufacturing sector where many jobs have been lost in the textile industry and all other manufacturing industries. Despite the fact that it rakes in so much money, the government never offered that industry any support. Its surplus was in the billions—$11 billion last year—but it did not offer any help. I think there is a lesson in that, and we hope that the Conservative government gets it. We cannot leave the industry to its own devices without providing some support to help it deal with competition. Under this agreement, it has 10 to 15 years, depending on the type of vessel, to bring in a real marine policy to support the shipbuilding industry. It has the means. I hope that the government will wake up.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to stand in the chamber and speak to this important issue.

There are so many different facets to any trade agreement. The principle behind it should be, for obvious reasons, to ensure a fair and principled trading relationship is developed so that it not only fosters economic development and social prosperity in our country, but also leads to greater relations with other countries and improves their trading and prosperity as well.

However, in that discussion there needs to be a balance and restitution when there are policy changes that will affect workers across this country, whether they are in Quebec, in British Columbia or in my home province of Ontario. We have seen some very significant shifts in people's lives when a trade agreement is brought into place by the government, although we are not sure whether we will be doing that here yet as we are just discussing it right now.

We have expressed some concerns on this one from day one with regard to the shipbuilding industry and also supply management for the agricultural industry. What we have sought to do is to find remedies to those main elements because workers will be exposed to some unfair practices and procedures. Until we actually get those things taken care of, that is the reason we object to this trade agreement.

I find it a little naive for the other parties to raise these issues of concern and then blindly hope the Conservatives will bring something in later on. Those things need to be put in the structure of the agreement now because, if we then start to take other measures, there will be challenges by other governments about the faith of the agreement and whether we were acting in good faith when signing it but then we were going to then do something different later on. We will create another complicated situation.

With this trade agreement, we need to ensure that all the parties understand there are a couple of areas of particular concern that are heightened here and which need to have a different set of rules to them.

For the shipbuilding industry, it is a real concern related to the fairness. Norway, in particular, is after this Canadian gem. It really is an opportunity. There has been discussions about the erosion of the industry but there is also an incredible opportunity right now to rebuild our shipbuilding capacity. I will talk a little about that later. However, it is an exciting opportunity for Canadian manufacturing and also Canadian value added work that could be done in our home ports.

It has been done in the past. We have an opportunity right now that we are squandering if we are going to be entering this agreement, because the phase out period, from 10 to 15 years, depending upon the circumstances, is not sufficient to put the proper policy in place. Once again, if we take other measures to try to do that after signing an agreement, I am sure we will end up being challenged on that. These things need to be fixed first before they go forward.

The second element that we have had increasing concern about is the issue of our supply management. What we would be doing right now is giving up our agricultural independence in many respects. Some elements would go to the WTO and there will be trade dispute mechanisms there. I will talk a little about that later. We would also be giving up our sovereignty.

Coming from a community that was reliant on jobs in the auto sector and still is to this day as we try to transition to a certain degree and win back some of the jobs in the auto sector, we witnessed first-hand the catastrophe of trade agreements and also the WTO.

Specifically, we can see it across this land right now with manufacturing. We now have more service jobs in Canada than manufacturing. We have lost around 250,000 jobs in the last five years and 60,000 of those lost jobs have been since January this year alone. That is unacceptable. We have witnessed this basically from a false economy, by having a high export of natural resource commodities, especially in the oil and gas sector, and it is not sustainable. We have driven our dollar so far up so quickly that rapid escalation has taken place and we have not been able to adjust in many ways.

We actually have not had the opportunity to prepare for this. Often what is not discussed in this whole debate is the fact that we had a lot of assembly and manufacturing that did not get the proper research, development and procurement for new equipment because we did not have a proper capital cost reduction allowance program in place to increase productivity levels. That was missed out.

What often ends up happening in a branch plant economy is that even knowledgeless jobs are lost to China, Mexico and the United States. Many of the jobs that are being lost right now in my constituency are sister and feeder plants that are being relocated to the U.S. because of the high dollar. The government has simply not done anything about it.

The new auto policy that it put in place is very vague and it is a modest amount of money. Ironically, it is derived upon a new tax on the auto sector itself and people are furious about that situation. The government has not shown any goodwill to address this issue.

I am not sure why the other parties think that the Conservatives will somehow get it and then, on top of that, politically act and put measures in place that will protect the shipbuilding industry. I do not think that is a realistic expectation. Once we make these decisions, we can change significant features of the Canadian economy. Even though shipbuilding is not at the peak that it was in the past, it has the opportunity to go forward.

I want to touch a bit on what happened with another trade deal. The Auto Pact in Canada was one of the best trade agreements ever entered into. It is a good example of dealing with the situation. Essentially, the deal was that if people wanted to ship vehicles into Canada, the vehicles had to be built here too. It opened up the North American market between Canada and the United States and a lot of value added jobs were added to the Canadian economy. It was very successful.

A number of new plants opened and a whole series of supply elements came with that. We had research and development and headquarters were located in Canada. It created an evolution, in many respects, in the automotive industry. Windsor was where the first automobile was produced in Canada. Despite that, there had not been the big progression that we wanted.

However, when the Auto Pact came into play, it really took off and was very successful. It was different than some of the manufacturing and service sector jobs. The service sector jobs are important too but they do not bring in the type of income that is necessary to sustain and support the average Canadian family. We have seen that through a series of statistics and heard it in testimony from constituents who are having a hard time getting by today and making the payments on their ordinary bills. These manufacturing jobs really became the basis for many progressive values in the Canadian system.

What also came about because of that trade agreement was the first program in Canada, developed in Windsor, that provided payments for prescription drugs as part of people's health care plans. That resulted from the trade agreement and the auto policy. Later on it became a feature of negotiations by the CAW and other labour organizations. Now the system is used is many places across Canada. It is a way of compensating employees by providing partial coverage for drug plans.

We entered into NAFTA with the United States and we became exposed to the WTO that then ruled against Canada having the Auto Pact. What became the recipe to create a good environment then became another one to dismantle it. The result is that we have gone from being the fourth largest assembler of vehicles in the world to number ten, and we are slipping further on that. We are continuing to witness a decline.

It is sad. At a time when the industry is starting to change significantly because of newer technologies and an exciting future, we are not there. Some projects in this country have gone forward and have been positive but, by and large, we are missing out on greater opportunities for vehicle development that is now happening in other countries for a whole host of reasons. A lot of that is over policy.

I see the same type of situation taking place with the WTO in the supply management situation that we will be facing with this trade agreement deal. I have a lot of concern. When we look at the WTO and how it rules, it has been described in some categories as a kangaroo court because the bodies listening to complaints are often controlled by corporations and business interests and can override domestic laws and sovereignty issues.

It is very important to recognize that the dairy and some of our other agricultural sectors will be giving up terms and conditions that could be favourable to Canadians in having other people set our rules. I do not particularly get great comfort in that given the experience we have had in the auto sector on this.

I want to turn my attention to this agreement and the shipbuilding industry. Right now there is a current tariff of 25% and Norway has been really good. It is interesting because Canada, despite having the largest coastline of any nation, really does not have the shipbuilding industry that it should have and historically has had since World War II. What is important about this deal is that there was an attempt by the shipbuilding association and the unions to carve this out of the actual agreement.

People might say, that is fine but they cannot get their way, so we should just go ahead with it anyway and see what happens and that is the way we do things. It is not. In the United States the Americans have the Jones act. The Jones act was something they put in place to protect their industry, not only just in terms of military ships but also other ships so that they are not only going to be built there, but they are actually going to be repaired and serviced there, and they are going to protect that industry.

They see it through the lens of not only just in terms of the protection of jobs but also what I think is important and being missed in this debate, and that is the ability to maintain sovereignty over national defence along with the security of the country.

If Canada sees a further erosion of our shipbuilding industry, and we have had some recent success stories because there is now a maturation in some of the fleets and there is a requirement to build at quite a significant increase in pace, we are going to witness a loss of that capacity, and we will be dependent upon others. I cannot understand how a country, with such a large coastline and such a strong tradition with regard to building and being engineers on the cutting edge in many respects of advancement, would want to pass up that opportunity.

For example, in the Great Lakes, when we had the last period of shipbuilding, there was a large influx that came in about 30 to 40 years ago or longer actually. Collingwood evolved as a shipbuilding community and a lot of the Great Lakes shipping was replaced there. Now the industry is having to change its ships, extending their life cycle, and there needs to be a large replacement of them over the next number of years.

That is a challenge because there are environmental issues, a whole host of manufacturing issues, but also it is an exciting opportunity at a time when we are witnessing the erosion of other types of employment in manufacturing in the country.

Why not now use this as an important opportunity to redefine the Canadian lens on shipbuilding and also manufacturing? We know that the work has to be done. The association admits it. It has been out there advocating because it needs to replace its fleets. At the same time we have this incredible opportunity.

Instead, by signing this agreement, we are actually going to be like Norway, having a different set of rules, and it will have more access to Canadian jobs and we will lose out on this.

We can see the characteristic comparisons with the auto industry quite clearly. After the second world war, Japan and Korea set up very specific strategies to get into the automotive market and the manufacturing market to rebuild their economies. They set up national strategies that would make them efficient and also would support the development of the industry because they knew that the jobs would be good and important, and they could create a based economy on that which was stable.

Therefore, they went ahead and did that, everything from Kia Motors in South Korea and Japan was very much supported by the American industry at that time. They got into an industry where they are now shipping into our industry quite lucratively and we cannot ship back to them.

Meanwhile, it has been the same thing with Norway. It has been very aggressive building its industry and good for it. Norway decided that as a public policy and decided to move forward with it. Now it has phased out that support, but it has done it at a time when it is really at the top of the game. It will be very difficult for us to be able to penetrate into that market. Therefore, we are going to be losing out on jobs which is unfortunate. Once again, this is a clear economic opportunity for Canada to move forward.

The testimony just did not come from the unions that are concerned about losing jobs and opportunities for the workers. Some of the shipbuilding association members actually came forward as well and presented this evidence. That is important to recognize because once again there was an attempt to say, “Let's carve it out and make sure the proper policy is there. At the same time, the deal could go forward if there were going to be those changes.”

So, as we are faced with this decision, we have to ask the fundamental questions about whether or not we should be entering into this agreement right now. The government has a period of time right now to consider it before signing this or bringing it back to the House of Commons for a vote.

I would argue that if the other parties are sincerely concerned about the shipbuilding and supply management issues, they should not support this bill until we get those clear indications from the minister and, as well, from this government. That would be the strategy that we would employ. There is no requirement right now for us to hang out this opportunity and to lose it.

What we should be doing is exercising our leverage as political parties to say, “Listen. This is a minority Parliament. There are some issues here that have been identified with this particular bill”. There are some strengths in it as well, recognizing that there are some positives, but we believe that these two things need to be examined and dealt with. That is the responsible way to go about dealing with other nations when we are entering into agreements.

If we think, and the other parties think, that once again we can just basically in a couple of years from now try to roll out some big policy that is going to shift investment opportunities that other people have already tried to go after or terms and conditions of this deal, and that they are just going to stand down, that is not going to happen.

They are going to challenge Canada on those things. We have even seen that with the softwood lumber sellout. There is a signed agreement right now. It was a sellout, a bad deal, but at the same time, despite it being a bad deal, the United States is now challenging what the provinces are doing. So we have to be accountable and upfront on this.

At the very least, we have an opportunity right now to say no to this and send it back to the government and say, “Let's fix this”. We can go to the partners that have actually said that they have some terms and conditions. They have some financing suggestions, as well as a couple of cash reduction allowance suggestions, and also a few other measures smaller than that, that they would be willing to negotiate with to derive a solution to this. Let us go back to them and actually sit down and come up with that type of a strategy.

The shipbuilding aspect, in terms of this trade agreement, is really focused on Norway. So, our leverage is quite good in many respects because only one other nation is really seriously interested in this shipbuilding component.

We have to deal with the supply management issue, as well, but I think it can be done. I think it can go forward in that context. However, until that time we, as New Democrats, are not willing to hang this industry out to dry by itself. There are too many workers.

It is interesting. I had a chance to go down to the shipyards, and speak to the workers and management as well. There is a lot of pride there. There is also a lot of willingness to work and to do the right thing. Some of those workers in the skilled trades who have been laid off have actually gone to other communities to work and then come back home.

They are willing to do those things to be productive for Canada and to be basically a breadwinner for their home, despite the fact that they cannot write off their travel expenses. This is an interesting side subject. Those workers who work in the skilled trades cannot write off the travel expenses if they travel for their work; however, curtain salesmen can. It is just unbelievable that we can have one set of standards for one group who are in sales and another set of standards for Canadians who are skilled tradespeople. It makes no sense.

I know the government has talked about this a bit and has not shut down the discussion on this, but it really needs to move on that right away. The mobility of people moving back and forth from their families needs to be dealt with. I have talked to those workers and they are willing to do that, whether the work be in Halifax, whether it be in British Columbia, or whether it be even in Alberta, when they are actually working on different projects.

I would say, just to summarize as I know my time is up, that living with the trade agreements, and coming from a constituency like mine, we are seeing the demise of the auto industry based upon the loss of trade agreements and by going to the WTO. There is an opportunity that we have in front of us, not just the challenges but the opportunity with the new procurement that is necessary for shipbuilding. With the massive loss of manufacturing jobs right now, the opposition parties need to tell the government strongly no to this deal. Let us take advantage of the opportunity of shipbuilding in our country and do it right. We can do that and we can move forward. But until then, we will not support this deal.

[Francine Lalonde, Bloc, La Pointe-de-l'Île, QC]

Mr. Speaker, I am pleased to speak to this bill and to say that the Bloc Québécois supports the free trade agreement with EFTA, the European Free Trade Association. This association refers to Europe but EFTA does not represent the Europe we know. It represents four small countries—Switzerland, Norway, Liechtenstein and Iceland—with a total population of just over 12 million and a small percentage, about 1%, of Europe's GDP.

However, we support this agreement because it has significant benefits for Quebec. The free trade agreement will liberalize trade between Canada and these four European countries. I am referring to trade in non-agricultural goods. In fact, this agreement covers only goods and not investments or services.

Why do we support it? Why are we saying that it benefits Quebec? For example, Switzerland is known for its pharmaceutical industry which is very active in the area of brand name drugs. Drugs represent 40% of Canadian exports to Switzerland and 50% of imports. That is a great deal of trade. To penetrate the American market, Swiss pharmaceutical companies might be tempted to manufacture drugs here. Quebec is the home of the brand name drug industry because of its pool of skilled researchers and its tax breaks. Given that a free trade agreement facilitates trade between a company and its subsidiaries, it is likely to mean new investments in the pharmaceutical industry in Quebec. That is fortuitous.

As for Norway, nickel accounts for over 80% of our exports to that country.The largest mine in Canada and the third largest in the world is owned by the Swiss company Xstrata and is located in Ungava.

Aluminum is our main export to Iceland. Aluminum production is also concentrated in Quebec.

Thus, we have a de facto agreement with respect to production in Switzerland and in Quebec.

One of the extremely important factors, in the Bloc Québécois's opinion, is that this agreement does not include the same condition as previous agreements, which we did not approve of. I am referring to the agreements with Costa Rica, Chile and Colombia. I am talking about the infamous chapter on investments that gave companies the right to directly sue any government that adopted measures that caused a reduction in their profits.

We fought against those provisions, which are contained in several bilateral agreements between Canada and the countries I named. There are no such provisions in the agreement with the EFTA, no doubt because this is not a situation where Canada can impose such provisions, which it can do when dealing with underdeveloped countries. We will come back to that at another point.

As I have said, the agreement does not deal with goods or services. Accordingly, there is nothing to open public services to competition, whether or not they are provided by the state, because they are not covered. In the same way, banks and financial services will not be exposed to competition from Switzerland, or from the very solid and very discreet banking system in Liechtenstein, a veritable paradise—we will say it a whisper—for the financial world, because of its tax regime and its banking secrecy.

It is a similar situation for government purchasing. The government retains complete freedom to promote buying at home, subject to the World Trade Organization's agreement on government procurement. Obviously, it would make no sense for the government to negotiate some room to manoeuvre and later to decide not to make use of that option. Let us fervently hope that the federal government, the largest buyer of goods and services in Canada, will favour domestic suppliers and consider the spinoffs from its purchases.

I am sure that many people are concerned about the provisions on agriculture. What is important for us and for Quebec producers is that supply management is not affected. Bill C-55 allows for the implementation of bilateral agricultural agreements, which would be added on to the free trade agreement with the EFTA. There are bilateral agreements that in no way threaten supply management and will not have a great impact on Quebec agriculture. I should mention that milk protein, for example, is excluded from the agreement.

The agricultural agreements will primarily benefit the west, since they liberalize trade in some grains. But even there, the impact will not be huge. Where there are problems, however, and it must be said—I heard my NDP colleague speak about this as well because he is familiar with the problems facing shipyard workers in Canada—is in the area of shipyards.

We will try to fix these problems by calling for a shipyard support and development policy, and I am sure many members in this House will join us in doing so. We also have some concerns about the future of our shipyards.

Imported vessels are currently subject to a 25% tariff. Under the agreement, these tariffs will gradually decrease over three years, and will be completely eliminated in 15 years. Our shipyards are far less modern than Norwegian shipyards and in worse condition. Norway has invested heavily in modernizing its shipyards, while the federal government completely abandoned ours long ago.

If the borders all had to be wide open tomorrow morning, our shipyards could end up whisked away like straw in the wind, or swept away with the tide, I should say. But, for economic, strategic and environmental reasons, we cannot give up our shipyards.

Imagine the risks to Quebec if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, the largest waterway in the world? It is unthinkable, and we will not give up on our belief—this is more than just a flighty idea—that we need shipyards that are equipped with the latest technology, robust and able to stand up to competition. A little later we will see that there are several conditions that need to be met for shipyards to truly be able to develop.

For years, the Bloc Québécois has been calling for a real policy.

For years, the government has been dragging its feet. Now that the agreement has been signed, time is of the essence.

Moreover, this is the only recommendation in the report of the Standing Committee on International Trade on the free trade agreement between Canada and the European Free Trade Association. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic and deputy critic:

—the Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.

This is the only recommendation in the report. The Conservative policy of leaving companies to fend for themselves is deadly for shipyards. We expect the government to give up its bad policy, and we ask that, by the end of the year, it table a real policy to support and develop the shipbuilding industry. Given the urgency, we will not be content with fine talk. We need a real policy that covers all aspects of the industry. I will come back to this at the end of my speech.

I want to say that when it comes to free trade, the real issue is the European Union. A free trade agreement with Switzerland, Norway, Iceland and Liechtenstein is nice, but we have to realize—and everyone does—that it is limited. As I mentioned, it represents just over 12 million people and roughly 1% of Canadian exports.

The real issue is the European Union, with its 495 million inhabitants who generate 31% of global gross domestic product. The European Union is the world's leading economic power.

Canada is far too dependent on the United States, where we send over 85% of our exports. The American economic slowdown, coupled with the surge in value of Canada's petrodollar against the U.S. dollar, reminds us that that dependence undermines our economy. Quebec has lost more than 150,000 manufacturing jobs in the past five years, including more than 80,000 since the Conservatives came to power, with their laissez-faire doctrine.

To diversify as we must do, we should not look to China or India, countries from which we import, respectively, eight and six times more than what we export to them. The European Union is an essential trading partner if we want to diversify our markets and reduce our dependence on the United States.

The fact that Canada has not concluded a free trade agreement with the European Union considerably diminishes how competitive our companies are on the European market. With the rising value of the petrodollar, European companies tend to skip over Canada and open subsidiaries directly in the United States. The Canadian share in direct European investments in the United States went from 3% in 1992 to 1% in 2004.

Add to that a free trade agreement between the European Union and Mexico since 2000. The Europeans are saying that they can negotiate a real tariff reduction with Mexico, while that is not really possible with Canada. They are saying that there needs to be a reduction in non-tariff barriers with Canada.

When Pierre Pettigrew was Minister of International Trade, Pascal Lamy, European Commissioner for External Trade, said he would negotiate another type of agreement.

No such negotiation is known to be taking place. I think it will not happen because it is too difficult. Just consider the fact that Europe requires GMOs in products to be identified, while in Canada, as we know, the government just recently refused to accept this measure.

The European Union has a free trade agreement with Mexico. That is an advantage for Mexico, an advantage that is prompting companies in Quebec to invest more in their own operations in Mexico since this gives them access to the European market as well as the U.S. market.

Again, Quebec would benefit from a free trade agreement with Europe. In fact, it would probably be the primary beneficiary. For example, 77% of the people who work for French companies in Canada are from Quebec, as are 37% of those who work for U.K. companies here and 35% of those who work for German companies here. In contrast, just 20% of people working for U.S. companies in Canada are Quebeckers, hence the great interest for Quebec of having a free trade agreement with Europe.

The Government of Quebec has been working with companies since the Quiet Revolution, and that is a major advantage when it comes time to seek out European investment. We have everything we need to become the bridgehead for European investment in North America.

I will use my last few minutes to appeal for a real marine transportation policy. It would include several factors, because otherwise, it will be impossible to revive this complex industry. I would remind the House that the federal government has been ignoring it since 1988. The industry needs funding, assurances and loan guarantees linked to sales contracts. In this case, access to credit at a reasonable rate is an important determining factor for the buyer. It needs loans and loan guarantees intended for shipbuilders who must invest or deposit a financial guarantee to bid for new contracts. It needs better fiscal regulations for leasing and a refundable tax credit for shipowners. Those are some measures that would help the industry.

We also need measures specifically for marine transportation in Canada. For example, we must eliminate the fees charged to marine transportation companies that practice cabotage. Truckers' employers do not pay for the damage caused to highways—and Lord knows it is extensive—although those who practice cabotage pay ice breaking fees, among others. It makes no sense.

Second, the government must implement a plan for major investments in port infrastructure. It must also bring up to standard all the ports that have been left to crumble and it must strengthen the Coastal Trading Act. It must also do something to fight against flags of convenience and poison ships. It is the federal government's responsibility to do something. It must negotiate an agreement like the Auto Pact and, lastly, eliminate all subsidies to shipyards. This House owes it to shipyard workers to pass real legislation that will allow shipyards to prosper once again.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I listened with great attention to the member from the Bloc. My own perspective is that this trade agreement is a very positive thing for Canada. It gives us a window into enhancing trade and investment with Europe. I think it is a very good start.

I have a question for the member with respect to shipbuilding, which I know has been a matter of contention. I wonder if she could comment on the state of the shipbuilding industry in places such as Lévis, for example.

The member talked about the need for various incentives or subsidies, if I may call them that, to help this industry compete with the Nordic countries. I wonder if anything within the EFTA agreement would preclude that, anything that would say it would constitute a subsidy. Are there any provisions in the agreement that address those particular matters?

[Francine Lalonde, Bloc, La Pointe-de-l'Île, QC]

Mr. Speaker, that is a good question. Perhaps my hon. colleague, whom I have known for a long time and who supports the sector, could help me answer it.

I do not believe that it would prevent this development. I know—and so does he undoubtedly—that, in 2000, there was an agreement with the European Free Trade Association. However, the agreement was blocked because it was not satisfactory to the shipbuilding sector.

This time around, we reached a consensus because the agreement—which will lead to competition and enable Norway in particular to be a fierce competitor, if nothing is done in the interim—will cover a 15-year period and will begin implementation in three years' time.

I do not believe that we would have signed this agreement, even unwillingly, if shipyard representatives had believed that this would prevent even governments from helping them to revive their industry.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I appreciate that good answer by the member from the Bloc.

Within the EFTA agreement itself, what growth areas does the member see as possibilities for Canada and for her home province of Quebec? Are there any particular sectors, products or services in which Canada and the province of Quebec would be poised to take advantage of this agreement? Does she see any possibilities for investment back and forth between Canada and the EFTA countries?

[Francine Lalonde, Bloc, La Pointe-de-l'Île, QC]

Mr. Speaker, I cannot cover all aspects of this question. I do know, however, that several sectors in Quebec are complementary and have significant industries.

For example, the pharmaceutical sector is clearly complementary. Had this agreement not been signed for Quebec, which has a strong pharmaceutical industry, investments might have been made in the United States given that the euro and the dollar are almost at par. However, with this agreement, Switzerland will be inclined to invest more in Quebec and Canada.

In other sectors, we have mining products and there again there is a complementarity.

I did not examine the question from the perspective of the rest of Canada. However, I do know that the agreement is very favourable for certain sectors in Quebec.

The House resumed consideration of the motion that Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to a committee.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, thank you for the opportunity to speak today on the Canada-European Free Trade Association free trade agreement implementation act.

First, I want to inform the House that I support this bill, because in my mind it improves access for Canadian businesses and strengthens our future in the European market. Right now, as I think everyone is aware, the vast majority of our exports go to the United States. It is not a major issue, but it serves as a platform in that the total bilateral trade between our country and the four countries represented by the European Free Trade Association, I believe, is approximately $12 billion. Larger than that, in my view at least, it represents a platform to provide us possible access into the European Union with future dialogue and discussions in the months and years to come. I certainly will be supporting this bill when it comes to a vote.

The agreement places Canada on an equal footing with competitors that already have free trade agreements with the European Free Trade Association. These countries include Mexico, Chile, South Korea and of course the European Union. These countries, the names of which are very familiar to us, are trade competitors of ours. Going forward it puts the country of Canada on an equal footing with these other countries, among others, in trading with this bloc of four northern European countries.

Although I support the bill and will be voting in favour of it, it is my position that the bill should be referred to the House of Commons Standing Committee on International Trade so that the committee can review the agreement again to ensure that the bill complies with the committee's report, which was tabled earlier this year in the House. The free trade agreement went to committee first. In my view, it is the right agreement and one which, in the long run, is a must for the Canadian economy.

There are concerns. I have listened to some of the debate regarding this particular legislation. The concerns raised have to do with shipbuilding and supply management. If we look at the provisions of the legislation, these are not totally taken into consideration but they are certainly considered. That is why it is so important for the legislation to go to the standing committee, so that these concerns can be taken into consideration before the bill comes back to the House for final adjudication.

This is a long-standing matter. It did not start last month. I believe it was 10 years ago that the negotiations got under way with this bloc of four countries, with the hope that a free trade agreement would be reached. For different reasons, I suppose, things did not go as quickly or as smoothly as first thought and the negotiations have been ongoing. However, I am glad to see that 10 years after negotiations started, we have in the House legislation which approves the free trade agreement.

I would suggest the majority of members in the House appreciate and understand the value of trade partners such as these four countries. It is my understanding that this bloc of four countries, if not the highest, has one of the highest GDP per capita in the entire world. It is a bloc of countries that this country should be trading with and trading with more often. It is a natural fit and I look forward to its implementation.

When we enter into these free trade agreements, I can appreciate the work, effort, time and energy that goes into them on behalf of all the players involved because a lot of different sectors have to be taken into consideration. In cases such as this, not everyone gets the same advantages and we have to look at all the sectors. The sector of biggest concern and the one which has been raised with all members of Parliament is the shipbuilding sector. The second sector that warrants special consideration is the agricultural sector.

On the shipbuilding sector, I have read over the agreement. It certainly provides what I consider to be fairly equitable terms. It provides a 15 year phase-in of the quotas for the sensitive sectors and 10 years in other sectors, which I think is equitable. I believe it is fair.

On the agricultural sector, from my reading and my understanding of the agreement, Canada's agricultural sector, insofar as this bloc of countries is concerned, will certainly be a winner. This agreement does protect the supply management regime in Canada. I have not read anything in the materials which would lead me to believe that the dairy farmers of Canada have any concerns with this free trade agreement.

The agreement would eliminate duties on non-agricultural goods and selected agricultural products, giving Canadian exporters better access to Canada's fifth largest export destination. As I said, right now bilateral trade is approximately $12 billion. I believe the four northern European countries involved in this association have a surplus. Canada imports approximately $7 billion from that particular bloc of countries and we export to them approximately $5 billion.

On the other hand, the direct foreign investment from the European Free Trade Association is quite substantially more. Those countries have invested substantially more in this country than we have in them. I believe that in the long run the agreement should increase trade in all five countries and it also should enhance direct foreign investment going both ways.

At the end of the day I see this as a win-win situation, although we certainly have to be very careful in negotiating these agreements and certainly as parliamentarians we have to be careful in approving them. I do see it being beneficial to our primary and our manufacturing industries.

The agreement would eliminate all European Free Trade Association tariffs on Canadian industrial exports. Some of the key ones that are included, and these are areas that are so important, are forest products, pulp and paper products, manufactured housing, aluminum, cosmetics, and motor vehicles. Forest products is one that I see has tremendous potential.

There is a substantial amount of trade right now in these sectors. I hope with the signing of this agreement that these sectors will increase the amount of trade going from Canada to these four countries involved, especially our forest industry.

As a result of the problems that are being experienced in the United States, these sectors are experiencing considerable difficulty right across Canada from coast to coast. For us to allow our products to go to Europe rather than to the United States provides more flexibility and more opportunities for our Canadian forestry industry. In that regard, it is a good situation.

The agreement would also provide improved access for specific Canadian agricultural products, including frozen foods, selected beverages, durum wheat, canola oil, honey, and various fruits and vegetables.

This whole agricultural free trade issue is an issue that is debated in the House every week and almost every day. We see the subsidies that other countries are involved with and sometimes we just have to shake our heads.

Last week, the U.S. farm bill was passed both in Congress and in the Senate. I know it was vetoed by President Bush, but I understand the votes are there for an override of that veto, if it has not been done already. I believe the total budget for that bill is $317 billion and a lot of that goes into subsidies for U.S. agricultural sectors.

Again, we have to wonder where free trade in agricultural products is going. When we hear what is going on in France and other European countries not covered by this agreement, we have to wonder whether free trade in agricultural products will ever be reached in our lifetime. We do not seem to be making any progress. In fact, I would suggest that we are taking steps backwards in this regard. However, this agreement is a step forward and I think it will certainly help our agricultural industry.

That leads to another issue on why it is important for Canada to perhaps be more aggressive in some of these bilateral trade agreements. We went through a period after the North American Free Trade Agreement when perhaps the country was not as aggressive as it should have been in pursuing these opportunities. At the same time, we had the negotiations going on with the Doha round of the World Trade Organization. That went on for four to six years.

We were all at somewhat different stages of the negotiations. We were optimistic that something would come out of those negotiations, but I think that at this stage of the game we are all just shaking our heads. We may not like to say it, but it looks as if the Doha round is dead. I do not see anything positive.

I have not heard anything positive coming out of those negotiations over the last 18 months which would assure me that there would be an agreement in the immediate future. I may be wrong on that statement, but certainly I have not heard, read or seen anything that would lead me to have any sort of a confidence that things are proceedings in a direction that would be beneficial to Canada in those negotiations.

For that reason, it is so important for this country to pursue other bilateral free trade agreements with other countries, especially this bloc of four northern European countries. There are some negotiations at the advanced stages.

I know that an agreement has been or is almost concluded with Colombia and also one with the country of Panama. Some of these issues are a little more controversial. In the Colombian agreement, an issue has been raised concerning human rights in that particular country. Our committee has been to Colombia on that particular issue. That has not come to the House yet.

However, this agreement is free from any of that discussion at all. As I say, there are no distortions with these European countries and it should be a clean agreement going forward. The biggest issue, of course, is the one I raised previously and that is the shipbuilding industry vis-à-vis the country of Norway.

That sets out some of the reasons why I am supporting the legislation. Again, it is important for another reason, which I mentioned briefly earlier in my comments. I believe it is so important to start the platform, the dialogue and the discussions with the European Union. That is going to be much more complicated. We are into some pretty heavy sectors there, especially in the agricultural sector where there are subsidies. That certainly will not be a one-month negotiation. It will be a long term negotiation, but it is a negotiation and a discussion that I think should start sooner rather than later.

It is important for our economy to build relationships with other countries if a deal can be done. If a deal can be done, a deal should be worked out and concluded. Again, sometimes we are not as big as we think we are. We are a big country but we have a small population and we have to pursue other markets. We have a very strong relationship with the United States of America and the vast majority of our trade heads south, but we always have to be pursuing other opportunities on the world stage, especially for our agricultural producers.

This agreement recognizes Canada's unique position as an agricultural leader, as it provides specific rules dealing with processed agricultural products. For items in that grouping, such as cocoa and confectionery sugar, the tariff rate will be reduced from 6% to 0% immediately upon the entering into force of the agreement.

This is good for the economy. As everyone in the House is aware, Canada has a strong agricultural industry and these new markets will present a reinvigoration of opportunities and partnerships for many of these particular sectors.

As I said previously, protected under this agreement are the supply management regime that we enjoy in Canada and the buy Canada government procurement programs as well.

To conclude, it is my submission that this is excellent for Canada's interests in Europe and a further step in our partnership with the four countries. However, as I said, it should be re-examined by the Standing Committee on International Trade to ensure that the bill and the previous agreement are in sync and that Canada's best interests are included in this agreement.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I want to raise a further question with the Liberal member for Charlottetown, Prince Edward Island.

I certainly respect his very considerable knowledge of agricultural issues. It would not be my intention to challenge his assessment that, on balance, the concerns about the agricultural aspect of this free trade agreement may in fact still warrant supporting the agreement. He has a lot more in-depth knowledge than I do about the agricultural issues at stake here, coming as he does from Prince Edward Island. We do not have a huge agricultural industry in our Halifax riding, not that I would not have a real interest, but I will bow to his superior experience in this regard with respect to agriculture.

I do, though, want to pursue for a moment the question of the shipbuilding sector. To his credit, the member has acknowledged that there are very major concerns of shipyard workers and shipbuilders about the negative impact of this agreement, which is without any real protections for the long term interests and what is really the long term survival of the shipbuilding industry.

I agree with some of the comments he has made about how there are reasons why it would be desirable to reach an agreement with these countries, which generally are higher wage countries with which we have a lot in common and so on. However, I am very surprised that his position and that of his Liberal colleagues is to basically toss the shipbuilding industry overboard with respect to the devastating impact that this agreement could have without having provided some kind of extra carve-out. We know that was not impossible when it came to the Canada-U.S. Free Trade Agreement, and we had the Jones act absolutely protected, which has had a devastating impact on Canada's shipbuilding. So now this is a sort of double whammy.

I would just like to understand better his view on this. Instead of taking a stand, which we could have done as opposition parties knowing this is going to be devastating for some in Quebec and other parts of the country, certainly in Atlantic Canada, the member and his colleagues decided to not take a united stand. I am surprised and I want to understand that decision. We could have prevailed in insisting upon protections for the shipbuilding industry in Canada, which otherwise may be very adversely impacted by this agreement.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, first of all, I am going to challenge the premise made by the member across in her first statement that I might have more knowledge in agricultural issues. It has always been my belief that she is probably more knowledgeable through her experience in the House on all issues debated in this House including agriculture.

However, having said that, I appreciate her comments. When the agreement is boiled down, this seems to be a win-win-win situation. The biggest concern is shipbuilding. Other concerns could be raised such as supply management, taking it to the World Trade Association and other agricultural commodities, but really when it is boiled down, they become pretty minor and shipbuilding was the issue.

I would suggest this is the reason why it took 10 years to conclude this agreement because it was an issue raised by the shipbuilding companies. It has been raised by unions across Canada. I read the agreement and it seems they have not a total carve out, but certainly negotiated what I consider to be a good agreement.

I will summarize it. It has the longest tariff phase-outs for any agreement with a developed nation: 15 years for the most sensitive vessels and 10 years for other sensitive vessels with no tariff reductions for the first three years. Of course, shipbuilding is also supported by the $50 million renewal of Industry Canada's structured financing facility.

This an issue that Industry Canada has to work with. This is an industry that Parliament of Canada has to be very sensitive to. I certainly acknowledge the concerns of the member across. We have a shipbuilding facility located in Georgetown, Prince Edward Island. It is extremely important to our economy.

I certainly would not want to sign any agreement or approve any legislation that would be in the long-run harmful to that facility. Again, I believe we have negotiated terms that are beneficial that will work for our industry and it is important for us as parliamentarians, the Government of Canada and the provincial governments, to work to enhance, develop and improve our shipbuilding industry.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I would like to congratulate my colleague, the member for Charlottetown, for his insightful remarks on Bill C-55, sponsored by the Minister of Foreign Affairs and International Trade.

For Canadians who are watching or following it is an important outcome for the amount of investment, energy and time that has been invested in negotiating an agreement between Canada and what is called the European Free Trade Association. We are not talking here about the European Union, the 26 or 27 member states that form the EU. We are talking about a much smaller conglomeration of states in Europe: Iceland, Liechtenstein, Norway and Switzerland.

It is a move forward for Canada to be able to move to ratify yet another bilateral trading agreement like so many others we have ratified in the past and others that we are presently negotiating.

We support initiatives on this side of the House in the official opposition that improve market access for Canadian businesses. We are a profoundly steeped in trading tradition nation. On balance we support the European free trade agreement deal and the bill that implements it.

Having said that, as we just heard in the previous exchange, there are some legitimate concerns surrounding Canada's shipbuilding industry and not inconsequential concerns. In large part, as we have just heard from my colleague from Charlottetown, it was the negotiating of those provisions that deal with shipbuilding that in part accounted for the 10 years it took to negotiate the deal.

We believe that there are some profound concerns around shipbuilding. We share these concerns, but we also believe that the unusually long tariff phase-outs and what are called the snap back provisions address these issues, and I will come back to that in a few moments.

We are anxious to send Bill C-55 to committee to ensure that the bill implements the agreement as has been described by the committee report dated April 7. So again, what is this all about?

[The Acting Speaker, Conservative, Royal Galipeau]

I regret to interrupt the hon. member for Ottawa South, but the government House leader is rising on a point of order.

[Peter Van Loan, Conservative, York—Simcoe, ON]

Mr. Speaker, I also regret interrupting the member for Ottawa South. I apologize for that, but there is a motion that we wish to put at this time.

There has been consultation among all the parties and I believe, Mr. Speaker, you will find unanimous consent for the following: That, during the debates on May 28 and May 29, 2008, on the business of supply, pursuant to Standing Order 81(4), no quorum calls, dilatory motions or requests for unanimous consent shall be received by the Chair and, within each 15-minute period, each party may allocate time to one or more of its members for speeches or for questions and answers, provided that, in the case of questions and answers, the minister's answer approximately reflect the time taken by the question, and provided that, in the case of speeches, members of the party to which the period is allocated may speak one after the other.

I thank the hon. member for having indulged this interruption.

[The Acting Speaker, Conservative, Royal Galipeau]

Does the hon. government House leader have the unanimous consent of the House to move the motion?

[Some hon. members]

Agreed.

[An hon. member]

No.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, as I was saying for Canadians who are watching or reading this debate, in due course this is about implementing a free trade agreement between Canada and a small number of European nations that form the European Free Trade Association: Iceland, Liechtenstein, Norway and Switzerland.

It is important to remember that the negotiations began in 1998 through the former Chrétien Liberal government to pursue this bilateral trade negotiation. It was signed on January 28, 2008 in Switzerland and then tabled in Parliament on February 14, 2008, three short months ago.

What does this agreement do? What are the important points of analysis that have been treated at committee that we need to make sure Canadians understand?

The first thing the agreement does is it eliminates duties on non-agricultural goods and selected agricultural products, not all, but only selected ones, giving our Canadian exporters better access, almost preferred access to Canada's fifth largest merchandise export destination.

The agreement also lays the groundwork for a better deal, a more comprehensive deal on services and investment with the European free trade association countries, as well as free trade talks with the broader European Union. This is extremely important for Canada as we move forward progressively, bilateral deal by bilateral deal to consolidate our trading relationship more formally with the European Union, and hopefully ultimately through a free trade agreement with the EU which, as we all know, is expanding rapidly. It comprises now some 26 to 28 nation states and is expanding in terms of massive economic opportunities for Canadian exporters.

We heard talk about the sensitivities around the shipbuilding sector. These are legitimate sensitivities and impressions that were asked at committee repeatedly by the shipbuilding industries and different labour representatives who did more than the yeoman's share of work in terms of making sure that what has arrived here in the House today addresses the concerns around shipbuilding.

As my colleague from Charlottetown has mentioned, it does something that has previously not been done here in Canada. It is certainly an interesting precedent for us to follow. What it has done here is it has actually included the longest tariff phase-outs for any agreement with a developed nation. There are 15 years of phase-out for the most sensitive vessels and 10 years of phase-out for other sensitive vessels with no tariff reductions in the first three years.

These are very important fiscal mechanisms that will help to cushion the transition in the shipbuilding sector as we ramp up our trade with the four nation states involved.

We also know that shipbuilding here domestically will be supported through a $50 million renewal of Industry Canada's structured financing facility or the SFF as it is known. That will also help deal with the adjustment in the shipbuilding sector as we move to formalize this bilateral trading agreement.

Experts have also included what is called a snap back provision, which raises tariff levels to what is called most favoured nation status and rates for up to three years if the agreement results in a serious threat to domestic industry. That is very powerful protection for our Canadian shipbuilding sector.

It has gone further. As an individual who has had the privilege of working on international trade disputes in Europe, what I like about this bill is that it also includes a process for binding arbitration and, of course, relevant dispute resolution mechanisms which are attached to it. This would really help deal with differences that might arise going forward.

Once this agreement is, hopefully, ratified and entered into, it would give us transparency and predictability. If we do enter into disputes with the EFTA, we would have a better and more transparent process for binding arbitration and dispute resolution already laid out and agreed upon. That would save countries and trading partners tens of millions of dollars of legal fees, of fighting costs, of lost energy and would help deal with differences in advance before they actually occurred.

Also in the bill, from an agricultural perspective, is this. Specifically, Canadian agricultural supply management and what are called “buy Canada” government procurement programs would be explicitly protected. That is important from a supply management perspective. It is also important, in my view, from an environmental perspective. It is important because I predict that in due course we will see much more local buying occurring as citizens in Canada become more attuned to, for example, questions of agricultural input and, for that matter, impacts on overall greenhouse gas emissions and atmospheric challenges. I believe that will start to drive more local and domestic consumption, which will have a bearing on our supply management systems, and I think speak volumes to keeping our supply management systems as they are presently constituted.

Why is this so important? How big is this in order of magnitude for Canadians who may be watching the debate?

These four European free trade association countries are the world's 14th largest merchandise traders and are Canada's 5th largest merchandise export destination. That is not inconsequential for a nation as deeply dependent on international trade as Canada has become.

For example, two-way Canada-EFTA non-agricultural merchandise trade is $12.6 billion. Canadian exports in 2007 to the EFTA totalled $5.1 billion. What are we selling? What constitutes the $5.1 billion? It is nickel, copper and pharmaceuticals, particularly as our life science industries explode in and around the Montreal catchment area and in other clusters that are servicing around the country, including here in my own community of the city of Ottawa. We also export forms of machinery, precious stones, metals, medical devices, aluminum and aerospace products, which are not inconsequential with Canada's burgeoning aerospace industry. We export pulp and paper, which is more traditional, organic chemicals, autos and parts, and art and antiques.

In the same year, we imported more. We imported some $7.4 billion worth of products, which included such important assets and products as mineral fuel, other pharmaceuticals, organic chemicals, machineries and medical and optical instruments. One can imagine, when we are talking about Switzerland and Norway, the kinds of high tech investments that have gone on there. We are talking about clocks, watches and many other products.

When we look at bilateral trading arrangements or multilateral trading arrangements, we often examine the concept of what is called “foreign direct investment”. We take, in this case, a cluster of four nation states and compare it with Canada. We want to know how much the four nation states are investing in Canada and how much Canada is investing in those four nation states, the EFTA. The news is overwhelmingly good because we are net winners. In fact, we are massive winners when it comes to how successful Canada has been in attracting investment into this country from the EFTA.

For example, in 2006 Canadian foreign direct investment in those four countries was $8.4 billion. In the same year, their investment in Canada was $15.6 billion. With $8.4 billion of our investment going there and $15.6 billion coming here, that is a net win for Canada at a time when the world is moving aggressively forward to a rules based,liberalized trading regime system. Whether it is Mercosur, the European Union, NAFTA and beyond, bilateral or multilateral, that trend is seemingly unstoppable.

However, when we look at the trend, we also measure the question of foreign direct investment: how much is coming here and how much are we sending there. That is not in terms of products sold, goods and services, but overall investment, and, in this case, Canada is a massive winner with almost twice as much investment being attracted here from the four countries as we are investing there. It is very promising for the future.

When it comes to the question of agricultural products and supply management, some comments were made earlier by the member for Halifax, I believe, about supply management. Here I think we should be cautious. The National Farmers Union has obviously raised some important questions around the agreement as to whether it might or might not negatively impact supply management by undermining Canada's position at the World Trade Organization. It may or it may not but in committee, from what I can recall in the transcripts I have read, I have seen no single supply management group indicating any profound concerns. The dairy sector may or may not feel some effects if this is ratified, but the Dairy Farmers of Canada were expressly consulted and at the time said that it had no deep concerns about moving forward.

That is not to say that we should not watch what flows from this negotiation in terms of the practices in those four countries and what we can learn from their subsidies in the agricultural sectors, particularly in anticipation of our negotiations with the European Union.

Why is that so? The last time I looked, 40% of the overall European Union budget was dedicated to the common agricultural policy, a massive agricultural subsidy program which, early on in the European Union's formation, lead to rampant corruption in countries like Italy and Spain where huge tracts of land were actually put into fallow status while farmers were collecting massive subsidies from the European Union. Those abuses were exposed and the European Union has moved to correct those difficulties, much later on, of course, in its existence. However, it does speak to Canada making sure that we deal appropriately with this level of subsidy. When we talk about 40% of the European Union's budget, we are talking about billions and billions of dollars.

It is also important to move forward with this agreement because, frankly speaking, the EFTA is a minor negotiation for Canada within the much larger context of the international trade portfolio. It probably will not gain a lot of media attention and probably will not form part of the next election in terms of core issues addressed at the door, but it is one of those areas where we can make progress and, again, progress because it is in anticipation of cracking the big nut, which is to begin to expand our negotiations with the European Union, which is very important for Canada's trading future.

I give great credit to former Prime Minister Chrétien for his perspicacity, his forward looking vision and his understanding of the need in 1998 to commence these negotiations to expand our bilateral and multilateral trading regimes--

[The Acting Speaker, Conservative, Andrew Scheer]

The hon. Minister of Agriculture on a point of order.

The House resumed consideration of the motion that Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to a committee.

[The Acting Speaker, Conservative, Andrew Scheer]

The hon. member for Ottawa South still has approximately two minutes left for his comments.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, let me wrap up in terms of why this is so important.

It is funny how the member for Charlottetown tied it together well in his closing remarks, pursuant to a question that was posed to him. Let me reframe and restate before concluding.

A lot of the multilateral approaches in which we are presently involved in terms of multilateral trading arrangements are stalled. Canada, in my view, needs to pursue and adopt bilateral trade agreements in order to remain globally competitive. We have benefited well. We are, as many describe, the most trade dependent nation on the face of the planet and, therefore, this is a good step forward.

As I said earlier, there is no evidence that the expansion of rules based trading regimes is in fact decelerating. On the contrary, it was China only several years ago that managed to break through and join the WTO after more than a decade of aggressive negotiations and positioning.

Here we have a win-win situation. We have the biggest concern addressed coherently in shipbuilding. Some concerns on supply management we have spoken to. We believe the bill addresses that imbalance as well. In fact, it took roughly 10 years to complete this negotiation because of the shipbuilding concerns that I believe have been adequately addressed. It is not a total carve out, as the member for Charlottetown indicated, but it is a good, solid agreement on which to move forward, to expand Canada's trading relationships and to create the wealth, the jobs and the investment that we need to move forward.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Mr. Speaker, as we always do, Canadians have a discussion about our trade dependence on the United States. As the United States is going through a recession these days, we are witnessing a significant impact on Canadian jobs and on the economy. There are always discussions on the need to diversify our trading partnerships, our exports and our imports so we are not that dependent on a single state.

I am not saying that we should not nurture, maintain and increase our trade relations with the United States, but could the hon. member comment on the value of Canada's diversification, of identifying trading partners, removing trade tariffs and the value that this expansion would have for Canadians and Canadian jobs?

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, there is no doubt that the United States is going through some very difficult and troubling times. I personally predict that we will see culprits. We will see the blame laid squarely at the feet of different actors in American society who I think concocted a sub-prime mortgage scam that has affected many vulnerable Americans. I wish our American cousins all the best in the recovery that we would like to see in the United States and, of course, the spill over effects in helping to keep Canada's trading arrangements there robust and healthy.

However, there is no doubt that Canada needs to expand its reach. We are already trading all over the planet but the formalization of this trading arrangement with four nation states goes another certain distance to help us diversify. Diversification is good. Dependency on one particular market is not so good. We are seeing that there are risks now despite the fact that so many hard decisions were taken by the previous government to prepare the country to deliver 10 years of surpluses consecutively, to pay down so much debt and to lower taxation while addressing core social equity and justice questions.

Canada is well positioned and well prepared to weather the storm, although we are not sure what the fallout effects will be of the recent 30 months of decisions taken by the government.

However, more important, expanding our reach in terms of trade builds on our people. The single greatest asset we will have over time will be people: their brain capacity, their training and their skills levels. We have people from every corner of the planet now living right across this beautiful country. It is up to us now to play intelligent hockey and to build on those relationships all over the world and to strengthen our trading relationships.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I listened carefully to the comments made by the member for Ottawa South. On the face of it, when we look at this trade agreement, the member nations of EFTA all have strong social democratic traditions. They are an excellent model for how one might go about building trade agreements. They have that ideal balance, almost, between trading and yet protecting the sovereignty of their own nations. To some extent, one would think they would be the ideal trading partner for a country like Canada.

Like the member for Ottawa South, I come from a landlocked riding. There is no shipbuilding industry on Hamilton Mountain--I know that will surprise some members--but what we do have in Hamilton is a really vibrant steel industry. Well, actually, it used to be a vibrant steel industry and now of course, like much of the manufacturing sector, we are seeing devastating job losses and declines in the manufacturing sector right across this country.

Yet we are selling out an industry in this trade agreement, namely the shipbuilding industry, which could make such a profoundly positive contribution not just to those communities across this country that are actively engaged in shipbuilding, but also in communities like mine that have steel making industries. The shipbuilding industry of course uses steel. There is all kinds of potential and, therefore, all kinds of reasons that we should carve out the shipbuilding industry from this trade agreement and then talk about the trade agreement again.

In light of the fact, and I think the committee hearings demonstrated this, that this trade agreement clearly sells out Canada's shipbuilding industry without any regard to either the workers or the community interests involved, could the member comment on why he would support an agreement that clearly sells out shipbuilding but also, as a result of that, continues to sell out industries like the steel industry in my riding of Hamilton Mountain?

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I would like to go back to the preface of the member's remarks. She heralded the notion that the countries with which we are entering into this almost complete negotiation are countries with strong social democratic traditions. Her language was “strong social democratic traditions”.

If in fact these are countries with strong social democratic traditions, I do not think they have expressed in any discussions, debates, negotiations or positions they have taken their view of what the member has categorized as a sellout. If they are countries of social democratic traditions, then I would expect they would negotiate in the best of faith and would put the interests of their trading partner alongside the interests of their own.

Surely the NDP is not suggesting that as a social democratic party that does not believe in the free market, only it can understand what is happening in terms of the Hamilton steel industry. The problem is that the NDP keeps pushing and pushing, not because it would like to see a carve-out. Once there is a carve-out, it sets a very interesting precedent. It is risky business and the question becomes, what is next to carve out?

I think what the NDP is really saying, and it should level with Canadians and tell them, is that it does not believe in the expansion of rules based trading systems; it does not believe in the international trading order; it does not believe in the international economic order; and it does not believe in private capital flows. It should say so and then give us an alternative vision of the world and the order that we ought to be pursuing.

Instead of trying to scare Canadian families and workers from the steel industry and beyond, I think it should--

[The Acting Speaker, Conservative, Andrew Scheer]

Questions and comments, the hon. member for Hull—Aylmer.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I congratulate the member for Ottawa South. It is refreshing to hear from an expert on the matter.

I would like him to elaborate on his concerns about how supply management could be affected by this agreement. We all know that the current Conservative government will not go to bat for supply management. I would like to hear an expert opinion on this subject.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I will just say that the government has had a terrible record concerning supply management in the last 30 months.

In Canada, we have already seen the dismantling of the call for tenders system for our aboriginal companies and communities, for example. There have been a number of situations where backroom deals took place, where the way in which the government carried out a call for tenders was compromised, and where the participating companies were complaining more and more about the tendering system.

It is up to us, as the official opposition, to pay close attention to what the government does with this free trade agreement.

[John Maloney, Liberal, Welland, ON]

Mr. Speaker, I am very happy to speak to Bill C-55.

I am a member of the Standing Committee on International Trade. The free trade agreement between Canada and the states of the European Free Trade Association, which are Norway, Iceland, Liechtenstein and Switzerland, was considered by our committee and I would like to make some comments on our findings.

First of all, I think we should look at the trade statistics between our countries which suggest that an agreement with the EFTA countries is of key importance to Canada.

We should note that the EFTA countries are the world's 14th largest merchandise traders and Canada's fifth largest merchandise export destination. They are key players. Two-way Canada-EFTA non-agricultural merchandise trade amounts to $5.6 billion. Canadian exports to EFTA totalled $5.1 billion in 2007 and include nickel, copper, pharmaceuticals, machinery, precious stones and metals, medical devices, aluminum, aerospace products, pulp and paper, organic chemicals, autos and parts, art and antiques. It covers a wide range of exports affecting many different areas of our country and affecting many different sectors of our economy.

Canadian imports from EFTA totalled $7.4 billion in 2007 and include mineral fuels, pharmaceuticals, organic chemicals, machinery, medical and optical instruments, and clocks and watches.

Canadian foreign direct investment in EFTA was $8.4 billion in 2006. EFTA foreign direct investment in Canada amounted to $15.6 billion in 2006.

This is certainly an agreement to be reckoned with.

I would like to go back to the considerations of our committee in our study of the agreement. I will give some of the history on this agreement.

In January 2008 Canada signed a free trade agreement with Switzerland, Norway, Iceland and Liechtenstein. The group is collectively called EFTA, the European Free Trade Association.

The Canada-EFTA agreement is the first agreement to be tabled in the House of Commons under the federal government's new policy of allowing members of Parliament the opportunity to review and debate international treaties by tabling those treaties in the House of Commons for 21 sitting days.

The House of Commons Standing Committee on International Trade took this opportunity to conduct its hearings on Canada-EFTA in order to contribute to these discussions.

It has been actually 10 years since a Canada-EFTA trade agreement was first proposed with formal negotiations beginning in 1998. Unfortunately they hit an impasse in 2000 on the issue of treatment of ships and industrial marine products. These issues are still of concern to some in this country.

Concerns were expressed then over the possibility that free trade with EFTA would require Canada to remove its 25% tariff on ships and expose the Canadian industry, which was already struggling with excess capacity to increase competition from subsidized Norwegian producers.

It should be noted, however, that in the time since those concerns were expressed, Norway reported that it has stopped subsidizing its shipbuilders. In fact, His Excellency Markús Örn Antonsson, who is the ambassador of Iceland to Canada, noted that several attempts were made to break this impasse but negotiations did not resume until 2006.

In June 2007 the two sides announced that negotiations were completed. In January 2008 the agreement was formally signed in Davos, Switzerland.

The Canada-EFTA free trade agreement is rather modest in scope. It is a first generation free trade agreement focusing on tariff elimination and trade in goods. Unlike NAFTA, for example, CEFTA does not include any substantial new commitments to investment services or intellectual property. These issues, as well as most safeguards, anti-dumping and countervailing duties will continue to be addressed by the World Trade Organization. However, as the committee heard, there are provisions within the agreement to allow for these issues to be revisited after three years, should the two sides wish to do so. As a consequence, it is not as controversial as some of the other free trade agreements we have dealt with.

The CEFTA is comprised of four linked agreements: a main trade agreement and three bilateral agreements on agriculture between Canada and Norway, Iceland and Switzerland, respectively. Liechtenstein is covered in the Canada-Switzerland agreement. Under the terms of the main agreement, tariffs on all non-agriculture products will be eliminated immediately upon entry into force of the agreement. The only exception is Canadian ship tariffs. Tariff reductions in agriculture are country-specific, as will be discussed later.

With respect to ships, boats and floating structures, the committee heard that the Canada European free trade agreement provides the Canadian shipbuilding industry with one-way protection by which Canadian shipbuilders gain immediate and full access to the EFTA market, while certain protections are maintained in Canada. It is not an unusual type of provision.

For Canada's most sensitive shipbuilding products, there will be a 15 year phase-out of Canada's existing 25% tariff. For less sensitive products, the total phase-out period is 10 years. In all cases, however, there will be no reduction in the import tariff for the first three years of the agreement.

The sole exception is for post-Panamax sized cargo ships, so named because they are too large to navigate the Panama Canal. According to officials from the Department of Foreign Affairs and International Trade, no Canadian shipyard claims to be able to lay down a hull of this size. The Canadian tariff on ships of this size will fall to zero immediately upon entry into force of the agreement, which makes common sense.

Moreover, the CEFTA also includes a safeguard mechanism which offers additional protection to the Canadian shipbuilding industry. If imports from EFTA are found to be causing injury to Canadian shipbuilders within the 10 to 15 year phase-out period, then the tariff rate can revert to the pre-free trade rate of 25% for up to three years. The committee also heard that the CEFTA does not oblige Canada to modify its buy Canada procurement policy for ships.

Addressing the issue of agriculture and agri-food products, which is another area of concern, certainly the content of the three bilateral agreements on trade and agriculture differ from one another, reflecting the unique sensitivities and priorities of Canada and the individual EFTA countries. Under all three agreements, most agriculture and agri-food products will be traded tariff-free. However, each country gained and/or limited concessions on certain key agricultural and agri-food industries.

For example, the committee heard that Canada did not make any over-quota tariff concessions on supply-managed agricultural products, but did grant to Switzerland tariff-free in-quota access to the Canadian cheese market. Canada also gained improved, but not tariff-free, market access to certain sensitive sectors in EFTA countries. These include frozen french fries in Iceland, frozen blueberries and durum wheat in Norway, and durum wheat and horse meat in Switzerland.

The committee heard that the expected economic gains from tariff reductions under this trade agreement will be modest. Tariffs on many non-agriculture products are at perhaps what I would say are nuisance levels, 2% or less, and many other products are already traded tariff-free.

Nevertheless, several witnesses anticipated an increase in trade to result from this agreement. Certain Canadian industries are expected to benefit from improved market access, particularly in agriculture where most of the major tariff reductions are found. Some industrial sectors are expected to benefit as well. These include wood and metal products in Iceland, apparel products in Norway, and cosmetics in Switzerland.

Witnesses also observed that the benefits of the CEFTA may not be limited to lower tariffs. Other potential gains include opportunities for trade diversification, enhanced industrial cooperation, and through increased interaction with the European business active in the EFTA countries, closer economic ties with the European Union.

The agreement will also put Canada on an equal footing with EFTA's other free trade partners, and will give Canada an advantage over countries like the United States, which do not have a trade agreement with EFTA.

The committee also heard that trade agreements have an important symbolic impact.

The vice-president of government relations for Bombardier, George Haynal, when he appeared before the committee, stated that trade deals create a level of confidence among investors, even if, as in the case of CEFTA, investment is not included in the agreement.

Per Øystein Vatne, first secretary to the Embassy of the Kingdom of Norway, when he appeared before us, observed that the very presence of a free trade agreement creates interest in the business community; the appetite for trade missions to Canada from EFTA countries has increased markedly since the CEFTA was announced.

In fact, many of their parliamentarians appeared here in Ottawa before our committee as the negotiations were going on.

Some witnesses, however, expressed reservations about the deal. There is no question about that. Representatives from Canada's shipbuilding industry, in particular, were concerned about the potential impact of CEFTA on their sector.

Mr. Andrew McArthur, of the Shipbuilding Association of Canada, noted that Norway's world-class shipbuilding industry is not subsidized today, but owes its present competitiveness to generous government support in years past.

For this reason, Canadian shipbuilders wanted their industry to be explicitly excluded from the CEFTA, as it is from the NAFTA. They eventually agreed to accept a long term phase-out of tariffs, but their support was contingent upon a new Canadian shipbuilding policy that included a buy Canada policy for government procurement, and the combination of two existing support mechanisms that are currently mutually exclusive: the structured financing facility, SFF as it is known, and provisions for accelerated capital cost allowances, ACCA.

The CEFTA includes a long term phase-out of tariffs and preserves a buy Canada procurement policy, but no action has been taken on the SFF or capital cost allowances as of yet. As per their submissions to the government, representatives of Canadian shipbuilders and marine workers were adamant that without combined access to the SFF and ACCA, the impact of the agreement would be devastating to the industry and would lead to job losses. In their view, this additional government support was critical if the Canadian industry was to survive increased competition from Norwegian producers.

It was noted, however, that the tariff phase-out schedule, and safeguard provisions, for marine industrial goods was particularly generous. According to the counsel for the International Trade Group, Cyndee Todgham Cherniak, a lawyer who specifically deals with international trade, the 15 year phase-out on sensitive ship products is the second longest phase-out she has ever encountered in her study of 100 free trade agreements. However, Ms. Cherniak also cautioned the committee that this abnormally long phase-out period could meet some resistance at the WTO from other major shipbuilding countries, like China and South Korea.

In addition to shipbuilding, some concern was expressed about the impact of CEFTA on supply management in agriculture. Terry Pugh, executive secretary of the National Farmers Union, suggested that the in-quota tariff cut for supply managed products might weaken the foundation of the supply management program.

Finally, several witnesses noted that no economic impact studies had been conducted to estimate the effect of the CEFTA on the Canadian economy. It was suggested that without such studies, it was difficult to judge whether or not the deal would be good for Canada.

Certainly, we are an open committee and we collaborate very well. I would like to draw to members' attention the considerations of the Bloc Québécois, who were certainly very concerned about supply management and preserving it.

Since the elimination of the 7% tariff provided for in the agricultural agreement with Switzerland will affect only the market segment that is already covered by imports, the impact on our producers would be minimal.

However, this will make it all the more important to vigorously defend supply management at the WTO. A quota increase, coupled with the elimination of the within-quota tariff would expose our dairy farmers to increased competition from countries that, unlike Canada, subsidize their dairy production. Certainly, this is a point that the current government must take into consideration.

The Bloc were also concerned about shipbuilding. It felt that the adjustment period provided in the agreement is quite long, as it is, but it will be helpful only if accompanied by adjustment and upgrading programs for our shipyards. Otherwise, it will slow their decline, but nothing more.

Of course, that hits the concerns of possible subsidization and Norway understood this very well. It began a vigorous industrial policy and built up a health industry--

[The Acting Speaker, Conservative, Andrew Scheer]

The hon. member for Acadie—Bathurst on a point of order.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I think you will find that we do not have quorum in the House.

[The Acting Speaker, Conservative, Andrew Scheer]

I seem to see full quorum.

And the count having been taken:

The hon. member for Welland has approximately five minutes to conclude his remarks.

[John Maloney, Liberal, Welland, ON]

Mr. Speaker, there was a suggestion by the Bloc that Canada has neglected its marine industry for years. Today our shipbuilding sector has fallen so far behind that it will be necessary to work in double quick time to make it up to date, productive and financially healthy when the market opens up to complete competition.

The Bloc was concerned that the government must immediately develop an aggressive marine sector policy to allow our industry to adjust. This policy must facilitate the industry's access to capital, stimulate investment, give preference to local suppliers in government procurements and encourage ship owners to buy vessels here. The policy must ensure that our shipyards can count on a prosperous marine transport sector, both by stimulating coastal shipping and by putting some order into international marine transport.

I would like to make reference to the Canadian Shipowners Association, which unfortunately did not appear before committee but made some submissions subsequently. It is interesting from my perspective because I come from the Great Lakes area and the inland shipping domestic fleet is very important.

The core of the CSA fleet, however, the bulkers and self-unloaders are averaging 35 to 40 years old and must be replaced. A 50 year old vessel, even in fresh water, is at its maximum life expectancy. Typically, these vessels are 730 to 750 feet in length and carry 22,000 to 25,000 tonnes of cargo with a crew of approximately 20 to 22. The problem is that the replacement cost of these vessels is roughly in the $40 million to $50 million range.

Historically, many of these vessels were built in Canadian shipyards that existed in the 1960s and 1970s, but today it is suggested that the Canadian yards are not able to build these vessels required to upgrade the CSA fleet. It is significant to note that the last Canadian-built bulker was completed in 1985. These companies are faced with the challenge of purchasing new vessels offshore either in Europe or Asia.

When these new vessels are imported into Canada for use in the coasting trading, within domestic waters, they are subject to a 25% duty as we have referenced resulting in a duty of $10 million or more per vessel. This is not only a tax on the Canadian ship owners but also the end users of marine transportation. These costs are obviously passed on. Canadian industries and consumers will bear the burden.

In a highly competitive commercial environment, where a few additional cents per tonne are very significant, the 25% duty creates a competitive disadvantage for those companies. As a consequence, they would like to see the 25% duty reduced as soon as possible. I would certainly like to reference that because of their inability to appear before committee at the time.

Perhaps I could conclude with a brief summary. CEFTA is a basic free trade agreement covering trade in goods. It includes no significant provisions on matters such as services, investment and intellectual property, but does leave the door open for these issues to be revisited. In terms of market access, the benefits of this agreement to Canada will largely be in the agriculture and agri-foods sectors. Some industrial sectors will benefit as well, although in most cases tariffs on non-agricultural products are not significant.

Shipbuilding was the most contentious issue of the trade negotiations and it would appear from the debate here this evening that it continues to be. It appears that Canada was able to successfully obtain generous phase-out terms giving the Canadian industry considerable time to adjust to increased competition from EFTA shipbuilders. However, concerns were raised about the long term viability of the Canadian shipbuilding sector in the absence of additional government support.

Therefore, the Canadian government must without delay implement an aggressive marine policy to support the industry while ensuring that any such strategy is in conformity with Canada's commitment at the WTO. That is subsidization specifically.

This agreement promises modest gains in trade and could pave the way for an expanded agreement that includes subjects like services and investment. Moreover, the point of several witnesses is that the very presence of a free trade agreement could create interest within the business community to explore economic opportunities in Canada and the EFTA countries.

In addition to reducing the tariffs, CEFTA would also act as a catalyst for increased trade investment and economic cooperation between Canada and the EFTA countries.

We are certainly in support of the agreement, but we want to make sure that the agreement reflects what we heard. That is why we would like to send it back to the international trade committee for further consideration.

[The Acting Speaker, Conservative, Andrew Scheer]

It being 5:39 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from May 27 consideration of the motion that Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to a committee.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a pleasure to speak to the bill dealing with the European free trade agreement with Canada.

The bill is one that started its progression internationally in 1998 when the then government of Mr. Chrétien moved forward on deliberations with our partners and began dealing with this particular issue. The agreement was signed on January 26, 2008, in Switzerland and it was tabled in our Parliament on February 14, 2008.

The purpose of the bill is to eliminate duties on non-agricultural goods and selected agricultural products, giving Canadian exporters better access to Canada's fifth largest merchandise export destination. Many Canadians would find it interesting that the particular destination is a group of northern European countries, including Liechtenstein and Norway.

This particular free trade agreement is one that has broad support. The Liberal Party supports this particular bill. There are some concerns in a few sectors, including shipbuilding, but I think we have worked together quite well to put forth some solutions that would enable our shipbuilders in Canada to find some recourse because the phase-out of tariffs will be over quite a prolonged period of time.

We want to ensure that in Canada we capitalize on our areas of expertise, and one of those is, quite frankly, in the shipbuilding area. On the east coast and west coast of Canada and in my riding of Esquimalt—Juan de Fuca, we have outstanding individuals, fine craftsmen and craftswomen, who work in the shipbuilding industry and provide exceptional products.

Some of those have been built for our Canadian Forces. When Liberals were in government, we commissioned a number of projects, including the Orca class of boats that have been built in my riding of Esquimalt—Juan de Fuca by the shipbuilders there. Quite frankly, the product they have is superb.

My hope is that the government will work with our private sector to ensure that our capabilities will be exported and that those capabilities will find markets in other countries. It would certainly be a fine testament to the exceptional workers that we have in our country, in both eastern and western Canada, who have that ability.

There is one area in shipbuilding in particular that the government may wish to pick up on. We have a tariff on importing ships. A company in Canada that wishes to import a large vessel would pay an import duty. That duty goes into general revenue.

The government would be wise to consider, rather than putting those import duties into general revenue, to put them into a fund that would have to be matched by the private sector, which would double the size of the fund, so that those moneys could be directed toward infrastructure for the shipbuilding industry. The funds spent by the companies could then be recirculated within the shipbuilding industry. The private sector would then know that its import tariffs were going back into the shipbuilding industry.

Third, it would also increase the bang for the buck because the government would be putting those moneys in to match. The matching funds would share the responsibility between the private sector and the government, so there would be dual responsibility and a dual opportunity for both the private sector and the government to enable the private sector to compete with other shipbuilders, particularly those in northern Europe, who quite frankly have done a pretty good job of developing a fine product and are competing internationally.

However, those countries subsidize their domestic shipbuilding capabilities, and while they do it in certain ways, it is important that our shipbuilders not be under the gun or behind the eight-ball when they are competing with other shipbuilding companies in other parts of the world.

The scope of the bill is very interesting. As I said before, the EFTA countries are the world's fourteenth largest merchandising traders and Canada's fifth largest merchandise export destination.

The two way Canada-EFTA non-agricultural merchandise trade is, in total, $12.6 billion. Our exports to the EFTA were $5.1 billion last year and our imports were $7.4 billion. Our exports included areas such as the aerospace products industry and I want to take a moment to talk about the MacDonald-Detweiler issue when the government, I think wisely, made the decision to prevent that sale from occurring.

There is a challenge, though. While the MDA sale was quite rightly blocked because Canada and Canadian taxpayers had put more than $500 million into enabling MDA to be a world leader in the aerospace industry and paid for satellites that are some of the best in terms of earth monitoring capabilities, there is another side to this. There are over 1,200 scientists at MDA and unless they have products to sell and be competitive internationally, we will lose those scientists.

It took some 20 years to bring those scientists to Canada and to build and create the capabilities. It is of the utmost urgency that the Minister of Industry work with and listen to MDA to find ways to ensure that those scientific capabilities stay within Canada. If we do not, the very real danger is that we will lose that world class capability we have within MDA with the pool of 1,200 scientists to other parts of the world. In particular, we will lose them south of the border to the United States.

This is not something we can wait on for a long period of time. This is something that has to be done quite quickly. I would again urge the Minister of Industry or industry officials to meet with MDA officials to determine what we can do to ensure we do not have this loss of very highly skilled, extraordinary individuals.

The other issue I want to talk about is international trade, as this is a trade issue, dealing with the WTO and the Doha round of talks. This is very appropriate given the fact that we have a world food crisis on our hands. It has caused governments to collapse and food riots, and it particularly affects those citizens of our planet who are the poorest and most impoverished in the world. One billion people live on less than $1 a day and 1.5 billion people live on less than $2 a day. Two and a half billion people on our planet live on less than $2 a day.

What happens if our foodstuffs increase 140% in a matter of less than a few months? That is what happened with rice. This year, rice prices have increased 141%. Wheat, sorghum, corn, the staples of life, have increased significantly over the last two years. Some have even increased 25% in a day.

Most of us in our country have been somewhat insulated from the effects of that for various reasons, but for the poorest people in the world, that is not the case. People living on less than $2 a day have a choice between food and sending their children to school, food and having a roof over their heads, or food and health care. Those are the stark choices people would have if they lived in those countries in the world, more than 58, where there is endemic poverty.

The food crisis has not hit us yet in terms of prices but it will. When it hits, it is those Canadians who are least able to afford it who are going to be hurt, people who are single parents with very little money, people making minimum wage or a bit above it, and seniors on fixed incomes who live hand to mouth. The implications of this are quite significant.

What if people have to make choices within food groups? That is how it happens. As prices increase dramatically, people actually have to jettison vital food groups that are important not only for the health of adults but are critical for the development of children.

We know that the deprivation of micronutrients and malnutrition on a developing child is catastrophic. If children are deprived of micronutrients and are malnourished, the developing brain in particular is affected. Malnutrition and micronutrient deficiencies create long term cognitive, intellectual and physical disabilities that are permanent.

Children would grow up to be adults who are less than what they could be. The downstream effects of this are what? The downstream effects are that children who are deprived of micronutrients and are malnourished have long term physical, cognitive and intellectual disabilities that affect them when they are adults.

When they are trying to be employed; go to school; acquire training; live and work; act, behave and interact; all of those are negatively impeded by virtue of the fact of what happened when those individuals were children. Early deprivation has long term, profound implications not only for the individual but for society as a whole. The tragedy of it is that it is entirely preventable.

When we know that, it behooves us to start to tackle this issue in a pragmatic way. Let us talk about some of the antecedents as to why the food crisis is taking place. Demand, to be sure, is going up in countries such as India and China, pushing prices up.

Second, there is the issue of higher energy costs. Energy is required to produce fertilizers. Seeds are becoming more expensive. Availability is down. Biofuel, the conversion of foodstuffs such as corn into ethanol, which is put in our gas tanks, is also a driver to move prices up.

The last and the most pernicious area is the area of trade barriers. There is something we could do that would dramatically ameliorate the effects of food prices and that is the tariff and non-tariff barriers to trade that are dramatically impeding our ability to be able to produce the food that we require.

Imagine that the Doha round and WTO has ground to a halt. It started in 2001, I believe, and it has been sitting there moribund or endlessly going around in one big circle. The countries that are most responsible for this are those that are the richest. The countries that pay the price are those that are the poorest.

Imagine that. We have a world food crisis where some of the poorest people in the world are unable to put food on the table and we, as developed countries that are the richest countries in the world, are actually doing things to prevent people who need food, who live on less than $2 a day to feed their children and themselves.

Why has the government not demanded an emergency series of debates at the WTO to move the Doha round forward and to implement the Doha round of agreements? This is something that our new Conservative government has fallen flat on, among many other things on the international stage. Why has the government not done this, instead of sitting back? Why has the government not taken a leadership role to address this international challenge?

Canada can do this. We can take a role in mobilizing the more than 27 agencies such as the World Bank, FAO, IFAD, WFP, and WTO. All of those organizations, 27 in total, are tasked with a responsibility to deal with food issues.

Canada can make a profound impact at the WTO. Canada needs to get our diplomats behind this. There has to be a sense of urgency that has to come from the Prime Minister's Office. The Prime Minister has to tell our highly competent diplomats to move this forward and get the job done. They have to get the Doha round of agreements completed and mobilize this with our international colleagues.

On the development stage, we have heard very little. In fact, we have heard nothing on this. Moneys were given. A good thing the government did was to not tie the aid and I compliment it for that.

The amount of money given by the government was $50 million more than last year, but prices have increased by 40% plus for the demands that the World Food Programme is trying to meet.

We have an increased demand but we also have increased costs. As a result, the amount of money that we are actually putting forward on this is not even able to keep up with the increases in prices. This is something that is unconscionable.

What else can happen? As I said before, some 500 million small landholders live on less than a hectare. About a tonne of foodstuffs, grain and basic products can be derived from a hectare. We know what we could do. Jeffrey Sachs from Columbia University has made some very eloquent interventions. We could double or even triple the output from these small landholders, who are some of the poorest people in the world.

Imagine if Canada were to tap into some of the extraordinary research available in the International Development Research Centre and other areas in Canada to deal with the issues of better seed quality, better access to fertilizer and markets and better agricultural practices, water security and irrigation techniques. That combination could be used quite significantly to triple the output of foodstuffs from small landholders. What a remarkable thing we could do if Canada were to take up that leadership role.

I would be remiss if I did not draw attention to two areas of excellence within CIDA. One is the micronutrient initiative in which Canada plays a leadership role. I urge the government to work with the Minister of International Cooperation and other partners to support this initiative because micronutrient deficiencies have a profound impact on developing children.

CIDA has discovered high protein, high caloric, high energy bars. The government could work in this area as well because these bars would be effective during a food crisis.

I also want to talk about food security and, in particular, the fisheries issue.

A good chunk of the world relies on fish for food because it is an important source of protein. Ninety per cent of world fish species have been removed from the oceans, particularly large fish species like tuna and shark. This is a catastrophe. Our oceans are dying. Dr. Sylvia Earle from Woods Hole in Massachusetts has done an excellent job of articulating this. She calls it the dying oceans. Why is the government not dealing with this catastrophe?

I will give the House an example. As draggers fish, they destroy the beds upon which fish reproduce. Draggers are horrible, destructive elements in fishing and they are creating an environmental catastrophe. If Canada were to work with our partners to ban dragging, that would go some way toward addressing the problem of our dying oceans. The reason I mention this is because this is part of international trade agreements and trade negotiations.

We have heard nothing from the government on all these issues. We have given the government a number of constructive solutions on which it could act. It could act on the food crisis. It could act through international development and trade. The government could ensure that Canadians are not going to be affected by the storms that are wafting over the world right now. So far we have been somewhat protected, but that is not going to exist much longer.

These are big international issues that demand international action. Our country can act with authority and knowledge. I implore the government to demonstrate some leadership and do this for our citizens and for the world.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, I am glad the member has spoken to the European Free Trade Association agreement with Canada. As he is well aware, it is an agreement between the Government of Canada and EFTA, which is a bloc of four countries, Iceland, Liechtenstein, Norway and Switzerland, to implement a bilateral trade agreement between us and those four countries. It is a bloc of countries that is made up of about 12 million citizens. It is a good trade deal because it is a free trade deal with countries that have similar or even higher labour and environmental standards as compared to Canada's. It is a step in the right direction.

I note that this is in Europe. The big trading bloc in Europe is the European Union, an area of about 27 countries and close to 500 million citizens.

What does the member think the Government of Canada needs to do in order to conduct a trade agreement with the European Union? The real future opportunity for Canadian trade, for Canadian business and for Canadian society is under a free trade agreement with the wider European Union, as I mentioned before, a trading bloc. It is one of the largest trading blocs in the world, made up of close to half a billion citizens and 27 member states. What does the member think we need to do as a country, as a government, to move that sort of trade deal along now that we have the first building block of a free trade agreement with the EFTA?

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, my colleague has hit on a very intriguing challenge for the reasons he has mentioned, in terms of the size of the existing population. He also knows there are enormous barriers within that bloc, particularly in terms of the trade subsidies, the tariff and non-tariff barriers, that exist within the European Union and between the European Union and us.

I submit that there are two channels we could take.

One is to pursue it through negotiations, but be very certain that our domestic producers will not be harmed. Critical to that and incumbent upon the European Union is to remove the tariff and non-tariff barriers that so far have created tremendous price distorting issues, not only in the agricultural sector but also the non-agricultural merchandise sector too.

The second channel is we move to the WTO. The member knows I have a particular passion, and I know he does too, in dealing with the Doha round of talks. It is unfathomable I think to most of us to see the intransigence on the part of the Europeans in trying to move forward with something that will help the most impoverished in our world. The failure to complete the Doha round is self-defeating. In the absence of moving through Doha and in the absence of completing these talks, we affect negatively the very security that we are trying to deal with not only in Afghanistan but also in other parts of the world. The failure to complete Doha creates insecurity in some of the most impoverished parts of the world, which ultimately will come to address us in terms of insecurity.

I will close by one point. Maybe the area in which we can attract our European friend on this is the issue of immigration to Europe from other parts of the world that are quite poor and the effect that has in its own countries. They are deeply concerned by the immigration issue. If they were able to go and complete Doha, then a lot of the people who would go to their countries, seeking simply a better and more secure life, as any of us would do, would not happen.

Therefore, the carrot for the European countries would be diminished immigration. A lot of the immigration challenges and racial issues within Europe would be defused. They would also be providing security in areas that have been a source of terrorist activity and insecurity for Europe.

[The Acting Speaker, Conservative, Andrew Scheer]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Conservative, Andrew Scheer]

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

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Andrew Scheer]

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

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Andrew Scheer]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Andrew Scheer]

In my opinion the yeas have it.

And five or more members having risen:

Accordingly the division on the motion stands deferred until the end of government orders today.

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Don Valley East, Federal-provincial Relations; the hon. member for Bramalea—Gore—Malton, Citizenship and Immigration; the hon. member for Rimouski-Neigette—Témiscouata—Les Basques, World Food Crisis.

The House resumed consideration of the motion that Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the second time and referred to a committee.

[The Deputy Speaker, NDP, Bill Blaikie]

It being 5:40 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at second reading of Bill C-55.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Vote #116

[The Deputy Speaker, NDP, Bill Blaikie]

I declare the motion carried. Consequently, this bill is referred to the Standing Committee on International Trade.

(Bill read the second time and referred to a committee)