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

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, it gives me a great deal of pleasure to speak to the issue before the House for a number of reasons. We are debating Bill C-2, 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 bill has been reintroduced. It was formerly known as Bill C-55, enabling legislation of the Canada-EFTA agreement signed in January 2008 by the present government during the 39th Parliament.

One of the reasons I am pleased to speak to this issue is that the bill was initially introduced by my predecessor in the riding of Vancouver Kingsway, the former minister of international trade.

I would like to take a rather different approach to a proper trade policy for Canada, vis-à-vis the policy that was being pursued in the previous Parliament.

I would like to begin my remarks by talking about the opportunity this legislation gives us to analyze what would be an appropriate trade policy for Canada in 2009 and as we go forward.

In my view and the view of our party, the principles that ought to be attached to an intelligent policy on trade at the present moment and in the years ahead are based on the following:

We must base our policy on the concept of fair trade, not free trade. We must base our policy on the notion of having balanced and reciprocal agreements, that is, agreements that actually respect the principles enshrined in the agreements and which guarantee that both countries have equal and untrammelled access to each other's markets. I will speak about this a bit later and we will see that a number of our recent agreements have failed in this regard.

Our trade policy ought to be based upon a foundation of a strong Canadian industrial strategy; that is, we profit best on the world stage and in our trade relationships when we have strong industrial sectors in Canada and approach trade from a position of strength for our Canadian businesses and workers.

We also need to build our policy on a position of a sound agricultural sector and well-functioning professional and service sectors. In other words, we need to build our trade policy on a strong foundation of a well-functioning and healthy domestic economy.

Unfortunately, this trade agreement does not meet the test of the principles I have just outlined. It falls short in several key areas.

As has been pointed out by several of the eloquent speakers who have preceded me, the essential problem with this piece of legislation is that it would phase out tariffs. This would put at risk a couple of very key and pivotal sectors of the Canadian economy, including the shipbuilding and agricultural sectors.

To elaborate more upon the concept of free trade, and fair trade as a distinction, I want to explain what I mean when I say fair trade. What we in the New Democratic Party mean by that is that we must ensure that we enter into agreements with other nations that respect the principle of fair wages for their workers and respect the principle of avoiding unfair subsidies to their industries. I will speak about this particular aspect with respect to shipbuilding and what Norway has done in contrast to what the Canadian government has done over the last decade.

Any agreement must be based on the concept of true reciprocal access to each other's markets and enforce standards in environmental protection, safety and employment standards.

If we enter into trade agreements with countries that do not have respect for each and every one of these principles, then we put at risk Canadian domestic sectors and we do a disservice not only to Canadian businesses but also to the workers they employ.

Agriculture and shipbuilding are two pivotal key sectors that are put at risk by the provisions in the agreement. Both sectors are particularly important to British Columbia, the province from which I come.

Agriculture is a very important industry in the province of British Columbia. I see a number of MPs who joined me last night at an event put on by the dairy producers. Dairy production is a very important part of British Columbia's agricultural sector. British Columbia has the third largest production of dairy products in Canada. It employs thousands of families. It is a clean and renewable sector. It is an important part of our domestic food supply. We need to ensure that this sector remains healthy in Canada so that we have a stable food supply for our country not only today but in the years ahead.

Shipbuilding is an industry which my colleagues have spoken about. It has a long proud tradition in this country from the east coast to the west coast. On the west coast the shipbuilding industry has been under a severe strain for the last several decades. This bill, unfortunately, would do nothing to help in that regard.

Essentially, this legislation would reduce tariffs on ships from 25% to 0% over a period of 10 or 15 years, depending on the types of products. One category of ships would go down to 0% right away. This provision refers to very large ships in the category of post-Panamax, which are ships that are not able to go through the Panama Canal.

If this bill were to pass, the Canadian shipbuilding industry, which we want to encourage to build ships, would have to compete with shipbuilding industries in other countries that have been supported by their governments in a manner that the Canadian government has not done domestically. This would put our domestic shipbuilders at great risk. Specifically, our analysis has shown that Norway has had a great head start in terms of support for its domestic shipbuilding industry and with that head start, Norway is able to produce ships which, unfortunately, Canadian shipbuilders would have a difficult time competing against.

Andrew McArthur of the Shipbuilding Association of Canada has made a compelling case on behalf of Canadian shipbuilders to have this industry explicitly excluded from this bill, as it is from NAFTA, I would point out. He notes that Norway's world-class shipbuilding industry is not subsidized today, but it does owe its present competitiveness to generous government support in years past.

This is not just a position that is taken by our party. It is a position that has been validated by industrial sectors and business people in civil society in Canada.

It is precisely the type of policy that has allowed Norway to become the world-class player that it is today. This is precisely what the federal government, once again, has failed to do by not supporting Canada's shipbuilding industry.

In terms of British Columbia, recently the current federal government and the present Liberal government in British Columbia declined to stand up for our shipbuilding industry. The example is British Columbia ferries. Hundreds of jobs were lost by the shortsighted government investment in a German shipbuilding industry rather than supporting British Columbia jobs for building ferries in B.C. coastal waters. Our party has asked that the import duties on three super C-class B.C. ferries built in Germany be entirely sent to support the shipbuilding industry in British Columbia. This very reasonable request has been refused by the current government. It would go a long way to providing some much needed money to kick-start the shipbuilding industry in British Columbia.

Shipbuilding and agriculture, besides being two key industries, are industries that not only provide good jobs but they are the jobs of the future and are sustainable.

In terms of shipbuilding, not only does it provide good, well-paying jobs upon which families can be raised, it also has multiplier effects and spin off jobs in a lot of areas in our economy, which I would think all members of the House would be interested in supporting, including research and technology, development, skilled trades, professional designing, engineering and other types of jobs that are not only the jobs of the future, but are jobs that our children will want to be trained for and occupy in the years ahead.

It is very important, when we talk about developing a trade policy that works in the years ahead, that we pay homage not only to the concept of having access to markets, but also one that promotes a strong national economy at the same time. I think I mentioned earlier that I would speak of an example where a previously poorly negotiated trade agreement resulted in us not getting the access that was promised. This example is illustrated by the softwood lumber agreement, where not only do our producers end up having to forfeit billions of dollars in duties to the United States, but at the end of the day we do not have the untrammelled access to the market we were promised by the agreement.

In my home province of British Columbia forestry is an incredibly important sector that at present is suffering in a terrible way. An almost record number of mills have shut down. I have been told by both trade unions and representatives of the business sector that they cannot remember the forestry sector being in such poor shape in living memory. Those who have studied the issue compare it to the worst state since the Depression. Tens of thousands of workers and their families have been laid off. We simply have a problem that is harming the economy of British Columbia and Canada, and part of its roots can be traced to poor trade agreements.

It is so critical, when we do negotiate trade agreements like the present one, that we ensure we get them right. In this case, we have to ensure that the interests of our domestic industries, like shipbuilding, agriculture and any other industrial sectors, affected by this are taken into account and taken care of so we do not subject them to further erosion, job loss and difficulties in terms of bringing their product to market, which is what this bill would do.

There are some good things in the bill. Entering into trade agreements with progressive countries that have respect for their workers and the environment, like the types of countries covered by this agreement do, is a good step. However, the legislation can be improved. In that respect, I would ask that the government listen to the remarks made by my colleagues and all members of the House, who seem to consistently point out the same problems, and ensure we develop and enforce policies that will ensure we have a strong shipbuilding industry, on both the west and east coasts, and a strong agricultural sector across the Prairies, Ontario, Quebec and wherever we have vibrant food production in this country.

We need to ensure we have a vibrant forestry sector and industrial and professional classes in our country, which will ensure we create the jobs that are not only so needed today in this time of economic crisis, but which will also form the basis for a strong economy in the days, weeks, months and years ahead.

There is some money in the budget for shipbuilding, and it is pleasing to see that. While that is a good start, as has been pointed out by my colleagues, it is far too little. There is a bit of money for some Coast Guard vessels. There is a bit of money to replace some aging infrastructure, including some wharves. However, in terms of a true Canadian policy that will kick-start and sustain our shipbuilding industry, the budget simply does not do that.

I would encourage the government and all members of the House to pay attention to this, because we all have an interest in developing a vibrant Canadian economy in this regard.

George MacPherson, the president of the Shipyard General Workers Federation of British Columbia has stated the following:

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.

That is from someone who is involved intimately with the shipbuilding industry in our country. The House would do well to follow and listen to his warnings in this regard.

Again, Mr. Andrew McArthur from the Shipbuilding Association for the management side takes a similar view. He says, “We have to do something to ensure shipbuilding continues”.

The easiest thing is to carve it out from EFTA, the present legislation before the House, and if members do one thing, it is this. They should convince their colleagues in government to extend the ship financing facility, make it available to Canadian owners in combination with the accelerated capital cost allowance and we will have as vibrant an industry as exists.

When we have the unique situation of both the industry businesses as well as representatives of the workers joining and meeting minds on this issue, it would well behoove the members of the House to pay attention.

It would be my great hope that the members of the House would join together and urge the government to amend the legislation, which, once again, does go some distance in arriving at an agreement that may derive benefits for our country and improve the legislation.

In the case of the government, the previous minister has stated that the shipbuilding industry is of strategic importance to the sovereignty of this nation. Our defence minister , in a press release last summer stated that the “government recognizes the challenges being faced by the shipbuilding industry and is taking real action to help both in the short and longer term”. He said that as a marine nation, Canada needed a viable shipbuilding industry to support our sovereignty.

Those are good words and I hope the government backs up those good words with policies and actions that are consistent with that rhetoric.

It is vital in this legislation that we heed not only the comments made by members of the House, both within and outside the House, but that we pay heed to the comments of the industry and to the interests of the workers and that we continue to work toward a policy that will create the kind of economy that will serve us in the future.

My colleague from Halifax had an all party press conference in Halifax at a shipyard. Once again, this underlines the fact that all parties of the House ought to be interested, as is my party, in developing and reinvigorating a shipbuilding industry that can derive and produce benefits for this country.

Reference has been made to the Jones act in the United States. which has been in place since the 1920s and which the United States has studiously refused and resisted abolishing, including during the NAFTA negotiations. That act requires the United States to have American built, American registered, American staffed vessels operating on intracoastal waters in the United States. That is sound policy for the United States and it is a policy that we should be pursuing in Canada as well. Once again, it is a principle that, unfortunately, the legislation before the House does not respect.

I hope members of the House would join me in standing up for a strong, vibrant Canadian shipbuilding industry, a strong and vibrant agricultural industry and fair trade policies upon which we can continue Canada's proud tradition as a trading nation.

Those are my comments. I would be delighted to entertain any questions that any members of the House may have.

Canada-EFTA Free Trade Agreement Implementation Act

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Speaker, Bill C-55 not only affects shipbuilding bit it also affects many other areas in Canada.

Destructive legacies, such as the softwood lumber sellout have eroded our confidence in the ability of the government to defend the best interests of Canada through trade agreements.

There is a lot of agriculture in Nickel Belt, especially in the Verner area. The NFU is concerned about this agreement because the provisions within the agreement concerning agriculture defer to the World Trade Organization dispute settlement mechanism which will have a very negative impact on supply management by weakening Canada's position.

What could the government do to improve this bill as it relates to agriculture?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I thank the minister for telling me where the minister is. I know we are not permitted to say he is not in the House. One thing for sure: he went to Davos and said he wanted to meet with the director general of the WTO himself to revive the Doha round. Reviving it for certain trade agreements is one thing, but putting that instrument back on the table, when it has been discussed and it would jeopardize the supply management system, is cause for concern. The Bloc Québécois will be even more vigilant in this regard.

With regard to the present agreement, we will look closely at what happens. Elimination of the 7% tariff, as provided in this agreement, makes it even more necessary that the government take a firm position at the WTO. Supply management is simply not negotiable. We have to say that and keep saying it. We believe that weakening supply management would justify renegotiating the agricultural agreement with Switzerland.

It should be noted that the part dealing with modified milk proteins, which were debated in the House of Commons not long ago, has also been properly examined. Switzerland is a major producer of modified milk proteins. At present, Swiss products are processed to the point that the tribunals have held that they are not agricultural products. They are therefore not covered by the agricultural accords referred to in Bill C-2. In any event, a schedule to the agreement excludes them completely. So milk proteins are excluded from the accord and tariff rate quotas and over-quota tariffs remain unchanged. In other words, products under supply management are still protected. That is what we currently see in practice and it is what we see in the bill. As I said, we will nonetheless be vigilant when it comes to agriculture, because that is our duty.

There is an interesting aspect to this agreement: it does not make the same mistakes that other Canadian agreements did. For example, NAFTA and the agreements with Costa Rica and Chile—two bilateral agreements—all have a bad chapter on investments, chapter 11, which gives corporations the right to bring proceedings directly against a government if it adopts measures that reduce their profits. The agreement before us, which we have been discussing for several hours, contains no such provisions.

I would like to point out that I worked with a member who was responsible for international trade. I was the deputy globalization critic. Some examples of chapter 11 action were absolutely ridiculous, and they must not be repeated. For example, in Mexico, an American company decided to take a municipality to court because it had adopted a bylaw prohibiting the development of a disposal site. Under chapter 11 of NAFTA, the company argued before the NAFTA tribunal that it would lose profits if not allowed to set up its disposal site at that location.

The municipality was taken to court under chapter 11 of NAFTA. I doubt that that is what the negotiators had in mind during NAFTA talks, but the pernicious effect of that part of chapter 11 led to that kind of completely unacceptable situation.

Fortunately, there is no chapter 11 in Bill C-2. The agreement with the European Free Trade Association covers only goods, not services. Therefore, we will not be forced to open public services to competition, whether provided by the government or not, because they are not included. Also, financial and banking services will not be exposed to competition from Switzerland, which has a very well-known banking system, or Liechtenstein, which is a true haven for the financial world when it comes to taxation and anonymity. None of that is included in this bill.

As my colleague from Sherbrooke just explained during questions and comments, the same is true of government procurement. The government is perfectly free to prefer Canadian suppliers, except as provided in the WTO agreement on government procurement. It would obviously be pretty ridiculous for the government to give itself a certain amount of latitude and then decide not to use it. We therefore want the federal government, which is the largest purchaser of Canadian goods and services, to prefer Canadian suppliers and show some concern for the spinoff effects of its procurement.

There was some discussion of this today in question period. We have to comply with the rules of the World Trade Organization, but there is absolutely nothing to prevent us from favouring local suppliers. The Americans are a problem for us now with their steel, but that is because they are not complying with some of the WTO rules. In other cases, though, when we have an opportunity to prefer our own employers and companies, we should do it and we should not hesitate.

One of the government’s first announcements after the election was the purchase of 1,300 trucks for the Canadian Forces, and the contract was quickly awarded to an American company. In my view, the Quebec company Paccar du Canada Ltée could very easily have filled this kind of order. Under the national security rules, the government could have ensured that such a contract was awarded within Canada. That would not break the WTO rules. We have to be very vigilant about other countries adopting extremely protectionist measures, but at the same time we are perfectly entitled to take steps to favour local suppliers, especially in these times of economic crisis. I cannot see why we would fail to take advantage of this right, especially when we are not contravening the WTO rules.

I spoke a little earlier about our shipyards. We are very concerned about some aspects of them, but we can still agree on a government policy if only the Conservatives would open their eyes and make an effort to ensure that the shipbuilding industry is not penalized too heavily by this bill. We are still concerned, however, about the future of our shipyards.

At present, imported vessels are subject to a 25% tariff. This is a form of protection, of course. However, under the agreement, these tariffs will gradually decrease over three years and will be completely eliminated in 15 years. Nevertheless, the government still has the flexibility to avoid the rocks and reefs that this kind of agreement could present and keep our shipbuilding industry afloat.

Our shipyards are far less modern and in much worse condition than Norwegian shipyards, for example. Norway has made massive investments in modernizing its shipyards, whereas the federal government has completely abandoned ours. If our borders were opened wide tomorrow morning, our shipyards could be wiped off the map. Yet for economic, strategic and environmental reasons, we cannot let our shipyards disappear.

Imagine the risks to Quebec, for instance, if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, which, I would remind the House, is the world's foremost waterway.

For years the Bloc has been calling for a real marine policy, and for years the government, whether Liberal or Conservative, has been dragging its feet. Now that the agreement has been signed, time is of the essence. We cannot waste any more time, since, as we have already heard, in three years the tariffs will begin diminishing and in 15 years the existing tariffs will be completely eliminated. The Bloc Québécois made a specific recommendation in committee on the matter. The recommendation reads:

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.

That was the only recommendation made in the report on that bill, which at the time was numbered C-55, and is now known as Bill C-2.

The Conservative policy of leaving companies to fend for themselves could be disastrous for shipyards, and we expect the government to give up its bad policy. 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. We need a real policy that covers all aspects of the industry.

Those are our concerns. There will always be some. As I said, the pros and the cons of any agreement must be weighed. Of course, the four countries we are talking about are not the biggest European economies. However, what is interesting about this free trade agreement is that it could be a foot in the door for an agreement with the European Union. That is the real issue. The Quebec government is currently lobbying and having discussions about a free-trade agreement with the European Union. A free trade agreement with Switzerland, Norway, Iceland and Liechtenstein is all well and good, but we have to be aware that it is very limited. Together, these four countries represent 12 million people and about 1% of Canada's exports. So, we are not doing the majority of our business with these countries. The real issue is the European Union, with its 495 million inhabitants—that is a much different story—who generate 31% of the world's GDP. The European Union is the strongest economic power in the world.

Since we are very dependent on the United States in matters of trade, this openness to Europe might be a very important alternative for the economy of Quebec and Canada. Canada is altogether too dependent on the United States. We send over 85% of our exports there. The slowdown in the American economy together with the explosive rise of Canadian petrodollars in contrast to the greenback, brings home the fact that our dependency weakens our economy. Quebec has lost over 150,000 manufacturing jobs in five years, including over 80,000 since the arrival of the Conservatives and their laissez-faire doctrine. It is wake-up time. An agreement with the European Union could reduce this trade dependency on the United States.

This vital diversification should not be undertaken first with China or India—countries from which we import eight times and six times respectively what we export to them. The first priority should be the European Union. This is the only way we will be able to diversify our markets and lessen our dependence on the United States. In addition, the fact that Canada has no free trade agreement with the European Union significantly reduces our business competitiveness in the European market.

In conclusion, this is a most important undertaking. The bill has shortcomings, specifically with regard to shipyards, but this can be resolved. There is no reason to ignore all the benefits that might accrue from an agreement with these four European countries, especially since, as I was saying, it could potentially lead to a free trade agreement with the European Union.

Canada–EFTA Free Trade Agreement Implementation Act

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

Mr. Speaker, today it is my pleasure to speak to Bill C-2, an act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association. The association is made up of four countries: Norway, Iceland, Liechtenstein and Switzerland.

As some of my colleagues mentioned this morning, this is the second time that Parliament is considering the bill to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association. During the second session of the 39th Parliament, Bill C-55 was passed at second reading, but could not be finalized before the 39th Parliament ended on September 7, 2008.

Bill C-2, which is before us today, and Bill C-55 are identical. I want to reiterate that the Bloc Québécois will support this bill because we believe that it will provide good trade opportunities for Quebec. Nevertheless, it is important to point out that this economic initiative, while very positive for Quebec, raises some concerns that I will explore later in my remarks.

As we all know, many Quebec businesses depend on exports to ensure growth. However, 85% of our exports are to the United States. That means that we have to diversify free trade.

International exports represent almost one-third of Quebec's GDP. 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 recession or a downturn in consumerism as is now happening with the Americans, coupled with the obvious aggression of emerging countries such as China, India and Brazil, we can see that it is getting more and more difficult to keep our place in the American market and to encourage growth in our manufacturing businesses. The results have been significant for Quebec. We have lost over 150,000 manufacturing jobs in the past five years, more than 80,00 of those since the Conservatives came to power.

The riding that I represent, Berthier—Maskinongé, has been severely affected by the loss of manufacturing jobs, particularly in the furniture and textile industries. If we were less dependent on the American market and our trading relationships were more diversified, I am convinced that our manufacturing sector would not be so hard hit.

And this is what makes the agreement that we are looking at today such an interesting initiative. It also offers new opportunities for Quebec business. For example, like Quebec, Switzerland has a large pharmaceutical industry, vigorous and innovative, especially with respect to brand name drugs. It is not surprising that Quebec is the Canadian leader in the field of brand name drugs because of its pool of skilled researchers and its favourable tax system. We could therefore easily imagine that in order to more easily break into the American market—

I think that I will stop there and continue after question period.

[The Chair, Conservative, Lee Richardson]

We'll come to order. This is meeting 35 of the Standing Committee on International Trade.

Today the scheduled topic is Bill C-55, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association, 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.

We're to hear witnesses today.

We have, from the Department of Foreign Affairs and International Trade, David Plunkett, director general, bilateral and regional trade policy; Marvin Hildebrand, director, bilateral market access; and Ton Zuijdwijk, general counsel, trade law bureau. From the Department of Finance, we have Christine Wiecek, senior economist, tariffs and market access; and from the Department of Industry, Chummer Farina, director general, aerospace, defence and marine branch. And from the Department of Agriculture and Agri-Food, we have Chantal Sicotte, senior trade policy analyst (Europe), eastern hemisphere trade policy, market and industry services branch.

It would be my suggestion that we hear from the witnesses. Should there be any other business or points of order, we wouldn't keep our witnesses here.

It looks like we're going to have a point of order, in any event.

Mr. Bains.

Extension of Sitting Hours

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, I would like at this time to move the standard motion that can be made only today. I move:

That, pursuant to Standing Order 27(1), commencing on Monday, June 9, 2008, and concluding on Thursday, June 19, 2008, the House shall continue to sit until 11:00 p.m.

Mr. Speaker, as I indicated last week in answer to the Thursday statement, this is we have work to do week. To kick off the week, we are introducing the customary motion to extend the daily sitting hours of the House for the final two weeks of the spring session. This is a motion which is so significant there is actually a specific Standing Order contemplating it, because it is the normal practice of this House, come this point in the parliamentary cycle, that we work additional hours and sit late to conduct business.

In fact, since 1982, when the House adopted a fixed calendar, such a motion has never been defeated. I underline that since a fixed calendar was adopted, such a motion has never been defeated. As a consequence, we know that today when we deal with this motion, we will discover whether the opposition parties are interested in doing the work that they have been sent here to do, or whether they are simply here to collect paycheques, take it easy and head off on a three month vacation.

On 11 of those occasions, sitting hours were extended using this motion. On six other occasions, the House used a different motion to extend the sitting hours in June. This includes the last three years of minority government.

This is not surprising. Canadians expect their members of Parliament to work hard to advance their priorities. They would not look kindly on any party that was too lazy to work a few extra hours to get as much done as possible before the three month summer break. There is a lot to get done.

In the October 2007 Speech from the Throne, we laid out our legislative agenda. It set out an agenda of clear goals focusing on five priorities to: rigorously defend Canada's sovereignty and place in the world; strengthen the federation and modernize our democratic institutions; provide effective, competitive economic leadership to maintain a competitive economy; tackle crime and strengthen the security of Canadians; and improve the environment and the health of Canadians. In the subsequent months, we made substantial progress on these priorities.

We passed the Speech from the Throne which laid out our legislative agenda including our environmental policy. Parliament passed Bill C-2, the Tackling Violent Crime Act, to make our streets and communities safer by tackling violent crime. Parliament passed Bill C-28, which implemented the 2007 economic statement. That bill reduced taxes for all Canadians, including reductions in personal income and business taxes, and the reduction of the GST to 5%.

I would like to point out that since coming into office, this government has reduced the overall tax burden for Canadians and businesses by about $190 billion, bringing taxes to their lowest level in 50 years.

We have moved forward on our food and consumer safety action plan by introducing a new Canada consumer product safety act and amendments to the Food and Drugs Act.

We have taken important steps to improve the living conditions of first nations. For example, first nations will hopefully soon have long overdue protection under the Canadian Human Rights Act, and Bill C-30 has been passed by the House to accelerate the resolution of specific land claims.

Parliament also passed the 2008 budget. This was a balanced, focused and prudent budget to strengthen Canada amid global economic uncertainty. Budget 2008 continues to reduce debt, focuses government spending and provides additional support for sectors of the economy that are struggling in this period of uncertainty.

As well, the House adopted a motion to endorse the extension of Canada's mission in Afghanistan, with a renewed focus on reconstruction and development to help the people of Afghanistan rebuild their country.

These are significant achievements and they illustrate a record of real results. All parliamentarians should be proud of the work we have accomplished so far in this session. However, there is a lot of work that still needs to be done.

As I have stated in previous weekly statements, our top priority is to secure passage of Bill C-50, the 2008 budget implementation bill.

This bill proposes a balanced budget, controlled spending, investments in priority areas and lower taxes, all without forcing Canadian families to pay a tax on carbon, gas and heating. Furthermore, the budget implementation bill proposes much-needed changes to the immigration system.

These measures will help keep our economy competitive.

Through the budget implementation bill, we are investing in the priorities of Canadians.

These priorities include: $500 million to help improve public transit, $400 million to help recruit front line police officers, nearly $250 million for carbon capture and storage projects in Saskatchewan and Nova Scotia, and $100 million for the Mental Health Commission of Canada to help Canadians facing mental health and homelessness challenges.

These investments, however, could be threatened if the bill does not pass before the summer. That is why I am hopeful that the bill will be passed by the House later today.

The budget bill is not our only priority. Today the House completed debate at report stage on Bill C-29, which would create a modern, transparent, accountable process for the reporting of political loans. We will vote on this bill tomorrow and debate at third reading will begin shortly thereafter.

We also wish to pass Bill C-55, which implements our free trade agreement with the European Free Trade Association.

This free trade agreement, the first in six years, reflects our desire to find new markets for Canadian products and services.

Given that the international trade committee endorsed the agreement earlier this year, I am optimistic that the House will be able to pass this bill before we adjourn.

On Friday we introduced Bill C-60, which responds to recent decisions relating to courts martial. That is an important bill that must be passed on a time line. Quick passage is necessary to ensure the effectiveness of our military justice system.

Last week the aboriginal affairs committee reported Bill C-34, which implements the Tsawwassen First Nation final agreement. This bill has all-party support in the House. Passage of the bill this week would complement our other achievements for first nations, including the apology on Wednesday to the survivors of residential schools.

These are important bills that we think should be given an opportunity to pass. That is why we need to continue to work hard, as our rules contemplate.

The government would also like to take advantage of extended hours to advance important crime and security measures. Important justice measures are still before the House, such as: Bill S-3, the anti-terrorism act; Bill C-53, the auto theft bill; Bill C-45 to modernize the military justice system; and Bill C-60, which responds to recent court martial decisions.

There are a number of other bills that we would like to see advanced in order to improve the management of the economy. There are other economic bills we would like to advance.

These include Bill C-7, to modernize our aeronautics sector, Bill C-5, dealing with nuclear liability, Bill C-43, to modernize our customs rules, Bill C-39, to modernize the Canada Grain Act for farmers, Bill C-46, to give farmers more choice in marketing grain, Bill C-57, to modernize the election process for the Canadian Wheat Board, Bill C-14, to allow enterprises choice for communicating with customers, and Bill C-32, to modernize our fisheries sector.

If time permits, there are numerous other bills that we would like to advance.

These include Bill C-51, to ensure that food and products available in Canada are safe for consumers, Bill C-54, to ensure safety and security with respect to pathogens and toxins, Bill C-56, to ensure public protection with respect to the transportation of dangerous goods, Bill C-19, to limit the terms of senators to 8 years from a current maximum of 45, and Bill C-22, to provide fairness in representation in the House of Commons.

It is clear a lot of work remains before the House. Unfortunately, a number of bills have been delayed by the opposition through hoist amendments. Given these delays, it is only fair that the House extend its sitting hours to complete the bills on the order paper. As I have indicated, we still have to deal with a lot of bills.

We have seen a pattern in this Parliament where the opposition parties have decided to tie up committees to prevent the work of the people being done. They have done delay and obstruction as they did most dramatically on our crime agenda. They do not bother to come and vote one-third of time in the House of Commons. Their voting records has shown that. All of this is part of a pattern of people who are reluctant to work hard.

The government is prepared to work hard and the rules contemplate that it work hard. In fact, on every occasion, when permission has been sought at this point in the parliamentary calendar to sit extended hours, the House has granted permission, including in minority Parliaments.

If that does not happen, it will be clear to Canadians that the opposition parties do not want to work hard and are not interested in debating the important policy issues facing our country. Is it any wonder that we have had a question period dominated not by public policy questions, but dominated entirely by trivia and issues that do not matter to ordinary Canadians.

The government has been working hard to advance its agenda, to advance the agenda that we talked about with Canadians in the last election, to work on the priorities that matter to ordinary Canadians, and we are seeking the consent of the House to do this.

Before concluding, I point out, once again, that extending the daily sitting hours for the last two weeks of June is a common practice. Marleau and Montpetit, at page 346, state this is:

—a long-standing practice whereby, prior to the prorogation of the Parliament or the start of the summer recess, the House would arrange for longer hours of sitting in order to complete or advance its business.

As I stated earlier, it was first formalized in the Standing Orders in 1982 when the House adopted a fixed calendar. Before then, the House often met on the weekend or continued its sittings into July to complete its work. Since 1982, the House has agreed on 11 occasions to extend the hours of sitting in the last two weeks of June.

Therefore, the motion is a routine motion designed to facilitate the business of the House and I expect it will be supported by all members. We are sent here to engage in very important business for the people of Canada. Frankly, the members in the House are paid very generously to do that work. Canadians expect them to do that work and expect them to put in the time that the rules contemplate.

All member of the House, if they seek that privilege from Canadian voters, should be prepared to do the work the rules contemplate. They should be prepared to come here to vote, to come here to debate the issues, to come here for the hours that the rules contemplate. If they are not prepared to do that work, they should step aside and turnover their obligations to people who are willing to do that work.

There is important work to be done on the commitments we made in the Speech from the Throne. I am therefore seeking the support of all members to extend our sitting hours, so we can complete work on our priorities before we adjourn for the summer. This will allow members to demonstrate results to Canadians when we return to our constituencies in two weeks.

Not very many Canadians have the privilege of the time that we have at home in our ridings, away from our work. People do not begrudge us those privileges. They think it is important for us to connect with them. However, what they expect in return is for us to work hard. They expect us to put in the hours. They expect us to carry on business in a professional fashion. The motion is all about that. It is about doing what the rules have contemplated, what has always been authorized by the House any time it has been asked, since the rule was instituted in 1982. That is why I would ask the House to support the motion to extend the hours.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I'd like to move that we have additional meetings next week, the necessary meetings to hear the witnesses for Colombia as requested, and we can complete and consider Bill C-55 next week.

Canada-EFTA Free Trade Agreement Implementation Act

[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 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 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.

[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 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.

[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 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.

[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.

[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.

[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.

[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 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.

[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.

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.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, in keeping with our theme for this week, which is strengthening democracy and human rights, today we will continue to debate Bill C-47, which is a bill to provide basic rights to on reserve individuals to protect them and their children in the event of a relationship breakdown, which are rights that Canadians off reserve enjoy every day.

We will debate our bill to give effect to the Tsawwassen First Nation Final Agreement, Bill C-34, and Bill C-21, which would extend the protection of the Canadian Human Rights Act to aboriginals living on reserve.

We will also debate Bill C-29, which is our bill to close the loophole that was used most recently by Liberal leadership candidates to bypass the personal contribution limit provisions of the election financing laws with large personal loans from wealthy, powerful individuals, and Bill C-19, which is our bill to limit the terms of senators to eight years from the current maximum of 45.

Next week will be honouring our monarch week. Members of Parliament will return to their ridings to join constituents in celebrating Queen Victoria, our sovereign with whom Sir John A. Macdonald worked in establishing Confederation, and honouring our contemporary head of state, Her Majesty Queen Elizabeth II.

The week the House returns will be sound economic management without a carbon tax week. The highlight of the week will be the return of the budget bill to this House on May 28.

This bill proposes a balanced budget, controlled spending, investments in priority areas and lower taxes, all without forcing Canadian families to pay a tax on carbon, gas and heating. Furthermore, the budget implementation bill proposes much needed changes to the immigration system. These measures will help us ensure the competitiveness of our economy. I would like to assure this House that we are determined to see this bill pass before the House rises for the summer.

We will start the week by debating, at third reading, Bill C-33, our biofuels bill to require that by 2010 5% of gasoline and by 2012 2% of diesel and home heating oil will be comprised of renewable fuels, with our hope that there will be no carbon tax on them.

We will debate Bill C-55, our bill to implement the free trade agreement with the states of the European Free Trade Association.

This free trade agreement, the first in six years, reflects our desire to find new markets for Canadian products and services.

We will also debate Bill C-5 dealing with nuclear liability issues for our energy sector; Bill C-7 to modernize our aeronautics sector; Bill C-43 to modernize our customs rules; Bill C-39 to modernize the Canada Grain Act for farmers; Bill C-46 to give farmers more choice in marketing grain; Bill C-14, which allows enterprises choice for communicating with their customers through the mail; and Bill C-32 to modernize our fisheries sector.

The opposition House leader raises the question of two evenings being set aside for committee of the whole. He is quite right. Those two evenings will have to be set aside sometime between now and May 31.

With regard to the notes that were quoted from by the Prime Minister and the Parliamentary Secretary to the Minister of Foreign Affairs, they were their notes and referred of course to announcements that clearly have been made about the need and the imperative of restoring our military's equipment and needs in the way in which the Canadian government is doing so.

Canada-EFTA Free Trade Agreement Implementation Act

[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.

[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.

[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.

[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]

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.

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.

[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.

[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.

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

moved for leave to introduce 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.

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