Bill C-2 (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 orders 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

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

Mr. Speaker, I was listening to my colleague speak on the motion for this bill currently before the Standing Committee on International Trade. First, I would like to know what his party proposes to support the shipbuilding industry and what are the main aspects of this bill that will support the industry.

Second, if this motion is adopted by the House and we are unable to make the government improve and provide more support for the shipbuilding industy that could be threatened by this type of agreement, should we simply forget about the agreement? It does nevertheless have certain advantages for Quebec's pharmaceutical industry. What position will the New Democratic Party take?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, we know the industry will be abandoned in Canada. I would be surprised if the Bloc thinks if the industry has trouble later on we should not worry because the Conservatives will rescue it at the end of the day. I would be surprised if the Bloc believes that would happen, because I do not sense that from the government. Traditionally it has not been there. I would not give the Conservatives that type of credibility or that type of responsibility and think it is real.

It is important that when we have a trade agreement, it is fair and balanced. It should not be done at the expense of one particular group or segment. That is the whole point, I suppose, of a united Canada, because we can be stronger and more successful.

There is nothing wrong with carving out a piece of this deal and then negotiating a better one. There is certainly a lot of benefit from other countries when they come into the markets in Canada. It will be more balanced and fair trade. However, we cannot ignore that Norway has provided more than a decade of support for an industry that will destroy that.

I would say that the Quebec shipbuilding industry will also take a hit. It could actually be much more significant but has not been because there has not been that policy in place. I believe Quebec will suffer from that lost capacity and also potentially a shipyard closure, which has been threatened in the past. That would be a setback for the country and for Quebec.

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

Mr. Speaker, the member for Windsor West pointed out that essentially other countries that have tough negotiators exclude shipbuilding from agreements. The United States has done it for every single trade agreement it has signed. Essentially, under the Jones Act, it carves out shipbuilding.

Referencing the question asked by my colleague from the Bloc, the Bloc should be voting for the amendment because quite simply it means that Parliament is ensuring, essentially, that the work that was not done in the negotiation of this agreement does get done through the due diligence of parliamentarians.

The member from the Bloc knows that many of the letters that are pouring in are from Quebec shipyard workers, but it is not just shipyard workers. Sheet metal workers and boilermakers are writing to us.

I just received on my BlackBerry a message from Jim Fitzpatrick, saying:

I on behalf of my members [of the International Brotherhood of Boilermakers] totally support the exclusion of our shipbuilding industry from the EFTA agreement. We have a vibrant workforce on this beautiful west coast--

He is writing from British Columbia, as we can surmise. He continues:

--and with the unemployment as it is at the moment in our shipbuilding industry we need our government's support with regards to this issue.

We are getting hundreds of letters, emails and phone calls to MPs' offices from sheet metal workers, from boilermakers, and above all, from shipyard workers from coast to coast, and only one party is standing in the House of Commons and allowing that voice to come forward. The other three parties are completely abdicating their responsibility to Canadian workers.

I would like to ask the member for Windsor West why he thinks all these other members are forgetting about the Canadian public interest and Canadian jobs.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, quite frankly, a couple of things play into this. First, the architect of this deal was David Emerson, a Liberal. Members have quite clearly hitched the history to him. He was the architect of the softwood lumber deal, and we all know how that is working out. In fact, I was just in the United States and it was questioning Canada's deal itself. So we do not even have a set stability pattern. We basically got taken to the cleaners on that deal. Ironically, we were winning in the courts, and then we pulled defeat from the jaws of victory.

I live across from Detroit, Michigan, which is home to the Detroit Lions, so I am very familiar with that process.

That is what was done with regard to the softwood lumber deal. We see the catastrophic result of it across this country. Who can be satisfied with the status quo in the agreement?

That is part of the problem, as well as expediency. When trade agreements are signed, for some reason they are seen as elements of justification or as a process that shows maturation in a government. That is really worrisome in the sense that the symbolism of it is being presented as more important than what is going to happen to industries after they emerge in this new relationship.

I do not know why the Bloc is supporting this without at least forcing the carve-out. It makes no sense for that party to turn its back on the workers of Quebec, in particular those directly affected. Basically giving up control of the potential shipping industry for the future to other hands without having a public policy is rather peculiar.

Those are some of the reasons I think we are seeing some of the decisions being made and why we in the NDP are the only ones speaking on this issue. I have debated this a number of times and people say I am against trade and moving forward. That is the furthest thing from the truth. What we need is fair trade. This is part of negotiations that have taken place in other bills and other countries and they have those elements.

We should move forward with this, because we not only have examples we can point to, but they are right next door in the United States.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I commend the member for Windsor West on his presentation this morning in the House. He certainly knows of what he speaks. He has watched the auto industry struggle through a number of difficulties over the last few years, all of it connected to so-called free trade, including the impact of the loss of the Auto Pact in Canada, not only in his own city but in cities across the country—in particular, places like Sault Ste. Marie, which provides the steel. It is all interconnected.

Having been here for four and a half years and listening to some of the discussions in the House about trade, free trade and meetings of Canadian representatives with officials from other countries about trade, it seems to me that we go to those meetings like good Boy Scouts. We are ready to throw absolutely everything on the table in order to get a deal that somebody else thinks is good for us because we have a lot of natural resources, not understanding that at the end of the day, in most instances—and I have not seen one yet where we have not—we come out the loser.

I remember standing in the House a few years ago on behalf of farmers, asking the government of the day, which was Liberal, to stand shoulder to shoulder with farmers, as we yet again caved in and provided more opportunity for foreign products to be brought in and sold in our market.

I ask the member for Windsor West to share with us a bit about the impact of the auto pact on his community and this country.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I think the people who negotiate on our behalf either have a self-esteem problem or need to see Tony Robbins, or something. It is habitually the case that they go in with a position to give up something quite significant and we get taken advantage of. People just cannot go in there playing poker with their hands facing the opposite way and pretend and hope things are going to go right. Those types of elements cannot be given up right away.

It important that we actually set the proper policy. I have seen it with the auto industry. It is affecting the entire country right now. All we can do now is hitch on to the United States, because we have given up so much of that sovereignty. I would hate to see the shipbuilding industry suffer the same fate, because it is important not only for our national security but also for the type of work that people can do and the value-added work that goes back into the coffers of this country.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I think they are trying to influence me.

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

Yes, we want you to vote like us.

[Serge Cardin, Bloc, Sherbrooke, QC]

The members of this House know the Bloc Québécois' position on this Free Trade Agreement between Canada and the States of the European Free Trade Association. In our opinion, the agreement would benefit Quebec. And knowing that the Bloc Québécois defends Quebec's interests, members understand that we will support this agreement.

Today, I would like to come back to the shipbuilding industry in particular. Some things have happened in the history of shipbuilding, and some things have not been done.

For 25 years, the Conservatives and the Liberals have shared power more or less equally. However, I would like to refer to an article that appeared in the Canadian Press on November 11, 2008 about comments made by Denise Verreault. I quote:

The president of Groupe maritime Verreault, Denise Verreault, did not mince words yesterday as she condemned what she called politicians' “lack of vision” on the marine industry.

Speaking at the Institut maritime de Rimouski..., Ms. Verreault said that “politicians could not see further than the end of their own noses or...the next election” when it came to shipping.

For more than 25 years, the CEO of this company based in Les Méchins has criticized the fact that Canada has no marine policy, even though shipping will double by 2020.

“Quite simply, there is no political will or vision. The shipping lobby is not as strong as the trucking lobby. The marine industry needs a single association that is very strong, instead of a number of groups. Our politicians think that ships are a vanishing breed and that as a mode of transportation, shipping is too slow. The hidden costs alone of just-in-time trucking are phenomenal, not to mention the environmental impacts,” said Ms. Verreault, honorary chair of the 27th funding campaign for the Institut maritime du Québec.

We can see that Ms. Verreault was talking about a 25-year period, and we can say that she was referring as much to the Conservative government as to the Liberal government of the time.

There was another very interesting article this morning in the newspapers, about comments made by the member for Bourassa. In a Canadian Press report, we can read:

But to win Quebeckers' hearts, the Liberals will have to rely on more than just their leader's relative popularity. [The member for Bourassa] therefore announced the appointment of two new campaign co-chairs: Gaspé businesswoman Denise Verreault and [other people, of course].

Should anything be inferred from what Ms. Verreault said in November 2008 and her current involvement with the Liberal Party? It is clear from her comments that she condemns the Conservative government for its lack of action with respect to the shipbuilding industry. We also know that she condemned the Liberal government of the day for its lack of action with respect to the shipbuilding industry.

At present, the fundamental problem facing the shipbuilding industry is not necessarily an international trade one, but rather a problem with the industry per se. The fact is that our industry has been neglected for many years, while other countries were heavily subsidizing theirs.

The suggested time frame in the accord is 18 years, that is an initial three year waiting period, followed by a progressive phase-out over 15 years to ensure that the trade can really be considered as free trade, with no extra costs.

What matters is to know what the Conservative government will do and, particularly, given Ms. Verreault's involvement, what the Liberals will do in the next election campaign. I want to know whether Ms. Verreault's efforts will have been all for naught, in the sense that, come an election, she will realize that the platforms include no shipbuilding policy, even though, as we know, such a policy is needed.

What I would like to hear today from Conservative members, and of course from the Liberals and even the NDP, is what they suggest as policy for the shipbuilding industry. It was primarily the shipbuilding industry that caused negotiations to last more than 10 years and people to fail to agree. What could these parties advocate or do to come up with innovative options for the shipbuilding industry? These are main points that must become clear through today's debate. We have to know what the government is going to do and what a party that, as we saw clearly on the weekend, was all energized to potentially form the next government, will commit to doing for the shipbuilding industry. Of course, we must not forget that Ms. Verreault is there, probably to provide strong suggestions.

I would still like to raise a number of points. I do not know whether I will have the time to list them all, but the Bloc has proposed a lot of things specifically to enable the shipbuilding industry to improve.

We must not forget that the shipbuilding industry has some very special features, features unique to it, which must be taken into account in working to ensure its development.

The government must realize that, because of the high cost of its products, the industry needs special financial arrangements for sales contracts. Because its products' value often constitutes the lion's share of the buyer's assets, the industry needs special financial regulations.

Because of the significant investments involved in producing the first of a line of ships, the industry must share the risks it faces in research and development and requires special credit access facilities.

There is also the matter of instability. Shipyards regularly do not operate for a number of months between contracts. Because of its instability and the high fixed costs of its considerable capitalization, the industry must have access to a substantial line of credit.

As it is also excluded from most trade agreements, the industry's international environment involves governmental subsidies, protectionism and buy-domestic policies.

Measures offering protection and support are needed to permit fair competition. Because contracts from DND and the Coast Guard are important to the industry, it needs a government purchasing policy that contributes to its development.

Since Canadian shipowners make up its main clientele, the industry needs a policy that promotes the development of domestic marine transportation, in other words, cabotage. Since the law of the sea is inadequate and does nothing to force companies to replace those dangerous, polluting scrap heaps, those poison ships, the industry therefore needs initiatives to modernize international shipping.

In order to bring in a real marine policy, the Bloc Québécois is proposing measures to ensure the development of this industry, which is of strategic importance to Quebec. It is also essential to ensure the protection and safety of the environment. Many of these measures could help the industry. I would remind the House that the federal government has not supported shipbuilding since 1988. 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 paid by Quebec to the industry.

In any discussion of financing, insurance or loan guarantees involved in sales contracts, it is important to note that purchasing a ship or an oil rig is a multi-million-dollar investment. Access to credit at favourable interest rates is a critical factor for the buyer. Through EDC, the federal government should set up a sales contract financing program to finance the purchase, repair and conversion of ships in Canadian shipyards. The program should provide funds for a significant portion of the value of the contract—perhaps 87.5%—at private market interest rates to low-risk companies that are in good shape. The program should be offered to both domestic and foreign buyers.

One issue is loans and loan guarantees for shipyards that have to invest or provide a financial guarantee in order to bid on new contracts. The tax rules for financial lease agreements have to be improved. We must bear in mind that under these lease agreements, the ship buyer does not take immediate possession. The buyer rents the vessel for several years and does not take possession until some time later. Because the buyer does not own the ship, tax rules allowing him or her to write off depreciation against taxable income do not apply. The government should improve the tax rules that apply to lease agreements for buyers of ships built or refurbished in Canada.

There should also be refundable tax credits for ship owners. The government should provide a tax credit to ship owners who sign shipbuilding or rebuilding contracts with Canadian shipyards. Because operating a ship is typically not profitable during the early years—all income ends up financing the initial investment—the credit should be refundable.

I want to point out that, in 1999, Antoine Dubé, who was the Bloc Québécois member for Lévis, introduced Bill C-213, which contained measures similar to those I just discussed. In 2000, after the bill was introduced, KPMG conducted a study for the Shipbuilding Association of Canada. It showed that, with respect to the 16 shipbuilding contracts between Canadian ship owners and foreign builders in 1999, these measures alone—none of them subsidies—would have, in a worst-case scenario, kept four to six contracts here in Canada, resulting in an additional $100 million to $150 million in annual sales. Their best-case scenario showed that some contracts for foreign ship owners—for the construction of drilling platforms worth from $300 million to over $1 billion—could have ended up in Canada.

The government must systematically favour Canadian companies for purchases to meet military requirements or those of the Coast Guard, and for offshore investments, drilling rigs and, eventually, wind turbines. A few announcements have been made, but more needs to be done.

In establishing its purchasing criteria, the government has to put a stop to discriminatory rules that offload transportation costs onto the shipyards, penalizing those in Quebec more than those in the maritime provinces.

It must also take measures focusing on water transport within Canada. While international seaborne shipping is growing at an exponential rate, domestic shipping, or cabotage, is growing at a slower rate. But Canadian shipping companies make much better customers for our shipyards than foreign companies. Environmentally as well as from an energy standpoint, shipping is the most logical choice and should rapidly become increasingly popular, given growing concerns about climate change and depletion of fossil fuels. In a nutshell, far from being a thing of the past, shipping is a forward-looking transportation mode.

Why do several government practices limit the development of cabotage for the transport of freight? Dredging and icebreaking expenses incurred by the government along the St. Lawrence River are entirely offloaded onto shipping companies. Conversely, the cost of maintaining roads is shared among all taxpayers, instead of being paid by truckers. Such an injustice hinders the competitive capacity of water transportation in comparison to land transportation.

The government should also eliminate the fees charged marine transportation companies that practice cabotage. It should also put in place a major investment program for port infrastructure focusing on the infrastructure needed to develop intermodal transport. In addition, the government should bring up to standard all the ports it left to crumble given that it is responsible for ensuring the best possible use of its own infrastructure. The government should also strengthen the Coastal Trading Act to support Canadian shipping and to ensure that foreign carriers that practice cabotage are subject to Canadian laws, especially those governing working conditions.

As for measures pertaining to international marine transport, we should oppose flags of convenience. Canada must ratify the UN convention on ship registration and lobby internationally for its implementation. We must fight poison ships by strengthening international marine law and creating an agency such as ICAO for marine transport.

This is not an exhaustive list, but it does show both the Conservative and Liberal members that it is possible to put in place measures to foster the development and competitiveness of the shipbuilding industry and the marine industry in general. Today, I would like to know what is the position of the Conservative, Liberal and NDP members, and the measures they are proposing to entrepreneurs and employees in the marine industry. I would like to know and I am certain that Ms. Denise Verreault would also be interested.

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

Mr. Speaker, personally, I very much like the hon. member for Sherbrooke. I know that if it were up to him, he would be willing to ensure that the Bloc Québécois adopted the right position. However, the Bloc leader seems to want to punish the workers in the Quebec City area. I do not know why, but I imagine it is because Quebec City rejected the Bloc Québécois. Thus, the leader of the Bloc Québécois seems to want to punish those workers, because they are asking Bloc members to support the NDP amendment.

Pierre Bérubé, a steel erector at the Davie shipyard, said:

As a worker at Davie Yards Inc., in Lévis, I wish to express my concern about the survival of the Canadian shipbuilding industry if the free trade agreement between Canada and the European Free Trade Association (EFTA) goes through.

That is why I support your efforts to exclude Canadian shipyards from that agreement.

Gaétan Sergerie, a welder at the same shipyard, said: “Like all workers at these shipyards, I am concerned about the repercussions that this free trade agreement will have on the growth of shipbuilding in Canada.”

Paul-André Brulotte, the union president, is saying exactly the same thing.

Quebeckers are asking the Bloc Québécois to support the NDP amendment. Why does the Bloc refuse to listen to them?

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, we in the Bloc hear these remarks and are listening to them as well. But we must always look at the agreement that was signed. We are at the stage of implementing that agreement. What the NDP would like is to leave out shipbuilding.

As I said earlier, I do not think it is a core problem of international trade as such. Rather, I think the problem stems from a lack of desire by the Conservative government and the previous Liberal government to support this industry. The negotiating process of 10 years ago indicates that the problem was substantial, and that negotiations at the time were primarily focused on the industry, which was the stumbling block.

I repeat, if the industry is not supported, whether or not the agreement includes shipbuilding, there will be no future for shipbuilding. When entrepreneurs and skilled employees cannot succeed in this sector, there will be no future. I believe there are skilled people and dynamic entrepreneurs in this industry. And so the 18 year delay would allow them to go even further.

If the NDP put as much energy into convincing the Conservative government and perhaps one day a Liberal government, with Denise Verreault of Chantiers Verreault as the co-chair of the campaign, I am sure they could eventually persuade the government to implement a real shipbuilding policy.

[Megan Leslie, NDP, Halifax, NS]

Mr. Speaker, I agree with the hon. member and thank him for his intervention. I agree that this tariff, this one little piece in the EFTA is not going to really create a vibrant shipbuilding industry.

Recently, some of my colleagues and I met with representatives from the shipbuilding industry. They said that this 25% tariff is not going to help the industry, but taking it away, if we get rid of this, it will kill the industry as it exists now.

I agree that we need to have a full, robust shipbuilding policy, but why would this member not support the one piece that we have now that prevents pulling the plug on a dying industry. I will refer to the Breaking Through: The Canadian Shipbuilding Industry report, which I will again mention brought industry together with workers to come up with creative solutions for the shipbuilding industry. I have some excerpts from it here.

Their recommendations included: eliminating exceptions to the existing Canadian shipbuilding policies such as tariffs and federal procurement; strengthening industry and government partnerships to focus more on high prospect areas such as oil and gas; improving the planning processes on federal procurement; pressing for the elimination of foreign subsidies and unfair pricing practices by dozens of countries; designating the industry as a national priority; and promoting marine transportation as an environmentally friendly alternative to other modes of transportation.

This is part of a shipbuilding plan to save this industry. Right now we just have this one provision in front of us. My question to the member is, why would he not support an amendment that could be the base upon which we could actually build a shipbuilding plan?

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, as I was saying earlier, the free trade agreement has been signed. We are at the implementation stage. If we give in to the NDP's call to remove the shipbuilding industry from the implementation bill, the agreement would automatically collapse, and negotiations would have to begin again. The fact of beginning again does not mean it would happen automatically or even that there would be a free trade agreement. It is unlikely. I have to say, and I said it earlier, and I am not ashamed to repeat it, a number of the elements of this agreement provide strong support for Quebec's development and economy.

As regards shipbuilding, there is a huge potential, as I have said. These companies could become more effective and productive even more quickly. However, there must be a degree of openness in the free trade agreement, and it must be supported by other government activities. I firmly believe that, in this, the House of Commons cannot be circumvented by the government, whether it is this party or the other in a little while. I refer again to this past weekend when people seemed very energized.

I note in closing that people were invited to testify in committee and did not appear. Even the president of Verreault shipyards was invited but she did not come. We can ask ourselves the same question that arises from the statements by our NDP colleague. Still, we must move forward and encourage the government to put measures in place.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I rise to speak to Bill C-2, the implementation of the Canada-European free trade agreement. The bill deals with a proposed arrangement between some of the European countries and Canada. The agreement was initiated nine years ago by the Liberal administration under Jean Chrétien. It came at a time when the ideology of free trade and the free market system was at its height. That is not the case today.

In the last 12 months, the world has seen a profound change. It has not yet played out completely around the world. It is a change that will lead us to make different choices in the future. It will lead us to situations where we must, in some cases, protect our industries. In many cases, Canadians will be obligated to take another look at free trade. For the purposes of preserving our economy, we will be obligated to better understand how the world will work.

That is what we are faced with today. We are not faced with the situation of nine years ago. We are not even faced with the situation of two years ago. We are faced with the situation that has come upon us today. If we look at the history of the opening of the liberalization of trade in Canada, for many years, we were under the guidance of a policy that said that good fences made good neighbours. In many cases, we understood that the situation in the world between countries was not open or equal. We were not in a position to allow free trade to take place. We needed to have tariffs and protection for our industries because the world was not the place it was 20 years previous.

When we started on the free trade talks and agreements that came along in the 1980s, we built them on the basis that we would open up the world economy. We were making trade and taking away barriers. We were going to create a level playing field around the world, where the best possible situation could arise for industry and commerce and permit an expansion of the world's economy. By and large, some of that worked and some did not work. Some of it was based on trade and some was based on technological advancement and many other factors.

However, today, we are dealing with where we are going in the future with trade. How do we set the path for our Canadian economy? We have seen that there is not likely to be less regulation, but more regulation. We are likely to pay more careful attention to how our industries work, not less attention.

Our amendment proposes to carve out the very important shipbuilding industry from the agreement. We do not see that this will work for our shipbuilding industry in the future. We do not see that free trade will make the kind of difference to our shipbuilding industry that we might have thought about 20 years ago. It is not the case today. This is why we are very interested in ensuring that our shipbuilding industry is protected and allowed to grow in a reasonable fashion.

Shipbuilding will have a place in Canada. We are a maritime nation. We have the largest coastline of any country in the world. A lot of that coastline is in my riding in the Arctic, among the Arctic islands. There is an enhanced interest in the development of arctic resources and arctic transportation and the use of the Arctic as the ice melts. With climate change, we see the opening up of the Arctic Ocean, the arctic shipping lanes and all of that.

It is imperative that Canada stays on top of Arctic marine shipping development. Right now that is in the hands of the Russians. They are the leaders in this field. Where are we? We are nowhere in it. We will enter into the next century of development in the Arctic, where marine transportation will be of the utmost importance, and we will have a shipbuilding industry that we have not supported and that we have not ensured has the opportunity to take advantage of this new and exciting area to work in, the Arctic.

That one factor should give us all pause. It should make us ask what is good for Canada, not what is good for the world, in our new opportunities in the new economy, which will have a very large Arctic base. Is it good simply to abandon the shipbuilding industry to the vagrancies of the world market to the kind of competition that can come not only from Norway and from that direction, but from the Koreans and the Chinese? Is that what we want to accomplish?

It is not simply about building ships. It is about all the ancillary things that go along with ships. If we are turning over the shipbuilding industry, we are turning over many of the components and technologies that can give Canada the edge in the new economy into which we are moving.

Therefore, what are we doing here? What are we trying to accomplish with this free trade agreement that was started nine years ago by the Chrétien Liberals, when free trade was popular? Are the two major parties, the Liberals and the Conservatives, simply caught in their past rhetoric, in their past ideas of free trade and free markets, that they cannot see what the future holds? Can they not say that this is the direction we should go in, that this is where the new economy is, that those are the things we have to protect and that those are the things we have to create.

Is that what their problem is, that their ideology has just bound them down? They used to complain that the NDP was ideologically bound by its protectionism, by its social justice, by its concerns about the environment, so that it could not be open to the development of world trade. Times are changing and we need to respond in a fashion that is acceptable and reasonable.

When the Mulroney government got us into the free trade agreement, the allegations at the time were that the free trade agreement was supported by the Conservatives and would continue to keep our dollar high. At the time, the New Democratic Party was pushing for a lower interest rate, which would help our economy. When the Liberals got in, they actually did that. They lowered the interest rate and let the dollar fall. Under the free trade agreement with the United States, we flourished. However, was it because of the free trade agreement or because of the lower dollar? Both of those factors had to come into play.

What is happening today? We are in the midst of a major global financial crisis, which we have not settled, yet we are talking about putting ourselves into more free trade agreements, when we do not understand yet what the financial situation of the world is going to be.

When it comes to currency, what is going to happen when the price of oil, inevitably in the next 12 months, starts to rise dramatically again, when the U.S. economy recovers and when the U.S. dollar starts to fall?

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

That would be a terrible thing to see that recovery happen.