Canadian Products Promotion Act

An Act respecting the use of government contracts to promote economic development

This bill was last introduced in the 40th Parliament, 2nd Session, which ended in December 2009.

Sponsor

Monique Guay  Bloc

Introduced as a private member’s bill. (These don’t often become law.)

Status

Defeated, as of Oct. 21, 2009
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

The purpose of this enactment is to promote economic development in Canada by ensuring that, in the procurement of its goods and services, the Government of Canada gives preference to Canadian products while complying with its international obligations.

The enactment requires, however, that the price of a Canadian product not exceed by more than 7.5% the price of a non-Canadian similar product.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

Oct. 21, 2009 Failed That the Bill be now read a second time and referred to the Standing Committee on Government Operations and Estimates.

Canadian Products Promotion ActPrivate Members' Business

October 19th, 2009 / 11:05 a.m.
See context

Conservative

Daryl Kramp Conservative Prince Edward—Hastings, ON

Mr. Speaker, last week, when discussing this issue, I talked quite a bit about the perils of protectionism and the advantages of trade. Today I will elaborate further on those components.

Trade also gives consumers more choice. We can think of all of the things that would disappear if our imports were taken away from us: food, clothing and other products that used to be, at some times, considered exotic. This is not just a question of consumers buying foreign-finished products. Imports are used as materials, components and equipment for local production. If trade allows us to import more, it also allows others to then buy more of our exports. That means that trade increases our incomes.

The advantages of trade spread to every part of our economy and touch every Canadian, from the farmer growing wheat to the engineer designing tractors, from the factory worker producing aircraft to the supplier providing aircraft parts. Trade's bottom line is our people and the jobs that it provides them with. One in five jobs in Canada is linked to international trade. We export more than half of our manufactured goods.

Let us look for a moment at our trade with the United States as an example. Canada and the U.S. are each other's most important partner in economic growth. Since the Canada-U.S. Free Trade Agreement was signed in 1988 and then NAFTA in 1992, there is no doubt that our bilateral trade has been one of the major components of economic growth.

During these two decades, Canada-U.S. trade has tripled. Investment flows have also increased substantially. Two-way trade crosses the Canada-U.S. border at the rate of $1.7 billion a day. I would just ask members to think about that scale. That is well over $1 million per minute of trade. It is estimated that over three million jobs in Canada depend on our trade with the U.S.

Given this scale of success, it is clear that protectionism is our mutual adversary. Protectionism, quite frankly, is the greatest ideological threat in this global recession. Restrictions on trade reduce real growth prospects in both the developed and the developing world. Restricting imports might look like an effective way of supporting an economic sector, but doing so biases the economy against other sectors that should not be penalized.

We are committed to respecting and upholding our trade commitments with our partners. We expect our partners to do the same.

To come out of this global recession, we need to continue to trade with as few barriers as possible. The Great Depression taught us that the downward spiral of protectionism will only lead to more dire situations. That is why our economic action plan protects Canadians during the global recession, not by restricting trade but by promoting it.

Our Budget Implementation Act revoked additional tariffs in order to increase international trade. Our plan works to create new, good jobs for the future and to equip our country for successes in the years ahead. It is designed to stimulate economic growth, to restore confidence and to support Canadians and their families during the global recession.

It takes action to build infrastructure, stimulate housing construction, and support businesses and communities. It also helps reduce taxes, freezes EI rates, and assists Canadians through the Canada skills and transition strategy. It also improves access to financing and strengthens Canada's financial system.

Members do not have to take my word for it or your word, Mr. Speaker, or even the word of other members in the House here. This initiative has in fact been praised by the International Monetary Fund, a respected international body. In a recent report, they called it “large, timely and well targeted”.

They said our immediate focus should be on implementing the budget to mobilize spending.

We are acting through the most appropriate means to protect our economy and Canadians affected by this downturn. That includes the tax system. It includes the employment insurance program. It includes direct spending by federal and provincial governments. It also includes lending by crown corporations, and it includes partnerships with the private sector.

What it does not include is a return to the perilous ideology of protectionism.

Canadians know that in this global economy we cannot simply build a fortress and lock ourselves inside. That would be destructive.

I believe the evidence before us can lead to only one conclusion. Therefore I call upon my colleagues in the House to emphatically oppose the bill which quite frankly would be dangerous to the health and welfare of every Canadian.

Canadian Products Promotion ActPrivate Members' Business

October 19th, 2009 / 11:05 a.m.
See context

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I am pleased to speak to Bill C-306, put forward by the member for Rivière-du-Nord of the Bloc.

First of all, members will know that this member is a very long-standing member of this place. I think she has been here for over 20 years.

My experience in working with this member on a number of occasions is that when she brings things up, they are usually fairly well thought out and provocative in terms of promoting debate. If I look at the member's speech, she is asking the House to give her an opportunity to debate the bill in committee.

We have had this on so many occasions, particularly for employment insurance bills where there have been many attempts to try to bring to the attention of Canadians the need for reform in terms of EI. We know that there needs to be a royal recommendation. We know that at the end of the day, there will never be a final vote but the debate is very important.

It is important so that Canadians understand the implications, so that within this place we look at the areas that we have difficulty with, to get the answers to certain specific questions because members usually do not have the personal expertise or the access within a short timeframe to the expertise that will give us the answers to those questions. Those questions include such things as what latitude we have within the WTO to give some preferential treatment to buy Canadian for government procurement.

It is a pretty good question. I know that our experience in this place has been that dealing with matters to do with the WTO creates a lot of acrimony. It could be the softwood lumber deal. We know that the dispute resolution mechanisms have been very problematic. We have had many debates in this place about why Canada is always on the short end of the stick when it comes to disputes. Why do we get dragged through the courts for years and years?

It is because the WTO and NAFTA do not provide the precision that we need to understand how much latitude we have to put the best interests of Canadians first, and that is what the member is asking for. Therefore I congratulate the member on bringing the bill forward.

In her speech the member also talked about the context that we have to put this conversation into. It has to do with the economic challenges we are facing now. It has to do with the fact that we have a government that said it was going to balance the budget. It had a $13 billion surplus. We now find out that as the last fiscal year ended, it turned out there was a $5 billion deficit.

Therefore the starting point was wrong. It squandered a $13 billion annual surplus and turned it into a $5 billion deficit. Then what happened? We had a budget come forward saying that we were going to have four years of surplus. We now know that at last report there was a $30 billion deficit. Now it is up to a $50 billion deficit and we have job losses that were over 9%. I think it dropped slightly, which I think is an aberration. All the experts seem to think we are going to have unemployment in the 10% range in Canada.

That means there are half a million families out there who are now forced to live on EI, and there are many families out there whose EI benefits have run out.

Therefore the member raises in her bill, Bill C-306 that the “purpose of this enactment is to promote economic development in Canada by ensuring that, in the procurement of its goods and services, the Government of Canada gives preference to Canadian products while complying with its international obligations”.

It is not saying that we should break the law but that we should do what we can within the rules of the game that we have, and that way we should be able to stimulate the Canadian economy and we should be able to stimulate job growth. That as a premise makes a lot of sense.

It also specifies that the buy Canadian approach would not exceed, I think, 7.5% in terms of giving preference to Canadian products.

I have a problem with 7.5%. I would like to debate that. However, the 7.5% is not the issue in this debate. The issue is whether we need another stimulus effort within Canada to assist Canadian business and industry to deal with the economic situation that we are faced with, to deal with the unemployment situation that we have.

The bill may not see the light of day, in terms of a final disposition. I do not know. It is hard to say these days. However, the debate is a relevant debate. We are not going to resolve it here by having a half-dozen speakers when there are probably 50 people in this place who would like to talk about it. We can only talk about it within the context of what we know now.

However, things are happening very quickly today. In the United States, President Obama has the issue of American protectionism facing him, and the U.S. is going through the process. Our provinces have been talking about opening up to the Americans provincial procurement and bidding on contracts, on an equal basis. They are trying to make it work. However, we have to remember our history in these things. Canada always seems to get the short end of the stick when it comes down to trade issues.

I can fully understand the United States saying that Americans should support American business. There is nothing wrong with that.

As well, there is nothing wrong with Canada, the Canadian government and Canadian members of Parliament encouraging Canadians to look at the labels and buy Canadian, because when we buy Canadian, we help Canadian business and Canadian jobs.

Today we are also going to be debating the issue of forestry, which is a beautiful example of where we have opportunities, but we need to take some action, and I am pretty sure that is going to get the support of the House.

I look at private members' business as a proxy for debate, and that debate cannot fully happen here at second reading. The bill needs to go to committee. It needs to have winesses and people with expertise so that we can ask questions and get answers. We have hon. members on these committees who work on this stuff time and time again. The knowledge, the approach, and the quality of the debate of the kinds of issues that will come up at committee are certainly more substantive than they are in this place right now. That is not to say that members are not capable of doing this. However, they do not have the time and they cannot ask questions or make comments. I could not ask questions of the member and nobody can ask questions of me.

Second reading is to ask whether we have an issue here that is worthy of more debate. In my humble opinion, I believe there is. I believe that the bill merits support to go to committee to have relevant debate, and I will be supporting this particular bill.

The other thing I wanted to talk about is whether or not matters like a home renovation tax credit or the stimulus program that we have, through which we are encouraging infrastructure, though not exclusively--as we know, there is a lot of stimulus money going to things that are not infrastructure--are promoting Canadians jobs, promoting Canadian business, promoting some assistance in the difficult circumstances we find in this economic climate. Those actions are not inconsistent, and this bill is not inconsistent with those actions with regard to the intent.

The intent here is to address our financial situation, the job situation and, to some extent, WTO, NAFTA and other trade agreement provisions that we have, as well as what the rules of the game are, what latitude we have and how we can have all Canadian businesses do better in this economic climate.

Canadian Products Promotion ActPrivate Members' Business

October 19th, 2009 / 11:15 a.m.
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NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Speaker, I was very happy to hear what the Liberal member had to say.

In the history of Parliament, the Liberals have never supported a domestic procurement policy. In fact, the Liberals have always criticized the NDP's promotion of policies that would use taxpayer money to buy Canadian products and to create jobs in Canada. The Liberals have made an about-face here, but I think that is a good thing. If the Liberals have finally realized that the NDP is always right, we are very happy, and we are very happy to hear that they will be supporting a policy that has long been endorsed by the NDP.

This bill is a positive step by the Bloc Québécois to support these procurement policies. This goes along with what the NDP has been saying for years, that we must use taxpayer money to support our Canadian industries. We support this Bloc bill, and we will be very happy if it receives the support of all the opposition parties.

Of course, this will be debated in committee, and that is very important. We know that the arguments others have repeatedly made against the NDP's practice of buying Canadian are unfounded. For a long time, we have heard the Conservatives—and up until today, the Liberals—claim that these policies are illegal, because of the regulations of the World Trade Organization and NAFTA. But we know that that is not the case. Other countries have passed similar legislation. Think of the United States, for example, and their Jones act and their shipbuilding policy. The American Congress just passed buy American legislation. These policies would be illegal. But they are not. It is very clear that they are legal.

The United States, Japan, China, Mexico and the European community all have buy local and buy domestic policies. These are our trade partners, and 98% of our international deals are with countries that have domestic procurement policies. So, it is very clear that this is not illegal from the point of view of the WTO or NAFTA.

For a long time now, other parties have been using patently false arguments to attack the NDP for supporting buy Canadian policies. The CAW even asked for a legal opinion from a leading expert in international trade law, Steven Shrybman of Sack Goldblatt Mitchell LLP. His legal opinion was very clear: a thorough review of Canada's obligations under WTO agreements, NAFTA and the AIT demonstrates that buy Canadian policies adopted by municipal, provincial or federal governments would not violate either international or domestic agreements. Basically, Canadian governments have more freedom to adopt such policies than most people think.

It is clear that the Conservatives' claim is false. According to Mr. Shrybman, municipal and provincial governments may specify levels of Canadian content when purchasing goods and services and, under certain circumstances, may even limit tenders to products manufactured entirely in Canada.

The member for Rivière-du-Nord's bill clearly defines the scope of these purchases. I want to emphasize that governments can buy products made entirely in Canada. It is legal and it is good for our economy.

This proposed comprehensive buy Canadian policy would apply not only to the very visible public transportation sector, but also to all other purchases from garbage trucks to office furniture, from uniforms to construction materials, and more. Provincial governments will also be able to attach buy Canadian conditions to transfers to municipal governments, agencies and crown corporations. The legality of such policies is indisputable and comprehensive.

Moreover, and most importantly, international trade law specifically addresses federal transfers to the provinces and international procurement regulations, thus enabling the federal government to attach comprehensive buy Canadian conditions to all funding transferred to other levels of government.

This legal opinion is very clear. It is also very clear that many countries around the world have implemented sound domestic procurement policies. The conditions are right for a bill like the one introduced by the member for Rivière-du-Nord. We can implement domestic procurement policies. We can use Canadian taxpayers' dollars to stimulate our economy just like every other country in the world.

It is somewhat ironic that the Bloc Québécois should be the ones to raise this issue in the House. Of course the NDP have also drafted similar bills, but the Bloc's bill goes a little further than the NDP's bills. The Bloc is introducing a bill that will help all Canadians, while, so far, the Conservatives and the Liberals have always rejected the possibility of using federal, provincial and municipal government funds to stimulate our economy.

This is an important issue, given that, over the past 20 years, the vast majority of Canadian families have seen their family income decrease, which is surprising. It is not an issue that is widely reported in the media, but that is the reality. According to Statistics Canada, since the first Canada-United States free trade agreement was signed and implemented, two-thirds of Canadian families have seen their family income decrease.

It is very clear that our economic and procurement policies are making the vast majority of Canadians poorer now than they were 20 years ago. The Conservatives and the Liberals are washing their hands of the issue and saying that it is no big deal. They maintain that we simply have to keep signing free trade agreements, and everything will be fine. However, the economy is much more complicated. We must do more than simply sign a few free trade agreements and give lots of money to Canadian banks to ensure prosperity for everyone. That is not how it works.

The fact is, we are talking about a complete and massive failure on the part of successive Liberal and Conservative governments. They have the same economic policies and the same laissez-faire attitude, which are leaving most Canadians poorer than they were 20 years ago.

The Conservatives and the Liberals have no reason to be proud. The vast majority of Canadian families are poorer than they were.

We have real concerns about the direction that the government has taken. We have real concerns that it seems to always be willing to negotiate with concessions first. We have seen via rumours surrounding buy America that it is willing to give away health care protection and procurement policies for universities and rapid transit. That is a failure.

We cannot bargain with concessions. We have to put sound economic policy in place. Domestic procurement is a very sound part of a sound economic strategy. That is why we are supporting it.

Canadian Products Promotion ActPrivate Members' Business

October 19th, 2009 / 11:25 a.m.
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Bloc

Paule Brunelle Bloc Trois-Rivières, QC

Mr. Speaker, I am pleased to speak today to Bill C-306, An Act respecting the use of government contracts to promote economic development, which was introduced by my colleague from Rivière-du-Nord.

Economic development is something we need more and more. The rapid deterioration of employment in Canada and Quebec is truly disturbing. There are 1.6 million unemployed workers in Canada. The OECD predicts that Canada's unemployment rate will reach 10.8% by the end of 2010. That means 2 million unemployed. We must support employment. We must support investment.

We are hearing more and more frequently about layoffs, plant closures and major reductions in productive investments. Forestry is vital to the regions of Quebec, and the situation in the forestry industry is a huge problem in Mauricie and in my riding of Trois-Rivières. In fact, 88,000 Quebeckers work in forestry, sawmills and pulp and paper plants, accounting for roughly a third of Canadian forestry jobs.

How has this government responded? It gave the automotive industry $5 billion, but it gave the forestry industry a mere $170 million. Companies told us they needed loans and loan guarantees. A few years ago, I visited the Kruger company in Trois-Rivières. People there asked us for loans and loan guarantees to conduct research and development in order to help this industry. The government said no, and so plants are closing.

What does that have to with this bill? We must support all our industries: aerospace, industrial research and fishing. One way to support industry is to give preference to Canadian companies when awarding government contracts. Bill C-306 is a response to this problem and seeks to ensure that government contracting complies with international agreements. The government has to use its procurement as an economic lever. This is something we need more and more. This bill would allow Canada to buy up to $600 million worth of Canadian products annually, which represents 21,000 jobs a year. That is significant, and it is a positive response to a problem Canada is experiencing.

This bill focuses specifically on purchases not subject to NAFTA. It complies with the rules and the spirit of NAFTA. It is important to understand that. It is narrower in scope because it would affect Government of Canada direct goods and services procurement only. The Buy American Act affects all of the government's indirect procurement, not just direct procurement. This bill could be implemented in accordance with NAFTA. In order to comply with international treaties, this Bloc Québécois bill targets small federal government expenditures under $25,000 U.S. for goods, $64,786 for services other than construction and $8.4 million for construction services.

What amounts are we talking about? In 2008, the federal government spent $20.1 billion on goods and services or 9.3% of its total expenditures. The Government of Canada is the largest purchaser of goods and services in Canada. Why not use the leverage we are proposing in Bill C-306 to truly produce spinoffs for our economy and for our businesses?

Passing this buy Canadian bill would halt the flow of some $600 million to other countries annually. It is estimated that more than 21,000 jobs could have been created annually if this bill had already been passed. There is an urgent need to pass this bill, an urgent need to take action.

This bill would provide a way around NAFTA by tying all federal transfer payments to the provinces—equalization, transportation funding or transfers for post-secondary education and health—to investments being made in Canada only.

This would allow our companies producing steel, lumber, cement and all manufacturing companies in Quebec to become, provided the price differential is not significant, sole source suppliers for all provincial and municipal governments. As we know, numerous manufacturing companies have closed down. That is really worrisome. They did not get any support, and that has literally destroyed Quebec's economic fabric.

This Bloc Québécois bill does, however, allow for the sound management of public resources. Under the national preference rule for products and services contained in the bill, when choosing between a Canadian product and a similar non-Canadian product, the government is required to buy the Canadian product if its price does not exceed that of the non-Canadian one by more than 7.5%, ensuring sound management but at the same time giving preference to products with greater Canadian content. This 7.5% cap was set to prevent negative financial impacts on the government.

As for direct benefits to Quebec besides the ones already mentioned with respect to our businesses, through a clause requiring that the government treat the provinces fairly when making acquisitions, the bill proposes that the acquisition of goods and services be distributed equitably among the provinces. At present, the government obtains nearly two-thirds of its goods and services from Ontario. To remedy this situation, the bill includes a provision precluding the government from obtaining more than 50% of its products from another province.

In conclusion, if passed, this bill will promote job creation, Canadian procurement and the equitable distribution of acquisitions among the provinces while complying with agreements already entered into by Canada.

I therefore encourage our colleagues to vote for this bill. To refer this bill to committee is to say yes to Canadian procurement, yes to Canadian jobs, yes to renewed economic growth.

Canadian Products Promotion ActPrivate Members' Business

October 19th, 2009 / 11:35 a.m.
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Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, I want to speak briefly to the concept of assisting Canadian businesses and provide a different dimension on some of the other ways we can deal with this conundrum.

Obviously, Canada is a trading nation, and more so than most nations in the world. If we are not effective in the trading environment or if trade is not amicable to our needs, we will suffer more than other countries. Therefore, we need to be experts in this and have an international regime that will help us.

Of course, as trade increases, prosperity for our citizens increases if they can buy products at lower prices. However, make no mistake, we have confidence that Canadians can compete in a trading environment and our products and services can stand up to any in the world on a fair trading field.

There are a number of ways we can help businesses without abrogating trade laws or going against agreements because, by and large, the agreements we have with other countries are in Canada's favour and help our prosperity to a great extent. Canadians would be amazed to realize how much of their salaries they would lose if the loss of trade were spread over everyone. It is a significant part of our economy, much more than our trading partners.

Because it is so important, our government has a larger role than most countries in exporting products. There are a number of ways we can assist with that, whether it is financing or marketing our products that would not abrogate trade agreements. We of course need to be very careful that we do not go against the very agreements that work in our favour and facilitate trade.

Another way is the promotion of Canadian products. We have done that over the years through internal trade fairs in Canada to promote domestically and international trade fairs to help Canadian businesses participate in worldwide or specialty trade fairs that deal with particular products and open up markets around the world.

Another way to promote trade is through trade missions. However, with a number of embassies having been closed, some services overseas have been reduced, which is a bit disconcerting as that is a window on the world for our businesses by which we can help them facilitate trade without going against any treaties or agreements.

Another way is the work we have done in the past, which has diminished somewhat recently, related to research. As products are changing faster than they ever have in history, it is very important to keep our businesses in tune with the world in order to support the research they require and make it worth their investment so they can compete on an even basis with businesses around the world that also have access to excellent science.

Another issue that we constantly hear about from Canadian business, and one only needs to make a quick phone call to the Canadian Federation of Independent Business, is the red tape burden on small and large businesses. The information we collect is important to assist us in doing all the other things to help businesses and run Canada but we need to make it more efficient so there is a coordination of federal departments. We need to make some of the surveys coming from Statistics Canada more realistic and to show businesses the benefits of this type of research. We need try to make the research so that it is not overburdened with red tape while collecting the information that we need to monitor and assist businesses.

An additional way to promote trade in a rapidly and dynamically changing world is business intelligence. There is a function for the government as part of its productivity initiatives to collect intelligence and keep businesses up to date.

Approximately 95% of the research in the world is not done by Canadians but Canadian businesses should have quick access to that. Not all small businesses in Canada can afford to research around the world to find out the status of the biggest invention in their product is that day. The Canadian government could play a role in ensuring companies know the relevant advances in the industry so they can be right on the mark and be competitive with the research on that business intelligence around the world, which they cannot necessarily do themselves. Their research would not be duplicating something that has already been found and they could strike into new frontiers with their research and use the other 95% of the world's research to advance their own products or add to their product lines, service lines or the competitiveness of their existing products.

Finally, the government could also help businesses work together in promoting and developing strong associations, associations that understand their members and can make the cases for that particular sector to survive.

I support the spirit of the motion in helping Canadian business but not to abrogate existing agreements we have. To ensure we have a free and liberalized trade regime around the world is where we do our lobbying when Canadian businesses are attacked. When something goes against us grievously, whether it is something related to the United States and softwood lumber or some other country, it does not do a lot of good to change by doing our lobbying and making a big row inside Canada because that is not where the problem is. The problem is in the other country and there are interests in that other country that benefit by free Canadian trade and by not having Canadian trade abused.

My concept is that we need to extend our efforts more into those countries, to attack those who are attacking us on their home ground and to make a case for the benefits. We need to get the groups on side that benefit by free Canadian trade, such as housing contractors and people buying houses, especially low income people in the United States who need our reasonably priced Canadian lumber. We need to expand the frontiers and the intelligence of our lobbying. In all these ways I have mentioned, we could help Canadian businesses when they are not being treated fairly by trade actions of other countries.

Canadian Products Promotion ActPrivate Members' Business

October 19th, 2009 / 11:45 a.m.
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Bloc

Monique Guay Bloc Rivière-du-Nord, QC

Mr. Speaker, I have five minutes to conclude this debate. Thank you very much.

This is a most important bill for us and for all Canadians and Quebeckers. In the midst of this economic crisis, we have to give ourselves the tools we need to create jobs. We are talking here about 21,000 jobs and $600 million worth of purchases made annually by the federal government. Imagine how that could help us get through this situation where it is said the unemployment rate could soon reach 10.8%. Instead of that, we could reduce the unemployment rate and help our businesses.

We have really done our homework with regard to the bill before us today. We asked legal experts to check the bill. We consulted the unions. I talked to various union representatives to seek their support and I succeeded in obtaining that support because they are in favour of making purchases here, in Canada and in Quebec. I am very proud of their letters of support. I think there is a consensus around my bill.

We must also consider the fact that we have concluded important international agreements and we certainly do not want to risk being sued for millions or billions of dollars because of calls for tenders or purchases that would go against NAFTA or other international agreements that have been signed.

We were careful in ensuring that international agreements would not be affected by this legislation. The bill would allow the federal government to buy Canadian goods and services without violating any international agreements. These contracts would not be covered under those agreements, but they sure would help many of our businesses get through these difficult times, because a lot of them are barely able to stay afloat at this point.

That is very clear in our bill. We are not leaving ourselves open to judicial proceedings. On the contrary, the government would be allowed to spend up to $600 million. That is no small amount. It is big money that could create 21,000 jobs. And such a number of jobs would help lower unemployment figures across the country. That is particularly important in the current economic context. People are losing their jobs. They had very well-paying jobs and they now find themselves out of work, precisely because businesses are reducing their staff. So, these people are left with nothing. Rather than buying abroad, let us try promoting local procurement.

Hon. members may also have noticed that, in our bill, we are asking to respect a certain percentage for the provinces. This means that the Government of Canada should not buy everything in the same province. It must act fairly towards all the provinces, so that everyone can benefit from this initiative.

This is a very comprehensive bill. Even at the municipal level—and I am referring to my riding—the people, mayors and councillors are promoting local procurement. I know that this is already being done through awareness. However, at the federal level, we could have true legislation that would not only allow us to buy at home, but would in fact compel to do so.

I realize that this raises questions, and I know that we cannot ask questions amongst ourselves, because this is a fairly dry issue. However, I sincerely hope that the bill will be referred to a committee. That would answer Liberal members' concerns about the 7.5% and it would allow us to take an in-depth look at this issue. We could then have witnesses come and tell us that they agree with this measure, or that they want something to be changed. Let us make this a viable bill that can truly help all Canadians and Quebeckers to create jobs and to encourage our domestic industries, instead of buying products from abroad.

That is a priority right now. This bill comes at the right time. It is very well drafted, and it was thoroughly reviewed not only by the law clerks of the House, but also by several other legal officers. We must give it a chance and refer it to a committee, so that we can really look at it and deal with the concerns of each political party. It is my hope that, for once—although I doubt it—the Conservatives will try to be part of this group that is the House of Commons and will take a real look at the situation.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:05 a.m.
See context

Bloc

Monique Guay Bloc Rivière-du-Nord, QC

moved that Bill C-306, an act respecting the use of government contracts to promote economic development, be read the second time and referred to a committee.

Mr. Speaker, we have been working for a very long time on this bill which, I believe, has become even more important today in view of the current economic situation.

Just a month ago, a $34 billion deficit was projected, and we learned last week that it would reach $50 billion. The federal deficit will be $16 billion higher than projected. It is very difficult for workers, it is difficult for the public in general and it means that economic recovery will not happen tomorrow but much further down the road. Therefore, measures must be taken to encourage Canadians and Quebeckers and help them through this economic downturn.

Bill C-306, an act respecting the use of government contracts to promote economic development, would encourage buying in Canada. Of course many people would say that we are following the Americans and that this bill is similar to the Buy American Act. Yes, this legislation could be said to be a protectionist measure, but I want to make it clear that is has absolutely nothing to do with the American legislation, and I will explain why.

It is also for that reason that I would like all my colleagues to read the bill and to give us an opportunity to debate it in committee. It is indeed a rather complex piece of legislation and we must be able to discuss it in committee. This important bill will allow Canada to buy, annually, up to $600 million worth of products made in Canada, which could create up to 21,000 jobs.

Do we not need jobs at this time while we are facing an exceptionally high unemployment rate because of the economic crisis and because of the government deficit? Would it not be desirable to create 21,000 additional jobs to give people a chance to work?

We support free trade, international economic agreements and the WTO, and this bill does not interfere in any way with NAFTA, the WTO or international economic agreements. It deals with small amounts and targets purchases made by the government. We are talking about a portion, 9.3%, of the government's total expenditures for goods and services.

I see no reason to be against apple pie. Basically, this bill will be grist to our mill for the next few years and could help small and medium-size businesses grow and continue to operate during difficult economic times. It would be desirable to pass this bill, which is, after all, very specific.

Chapter 10 of NAFTA, which deals with government procurement, provides that, as a general rule, the government shall accord the same treatment to American and Mexican goods and services as to Canadian ones when making purchases. Conversely, the United States and Mexico commit to accord Canadian suppliers equally open-minded treatment. In the lingo of international agreements, that is called the national treatment rule.

Clause 7 of the bill is designed to reflect that obligation under NAFTA. NAFTA does, however, contain provisions allowing the government to buy Canadian in certain circumstances. These exceptions are far from insignificant and probably cover the majority of government purchases.

The legislation I am proposing this morning includes all of these exceptions and, in each case, requires the government to give preference to and buy Canadian products.

The main exceptions to the national treatment rule include any procurement where the value is under $50,000 U.S., $25,000 U.S. with respect to the United States in accordance to a provision of NAFTA that was renewed, calculated in constant January 1, 1994 dollars.

In current Canadian dollars, that means all contracts valued at less than $80,000. For crown corporations, the threshold is five times higher: $400,000. Also included are all purchases for construction contracts valued at less than $5 million U.S., in constant January 1, 1994 dollars. In current Canadian dollars, that means all construction contracts under $8 million.

For crown corporations, the limit is 60% higher, at $12.8 million. That includes all construction contracts from the Department of Transport, Infrastructure and Communities, meaning roads, airports, railways, docks, etc. It also includes all purchases made for national security purposes by the Department of National Defence, the RCMP or the Canadian Coast Guard. As well, it includes the construction, maintenance or repair of ships, subways and commuter trains; communication and monitoring equipment; most agricultural products, except those used directly by the government, for example, purchases made by the cafeteria of Parliament; cultural products; and a vast number of services.

The bill refers to more than 60 categories of services. I will name them, because it is important for parliamentarians to understand why this bill was tabled. The bill includes all financial services, all public services, all categories of health and social services, all services related to research and development. Heaven knows that the government has made cuts to research and development. It needs to get back to basics and reinvest in research and development. The bill also includes most telecommunications services; most transportation services, for passengers and cargo; most services related to government activities in the areas of agriculture and fisheries, such as tests, inspections, veterinary services, resource management, management of government facilities, postal services, transcription and translation services.

I think that given the situation we are experiencing right now, our bill is absolutely not comparable to the Buy American Act. We are simply asking the government to favour Canadian purchases for anything that does not fall under international agreements, and anything that costs less than $25,000 and does not require a call for tenders.

This bill also calls for purchases to be distributed equally among the provinces on a pro-rated basis so that all provinces receive fair treatment and not all purchases are made in Ontario and Alberta. We have to make sure that all of the provinces are treated equally.

I think that this bill is very clear and that we can talk about it in committee. If it needs to be changed or amended in any way, that can happen; we are open to that. But I don't think that we should turn our backs on the possibility of creating 21,000 jobs. We are not talking about huge amounts of money here. We are talking about $600 million per year, which is just a fraction of the government's annual budget. That would be enough to help some companies survive these economic times of plant closures and massive layoffs.

There have been lots of layoffs in my region. Bombardier laid off 1,000 workers and issued temporary recalls. Bell Helicopter laid off over 600 workers and also issued temporary recalls. That makes things very difficult for people who are laid off for a period of time then return to work with no job security. We have to support a buy-at-home policy.

We have the technology we need right here. Why buy things from other countries when we can buy them here?

This bill caps the price difference at 7.5%.

If the government wants to buy a Canadian product, it can spend up to 7.5% more. If I issue a $25,000 tender abroad, I can spend up to 7.5% more on Canadian products to support our own businesses. That is not a lot of money. It is relatively little. Spending $25,000 is not the end of the world; that is about how much would be spent on stationery, for example. That is money the government would spend anyway. They should be spending that money here. The government should be buying goods like that at home.

The House of Commons uses a lot of goods and services. Running Parliament is expensive. Why not support companies that can supply products the government needs? For example, Cascades, a company in my riding, supplies specialized stationery to the government. Of course there are tenders, but this is a good thing because the government is supporting a company that is producing goods here. Why buy things from Australia or any other country when our country is going through hard economic times?

This is also a message we want to send to the Americans. We love the Americans. We do not want to send them a negative message. We want to tell them that we too want to buy our own products. We want to give preference to some of our own products while honouring the agreements we have with them so as not to create conflict. The bill is written in such a way that we are complying with international agreements and respecting the American government, but we are sending the Americans a very clear message that, in an economic situation such as the current one, we too will give preference to our own products, in a far more respectable way than the Americans with their Buy American Act. We will be able to create employment and help our workers keep their jobs and small and medium-sized businesses stay open.

I sincerely hope that all the members of this House will read the bill. It may seem hard to understand, but I have given a good description of what it contains. I sincerely hope that the bill will be referred to committee so that we can hear witnesses. To date, I have spoken with a number of companies and unions that support the bill. They see it as a first step in at least stimulating the economy, which badly needs a boost.

The government could also take this approach in the future. We know that Canada and Quebec can be very prosperous. We could develop new businesses. We can invest in research and development. I sincerely hope that this bill will be examined in depth and that we will hear witnesses such as unions and interest groups as well as companies that support this bill, consider it a step in the right direction and feel that it complies with international agreements. This is very important to them. Many firms in Canada and Quebec export their products and need international agreements such as NAFTA and the WTO. Certainly, we want to keep on honouring those agreements while giving ourselves the opportunity to promote local purchasing.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:15 a.m.
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North Vancouver B.C.

Conservative

Andrew Saxton ConservativeParliamentary Secretary to the President of the Treasury Board

Mr. Speaker, the hon. member says that this bill will only affect $600 million worth of trade, a small amount, she says, but what about the message that it sends to the rest of the world? What about our reputational risk as a protectionist nation if we were to allow this bill to go through? Is it worth it for such a small amount?

There is no provision to exempt new and emerging trade agreements. In order to emerge from this recession, we need to continue trading with as few barriers as possible. The Great Depression taught us that the downward spiral of protectionism will only make the situation worse.

Surely, the member opposite cares about Canada's reputation and credibility. I would ask her this. If she is interested in our reputation, why is she putting forward a bill that is undermining current and emerging trade agreements?

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:15 a.m.
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Bloc

Monique Guay Bloc Rivière-du-Nord, QC

Mr. Speaker, that does not make sense.

The Conservatives are introducing bills to enter into bilateral international agreements with developing countries that have certain problems. Those agreements contain no measures to protect workers and the environment. We do not need to take any lessons from them.

Second, it is true that $600 million is not a large sum, but it is a step in the right direction, and not a step back. What message would we be sending to the rest of the world? It would show that we are taking care of our own affairs, our citizens, our workers and our industries, while still respecting all international agreements. We therefore do not need to take any lessons from the Conservatives in that regard. They need to go back to the drawing board when it comes to the agreements they are trying to conclude with troubled nations.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:20 a.m.
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Liberal

Martha Hall Findlay Liberal Willowdale, ON

Mr. Speaker, in discussing Bill C-306, An Act respecting the use of government contracts to promote economic development, we have to remember that we are in the middle of a worldwide recession. As Canadians, we are in fact in the process of arguing strenuously against any American efforts at protectionism. They are very, very real, as many manufacturers in this country have already discovered. Protectionism, particularly at a time of such economic crisis, is simply not the direction we want to be going in.

With regard to specifics in the act, there is no empirical evidence or sound economic reasoning behind what the bill is trying to achieve. The 7.5% price differential this act wants to apply was pulled out of a hat. There is no logical way of measuring the Canadianness, and an attempt at measuring this for the 50% to 75% requirement simply does not measure up. The agreement certainly does not provide any indications.

The act tries to suggest that NAFTA will still be complied with. We have serious doubts that this is even possible, and it certainly goes against the spirit of it. Therefore, for many reasons, we do not support Bill C-306.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:20 a.m.
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Bloc

Monique Guay Bloc Rivière-du-Nord, QC

Mr. Speaker, both sides of the House are very similar.

We must stop being afraid. It is time to show some backbone, as they say, and do something. It is not true that we are sending a negative message. We are sending a positive message that shows that we are standing up for our citizens and that we also want to invest in our own country. We do invest elsewhere; we export our products. We are one of the world's biggest exporters. That does not stop us from establishing measures for our country in order to protect certain companies and create jobs. It is a question of $600 million. That is a small sum. It was limited for that very reason. Norms were established to ensure that it respects international agreements. What else does the member want? There is no doubt it will be respected; that is in the bill.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:20 a.m.
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Bloc

Guy André Bloc Berthier—Maskinongé, QC

Mr. Speaker, I would like to congratulate my colleague on Bill C-306, which was inspired in large by the Buy American Act that currently exists in the United States. However, this bill will have a lesser impact than the Buy American Act since it gives preference to Canadian products in government procurements only. How does she explain that both the Conservatives and the Liberals seem to want to oppose this bill? We know about the free trade agreements with the Americans with regard to softwood lumber. We heard about how the Buy American Act is affecting the steel industry. This bill is a small step towards protecting our jobs, but other parties seem determined to oppose it. I would like to hear my colleague's comments on that.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:20 a.m.
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Bloc

Monique Guay Bloc Rivière-du-Nord, QC

Mr. Speaker, I was on the executive of the Canada-United States Association for 10 years. It was during the softwood lumber crisis. The Americans did not do us any favours nor did they intend to. We need to take matters into our own hands. It is true this bill is small step and presents no danger. It is high time we passed such legislation.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:20 a.m.
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North Vancouver B.C.

Conservative

Andrew Saxton ConservativeParliamentary Secretary to the President of the Treasury Board

Mr. Speaker, I rise today on behalf of the government to argue against Bill C-306, which the hon. member from the Bloc introduced last February.

The year is 2009, not 1929. We live in a time when Canada no longer needs to prop up its industries with protectionist laws. We live in a time of liberalized trade and increasingly open world markets.

The fact is that Canada is a trading nation, and it always has been. Trade is a huge part of who we are. It is a part of our past, it is a part of our future competitiveness and it is a key part of our fight against the current recession.

In a recent report by the World Economic Forum, Canada ranked fifth among 118 countries in enabling trade. That report measures the degree to which a country facilitates international trade and investment, and it bears witness to its successful economic development.

Indeed one in five jobs in Canada is dependent on international trade, and we export half of all our manufactured goods. Clearly our success as a nation is built on increasing trade with other countries, not putting up barriers to trade.

However, this bill would do exactly that. It would put up trade barriers by making it the law that federal departments and agencies buy only Canadian produced goods, and not only that, but buy them at prices up to 7.5% higher than the competing products of other countries. This is deeply flawed economics and a very short-sighted response to the recession.

However, we do not have to take my word for it. Both the Prime Minister and the Minister of Finance have said publicly that protectionism is not the way to fight a recession. Their position, and that of the government, has been stated clearly: protectionism would mean recession, or worse, for a very long time.

Just a few months ago, in Washington, the Prime Minister spoke out strongly against protectionism in the United States, saying, “If there is one thing that could turn a recession into a depression, it is protectionist measures across the world”.

The reality is that the economic slowdown is not just a Canadian problem; it is an international one. All countries need to focus on stimulating the global economy because we are in a global economy, not just our national economy.

One of the ways we are doing this is by keeping protectionism at bay. This is the point that Bill C-306 completely fails to grasp.

Can we imagine what would happen if Bill C-306 did become law? First of all, Canada would be made an international laughing stock. After all, at the November summit of the G20 countries, we, and all other countries, agreed to avoid a return to protectionism.

That the hon. member opposite would table such a bill shows how out of touch she and her party are. At a time when the world needs less protectionism, the hon. member has produced a bill that would force government departments and agencies, crown corporations and even foundations to buy Canadian products at inflated prices and to invite retaliation.

That is woolly economics. From the point of view of our trading partners, it would be a subsidy. Our trading partners would have a field day the next time we find ourselves in front of an international trade tribunal, which will be soon if the bill passes.

What kind of retrograde thinking is this when the countries of the world are acting together to fight the worst economic crisis in a generation? If we want to protect jobs today and position the economy for growth in the future, we do not do it by hiding behind artificial barriers to trade. That is totally wrong-headed.

For one, we are not helping our industries to become more competitive; we are coddling them. For another, adding a price preference for Canadian products essentially adds 7.5% to the operating costs of government, at all levels. I cannot believe that a member of the House thinks that is going to make our economy more competitive.

At a time when Canadians are sacrificing and when governments have put their costs under the microscope, to suggest that we pay a premium for bad economics is the height of absurdity. Our government is not looking backward like this. We are looking forward and outward.

We are against protectionist policies and we are determined to respect and uphold our trade commitments with our partners. That is why our Prime Minister was in Europe earlier this month, opening doors on trade talks with the European Union potentially worth $12 billion in new Canadian exports.

The government has a perfectly good plan to fight the recession. It is the economic action plan. This multi-year plan outlines the steps we will be taking to stimulate the economy, to protect Canadians during a global recession and to invest in our long-term economic growth. As a result of these actions, Canada will emerge from this recession with better infrastructure, a more skilled labour force, lower taxes and a more competitive economy.

To finance this plan, the government is making a deliberate choice to run a temporary deficit to help stimulate our economy. There will be no long-term running of permanent deficits because the approach we are taking emphasizes capital expenditures rather than increasing the operating costs of government. This allows us to meet short-term needs while serving long-term goals. It helps sustain and create jobs during the global recession, and it allows us to build the infrastructure our country needs for long-term growth.

As the economy recovers, we fully expect to emerge from deficit and return to surplus within five years. We will use future surpluses to pay off the debt incurred during this recession. This plan will get money into the hands of individuals, families and communities in all provinces and regions of this country.

The measures we are taking are necessary, affordable and short term. I want to emphasize that point. It is temporary. It will not permanently increase the cost of government. We will continue to avoid a long-term structural deficit that we cannot afford. The amount that we borrow this year will remain affordable and reasonable by international standards.

Let me also assure the hon. members that the economic action plan contains many measures to support industries in difficulty, including the forestry, manufacturing, tourism, agriculture, fisheries and automotive industries. At the same time we need to focus on keeping our markets open and continuing free trade with our American partners. When 80% of our manufactured goods are dependent upon the U.S. market, we cannot afford to start putting up barriers to trade. Nobody can, so let us not start with this bill. We need to keep the Canadian market open and we expect our trading partners to do the same.

Do the hon. members of this House honestly think that the best way to fight the recession is by increasing the cost of government and putting up new trade barriers at this time? Do they think that is the best way to protect jobs and prepare Canadians for the future?

I doubt the majority in this House would agree that this is the best way forward. I would ask members to vote to defeat this bill, which would undo everything that Canada and the world is fighting for: more jobs and strong, competitive economies for the future.

Canadian Products Promotion ActPrivate Members' Business

June 1st, 2009 / 11:30 a.m.
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Liberal

Martha Hall Findlay Liberal Willowdale, ON

Mr. Speaker, we do not support Bill C-306. Frankly, the bill seems aimed less at being passed than as a medium for certain partisan discussions. Its purpose seems to be to implement buy Canada legislation in response to the buy America provisions in the recently enacted U.S. budget. It is for those very reasons that we object to it. We are in the middle of a worldwide recession. Protectionism is widely regarded as the worst possible thing that countries could engage in in a worldwide recession. We are in the throes of objecting strenuously to the American buy America provisions.

As an aside, we on this side of the House are very upset with the fact that the current Conservative government has not done nearly enough in anticipating these buy America provisions and working in Washington before they were enacted to ensure that they were not, and we are seeing many manufacturers in Canada already suffering as a result. We have a concern that the current Conservative government has not done nearly enough to deal with these protectionist measures, but our position is very strongly that they do not belong, especially in a time of worldwide recession. In that sense, for a Canadian bill to suggest a similar approach is completely opposite to what makes sense from an economic perspective.

We have some significant concerns with the way the bill has been drafted. There is no empirical evidence or sound economic reasoning behind what the bill is supposedly trying to achieve. The 7.5% price differential this bill wants to apply seems to have been completely pulled out of a hat. There is no logical way of measuring the Canadianness and an attempt at measuring this for the 50% and 75% requirements in the bill is comical, at best. The agreement certainly does not provide any indication of anything otherwise.

The bill attempts to say that the provisions of NAFTA would still apply but, in our view, certainly this bill contravenes NAFTA and it certainly contravenes the spirit of our free trade agreements with the United States, Mexico and others.

The bill is poorly and vaguely drafted to allow for interpretation that may be inappropriate, in our opinion.

Ultimately, if protectionist measures are imposed, our significant concern is that this will harm Canada's economy, not improve it. We are on record as saying that free trade is important for economic competitiveness, economic sustainability and ultimately, economic prosperity. We object strenuously to the American attempts at protectionism, and we have said so publicly. For Canada to be seen to be attempting to do so completely flies in the face with our public position. Not only would it be damaging to our economy, but it would be extremely damaging also to our international reputation.

Mr. Speaker, I neglected at the beginning to ask to split my time with my colleague from York South—Weston. If it is all right with the Speaker, having neglected to do so, may I make my request at this point and ask my colleague to step in?