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.