Bill C-306 (Historical)

Canadian Products Promotion Act

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

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.

Sustaining Canada's Economic Recovery Act

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

Mr. Speaker, I completely agree with our hon. colleague who said that it would have been interesting if the government's economic action plan had focused more on moving toward a green economy. But that was not the case; in fact, quite the opposite.

I heard our Liberal Party colleague talk about the importance of taking care of our seniors. Yet when I was first elected to this place in 2004, the Liberal Party was in power and we were calling for an increase in the guaranteed income supplement, as well as reimbursements to many seniors cheated out of their guaranteed income supplement for a number of years. Nothing happened. Instead, the Liberal Party at the time plundered the employment insurance fund, stealing from the unemployed, and that has continued under the Conservatives.

Last week we voted on Bill C-306. Unfortunately, most Liberals voted against the bill. With all due respect to the member, whom I know well, I have to wonder why he is talking about social measures. The closer they get to power, the more they seem to adopt the Conservatives' ideology when it comes to social programs.

Canadian Products Promotion Act

[The Speaker, Liberal, Peter Milliken]

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-306.

The House resumed from October 19 consideration of the motion 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.

[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.

[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.

The House resumed from June 1, 2009 consideration of the motion 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.

Made in Canada Act

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, today we are voting on Bill C-392. I will read the summary because there are two aspects to this bill that promote employment and economic development in Canada by ensuring that the Government of Canada, while complying with its international obligations, gives preference to Canadian products or services in transfers to provinces, municipalities and private parties and in the procurement of its goods and services.

Let me say from the outset that the bill before us imposes conditions on cash transfers from the federal government to Quebec and the provinces. Once again, that is the sadly centralized and paternalistic vision of federalism rejected by Quebec. It is an insult to the Quebec nation and under no circumstances will the Bloc Québécois support a motion, bill or any other parliamentary initiative that seeks to undermine Quebec's autonomy by imposing conditions.

Furthermore, the members of the National Assembly have unanimously called for unconditional transfers. I see that my colleagues are paying close attention. I say to them that what we have here are the two visions of what Quebec should be. A sovereign Quebec would make it own decisions and would not let transfers or transfer conditions be imposed on it. But the bill before us is a federalist bill that says that when the Government of Canada makes transfer payments to the provinces and municipalities, it has to impose its vision. I would remind you that, in Quebec, the municipalities are creatures of Quebec, of the National Assembly. We have our own legislation in Quebec. We are not happy with this part of the bill.

The NDP bill also runs counter to Quebec's long battle to correct the fiscal imbalance. Quebec is calling for the right to opt out of federal spending programs in areas of shared and exclusive jurisdiction of Quebec and the provinces, with full compensation and with no strings attached. Unfortunately, the NDP has introduced a bill that interferes in Quebec's areas of jurisdiction.

We will oppose this bill for that reason, but also for another reason: the Bloc Québécois has already introduced Bill C-306, which would enable the government to use government contracts to promote economic development, while respecting the jurisdictions of all governments and complying with trade agreements. In Bill C-306, which is quite similar to the bill before us today, the Bloc Québécois ensures that, within international agreements, the federal government uses its procurement as an economic lever to promote the growth and prosperity of businesses here. This bill would enable Canada to purchase up to $600 million annually, which is the equivalent of 21,000 jobs a year. In a way, it is also a response to the Buy American Act, and it would add to the pressure on the U.S. government to drop this sort of measure. This bill we have introduced focuses specifically on purchases not subject to NAFTA. In other words, it complies with the rules and the spirit of NAFTA, which would address the concern my Liberal colleague expressed earlier.

However, this bill is much narrower in scope because it would affect Government of Canada goods and services procurement only. It would target purchases whose value falls under the threshold requiring the government to issue public tenders under NAFTA. It would target only small federal government expenditures under $25,000 U.S.

We know that the Government of Canada is the largest buyer of goods and services in Canada, that it makes about 3% of its purchases abroad, and that passing a buy Canadian bill like the one the Bloc Québécois is proposing, as opposed to the one before us today, would halt the flow of some $600 million to other countries. If only half of those purchases had been made in Canada, we would have created an estimated 21,000 jobs per year.

If the Bloc Québécois bill were passed instead of the one before us today, that would mean over $60 billion spent in Canada, perfectly legally, without having to deal with NAFTA legal negotiations.

The bill before us today contains conditions that are unacceptable to Quebec, conditions governing cash transfers from the federal government to Quebec and the provinces. We do not like that idea. We want our independence, and we will never accept such a federalist, paternalistic vision. Furthermore, the Bloc Québécois has already introduced Bill C-306, which would use procurement to promote the kind of economic development that does not impose conditions on Quebec and the provinces and that complies with international agreements.

That is why, unfortunately, we cannot vote for Bill C-392 even though it is well-intentioned.

Bill C-306

[Monique Guay, Bloc, Rivière-du-Nord, QC]

Mr. Speaker, on June 1, I spoke to Bill C-306, An Act respecting the use of government contracts to promote economic development at second reading . This bill will make it possible to create hundreds of jobs and, we hope, to attenuate some of the negative effects of the economic crisis we are going through.

What did the Conservative member and Parliamentary Secretary to the President of the Treasury Board have to say? “The year is 2009, not 1929. We live in a time when Canada no longer needs to prop up its industries with protectionist laws.”

As for the Liberals, they said they would not support Bill C-306 because “the bill seems aimed less at being passed than as a medium for certain partisan discussions.” Yes, let us send this bill to committee where it can be discussed. What a lukewarm reaction from the Liberals.

As for the workers of Quebec, they understand that one of the things a bill like C-306 is aimed at is economic recovery.

Canada-Peru Free Trade Agreement Act

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

Mr. Speaker, I would like to congratulate my colleague on his excellent speech on the Canada-Peru agreement, which is somewhat similar to the Canada-Colombia agreement. The agreement allows mining to occur in situations where, often, neither the country nor the investors respect human or environmental rights or labour standards. This bilateral agreement also includes chapter 11, which protects investors from future policies that could help workers in countries with mining activity.

This morning, the House considered Bill C-306, and the Liberals and Conservatives spoke against it. That bill would have created jobs here at home, in our regions. The bill would have strengthened our position vis-à-vis free trade agreements with the United States, but they were against it anyway.

I would like my colleague to comment on the corporate social responsibility motion moved by a Liberal Party member and supported by the Liberals. Why does he think the Liberals voted for a foreign corporate social responsibility motion, then turned around and voted for bills that do not respect workers' rights?

Canadian Products Promotion Act

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, it is a pleasure for me to rise in the debate on Bill C-306, introduced by my colleague from Rivière-du-Nord.

I prepared a speech on the bill this morning, but after listening to the Conservatives and Liberals, I do not think I will need it. I am just going to talk a bit about whether these representatives of ridings all across Canada are aware of the consequences of voting against a bill like this.

Are the hon. members in touch with their constituents? Or do these Conservative and Liberal members always stay in Ottawa and never get out to meet the people? I think that must be it.

If these members met the workers in their individual ridings, they would know that these people want to work. Even though we are talking about protectionism and keeping jobs in Canada, Bill C-306 is not the end of the world. It is hardly the Buy American Act. It does not talk about 40%, just 7.5%. We chose very small numbers precisely because we did not want to frighten off the Liberals and Conservatives, but those numbers are still too big for them. It seems we should keep giving and doing nothing, and should not protect our jobs.

We are talking about $600 million here, in the knowledge that $300 million would create 21,000 jobs a year. The Liberals ask the Conservatives every day what they are going to do about the crisis in softwood lumber and how they are going to create jobs, but the Conservatives never answer. Twenty-one thousand jobs could be created now in a very reasonable way, but the party in power refuses to do it and the power that aspires to power refuses as well. We are not going to create jobs by sitting on our hands and wondering what the rest of the world would say.

The Liberal member just said we would be an international laughing stock. Do they know what it is to be an international laughing stock? It is when Olympic athletes go to other countries dressed in clothes made in China rather than in Canada. That is what it is to be an international laughing stock. We cannot even make clothes for our own athletes. We have them made elsewhere.

We took this a bit further than they wanted. It is the same as when the NDP reacts to buses being purchased in Germany, something that I objected to as well. It is quite the situation. Canadian companies build buses, but we turn our backs on them and award these contracts to Germany. I understand the situation, but we have jobs to protect right here.

The Conservative government will not stand up for Canadians and the Liberal Party, the official opposition that aspires to power, says it is ready to defeat the government at the first opportunity. Neither of these parties is really able to stand up to the Americans and tell them that they could do a bit better with their steel products. It is only fair and reasonable for us to present our proposals. We are not talking about $600 billion here, just $600 million.

I think it is very reasonable in all respects to proceed with this kind of bill, and that cannot be said about the Conservatives and the Liberals with their fear of the Americans and of what they might do and what they might say.

Canada is being colonized by the Americans, and we are incapable of standing up to them. We cannot even stand up in front of our working people and say we will try to protect their jobs, will go to any lengths to save their jobs and are even going to create some new ones with Bill C-306. That is all perfectly clear.

I cannot understand how we can enter into free trade agreements with Peru and Colombia, and in all of that, the Liberals and Conservatives are focusing their interests on other countries. You can talk to them about the workers, people who work every day to earn a living, who work 40 hours a week and give half their pay to the provincial and federal governments, but they laugh in their face. I find this disappointing.

I hope that the people listening to us today will see how wishy-washy the party that aspires to power is. Today it is a little too far left, and not in a protectionist way, compared to the voters. The official opposition can forget about asking the public to elect it to form the next government when it cannot even step up to the plate for $600 million. These poor Liberals want to trigger an election campaign when they cannot even take a stand. In my riding, people will know that we tried to enact a few little measures to keep the jobs that are available and create jobs at home and that two parties in this House of Commons were strongly opposed to it and said we would be an international laughingstock. The laughing stocks in Canada and Quebec are the Liberals and the Conservatives. I am not even weighing my words because I could say even more than that.

We do have to assume that things might change fairly quickly. Ultimately, if they agreed to give this bill second reading and refer it to committee, we would be able to see its value. Today, it is being brushed off by those two parties without giving us a chance to consider it or hear witnesses such as representatives of unions, companies and industries who could tell us whether it is a good bill and a good start. The bill is small step, but at least it is a start.

We just want to refer it to committee and they want to pull the rug out from under our feet. They do not want to hear about it so as not to upset their American friends. I have some news for them. All they have to do is ask Canadians and Quebeckers what they think about a little protectionism to keep and create jobs here at home. All of these members, sitting here in this House, have not gone out to see the public they represent, to learn whether or not they agree with the protectionist measure in Bill C-306. I firmly believe that these members sit in this House and listen to one or two people, and are afraid that some people will not like them as much.

Does a country that decides to take a stand at some point think about what the country next door is going to say? It works for its people. We are talking about a people, but some individuals are unable to think of there being a people. They recognized the Quebec nation, but they are unable to keep their word. We want to give our workers, our workers who are in trouble, a little more. We are in a recession. The budget the Conservatives have proposed was supported by the Liberals, but today they are telling us they do not know where we are going. We find that we are short $50 billion.

For all these reasons, I completely agree with Bill C-306 and I hope we will move forward with it.

[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?

[Andrew Saxton, Conservative, Parliamentary 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.

[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.

[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.

[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.