moved that Bill C-392, An Act respecting the use of government procurements and transfers to promote economic development, be read the second time and referred to a committee.
Mr. Speaker, the current debate on protectionism, trade and the U.S. buy American policy has been framed around the claim that protectionism was the cause of the Great Depression and that the Government of the United States is moving dangerously toward greater protectionism.
In fact, before they even knew the details of the buy American provision in the U.S. Congress stimulus bill, the Conservatives were out defending free trade and criticizing American protectionism.
The Canadian government acted aggressively against the U.S. Democratic government's stimulus plan despite the fact that existing U.S. law already created local content requirements under the buy American act which dates back to the early 1930s.
A small fraction of the procurement in the buy American bill would have been under federal U.S. jurisdiction. Most of the money was destined for the states and cities to spend under their own local procurement rules.
The bill I have introduced is straightforward instituting a made in Canada procurement policy for the federal government and its agencies. The bill would ensure that Canadian companies are given the first opportunity to bid on federal government contracts that are not restricted by international trade agreements such as NAFTA or the WTO.
This approach is reasonable, populist and consistent with the approaches taken by the U.S. and most European countries. In fact, a May 2008 poll revealed that an astounding nine out of ten people think the government should buy Canadian made equipment when it comes to key public purchases because Canadian communities should benefit from federal procurement.
The current piecemeal approach should be replaced by a clear, transparent buy Canadian policy, which is precisely what my bill would achieve. The bill would go a long way toward building new markets for Canadian suppliers, strengthening sustainability and fulfilling our environmental commitments, while encouraging Canadian entrepreneurship.
The bill would help support sectors in crisis, including auto, steel and forestry, and replace the governments ad hoc approach with a consistent policy.
Local spending of stimulus investments is necessary for effective job creation and job protection. Canadians expect their government to invest their tax dollars wisely. By investing in our communities, we can support local jobs and generate more tax revenue that in turn supports our families and national services.
Ironically, while the Prime Minister and some premiers have been busy attacking U.S. protectionism, many cities, provinces and even the federal government itself already apply buy Canadian local content policies for procurement on a case by case basis.
The government and its Liberal allies want a deregulated, unmanaged, let the market decide approach to trade. That quite simply places Canadian jobs and sectors at risk. Conservatives are unwilling to defend Canadian workers and industries, like manufacturing, forestry, auto or steel. They say that it contravenes our trade obligations. Nothing could be further from the truth.
A comprehensive review of Canada's obligations under WTO agreements and NAFTA reveal that buy Canadian policies adopted by municipal, provincial and federal governments would not violate any international or internal trade agreements. In short, Canadian government have far more room to adopt these policies than is often believed.
Provincial and municipal governments can specify levels of Canadian content for purchases and, under some conditions, even restrict tendering entirely to Canadian made goods. The ability to adopt comprehensive buy Canadian policies applies not only in the high profile area of public transit but to all purchases; everything from garbage trucks to office furniture, uniforms, construction materials and more.
For the federal government, made in Canada options are much more constrained by international procurement rules under WTO, NAFTA and other international trade agreements. Successive federal governments have given away many rights under different trade agreements but they have also explicitly maintained rights in certain areas. The exceptions include federal transfers to provinces and municipalities that do not fall under international trade agreements.
There are also two broad areas of exemptions under NAFTA: one for the purchase of goods for the Royal Canadian Mounted Police and the Department of National Defence, and the other for goods related general federal government procurement, including things such as shipbuilding and repair, urban rail and transportation equipment and materials, communications equipment, research and development, health and social services, financial and related services, utilities and agricultural products. Smaller contracts are also exempt, in particular, those under $28,000.
However, despite these exemptions, millions of tax dollars have been spent on acquiring goods and services from foreign countries. I have some upsetting examples.
In 2006, the federal government approved nearly $13 billion in defence and aerospace purchases, mainly from the United States.
In 2006, the Canadian census was outsourced to an American company, Lockheed Martin, which is part of the American military industrial complex.
In 2007, the federal government purchased new intercity buses from Germany, bypassing two highly qualified Canadian firms.
In 2008, the uniforms for our Canadian Olympic team were outsourced to China.
Between April 1, 2007 and March 31, 2008, 466 contracts were awarded under the NAFTA threshold of $28,000 to vendors in the United States. In the same time period, the federal government awarded 47 competitive contracts, valued at over $47 million, to vendors in the United States for communications equipment, equipment that is exempt from NAFTA.
We need to consider what these contracts meant to Canadians, like workers in Winnipeg. The Prime Minister and the federal Conservative government chose to sell out over 1,000 Winnipeg workers for a savings of 0.5% on a bus contract, or about $2,000 per bus; the cost of a set of tires. Motor Coach Industries has been making military buses for more than 60 years but the Conservative government gave the contract to a German company, and those buses were built abroad. Jobs were lost and opportunity was lost for the price of a set of tires.
I believe the majority of Canadians would like to see their tax dollars invested in Canada. There are many business organizations that also support this initiative.
The Ontario Chamber of Commerce, which represents 57,000 businesses across the province, strongly endorses a policy that mandates Canadian content levels for publicly funded mass transit and transportation projects.
The Canadian Manufacturers & Exporters has also publicly supported the need for the Canadian government to apply rules and regulations that favour Canadian content when it funds infrastructure and mass transit projects under its authority or under the authority of provinces and municipalities.
The Canadian Auto Workers have argued in favour of a made in Canada policy. It maintains that Canadian citizens expect their governments to spend their tax dollars wisely. They also expect all levels of government to invest in their communities.
The economic benefits of spending at home are well-known. These expenditures support jobs, fund payrolls and generate much needed tax revenues.
Tragically, today many Canadians are faced with an uncertain economic future. Well-paying, secure manufacturing jobs are disappearing at an alarming rate. More than 350,000 have been lost since the current government took office. Ensuring that our tax dollars are spent to support good jobs in our own communities just makes good economic sense. When we are facing a recession, the need for action is urgent.
Many countries are investing domestically. Some of Canada's largest trading partners are included. Member countries of the European Union, Japan, China, Mexico and the United States all have local procurement policies.
Under the buy American act, U.S. law requires 60% domestic content and domestic final assembly for federally funded public transit purchases and 100% domestic content for material inputs like iron and steel.
The Americans, the Chinese, the Mexicans, the Japanese and most European countries understand that investing in local communities makes good economic sense. According to the Federation of Canadian Municipalities, each $1 billion in new infrastructure creates 11,000 jobs; more than twice as many jobs as the equivalent tax cut.
Canada needs to take a lesson from our trading partners. By investing our tax dollars in Canadian companies and investing in Canadian jobs, we can dig ourselves out of this recession faster. With a focus on made in Canada products, we can generate not only more jobs but an increase in tax revenue that can be used to pay down our deficit or reinvest again in Canadian workers. By investing in ourselves, we can build the strong communities that support families.
Many Canadian companies across this great nation would benefit from made in Canada legislation. In my riding of London—Fanshawe, the manufacturing sector has been particularly hard hit with cutbacks, shift reductions and even plant closures. There are companies fighting through this economic downturn that would benefit from a boost in government investments in Canadian companies, companies like Sciencetech, a designer and manufacturer of scientific instruments. Sciencetech has been operating in my riding since 1985.
Purifics, an engineering firm that provides environmentally smart engineering systems and products for both industry and municipal government, has been headquartered in my riding since 1993.
Trojan Technologies is a water treatment technology company that builds disinfection systems for municipal waste water and drinking water for both municipal and commercial applications, as well as industrial applications.
Those are Canadian companies that bring benefit and could benefit from the passing of this made in Canada bill and there are many more companies across Canada that could also benefit from such legislation.
Navistar in Chatham could have saved local jobs if the federal government had not awarded a military truck contract to a firm in Texas.
The Prime Minister has spent the past several days in Washington meeting with the President of the United States and the American Congress. He is there, apparently, to try to persuade the president to change his stance on the buy American policy, a policy that has been in place, as I said, since 1933. I believe the Prime Minister is wasting his energy. He should focus his efforts and those of his government and make Canada's businesses a priority. No other country will make Canadian business a priority if Canada does not.
The Canadian manufacturers and exporters argue that:
In spite of NAFTA and the WTO’s Agreement on Government Procurement, which provide fair treatment to signatory nations when granting certain contracts, the U.S. government succeeds in promoting manufacturing on U.S. soil while respecting these agreements. ...restrictions exist regarding a manufacturing presence in the U.S. for all projects funded by the U.S. government in the sectors of mass transit, airports or road construction. These policies help meet economic development goals by striving to maximize the impact of government funds on U.S. industry.
However, Canadian companies do not benefit from the same support from their own governments, even though Canada has economic development goals which are similar to those of its main trading partner, and even though it is important for Canadian companies to have support that is similar to the one obtained by foreign companies from their governments in order to be competitive on a global scale. Too often, international agreements to which Canada is a signatory have been estimated to be restrictive regarding the actions it can take, to the point where it is powerless. However, Canada does have a scope of concern that is does not use, to the detriment of companies that choose to design and manufacture their products here.
Because of restrictions based on U.S. content...[and] the absence of such rules in Canada, Canadian manufacturers [are going to the U.S.]
This explains, in part, why the Canadian presence of companies is so intense along the U.S. northern border.
Those companies can bid on contracts on both sides of the border. Our Canadian companies are precluded from the U.S. market. These are jobs that have moved to the United States because we have a timid government.
My bill is not protectionist. It simply updates our laws to reflect those of our major trading partners. I want to give Canadian companies the same opportunities as their American counterparts. I want to stop penalizing companies for staying in Canada. I believe that the point of international trade agreements such as NAFTA and my bill is within limits of those.
If my bill had been in place before the current recession, we could have protected those jobs in Winnipeg, at Navistar, Lear, Sterling Trucks in St. Thomas and Siemens in London. I want job security for Canadian workers, for the people of my community, which is the purpose of my bill. I ask the members of the House to support it for the sake of our families, workers and Canadian companies and do what other nations do. Let us use our resources for the benefit of this country.