Bill C-392 (Historical)

Made in Canada Act

An Act respecting the use of government procurements and transfers to promote economic development

The purpose of this enactment is to 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.

Made in Canada Act

[Irene Mathyssen, NDP, London—Fanshawe, ON]

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.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I listened intently to the member for London—Fanshawe and her new-found love of infrastructure spending.

I am an entrepreneur in my other life and I agree that Canadian companies should sell their products. They should sell their products because they are the best at building their products. They should sell their products because they go out and market them.

However, I heard a new-found love for local spending on infrastructure in the member's speech. I have seen her in her riding and, indeed, she mentioned a couple of companies in my riding. She has been in my riding. She will stand wherever she can behind a great big cheque that supports local infrastructure and the growth of companies in our country.

However, I would like to ask her how she squares that circle. Back home she is an infrastructure champion but here in the House her and her party voted against every dollar that we put forward in the economic action plan. She is a champion behind a podium here in the House but—

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Not any more.

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

You haven't read the bill.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

How can we square that circle?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I find it quite fascinating because I, too, have a reasonably long memory and a reasonably good grasp of what goes on in this place and the policies that we have seen.

Mine is not a new-found love for infrastructure projects. I go back to a government that begged Conservatives in the House, in 1990, to put in place infrastructure, to save jobs in the province of Ontario. They could not be bothered. They had no interest in it. The current government was brought kicking and screaming to the idea of investing in our communities through infrastructure.

Last November there was no recession. Last November there was no deficit. Last November Conservatives came in here with an economic update that was an insult to every Canadian and members of our communities. They have the audacity to stand and say that somehow this side of the House, this party, is not interested in helping Canadians.

I will be everywhere it takes to stand up for the people in my community and for their jobs. I will take nothing from that side of the House and nothing from that member.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I am sure time is limited so I will make this question very quick. She has quite a bit of enthusiasm for her disdain of the current government. This is a simple question. Does she have confidence in this government, yes or no?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I have confidence in Canadians. I have confidence in our ability to dig ourselves out from under that.

It does not mean that I have any particular love nor faith in the Conservative Party. It has given me absolutely no reason to believe in it. However, I will stand up for the unemployed. I will stand up for pensioners. I will stand up for those who need it. Unlike Liberals who gutted the EI system and threw Canadians to the wolves, I will be there when my constituents need me.

I do not like that side and I do not like the other side. I like the policies that bring Canadians to a point where they can look after their families; plain, simple and straightforward.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Speaker, I appreciate the intentions, but how on earth can we possibly continue to stand and rally against the buy American provisions, while at the same time support a buy Canadian provision? How can she possibly support that at this point in time?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, it is fascinating. The Prime Minister has gone on bended knee seven times to the Americans about their policy of procurement and did not get anywhere.

If we cannot convince Americans to let us in, we need to ensure that this country lets Canadian manufacturers in to our procurement policies.

[Andrew Saxton, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, that is a hard act to follow, but I will do my best. I will be splitting my time with the hon. member for Elgin—Middlesex—London this afternoon.

I appreciate the opportunity to rise today to speak out vigorously about private member's Bill C-392. The bill is another attempt—

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I rise on a point of order. I have no objection with the member splitting his time, except that within the Standing Orders, my impression is that he has to have the unanimous consent of the House.

[The Acting Speaker, Barry Devolin]

The member for Hull—Aylmer is correct. During private members' business, if a member wants to split his time, he or she does require unanimous consent.

Does the hon. member have unanimous consent?

[Some hon. members]

Agreed.

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, I thank my hon. colleagues for that unanimous consent.

The bill is another attempt by a member of the House to use the economic crisis for political purposes rather than helping Canadian families and businesses.

Bill C-392 would require that the government, including crown corporations and any foundation or trust with 75% of its income from the government, give absolute preference to Canadian goods and services in its procurement policies. This would also apply to transfers to the provinces, municipalities and private parties. This is the plan from the opposite side for economic development and employment, and I call it a recipe for disaster.

As members know, the economic crisis has been a synchronized global economic meltdown. No industrialized nation has been untouched by its impact. As a result, the nations of the world came together to fight the global recession with measures to stimulate our economies, and Canada was among them. We in this country are coming back.

Earlier this month, Statistics Canada reported an increase in employment during the month of August, a sign the economy is moving in the right direction. A recent report from the CIBC says that Canada's economy is to grow 2% in 2010, half a percentage point stronger than in the United States and more than double the growth expected in the eurozone economies. This is good news, but to keep the recovery on track, trade is essential.

Everyone knows a recession cannot be fought by using protectionist measures to close the markets in a shortsighted and ill-conceived attempt to save domestic companies and jobs. The last time that was tried it was followed by the Great Depression. That is the lesson of this economic crisis and of history.

In the global marketplace no country is an island. Our government knows the importance of engagement with the world. That is why the Prime Minister has publicly stated he is against protectionism. That is why Canada's policy is to counter buy American provisions in the U.S. and economic stimulus package. Has the hon. member who proposed Bill C-392 understood the lessons of history? I do not think so. Her bill would turn an economy and a nation, built on trading with the world, away from the world.

We cannot fight a recession by choking off one of the key drivers of economic growth. That is what the bill would do. It would slow down stimulus spending by limiting it to those companies that are be acceptable to its narrow criteria. It would penalize small Canadian suppliers that are distributors of foreign made goods in terms of winning contracts. It would increase administrative costs for those companies to demonstrate the origin of their goods and services. In addition, it would increase administrative costs for recipients of federal government transfers, like provincial and municipal governments, charities and individuals.

The government has worked hard to do exactly the opposite, to cut the red tape for organizations doing business with the government. We know the cost of government is an important factor contributing to the competitiveness of our economy. Why on earth would we act to increase our costs at a time like this?

Our government is offering the right kind of leadership at the right time. We are acting to get the economy growing again and to make it stronger than ever. Our economic action plan is working. We are continuing to inject stimulus spending into the economy. We are making government more efficient and effective. We are ensuring that continued and expanded engagement with our trading partners lifts our economy out of crisis.

This is a real plan for economic recovery and Canada will emerge from this crisis stronger because of it. We cannot and will not hide behind protectionist trade policies. That is not the 21st century way. It is not the government's way and it is not the Canadian way.

We have to make a choice: turn inward, lock our doors and watch our economy shrivel, or continue to look outward, build our competitive advantages and secure our prosperity through global economic engagement. When faced with those choices, our duty is clear.

I call upon my colleagues to join me in opposing this bill.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I thank the House for its consent to speak today.

The bill is yet another protectionist measure emanating from the benches opposite. It would require that every department and agent of the Government of Canada give preference to Canadian products when purchasing goods and services. It would apply not only to every department and agent of the Government of Canada, but to any crown corporation and any foundation with 75% of its income or funding coming from the government.

The best way to promote jobs and growth in our country is not by protecting Canadians from foreign competition, but by preparing for it. The best defence is a good offence. The best way to create jobs and growth is to guarantee that our products and services have access to worldwide markets. The best way to do that is to ensure that the world markets, including our own, stay open to competition.

The bill runs completely counter to the work of the last 20 years to guarantee access to international markets. Beginning with the Canada-U.S. Free Trade Agreement signed in 1988, the Government of Canada has entered into many free trade agreements to ensure this access. These include agreements with Mexico, as part of the North American Free Trade Agreement; with Chile, Israel, Peru, Colombia, Costa Rica; and Iceland, Liechtenstein, Norway and Switzerland as part of the agreement with the European Free Trade Association.

As we look forward, we know that as small market economy Canada's future growth depends on our ability to reach markets beyond our own borders. That is why, at the Canada-European Union Summit in Prague earlier this year, the Prime Minister announced the historic launch of negotiations toward an economic partnership between Canada and the 27 member states of the EU.

Canada is, and always will be, a trading nation. One in five jobs in Canada is linked to international trade and 70% of our GDP is dependent on it. Consider, for example, the significance of our trade with the United States. Canada and the United States 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 our bilateral trade has been one of the major components of economic growth.

During these two decades, Canada and U.S. trade has tripled. Investment flows have also increased substantially. Two-way trade across the Canada-U.S. border at the rate of $1.7 billion a day, over $1 million a minute. An estimated three million jobs in Canada depend on our trade with the United States.

Given this scale of success it is clear that protectionism is our mutual enemy. In fact, it is a threat to our economic recovery. Indeed, it places restrictions on free trade and real growth prospects in both the developed and developing world alike.

Protectionist policies might look like an effective way of supporting economic growth, but our companies cannot compete if they are coddled. In fact, such actions prepare Canadian business not to compete on the world stage at all, but to fall behind under protectionist measures.

In addition, we are committed to respecting and upholding our trade commitments with our partners and we expect our partners will do the same. To come out of this global recession, we need to continue to trade free of barriers. The Great Depression taught us that the downward spiral of protectionism only leads to a more dire situation. 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 to increase international trade. This plan works to create good jobs for the future to equip our country for success in the years ahead.

We are acting through the most appropriate means to protect our economy and Canada is affected by the downturn. That includes the tax system, the employment insurance program and by direct spending by federal and provincial governments. It includes lending by crown corporations and partnerships in the private sector. What it leaves behind is protectionism, in the dustbin of history where it belongs. Canada knows we cannot build a fortress and lock ourselves inside it.

I believe the evidence before us can only lead to one conclusion. Therefore, I call on my colleagues in the House to oppose the bill.

The House resumed consideration of the motion 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.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Speaker, I am rising today in response to the proposed Bill C-392, An Act respecting the use of government procurements and transfers to promote economic development.

I appreciate the efforts of my colleague from the NDP and I will acknowledge good intentions. I believe firmly that credit is due when it is appropriate, and I do appreciate good intentions.

However, this proposal, in effect, is a vague, protectionist and retaliatory response. It is an attempt at a response to the buy American provisions in the United States which we, as a group of parliamentarians, have vehemently opposed for some time now.

I wish to stand here today to show our lack of support for this particular bill. Let me add a little bit of context to our position on this. The buy American provisions were announced some time ago and are clearly creating significant challenges for Canadian businesses and therefore for Canadian jobs.

As much as I might have some agreement with some of the interventions from my colleagues across the way, I hate to inform them that I am not in fact part of their current coalition and I will take significant exception to some of what they said.

The challenge that we are facing now requires results. It does not require letters and words. So far, from the Conservative government that we have at the moment and since the buy American provisions were announced, we have seen nothing but letters, some of which have gone unanswered and words. This past week alone we have seen another photo op with the President of the United States, who once again acknowledged, in certain words, that the buy American provisions were not something that he felt were that important from a Canadian perspective, and that we really ought to focus on things of a more significant nature. From a Canadian perspective, these buy American provisions are in fact very important and very damaging. We need far more than a photo op and words and letters.

What we needed, and still need because we continue to not see any results, was a recognition of the impacts of the buy American provisions. Although the federal government is subject to NAFTA, the individual states of the United States and the many municipalities are not. The effect of the buy American policy, and not even just the provisions but the sentiment, has created significant efforts on the part of many states and municipalities in the United States to source specifically from the United States, which, as I have said, has created a real challenge for many Canadian businesses and therefore Canadian jobs.

The answer is not, at the top, to make noise and to protest weakly. The answer should have been and continues to be to have people on the ground in the United States, not just in Washington but at the various state levels and the municipalities, working with those people to ensure that Canadian businesses and Canadian jobs were not going to be sacrificed and put at risk because of the buy American provisions.

I feel very strongly in representing the Liberal Party saying that we stand for free trade. We stand against protectionism. We stand for the long-term economic benefits of free trade and against protectionism, and that one cannot do a knee-jerk reaction at the expense of long-term economic benefits.

We are critical of the buy American provisions, very much so. I, as a Liberal on this side of the House in opposition, am also very critical of the complete lack of results that we have seen from the Conservative government.

It is my distinct recollection that the other opposition parties have also been critical of the buy American provisions and have also been very critical of the lack of results seen from the current government.

How on earth does this response sound: “We do not like buy American. We want you to stop the buy American provisions or we are just going to do the same thing”? It sounds frightfully like children in a sandbox saying, “You have now thrown sand me, so I am going to throw sand at you”.

Retaliation does not good policy make. Simply recognizing the circumstances that we are now in, even if there were value to this, which I question, the appearance of having us as Canadians who as parliamentarians appear to have been unanimous in our critique and our criticism of the buy American provisions to simply even be seen to be promoting buy Canadian as a retaliatory measure would make absolutely no sense, and in fact would be somewhat embarrassing, frankly, for us as Canadian parliamentarians.

I would recommend that my hon. colleague think very seriously about moving this forward. I invite her to engage in a discussion on how we can achieve solid results collectively and ensure that the government finally works to achieve some results in challenging the buy American provisions.

However, this particular bill does absolutely nothing of the kind. On the contrary, it really diminishes our ability, when we are engaging with the Americans, to encourage them to reduce their buy American provisions.

[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.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Mr. Speaker, before I begin commenting on this bill, I would just like to take a minute to express my sincere condolences on my own behalf and that of the New Democratic caucus to the family and friends of the former member of Parliament for Port Arthur, Doug Fisher, who passed away earlier today. He was just one day short of his 90th birthday.

Doug Fisher led an incredibly accomplished life that included many careers. He was in the armed forces. He was a miner, a teacher, a fire ranger, a construction worker, and he was considered the dean of the parliamentary press gallery when he joined the press after his parliamentary career.

He was a very active and sometimes very outspoken member of Parliament who was always dedicated to his constituents. He was greatly appreciated for his integrity and his commitment, and he will be deeply missed. Our thoughts are with his five sons: Matthew, Mark, Luke, John and Tobias, and with their families.

His legacy in the CCF, in the NDP and in Parliament will not be forgotten.

It is my pleasure to support my colleague in urging the passage of Bill C-392 introduced by our hard-working member for London—Fanshawe. She has been long committed to helping Canadian workers. This bill continues that dedication.

Others who might not share that dedication might say, and have said here today, that this bill is protectionist at a time when they want more trade openness. I was disappointed in the previous speakers from the Conservatives and especially from the Liberals today. Did they read the bill? I thought they were discussing a different bill here today. If they read it, they do not seem to have understood it, especially the Liberals who said they were going to vote against NAFTA and repeal it, and vote against the GST, and who are now coming onto this bandwagon.

They gloss over the fact that all of our major trading partners have had the same or more stringent measures in place, most of them for decades. This is not protectionist. It is smart and it is fair.

Governments here have left Canadian companies and workers at the mercy of foreign competitors on government contracts and infrastructure projects, while the same Canadian companies are blocked from bidding on foreign government contracts abroad. That was not fair and that was not smart.

This bill levels the playing field for Canadian products and services. It does nothing more and nothing less. A made in Canada procurement policy has been a long time coming. Canada is the last in the G7 to play catch-up and implement even minimal domestic procurement requirements. Canada is the last within NAFTA to do it as well.

Successive Conservative and Liberal governments in Canada have lost a lot at the negotiating table. There has been a chronic failure of our governments to show courage and strategy in trade negotiations and disputes. Why have all of our trading partners done otherwise? There are many reasons. Here are a few.

First, they have seen the wisdom of supporting their local industries. Mandating a minimum level of domestic content in public procurements is the smart way to use public tax dollars to stimulate our domestic economies. In other words, it will be our government buying our goods and services. That has nothing to do with free trade in the private sector. It is about our government buying our goods and services with our tax dollars.

Spinoff benefits such as local jobs, an increased tax base, increased industrial capacity and the sparking of innovation are sent abroad when projects are outsourced to foreign competitors.

One glaring omission in the stimulus package in this year's budget, whether that stimulus is actually flowing or not, is that there is no preference for products or services that are made in Canada, even when that planned spending involves billions of dollars. Canadian taxpayer dollars should not be going to stimulate the economies of China or the United States.

Second, in other countries, they know they have a fiduciary duty to their taxpayers to get value for those taxpayer dollars. The fact that the government failed to include any domestic procurement requirements regarding the billions in spending it announced is a major disservice to Canadian taxpayers.

When passed, the made in Canada bill will mandate domestic source requirements for federal rail, transit and shipping contracts, such that infrastructure projects supported by our federal government will use, at a minimum, 50% Canadian products and services.

That is getting more stimulus bang for our taxpayer bucks. Some of that stimulus will come back to the government in new revenues.

Third, it is important leverage in trade negotiations. Exercising this legislative muscle is crucial if Canada wants to be taken seriously when we assert our interests to export markets. For Canada to have any leverage in trade negotiations, we must implement our own domestic buying by our own governments. Only then would we be in a position to pursue a managed trade agenda that would optimize and fairly allocate the beneficial impacts of public procurement.

The current government practice of again and again allowing the free market to make key decisions makes no more sense for the industrial sector than it did for banking or financial services.

Critics have sometimes said that we cannot implement made in Canada because it would violate our trade agreements, like NAFTA. Baloney. This will not violate our trade agreements. I ask my colleagues to go back and read the bill. It is very simple and straightforward. Let us not confuse trade in goods commitments with rules for domestic procurement.

For example, restricting steel imports would contravene NAFTA and WTO rules and would be protectionist, but using public funds for state and local projects in order to favour U.S. suppliers to stimulate the U.S. domestic economy would not. In fact, Canadian steel imports have already seen litigation in U.S. courts under NAFTA and the tribunal in those cases rejected the Canadian companies' claims because public procurement is also exempt from NAFTA investment rules. The U.S. already does it and it has been cleared by NAFTA and the courts.

Direct federal procurements are constrained because of NAFTA and WTO agreements, but federal transfers to provinces, states or municipalities for infrastructure are not. This is how the American government requires 60% domestic content in infrastructure projects there while still complying with NAFTA.

The United States has had buy America requirements on its books since 1933. When are we going to get it? This is the reason that so many Canadian companies have opened up plants and shifted production and Canadian jobs just across the border to places like Plattsburg, New York, and Blaine, Washington.

The current buy America debate in the U.S. is about extending its policies yet further. Made in Canada offers flexibility on future trade deals when trading partners are fair. The government is currently negotiating a trade agreement with the European Union and its 27 members, all of whom are also party to the WTO's AGP.

I do say bravo to our Prime Minister for his efforts to diversify our international trade which is greatly needed. This can be profitable to all parties involved if agreements are crafted intelligently.

As I have already mentioned, direct federal procurements are already regulated under international agreements and preference cannot be made for domestic companies. It is therefore no surprise that a focus of ongoing negotiations for the Europeans is to ensure that provincial and other non-federal contracts are opened up.

The made in Canada act does not preclude any agreements with the Europeans or any other AGP country. That is flexible and it is fair, but what it will not do is let the government sell us down the river in the future.

In conclusion, Canada absolutely must pass an act mandating made in Canada requirements. Let us really stimulate the Canadian economy and not just the U.S. and Chinese economies.

Let us stand up for Canada. Let us stand up for Canadian companies and for Canadian workers. Let us get the most mileage from hard-earned Canadian taxpayer dollars.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Speaker, I appreciate all the comments I have heard in this place today and certainly the comments from my colleague, the member for London—Fanshawe.

It is interesting. When I was listening to the Conservative members speak, I wrote a couple of things down while they were speaking. They were talking about Canadian businesses being ready to compete worldwide. I heard one of the members say that we need to go on the offence, not the defence. Another commenter said that we do not want to coddle Canadian business.

It is not about coddling Canadian business. It is about making life more affordable for Canadians. How do we make life more affordable for Canadians? We keep Canadians working. It is as simple as that. That is how we make life affordable for Canadians.

Speaking of affordable, I will digress for one second. I noticed that the Leader of the Opposition along with the government are now supporting Mr. McGuinty and his harmonized sales tax in Ontario.

[An hon. member]

Yikes.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Yikes is right. Mr. Speaker, if we want to make life less affordable for people in Ontario, such as the people in my riding, why not increase the cost of goods by 8%, and in some cases 13%, for things that have not been taxed before?

I have spoken to all sorts of small business owners who do not want to be coddled. All they want is a fair deal. They want to be able to sell a cup of coffee or one of the great products that comes out of Thunder Bay, Persians. People cannot afford another 8% on top of that. Small businesses cannot afford that. This is all about making life affordable for all Canadians and the people in my riding. Shame on them for the harmonized sales tax. We will have a lot more to say about that later.

Speaking of affordable, not only do we have to keep Canadians working to make it affordable, but there also has to be industry to make life affordable, so that people can be employed. If preference is not given to Canadian companies, those companies will wither and die. A good example is that just recently, the federal government refused to pay its fair share for the city of Toronto to help keep its environment clean and green by having streetcars built at the Bombardier plant in my riding.

Not only are the people in my riding disappointed with the actions of the federal government, but they are disappointed because the government does not seem to understand that if Canadian taxpayers are paying for something, it is a government's responsibility to do everything it possibly can to ensure that those things are built right here in Canada with Canadian taxpayers' money.

I will speak briefly about Bombardier. Bombardier is a state-of-the-art streetcar, train car and subway car manufacturer. It is the best in the world. I have been through that plant a couple of times. Raw materials such as sheets of aluminum come in one end and go out as finished streetcars. The only thing the Bombardier plant in my riding does not make are the wheels. They buy the wheels from somebody else. Everything else is manufactured from scratch in that plant.

It means that those are highly skilled, well paid jobs. If Toronto needs streetcars, subway cars or train cars, it is the government's responsibility to ensure that those train cars are built right here in Canada and preferably right here in Ontario.

The issue is very simple. Canadian taxpayers are going to be purchasing manufactured goods. We are talking about billions of dollars of goods in the case of Bombardier and the streetcars for Toronto. If we are going to spend that money, it is going to come out of the pockets of workers who struggle every day to make ends meet and put food on the table. What would happen if the government had its way? Those jobs would be offshore.

There was a big fight. A whole of people wanted to see those streetcars made in China. We are talking about billions of dollars worth of streetcars, well-paying jobs, and there was a group who wanted to have them built in China.

It might have been $50,000 cheaper to build them in China. However, what about the service? What about after-service? What about after manufacturing? What about people who have the skills in this country to work and work hard on behalf of their families and they do not have an opportunity to work?

Mr. Speaker, I see I am running--

[The Acting Speaker, Barry Devolin]

The time provided for the consideration of private members' business has now expired and the item is dropped to the bottom of the order of precedence on the order paper.

It being 2:30 p.m., pursuant to an order made Friday, June 19, 2009, this House stands adjourned until Monday, September 28, 2009 at 11 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 2:30 p.m.)

The House resumed from September 18 consideration of the motion 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.

MADE IN CANADA ACT

[The Acting Speaker, Barry Devolin]

When the House last considered this business, the hon. member for Thunder Bay—Rainy River had four minutes remaining.

The hon. member for Thunder Bay—Rainy River.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Speaker, I thank the House for the opportunity to speak again to this bill. I would also like to thank my colleague, the member for London—Fanshawe, for this opportunity to speak.

We are talking about 50% of content being Canadian.

I would like to give my personal opinion so that everyone in the House can hear it. If taxpayers' money is being used to purchase something, I think it should be 100% Canadian content. Bombardier train cars are built right in Thunder Bay. If you can find a product like that and you are spending taxpayers' money on it, then it seems to me that we ought to be working towards 100%. This bill is talking about 50%.

I talked about our natural resources. I talked about our highly skilled workers when I talked about Bombardier. Let me talk about the forestry industry for a second.

What has happened in the forestry industry in Canada, particularly in Ontario, is that aside from all the closings, secondary manufacturing has disappeared south of the border. In many instances, particularly in Ontario and British Columbia, whole trees are cut and shipped south of the border for secondary manufacturing.

If the Government of Canada is going to buy wood products--toilet paper, for example--it seems to me that they ought to be made in Canada. It seems to me that 100% of that toilet paper should be made in Canada.

The sad fact of the matter is that toilet paper used to be made in my riding and the riding next to it, but those plants are closed. If the Government of Canada and the other provinces made an effort to have Canadian content of 50%, or 100% in the case of toilet paper, that would be wonderful.

It is all about making life affordable, keeping highly skilled workers working right across Canada and allowing them the opportunity to raise their families.

When I spoke during my first six minutes of debate, I believe I mentioned the harmonized sales tax, and I would like to revisit that issue again for a minute. In terms of making life more affordable, this tax is going to be a huge blow to people who live in Ontario. CARP, the association for retired persons, did a survey. It estimates that the new harmonized sales tax would probably cost the average senior about $2,100 a year. This is a senior who is not on a fixed income, but who has a small RRSP and some small investments. That is going to be the extra cost for that senior.

I speak to seniors in my riding. Some of them have told me that they cannot pay their electricity bills. The last time I was in Atikokan I was chatting with one senior who is well into his 80s. He said he lives with one light bulb and he still cannot afford to pay his electricity bill.

Ensuring that the Canadian government purchases items with Canadian content of 50% to 100% would keep people employed and would make life more affordable for all Canadians.

[Ed Holder, Conservative, London West, ON]

Mr. Speaker, I welcome the opportunity to respond to the hon. member's Bill C-392 now before us.

Let me be clear. The bill is yet another protectionist measure emanating from the benches opposite. It would require that every department and agency of the Government of Canada give preference to Canadian products when purchasing goods and services and when transferring funds to the provinces, municipalities and private parties. It would apply not only to every department and agency of the Government of Canada, but to any crown corporation and any foundation with 75% of its income or funding from the government.

The best way to promote jobs and growth in our country is not by protecting Canadians from foreign competition. Canadian workers and Canadian businesses can compete with anyone in the world. The best defence is always a good offence. Ask my London Knights. The best way to create jobs and growth is to guarantee that our products and services have access to markets worldwide. How do we do that? By ensuring world markets, including our open, stay open to competition.

The bill runs completely counter to world trends and the work of the last 20 years to guarantee Canada's access to international markets.

Beginning with the landmark Canada-U.S. Free Trade Agreement, signed in 1988, the Government of Canada has entered into many free trade arrangements to ensure this access. These included agreements with Mexico, as part of the North American Free Trade Agreement, with Chile, Israel, Peru and Costa Rica and with Iceland, Liechtenstein, Norway and Switzerland, as part of the agreement of the European Free Trade Association.

As we look forward, we know that as a small market economy, Canada's future growth depends on our ability to reach markets beyond our own borders. That is why at the Canada-European Union Summit in Prague earlier this year, the Prime Minister announced the historical launch of negotiation toward an economic partnership between Canada and the 27 member states of the European Union.

Canada is and always will be a trading nation. Many of the first nations people who populated this land in early times were traders. When the first Europeans arrived on these shores, they traded manufactured goods for furs. Voyageurs paddled their canoes deep into the interior to trade with aboriginal peoples, while other first nations traded at outposts set up by the Hudson's Bay Company. The fur trade shaped the social, economic and political history of our country.

Make no mistake, today, trade continues to dramatically our lives. One in five jobs in Canada is linked to international trade. Why would any member opposite want to kill good Canadian jobs? Seventy per cent of our gross domestic product is dependent on it.

We are the second most open economy to trade in the G8. Consider, for example, the significance of our trade with the United States. Canada and the United States are each other's most important partner in economic growth. It is a partnership that has developed and grown over the last 20 years and, frankly, over its history.

Since the Canada-U.S. Free Trade Agreement was signed in 1988, and then NAFTA in 1992, our bilateral trade has been one of the major components of economic growth. During those 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 $1.6 billion a day. That is well over $1 million per minute.

Close to my city of London, trade over the Ambassador Bridge, connecting Windsor and Detroit, is greater than twice the value of all U.S. exports to Japan.

There are now over 40,000 exporting enterprises in Canada in areas ranging from information and cultural industries to finance and insurance and from construction to manufacturing.

An estimated three million jobs in Canada depend on our trade with the United States.

Given this scale of success, it is clear that protectionism is not Canada's friend; it is our mutual enemy. In fact, it is a threat to our economic recovery, a recovery that is nascent but remains fragile. Indeed, restrictions on trade could stifle the recovery that has just begun. That is because these restrictions reduce real growth prospects in both the developed and developing world, alike.

Protectionist policies might superficially look like an effective way of supporting economic growth, but our companies cannot compete if they are coddled. In fact, such actions prepare Canadian businesses not to complete on the world stage at all, but to fall behind.

In addition, we are committed to respecting and upholding our trade commitments with our partners, and we expect our partners to do the same.

Our government is committed to building to Canada's capacity to successfully participate in the ever-changing global economy. Through our Advantage Canada initiative, we have taken important steps to create the right conditions for Canadian businesses to compete here and abroad.

Our plan lays out five key advantages that make up the groundwork for even greater prosperity for Canadian businesses and individuals, both today and in the future. Key among these are our tax advantages. A competitive business tax system that is responsive to changes in the economic environment is important to encourage investment, growth and job creation in all regions of Canada.

To come out of this global recession, we need to continue trade as free of barriers as possible. We just have to look at our history. If the great depression taught us anything at all, it is that the downward spiral of protectionism only leads to a more dire situation. That is why our economic action plan protects Canadians during the global downturn, not by restricting trade but by promoting it.

Our Budget Implementation Act revoked additional tariffs to increase international trade. This plan works to create new good jobs for the future and to equip our country for success in the years ahead.

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

The plan, which is among the largest fiscal stimulus packages in the world, is working. For the first time in a generation, Canada's unemployment rate is a full percentage point less than the United States rate.

Furthermore, the International Monetary Fund forecasts that Canada will be among the least affected by the global downturn this year and our recovery will be one of the strongest among G7 countries in 2010.

What our plan leaves behind is protectionism in the dustbin of history where it belongs. Canadians know we cannot build a fortress and lock ourselves inside. We must continue to engage with the world and work together to solve common challenges.

I believe the evidence before us can only lead to one conclusion. For the sake of Canada, for the sake of our families and the sake of our kids, I call on my colleagues in the House to oppose the bill.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Mr. Speaker, I rise today to speak to Bill C-392, An Act respecting the use of government procurements and transfers to promote economic development.

Let me begin by recognizing the good and honourable intentions of the member for London—Fanshawe in drafting this legislation.

The purpose of the legislation, as stated in its summary, is to promote employment and economic development in Canada. This is a goal we can all support. Strengthening Canada's economy in order to provide Canadians with meaningful, good-paying jobs is a top priority of members on all sides of the House. However, to achieve this goal we need responsible public policy that acknowledges and addresses the reality faced by Canadians. The reality is that Canada has a small population that relies on international trade for our collective prosperity.

We produce far more than we can consume, and this is the source of much of our wealth. Put another way, Canada is our classic small, open economy. When we consider the value of our exports and imports together, this represents more than two-thirds of Canada's GDP.

Approximately three-quarters of Canada's trade is with the United States. That is about $1.6 billion in two-way trade between Canada and the United States on a daily basis. That is the largest bilateral trading relationship in the world. No existing Canadian trade issue or policy area is as important or complex as Canada's relationship with the United States. The level of integration between our economies requires that we constantly build and strengthen that relationship, especially during times of economic uncertainty.

It is true, with so much of the Canadian economy depending on trade with a single partner, it does leave us vulnerable to protectionist provisions like buy American.

It is also true that buy American is killing Canadian jobs. Workers across Canada have watched their shifts disappear as Canadian manufacturers lose contracts in the United States. For example, Cherubini Metal Works in Atlantic Canada has had to lay off workers, blaming between 30% and 40% of its slowdown on buy American. Canada needs an exemption from buy American provisions. It is in the best interests of both Canada and the United States.

Unfortunately, the Conservative government has been late to act on the file. The Conservatives lost precious months after the U.S. stimulus package was passed when they tried to convince Canadians there was not a problem instead of working to solve that problem.

The Conservatives were wrong to declare victory over buy American when the United States amended the stimulus package in the U.S. recovery act to ensure it respected U.S. trade obligations. Their premature declaration of victory showed they did not understand our trade agreements. U.S. stimulus money is being spent by its state and local governments, and this spending is not covered by our trade agreements.

When buy American proposals first took shape, the Canadian government should have immediately sat down with the provinces to work out a proposal for an exemption that extended coverage of Canada's trade agreements with the United States to provincial, state and local governments. Instead of doing this immediately, the Conservatives waited. In the meantime, a number of Canadian manufacturers gave up on our federal government and began moving both their operations, and the Canadian jobs that go with them, to the United States.

A recent CIBC report blames U.S. protectionist provisions like buy American for slowing down Canada's recovery in 2010, so there is no question that buy American is hurting our economy. We owe it to Canadians to work on responsible solutions to the problem.

Bill C-392 certainly appears to be a reaction to the buy American provisions in the United States. Yet reacting in kind is not the answer. Here is what Gary Shapiro, president of the Consumer Electronics Association, said about buy American.

The “Buy American” provisions...will signal to our trading partners around the world that the United States is returning to the bad old days of protectionism and economic nationalism.

Why would we want to do the same in Canada?

Bill C-392 not only will not work, it would actually worsen the problem. While we work to address a growing number of trade irritants with the United States, like buy American, country of origin labelling, and the western hemisphere travel initiative, we must not lose sight of the fact that the Canadian and U.S. economies are still highly integrated. We do not simply trade with each other, we build things together.

One-third of Canada-U.S. trade is between divisions of the same company. Two-thirds of Canada-U.S. trade takes place within established supply chains. Over 3 million Canadian jobs rely on trade with the United States. Implementing protectionist provisions here at home would put these Canadian jobs at risk.

The unintended consequence of this legislation would be to hurt Canadian companies that have U.S. companies as part of their supply chain. These consequences have been identified by prominent leaders, such as Leo Gerard, president of the United Steelworkers of America. In a written submission to the Congressional Steel Caucus, he said:

Because we are an International union, and because Canadian and US manufacturing is so integrated, we encourage you and other members of the Steel Caucus to approach your counterparts in Canada to discuss a coordinated approach for the North American industry to strengthen its ability to create and preserve these good jobs in both countries.

American manufacturers often use Canadian suppliers. When American manufacturers are shut out of the procurement opportunities, their Canadian suppliers lose out too. This hurts Canadian workers.

Each additional barrier to trade along the 49th parallel increases the cost of doing business in North America, both in Canada and in the United States.

Instead of reacting to the rising U.S. protectionism with our own Canadian brand of protectionism here at home, instead of erecting trade barriers and contributing to the global trade war of the likes of Smoot-Hawley during the Great Depression, we should focus our efforts on removing trade irritants and bringing down unnecessary trade barriers, particularly between Canada and the United States.

In the face of increased competition from emerging markets like China and India, the best way to grow the Canadian economy is to work closely with our largest trading partner, the United States, to improve our competitiveness and make our shared market the best, most efficient place to grow our business.

To summarize, while I recognize that Bill C-392 is motivated by the best of intentions, it does not reflect or address the realities of the Canadian economy. A recent statement made by Ontario Premier Dalton McGuinty highlights this fact. He said:

Closing the border to companies south of the border is not the way to combat American protectionist policies.

McGuinty told the delegates at the Association of Municipalities of Ontario that the best way to ensure both countries enjoy a strong and sustained recovery is if they work together. He called on municipal leaders and politicians to reach out to their counterparts across the border.

Bill C-392 will not do this. Instead, it would in fact achieve the opposite of what the member for London—Fanshawe intends to achieve by needlessly risking Canadian jobs. It is not in Canada's interest to contribute to global protectionism.

Instead, our federal government must focus on gaining and securing access for Canadian exports to foreign markets, so that Canadians can sell their goods and services to businesses and consumers around the world. That is the most effective, most responsible way to protect and create Canadian jobs.

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I have listened with great interest to my colleagues from both the Liberals and the Conservatives talk about this in a protectionist sense. They ought to open up their eyes because the world has been doing it for years and continues to do it.

The most recent piece about the buy America act simply highlighted what has been going on for the past 55 years. In fact, it is slightly more than that. The buy America act was enacted some 50-odd years ago. It is not new. It is not an Obama situation.

The reason that folks finally paid attention is because of the economic downturn and the huge number of dollars that the federal government in the U.S. pushed into its system and said to give it to state and local governments to decide what to do. The 50 U.S. states have a buy America act. Their local governments buy local.

The reason Bombardier has a plant in Plattsburgh instead of the Americans importing from Thunder Bay is because New York State has a buy New York State policy when it comes to buses. That is why the Plattsburgh plant and the supplier park that surrounds it has thousands of jobs that should be in Canada where Bombardier is the home company.

However, because of the decision it made a long time ago, that is exactly where the plant relocated and it is not alone. The European consortium that builds buses also happens to be in Plattsburgh, just down the road from the Bombardier plant.

With regard to how much of the economy we are talking about, my friends on the other side of the aisle and down the way think that the whole economy is about to be protected. We are talking about 23% of the total economy. Those are the latest numbers for what local, provincial and territorial governments would buy via their procurement policies, which leaves 77% of the economy open to be governed by international trade deals.

It is really transparent, it seems to me, in the NAFTA accord where chapter 10 talks about there not being any provisions to stop local governments from having local procurement. They can make the decisions.

In the province of Ontario local government is mandated by the provincial government, having been a member of municipal government previously, to develop its own procurement policies and the policies are entirely written up by the local government.

I had the great pleasure, starting about two years ago, of travelling to meet with nearly all of the municipal governments in the Niagara region and asking them to consider procurement policies that looked at buying Canadian. Basically, all of them agreed because it really boils down to one common element.

When it comes to government, it collects money. It does not sell things to people. It does not make things for sale. It taxes people and collects their money. People entrust it to government and then they want it to appropriate that money and spend it wisely.

One of the questions I put to mayors in my region was this. If they are collecting money from their neighbours, why would they not spend it on them? It is their money, after all. Why would they give it to some foreign national? Why would they send it across the way? Of course, most say they get a better price there, it is more competitive, and that is how they drive the competitiveness. My reply to that is, how much was saved? Usually it is pennies. If they are lucky, it is a penny on the dollar.

If people are laid off because we decided to buy what they make somewhere else, what is the cost to the municipality? Initially, it is EI, so it is a cost to the federal government, which really is all of us in this country. At some point in time, if that person does not get a job, people go on social assistance, which in Ontario is borne by the municipality.

If we look at the true cost of what these things really do and factor that into the whole equation, we will find that buying local is not only smart but it builds community. It does not put us at a disadvantage. It does not hamper us from getting good quality materials. It does not hamper our competitiveness. When it comes to large purchases involving hundreds of millions of dollars, when it comes to infrastructure for buses and rail cars, if we decide to buy somewhere else, Europe for instance, it is our workers who are laid off.

As we have seen in this country, 400,000 manufacturing jobs have disappeared. None of them have been replaced. It was not about a sense of being competitive and replacing those jobs with something else. They are gone.

We, in this House, are all too well aware of what has happened to the economy of this country. If we do not decide to invest in our own, who will? Who will if not us? We speak for all Canadians. We speak for all of those who have come here and if we are not going to speak for them, it is hard for me to imagine that Nokia is going to speak for them in Finland, or that some plant and some manufacturer in Stuttgart is going to speak for Canadians from there. Canadians are looking to us to speak for them and we should. That is our job. That is the role we play.

We are not looking at closing, putting up walls and closing doors, and saying we do not wish to trade with the rest of the world. We understand we are a trading nation. The world understands we are a trading nation. In fact, the world looks at us and says the Canadians really do not get it, so let us sell our stuff to them because they do not have procurement policies.

Every major manufacturing country in this world has a procurement policy, whether it is Mexico, Japan, Germany, U.K., or whether it is the Americans who we trade nearly 80% of our products with. All have inside their walls, inside their country, local procurement policies. Yet, we refuse in this country, at least at the federal level to this point in time, to acknowledge that. At the local level across this country there are quite a few municipalities which are saying they are going to take the initiative because one of the fallacies about the NAFTA was that somehow provinces and municipalities could not enact buy Canadian. How wrong they were. Of course, they got that advice from the federal cousins. Their federal counterparts said they cannot do that, NAFTA says no.

Of course, when the buy American act raised its head and all that money poured in, all of a sudden it became oops, now we need to change it. Now we see the Minister of International Trade down in the U.S. cap in hand, trying to say, “Let us do something about the buy American act”. We are trying to negotiate a deal with nothing in our hand. We have an empty cap, hoping for coppers to be placed in that cap. That is not what we ought to be doing. We should be fighting for Canadian jobs because it really is about making sure they are protected.

What do municipalities buy? In my riding a town called Thorold enacted a buy Canadian policy. In fact, when officials go to the local hardware store just to buy a shovel, they make sure it is a Canadian shovel. Their lapel pins have “Made in Canada”, contrary to what we have received as part of our allotment of Canadian pins made in China. There is a community that understands about standing up for its citizens, its workers. What do their citizens say about that resolution? They are in full support.

One survey asked about municipal transit buying buses. Specifically, 9 out of 10 Canadians surveyed said we should buy Canadian buses if they are made here. Just so everyone knows, we make buses in this country. We make very good buses in this country. But I guess the Minister of National Defence did not think we made good enough buses to give to the defence department, to give to our brave soldiers overseas and our soldiers who are here in this country. He decided to buy them from Germany. We could have made them in Chatham, no more than five or six hours drive from here. We could have made those buses, but instead we shipped them over and allowed the Germans to make those buses.

If we had said we will like to build buses for the German army, imagine the response of the chancellor of Germany. I am sure she would have said, “Not on, we will make our own buses, thank you very kindly, for our troops” and that is exactly what we should have done. The difference in what it cost for those buses in Germany versus here was infinitesimal. Add in the cost of what happened to the workers in that plant in Chatham who are now laid off and the cost now is disproportionate because it would have been cheaper to make them in Chatham than have them shipped from Germany. The same quality buses, the same type of things that we were looking at, and that situation can be extrapolated across this country into municipalities, into the provinces, so that we will put our workers back to work.

We are going to collect their money as I said earlier and it is their money. If we are going to make an investment in anyone, it ought to be them because it is their money after all. They would be grateful for the fact that we thought it was important to invest in them and not send it overseas.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I thank all the members who have made a contribution to this debate.

This bill, my made in Canada bill, will go a long way toward building new markets for Canadian suppliers, strengthening sustainability and fulfilling our environmental commitment while encouraging Canadian entrepreneurship. This bill will help support sectors in crisis, including the auto, steel and forestry sectors, and replace the government's ad hoc approach with a consistent policy.

Local spending of stimulus investment 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 which in turn supports our families and national services.

Though successive federal governments have given away many rights under different trade agreements, such as NAFTA and the WTO, they have also explicitly maintained rights in regard to some areas of procurement. The exceptions include federal transfers to provinces and municipalities which do not fall under international trade agreements.

There are also two broad areas of exemptions under NAFTA, one for purchases of goods for the Royal Canadian Mounted Police and the Department of National Defence, and the other for goods related to 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.

Despite these exemptions, millions of tax dollars have been spent on acquiring goods and services from foreign countries.

A case in point is that in 2006 the federal government approved nearly $13 billion in defence and aerospace purchases mainly from the United States. The 2006 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, there were 466 contracts under the NAFTA threshold of $28,000 that were awarded to vendors in the United States. In the same time period, the federal government awarded 47 competitive contracts valued at $47 million to vendors in the United States for communications equipment, equipment which is exempt from NAFTA.

Our lack of a made in Canada policy shuts out Canadian workers from the jobs that should be created in Canada by Canadian companies, jobs that should go to workers in London, Winnipeg, St. Thomas, Montreal, Vancouver and Halifax.

I want this House and the members herein to know that I am proud of this bill and feel privileged to be able to present it to the people of my riding on behalf of the many Canadians who have lost jobs and have been forgotten by the government. They have been forgotten and discounted by a government that prefers to acquiesce to trade rules that undermine Canadian sovereignty. It has actually made a point of telling Canadians that despite the fact that our trading partners--the United States, Japan, China, Mexico and most European countries--understand that investing in local communities makes good economic sense, it will not stand on the side of Canadian workers and Canadian companies.

It is the absolute obligation of this House and its members to bring forward legislation, whether it be government legislation or private members' bills, that ensures the security and safety of each member of our society. That security is a singular trust. No citizen of this country should ever suffer because of legislation that is driven by self-service or that is designed to appeal to any narrow or hurtful motivation.

Everything we bring to this place must serve this country and its people. That is what my bill is about. It goes to the core of the reason I chose to offer service to the people of London--Fanshawe and to all the people like them who built this country by their labour, their ingenuity and their commitment to community.

I ask members of this House to show commitment to community and to pass this made in Canada bill for the people of the present, for the people of the future, and for the sake of this country.

[The Acting Speaker, Barry Devolin]

The question is on the motion.

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Barry Devolin]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Barry Devolin]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Barry Devolin]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to Standing Order 93, a recorded division stands deferred until Wednesday, November 4, 2009, immediately before the time provided for private members' business.

The House resumed from November 3 consideration of the motion 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.

Made in Canada Act

[The Speaker, 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-392, under private members' business.

The question is on the motion.

(The House divided on the motion, which was negatived on the following division:)

Vote #127

[The Speaker, Peter Milliken]

I declare the motion lost.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, on a point of order, I believe my vote was not recorded. I would like to record my vote as being in favour of the motion.

[The Speaker, Peter Milliken]

Is it agreed that the member's vote be recorded as being in favour of the motion?

[Some hon. members]

Agreed.

No.

[The Speaker, Peter Milliken]

There is no agreement but the point has been made.