Government Operations Committee on Oct. 21st, 2010

[Guy Chevrette]

I understood it to mean at equal cost. That's why I used the word “equity” a little earlier. If certain words bother you, the dictionary is filled with synonyms. I have no objection to using a synonym that garners the greatest possible support. However, people should not be out there saying they're in favour of something when they actually oppose it and are not the least bit interested in making changes.

[The Chair, Liberal, John McKay]

Thank you, Monsieur Bouchard.

Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I'd like to thank all of our guests for what I believe are very thoughtful presentations today.

As I've reviewed and heard your comments today, let me say, first, I think the intention behind the bill is very sincere. I think we would all acknowledge that there are challenges in the forestry industry. In that respect, I do believe that what Bill C-429 is intended to do is to highlight the challenges that are reflected in the industry. But in my opinion, from what I've seen, there are flaws in this bill.

I sit on the Standing Committee for International Trade. One of your representatives, who was one of our guests in the first hour of testimony, talked about the importance of the forestry industry in terms of exports worldwide.

Mr. Jeffery, thank you for being here through video link. You may have not been privy to some of the information that was presented in the first hour. As I heard your comments, you talked about the importance of wood; you talked about trying to demonstrate to the Chinese the importance. But it's rather interesting that when I look at the concerns that I would have on this, as a member of international trade, in complying with this kind of legislation—were it to become law—we would contravene Canada's procurement obligations under international and, for that matter, domestic agreements. That does include issues relating to NAFTA, the WTO Agreement on Government Procurement. We actually have some advice that preferences for wood and tenders would be considered terrific obstacles to trade were we to be challenged in a Canadian international trade tribunal. We deem that to be very serious for the sake of the forestry industry.

By the way, Mr. Jeffery, as part of background, you may or may not be aware--and I hope that you are--that the Government of Canada, over the last several years, has invested something in excess of $1.5 billion to support wood programs in the forestry industry. Even things like $400 million, which relates to our competitiveness in the forestry sector, even $100 million spent on pine beetle eradication...there's a lot of support in that $1.5 billion plus, supporting development, commercialization, and implementation of advanced technologies in the forestry sector.

My concern is that in light of the challenges that would happen internationally to us, Mr. Jeffery, in terms of the potential to sacrifice our forestry exports, is this the bill you'd want us to go forward with, sir?

[Rick Jeffery]

I don't actually agree with your assessment there, to tell you the truth. I'll lead you to Japan; the Japan national government just passed a wood first policy. It is very similar to what you're being asked to consider here.

B.C. has passed—

[Ed Holder, Conservative, London West, ON]

Mr. Jeffery, I'm sorry to interrupt, but the time is limited.

I'll quote this prohibition for you from the Agreement on Internal Trade:

the biasing of technical specifications in favour of, or against, particular goods or services, including those goods or services included in construction contracts

That comes from articles 504(2) and 504(3)(b). I appreciate, of course, that I have that in front of me and you don't.

We have more specifics: NAFTA article 1007(1), which talks about “unnecessary obstacles to trade”, and the WTO Agreement on Government Procurement, article VI(I).

I think it's fairly clear, sir, that this creates great impediments for our forestry industry nationally to be able to export. You might reference something else, but I have grave concerns for the sake of the greater good of the Canadian forestry industry.

Any comment on that?

[Rick Jeffery]

The forest industry doesn't share your view on that. We believe this bill doesn't tell you that you have to use wood; it levels the playing field.

[Ed Holder, Conservative, London West, ON]

Well, I would say to you that some of your colleagues don't share that view.

In the limited time I have left, I would like to ask you this, if I might, Mr. Atkinson. If this were to be enacted, have you put together any financial impact on other members relating to your industry?

[Michael Atkinson]

No, we haven't, but we would oppose this bill even if it had minimal impact, because it's a slippery slope. It's setting a dangerous precedent. It's bad public policy, period. In essence, it pre-selects or makes a predetermination as to what ought to be the preferred building materials on a project and takes that decision out of the hands of the design professionals and experienced builders in those situations.

I cannot stress this enough: we would be here regardless of what material was being preferred. The material is immaterial in this situation. The impact, whether it's significant or not on the marketplace, is not the issue. It could establish a dangerous precedent; it's a slippery slope.

[The Chair, Liberal, John McKay]

Thank you.

I apologize to both witnesses and members. Time is the enemy here.

Mr. Martin, five minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair.

Given that the federal government is one of the major purchasers of construction industry services, I think the only thing our committee or members of Parliament should be concerned about is getting the best value for the construction dollar invested. Other regional concerns or industry sector concerns should be dealt with as policy matters for the government, but not legislated. I keep getting caught up on that.

Mr. Atkinson, in your report I think you used language that I would use. You pointed out that it shouldn't be a legislated matter: “no construction material...should be awarded a legislated priority over others”. I can't disagree.

But I'm also sympathetic. It seems that the wood producers and the forest industry claim that they don't have an equal footing, that the government isn't allowed to consider the use of wood in building projects. That is what I understood from some of the presentations.

Is it your understanding that there is a bias against using wood, as opposed to an equal opportunity for building materials? Is there any evidence of this?

[Ed Whalen, President, Canadian Institute of Steel Construction, Canadian Construction Association]

I think this is one of the problems I am hearing today.

I represent the steel industry, and it's all about a level playing field. From what I've been hearing from the wood industry, they are superior in every way. If that is the case, they should be able to be competitive and innovative and compete against any building material.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's kind of my point. If that's the best value for the construction dollar invested on behalf of the taxpayer, I think the case makes itself.

Is there anything in the tendering process that precludes the use of wood?

[Ed Whalen]

There is absolutely nothing that precludes the use of wood--

[Pat Martin, NDP, Winnipeg Centre, MB]

Then I honestly don't know why we're seized of this issue.

[Ed Whalen]

--and everything the wood industry has brought forward today is a non-government issue and can be dealt with in other ways. You could go to the building code. If you have something innovative and you want to make a change, make a change in the building code. If you have some environmental concerns and you think you're the superior product environmentally, that will be chosen by the design team.

We even have a program in North America, not just in Canada, but in North America, called LEED.

[Pat Martin, NDP, Winnipeg Centre, MB]

It's a wonderful program, yes.

[Ed Whalen]

That sets points for environmental performance.

If the wood industry and that particular product will be superior, that material will be chosen.

[Pat Martin, NDP, Winnipeg Centre, MB]

There is only one other example that I can find where a parliamentary committee was seized with the issue of promoting one construction product over another. There was a report from the committee on international trade, in 2005, that said Canada should promote the use of asbestos at every opportunity: we should use it more domestically; we should export more; we should mine it more; we should promote it in every respect.

I used to work in the asbestos mines, and it bothered me that we would be using a parliamentary committee to promote one regional issue like that for building material.

Nowhere else in the history of Parliament can I find a bunch of MPs trying to dictate what kind of doorknobs should go on the next.... You know, that's as silly as it is, to me.

[Ed Whalen]

One of the things that was interesting in the Ottawa Citizen yesterday was that the wood industry admitted that, really, this wouldn't have any real impact to their industry. They want to show the rest of the world that Canada is making a stand.

We need to give architects and engineers around the world a little more credit than that. If you mandate the use of a particular product, do you think that is going to change their idea on the use of that product elsewhere?

[Pat Martin, NDP, Winnipeg Centre, MB]

I think most of the world does associate Canada with wood products--the iconic image of a lumberjack in a red-checkered shirt sort of thing. It's already how other countries view Canada.

I don't have any other questions, other than to say that I hope we can amend this bill to perhaps satisfy the concerns brought forward by the forest products industry.

[The Chair, Liberal, John McKay]

Mr. Whalen, therefore, gets the last word.

[Ed Whalen]

One of the things we need to realize is that over the last two years or so, Canada and the U.S. have been working on programs, issues related to Buy American. This issue is coming up again.

We can't forget that, and this fall the Canadian government has to start negotiations, again, on a longer-term relationship on procurement between our two countries. This type of move will certainly set certain material industries in the U.S. totally against Canada, and it will have long-term negative effects--guaranteed.

[The Chair, Liberal, John McKay]

Thank you, Mr. Whalen.

Thank you to each and every one of the witnesses. Thank you particularly to Mr. Jeffery, who got up a bit early just to join us.

Colleagues, I'm going to continue with the meeting but will ask the witnesses to leave.

As you can see, we have less than 30 seconds of our allotted time left. I may be able to have some discretion in running over for a moment.

Colleagues, we are at the end of our allotted day for this particular bill. We are ready for clause-by-clause. I also have a motion before me from the Conservative Party for a 30-day extension. I also have an amendment put forward by Mr. Martin on this item.

The chair is therefore in your hands as to how we proceed with this particular bill at this time. I am open to suggestions. We could deal with the amendment first. You could introduce yourself, read the amendment into the record, and give us your opinion on it.

I suppose the first question, ladies and gentlemen, is whether we go to clause-by-clause at this time. Is there any point in debate, or should we just vote on whether we go to clause-by-clause at this time?

Go ahead, Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Chair, at the risk of dragging this out, I believe we've heard a number of different testimonies today that have raised grave concerns about aspects of this bill. I think we need some recommendations from international trade lawyers. I think it's also important that we hear from third-party folks who have analyzed the wording of this bill. I think there are some technical issues with regard to this piece of legislation that need to be fully explored.

Therefore, I think it's important that I move my motion to give an extension for the consideration of this bill so that we might be able to do our job in an effective way to ensure that we're protecting the forests sector but that we're not impacting the international trade agreements that we have signed as a country.

My biggest fear is that this bill moves from this place and, for political reasons, gets approved in the House, and becomes legislation, and it impacts far worse the trade agreements as it relates to wood than any benefit that might be realized from this bill.

So that's my concern. I think it's important that we fully explore that and fully understand the impacts this bill may have.

[The Chair, Liberal, John McKay]

I take your intervention as you formally moving your motion. Is that correct?