Evidence of meeting #2 for Subcommittee on Canadian Industrial Sectors in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
9:05 a.m.
Conservative
The Chair Conservative Dave Van Kesteren
Good morning.
Welcome to our Subcommittee on Canadian Industrial Sectors of the Standing Committee on Industry, Science and Technology. This meeting is looking into the crisis faced by certain industrial sectors in Canada, such as aerospace, energy, forestry, high-tech, and manufacturing.
We have the forestry representatives here today. We are going to ask that you give your presentations in seven minutes, as there is limited time.
We will begin with Mr. Lazar.
9:05 a.m.
Avrim Lazar President and Chief Executive Officer, Forest Products Association of Canada
Thank you.
Let me congratulate the subcommittee on having chosen to do this. We certainly appreciate the interest.
I represent the Forest Products Association of Canada, with members from coast to coast, in 70% of the forestry operations in Canada, including pulp and paper and lumber.
I'm sure the committee is aware that we are suffering major devastation across the country in the forest industry, and I'm sure members of Parliament have occasion to observe that when we talk about job losses, we're not just talking about individuals losing jobs, we're talking about whole communities being devastated, about house prices going to next to nothing, about increases in alcoholism and family abuse. The subject at hand is not simply job loss numbers; it's the social integrity of rural Canada.
Even though the devastation, heartbreak, and the disease of social disintegration we're experiencing is cause for deep concern, I also want to reassure the committee that prices for forest products will return and there will be new markets. When prices return, Canada will be very much advantaged.
Our job in the forest industry is twofold. The first job we have is to survive from now until markets return. The second job is to be prepared to be competitive when those markets return. The good news is that many of our competitors are similarly devastated. Brazil and Russia have been stopped because of the credit crisis; they depend on credit. The Europeans have been tremendously impacted, and not just by the credit crisis but by rising prices.
The question that I'm certain is on your mind is, what can government do? We know what we have to do in the industry, and we're doing it, but what can government do?
Clearly, you can't increase demand for newsprint or raise lumber prices--we have to wait for markets to do that--but you can help us get from here to the return of markets. The government has made a lot of the right moves in EI work sharing, which is keeping many mills open that would have otherwise closed. The announcements to EDC changes and new funding for debt are very positive, and we're hoping to see speedy passage of the legislation to allow EDC to have an expanded mandate.
This is tremendously important. If you can't get your credit renewed, you can't survive until markets return. I would hope that the government would expand EDC's mandate to allow more domestic activity for export-oriented markets. That would make a very large difference because the credit markets that we've seen in the past have just disappeared. Our customers can't get their credit renewed, our suppliers can't get their credit renewed, and we can't. Without that, healthy competitive businesses will go down.
Helping the communities during this time is, of course, primordial, and again the government has done a very good job of creating a fund, but we haven't seen the fund yet. So like the increase in credit, the EI work sharing, and the community development stuff, it has to actually happen on the ground before it helps.
Beyond getting through this crisis, helping the industry become competitive through better business climate conditions and assistance to transformation is essential. When we get through this crisis, it's going to be a more competitive world than at any time in the past.
Your committee did a great job with the manufacturing report; go back to it. There are a lot of good ideas in there. The natural resources committee did a great job with the natural resources report on forestry; go back to it. Parliamentarians worked hard and smart and many of these recommendations are still relevant.
What the government can do beyond helping us through this crisis, through debt and EI work sharing, is to increase funding for research. There was significant money for that in the budget and more is necessary.
Make SR and ED tax credits refundable. That will help us innovate our way out of the current problem.
Fix the transportation system. We are made uncompetitive because of the monopolistic avaricious behaviour of Canada's railways.
Encourage the use of responsibly harvested wood in all federal buildings in the home renovation program and in the infrastructure program.
Help fund the transition of the industry into the use of green energy. Help fund the industry's pollution abatement commitment. Anything we can do on retooling the green side of the industry will be tremendously useful.
Finally, we're inviting the government to join with us in partnership on a project called pathways to transformation, which will look at where future markets are, where Canada's competitive advantage exists, and what's necessary to accelerate our transformation to be able to take advantage of those opportunities.
I would be remiss if I didn't share with you our concern on the softwood lumber deal constraints. Our access to the United States market is absolutely essential. Anything that gives the Americans an excuse to take action against us would be a mistake. The materiality of being shut out of the U.S. market is very large, but the softwood lumber deal should not be an excuse for inaction. There are many things governments can do. There are many things already announced in the budget. There are many things now being contemplated that would assist the industry, that would not be subject to countervail or objection under softwood lumber. The secret to all those actions is that they be applied industry-wide rather than specifically to the forest industry.
Thank you.
9:10 a.m.
Conservative
The Chair Conservative Dave Van Kesteren
Thank you, sir, and thank you for your promptness.
We will now go to Mr. Chevrette, for seven minutes, sir.
9:10 a.m.
Guy Chevrette President and Chief Executive Officer, Quebec Forest Industry Council
Thank you very much.
This is the fourth time I've appeared before various committees to say what the industry thinks about all this. I hope it will be the last. This morning, I'm not here to represent just the Quebec Forest Industry Council. I also have a motion to introduce from 14 groups, including the two major municipal unions of Quebec, the forestry cooperatives, foresters, sylvicultural workers, the Quebec wildlife people and the controlled harvesting zone suppliers. I also represent the independent truckers. This is a common front requesting that you take action as the Parliament of Canada. The motion is also intended for Canadian parliamentarians, in the hope that they will rise above political allegiances and pass it.
From the outset, I will say that Minister Béchard was supposed to communicate with Ms. Raitt yesterday evening to make the same kind of proposal to her as we will be making to you this morning.
At this stage, with the votes that have been held, there is a lot of room for developments within the budget. We find it inconceivable that no one can identify a specific budget envelope for the forest industry, instead of scattering aid and credit access all around. One minister even told me there was $1 billion for access to credit. Well, gather $2 or $3 billion together and allocate it specifically to the forest industry. A very specific envelope should be established with a very specific access channel, a kind of window.
We are fighting for our survival. What Avrim Lazar told you earlier was good. You've done good things, but it's the ones that come out of the coma or crisis that will be able to take advantage. Your $170 million budget is intended for marketing. We don't currently need marketing. It's a nice effort, but why get involved in marketing right now? If we can't survive, we don't need marketing. We are simply in a state of distress, and that's not being understood. We want to lend you a hand so that you can gather the money together.
In my meeting with Minister Stockwell Day, I found an opening in that regard. We explained to him that there was a host of credit opportunities, but that nothing had been identified for forestry, whereas on the automotive side... We're not jealous of the automotive sector. On the contrary. We're proud for them. But why not have a single window? The crisis is just as big, even more so, than that in the automotive sector, since it affects 825,000 workers, compared to 500,000 workers. It seems to me you have to make an effort to be coherent, an effort to use common sense. Based on the motion you passed by a majority in the House yesterday, you must be able to suggest that $2 or $2.5 billion should be taken from the total of $20 billion in credit, to identify a specific budget envelope for the forestry sector and create a single channel, without there being any overlap with the provinces. Do something that makes sense and we'll support you. We're not here to condemn, but rather to ask you for things. That's our right; that's our role. If you grant that, we'll be here to congratulate you.
The Quebec government heard us. We met with Minister Béchard on Tuesday afternoon. We did our duty. I regret that the motion we're presenting to you has not been translated into English, but I asked the chairman for permission to distribute it to committee members. If I am not entitled to do that, I will distribute it to you later. I suppose it would be interesting to see all the groups who have supported this request this morning, which is also a defence of the proposal by Quebec's Minister of Natural Resources. I believe that all your successful efforts, all the research aspects, for example, will be useless because, fundamentally, that's not what we're asking for. What we're asking you for is to survive. Programs are all well and good; we don't deny their purpose, but there is a time for that.
If you ask me whether it's a good idea to do marketing, I'll say yes, but I'm going to use it if I get out of intensive care, if I get out of palliative care. However, the illness is coming to its crisis, to the terminal phase. If you don't understand that, you're disconnected from reality.
The automotive sector is lucky to be concentrated in three cities. I understand that the major population concentrations are politically profitable. In Quebec, for example, 264 towns and villages don't carry very much demographic or political weight. However, these are men and women who live off a regional economy and who are entitled to expect that their government will look beyond high population concentrations and big cities. They want distributive justice, and that's what I'm asking you for.
Thank you.
9:15 a.m.
Conservative
9:15 a.m.
Renaud Gagné Vice-President, Quebec, Communications, Energy and Paperworkers Union of Canada
Good morning.
I am vice-president of the Communications, Energy and Paperworkers Union of Canada. As the name indicates, my union represents three major areas of activity, including the forest and wood products sector. We belong to the group that is introducing the motion Mr. Chevrette talked about earlier. This morning, I also represent the FTQ.
In Quebec, we represent more than 45,000 members, more than 20,000 of whom are in the paper sector, whereas, in Canada, we represent 150,000 members, more than 50,000 of whom come from the forest sector. There were 26,000 of us in Quebec in May 2007. Today, two years later, that figure is 20,000. We've lost 6,000 permanent jobs. However, those figures don't reflect all the latest job cuts in the sector, or the temporary closings that are currently an everyday occurrence the consequences of which are suffered by workers.
For reference purposes, for Quebec alone, the figures provided by Quebec's department of natural resources and wildlife shows that, since 2005, more than 8,800 members have lost their jobs and that 6,300 workers were affected by temporary closings as of February 2009. One hundred and nineteen plants have closed for good and 112 are closed temporarily. That's enormous.
A long descent into hell. For a number of years now, the industry has been hit by various crises and issues that have ultimately had an impact on job protection and working conditions of our members, like those of the entire sector. We won't go into all the details since that's more the industry's responsibility, but note that, for our members, all these fluctuations have resulted in insecurity and additional threats.
The current economic crisis is the cherry on the sundae, to use a popular expression. For months and years, our members have had a sword of Damocles over their heads.
The additional difficulty that financing their companies' debts represents is really the last thing we needed. No one could have predicted the collapse of the securities market, financial markets, the increase in the price of oil and exchange rate fluctuations at the time of forest mergers and acquisitions.
The result is that our employers are threatened by bankruptcy. And when you say bankruptcy, you're also talking about thousands of lost jobs and thousands of retirees whose pensions are threatened. We have Smurfit-Stone, which has already been placed under legal protection and whose future concerns more than 1,000 workers in Quebec alone, not to mention retirees. These workers work at five plants, all of which, except one, are still in operation. We cannot forget the recent closing of the Smurfit-Stone plant in Portage-du-Fort, Quebec, where 280 jobs were lost.
Today, AbitibiBowater is really in trouble. This makes no sense. This is the largest company in the forest industry. If it stops its operations at the end of March, 7,600 workers will lose their jobs and 9,000 retirees will be affected. And those figures don't include thousands of direct and indirect jobs that depend on the operations of plants like SFK Pâte in Saint-Félicien.
I'm giving you a very brief, summary picture of the lamentable state in which we find ourselves today. From it, you will understand why our members wonder what to do for our governments to intervene. An entire segment of the Quebec and Canadian industy is disappearing, and no one appears to realize the extent of the disaster, no one apart from us and our members. This is all the more serious since these jobs are, in most cases, located in regions where it is difficult to find other work. These are genuine human dramas.
I could cite the example of Lebel-sur-Quévillon. That town was built from nothing 50 years ago. Today there's nothing left. The pulp plant, sawmill and mine are closed. The houses are worthless. You can imagine what the workers in that town are feeling.
These figures that I've given you concern our members, but the situation is dramatic as well for independent companies operating in wood processing that have stopped production or are on the verge of bankruptcy for lack of financing.
Forest contractors are also in danger of losing their investment, which represents more than $1 million on average for small contractors operating in the forest.
It's not for lack of effort. We, the workers, have taken an active part in the workplaces to cut costs by negotiating numerous measures: staff cuts, consolidating duties, worker-funded retirements, subcontracting, lay-offs, increased plant efficiency and productivity.
We have also taken part in the consolidation of a number of sawmills to reduce the number of facilities, to relocate staff, manage retirements, increase productivity and cut costs.
The financial impact on the workers and their communities is dramatic. It is true that an unprecedented crisis is underway, but we have to save these jobs because, if they are lost, the skilled labour required will no longer be there when the economy recovers as a result of the current uncertainty and government abandonment of this economic sector.
I would like to point out to forest committee members that the resource is renewable. This resource has been a driving force for development in our country and will be in future—it will be if we make the necessary investment to get through the crisis and build for the future.
Moreover, it is with this in view that, for two years now, all the partners in the forest sector have been working together to build a new forest system, in cooperation with the Department of Natural Resources and in a context of sustainable development. In the medium term, it is this kind of approach that must be promoted, but, for the moment, there is an urgent need to take action to put in place programs that will give businesses quick access to refinancing through loan guarantees.
In Quebec, we are also working to put in place a policy for wood utilization in public construction and on all amendments to the Building Code. In the medium and longer terms, we repeat the requests we've been making to the federal government for a year now. In particular, we are seeking older worker assistance programs to enable those workers to retire, extended employment insurance benefits combined with occupational training in the regions affected, as well as programs for research and development and assistance to establish secondary and tertiary processing businesses. It is very important to maintain primary processing, which should be the driving force for secondary and tertiary processing, when conditions permit. We are also seeking refundable R & D tax credits, the adoption of a policy for the use of wood in public building construction and renovation projects, and the introduction of a mechanism... As Mr. Chevrette indicated, we really need a single window to support the industry, not a host of scattered programs.
I will close by emphasizing the urgent need to act in our sector. The future of thousands of citizens and entire towns and villages, if not entire regions, is at stake. We deserve as much attention as the people in other sectors, such as the automotive sector, which have helped and are still helping to develop our country. I would like to be able to say, when I go back to my members, that concrete measures will finally be put forward and that, not only will they be listened to, but something will also happen.
Thank you.
9:25 a.m.
Conservative
9:25 a.m.
André Roy Second Vice-President, Fédération des producteurs de bois du Québec
Thank you, Mr. Chairman. First, I want to thank committee members for hearing the representatives of Quebec's 130,000 forest owners.
From the outset, I entirely share the concerns of the people who are here with me around this table. However, I would like to emphasize the concerns of forest producers who have been some of the most forgotten players in this crisis.
First of all, I would like to introduce our organization. The Fédération des producteurs de bois du Québec represents 130,000 forest owners, who own 10% of all of Quebec's forested land, the majority of which is located near the processing plants on the most fertile sites in Quebec. Of that number, with the incentives in place, some 35,000 owners have land use plans for their woodlots, actively cultivate those lands and already represent 20% of the supply to forest products plants. The Fédération des producteurs de bois du Québec is a member of the Canadian Federation of Woodlot Owners, which is the mouthpiece of the 450,000 woodlot owners in Canada who own 7% of all forested land.
The federation has, on many occasions, asked the federal government to use the tax system to promote investment in the development of private forests. This is forested land with the greatest development potential located closest to plants.
Today, with the crisis severely affecting the activities of thousands of families and their rural communities, the federal government must intervene soon to assist them. The government must stimulate investment in private forest development. The measures that should be adopted quickly will have a twofold advantage: first, they will immediately create economic activity, as a number of families are facing significant revenue losses, and, second, help develop forests that will—and this is a major benefit—provide more high-quality wood in future near processing plants, with positive environmental impact.
I will focus on a few measures that we would like to see implemented soon. First, we are seeking a targeted transfer to the provinces for private forest sylvicultural programs. As you know, Quebec already has a private forest development program managed by regional agencies. The federal government withdrew in 1994. We think that, during this crisis, it is important to re-establish high-quality and highly productive forest land. It is time for action, since these programs are currently inadequate in Quebec.
Like our colleagues, we would like a policy promoting the use of wood in institutional and commercial construction. Quebec adopted such a policy 2008. More specifically, we would also like to see a registered sylvicultural savings plan that would enable forest owners to accumulate tax-sheltered funds that could subsequently be reinvested to develop their woodlots. This measure has been introduced elsewhere in the world, and we think it is high time that Canada established this kind of tool.
In addition, there is a major irritant in the tax system that we would like to see disappear, and that is the tax on forestry operations. Those dealing with this kind of red tape, which generates millions of dollars of additional revenue for the Quebec government, know what I'm talking about. I'm sure it costs two to three times that amount for administration alone. It would therefore be a good idea to establish, together with the provincial governments, that of Quebec in particular, a new way of cooperating to eliminate that tax, which is a major irritant for the big wood producers.
In a longer-term perspective, the federal government must ensure greater investment in forest development in order to position itself to respond to the global population's growing need for forest products. We know that global forest product demand should double within 20 years. It is therefore important to position Canada accordingly. In so doing, Canada will be assisting in the struggle against climate change by means of more productive and healthier forests.
In conclusion, rapid intervention by the federal government is desired to enable forest owners to step up development of private forests. The introduction of additional measures for owners will assist families coping with the current crisis, which has hit them very hard.
Thank you.
9:30 a.m.
Conservative
The Chair Conservative Dave Van Kesteren
Thank you, sir.
Thank you all for coming. I didn't do that properly when you first came—only because of time restraints. This is a very important issue, and I know you all have a lot to say, so we wanted to get right into this thing.
So again, I thank all of you for coming, and thank you for your presentations.
Monsieur.
March 12th, 2009 / 9:30 a.m.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Before the witnesses speak, I would like to know how the questions will be allocated. I see four Conservative Party members before me, whereas there must be five of us on the committee. Are we going to lose a turn to speak, an opportunity to ask questions?
Furthermore, since there are a number of witnesses, would it be possible to extend the discussion we could have with them for half an hour?
9:30 a.m.
Conservative
The Chair Conservative Dave Van Kesteren
In answer to your first question, I believe that one of you is going to be taking a line of questions.
Is that correct?
9:30 a.m.
Conservative
Chris Warkentin Conservative Peace River, AB
We'll just go through the speaking order, and as we have questions, we'll take turns.
9:30 a.m.
Conservative
The Chair Conservative Dave Van Kesteren
Okay. In answer to your first question, the witnesses are allowed to take questions, but only in the order the questions are designated to them. So we'll follow the order and won't deviate from it. But if one of them wants to take a question, they are allowed to do that. So there won't be any time taken away from you.
In answer to your second question, personally, I have another committee I have to attend at 11 o'clock.
Glenn, unless we have a consensus against this, if we don't finish today, maybe we can talk about this again at a future meeting and have some of the witnesses come back again.
Is that acceptable to committee members?
Okay. Then I'd like to begin right away, because I know we have a lot to talk about and these gentlemen have lots to say.
So our first round of questioning is for seven minutes, and we will begin with the Liberals and Mr. Garneau.
9:30 a.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you, Mr. Chairman. My first question is for Mr. Chevrette. Thank you for coming. I know this is your fourth time; perhaps it's becoming a little repetitive for you.
You passionately outlined the fact that the forest industry needs a single window for credit purposes. You also very clearly established that Quebec's forest industry is, to use your expression, currently in intensive care. My question concerns competitiveness. People are currently experiencing very major difficulties.
However, looking to the future, can you tell us about measures that the forest industry—particularly in Quebec—could take, with government assistance, to become more competitive, to enable you to better manage the crises that will no doubt arise in future.
9:30 a.m.
President and Chief Executive Officer, Quebec Forest Industry Council
The problem is that we're experiencing two crises in Quebec. That's the dilemma. It's even worse than in the other provinces of Canada. We were going through a structural crisis before the economic crisis that the United States is experiencing. In Quebec, our fibre was considered to be the most expensive. We had a study conducted by Pricewaterhouse Coopers. The consultants concluded that Quebec was experiencing something structurally impossible with regard to the competitiveness of the other provinces and U.S. states. In that case, you don't turn to the federal government, but rather to the Government of Quebec, which has to correct the elements of the structural crisis. Under section VI of the Constitution, I believe, forests are an area of provincial jurisdiction. International trade, on the other hand, is a federal jurisdiction. As Mr. Lazar said a little earlier, the federal government, which was the negotiator and signatory of the softwood lumber agreement, has a very important role to play. Industry promotion is the responsibility of the federal government, which plays that role with our agencies, such as FPAC or QWEB in Quebec and British Columbia. We already have structures in this field.
The major problem right now is credit. Do you know how an industry is experiencing two crises at the same time is perceived by the financial institutions? They aren't too happy to see us. If we want to pay interest of 25% or 30%, they guarantee the risks no problem, but at prohibitive rates. We think money should be lent at a commercial rate. That's what I argued before the Standing Committee on Finance the last time I testified there. That was interpreted as a dangerous point with regard to the softwood lumber agreement. We didn't ask for interest relief. We didn't ask for preferred interest rates. We asked that the door be opened to reasonable credit, based on a percentage of commercial loans. We read the arguments submitted by the Americans to support their complaint and in favour of arbitration for non-compliance with the agreement. They said precisely that we didn't have a commercial rate. In any case, this isn't the same agreement. But we know that a commercial rate couldn't be a factor in breaking up the agreement, particularly since the lawyers at all levels—the Government of Quebec, the Government of Canada and even our personal U.S. consultants—simply say that a loan at a commercial percentage interest rate does not constitute a violation of the softwood lumber agreement. One might call that access to credit. If the vocabulary is lacking, there's a dictionary of synonyms. If we're afraid to talk about loan guarantees, let's talk about access to credit. Mr. Day, Mr. Lebel and Mr. Blackburn told me that there was credit. Let them organize things so that we don't have to visit 20 places at a time; so that there is a single window and a fast track. This is urgent; the government knows it's urgent; there are companies that will be going under. Ministers know that it's urgent for certain companies. So there has to be a fast track, to avoid overlap with the provinces and to concentrate everything in an identifiable envelope. That way, they will have done a useful job. Moreover, I think yesterday's vote was proof of that.
9:35 a.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you, Mr. Chevrette.
My other questions were for Mr. Lazar.
Once again, dealing with the competitiveness of Canada, you had mentioned that when the rebound occurs, we need to be in a more competitive position. And you touched on a number of areas. I was wondering if you could perhaps elaborate a little bit more on these for my own benefit.
On funding for research, I'm assuming you're talking about the use of biowastes or bioenergy, or cogeneration. I was wondering if you could talk a little bit more about that. I'd be interested to know where Canada sits relative to other countries with important forestry industries.
Can we, in your opinion, be leaders in this area? Or are we coming from far behind?
Perhaps I'll start with that question.
9:35 a.m.
President and Chief Executive Officer, Forest Products Association of Canada
Generally speaking, if you do an analysis of future demand and capacity to compete once global markets return, Canada is actually quite well situated. Our western lumber mills are right now among the most competitive in the world. The number of mills in eastern Canada that are top-quartile competitive is going up all the time. The demand for what we make is going to be increasing year by year, and if you look around the world, the things that are going to be scarce are fibre, energy, and water. Those are the things that no one has the way we do, except for the Russians, and they have their own problems of infrastructure. So we're quite confident we'll be competitive.
If you want to go specifically into bioenergy, our capacity to do cogeneration is equal to anybody's. We are now at 60% energy from waste in our mills. We produce enough energy from waste through cogeneration to replace three nuclear reactors. So we're well on the path. We should go to, on a net basis, 100%. One of the things the government could do now that would increase jobs immediately, increase competitiveness in the long term, and position us in markets would be to help fund the transformation to a green industry, and there are many ways of doing it that would be softwood neutral. Almost every measure would increase our cost competitiveness as well as our environmental credentials. It's not simply bioenergy. It's a whole range of bioproducts, and we're well positioned to do it.
The one thing I would caution against is to jump into the idea that it's better to burn the wood than to manufacture with it. The number of jobs you get out of simple bioenergy projects is one-seventh the number of jobs you get out of manufacturing. The environmental impact of the green energy from burning wood is not as good as the environmental impact of the sequestering of carbon in products. So cogeneration and the use of what would otherwise be waste for energy is positive socially, environmentally, and economically, but thinking that the answer is just to burn it all for energy is, in most circumstances, bad policy.
Obviously, beetle wood, which there's no other use for, or other waste would be part of the answer.
But we do have a future. I certainly agree completely with Mr. Chevrette. As a country we would be profoundly delinquent if we didn't keep sound businesses alive from here to there to enjoy that future.
9:40 a.m.
Conservative
9:40 a.m.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Thank you, Mr. Chairman.
Thanks to all of you for being here today for this important meeting concerning the forest industry. My first question is for Mr. Chevrette.
Mr. Chevrette, the message you've just presented was a real cri du coeur. I also understood that the forest industry was on the verge of collapse, that the situation was urgent and that action had to be taken. I understood as well that loan guarantees were essential, that they were a priority that the federal government should give to the forest industry. I have in my possession a statement by the Minister of State for the Economic Development Agency of Canada for the Regions of Quebec, which appeared in Le Quotidien newspaper this morning. Minister Lebel stated:
[...] that Ottawa cannot grant loan guarantees to the forest industry subject to severe sanctions.
The minister added that such guarantees:
[...] could torpedo the softwood lumber agreement.
My question, Mr. Chevrette, is this: is it legal to grant loan guarantees to the forest industry? I'd like to hear what you have to say on that subject. In your opinion, is it legal?
9:40 a.m.
President and Chief Executive Officer, Quebec Forest Industry Council
It is entirely legal to guarantee us loans at a commercial rate. A loan guarantee at a preferential rate or with assumed interest payments is illegal. I don't know who wrote that, yesterday or the day before, but hiding behind the fear that the Americans will apply penalties... We experienced Lumber IV—you must remember that—and we won in all the tribunals for three or four years, and we nevertheless faced proceedings. We have to stop being afraid. Fear of being afraid paralyzes the brain; you know that. You have to let the industry live. If you examine the coalition argument for filing the complaint, you see that it's arguing that it was precisely because there was no commercial rate percentage. At least people raise that point. They'll have to prove that it's lower than the commercial rate. They say that in their argument, in their presentation. The federal government lawyers defending us, representing us, argued that in the second round of arbitration. They defended the fact that a loan was made; it's all right. So we have statements like this one this morning, and those we've heard for the past two or three weeks. A lot of politicians hide behind that idea so as not... They call that access to credit.
Let them give us the opportunity to have access to credit at a reasonable rate that enables us to get through the crisis. That's what we want. We're not asking for subsidies or assumed interest payments or loans at lower interest rates. We're asking you to give us access to credit at a commercial percentage, so that we can be competitive. That's all we're asking. Any argument to confuse people, to claim that it's illegal and that they know the truth is misleading and intellectually incorrect.
9:45 a.m.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
I have a brief question that will require a very brief answer. You talked about subsidies. The Prime Minister says that granting loan guarantees is tantamount to subsidizing the forest industry. Do you agree with that statement?
9:45 a.m.
President and Chief Executive Officer, Quebec Forest Industry Council
No, I disagree, and soon I'm going to ask the following question: does the government, whatever it may be, consider that the Canadian and Quebec forest industry is as important as an agreement?
9:45 a.m.
President and Chief Executive Officer, Quebec Forest Industry Council
Ask yourself that question; it's serious. I'm not joking with the question; I'm very serious. At some point, if we do nothing on the ground that we have an agreement... Would the agreement have the effect of killing off a global industry of a country, an industry that has 825,000 workers? If that's the case, pardon me, but we'll have to consider whether an agreement must take precedence over the very basis of an industry's existence. We have serious questions to consider.
9:45 a.m.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
I'll question the wood producers union.
Mr. Roy, you say you've hammered at the message, that you've demanded the same things a number of times. Could you tell us whether you've been calling on the federal government to introduce tax measures adapted to development for private producers, private forest producers?