Thank you, Mr. Chair.
I would like to thank the Committee for offering me this second opportunity to appear before the Standing Committee on International Trade. I consider it a privilege to be allowed to come before you and present our company's perspective on the agreement initialled by the governments of Canada and the United States of America.
When I last appeared before you, on June 19th, I voiced my approval of the framework agreement. Today I will be presenting Bowater's point of view on the detailed framework agreement as it was initialled on the first of July.
To begin with, I would like to remind you of the important contribution that Bowater, headquartered in Greenville, South Carolina, makes to the Canadian economy. Our sales figures exceed $3 billion US dollars, about half of it from Canadian mills. In addition to softwood lumber, Bowater is also a major player in pulp and paper. Half of the company's assets are in Canada and we employ about 4,000 people at our Canadian mills and in our Canadian headquarters in Montreal.
Last June, I expressed to you our initial support for the framework agreement signed on April 27. I also stressed that the government, as it negotiated the final agreement, should seek to improve certain points.
I can see from the most recent version of the agreement that some points were in fact the subject of heated negotiations. I am pleased to see some improvements and clarifications that show movement in the direction of the requests that we made.
On the other hand, it is our opinion that some points still need to be improved. That is why we support the steps taken by the OFIA and by the CIFQ, two associations of which we are members. We support both their approach and the representations they are making, in view of their efforts to find acceptable and practical solutions for our industry.
We at Bowater believe that an agreement is preferable to an endless legal debate, even as we continue to win again and again before U.S. and international courts. We believe that, given present circumstances in the industry, a negotiated settlement is the course to pursue, although not at any cost.
The settlement must, above all, provide us with a stable marketplace and a predictable business environment. We would like to see government supporting our industry's pursuit of improvements to the agreement. We would like clarification of the scope of article XX, which gives Canada or the United States the right to unilaterally terminate the agreement, even before it comes to an end.
We also need clarification about the rules underlying the quota mechanism, commonly called the "running rules". These rules could have a great impact on our operations and on our ability to meet the expectations of our customers.
Finally, we would consider it normal to have a clause that would prevent complaints being lodged in the year following the end of the agreement. This would have the effect of preventing subsidy or anti-dumping investigations of a period covered by the agreement.
We also still have the same concerns that we expressed in our testimony of June 19 about the federal government's allocation of quotas based on export history. If option B is retained by Ontario, this will cause us serious problems, given that our Thunder Bay sawmill is very new. We therefore ask the government of Canada to press the government of Ontario to create a set-aside for newer arrivals, in recognition of the fact that new mills have been built in recent years. Bowater and our business partners at Fort William First Nation have both invested heavily in our sawmill at Thunder Bay in one of the most innovative aboriginal business partnerships in the country. However, this mill requires adequate access to the U.S. market to continue into the future.
We hope that action will be taken shortly on these requests for clarification and improvement. If adequate responses are forthcoming to our key requirements, Bowater will be very active in helping the government to obtain the 95% support it is seeking to finalize the agreement.
In closing, I would like to mention that the government's offer to set up a program to allow companies to obtain their deposits before the end of the year was an important factor in our decision to support the initial agreement. We applaud the efforts of government in this area.
I would like to thank you again for inviting me and I will be pleased to answer any questions you may have.