Evidence of meeting #22 for International Trade in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was quebec.
11:20 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Johnson.
We'll go now to the Parliamentary Secretary to the Minister for International Trade, Ms. Guergis, and if there's time, to Mr. Paradis.
11:20 a.m.
Conservative
Helena Guergis Conservative Simcoe—Grey, ON
Great, thanks very much, Mr. Chair.
Welcome, and thank you very much for your excellent testimony. We do appreciate your being here. I'd also like to congratulate you for the great work you have done.
I don't think I really need to remind anyone around the table that thousands of jobs, of course, have been lost because of this dispute. Communities and small businesses have been devastated because of this dispute, and the industry have told us that they must have stability in order to survive. Of course, that has been the focus of this Conservative government, to find that stability, not only for the communities and small families and small businesses, but also for industry as whole and Canada as a whole.
Just to comment a little bit on some of my colleague Peter Julian's comments with the previous witness, he clearly does not like this deal, I think it's safe to say. He might even hate it—except he really wants to see a longer termination clause for something he doesn't want to be in. He wants a longer termination clause; he doesn't want to get out—
11:20 a.m.
Liberal
Marcel Proulx Liberal Hull—Aylmer, QC
On a point of order, Mr. Chair, we have a renowned witness in front of us and we're losing time.
11:20 a.m.
Conservative
The Chair Conservative Leon Benoit
Mr. Proulx, you know that's not a point of order. Allow the questioners to ask the questions—
11:20 a.m.
Conservative
Helena Guergis Conservative Simcoe—Grey, ON
Thanks very much. I hope that's not taken off my time, Mr. Chair.
11:20 a.m.
Conservative
The Chair Conservative Leon Benoit
No, we will add time, Ms. Guergis.
We allow each member to ask questions as they want to—
11:20 a.m.
Liberal
11:20 a.m.
Conservative
The Chair Conservative Leon Benoit
Monsieur Proulx, order, please. Let's allow this to go ahead in an orderly fashion.
11:20 a.m.
Conservative
Helena Guergis Conservative Simcoe—Grey, ON
A very soft spot there. Thank you.
He's also said, and others around this table have said, that the U.S. has gotten everything here, that in fact we've sold out to the U.S. But in the same breath or next sentence, they're insisting that the United States is going to terminate at the first opportunity. So again, that's another contradiction that doesn't make any sense.
Also, we have them advocating for loan guarantees, which are taxpayer supported, of course. But then they do not support the unique mechanism the government has set up to return the duties to the industry as fast as we possibly can, a mechanism that is, of course, taxpayer supported as well. So the criticism for doing that is that it's taxpayer supported, but they'll support loan guarantees although they're taxpayer supported. So they're not making any sense, in contradicting....
I'm just wondering if you would care to comment on that for us.
We'll let Christian ask his question before you respond, Mr. Johnson, please.
Thank you.
11:25 a.m.
Liberal
Marcel Proulx Liberal Hull—Aylmer, QC
On a point of order, Mr. Chair, we have a question from Ms. Guergis to a renowned witness. She is trying to piggyback Mr. Paradis' intervention.
11:25 a.m.
Conservative
Helena Guergis Conservative Simcoe—Grey, ON
I asked if I could have that from the beginning, Mr. Proulx.
11:25 a.m.
Liberal
11:25 a.m.
Conservative
The Chair Conservative Leon Benoit
Monsieur Proulx, Ms. Guergis had just asked if the other member of her own party could ask a question before the answer comes. Certainly, on this committee we allow that to happen.
Please go ahead, Mr. Paradis.
11:25 a.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
Thank you, Mr. Chairman.
Mr. Johnson, it's an honour for me to have this opportunity to speak to you today. You have tremendous credibility in Quebec, and your record speaks for itself. It was reassuring to know you were acting as chief negotiator for the Government of Quebec. Since 2001, I have heard good things about you from industry representatives.
Mr. Johnson, I have gone into the field quite a bit. I'm from the riding of Mégantic—L'Érable, where the border mills are located. You referred to a recurring problem. On the one hand, people were concerned about the very survival of the industry and, on the other, they were saying that if it did survive, mills would have to retool on an urgent basis because of their unproductive equipment.
Mr. Johnson, I heard you say that continuing the litigation is probably not an option. It's easy for the opposition to say that this is not a good agreement, but there is the uncertainty. And this resolves that part of the problem.
You also talked about money being returned by Halloween, Christmas or after that. So, criticizing the current government for not providing loan guarantees is just forcing us to talk about a non-issue. This goes back to the question my colleague put to you earlier. I would also like to hear your comments in that regard, with respect to Quebec. Thank you.
11:25 a.m.
Senior Counsel, Heenan - Blaikie, As an Individual
Thank you both for your questions.
I will briefly touch on the situation as regards the border mills. The agreement specifically considers the circumstances of these companies, of which there are 30. I won't address the mechanics of the agreement, but basically they will be able to continue to operate as before, except that there will now be free trade, or almost. The reason for that is that these border mills use mainly American timber. Because they get their supply of timber from the United States, one can hardly conceive of their being accused of obtaining their timber under conditions different from those that prevail in the market.
Sometimes the provinces are accused of creating an environment that does not reflect market conditions. However, it is very clear that border mills get their supply of timber from private American wood lots and, therefore, based on conditions which are undeniably market conditions. In fact, I believe access to timber on Crown lands in Quebec also occurs based on market conditions, since we copy those conditions when developing our formula for accessing timber.
Consequently, border mills have every reason to be satisfied with this agreement, as I know they are, since I have talked to a number of their representatives. As for the rest, I'd say that without reinventing the wheel, the Canadian government has nevertheless developed quite an attractive formula for returning the money. Indeed, I believe this was the subject of some debate in the House of Commons at one time. Mr. Paquette referred to it a little earlier. Basically, we have institutions that can act as banks and provide bridge financing as a means of ensuring that the monies are repaid before a certain date. The Canadian government will thus be reimbursed gradually, because of the imperatives of the U.S. administration and legislation, which are extremely complex. We are talking literally about hundreds of thousands of cheques. Every time a cheque crosses the border, it has to be recorded in a log book. Theoretically, there will have to be as many refunds as there were cheques. So, one can easily understand what a nightmare this could be for our companies.
The Canadian government decided to subrogate them in their rights and wait for the U.S. administration to refund the money. I believe the agreement provides for a six-month time frame. I see this as the perfect arrangement, and one which will allow many Quebec companies to get through the winter with fewer problems.
11:30 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you very much, Mr. Johnson.
Your time is up, so we'll now go to the New Democratic Party.
Mr. Julian, for seven minutes.
11:30 a.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you, Mr. Chairman. Mr. Johnson, thank you for being with us today.
I would like to begin by talking about stability. I agree with you: the April 27 draft talked about a seven year agreement. However, on July 1, we went from a firm seven-year agreement to a firm 23 month agreement. This morning, we found out—and I believe you were present—from Mr. Wilson that we are now talking about a firm 18-month agreement. We've gone from seven years…
11:30 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
On a point of order, Mr. Chairman, could you just clarify that?
11:30 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
It is not 18; it's a 24-month agreement. I understand Ambassador Wilson—
11:30 a.m.
Conservative
The Chair Conservative Leon Benoit
That is not a point of order; that is debate. We will allow Mr. Julian to continue. We'll allow the witnesses to answer those questions, Mr. Cannan.
Mr. Julian, go ahead, please.