Thank you, Mr. Chairman.
Madam Secretary of State, Members of Parliament, allow me, to begin with, to introduce the Quebec forest industry and in so doing, show you that practically nowhere else is there an industry of such complexity.
We have both integrated and non-integrated companies, very large producers and very small producers. We also have large, very large and very small exporters. The softwood lumber sector currently includes some 110 members. We have border companies that use American timber almost exclusively and others that get almost all of their supply from Crown land in Quebec. We also have companies that operate in several different Canadian provinces.
I would say that about one quarter of the timber supply in Quebec comes from private wood lots. That gives you an idea of what the Quebec industry looks like and what that means for the people involved in it.
On April 27, a very large majority of our members voted in favour of the draft agreement, primarily because it promised seven years, plus an optional two years, of peace. There were other reasons as well. The fact is we were given to believe that flexibility would be part of the agreement, among other things.
On July 1, we changed our tune. We voted against the agreement and proposed four amendments. We shouldn't really call them that, if I understood what Mr. Wilson said this morning; we should instead be talking about minor changes or improvements. But whatever name we give them, the fact remains that we made four quite important points relating to the termination clause, the flexibility of the rules on exports, the anti-circumvention provision, and the measures relating to remanufacturers.
There were discussions—I won't say “negotiations” because I want everyone to be happy… However, in the letter Mr. Emerson sent our members, we noted the following improvements, clarifications or changes. I'm mentioning them because they did affect the vote taken on August 18.
First of all, we believed that a six-month, rather than 30-day, notice period was an improvement. For example, that kind of timeframe meant it would be possible to carry out awareness campaigns and outreach activities aimed at changing people's views. In any case, in this kind of battle, we believe six months notice is preferable to 30 days.
Also, the addition of a twelve-month period to the existing seven-year term—in this case, a further standstill after seven years — is an improvement, in our opinion. As regards the committee which will be looking at flexibility, we feel quite confident about that because we know that the Americans are already aware of flexibility issues as they relate to the export rules. We want to be able to honour our commercial contracts, and there is nothing really complicated about that. It doesn't cost anything. In fact, we are authorized to sell timber annually, and we see no reason why we should have to put up with these kinds of hassles on a monthly basis.
We believe that a committee acting in good faith could easily arrive at an agreement on this specific issue. Also, it is our intention to be active and positive participants in the work of this committee. We hope to be involved. In fact, Mr. Wilson's comments this morning lead us to believe the industry will be very closely involved in the flexibility committee's work. So, we have great hopes of being able to do that.
As regards anti-circumvention, I must say, to be perfectly candid with you, that we had less trouble explaining all that this would entail to the Americans than we did to our Quebec representatives. In our opinion, the anti-circumvention provision should apply specifically to softwood lumber, and not to the forest management system. Just before concluding my opening statement, I will explain the important difference between the two, as we see it.
If we leave a term such as “forest management system” in the legal text of the agreement, nothing would prevent the Americans, or even the government of a province, from using that to refuse any change in the management system, even one that has nothing to do with softwood lumber. On that point, we were unable to secure assurances from the governments concerned that a clarification would be added to the agreement to state that it only applies to softwood lumber. However, the Americans did give us that assurance. As a result, we were willing to place our trust in them on that point; I say that quite candidly. As regards the remanufacturers, we simply dropped our request, as did the other national associations.
On August 18, the Quebec industry considered whether it would be better to accept a somewhat imperfect agreement or not have an agreement at all. The consensus was that we should accept the imperfect agreement, for a whole host of reasons. I will be happy to explain if someone wants to ask me that question. In Quebec, we are experiencing a major structural crisis. As one speaker said a little earlier, production costs are huge, wood fibre is the most expensive in the world, as are chips as well. So, we are going through a very serious structural crisis at this time. It is absolutely unprecedented. It is no longer a cyclical crisis solely attributable to the Canadian dollar. That is not the case. There are much more profound reasons for what we are currently experiencing. The federal government alone cannot resolve the structural crisis; our government must also take steps to address this issue.
In closing, we will soon be sitting down to look closely at this negotiation and take stock. I have to say that as far as the process goes, I think we need to look at ourselves in the mirror. The process is neither fish nor fowl. On April 27, our representative told us it was take it or leave it. But in spite of that, we waited and we were successful. During the morning of April 27, the CIFQ managed to get an agreement that calculations would not be based on one year only, but rather on an average covering the period from 2001 to 2005.
On July 1, we were again told we could take it or leave it. And yet we have been able to make changes since then—what might be called improvements to clarify the text. But there have been minor changes.
The fact is we cannot operate on the basis of ultimatums. Nor is it appropriate, in a process such as this, to be constantly taking advantage of the plight of an industry. I think we are going to need to sit down and talk about developing a much smarter and more meaningful process.
In closing, I want to say that I, personally, am very anxious to see the day when free trade will be something other than trade in legal services. I'm also anxious to see whether governments, which will have to develop mechanisms to manage the export rules, will see fit to avoid making the ground rules overly technocratic. If they do, it will cost an industry which is already having trouble making ends meet even more.
Thank you.
