Thank you, Mr. Chairman.
I thank the committee for inviting me to appear here again. Although my association has a continuous and significant agenda involving the forest industries of Ontario, nothing is more important than the proposed settlement of the dispute with the United States over softwood lumber, and I am grateful, therefore, for the opportunity to be able to address you.
I speak, of course, only for myself and my association, but I suspect the leaders of other trade associations share my distress when we are the frequent focus of a government assault on critics of the proposed agreement. It seems odd, but apparently necessary, to begin with a reminder: trade associations exist to bring common views in a collective position; heads of associations represent and speak for their members. Members do not always want to speak individually, and they look to us to represent their views faithfully and reliably. If we were not doing our jobs, we would be replaced. The government might have noticed that none of us—the heads of the trade associations across Canada—has been replaced. When the government tries to divide us, saying it must speak with real decision-makers or that the real decision-makers and the trade association heads have different views, it does itself and us a disservice. It replaces a search for truth with demagogy.
We speak for our members and we say what they want us to say.
When I appeared before you on May 31, I noted that my members were not averse to a deal, that the history of deals on the softwood lumber was not a happy one, and that the April 27 basic terms left a bit too much to the imagination. We would need to know a lot more before we could make an informed position on the deal.
We do know a lot more now, although I'm amazed how few of the questions I asked back in May have been answered. Here are some examples: Can Canada's overall market share in the United States under the deal exceed 34% because of the Atlantic provinces, which under the current terms are permitted to export to the United States every piece of softwood lumber manufactured there? Or, because British Columbia might opt for a graduated export tax and pay it in order not to be limited in the quantity of lumber it can ship, and assuming Ontario accepts a quota, will Ontario's volume of lumber shipped to the United States diminish because British Columbia may increase its shipments, restricted only by the export tax?
We still don't know, even after we have the so-called final text, how quotas in one province may be affected by export taxes in other provinces, but we do know that we are to be monitored monthly and that the operating terms—the so-called running rules—are not commercially viable. We know that provinces opting for quotas will likely never fill them, because we're in a seasonal business and the running rules impose severe penalties for exceeding quota in any given month.
We also know that the end of litigation means the elimination of our legal victories. When I appeared on May 31, I emphasized how important it was to us that those victories be preserved. We know now that a dispute resolution mechanism excludes the industry altogether, making us completely dependent on the Government of Canada to protect our interests for the duration of the agreement. We know that the duration has changed, that the deal is no longer for seven years but for two years, and that for those two years, and a year's standstill, which is not long enough to protect us from the dumping that follows inexorably, we will pay $1 billion. And although the language of the April 27 agreement led us to believe that about half of that money would go to a joint initiative that might help the industry to cooperate with the industry in the United States, we know now that only about $40 million will be committed to such an enterprise and that $450 million will perhaps be the largest foreign aid package ever received by the United States, going to the President for him to spend pretty much as he pleases.
The Prime Minister and Minister Emerson have been telling everybody that the July 1 final text is faithful to the April 27 basic terms—only better. They say we will get more money back, without mentioning that because of the suspended extraordinary challenge, we're paying more money in, so that of course we're going to get more money back.
They say we will get it back faster, but they don't emphasize that we get it back faster because we get it from the taxpayers of Canada as an advance, and that the taxpayers of Canada are also advancing a billion dollars to the United States. It's not necessary to make a deal with the United States for the Government of Canada to advance us the duties the law says belong to us. In fact, we only ever asked for loan guarantees, which would not have cost the Canadian taxpayer anything.
So we know more now, although a lot less than we ought to know. It has not made us more enthusiastic.
The government says it was the best it could do, the best anyone has ever done. It is not the best anyone has ever done. As defective as the earlier efforts at managed trade might have been, they were better than this one. They were at least attempts at commercial sense; they had policy exits; we didn't pay a fortune for them, let alone a fortune to our opponents so that they can reload and in three years fire at us at will.
Enough of the propaganda and the face-saving; it's a very bad deal. Yet the OLMA has members ready to accept it because the threats of the government are impressive: no future help, no cooperation, no negotiations.
I said last time I was here that a lot of companies in Ontario would go out of business. That's more true than it was back in May. We're going to suffer. Taxpayers will have to help, more after failure than now while we have been succeeding.
The government has said on the one hand that NAFTA victories get us leverage to negotiate, but on the other hand that litigation has gotten us nothing and should be stopped. You can't have it both ways. We think the government failed to capitalize on the leverage.
Minister Emerson told this committee on July 31 he was surprised to get as much as 80% of our money back. Why? On April 7 the United States Court of International Trade ruled that the U.S. industry was not entitled to any of our money—not one penny—no matter what else might happen in the litigation. Then 20 days later, the government promised the United States' industry $500 million of our money and another $500 million for foreign aid to the United States, also of our money. Since they were not entitled to any of the money at all, and we're giving them a billion dollars, shouldn't we have gotten something more than two years of highly constrained managed trade in return?
I'll finish with still more questions. Will Parliament rescue us and give us immediately, as its first order of business when it returns next month, the loan guarantees that will enable us to finish the fight? Will it insist upon reinvigorating NAFTA instead of abandoning it? Will it promise to work with the industry instead of bullying it? For if Parliament will not do these things, we will capitulate to the deal—not support it or endorse it or cheer it, but we will capitulate to it—because we see no future and we have no choice. We ask Parliament to give us that choice.
Thank you.