Evidence of meeting #5 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 deal.
Conservative
Rob Merrifield Conservative Yellowhead, AB
From the information I have, I see that those are areas that have yet to be worked out. I think Ontario is looking for the same sort of detail in this agreement. Is that a fair statement?
Chair, Alberta Softwood Lumber Trade Council
I'm not sure, Rob.
Yes, the devil's in the details. We were supposed to be consulted on the details, but as you're aware, so far we haven't had a chance to have that discussion.
We welcome the opportunity to discuss the areas concerning which we may not be able to see some relief.
Conservative
Rob Merrifield Conservative Yellowhead, AB
Yes, and I think that's really the nuts and bolts of it. I certainly understand why you'd be nervous about the acceleration of the timeline. But whether it's fast or slow isn't the issue; whether it's good or bad is the issue. It's good or bad depending on the details, and those might or might not go in accordance with responding to the pine beetle or to the overcutting and the quotas—in Alberta's case and probably Ontario's as well.
I want to get a sense and have the committee understand that it may not be that bad a deal. We're a little nervous about the details.
Conservative
Bloc
Chair, Alberta Softwood Lumber Trade Council
Do you want me to answer the question?
Chair, Alberta Softwood Lumber Trade Council
It's fair that you ask these questions. But you have to understand that because of our very small market share, Alberta is already on the verge of a surge now, without the mountain pine beetle. That's our concern. We have done enough analysis on this to know that Alberta would be in a surtax all the time. If that's the case--that we're going to be in a surtax all the time because we didn't receive in our market share an allowance for the mountain pine beetle, such as British Columbia will have--we feel that the surtax, as it's being suggested, is too punitive. We are quite prepared to pay a surtax, so long as it's on the overage, not on the full export volume.
Bloc
The Vice-Chair Bloc Pierre Paquette
Thank you. Unfortunately we have run out of time. Perhaps Mr. Julian will ask exactly the same question you wanted to ask. Is that not right, Peter?
NDP
Peter Julian NDP Burnaby—New Westminster, BC
I am going to ask each of the witnesses for a brief response.
First, it has been said that under this deal we'd actually be paying more in duties than would have survived litigation. I'd like you to comment on that.
Second, we're sort of looking at the elephant in the corner here, which is something we've skirted around in this committee hearing today. But the question is, under what circumstances should this deal not be signed? If this deal continues as it is, and if the ambiguity is such that the American industry can profit from every area that has been left with the t's uncrossed and the i's undotted, under what circumstances would it be irresponsible to sign a deal?
Third, my last question, if there was a very explicit recognition from the federal government that loan guarantees would be provided to the industry and that litigation support would continue to the end of this process so that Canada's rights are maintained, do you believe the industry would support that approach?
President, Director General, Ontario Forest Industries Association
I missed the last part of your question because I was trying to write the first part.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
The last part of the question was that if loan guarantees were forthcoming and litigation support was there--we're now nearing the end of the process where Canada's rights would be maintained--do you believe there would be people in the industry who would support that process?
President, Director General, Ontario Forest Industries Association
When you don't have a financial quagmire over your head, it allows you to think more long term. I think right now, as everyone around this table has recognized, getting the deposits back is obviously a huge plus. It's a huge lure. It's short-term gain, and everyone needs that right now.
But then, as Mr. Wakelin said, you have that short-term gain, but where are you going to be seven years from now? So you get this deposit in year one--we won't get it back in a year, but maybe 18 months from now--and what happens after that? What happens for the next five and a half years?
Just think about the huge difference the assistance would make to those companies that would choose to use loan guarantees. And as was mentioned earlier, not everyone would use them, but it might keep 200 people employed in a community where the sawmill is the only employer. That's a huge, significant benefit. So loan guarantees are huge, and they should stay on the table.
Your original question was why we wouldn't sign this deal.
President, Director General, Ontario Forest Industries Association
Under what circumstances would we not sign this deal? It's critical to recognize that's a difficult question to answer right now, because we haven't seen the details. We haven't really seen the deal yet. We saw a three-page framework on April 27. Right now we're looking at 24 pages of legal text, and most of it is still in brackets, which means it hasn't been agreed to. We recognize that a complex commercial agreement will involve hundreds of pages of sophisticated legal analysis and legal language to go forward for seven years of managed trade. We're not close to seeing hundreds of pages of legal text yet.
I'm not trying to avoid your question; I'm just getting back to what we said earlier. To give you guidance as to whether or not the agreement should be signed is really difficult, because there are so many assumptions that we're using right now: if we only get a little bit more consultation, or if we can get this into it maybe it will be better. There's still so much hanging.
As a heads-up, if the language Mr. Grenier had in his comments on page 3, from the legal text from the United States on Friday night, is still in the final text, I'd say that might be a pretty good reason. It said that the United States is:
seeking to resolve disagreements with respect to shipments to the United States of Canadian softwood lumber that the United States has found to be dumped and subsidized and threatening material injury to the softwood lumber industry in the United States.
That kind of language will not preserve our legal victories. You'd wonder why you were paying a billion dollars for that kind of language. We're willing to pay a billion dollars for stability and peace in trade, but not for punishment and guilt.
Bloc
The Vice-Chair Bloc Pierre Paquette
Your comment will have to be very brief, because we are out of time.
Executive Vice-President & CEO, Free Trade Lumber Council
I will address the question of under what circumstances should the deal not be signed. In order to answer that, you have to consider the alternative. The alternative to not signing the deal is to continue the litigation, continue the fight against the U.S. I have to tell you that no country in the world, no industry in the world, without the support of its government, can fight an attack from the U.S. government fully supporting its industry. We can't do that without the government's support.
We've been told that this is the deal, take it or leave it, and if you leave it don't expect support. Under these circumstances, given the state of the industry after four or five years of being bled to death, I doubt the industry would use its so-called veto, because it's a party to these litigations. It has to agree to drop these legal suits. I doubt, as we speak now, it would re-exercise that veto. It's just too badly off. That's unfortunate, in my view, but that's the situation we're in now.
Bloc
The Vice-Chair Bloc Pierre Paquette
In closing, I would like to thank all our witnesses and remind my colleagues that we will continue discussing the same subject on Wednesday afternoon.
The meeting is adjourned.