International Trade Committee on May 31st, 2006

[Dr. Elliot Feldman]

Yes, and my answer to you was that the Court of International Trade will give us a decision no later than July 3 under Judge Restani's 90-day rule.

Then you asked me just now as to the U.S. Court of Appeals for the Federal Circuit appeal. That is typically no more than 12 months.

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Well, my goodness; my research has shown it could be up to five years though.

[Dr. Elliot Feldman]

No. There's nothing here that's going to take five years. You're looking at 12 months from July 3 at the latest.

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Can you can guarantee everyone around this table that it will not take any longer than 12 months?

[Dr. Elliot Feldman]

Can I guarantee you that I'm a sitting judge in the court of appeals for the federal circuit and will write the decision? No, this I can't guarantee you. But I can guarantee you that under the current terms drafted, chapter 19 will not exist seven years from now when you start Lumber 5.

[Helena Guergis, Conservative, Simcoe—Grey, ON]

I'd just like to point out that if Canada does prevail in a court of appeal, the U.S. coalition can petition to the Supreme Court for review. They can do that, is that not the case?

[Dr. Elliot Feldman]

May I point out that no trade case, but one—the Zenith case—has ever gone to the Supreme Court of the United States. We can develop all the scenarios we like; it's possible to conjure anything imaginable, but the realities reside in the history and experience and precedents of the courts. Twelve months from now, the CIT case would be finished in August, and the countervailing duty order would be gone.

[The Vice-Chair, Bloc, Pierre Paquette]

Mr. Weaver.

[John Weaver]

I want to make one point. For four years now, most of us around this table have listened to lawyers tell us how long it will take and how much it will cost. The only thing for sure is that we continue to get their bills, and we really didn't know how long it would take. Maybe they're right this time, but maybe they're not. Certainly, all I know is that the industry is a lot better off with certainty and I think that's where we need to head: we need certainty.

We have too many other crosses to bear, from countervailing duty to energy—who knows where oil prices will go—to a Canadian dollar that doesn't seem to.... Well, how would you like to have your income cut 10% a year? So I think we need certainty in our industry, and that's why I think we need to move forward on this.

[The Vice-Chair, Bloc, Pierre Paquette]

Ms. Goodman.

[Sarah Goodman]

I'm making exactly the same point that Mr. Weaver makes, that this has been a long legal road. It can be appealed to the federal court circuit; it can potentially be appealed to the Supreme Court. We've gone a long way and there's been a lot of damage wreaked to companies, communities, our economy—and we believe it's time to get on with it.

[Helena Guergis, Conservative, Simcoe—Grey, ON]

With Canadian companies we've seen some bankruptcies; we've seen a lot of families lose their income. None of the bigger companies here will be offended by what I'm about to suggest, but I did ask the minister and the answer back was that the bigger companies can probably hold out in litigation a lot longer than the smaller ones can. If you would care to comment on that, I would appreciate it.

I'd also like to know if any of you have had the opportunity to acquire any of the other smaller companies that have been on their way out? Have you had any situations like that?

You don't have to comment on that, if you don't want to.

[The Vice-Chair, Bloc, Pierre Paquette]

Would someone like to make a comment?

[Guy Chevrette]

I'm not sure a big business is in a better position than a small one. A small one is subject to fewer standards than a multinational and it no doubt doesn't have any unions, whereas a big business has one that's probably very aggressive. I'm convinced that the financial health of both may be very comparable. I think you have to be careful about the judgment you come to on this question.

I believe that—and here I'm speaking for Quebec—we're currently going through a structural, not an economic crisis. This crisis affects all Quebec companies. In the current circumstances, we think the negotiation route is distinctly preferable to the legal challenge route.

I wouldn't want to insult anyone either. However, it's very easy for observers to judge those who make decisions in which they bet all their marbles. These people are judged by people who haven't anteed up a cent, but who pontificate.

[The Vice-Chair, Bloc, Pierre Paquette]

Mr. Kamp.

[Helena Guergis, Conservative, Simcoe—Grey, ON]

I just have one quick comment and then I'm going to pass it over to my colleague here. I find it very interesting, through my experience here, to see that those who stand to lose the most—and it's usually the lawyers and the lobbyists—are the ones I find to be most against this agreement.

I'll end it at that, and pass it over to my colleague.

[Dr. Elliot Feldman]

Mr. Chairman, if I may, this insult has been rendered in the press a great deal with respect to lawyers, and I would ask for privilege to respond.

The lawyers in this case have done what their clients have asked, and they've done it successfully, and Canada should be grateful for the position it's in because of what the lawyers have done.

[The Vice-Chair, Bloc, Pierre Paquette]

Mr. Feldman, as you know, this committee often invites you here. You're very much appreciated. I don't believe the parliamentary secretary's comment was aimed at you personally.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chairman.

Thank you as well, each one of you, for taking time and educating us from your industry perspective. Sitting back and coming from the private sector and always complaining that government moves too slowly, then seeing all of the private sector complaining we're moving too fast, there's hope here.

[Some hon. members]

Oh, oh!

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

It's a bit ironic in that respect.

To Ms. Goodman, Mr. Higginbotham, and Mr. Weaver, you indicated that your companies want to move ahead, and you talked about the fact that you don't want to go through litigation—or prefer negotiation to litigation—and want to try to bring some closure. You said we don't have a perfect deal, but that you'll move ahead. You realized that there's the aspect of the billion dollars and what the advantages are of moving ahead now and where those dollars will go. We've heard about those being used for investment, helping the forest industry. If we can work north and south in an agreement as far as the two forest councils are concerned, I think that some of the billion dollars could be fostering further industry improvements as well.

You also spoke about the need for certainty and predictability in this agreement. I would just like to hear from whoever would like to respond, but I know the three I mentioned spoke specifically about the need for predictability in the industry for investments and jobs. What does that mean for your community?

Coming from the Okanagan and Kelowna lakes country, I've spoken with folks in the industry in the valley. Of course, the pine beetle is a very serious problem for the short term and could cause a national crisis, as we learned on Monday in hearing that the pine beetle could cross the B.C.-Alberta border if the food sources.... If they'd like to take up the jack pine, they've already taken the mountain and the western pine in the interior.

But specifically, what does certainty and predictability mean from an industry perspective? I guess certainty is for jobs and further investment in our communities. That's what we're here for, as we're concerned about the future economies of our communities.

Mr. Weaver, you could start.

[The Vice-Chair, Bloc, Pierre Paquette]

I would ask you to give a very brief answer because time is up.

[John Weaver]

Simply put, in order to plan and have strategic plans and to budget for capital investment and growth of your industry, you need to understand very basic things, like what is your revenue going to be and what is your cost going to be? The countervailing duties and anti-dumping duties drive both of those. So if we can answer those and have a predictable position going forward, then we're much better off in order to plan for strategies, capital expenditure, and future growth of our businesses. Everyone needs stability.

[The Vice-Chair, Bloc, Pierre Paquette]

We'll go on to the last round. It's the turn of Mr. Peter Julian of the NDP, whom I believe I can call “comrade” without any problem.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you very much for your testimony today. It's been very valuable.

I am sorry that some of my committee colleagues have chosen to throw insults rather than listen. What you are bringing is of immense value, as it was on Monday as well.

What we are getting, for the most part, is pretty devastating testimony about what the impact would be if we have a botched, rushed job. We appreciate that each one of you has raised that point--that as these successive drafts come out and we see more concessions, there is a real danger to softwood communities and to the industry.

I also appreciated Mr. Feldman's remarks about erasing legal history, because that's a fundamental issue. As close to the finish line as we are, we have a government that seems to be snatching defeat from the jaws of victory. I think it's the first time we have a government that's not only ceding the ground but also trying to pretend that we didn't have that ground occupied in the first place.

I have four specific questions. Unfortunately I can't ask each one of you, because there are so many of you here today, but I'd like to ask Mr. Milton, Mr. Allan, Mr. Cameron, and Monsieur Chevrette the following questions.

The first question is with reference to your provincial governments. We have not heard the provinces weigh in with the concerns about where this agreement may be going. Have you expressed these concerns that you are expressing to us today to the provincial governments--B.C., Ontario, and Quebec--and what has been the response of the governments?

Second, with the current benchmark price, we're actually looking, according to some analysts, at an agreement that with the volume cap and the export tax would actually be worse than the current situation with the illegal tariffs, and would certainly be much worse than what Mr. Feldman described as a 2% tariff, perhaps, when this process ends in a few months. Do you share the opinion that, given the change in the benchmark price, we might actually be looking at a deal now that it is worse than the current status quo?

Third, how disastrous would a botched, rushed process be to the industry if we were to try to run this through, given the various concerns that have been raised--anti-circumvention and others?

The final question is based on the fact that there was, I think, an unspoken threat to the industry that if this agreement wasn't accepted, there would be no litigation support and no loan guarantees; basically, the industry would be left hanging on its own. Even providing you had the conditional support that some of you are still expressing, would you feel differently if the government were to come forward and say unequivocally that it would support the industry with litigation support, it would provide loan guarantees, it would be invoking Chapter 19 for non-compliance--said it would be fully supporting the industry? If you had that as an alternative, would you feel differently?

Thank you.