International Trade Committee on March 31st, 2008

[Guy André, Bloc, Berthier—Maskinongé, QC]

Good afternoon and welcome to all of you. We have representatives from the Embassies of Iceland, the Kingdom of Norway and Switzerland. I would like to thank you for coming along today to help us better understand this Free Trade Agreement. We have some questions on the agreement, but I would like to begin by saying that we have a great deal of admiration for your respective small countries. As you are aware, there is a sovereignist movement in Quebec; we want to create a small country of our own with seven million citizens. Small countries such as yours inspire us to fight for our own country.

I know that Switzerland is a leader in the manufacturing of brand-name pharmaceuticals. My first questions is with regard to Switzerland's intentions on this front. Do you plan to manufacture pharmaceuticals in Montreal, an ideal location for such an endeavour, in order to sell more products in North America? Such a decision would also create jobs in Quebec.

I also have a question for Mr. Vatne, the Norwegian representative. As I am sure you are aware, Teco Management acquired Davie Québec, a shipbuilding company, for $28.4 million, a virtual giveaway. The sector has since begun to flourish again. Shipbuilding was heavily subsidized in Norway for a number of years and, even if that is no longer the case, it is something that still causes a lot of concern. I appreciate that there is a 15-year phase-out period for some products and a 10-year phase-out period for products that are more affected by competition; however, some Quebec companies are still concerned.

How do you foresee events unfolding? Are Norwegian shipbuilding companies buying Quebec and Canadian companies as part of a strategy to gain a greater market share?

[Nicolas Bruehl]

Thank you very much for your question, Mr. André. Quebec is obviously an important market for Switzerland; indeed, my Ambassador, Werner Baumann, was in Quebec City a few weeks ago for a courtesy visit. He had some very productive meetings and we realized that Montreal and other Quebec locations are key to strengthening economic ties between Switzerland and Quebec. I am no expert, but I am convinced that this agreement between the states of the European Free Trade Association and Canada will be an ideal means for strengthening these ties. We have always enjoyed excellent relations with our friends in Quebec and I do not think that will change; indeed I think that the agreement will only serve to strengthen relations.

[Guy André, Bloc, Berthier—Maskinongé, QC]

With regard to pharmaceuticals, or to be more specific, are companies planning to set up...

[Nicolas Bruehl]

I do not have any specific information on that issue at the moment, but given the excellent relations between Quebec and Switzerland, I am sure there is scope for developing what we already have, especially with regard to pharmaceuticals and chemical products. I am sure that aspect will continue to develop.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Bruehl.

[Per Øystein Vatne]

Mr. Chairman, first, on your question regarding the strategy of Norwegian shipyards, I don't want to go into depth on that, because it is a business-related issue and I think they have to answer in regard to their own strategy. But it's rather common that Norwegian shipyards or companies have interests abroad. That's true.

As you probably know, and as I mentioned, a Norwegian investor invested several million Canadian dollars in the shipyard Davie Québec. Following the Norwegian buyout and the latest investments from the Norwegian company, Davie Yards, as it's called now, will receive new equipment and heavy lift capacity at its Quebec yard. Now up and running, the new company has landed contracts to build five ships during the next 30 months. Davie has also signed a memorandum of understanding with another Norwegian client to build two more ships for the North Sea oil fields. And with the Norwegian-owned, Davie is boosting its workforce, as far as I know, to about 1,000 persons. So think I'd want to see this from a very positive angle.

Thank you.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Thank you.

Do I have any time left?

[The Chair, Conservative, Lee Richardson]

Yes.

[Guy André, Bloc, Berthier—Maskinongé, QC]

I simply wanted to share with you the concerns that have been raised with regard to shipbuilding. It creates a certain challenge for us when it comes to establishing ties; the relationship needs to be mutually beneficial. For example, Quebec could specialize in the construction of a particular type of ship or pleasure craft and Norway could increase its share of the market.

Do you think that we could develop greater complementarity in the shipbuilding sector, or do you think the relationship is purely one of competition?

[Per Øystein Vatne]

To be honest, I don't feel I'm competent to answer such a question about further development. I think I will leave that open. We could ask the industry, of course, about this question, but for the time being, I don't think I'm in a position or competent to answer that question.

Thank you.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. André.

Maybe we'll give Mr. Julian an opportunity to catch up and then come back.

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

Thank you, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

We'll go ahead with Mr. Allison and give Mr. Julian a minute to catch up.

Mr. Allison.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Thank you, Mr. Chair.

I want to thank all the gentlemen from the embassies for being here.

My question is for you, Your Excellency from Iceland. I know you mentioned during your opening remarks a strategy that was proposed for 15 years. I know that's what we have in place right now for shipbuilding, but my question is, was this something originally referred to or discussed as a possibility? I recognize it was highly unusual, etc., Your Excellency, but I thought you mentioned a 15-year...?

[H.E. Markús Antonsson]

The dismantling period.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Right. Was that close to what we ended up with, or was it something that was proposed originally? Was it ever a part of...?

[H.E. Markús Antonsson]

For the most sensitive products, it was for 15 years, yes. That's correct, yes. It was for 15 years for the most sensitive products, and then there was another category of less sensitive products, which was for 10 years.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Right, but was that something you guys had proposed, or were you just commenting on the...?

[H.E. Markús Antonsson]

It was proposed by EFTA to get the negotiations going again when we experienced the obstacles caused by the shipbuilding file.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Okay. Was what you proposed pretty much where the recommendation ended up?

[H.E. Markús Antonsson]

In the agreement?

[Per Øystein Vatne]

It was part of the negotiations. As to what was proposed and where it ended up, I don't have a full overview, because parties presented proposals and counter-proposals, and so on. It was a process that ended up with the result you see today, with 15% for the most sensitive products and 10% for the less sensitive products. This was the result of the rather lengthy negotiations that took place on the part of the two parties making proposals to each other.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Thank you.

[The Chair, Conservative, Lee Richardson]

Mr. Miller.