International Trade Committee on Feb. 12th, 2009

[Karl Risser Jr.]

Is there a foreign buyer in Davie Shipyard? Is that your question?

[John Cannis, Liberal, Scarborough Centre, ON]

The Greek industry has bought into the shipyard, has it not?

[Karl Risser Jr.]

Which is Davie. Is that what you're talking about?

[John Cannis, Liberal, Scarborough Centre, ON]

I'm not sure--

[Karl Risser Jr.]

Yes, there is a foreign owner in Davie.

[John Cannis, Liberal, Scarborough Centre, ON]

Where's our sovereignty?

[Karl Risser Jr.]

The issue of sovereignty is the miles of coastline, our waterways, all that Canada is responsible for, our arctic pass that the Americans have now decided they're not going to recognize as--

[John Cannis, Liberal, Scarborough Centre, ON]

I'm not here to argue with you. I'm just here to make some sort of headway, because you also talked about the European countries that have secured the markets unfairly.

My concern here is this. I'm not here to blame the officials, but as our negotiators are moving towards putting this deal together and are looking at these potential bugs there so we can go to the table.... A negotiated free deal is never one-sided; it's give and take. I'm sure we all agree. We in Canada had to give up a little bit, and I'm sure they did as well, but I'm always so upset with the Europeans because they always manage to subsidize, somehow, in some way.

What upsets me more than anything else--and I think Mr. Harris brought it up in terms of the softwood lumber arrangements--is that if these issues are not addressed, down the road we find ourselves being taken to the international courts, challenges are brought forth, and so on. Then we're spending hundreds of millions of dollars to address this and argue back and forth. I'm sure my colleagues here agree that we don't want to see hundreds of millions of dollars wasted or held in trust, etc., or whatever, only to find ourselves really no further ahead seven or eight years down the road.

I'm just putting a point to the officials. Did they do their work, do you think, Mr. Risser, in putting this deal together? Are you saying this was not done properly? Is that why you're suggesting that we should not sign this deal?

[Karl Risser Jr.]

I don't know the full details of the deal. What I do know is that it's not good for shipbuilding, and what I'm suggesting is that it can be a carve-out of our industry.

[John Cannis, Liberal, Scarborough Centre, ON]

Sir, I'll close with this. I'll tell you that I also don't know the deal, but you are a stakeholder. You have a vested interest. It is your responsibility--not yours, but your association's, your group's, and your industry's--to dig into the area where it affects you--

[Karl Risser Jr.]

That's right.

[John Cannis, Liberal, Scarborough Centre, ON]

--to know this deal so that you can, as the deal unfolds--

[Karl Risser Jr.]

And we have. On our issue around shipbuilding, we've gone through the issue and we understand that it's not good for shipbuilding in Canada. I said it's going to devastate us. I don't know how else I can be clear. The tariff is there. It's not working now. The phase-out is not good for our industry. I think we've been through the agreement and we clearly know it's not good for shipbuilding.

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you.

[Karl Risser Jr.]

As far as agriculture is concerned, I'm no agricultural specialist.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Cannis.

Thank you, Mr. Risser.

We'll go now to Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

[The Chair, Conservative, Lee Richardson]

You knew we'd get there eventually.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

It took a while.

[An hon. member]

Now take as long as you want.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

As long as it's not over five minutes, right?

Welcome to all of our witnesses today, and certainly to Mr. Risser.

Karl, I appreciate the fact that you're a third-generation shipbuilder. In the real world, I was a fifth-generation farmer. It's quite important to have both feet on the ground. You and a number of your union workers are constituents of mine, so I appreciate your point of view. At the same time, I also appreciate Mr. Cannis' point of view and other comments that have been made.

We have a situation here...and I'm going to make a comment. We ran our yards for years--I know a little bit about our shipyards in Canada, as I spent a decade of my life in the offshore, on oil rigs and supply vessels--at 50%, with protection. During that period of time, you're absolutely right, we didn't have a shipbuilding policy. So we've embarked upon free trade agreements with other nations around the world to get our dependency away from 80% trade with the United States.

We have tried to assess the impact on shipbuilding. A number of the things you asked for are in it. We put another $50 million into structured finance. We allowed the accelerated capital cost allowance to be applicable. We brought out, for the first time in decades, a shipbuilding policy for procurement in Canada--the total, $43 billion. Two contracts have been let so far--one for $351 million, to Washington Marine Group in British Columbia, and one for $549 million, to the Irving shipyard. And there are more contracts to come.

I don't disagree with your comments on sovereignty. I think there's a real case to be made for sovereignty in the shipbuilding industry for our own procurement. But what I'm trying to point out, on a number of the issues you've talked about, is that we've done them. Now, maybe we haven't gone far enough to suit you, but I think we've gone more than three-quarters of the way, and 100% of the way on some of them.

So you have this issue where we have protection on tariff for 15 years, the longest protection we've ever negotiated for any trade agreement in the history of Canada. We have ten years of protection on less sensitive products and three years of total protection, within that 15-year block of time.

You know, if you look at sovereignty, well, that's procurement. We've protected government procurement. You look at an industry that has to have time to compete. Up until a few years ago, the Norwegians, for instance, did have an advantage. Well, three or four years ago they ended their subsidies. Now we have three years of subsidies going in. They had a lot longer time than that, I understand that, and I'm not disagreeing with you. But we can't do anything about that. That's something that should have happened 20 or 30 years ago that didn't happen.

All we can do is protect what we have today, move forward in a progressive manner, and offer jobs and opportunities. Right now we have our shipyards--I have to say this--working at 40% or 50%. We still have protection for them, and we have all these government contracts. So I would think that they would be able to adapt with this 15 years of protection that's in there.

I agree with you 100% that our shipyard workers are some of the best in the world, without question, and I've said this in the House. When all the other parties have been saying that we should be bringing in protectionist measures, I've been saying that we can compete anywhere, anytime, but we have to get to that point. We're there now. This free trade agreement has been negotiated. We've heard witnesses on it. We've had lengthy discussions. Sooner or later, we have to move forward.

If I have any time left, I now have a question.

[An hon. member]

That was a speech.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Brison asked a question on foreign buyers being able to access both the structured financing and the accelerated capital cost allowance. That is not my understanding. Can someone put a little illumination on that?

[Karl Risser Jr.]

I think he's asking Industry, but I have some insight on that. There was a job we did in the Halifax shipyards. It was called the Stevans Tug. It was a Norwegian firm, right?

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Yes.