International Trade Committee on Feb. 12th, 2009

[Karl Risser Jr.]

I'm not exactly sure what you're saying. Are you asking about a green policy?

[Mario Silva, Liberal, Davenport, ON]

Yes.

[Karl Risser Jr.]

I'm not sure about the purchase of goods, but I do know that shipping is the most environmentally friendly way of shipping goods. I also know that we underutilize both the St. Lawrence Seaway and our possible ways of shipping goods by sea.

So yes, shipbuilding can have some benefits, if you're looking environmentally--

[Mario Silva, Liberal, Davenport, ON]

I guess I was trying to say that at one time there was a policy to look at niche markets. I realize that shipping could be perceived as environmentally friendly and so forth. But what differentiates us from, say, the Norwegians? What is the niche market? Why not look at green procurement on how we do things? Maybe that would be the niche market for that industry.

[Karl Risser Jr.]

We're open to looking at things like that, but I can't really speak to it today.

[Mario Silva, Liberal, Davenport, ON]

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Silva.

Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

I'd like to make a quick point of clarification for my colleague Mr. Keddy and for the entire committee and just explain the SFF and ACCA. Some would say that if you combine them, you'd have the SFA program, but that's not what I'm suggesting.

If you're a Canadian shipowner buying a vessel, and you buy a Norwegian vessel, you qualify for the Canadian accelerated capital cost allowance and for Norway's structured finance facility. But if you buy a Canadian vessel, you'd have to choose between the structured finance facility or the accelerated capital cost allowance. That is the issue. Effectively, for a Canadian buyer, it represents a competitive disadvantage to buy a Canadian vessel.

Alternatively, if you're a foreign buyer and you have a choice, and you buy a Canadian vessel, you can qualify for the structured finance facility offered by the Canadian government and at the same time qualify for your own country's accelerated capital cost allowance.

So that's the point: for Canadian buyers, the current system represents a disincentive to buy from Canadian shipyards. That would be rectified if we were to allow the two programs to be simultaneously available.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you for that point.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Chairman, we could hear from our experts on that.

[The Chair, Conservative, Lee Richardson]

Mr. Brison, I think we did get the clarification earlier. I appreciate that this is your view of SFA, in your words, but I'd like to hear again from Ms. Moray.

Do you find that there is some...?

[Kei Moray]

I just want to clarify that the ACCA for ships is only available to Canadian-built and -registered vessels.

[Scott Brison, Liberal, Kings—Hants, NS]

But my point, and I'll explain it again, is that if you're a foreign buyer and you buy a Canadian vessel, you can qualify for the structured finance facility offered by the Canadian government, but in your country of origin, or the country where you're incorporated, you can still benefit from the accelerated capital cost allowance.

Most countries do benefit. Most countries do. Our trading partners have very aggressive accelerated capital cost allowance on vessels. That's the point. If you're a Canadian buyer and you have the choice, you are more inclined to buy from a foreign builder, because you can still qualify for Canada's accelerated capital cost allowance and their structured finance facility. That's the point.

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

I have a point of order, Mr. Chair, or perhaps a point of clarification.

[The Chair, Conservative, Lee Richardson]

Fine, Mr. Keddy.

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

If that's correct, then all you're saying, Mr. Brison, is that the playing field is level. We can do the same thing as a foreign purchaser can do in Canada.

[Scott Brison, Liberal, Kings—Hants, NS]

Other countries allow the simultaneous availability.

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

Do other countries have a--

[The Chair, Conservative, Lee Richardson]

Ms. Moray, can I ask you again to clarify? I'd like Mr. McGee to comment as well.

[Kei Moray]

Sure. I can't speak to what other countries do, and I may have misunderstood you, Mr. Brison, but I thought you were saying that Canadian purchasers may favour a foreign built ship because they could get the ACCA in Canada.

No, okay. As long as that's clear.... The ACCA in Canada is only available for Canadian-built and -registered ships. Whether or not foreign purchasers can get ACCA in their country would depend on the rules in their particular country.

[Gary McGee]

I have nothing more to add. The explanation, as given, is that a Canadian purchaser of a vessel built in Canada has the option of SFF or ACCA. I think Finance has clarified the rules with regard to accelerated capital cost allowance, so I have nothing more to add.

[The Chair, Conservative, Lee Richardson]

Okay, I think it's now clear to members. We'll continue with our round of questioning.

Five minutes to Mr. Allison.

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

Thank you, Mr. Chair.

Once again, I want to thank the witnesses for being here and taking time out from their schedules. Mr. Risser, I appreciate your comments about how Canadians are used to playing ball fairly; the rest of the world doesn't always.

I want to comment on Mr. Cannis' point, which I think is sometimes related to frustration. I represent part of the wine industry in my riding. As soon as we make concessions for it, we get WTO challenges. Yet the thought process is that there are a lot of subsidies for foreign-owned wines, whether it be France or some other country. We have a hard time challenging them, so I guess that's part of my question.

I have two parts to this, either to you, Mr. Risser, or to the department officials. Do we have a hard time challenging these advantages that other countries have, or, as in the case that appears when our Canadian wine guys went to challenge some countries, they were not WTO-eligible challenges because those countries got around them and all those kinds of things? It's not like France and Italy aren't getting huge subsidies for the wine industry; we just have a hard time proving it.

My question to you and to the officials is this. Do we challenge these things, which I'm sure we do, or do we have a hard time because the subsidies don't appear in a form that is recognized by the WTO? To Mr. Risser first, and then--

[Karl Risser Jr.]

I'll just give you the basic thoughts on it and then these guys can give you the facts. I agree with you 100%. I think that's the issue right there; you hit it in a nutshell. We have a hard time proving it for other countries. I think Canada is very transparent about what it's doing, so it's easy for them to prove it against us. I agree with you on that point.

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

Okay, thanks.

How about the department officials?