International Trade Committee on Feb. 26th, 2009

[Chummer Farina]

Yes, that's true.

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

I just want to know if that's correct.

[Chummer Farina]

That's correct.

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

Okay, thank you. I appreciate that very much.

We talked about the $43 billion in procurement over the next 30 years. We talked about the number of vessels. But what we really haven't talked about in the shipbuilding industry is the private industry's role here, with the offshore platforms, the offshore supply vessels, the independent ferries, and all of those vessels being built by private companies.

In terms of the future of the shipbuilding industry, the government did step up to the plate. In 2007 we launched a very aggressive procurement policy for Canadian ships that will be built in Canadian yards. I think the two ingredients that we're missing here is the private industry's own ability to put bids into the shipyards and our industry's ability to compete internationally. Because we have a very, very good professional shipbuilding industry in Canada that, when the final barriers come down in 15 years' time, I would expect to be on equal footing with any shipyard anywhere in the world.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Yes, I think that's an important point. It really springboards from one of my comments during the exchange I had with Mr. Julian.

But we already have agreements to remove duties on ships with the U.S.A., Mexico, Chile, Israel, Costa Rica, Colombia, and Peru. So that's not a bad start. I think when we get the EFTA done, if that is the will of Parliament, then that will certainly help us expand our markets as well. And that's what we really need.

You're quite right, domestic procurement for military purposes is obviously a lot of money; there's no question about that. But if this industry is to be truly successful and world-class, we do need to have access to other markets, and those are civilian markets as well as military markets. So I think that's got to be part of the strategy. That's why we want to maintain our current yards as best we can, even with the world economic downturn. That's obviously part of our strategy, and if the military procurements help us with that--for the coast guard and so on--that obviously helps us reposition ourselves. But generally we think we can be poised to gain.

I subscribe to the theory that there can be a renaissance of North American manufacturing. That could be one of the things that come out of this current downturn. The supply chains have been found to be more expensive than previously predicted. People, on other matters, are....

I'm sorry, I'll stop expounding, Mr. Chair, but the fact of the matter is that I think there is a real opportunity for manufacturing to really shine in the future across all sectors, not just shipbuilding.

[The Chair, Conservative, Lee Richardson]

Thank you.

I'm sorry, Mr. Keddy, that is seven and a half minutes.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

You've got to be fair to us, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

Exactly.

We're going to move along with Mr. Cannis, and I understand you're going to share your time with Mr. Silva.

[John Cannis, Liberal, Scarborough Centre, ON]

I'll be very brief.

Minister, welcome to the committee, and welcome to your colleagues as well.

As supportive as we all are to see this file move forward, because we believe we have a specialty here in Canada, especially in the expertise that's been built over decades and decades of work, there are a few things you said....

And I want to also ask a question of Mr. Farina, because he responded to Mr. Keddy's question in terms of combining the two programs. There is a disadvantage when foreign purchasers have the ability to access one of our programs and yet can access their local program, putting Canadians at a disadvantage. Am I correct on that?

[Chummer Farina]

Foreign firms can get access to the structured financing facility--

[John Cannis, Liberal, Scarborough Centre, ON]

And their own local programs.

[Chummer Farina]

--and they can get access to their own local programs if those exist.

[John Cannis, Liberal, Scarborough Centre, ON]

Generally they do—

[Chummer Farina]

Well, no—

[John Cannis, Liberal, Scarborough Centre, ON]

—and that's part of the problem, because as much as I appreciated what the minister said earlier in his presentation, with all due respect, from what I heard from Karl Risser—I met him a little while ago, he came as a witness—he says just turn this damn proposal down, that it doesn't make sense. Could we pinpoint why? He made some suggestions. The minister today made several suggestions as to why we move forward.

Mr. Dicerni, I want to put this to you in closing, because you talked about subsidies with respect to other countries—and of course we'll do our best to challenge those when we feel other countries are out of line. Won't this be a challenge? Why can we not look at these two programs to help our industry here locally? If indeed we're going Buy Canadian right now, why can't we put the SFF and the ACCA programs together? I know the minister said he'll take it under advisement and it's a revenue issue. I'm sure the minister will bring it around the cabinet table. But why can't we combine it and worry about a challenge, if it is a subsidy, or if it is impeding on WTO guidelines? Can we move in that direction?

[Richard Dicerni]

I think, as the minister noted, those matters are the purview of the Minister of Finance in regard to who is eligible for what, because these are tax expenditure type programs. I believe we will indeed note the views of the committee, and the minister can share those with the Minister of Finance.

[John Cannis, Liberal, Scarborough Centre, ON]

I appreciate the comment, Mr. Dicerni, and I'll accept that, but we're looking also here at industry, a sense of who we are as a country as well. We're trying to support it, not just allow it to survive, and make sure that we are just as competitive.

I'll close with this. If we are having problems today to be competitive, 15 years down the road, Minister, when all the barriers come down, what do you think would be the problem? If we're having problems today, do you not see us having more problems to be competitive 15 years down the road?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I think there are challenges, but there are also some great opportunities. We can't survive just by catering to a domestic market, so we have to adapt, and that's how we'll thrive. I really do believe that.

[Mario Silva, Liberal, Davenport, ON]

Thank you, Minister, for coming before committee.

I agree with you. I don't share the politics of doom and gloom. I think there are also opportunities here, and I am supportive. I have spoken before in the House in favour of this agreement, and I know that there are great opportunities as well as we expand also the European markets.

My question was not that different from my colleague's, which was on the two programs that you do have. If there are going to be challenges, and there seems a great concern from the shipbuilding industry, what are we going to do outside the agreement to help that industry?

There are programs out there. I think one of the programs, the SFF, has a $50 million budget, but about $28 million still remains to be disbursed. So what are we going to do to accelerate that? What can we do to help that industry? Is there also going to be an announcement from you, saying that we recognize this is a concern and we are prepared to put moneys as well on the table to alleviate that concern?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I recognize that we'd like to maximize these programs. We don't want to throw money out the window without any accountability. I don't think anybody around the table is suggesting that. But what we want to do is make sure that if there are willing and able companies that should by virtue of this program be assisted, then we should make sure that they are.

So I'll certainly take note of your concern—it's a concern that has been shared around the table here—and we'll have to be more aggressive perhaps.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Silva.

Thank you, Minister.

That is the time we have. Unfortunately we can't go on. I know there were several members who also wanted to ask additional questions.

We very much appreciate your taking the time to come, again on short notice, and your officials. I very much appreciate what you've brought to the committee today.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Thank you, Chair.

[The Chair, Conservative, Lee Richardson]

Thank you for that.

We're going to take a short break while we bid farewell to our witnesses.

Thank you again for coming.

[The Chair, Conservative, Lee Richardson]

We'll reconvene.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Chairman, I have a point of order.