Evidence of meeting #6 for International Trade in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
9:35 a.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
If those were brought in immediately, would they have an effect fairly quickly? In the next couple of years, would you see a difference?
9:35 a.m.
Chairman, Shipbuilding Association of Canada
Yes. If you started all these programs right now, you would create thousands of jobs across the country.
It's not only the shipyards. We buy equipment and materials in almost every province. Unfortunately, we don't buy much in Manitoba. But look at Ontario, for example. If we build the ships in Nova Scotia, a huge part of the contract price goes to Ontario, a lot goes to Quebec, and some goes to B.C.
The association prepared a map that shows that we've got companies right across the country that benefit from shipbuilding. We use a factor of probably three to one; for every job in the shipyard, there are probably another two or three created outside the shipyard.
9:35 a.m.
Liberal
John Cannis Liberal Scarborough Centre, ON
Thank you, Mr. Chair.
Mr. McArthur, before I get into my question, if I didn't hear that accent, I would have thought it was Jean Chrétien saying, “jobs, jobs, jobs”.
Nevertheless, just to pick up on what my colleague, Mr. Brison, said, we had the Minister of Industry here in our last meeting and he was put the same question in terms of combining the two programs. We asked for his assurance that he would take it to his cabinet colleagues, because the response back to us in this committee was that this was a revenue issue.
Given that this is one approach that would help the industry--as you've just clearly stated--have there been presentations to that ministry? If not, will you commence some kind of a proactive initiative to pressure that ministry to see how they can combine these two programs? It's one of the areas that I think would help the industry.
9:35 a.m.
Chairman, Shipbuilding Association of Canada
With all due respect to the minister, I think we've been making presentations on that for at least three or four years.
9:35 a.m.
Chairman, Shipbuilding Association of Canada
Finance. We've made presentations to the Department of Finance, and it's always been the Department of Finance that has said no. Really, the accelerated capital cost allowance is not costing the government any dollars. It's the time value of money, and that's not a big factor in the equation.
9:35 a.m.
Liberal
John Cannis Liberal Scarborough Centre, ON
You talked about the three centres of excellence to be developed as one method of supporting and sustaining long-term industry. Then you talked about the allocation. How would you handle the trickle-down contracts to the peripheral industries that support the industry? Would they be open? Would they be open bidding? Can you give me an idea?
9:35 a.m.
Chairman, Shipbuilding Association of Canada
It would be open bidding.
If you look at the cost of a ship, it doesn't matter what type of ship you build, approximately 60% of the cost to the shipyard is purchased items. We buy engines, generators, pipe, valves, fittings, and cable. That would all be up for competition. So there's still a large element of competition.
Some people ask about the smaller shipyards. We're all accepting that there would have to be guarantees--maybe a certain percentage of the contract price to the shipyard would have to be subcontracted out to the smaller shipyards so that they would benefit as well. We're quite open to that. We'd like to start a dialogue with the government to get it going.
9:35 a.m.
Conservative
March 3rd, 2009 / 9:35 a.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
Thank you, Mr. Chair.
How much time do I have? I'm going to split my time with my colleague, given that there will only be one round of questioning.
Good day, gentlemen.
Today's witnesses represent the shipbuilding and agricultural industries, two fairly sensitive areas, as far as our party is concerned. We are in favour of the proposed free trade accord, but we do have some reservations about these two areas.
I listened to what Mr. McArthur and Mr. MacPherson had to say.One of the two said that initially, he was in favour of excluding shipbuilding from the accord. Mr. MacPherson, on the other hand, has always maintained that this industry should be excluded. Yet, we sense that both these individuals held out some hope that in spite of the agreement, the government could put forward a real policy for the shipbuilding industry.
Over the years, you have gained some experience. The government has two programs in place: the structured financing facility and accelerated depreciation. That's all very good, but there are a slew of other programs included in the $4.3 billion in investments announced by the government for the next 30 years. These investments could be made over a shorter timeframe. For example, they could be made over the 15-year period during which tariffs are to be eliminated.
Do you hold out any hope that the Canadian and Quebec shipbuilding industries will be able to survive if there is genuine political will to support their development?
9:40 a.m.
President, Shipyard General Workers' Federation
I believe that shipbuilding has a very strong possibility of survival, but the government really has to come to the table and make some hard decisions, and they have to do that very quickly. We've been trying since Minister Tobin structured the committee back in 2000, with a report coming down in 2001, saying that it was on the right track and that everybody was going in the right direction. We hit the wall with Finance, obviously, and what we really needed was structured financing, along with the ACCA and government procurement. We believe this industry would be viable today; we believe it would be moving forward.
This committee is going to finish up today and you'll go back to the House with whatever recommendations you come down with, but we believe this committee today has an opportunity to turn this industry around. We hope that today, as you make your decisions, you'll be able to do that.
The government to date has not come to the table to try to fix the industry and put it back on the right track, and we think that has to happen. Once the Conservative government came into power, everything changed, and it changed in a hurry. The committees that were struck and that were looking at the industry were dismantled. Labour was excluded from whatever talks were going on. Industry was there doing the best they could do, but nothing was moving in the right direction any more.
9:45 a.m.
Chairman, Shipbuilding Association of Canada
Thank you, Mr. Cardin.
I'm sorry for the delay, but I don't speak French. In fact, I've often been told that I don't speak English, either.
9:45 a.m.
President, Shipyard General Workers' Federation
Many people have told you that.
9:45 a.m.
Voices
Oh, oh!
9:45 a.m.
Chairman, Shipbuilding Association of Canada
I'm curious about part of your question. You mentioned $4.3 billion. Are you referring to the cost of the contracts?
9:45 a.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
I'm referring to the $4.3 billion the government says it will invest over 30 years.
9:45 a.m.
Chairman, Shipbuilding Association of Canada
Okay. Basically that's the cost of the programs.
There actually are two problems. There's EFTA and what we can achieve under EFTA. Then there's what I call following on with the completion of the rationalization program. It just happens that timing is causing the two to come together. We have the EFTA situation and we have the continuation of the rationalization.
The best way to support the industry is to carve out shipbuilding from EFTA, carry on with the rationalization program, and create three centres of excellence across the country. You will find jobs created fairly quickly. There's always engineering up front--you can't start cutting steel tomorrow--but you could be off and running with all these programs very quickly and would start creating a lot of jobs within a year.
9:45 a.m.
Bloc
Claude Guimond Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Good day, gentlemen.
Can Mr. Pugh hear the translation?
9:45 a.m.
Bloc
Claude Guimond Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
My comment and question are for Mr. Pugh.
Mr. Pugh, thank you very much for your heartfelt plea. As a farmer myself, I can very well understand your reasons for being concerned, in light of everything that has been said in recent years about the Canadian Wheat Board and everything we're still hearing today about supply management. Farmers in Quebec and Quebec must surely be concerned about what lies ahead. I want to assure you today that the Bloc Québécois is fully committed to protecting the existing supply management system.
Mr. Pugh, what do you think the future holds for agriculture within the context of the current WTO negotiations?
