International Trade Committee on April 12th, 2016

[Gaston Poitras]

That's for sure.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

If we were to lose the market share in the United States to other provinces, the provinces' softwood lumber producers in the event, how would that affect our area?

[Gaston Poitras]

I don't even want to think about it. We would be paying the highest stumpage rate in Canada, and it would be subject to tax or quota. It wouldn't be very good.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

The other question I have is regarding your research. You mentioned a database that you've been collecting.

[Gaston Poitras]

Yes.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Is that being paid for by the associations?

[Gaston Poitras]

No, the industry doesn't have anything to do with that. It's a government initiative, and they're doing that as we speak. As I said earlier, they're using PricewaterhouseCoopers as an arm's-length auditor to make sure that the process is transparent.

We just want to make sure that we've been exempt for many years because of the way that we've been doing things and over the years. We've been improving our systems, and that's the reason that we should remain excluded.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

What is the relationship like with the state of Maine?

[Gaston Poitras]

There's wood that goes back and forth between New Brunswick and the state of Maine on a regular basis. I'm talking round trees, lumber, etc., and it's been tradition. If you look in the history books, you will find the Webster-Ashburton Treaty back in the 1800s that permitted the free access of wood between New Brunswick and the state of Maine, and it's still there.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

[The Chair, Liberal, Mark Eyking]

You have half a minute. Are we just going to move on? It's up to you.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I'll take another one.

Just quickly, for any of you here, what would be the key features to form the basis of a new softwood lumber agreement and any different types of export measures? You have about 40 seconds.

[Richard Garneau]

It's simple for Quebec and Ontario. The Ontario system has been tested. It's fair trade, and Quebec's system is a copy of the U.S. Forest Service one. Based on that, I think Quebec and Ontario should benefit from free trade. It's NAFTA.

[The Chair, Liberal, Mark Eyking]

We're going to move to Mr. Fonseca for five minutes.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

The 2006 SLA included a dispute settlement process. What changes would the Canadian softwood lumber producers like to be made to the dispute settlement process going forward?

[Richard Garneau]

I can address this one dispute settlement we have in NAFTA. It's called chapter 19, and it's supposed to work really well and quickly. They're supposed to have their decision within 352 days, but it doesn't quite work this way. If I have any advice to give to the federal government, it is to make sure that chapter 19 of NAFTA works properly.

I think that based on our resolution experience in SC paper, we know that chapter 19 dispute resolution is a mechanism that does not exist elsewhere. It's Canada, U.S., and Mexico. Let's have this dispute resolution. It's already negotiated. Let's have it and let's make sure that it works.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Why has it not been working for softwood lumber?

[Richard Garneau]

I think that it works really well. It took five years basically to get the decision, and if you look at the decision, it shows that Canada won all the way with chapter 19 in NAFTA. I think that we have a demonstration that this dispute resolution works. Make sure that it's there and that it's available. I wish that we were going to go there, but let's make sure that it operates properly.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

You cited Ontario's case from what year?

[Richard Garneau]

From 2005. I can forward the decision to you from the chapter 19 panel of NAFTA. Basically it's a force of law. Well, it was supposed to be the force of law.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

In the past, the United States has used tactics to gain an advantage as we enter into a new round of negotiations. What do you see happening from their side?

[Richard Garneau]

They just basically made exactly the same thing with SC paper, so they used the new provisions they have. Now with the adverse facts available, they can make it up.

I think that on SC papers, the Canadian industry is paying a tax now, certainly in our company, that it's made up. I think that it's a violation of the U.S. obligation with the agreement, the international trade agreement that they signed, and Canada has a responsibility, and I think Madam Freeland can do it to remind the U.S. that they have to respect the agreement that they signed.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Tremblay.

[André Tremblay]

That's what I pointed out earlier. We know the Americans are going to engage in trade retaliation and file complaints, in terms of either anti-dumping or countervailing. It's crucial, then, that we be well-equipped and that we have the government's support if we are to deal with what's to come, if we are to fight their claims right to the end, and if we are to successfully show that we are entitled to free trade access. As I said, having the government's support is paramount.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

My question also focuses on the U.S.

Do you believe the U.S. has enough incentive to get another SLA done in the light of the bigger trade deals that are happening and these negotiations as they're going forward?