International Trade Committee on March 28th, 2022

[Kevin Lee]

Thank you very much.

I have dropped the interpretation, so I understand your question better, but I'll answer it in English.

In terms of first-time homebuyers, obviously the increase in house prices all across the country has been quite dramatic. We are facing a real supply and demand imbalance. It's something we've talked about at the home builders' association for years. This predates the pandemic and was exacerbated by the pandemic. What we're really seeing is escalating house prices.

Previously it was largely in Canada's larger urban centres. One of the benefits of the pandemic, if I could put it that way, is that it's enabled people to look to live in different places, maybe a little further away from urban cores or somewhere they can work from home on a full-time basis.

As a result, though, there are increasing house prices in almost every community in Canada, which is a big challenge.

We definitely need to move forward in providing more supply. Lumber is a big part of that. Lumber is our major construction material for housing in Canada, so we need to make sure we go that route.

Also, on the shorter-term basis for first-time buyers, there are definitely some macroprudential opportunities. Certainly, at the association, we've been big proponents of a return to a 30-year amortization period, which makes it a little easier for first-time homebuyers. A 30-year amortization for first-time homebuyers makes a lot of sense, because you can spread your payments over an extra five years to get more access, and there is no question—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Lee.

We will move on to Mr. Virani, for five minutes, please.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Thank you very much, Madam Chair.

I'll just start by saying thank you to all of the different witnesses who have provided some very important testimony today.

I'm going to start with Mr. Balisky.

You commented on your operations in Saskatchewan and the fact that they're indigenous-led and that some of the benefit has accrued to the indigenous community in Saskatchewan. I thought that was very important testimony.

You also talked about some of the features of CUSMA; in particular, the allowance for increased exposure and involvement of indigenous persons in that trade agreement and what it resulted in, including citing Article 32.5 of the CUSMA agreement.

I want to put to you something that came up at the last meeting we had on this very issue, from a witness who was invited by Her Majesty's official opposition. He is a gentleman named Mark Warner. When he was asked about indigenous involvement in negotiations, he said—and I'm going to quote it so that I get it right, because I'm reading from the blues:

I hate to tell you the truth, but for most trading partners, Canada is an annoying country to negotiate with, because they already have a hard enough time negotiating with the provinces and the federal government.

Then he went on to say, and I am continuing to quote:

If you add on indigenous communities, I think you'll just make it even more complicated, to be very honest with you. It's hard enough now.

I have my own views about Mr. Warner's testimony, but I'm wondering if you might be able to provide us with some observations, Mr. Balisky.

[Al Balisky]

Well, I don't agree with Mr. Warner.

A key consideration for Canada as well as the United States is the relationship with indigenous communities, the indigenous population in Canada, and there's been a tremendous amount of action taken over the decades towards reconciliation. This Liberal government has made it very clear that there's no more important relationship than the relationship of Canada with indigenous peoples. Whether that means that this falls within the purview of international trade, or whether it's domestic affairs, all these things are part and parcel of what makes us a community and a people, and what makes us Canadian.

I will point out to Mr. Warner, and anybody else who's interested, the extensive trade networks that used to exist in times gone by throughout North America, from the eastern seaboard well into the Northwest Territories—massive trade routes—so free trade has been a thing in North America, practised by indigenous peoples, for millennia. This artificial boundary that's been imposed certainly gets in the way of that and of facilitating the engagement of indigenous economies in international trade.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Thank you.

That's a very important observation, actually, because when we traditionally think of indigenous knowledge-keepers, sometimes we don't think about the vast ambit of knowledge they contain. The fact that it can even apply to something as commercial as the trade committee, in terms of how we're engaging with hemispheric trade or continental free trade, is a critical point.

I personally think that no matter how “complicated” it is, to use Mr. Warner's word, that doesn't really matter when you're trying to advance reconciliation. I would add that it helps to further the goals of UNDRIP, which is also an initiative that was enacted under our government's watch.

Thank you, Mr. Balisky.

Mr. Lee, I want to turn to you. This has come up in your testimony and in the testimony of some of the others. You provided us with a little list, and I stopped it at six, but you may have had more. When you indicated some of the things you were seeking, you said to swiftly deal with transportation disruptions.

Obviously, we saw a transportation disruption that was quite cataclysmic about six or seven weeks ago, when we had blockaders illegally stopping the flow of cross-border traffic at places like Windsor, Emerson, Coutts and Surrey. Please comment on that and how it impacts things such as the B.C. lumber industry, for example, when you're blocking the Surrey border, and the speed with which that was dismantled under the Emergencies Act.

Thanks, Mr. Lee.

[Kevin Lee]

There's certainly no question, with all of the challenges we've been facing through the pandemic with the supply chain, that blockades of international borders were a challenge that no industry needed to compound everything else that was going on. It was certainly important that those blockades be removed as quickly as possible, and I think it's important, looking into the future, that Canada does all it can at all times to make sure trade routes remain open, healthy, safe and secure.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We're on to Monsieur Savard-Tremblay for two and a half minutes, please.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Lalonde, they say that your business is the main victim of these rates. We know that the countervailing duty rate is 15.48% and the anti‑dumping rate is 4.76%. So the two rates together are 20.24%.

I imagine that you can clearly confirm that your company does not dump or engage in such practices. Is that the case?

[Rémi Lalonde]

I would say it's even more than what you're saying. You cite the rates that are expected to come into effect later this year. Right now we're paying 30%, whereas the total of what you've noted is 20.24%.

I am confirming not only that, when Resolute was specifically audited, the company had the lowest rate of dumping, so‑called dumping, of any producer.

In the last two years, the United States Department of Commerce has stopped doing audits on us. So they removed the dilutive effect of our low rates, if I can call it that, and we now have the industry average in the calculations you presented.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Perfect.

Thank you for that confirmation.

You can also confirm that, in every respect, the price of wood is set by the market, by the auction system, and is therefore 100% in line with North American trade rules.

[Rémi Lalonde]

Absolutely.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Great.

This makes these multiple punitive duties all the more unjustifiable in various ways.

Given that Quebec's regime was even specifically designed to be compliant, do you think that this distinction should be formally recognized if the Canada‑United States‑Mexico Agreement is reopened?

[Rémi Lalonde]

We have always requested recognition of Quebec's forestry regime, which is based on Oregon's regime, if I'm not mistaken. We have always asked that there be recognition, if there is an agreement, that certain plans are market‑based and that punitive rates be eliminated.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Perfect. Thank you.

I don't have any more questions, Madam Chair.

[Rémi Lalonde]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

It's on to Mr. Masse for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

To follow-up, Mr. Lee, my riding has 40% of Canada's daily trade with the United States between the Ambassador Bridge, the Detroit-Windsor Tunnel, the Detroit-Windsor truck ferry and the CP Rail tunnel. One of the things I proposed—and it comes from the Wilson Center in the United States—is a safe border task force. That's an operational working group similar to what was done before. It's not only for these emergencies when there's illegal blockage of the border, which the Emergencies Measures Act was brought in for, but also to deal with other border issues. Is that something that you think your association might be interested in participating in?

This is not my idea. It comes from Canadian businesses and from working in Washington. I'm just wondering whether or not that might be an appropriate venue to dismantle some of the border blockages that we have.

The obvious one, with the border being blocked by people abandoning cars, hot tubs and so forth, is unacceptable, but there are also other working problems that we have on a regular basis.

[Kevin Lee]

Absolutely, and there were literally hundreds of organizations like ours that were signatories to documents to the effect that we really need to do everything we can to keep our trade routes open, secure and safe at all times. I think the pandemic brought some very bizarre situations that nobody would have predicted, but, to your point, there are all kinds of situations that come up all the time, and everything we can do to keep businesses moving, to keep trade moving and to keep product moving is absolutely critical to our economy and the well-being of Canadians.

[Brian Masse, NDP, Windsor West, ON]

It brings home the point Mr. Balisky made with regard to those imposed barriers that you now face. I think we really need to reflect on that, because working with Mr. Balisky's group, maybe as a model to start something, to get something done, actually might be a way forward, at least to gain some ground.

That's my time. Thank you.

[The Chair, Liberal, Judy Sgro]

You have 20 seconds left.

Thank you very much, Mr. Masse.

It's on to Mr. Baldinelli for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair, and thank you to the witnesses for being with us today. I'm just going to further build on some of the comments of Mr. Masse.

In our notes here, it indicates that the U.S. National Association of Home Builders has come out against the complete elimination of these U.S. duties. In our last meeting, one of our witnesses, Derek Nighbor, with the Forest Products Association of Canada, indicated that he never believed that he would spend the amount of time that he has recently lobbying in the United States, and now with particular states in some of the procurement issues that they're facing.

Mr. Lee, first of all, do you have relationships with the U.S. National Association of Home Builders? Do you find yourself engaged in some of the lobbying activities that are taking place? Second, in the seven-year period, what specific involvement have you had in contributing to efforts to negotiate a new softwood lumber accord?

[Kevin Lee]

We've certainly been engaged with the National Association of Home Builders in the U.S. over the years on this issue. They've been forthright from the start on their opposition to all of these tariffs, and have been quite vocal about it. We've lent support where we can, but this is definitely a situation in which it's their advocacy with the U.S. government that's really front and centre. It's been a huge challenge and a huge frustration for them. We've spoken about the challenges with the lumber prices both north and south of the border, and south of the border they have that additional tariff over and above everything else. It's been a huge challenge. We've helped out where we can, but it really is their advocacy with the U.S. government that's been the most important thing.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

On the Canadian side, over the past seven years, have you been involved? Have your advice and views been sought in contributing to efforts to negotiate or to bring forward positions?

[Kevin Lee]

Certainly, from our perspective we've been very supportive of all efforts by the Canadian government to bring the softwood lumber dispute to an end. Mr. Lalonde has outlined very well the situation and how in all cases, at international levels, the courts have always sided with Canada. We're certainly supportive of all measures by the government to bring this to an end and to bring a much more fair situation to Canada.