Madam Speaker, I am happy to take part today in the debate on Bill C-55, but I am disappointed in the government's approach to responding to the World Trade Organization.
The WTO has asked Canada to redo its law to comply with the ruling made in March and June 1997 against Canada regarding punitive tariffs and tax measures against split run additions. Canada was clearly in contravention of the rules that we signed at this international body. What bothers me most is that Canada has been one of the main proponents at the World Trade Organization and the international body before it, the General Agreement on Tariffs and Trades, to establish clear rules of conduct for business.
Canada needs this very badly. Our country has large exports. Forty per cent of our gross domestic product is derived from our exports. That is probably more than any other country in the world. More in fact than the United States whose GDP derived from exports is something like 10%.
Canada clearly needs rules, a rule based regime. Canada recognized this a long time ago. Our government introduced legislation back in 1946, 1947 and 1948 and was the main push behind getting the GATT established, recognizing that it would serve Canada's interests. Canada has held an inordinate amount of sway in these international talks.
I was with the Minister for International Trade in Geneva last spring at the ministerial conference of the World Trade Organization. Canada is pushing for more liberalized trade in investment. We are pushing for more rules in areas like services and trying to bring agriculture under the trade rules which have hurt the industry through trade wars and massive subsidies in the past.
Yet, at the very time when we are going down that road with the trade minister and the government, we have the heritage minister seeming to completely contradict the trade minister by not complying with the World Trade Organization ruling and trying to circumvent the World Trade Organization ruling in June of this year by bringing in Bill C-55. The United States has already said that if the bill becomes law it will ask the World Trade Organization to repeal it.
What would happen if that were to happen? I believe it will happen because it is in contravention of the ruling. Rather than complying and being gracious about defeat in this area, the minister of heritage has sort of stuck her finger in the eye of the international dispute body, the World Trade Organization. Effectively she has said that we will not comply; to heck with those guys, we will go our own way.
What would happen if the United States took us to the World Trade Organization because of this legislation? What would happen if the World Trade Organization ruled against us for a second time? Canada does not have to comply because those are the rules of the World Trade Organization, but it certainly should because our international reputation would be tarnished. However we do not have to. We can go on with our silly policy if we want, but any country that takes us to court and gets a ruling in its favour has the right to retaliate. Those are the rules of the GATT. A country has the right to retaliate in kind.
What form could that retaliation take? It could take the form of retaliation in the cultural sector, the agricultural sector, the forestry sector, and even in areas that are not distinctly related to this dispute.
Let us assume that they took retaliation in the area of culture. What does Canada have to lose? We have a very big amount to lose. We have a lot of Canadian entertainers in the cultural sector finding employment in the United States. It is a very big market with some 260 million people. Shania Twain and other entertainers go to Nashville and Hollywood. They do not want their access denied. However, if the ruling went against Canada, and I believe it will, the United States could choose to follow that route. I think we are cutting off our nose to spite our face.
What possible good can come out of this? We have the matter of Canadian advertisers who want to advertise in split-run magazines. It seems to me that they would know what is best for their business. It removes a choice from Canadian advertisers. Do we really need a magazine that is so mediocre that it cannot stand up to competition without support or protection? I think not.
Let us look at some of the magazines that claim they need protection. What would happen to those magazines if the United States said it would not let Americans advertise in Canadian magazines if we did not advertiser in theirs? We can flip through the October 26 edition of Maclean's , one of the magazines we are talking about in this whole issue. What is the ad on the first page? Jaguar. It goes on. Three-quarters of the ads in Maclean's magazine come from outside Canada. Is that the message we want to send around the world, that we are not open to business in Canada? Could it function without ads from Volvo, Subaru, Disney World, IBM, Air France, Oldsmobile and Kodak? I do not know that it could.
We are using foreign money to support our magazines right now. On the other side of the equation we are saying that we cannot let Canadians advertise in magazines such as Sports Illustrated because it does not have enough Canadian content.
The ruling has gone against us once and it will go against us again. Then what will the government do? The United States has the right to retaliate. This time I think it just might get tough. We certainly do not want to go down the road of possibly risking closure of the United States market to our entertainers.
Let us examine the issue of whether the industry needs protection. My colleagues have already made some interesting points by suggesting that it probably does not. I would agree that it probably does not, but the industry certainly warrants promotion.
Canadian trade delegations travel all the time. The Prime Minister is very proud of the January junkets he takes to promote Canadian goods. Incidentally, it seems that he only goes to countries in January that have a temperature of about 30° Celsius. Be that as it may, he is out there promoting Canadian goods and services. The trade minister is out there all the time. Canadian businesses are too.
Why can they not promote Canadian culture? Why can they not promote Canadian entertainers, our magazines, our book industry and our publishing industry? They should be very much a part of that promotion in the same way they promote Canadian agriculture, Canadian forest industries or whatever.
The opposite to that is the approach the heritage minister seems to take, one of protection. I thought the protectionist walls had been broken down a long time ago. We have seen protectionist walls in the past. Sir John A. Macdonald put up high tariff walls after Confederation and essentially destroyed Atlantic Canada's ability to trade with the New England States. As a result it became a welfare state of Canada, and the government wants to go down that road again.
We have an $800 billion industry in Canada. That is the GDP of our country. Protection does not enter into very many of those industries. I can think of only a couple like the supply management sector of agriculture, an industry that basically has no exports. It basically has to look at the Canadian market all by itself. There are other sectors of Canadian industry that do not have competition. Largely they are industries like the power industry. Where that happens, public utilities boards are put in to look after the public interest because no competition can occur.
Why should we be afraid of competition? We are out in the world every day exporting product. The two way trade between Canada and the United States is worth over $1.4 billion a day. They are saying that we cannot compete. All we need is a small piece of the American pie, and I think we are doing very well. Many Canadian artists have already discovered that. That is why Shania Twain travels to Nashville. That is why Terri Clark from Medicine Hat is in Nashville. They are looking at that big market. They are not only serving Canadians. They are out there looking at a much bigger world.
Canadians will not be intimidated. They will look outward. They will look at the global economy. They have enough confidence to take that on, but we have to get things right at home. We have to get the fundamentals right.
When the foreign affairs and international trade standing committee did a study on why small and medium size businesses were not exporting as we believed they should, the message was strong and clear. They said the government had far too much regulation and that the cost of doing business in Canada was too high.
A representative of one small company with under 100 employees came before our committee and said that he had to move his operation to Illinois. He said that he could do better business, that he could trade more effectively back into Canada with his company in Illinois than he could when he was located in Ontario because of interprovincial trade barriers.
Small companies are telling us that is the problem. I suggest that many of these companies such as Maclean's are not small companies at all.
They are relying right now on the international marketplace. They are relying on international investors and companies to advertise in their magazines. I think they can make it. Canadian cultural businesses, small or large, have to face the reality that there is a big world out there. They have to go after a portion of that market. They can do it. We have to get past this myth that subsidies and barriers are a great thing in Canada.