Madam Speaker, it is my pleasure to rise today to speak at third reading of Bill C-35, a bill which amends the Special Import Measures Act and the Canadian International Trade Tribunal Act.
This bill has been a long time in the making. Two and a half years ago a special subcommittee was struck to conduct a mandatory review of the SIMA legislation. I was a part of that subcommittee, as well as a former member of this House, Mr. Herb Grubel.
We agreed with the main components of the report, but we also issued a dissenting opinion. The reason for it will be outlined as I walk through this process today.
Just before the House recessed for Christmas two years ago the subcommittee brought down its report which made a list of recommendations, most of which are included in the bill today. I am not sure why the bill was delayed so long, but I welcome its appearance and I think it will help to clear up an area that needs to have more clarity.
The Reform Party supports this bill, although we have raised some minor concerns with it. We hope that, despite having our amendments struck down in committee, the changes to the SIMA legislation will strike the right balance in protecting producers and manufacturers without unduly hurting consumers, importers and downstream producers. To that end, I certainly want to talk about the public interest component of SIMA, an area that we tried to strengthen in committee with an amendment that was not allowed. Be that as it may, we are in general support of the bill.
I want to take a moment to explain what this bill is all about.
Under World Trade Organization rules all countries are permitted to impose duties on imported goods if those goods are being dumped into that country or if their production is being subsidized at home.
SIMA is the framework legislation which allows Canadian companies to request that anti-dumping and countervail duties be imposed against imported products which are found to be sold at too low a price or imported goods whose production is subsidized.
The steps that need to take place to arrive at these duties are clearly laid out in the bill. First, a Canadian company must file a complaint with Revenue Canada. Once Revenue Canada is satisfied that the complaint is properly documented, it initiates an investigation. The department then sends investigators to countries against which complaints have been filed and these investigators look into the books of those companies to ascertain whether there is sufficient evidence to establish whether or not there has been dumping or subsidization.
It is the job of the Canadian International Trade Tribunal to conduct inquiries into whether dumped or subsidized goods are actually causing injury to Canadian producers.
In the past, the CITT did not begin its job until Revenue Canada had determined that dumping had occurred. This caused delays and allowed preliminary duties to be collected before the CITT ruled that injury to Canadian companies had actually taken place. That process has been changed to the better. The new legislation under SIMA changes that. In future, the CITT will begin its work immediately and I fully support that process. I think it will help to speed things along.
I said earlier that I was concerned about the public interest component. After all, even though products are being dumped into Canada, there are times when I believe, in the public interest, that should be allowed to happen. The basic concern I have with this legislation is that the interest of the public is not taken into account soon enough in the process.
A good example of this is in the recent baby food case. Earlier this year Heinz, an American company with a subsidiary in Canada, charged Gerber, another American company, with dumping. Heinz took its case before Revenue Canada and the CITT and won its case against Gerber. Gerber had a 60% duty slapped on it which effectively forced it out of the Canadian market. That is one thing, but it left Heinz with a monopoly on baby food in Canada.
In the meantime we have parents of babies in Canada who do not have time to prepare their own baby food and as result are left with only one brand of baby food. My office received information that some babies could only be fed Gerber products because they were allergic to Heinz baby food products. With Gerber pushed out of the market, the parents of those babies found that their interests had been overlooked. This is only one example of how dumping duties hurt consumers.
If we create monopoly situations or lessen competition, that is a problem. I want to make sure that this public interest component is taken into account and reviewed down the road.
There are also instances where dumping duties have hurt downstream producers and importers. It is not just exports that create jobs in Canada. Imports create jobs as well. Carpet distributors and importers in Canada have long complained that the entire dumping procedure has hurt their business.
Because carpet distributors have so many types of carpets coming into the country, with different weights, fibres and finishes, they are always unsure at the border what the dumping duty will be. Therefore, these distributors find it difficult to bid on large contracts. It is bad enough having to deal with exchange rate uncertainties and problems in Canada in terms of being competitive, but when duty fluctuates by 10% or more profits can often turn to losses in no time.
Downstream manufacturers are also hurt when the cost of imported inputs suddenly rise because of dumping duties. I have quite an active and aggressive company in my riding that imports a lot of components for the finished product they manufacture. Those components come from the United States. They are a big part of the total package, something like 65% or 70% of the end product. This company imports those products. Dumping duties often hurt companies such as that.
I was given assurances by the drafters of the bill during briefings that there was enough flexibility built into the bill to consider the public interest in a timely fashion. But I believe this component should be examined again in a few years' time to ensure it is working properly. It must balance the interests of those companies that require protection with those that will ultimately pay the price.
In an ideal world, which everyone knows we do not have, dumping duties would not be necessary. I would like to see the U.S. trade remedy law and this particular legislation rescinded down the road. Canada's provinces do not have dumping duties against each other's products and, ideally, Canada and the United States should not have either because we have become very much an integrated market on many commodities.
We have sectors such as steel, beef and the automobile sector that essentially conduct cross-border trade via train and truck every day. We are not talking about a typical example of dumping with 50 million metric tonnes of dumped steel arriving at a Vancouver port from an Asian country.
The trade between Canada and the United States is regular trade between a supplier and a business that requires that product on a daily basis. So it is very hard to see how dumping duties do anything to satisfy that. On the other hand, the United States continues to keep its trade remedy law, including dumping, and it uses it very aggressively. As long as it does that, we have to keep that protection.
It is interesting that the first country in the world to ever use dumping was Canada. We introduced the measure 80 or 90 years ago. Now it is coming back to bite us. Eventually I would like to see it phased out.
At the next round of World Trade Organization talks I would like to see a better definition of dumping and a better subsidies code to make sure we can all play with the same rule book.
I recognize that a duty free world is quite a long ways away, but I would suggest that a duty free world between Canada and the United States is not that far away. We should be working to see if something can be done in the integrated industries, as I said earlier, to make dumping and countervail duties unnecessary.
The Reform Party supports this legislation which has been a long time in the making. We trust it will prove to strike the right balance that we are seeking to protect manufacturers and also to provide openness for our consumers and our downstream producers and importers.
We support this legislation and would like to see it move along fairly quickly.