Debates of Dec. 7th, 1998

Special Import Measures Act

[Benoît Sauvageau, Bloc, Repentigny, QC]

Madam Speaker, like the two previous speakers, I am pleased to rise today in this House to speak to Bill C-35, an act to amend the Special Import Measures Act and the Canadian International Trade Tribunal Act.

As we Bloc Quebecois members indicated in previous speeches, we support this bill. However, since we had some reservations about certain aspects of this bill, at report stage, we introduced a number of motions in amendment to try to improve it. But they were defeated.

These motions result from a study of the Special Import Measures Act done by the Joint Committee on Foreign Affairs and International Trade and by the finance committee. I would like to briefly outline these motions, which reflect the issues on which we differed.

Our Motion No. 1 read as follows:

That Bill C-35, in clause 15, be amended by adding after line 21 on page 10 the following:

“(3.1) In determining whether the complaint is properly documented, the Deputy Minister shall not take into account representations received from parties other than the complainant.”

A number of witnesses voiced concern during committee proceedings. The Canadian Steel Producers Association was one of these witnesses with concerns about certain provisions of the act. The Bloc Quebecois shares the concerns of these witnesses, which were asking that Revenue Canada ignore the unsolicited presentations by parties other than the complainant before the start of an investigation.

Such an approach would have Revenue Canada take into account only information coming from the complainant, without having to consider unsolicited comments from outsiders.

This approach, which was rejected, seemed reasonable to us since it would apply only before an investigation was opened. Unfortunately, the government does not seem to care any more about our requests than about those of an industry as essential to the economy of Quebec and Canada as the steel industry. Therefore, it rejected this amendment, which will not be included in the bill.

Motion No. 2 read as follows:

That Bill C-35 be amended by deleting Clause 27.

We considered that Bill C-35 should not contain provision for the minimum duty. We think it is premature to include the concept of a minimum duty in the Special Import Measures Act.

We think the government should stop approving policies that reduce the protection afforded Quebec and Canadian businesses when our main trading partners are not doing the same thing.

The Standing Committee on Foreign Affairs and International Trade recommended in its report—not one of the ones that was leaked—inclusion of the concept of a minimum duty in section 45 of the legislation on public interest.

However, clause 27 of the bill incorporates the concept of a minimum duty by amending section 45 of the existing legislation. Thus, the Canadian International Trade Tribunal may, on its own initiative, or on request, initiate a public interest inquiry if it is of the opinion that the imposition of an anti-dumping or countervailing duty, or the imposition of such a duty in the full amount provided for by any of those sections, in respect of the goods, would not or might not be in the public interest.

As a result of a public interest inquiry, if the tribunal is of the opinion that the imposition of a duty might not be in the public interest, the tribunal shall without delay do two things. First, it shall report to the Minister of Finance that it is of that opinion and provide that minister with a statement of the facts and, second, it shall cause notice of the report to be published in the Canada Gazette , which many people read every day without fail, as we all know.

In addition, in that same report, the tribunal shall specify either a level of reduction in the anti-dumping or countervailing duty provided for, or a price or prices that are adequate to eliminate injury, retardation or the threat of injury to the domestic industry. It is through this last measure that the concept of minimum duty is introduced.

Motions Nos. 4, 5 and 6 concern the notion of “material harm”. In our opinion, the definition of material harm was also problematical. The Bloc Quebecois called for insertion of a definition for the expression “material harm” into the Special Import Measures Act. This, coupled with the criteria suggested in the current regulations, would clarify this important concept for everyone.

In Motion No. 4, we proposed, and I quote:

That Bill C-35, in clause 44, be amended by adding after line 46 on page 33 the following:

“(3.2) For the purposes of subsection (3.1), “material harm” means harm that is more than negligible and that is not immaterial or trifling.”

We also proposed to make reference to “material harm” in several other provisions, including in clause 44, line 46 on page 33, which would read as follows:

“(3.2) For the purposes of subsection (3.1), “material harm” has the meaning given to that expression by the regulations.”

We also asked that the notion of “material harm” be applied to clause 51, through the following amendment:

—be amended by adding after line 18 on page 36 the following:

“(f) defining the expression “material harm” for the purpose of section 44;”

This is very technical, but so is the bill, and this is why we had to conduct a thorough review.

So, had these amendments and improvements been included, the legislation would leave no uncertainty for Quebec and Canadian businesses. These motions are very important, because the bill is supposed to improve the Canadian system of special trade measures so that it can better reflect the new economic context and the changes in the rules of international trade, and leave no room for confusion.

Another Bloc Quebecois proposal ignored in this bill concerns the future or retroactive method of imposing duties. We wanted Revenue Canada to continue using the future method. However, we would, in cases where prices or costs are likely to fluctuate significantly, like to have Revenue Canada authorized to use the retroactive duty imposition method.

This method would be used only exceptionally and only when Revenue Canada considered it necessary. This is why we tabled Motion No. 7 in this House.

I will read a passage from this motion:

That Bill C-35 be amended by adding after line 42 on page 36 the following new clause—

In this regard, we referred to the prospective and retroactive methods.

This bill is very important as it governs the imposition of antidumping and countervailing duties on dumped or subsidized goods where this dumping or subsidizing has or may have an injurious effect on producers in Quebec and Canada, while at the same time making changes to the Canadian International Trade Tribunal.

We need only think of our farmers on the Prairies, who are facing very definite problems with farmers in the northern United States, to realize how the border aspect of subsidies and dumping duties are a part of our daily lives.

The interventions of Bloc Quebecois members during this study have already led to a few important changes and substantial improvements. We suggested, for example, concrete measures allowing small and medium size producers in Quebec and Canada to have fair, equitable and easier access to the redress procedures provided by the current legislation.

We also proposed improvements to the way the Canadian International Trade Tribunal operates. The Bloc Quebecois also proposed that the cumulative effect be taken into consideration by the tribunal when assessing damages.

Furthermore, the amendment of section 76 of the Special Import Measures Act, requiring the Canadian International Trade Tribunal to assess the cumulative injurious effects of dumping or subsidizing in the context of interim reviews was consolidated as the result of our interventions.

We agree with the intent of this bill, which marks the government's first effort to clarify things. Quebeckers and Canadians, as well as the Bloc Quebecois, have long been calling for less bureaucracy and more efficiency. The government must give producers in Quebec and Canada the tools they need to compete in the global economy.

Dumping and subsidies are tools criticized, but often used, by industrialized countries. This legislation and the Canadian International Trade Tribunal Act are necessary, in fact essential tools to counter dumping and subsidies.

It is important that these laws be designed in such a way as to appropriately meet the needs they were intended to address.

These amendments should hopefully improve the Canadian trade remedy system so that it will better take into account the new economic context and the evolution of international trade rules.

Unlike our colleagues across the way, who suddenly changed their tune after they took office five years ago, we in the Bloc Quebecois have always been in favour of free trade. We can therefore only applaud any steps taken to help ensure businesses in Quebec and Canada are full participants in this era of globalization, in a well-structured context based on appropriate legislation.

Overall, the Bloc Quebecois supports the principle of Bill C-35, which is to clarify the role of the Canadian international trade tribunal and to improve the Special Imports Measures Act. The review conducted by the subcommittees helped identify the improvements that should be made to these acts.

Bill C-35 will implement the recommendations included in the December 1996 report on the Special Import Measures Act which, as I said, was not leaked, and which the Bloc Quebecois greatly helped improve and fine-tune.

This review has identified a number of improvements which should be made to these acts, but more needs to be done, including the changes put forward by the Bloc Quebecois and by officials from various industries.

So, in spite of some concerns, we are rather pleased with the bill and we will support it, as we did at the previous stages. However, as we said before, we feel that rapid developments in international trade emphasize the need to review these two laws on a regular basis in the future.

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I am pleased to rise on behalf of the New Democratic Party caucus to speak to Bill C-35, an act to amend to the Special Import Measures Act and the Canadian International Trade Tribunal Act. Along with the Bloc Quebecois we oppose the bill, but we want to make clear that opposition in no way detracts from our overall support for SIMA and the work of the CTT.

The Special Import Measures Act remains one of the very few mechanisms we have in Canada to protect Canadian industry and jobs in the ongoing trade disputes we have with the United States in particular. Because we live in an increasingly liberalized global trading environment, we support the bill in so far as it clarifies, streamlines and improves the Special Import Measures Act.

However, we oppose Bill C-35 in its totality because we honestly feel that what is before us has not strengthened the legislation sufficiently, in particular with respect to trade with the United States of America.

In some ways the bill may actually weaken SIMA as a protection against unfair trade. As has been expressed by others, the main concern is the anti-dumping legislation. It must be as strong on the north side of the 49th parallel as it is south of the 49th parallel. In other words, our system must be as advantageous to Canadian producers as the U.S. system is to its producers. We can afford to do no less in the protection of our country, our traders and our exporters. I do not think the boy scout image will carry us very far in negotiations with the U.S.

The trade wars between our two countries have continued unabated despite the free trade agreement and the North American Free Trade Agreement. A few weeks ago and even last weekend we saw the spectacle of the U.S. violating international agreements, making it difficult for our processors and producers of grain and livestock to transport goods into the United States. The first blockade was with the encouragement of elected U.S. legislators, but that was not true with the resumption of the blockade we saw this weekend.

Bill C-35 may very well weaken SIMA and place our producers and shippers at a further disadvantage to their U.S. counterparts. The key concern would be implementing the World Trade Organization's definition of a lesser duty provision. The concept of lesser duty as I understand it allows anti-dumping duties to be set lower than the injury faced by domestic producers. There is a genuine concern that it will put Canadian producers at a further disadvantage.

Another aspect of it is the concept of material injury. We feel that too is inadequate. The U.S. employs a broad definition to provide greater scope for corrective measures. For example, pasta that was dumped on both sides was found to cause injury in the United States but not found to cause injury in Canada. The broader definition of the material injury has been pointed out as the reason for the different interpretations on either side of the border.

During the report stage of the bill, we supported the Bloc because we wanted to clarify material injury and ensure that it was as tough north of the border as the U.S. definition. We regret sincerely that that was defeated at the report stage.

We also supported an amendment which would have enabled Revenue Canada to use retrospective duty assessment in cases when there would be significant fluctuation in prices or costs. Once again we see that the United States uses the retrospective method in all cases which of course provides greater security for its domestic producers. We regret sincerely that this amendment was also defeated at report stage.

We regret profoundly that Bill C-35 was not used to strengthen the Special Import Measures Act. Does the government not recognize the inherent dangers our producers face? When our protective system is weaker than that of our trading partners, we disadvantage our exporters, particularly with respect to the United States, and make ourselves a target for countries looking to dump into North America. We expose ourselves to abuse from foreign exporters by our actions.

We see a pattern that emerges time and again in Canadian trade law and in Canadian trade policies. Whenever there is some liberalization to be done or some weakening of a nation state's ability to protect itself, Canada always seems to be the first to want to jump in with both feet. We are always eager to play the game, so eager that we often leave ourselves vulnerable to other nations, in particular to our powerful neighbour to the south. It seems we just cannot get enough of this tickle me Elmo approach by other countries and then we are first to hail any new agreement as some kind of testimony to our free trading spirit.

I say with respect that the United States seems to have absolutely no respect for any agreement into which it enters. The United States is the last country to amend its laws in such a way as to conform to whatever other nations may be doing in order to liberalize trade. The U.S. has not adopted this lesser duty provision, but no, we will be the eager ones again. We will be out there leading with our chins.

This certainly gives an opportunity in the context of Bill C-35 to say that we are not only opposed to the bill, but we are opposed to the entire approach that the government opposite has pursued with respect to trade.

The Liberal government has become totally uncritical about free trade in recent years. The Liberals have become evangelists for the very notions they deplored when they sat on this side of the House. After campaigning against the free trade agreement in 1988 and in the years following, after being elected in October 1993, the Liberal government promptly signed NAFTA. Since then it has become the cheerleader for additional free trade agreements around the world, whether it is signing on to the Canada-Chile free trade agreement, APEC, the free trade agreement with the Americas, the FTAA, the multilateral agreement on investment or the World Trade Organization.

The ongoing crisis faced by Canadian farmers shows the danger of sticking our neck out as far as we do for the sake of this or any free trade deal. The Liberal government went way beyond our WTO commitments to reduce farm support after the Uruguay round in 1993, way beyond what the United States has done, and way beyond what the European Union has done.

Many Canadians have a right to feel utterly betrayed. The result is a disaster for our farmers. We are now belatedly trying to rectify the damage that has been done.

The most recent deal the Liberals have chased after is the multilateral agreement on investment. Fortunately other governments had better sense. This fall various governments in the Organization for Economic Co-operation and Development rejected the MAI and the NAFTA model. When they looked closely at NAFTA as the blueprint for the MAI, they wondered why Canada ever agreed to signing a deal like NAFTA. They wondered why anyone would be so keen to replicate NAFTA on a global scale.

Our caucus has been critical of this unthinking pursuit of free trade from the beginning. We are not against fair trade. We are not against trade agreements that incorporate into them real, meaningful and enforceable protection for workers, for labour standards, for environmental regulations and for the continuing ability of governments to act in the public interest. It is because we believe in fair trade and the role of effective regulation that we support SIMA. That is why we see the need for strong and effective mechanisms to protect Canadian producers and ensure a level playing field with the United States.

In conclusion, we believe that Bill C-35 does not ensure this, so we do not support the bill. We oppose it because we believe that overall we are facing a weaker SIMA, one that will put us at a disadvantage especially with respect to the United States.

[Chuck Strahl, Reform, Fraser Valley, BC]

Madam Speaker, I will make a couple of comments first then ask the member a couple of questions about Bill C-35.

When we look at this bill we see a bill that tries to address the anti-dumping problem in the world where heavily subsidized foreign companies dump products into Canada and try to drive our businesses out of business. We see the bill as a move in the right direction. I do not claim that it is a perfect bill, but at least it does make that provision possible.

I would like the member to detail a bit what he would rather see in this bill. More importantly, because this comes before us in the form of a bill, we have a chance to debate an idea or a conclusion, in this case an act of parliament, that will commit Canadians to an international agreement for years to come. That does not happen all that often.

All too often people on behalf of the government wander off to different UN conferences, conventions, groups and backdoor meetings of all sorts. Often they sign on to deals and there is no corresponding legislation in the House of Commons. We live with whatever those folks negotiate behind closed doors.

The MAI is a good case in point. People were very nervous about the potential of the MAI. Although I must admit that Canada does need an agreement on international investment, it is a matter of how it is negotiated.

I would ask the member to comment on the approval process he would like to see on international agreements like this one. At least we have a bill that we can debate, talk about and amend. It is healthy for the House of Commons to deal with those issues in that way. There are countries, for example, Australia and the United States, and other countries both inside and outside the Commonwealth which have a much better approval process for ratifying international agreements. It involves either committees of a house or a vote of some sort before the treaties come into effect.

I would like the member to comment on two things. How would he like to see this bill specifically amended to strengthen it? More importantly, what type of approval process would he like to see this House adopt for the adoption of international treaties?

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, the member asked what we in this caucus would rather see in the bill as it affects anti-dumping.

I tried to indicate in my remarks that we wanted to see similar provisions to what the United States has on its side of the border including the retrospective look at legislation so that we can remedy changes when they come up.

With regard to the approval process, I indicated that we supported SIMA and the CITT. I recognize and appreciate that parliament needs to figure out ways for members of this House regardless on which side they sit to work co-operatively to assist Canadians who we are here to represent.

I do not have a specific approval process that I would be advancing here today. However, I concur with the hon. member's remarks that we need some help in that direction and we could probably look to some of the countries he referred to. Australia is a good example.

We certainly need to draw opposition members into the operation more than we do now.

[Bill Graham, Liberal, Toronto Centre—Rosedale, ON]

Madam Speaker, I will leave aside the rather large philosophical question as to the way in which this House and we as members go about ratifying and approving international treaties. This clearly is something of interest to a lot of members. It comes up in the foreign affairs and international trade committee from time to time, and it may be something we should be looking at.

I am a little surprised at the tone of opposition the member expressed and particularly his suggestion that we should be adopting mirror legislation vis-à-vis the United States.

The member will recall that the committee held extensive hearings on this bill. We often heard recommendations from various parties, particularly the steel industry and others, saying that we should adopt mirror legislation vis-à-vis the United States. However, it was pointed out by a lot of people who came before the committee that this would also hurt the Canadian automotive industry which imports a lot of parts that are then used in exports.

I would suggest to the member that I am not so sure we would want to go down the track of imitating what the United States does.

What we are trying to tell everybody in the United States and the world is that their ideas are crazy, do not make sense and are contrary to the international agreements we are subscribing to. Why would we want to do what they do just to prove that we agree that what they are doing is crazy? I do not understand where the member is coming from on this.

I think I understood that his party is in favour of the general thrust of the legislation and that maybe we can work on it together. However, the recommendations in this legislation have all-party support of the committee which recommended most of the changes. The legislation itself brings Canada into conformity with our international agreements and at the same time protects our producers and our consumers in a proper balanced way.

[Dick Proctor, NDP, Palliser, SK]

Mr. Speaker, the member opposite talks about the United States being crazy. I agree with him but it is driving our producers nuts in the process. This is in the context that the United States is our major trading partner. Around $20 million worth of trade, an inordinate amount of money, crosses the border every day. I think the feeling around here from Canadian producers and exporters is that we are being hosed more often than not.

It may very well be that the United States is out of step with the rest of the world. We are so close in proximity to the United States and our trade with that country is so important that we cannot afford, as I suggested in my remarks, to be leading with our chins when negotiating with the United States. I fear that the legislation before us today will force that upon us.

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, I am glad to rise on this occasion. I would like first to tell a very short story and then ask a question.

In 1993 I remember the NDP running ads talking about how free trade would kill jobs and devastate the Canadian economy, that it would be a colossal failure and that the whole nation would weep in the wake of the signing of a free trade agreement. I am glad to hear the member's party has changed its position on free trade. I remember as well the commercials that were run in the 1993 election campaign were actually made in the United States. It was rather ironic since they were running ads that were negative to free trade.

Is the member aware of other flip-flops the Liberal Party has made with regard to issues like free trade since they won election in 1993?

[Dick Proctor, NDP, Palliser, SK]

No, Mr. Speaker. I think I set that out fairly clearly. When the Liberals were in opposition they were very firmly opposed to free trade. The previous leader referred to it as the fight of his life back in 1988.

However they embraced free trade altogether, 100%, following the election in 1993. They continue to go down that road with the agreements I referred to: the agreement with Chile, the agreement with the Americas, the WTO, their push on the multilateral agreement on investment, et cetera.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, it is my pleasure to speak to Bill C-35. The Progressive Conservative Party is in favour of this bill.

Unfortunately, Bill C-35 is not perfect, coming as it does from the government opposite, which is not perfect. Let us hope that the future will bring perfect legislation from a perfect government of the right colour.

We are in favour of Bill C-35, about which much has been said. I would like to come back to the purpose of this bill. We already had the 1984 Special Import Measures Act, which was aimed at exercising some control over what was coming into this country by setting rules to protect our industry. Following a most welcome change in government that Canadians and Quebeckers had been waiting for, negotiations were initiated to open up channels for trade around the world and with the United States in particular. Free trade agreements were signed, leading to various international trade negotiations.

After a free trade agreement is negotiated, it continues to evolve. In implementing the legislation, it becomes evident that changes have to be made to the laws of the various countries involved. Bill C-35 contains a number of changes, especially with respect to antidumping measures. This is the main purpose of Bill C-35.

There has been much mention of the United States. Free trade agreements have fortunately addressed most of the potential problems with that country. Since 1984, the Special Import Measures Act has been amended with each successive international treaty. Free trade is therefore a partial solution to some of our import problems.

Much was said about the United States and the very tough measures imposed by that country. One thing needs to be understood. Like Canada, the United States has a trade deficit. When a country has a trade deficit, it reacts by making its legislation more protectionist.

This is what happened in the United States in a few particular sectors, agriculture being one that has been debated in the last few weeks and months.

It is a very human reaction, particularly on the eve of an election, when barriers go up. With its free trade agreements and exports, however, Canada has been able to reassure Quebeckers and Canadians. The latest figures show, without a shadow of a doubt, that, had we not had free trade boosting exports to the United States, among other countries, Canada would be in a recession.

We export 1.8 per cent of our GDP. If we reduced our exports, we would go into a recession and all Quebeckers and Canadians would lose.

Naturally, some things still need to be changed. Bill C-35 introduces some worthwhile amendments, but it is not perfect. The Bloc Quebecois suggested some very interesting amendments that would have seen duties apply even further back in the case of dumping. We hope that it will not take the government two and a half years to amend the Special Import Measures Act.

Bill C-35 also introduces a change with respect to the Canadian International Trade Tribunal Act. It will be made much more stringent. We are going to send a very clear signal to those who want to dump their products onto this country, directly or by devious means, that Canada, under its international agreements, is ready to face the music.

We have examples from 80 years back, but the practice of dumping has existed since the time of the empires. At that point—as a history buff like you, Mr. Speaker, would know in spite of your young age—what they dumped was rum or furs or wood, depending on what the empire wanted to do with the recalcitrants in certain parts of its great kingdom.

As countries were established, various laws and agreements came into being, often within large groups such as the Commonwealth where there was some control over the movement of merchandise.

Bill C-35 is a step in the right direction. But, naturally, it is not perfect. However, we are giving it some teeth. Oftentimes on the international scene, when the government tried to show its teeth, people realized it had no dentures. Bill C-35 gives it enough teeth to better control the measures that could harm Canadian producers.

Even though we are delighted, we think it took far too long: two and a half years. Whether it is the crisis we are facing now in agriculture or the pasta crisis because of dumping by Italy, which has made it difficult for Italian products to move through the Canadian market, or any natural resource produced and sold in the country, there are difficulties.

I will not go further, for time is slipping by. I also know that all parliamentarians, with the exception of members of one particular party, have agreed to support Bill C-35.

Once again, we might say that the Liberal government has recognized its past mistake of failing to support the previous government on free trade, and we hope that the red of the government in office becomes a little less evident, that is, a little more blue.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, it is not often that I stand in the House in agreement or even partial agreement with something brought forward by the government. I can say that with regard Bill C-35.

We do not have to look too far to see what is actually going on today with trade. It is in the news. At the border there has been stoppage of some of our produce from entering the States.

Bill C-35, if it were to be implemented, might play a small part in addressing some of the concerns. Dumping is basically when other countries sell their product in our country at less than it costs them to produce it. We have to pay attention to exactly what is going on. Otherwise our financial picture will look bleaker than it is now. I do not think the country could stand that for one moment.

Bill C-35 respecting the Special Import Measures Act governs the procedures under which anti-dumping and countervailing duties are imposed. Under WTO rules all countries are permitted to impose penalties on imported goods if the goods are being dumped into their countries or if their production is being subsidized at home.

That also brings forward the definition of dumping or subsidizing. What exactly is subsidizing? We should be looking at this subject more carefully than we do. Subsidization can take many forms. I am and always will be basically a free trader. More important, I would like to say I am a fair trader. I do not have a doubt that Canadian workers, farmers and manufacturers can compete in any field against any country if we have fair trade.

Fair trade does not necessarily fall into the same guise, unfortunately with the government, as does free trade. Fair trade means that we require a level playing field for our producers to compete. When we have to face higher taxes than in other countries, it is no longer fair trade. When we have to pay more for our electricity and for our heat than other countries do, it is no longer fair trade. When we have to pay more for shipping costs than other countries do, it is no longer fair trade. When we have to pay our own people to collect taxes such as the GST and other countries do not have to do so, it is no longer fair trade. However it may be so-called free trade. If we were to look into those areas we would find that Canadian producers could definitely compete by anyone's standard in the world. I have no doubt about that.

I admit that is getting a bit off topic from Bill C-35, but the government should take heed of this when talking about imports and exports. The first basic concern should be for the producers in Canada and trying to give them a fair chance to compete in the global economy, if that is where we want them to go. It is only reasonable to ask that.

As long ago as 1904 Canada developed the world's first anti-dumping legislation. Over the years since then Canada has evolved into one of the world's leading trading nations. Canada's trade legislation has been changed many times, including changes to the Special Import Measures Act or SIMA that were needed to implement the North American Free Trade Agreement and the Uruguay round of the General Agreement on Tariffs and Trade or GATT.

We have been here before. We have gone through the hoops. We know we have serious problems and keep on having serious problems. It was only on Friday that I asked the minister about what was happening at the border. His answer to me was basically “Don't worry. Be happy. We have drawn up an agreement and nothing will happen”. It did happen because these agreements were not implemented when they should have been.

As I said, I am basically in support of Bill C-35. The government could be doing a lot more to help our companies and producers but it refuses to look at it. I sincerely hope it will give as much attention to that area as it has to Bill C-35. It has taken the government two years to get the legislation before the House.

In conclusion, basically the government has our support.

[Gurmant Grewal, Reform, Surrey Central, BC]

Mr. Speaker, I would like to tell a story to the House about a small company in my constituency. It is called Bed-Roc Industries, a medium size company. It had to fight against an American competitor that used to dump tiles in B.C. and Alberta. It was selling specific tiles at a price which was undercutting Bed-Roc's price, selling at a very low price to outbid Bed-Roc.

It fought against the American company. It went through the International Trade Tribunal. After many years of battle it won the case and was compensated for the injuries it suffered.

Small and medium size businesses suffer because the bigger companies dump some of their products in our market and it is difficult for the smaller companies to survive. Very few companies go to the tribunal and go through the lengthy process to save the jobs they create in this country.

Under this Bill C-35 I am wondering if we are looking at the long term implications of the amendments. How will the changes to be implemented affect business in the agriculture sector?

[The Deputy Speaker]

The difficulty is we have passed questions and comments and we are on debate. Perhaps there would be consent to allow the hon. member for Okanagan—Shuswap to resume the floor to answer this question. Is that agreed?

[Some hon. members]

Agreed.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, unfortunately I did not catch the question. I thought that time had passed and I got on with something else.

I hope it will address the member's concerns. If not, I am sure we will be back before the House screaming and hollering, there is no doubt about that.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[An hon. member]

On division.

(Motion agreed to, bill read the third time and passed)

(Bill C-59. On the Order: Government Orders)

November 30, 1998—Second reading and reference to Standing Committee on Finance of Bill C-59, an act to amend the Insurance Companies Act.

Insurance Companies Act

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Mr. Speaker, there have been discussion among the parties. I believe that you would find unanimous consent to order, without debate, that Bill C-59 be forthwith referred to the Standing Committee on Finance pursuant to Standing Order 73(1).

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Corruption Of Foreign Public Officials Act

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Mr. Speaker, there have been discussions with the parties. I believe you would find consent for the following:

That Bill S-21, an act respecting the corruption of foreign officials and the implementation of the convention on combating bribery of foreign public officials in international business transactions and to make related amendments to other acts, be now read the first time and ordered for immediate consideration at the second reading stage.

(Motion agreed to and bill read the first time)

[Alfonso Gagliano, Liberal, for the Minister of Foreign Affairs]

moved that Bill S-21, an act respecting the corruption of foreign public officials and the implementation of the convention on combating bribery of foreign public officials in international business transactions and to make related amendments to other acts, be read the second time and referred to a committee.

[Julian Reed, Liberal, Parliamentary Secretary to Minister of Foreign Affairs]

Mr. Speaker, I rise with pleasure to speak to a matter of concern to all of us, the subject of Bill S-21, the bribery and corruption of foreign public officials in international business.

This bill when enacted will allow Canada to ratify the convention on combating bribery of foreign public officials in international business transactions. This convention was negotiated by the members of the Organization for Economic Co-operation and Development.

The 29 member OECD, which includes Canada, the United States, most European countries, Japan and South Korea, is the major economic policy forum for the world's most advanced industrialized democracies.

It is an accepted fact that corruption distorts international trade and competition. It impedes economic development. In developing countries in particular corruption distorts public policy. It leads governments to make decisions that are not in the public interest but are in the interest of those who benefit from the bribes.

Corruption also has the effect of lowering the quality of goods and services provided by the private sector in the course of meeting its contracts. If substantial bribes are being offered the money comes either by shortchanging the countries with which one has a contract or by undermining the quality of the goods and services being provided.

Furthermore it has an insidious effect of threatening the rule of law, democracy and human rights. It undermines the development of competent political and democratic institutions. Where they are in the course of development, it blocks that development. Stability and security are essential preconditions for economic growth. Prosperity, sustainable development and employment engender greater security and stability.

The successful promotion of Canadian values abroad can be assisted by increased economic partnerships between Canada and other countries.

The issue of the corruption of foreign public officials is not new and continues to be a major problem affecting international trade and investment. The problem has been the focus of attention within the OECD, the Organization of American States and the Council of Europe.

To implement the OECD convention would enhance Canada's reputation as a world leader in fighting corruption. It would honour the commitments Canada has made at the OECD, at the Denver and Birmingham summits of the G-8 and at the United Nations. And it would continue to ensure if not enhance Canada's standing at the OECD.

Some have questioned whether what we are doing is enough. My response is that this is a dramatic and significant first step in the right direction.

I will highlight the key elements in this legislation. The essence of the convention is the requirement that each state party criminalize the bribery of foreign public officials in international business transaction and take measures to establish the liability of legal persons for the bribery of a foreign public official. This provision appears in section 3 and is the centrepiece of the proposed act. It prohibits the bribery of a foreign public official in the course of business whether directly or indirectly. It calls for significant penalties. The offence would be punishable on indictment and carries a maximum penalty of five years imprisonment.

This legislation will use the definition of person found in the Criminal Code that includes Her Majesty and public bodies, bodies corporate, societies, companies and inhabitants of counties, parishes, municipalities or other districts in relation to the acts and things they are capable of doing and owning respectively.

Therefore for the purpose of the offences under this proposed act, potential accused are not limited to natural persons. Corporations also fall within the scope of these offences. The bill describes facilitation payments that would be exempted from the ambit of the offence. It would not be an offence if the advantage were lawful in the foreign official's country or public international organization. Reasonable expenses incurred in good faith and directly related to the promotion, demonstration or explanation of products and services or to the execution or performance of a contract with the foreign state could also be argued as a defence.

The bill would amend section 67.5 of the Income Tax Act to add this new offence to the list of Criminal Code offences referenced in that section in an effort to deny the deductibility of bribes paid to foreign public officials.

The convention requires the parties to provide that the bribe and proceeds of the bribery of a foreign public official be subject to seizure and confiscation. It requires the parties to consider the imposition of additional civil or administrative sanctions. For this reason the bill proposes to create two additional criminal offences, the offence of possession of property or proceeds obtained or derived from the bribery of foreign public officials or from laundering that property or those proceeds, and the offence of laundering the property or proceeds obtained or derived from the bribery of foreign public officials.

The bill incorporates the proceeds of crime provisions of the Criminal Code for use on prosecutions of the new offences. The new offence of bribery of foreign public officials is an enterprise crime offence to permit the search, seizure and detention of these proceeds of crime and is a predicate offence for the offence of laundering of the proceeds of crime. The convention has provisions dealing with mutual legal assistance and extradition with which Canada can comply. If possible under their legal systems, each party must also provide legal assistance in criminal and civil matters.

It is important to note the Canadian business community is behind this initiative. It considers the OECD convention as the most significant achievement to date in the international campaign against bribery and corruption. This convention is seen as an opportunity to create a level playing field on which Canadian companies can compete on the basis of quality, price and service. This was said loudly and clearly by members of Transparency International when they appeared before the Senate last week.

When he appeared before the Senate, the Minister of Foreign Affairs quoted Donald Johnston, a former Canadian Minister of Justice and current Secretary General of the OECD, who said in a recent article that “Integrity in commercial transactions is essential in making the global market work and to ensure that the public supports it. A logical consequence of globalization is that honesty has to be enforced at the global, not just national, level”.

With the passage of this legislation Canada has the opportunity to be the fifth country to ratify the OECD convention and to bring it into force, thus ushering in a new era of international accountability. I ask all hon. members to consider that the war on corruption is well underway. There is now no looking back.