Mr. Speaker, I shall refrain from using the member's name. Anyway, we know who he is and I will continue. He says that he would abstain from the vote because 40% of Canada's $5.9 billion plastics industry is in his riding—that is a lot a money—and that 85% of the goods are exported south of the border. He is also concerned about aspects of the bill that limit Canadians' rights to advertise in whatever publication they choose. This is a quote from him:
It is telling people how they can spend their money. I think there is a dangerous step there in terms of freedom of speech and quite frankly I don't think telling people how to advertise is going to influence what Canadians read anyway.
This quote is from a March 11 article written by Rosemary Speirs:
A few Liberal MPs are starting to get cold feet, notably the member for Hamilton West, normally a staunch supporter of the heritage minister, but like her, a representative of Hamilton's threatened steel industry.
The trade minister is said to be anxious, behind his bold front in public.
I will continue with the same article.
After she left the environment ministry, the heritage minister watched two of her previous attempts to stand up to the Americans—her ban on the gas additive MMT and her moratorium on the cross-border transport of PCBs—go down to humiliating reversals.
We know that has cost taxpayers a huge sum of money.
This time however, the Prime Minister appears to have dug his heels in. He is no doubt aware that the whole Canadian cultural community is anxiously watching the magazine precedent.
The last article I will read is from the March 11 Ottawa Citizen , by David Warren. The concluding paragraphs read:
Though a mindless torpedo to our actual interests, Bill C-55 makes sense as a party power play. The Liberals are trying to preserve a Canadian media establishment beholden for its survival to the Liberal Party. Even if they can't possibly succeed, they want to be seen helping their old reliable friends.
The Liberals get their moment of seedy rapture, wrapping themselves in the red Canadian flag. We get to pay for it.
Let us look at the realities of Canada. We all know that Canada's beginnings were with trade. Remember the Hudson's Bay Company. Over the years and still today our economy is fueled by trade. We have heard often that 83.5% of all goods and services produced in the country head south. It is a fact that our economy is directly linked to the U.S. economy, whether we like it or not. That is a reality check.
To support this position I would like to read parts of a speech given by our international trade minister to the House of Commons Standing Committee on Foreign Affairs and International Trade. This took place on February 9 this year.
I quote the Minister for International Trade:
We live in exciting times. Around the world, trade barriers are falling down, opportunities are opening up and the possibilities for Canadians to create better lives for themselves and for their children are greater than at any time in our history.
Technology is collapsing distances, and there is an ever-smaller distinction between international and domestic markets. We are able both to buy from and sell into markets that had previously been closed to us.
For a trading nation such as ours, these developments are to be welcomed. They provide Canadians with rewards for their labour, markets for their products and hope for their future.
First, we have benefited from liberalized trade because our economy is so dependent upon trade. In fact, we depend more upon trade for our prosperity than any other G-7 country.
Forty per cent of our GDP and one in three Canadian jobs depend upon our ability to sell our goods and services abroad.
Between 1992 and 1996, our exports grew roughly four times faster than our GDP. Due in no small measure to this performance, the Canadian economy created more than 1 million new jobs—450,000 last year alone. The connection between our trade figures and our employment figures could not be clearer.
There is a relationship between trade and job creation according to the international trade minister. I continue from his speech:
This is something that we need to stress. Trade is not an abstraction. It produces real jobs for real people and is not just happening on the international stage—it is happening locally, in our communities and in our neighbourhoods.
As a result of earlier rounds of trade talks, we have opened our economy and enhanced our opportunities. And, as country that depends so heavily upon trade and investment, we have benefited from more open markets.
He made one more key point:
The real challenge in trade policy, therefore, is not protectionism versus liberalization—closing or opening our borders—but to recognize our interconnectedness and learn to manage our national differences.
Canada stands today as a trading powerhouse at a time when the world is embracing freer trade as never before. We are in the right place at the right time, and our future has never been brighter.
By experiencing firsthand the benefits of trading abroad, many of the concerns about liberalization are put into perspective. And far from seeing trade liberalization as something to be feared, Canadians have come to see it as something to be embraced.
We can see that our international trade minister understands trade, what an open door policy is all about, what promotion is about rather than protection. Like most Canadians, he knows our economy is based on trade. That is what Bill C-55 is about. It makes no sense. It takes a protectionist approach. I cannot understand why the trade minister has defended Bill C-55 in public. Defending Bill C-55 contradicts his position.
At a meeting I asked the international trade minister if his department had done a risk assessment on this bill. Of course I did not get an answer. Knowing what he does I find it hard to believe this government would not do a risk analysis to consider the potential outcome if the Americans retaliate. In essence Bill C-55 is not about culture protection. It is anti-free trade and it puts Canadian jobs at risk.
I would like to examine some of the myths we have heard from across the way about Bill C-55. The first myth I would like to dispel is that Canadian magazines do not want subsidies. The fact is the Canadian magazine industry receives a postal subsidy of almost $50 million annually, a significant portion of which goes to Rogers and Télémédia, the dominant Canadian periodical publishers. Another fact is that Canadian magazines effectively offer their advertisers a taxpayer funded 45% discount through section 19 of the Income Tax Act.
Myth number two is that U.S. magazines crowd out Canadian periodicals. Often heard is the statistic that foreign magazines capture 80% of the news stand space. This figure reflects the fact that English language Canadian magazines do not rely on news stand sales to generate revenue. Of the top 28 Canadian based English language magazines, only 5% are distributed through news stand sales, 59% are distributed through controlled circulation, with the remaining 36% being sold through subscriptions.
The third myth is that Bill C-55 is needed to protect the Canadian magazine industry. The fact is that a study commissioned by the federal government revealed that small Canadian niche magazines are not vulnerable to competition in a deregulated industry.
Another fact is that Canada's two dominant periodical publishers, Rogers and Télémédia, are large, immensely profitable corporations as evidenced by both their financial statements and their massive Bill C-55 lobbying effort and ad campaign.
In 1997 the magazine publishing arm of Rogers, a $2.6 billion conglomerate, generated operating profits worth 10.4% of revenue while Télémédia, for the nine month operating period May 31, 1997, had operating profits of 11.7% of revenues.
The fourth myth is without Bill C-55 a flood of U.S. split-run magazines will swamp the Canadian market. The fact is that since October 1998 Canada has had no law prohibiting split-run magazines. Yet not a single split-run magazine has entered the Canadian market during that time, at least the ones the government knows about.
The fifth myth is that split-run magazines will discount advertising rates to scoop up advertisers who would otherwise be forced to use Canadian magazines. The fact is Bill C-55 permits Time Canada, a U.S. split-run magazine, to operate in Canada. Far from scooping Canadian advertising revenues, Time Canada charges higher advertising rates and carries fewer advertisements than its major Canadian competitor Maclean's . A comparison of Time Canada and Maclean's reveals that many companies place the same advertisements in both magazines.
Another fact is that magazine advertising as a percentage of total advertising has declined from 11% to 6% over the last 30 years. These advertising revenues have not been scooped by split-run magazines. Rather, advertisers have switched to other media because of a lack of appropriate Canadian periodicals to reach their targeted market.
As a study commissioned by the Canadian government concluded, the major reason for the underdeveloped state of magazines in Canada is lack of available advertisers, titles and little or no Canadian title coverage for many editorial segments. The advertising community will avoid recommending the magazine medium if lack of advertisers and available titles prevents proper execution of plans.
The last myth is that Bill C-55 complies with international trade rules. It is a fact that it does not comply with trade rules.
Bill C-55 is not just about advertising. It is about magazines. Bill C-55 discriminates against foreign magazines, contrary to previous World Trade Organization rulings. It is as simple as that.
The question is why are these publishing giants crying poor while spending hundreds of thousands of dollars to push Bill C-55 through parliament instead of exploring viable alternatives.
There is no doubt that the two trades are heading closer and closer on a collision course. I have been told that negotiations are occurring as we speak.
To put this in perspective, I want to read two letters for the record to illustrate how serious this matter is and to show that Bill C-55 may launch Canada into a trade war with the United States.
The first letter comes from the United States Senate committee on finance dated February 5 and written to Charlene Barshefsky, the United States trade representative.
The second comes from the committee of ways and means of the House of Representatives dated February 9 and written to the Canadian ambassador to the United States, Raymond Chrétien.
I wonder if reading the letters now is a good thing considering we are almost at 11 o'clock.