Mr. Speaker, I am pleased that the hon. member for Lévis-et-Chutes-de-la-Chaudière has given me the opportunity to speak to the subject of shipbuilding.
The federal government acknowledges the important contribution the marine industry makes to our national economy. As well, I must reiterate that the government currently maintains a generous package of measures which, in conjunction with provincial policies and sound industrial practices, benefit shipbuilders.
These measures are: a 33.5% accelerated capital tax allowance for Canadian built ships; a 25% duty on most non-NAFTA ship imports; domestic procurement on a competitive basis for all government shipbuilding and ship repair needs; Export Development Corporation financing for commercially viable transactions; and a very favourable research and development tax credit system.
We acknowledge that despite this support the industry continues to face considerable challenges in international markets. For instance, in December 1997, in an OECD workshop on shipbuilding policies, it was reported that a substantial overcapacity exists in the shipbuilding industry and that this overcapacity would grow to around 40% of the estimated world capacity by 2005.
The Canadian shipbuilding sector went through a voluntary rationalization process that culminated in a more streamlined and viable industry. The government participated in this industry led process by contributing nearly $200 million between 1986 and 1993. Through reorganizing and streamlining its operations over the past decade, the Canadian industry has been able to improve its productivity levels even with the forecast world overcapacity and has been successful in obtaining some international sales in specific markets, such as tugboats.
In summary, substantial support has been provided to the shipbuilding industry in the past and we continue to support it through a variety of initiatives. If the provinces wish to supplement our initiatives, as has been done by Quebec and Nova Scotia, they are free to do so.
The comments concerning the Minister of Finance made by the opposition and by the president of Davie Industries workers' union are completely false. As is the case for all cabinet ministers, all such assets are placed in trust under the control of a trustee. It is the trustee who has the final say. Consequently, there is no conflict of interest.