Madam Speaker, I am pleased that the hon. member from Lévis has given me the opportunity once again to speak to the subject of shipbuilding.
The federal government acknowledges the important contribution the marine industry makes to our national economy. The hon. member is well aware of the generous package of measures the federal government provides, which in conjunction with provincial policies and sound industrial practices benefits shipbuilders.
This package includes an accelerated capital cost allowance which many industries would like to have, a duty on ship imports, a domestic procurement for all government shipbuilding and ship repair needs, Export Development Corporation financing, and a very favourable research and development tax credit system.
Despite this support the industry continues to face considerable challenges in international markets. For instance, at the December 1997 OECD workshop on shipbuilding policies it was reported that a substantial overcapacity exists. In fact the estimate for 2005 is 40%.
The Canadian shipbuilding sector went through a voluntary industry led rationalization process in which the government participated by contributing nearly $200 million. Through the reorganization and streamlining of its operations over the past decade, the Canadian industry has been able to improve its productivity levels.
Concerning shipbuilding in Quebec, the federal government invested almost $1.6 billion in Davey Industries during the period of 1983 to 1996 in the form of contracts, contributions and loan guarantees. Moreover, commercial arrangements by the Export Development Corporation are currently moving forward to provide additional support to this company through a loan guarantee on the Spirit of Columbus .
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 provinces wish to supplement our initiatives, as has been done by Quebec and Nova Scotia, they are free to do so.