Debates of May 3rd, 1999

Supply

[Bill Matthews, Progressive Conservative, Burin—St. George's, NL]

Mr. Speaker, if I did make any incorrect statement to the House about the minister and his meetings with representatives of the shipbuilding industry, I would certainly withdraw it. The information I had was that he refused to meet with representatives from the Atlantic provinces. Maybe I did not get the information correctly, and I apologize for that if I did not.

I am not interested in playing petty politics. This issue is too important to be taken up with what I said was correct or incorrect. It is too important for the parliamentary secretary to rise in his place and talk about a government with which the voters of Canada dealt six or seven years ago when they voted out the Conservatives and elected the Liberals. That is not what it is about.

The Liberals have been in power now for six years. In 1993 they became the Government of Canada. It is time for the parliamentary secretary, the minister and others over there to recognize they are now the government of the country. Canadian taxpayers and people involved in the shipbuilding industry in Canada expect them to make decisions for the benefit of the shipbuilding industry.

It is no good going back to Mulroney, Diefenbaker, Trudeau, Laurier, Pearson and others. People in Canada want the parliamentary secretary, the minister and the government to make decisions which will improve the shipbuilding industry in Canada today.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I really do think that the federal government is very concerned about this issue, but I would like to ask the member, though, do the provinces not have a role to play in this. Should the provinces not be active in helping out these industries which are indeed in their territories?

[Bill Matthews, Progressive Conservative, Burin—St. George's, NL]

Mr. Speaker, I meant to make that reference in my remarks. There is a very important role for provincial governments to play in revitalizing and regenerating the shipbuilding industry. They cannot be let off the hook, but it is the federal government and the industry minister which must take the lead role. We must have a new national shipbuilding policy.

When I was a member of a provincial government in Newfoundland and Labrador we entered into a trawler replacement program with Fishery Products International Limited. We built offshore supply vessels on spec at the Marystown shipyard. As a provincial government we were very proactive in the shipbuilding industry in creating employment in one shipyard in Marystown on the Burin peninsula.

There are possibilities for provincial governments to get involved. Only last week the auditor general said in his report that we do not have enough patrol vessels to enforce our fishery's policies and regulations. There is a place for provincial governments to play a role, but the major role and the most important government is the government of which the hon. member is a member.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, is it not true that representatives of the shipbuilding industry have stated to the hon. member that if Revenue Canada excluded Canadian built ships from leasing rules as it does for furniture, computers, rail cars, autos and vans, they then would be able to be competitive?

[Bill Matthews, Progressive Conservative, Burin—St. George's, NL]

Mr. Speaker, yes, indeed, the industry has indicated that to me, and my colleague has alluded to the four or five measures that the Canadian shipbuilding association, the marine workers union and the CAW want. I want to go on record again as saying, yes, that certainly would level the playing field.

I cannot emphasize enough that no one in the shipbuilding industry, whether it be the people who own, manage and operate the yards, or the unions, is asking for direct subsidies from the government. They are not asking for subsidies.

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

Mr. Speaker, I rise on a point of order. I want to assure the House that the usual discussions have taken place with representatives of all parties. Therefore, I believe you would find consent for the following motion:

That at the conclusion of the present debate on today's Opposition Motion, all questions necessary to dispose of this motion be deemed put, a recorded division deemed requested and deferred until Wednesday, May 5, 1999, at the expiry of the time provided for Government Orders.

[The Speaker]

Is that agreed?

[Some hon. members]

Agreed.

(Motion agreed to)

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, the hon. member for Saint John is right to point out that shipbuilding is a long and honourable tradition in Canada. It is an important part of Canada's marine industry.

In 1997 the shipbuilding industry employed 5,400 Canadians and had total revenues of around $625 million. Canada's current strength is in building high quality, relatively small vessels, such as ferries, icebreakers, tug boats, fishing vessels, excursion craft and so on. We are also internationally competitive in commercial ship overhauls and mining platforms.

Many regions of Canada have shipbuilding companies. Activity on the east coast has recently centred on the construction of two container ships, two offshore vessels and tugs, the refit of one oil rig, the manufacture of oil rig components and various commercial repair work. The industry in Quebec has been involved in upgrading one oil rig, constructing tugs and doing ship overhauls and commercial repairs. The Ontario industry is currently active in the reconstruction of three bulk carriers, the conversion of two ships into one self-unloading ship and commercial repairs. The primary construction activity in B.C. has been the three high speed ferries, but the industry is also active in the construction of smaller ferries and in commercial and government ship repairs.

The health of the shipbuilding industry concerns four regions and seven of Canada's ten provinces. The Government of Canada recognizes the importance of the industry. It has a shipbuilding policy that benefits the industry and acknowledges that taxpayers want to stop business subsidies. This policy includes an accelerated capital cost allowance of 33.3% for Canadian shipbuilding. Many other industries would not mind having that type of capital cost allowance write-off. The policy includes a 25% duty on most non-NAFTA ship imports, domestic procurement on a competitive basis for all government shipbuilding and ship repairs, a favourable research and development tax credit system, including the technology partnerships Canada program, as well as Export Development Corporation financing for commercially viable transactions.

Last year, after consulting with the industry, we extended the pay back period for this financing from eight years to twelve years. In fact discussions with the Export Development Corporation continue in that area.

I would also add that one of the major contributions the government makes to the competitiveness of our shipbuilding industry is through the facilities of the National Research Council. In Saint John, NRC's Institute for Marine Dynamics offers R and D programs in ship design and advanced navigation systems, ice structure and wave structure interaction, and innovative concepts in such areas as underwater vehicles and recreational craft.

The federal government is not alone in supporting the shipbuilding industry in this country. Two provinces have come forward with programs to foster shipbuilding in their jurisdictions. Nova Scotia has a shipbuilding loan guarantee program similar to Title XI in the United States. The program consists of loan guarantees up to 87.5% of the buyer loan, with a maximum $80 million to be guaranteed at any time.

Last March Nova Scotia announced that it will provide $47.5 million in loan guarantees to Secunda Marine of Dartmouth for the construction of two supply vessels for the Terra Nova offshore oil project.

The Government of Quebec has also stepped forward with a program for the shipbuilding industry. Quebec will provide a 50% subsidy on the direct labour costs of the first ship built in a series or converted into series. The subsidy may be as high as 20% of the ship costs, with the subsidy decreasing to zero over the first four ships. Quebec has also provided income tax exemptions on the foreign income of Quebec mariners and has reduced the capital tax for owners of new ships operating internationally.

Hon. members opposite have been calling for similar subsidies to be provided by the federal government. I would ask them if they would be prepared to offer similar subsidies to every other industry in Canada that must meet the test of tough international competition. Some say that shipbuilding is an exceptional case because other countries subsidize their industry so heavily. The Bloc in particular wants Canada to match the kind of subsidies provided by European countries and the United States. What it neglects to say is that even if we tried to match these subsidies dollar for dollar there is no guarantee nor even a likelihood that foreign buyers would turn to Canadian ships instead of ships from their own country or region.

The international market for ships is much more complicated than that. It is not just a case of who offers the best price or who puts more of a burden on their taxpayers so they can offer a good price. In the case of the United States, for example, the Jones Act of 1920 prohibits non-U.S. boats from taking part in domestic U.S. commerce.

The Canadian government is participating in the OECD and WTO negotiations to eliminate subsidies and remove the barriers that impede the ability of our shipbuilding companies to compete internationally. We offer generous tax and export support. We are continuing to meet with industry representatives to fine tune the programs now in place and ensure that the industry takes advantage of them. That is a more realistic response to the challenges faced by the Canadian shipbuilding industry than the spend thrift proposals we have heard from the opposition parties to date.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, it cannot be said that the parliamentary secretary does not care about the shipbuilding industry. There is a shipyard in his own riding. I met with him during the summer. He is worried about the industry, but he seems to be the only Liberal that is. He is unable to convince his colleagues to do what the shipbuilding industry and unions would like them to do.

What is stopping the Liberal Party from holding the shipbuilding industry summit Liberal candidates promised during the 1993 election campaign? They were talking about the following year, 1994, but five years have gone by.

It could be dismissed as an election promise but, more recently, members of the Liberal Party from the maritimes also called for something to be done for shipbuilding, for a good policy to be developed.

Again, just recently, the Liberal premier of New Brunswick, Mr. Thériault, criticized the Minister of Industry's attitude. The minister always says that he has a good policy but, if it is as good as all that, why is the shipbuilding industry operating at only 40% of capacity?

[Walt Lastewka, Liberal, St. Catharines, ON]

Mr. Speaker, I thank the member for his question and I also thank him for his tour last year of my area to review shipbuilding and to understand the shipbuilding industry in Ontario, which is not only in southern Ontario but in the Ottawa area as well.

I should remind him that we do not want to get into a subsidy shipping war because of other countries. We have heard over and over “not a subsidy”. However, when we get down to reviewing proposals it becomes a subsidy.

I am interested in proposals, as long as they do not involve a subsidy campaign. I am willing to meet with the member, as I have before. However, let us understand that the Export Development Corporation, in conjunction with the member for Fredericton and a representative of the shipbuilding industry in New Brunswick, met to discuss the EDC's financing and over time it changed from eight to twelve years. They are still meeting on an ongoing basis to discuss various other alternatives. That is the way it should be done, sector by sector.

The member from Lévis mentioned the premier of New Brunswick, to whom I have written in objection to his comments that there is no shipbuilding industry in Ontario and that if there were, maybe there would be interest. I immediately wrote to him so that he could understand the shipbuilding industry across Canada. I do not believe he understood that the shipbuilding industry exists from coast to coast to coast. I am interested in how he would proceed from there.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Mr. Speaker, I would caution the parliamentary secretary to be far more judicious in his comments in terms of the use of the words tax incentives versus subsidy. Revising Revenue Canada leasing regulations is a tax incentive. It is not a subsidy in any way, shape or form. He can ask the finance minister or the secretary of state for finance. It is a concrete initiative which was tabled by the industry, the premiers, labour, shipowners and shipbuilders, who all agree that it is not a subsidy.

The wording of our motion comes from Liberal Party policy conventions of 1993 and 1998. Did the parliamentary secretary support it at those conventions? If he did, will he support it when it actually comes to a vote?

[Walt Lastewka, Liberal, St. Catharines, ON]

Mr. Speaker, yes, I had discussions with members across our country on shipbuilding. My comments there were the same comments as here.

There is a need to understand all aspects of the shipbuilding industry. Before we know it, when people talk about the various items, it becomes a subsidy. The important thing is that if there is to be an initiative we must back the initiative down. Is it a subsidy in the end or is it not?

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Mr. Speaker, I am pleased to rise today to speak to the motion before the House, put forward by the member for Saint John and seconded by the member for Burin—St. George's.

I regret that the motion is empty and meaningless and would compel the Liberal government to do essentially nothing to help the shipbuilding industry that it is not already doing through the discredited technology partnerships Canada program and the failed research and development tax credit system.

I will address both of those issues further, but I would like to first address what the Reform caucus had hoped for with this motion.

I had hoped to introduce an amendment to the motion. While I know this is no longer possible, I would like to read the motion into the record:

That this House calls on the government to develop a new national shipbuilding policy that includes broad based tax relief for all Canadians and a commitment to pursue better access to international markets, particularly American markets, through equitable trade liberalization.

The amended motion would have called on the government to specifically address high taxes as the primary cause for low productivity and slow economic growth in the shipbuilding industry. It would have addressed the unfair trade practices exempt under NAFTA which effectively exclude Canadians from participating in a $1.1 billion U.S. shipping market.

Once again I would like to take the time later in my speech to address the issues of taxation and the serious problem of inequality with the U.S. However, to ensure that the members of the House understand the Reform Party's position on the motion, I will quote from the Leader of the Official Opposition. He stated:

The Official Opposition believes that tax relief and the expansion of Atlantic Rim trade are the keys to job creation in Atlantic Canada, and we will vigorously represent those views on your behalf in parliament.

The Leader of the Opposition made these remarks, which are embodied in the proposed amendment, on October 16, 1998. The remarks made by the Leader of the Opposition are not that much different from the remarks made by the hon. member for Fundy—Royal in 1997 when the Tory motion on shipbuilding was debated in the House. The member insisted he was not interested in subsidies but deregulation and improving Canadian access to international markets, in particular U.S. markets. Therefore, the motion would have been consistent with the Tory shipbuilding policies.

My questions for the Tory members of the House are: Why does the motion not address the issue of high taxation; and, why does it not address the important issue of trade barriers and trade discrimination?

Broad based tax relief for all Canadians is needed to ensure that shipbuilding and all other Canadian industries survive. It is that simple. It is so simple that even the Minister of Industry is beginning to understand this.

Tax relief is not part of the Tory shipbuilding plan. The Tories have consistently called for loan guarantees similar to those provided by the United States which has several federal assistance programs. Financial assistance is provided in the U.S. through the federal ship financing program, capital construction fund program and the maritime security act. Loan guarantees force the taxpayer to take on a financial liability that banks and venture capitalists consider to be too risky. This is an unacceptable burden placed on taxpayers.

The Shipbuilding Association of Canada argues that there has not been a single default under the U.S. federal assistance program. This begs the question: If default rates are this low, why does the government need to provide incentives for banks and venture capitalists to provide capital for shipbuilding projects?

What is needed is real competition in the financial service sector so that banks are compelled to compete for medium and high risk loans. Lack of competition in the Canadian financial services banking sector has made banks complacent about funding any medium to high risk ventures. Furthermore, broad based tax relief would leave more money in the pockets of Canadian consumers and entrepreneurs. This would lead to greater savings and higher corporate profits which can then be reinvested into the shipbuilding industry.

Why do the members of the Progressive Conservative Party not care enough about tax relief, particularly tax relief for Atlantic Canadians, to make it part of their shipbuilding plan?

On the issue of access to international markets for Canadian shipbuilders, the Reform Party supports the pursuit of equitable trade liberalization policies as an essential part of our industrial policy. In this instance, we are very concerned with what appears to be unfair trade practices with the United States with respect to the 1920 Merchant Marine Act currently exempt from NAFTA.

The 1920 Merchant Marine Act, commonly known as the Jones Act, legislates that cargo carried between U.S. ports must be carried aboard ships that are U.S. built, U.S. registered, U.S. owned, U.S. crewed and repaired and serviced exclusively in the U.S.

This legislation was exempt from NAFTA and without amendment it effectively prevents Canadian shipbuilders from building a ship that could be used in the United States' domestic trades while allowing U.S. shipyards the right to sell to the Canadian market new or used ships and barges duty free. The legislation effectively excludes Canadians from participating in a $1.1 billion shipping transportation market.

In order to be completely forthright in this debate, I believe the members of the House must also recognize the provisions in place currently protecting the Canadian shipbuilding industry.

Under Canada's Coastal Trading Act, the owner of a ship built or purchased abroad must pay a 25% tariff to have it flagged Canadian and operate in Canadian domestic trade. Also, the Canadian government policy dictates that government fleets must be renewed and repaired in Canada.

While we must recognize these trade barriers, it is clear that they do not cause the same material damages to the U.S. shipbuilders as the Jones Act does to the Canadian manufacturers. Canadians must appreciate, however, that trade liberalization efforts will bring these protectionist government policies under closer scrutiny. We cannot call for freer trade and then also call for protectionist policies.

I offer this point to my colleagues as a word of caution. Canada has many barriers to trade and the Liberal government looks like it will continue to violate the spirit of global trade liberalization. We must be aware of this before we tackle trade disputes like the one I have just addressed.

I will conclude my remarks by saying that the Tory motion succeeds in that it brings attention to the need to address the lack of Liberal vision for the shipbuilding industry. Sadly, it makes no specific policy recommendation.

On the plus side, there is nothing in the motion that is outwardly objectionable to Canadian taxpayers because there is nothing in the motion at all. Although it fails to address the primary cause of our deteriorating shipbuilding industry, which is high taxes and unfair trade practices, the motion before the House has the qualified support of the Reform caucus.

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I enjoyed the last presentation by the member opposite. I am glad that he brought up the area of the Jones Act, an early 1920's act. I know that he is a small businessman and has experience negotiating.

In order to do away with the Jones Act, there was an opportunity during the trade negotiations, including NAFTA, to hit that straight on. By Canada giving up cards and not getting the Jones Act straightened out, it leaves us no choice but to go into the OECD and WTO negotiations with an item that needs to be discussed and moved forward. The Jones Act should really have been tackled by the previous government when it had the Canadian cards to be able to discuss that item. I would be interested in the hon. member's comments.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Mr. Speaker, I commend the hon. member for his comments and his brief question. I know that within the industry committee the hon. parliamentary secretary is always open to discussing various issues. Shipbuilding has been one that has come up on the table which we have been looking at and planning to deal with in the future. Hopefully, we will be able to address some of the issues in the Jones Act that were left out during past trade discussions.

Instead of blaming past governments or looking at past records, especially when it comes to shipbuilding, we should be looking at ways to make shipbuilding more competitive and become an industry that can survive on its own. We should start moving away from areas of subsidies, such as the technology partnerships Canada program. Right now the World Trade Organization is ruling that a lot of subsidies are illegal. We must look at ways to get the shipbuilding industry moving through tax relief.

When we look at the issue of tax credits, we basically have some of the highest tax credits in the country for the shipbuilding industry when we look at our R and D and tax breaks. However, we still have the lowest spending per capita when it comes to the shipbuilding industry, specifically in the overall basic R and D spending and investment in those areas, even though we spend a fair amount in research and development.

We have to address those key problems. I think trade liberalization is the key, but we must also balance that with tax policies.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, the hon. member says that our motion does not include any recommendations to correct the situation. If he had listened to my presentation he would know that we brought forth the recommendations that we are asking the minister to look at. These recommendations come from the shipbuilding industry, not from us. The people building the ships are the ones who know what has to be done.

Does the hon. member have a problem with the exclusion of new construction ships built in Canadian shipyards from the present Revenue Canada leasing regulations, when one looks at the fact that Revenue Canada excluded Canadian-built ships from the leasing rules but allowed those rules to apply to office furniture, computers, rail cars, autos, vans, trucks, everything but ships? The workers are telling us that if they could have this it would give them an opportunity to compete around the world and would put 24,000 people back to work.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Mr. Speaker, on the issue of the recommendations, I know the official opposition would have been happy to see within the motion some of these recommendations coming from the industry so we could see exactly where the Tories wanted to go with the motion. That is really all we were asking for. We know the spirit of the motion is a positive one and that is why we are supporting it.

On the issue raised by the hon. member, the official opposition has always been committed to creating fairer tax incentives for everyone. We obviously want a simple tax system that would be more competitive and equitable to all industries in being able to write off certain parts of their industries that deteriorate in value and so on.

Although I know the hon. member is concerned about that specifically with the shipbuilding industry, we in the official opposition have said that is something we would look at right across the board. Although shipbuilding is one of the more important industries in the area the hon. member comes from, we know there are various industries across the country where inequalities within the tax system cause them to be less competitive. That is what we would like to address across the board.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I am very pleased to rise today, on behalf of the Bloc Quebecois, to debate the motion introduced by the PC member for Saint John.

The motion reads as follows:

That this House calls on the government to develop a new national shipbuilding policy to support the revitalization of the Canadian shipbuilding industry by maintaining and advancing the degree of excellence and the technologies for which Canada is historically renowned, given that Canada has the longest coastline of any nation in the world and that historically Canadians are among the finest shipbuilders in the world.

An amendment was introduced to add the word “immediately”. And a good thing. Back in 1993, after the general election, when the Liberal Party was fresh from the opposition, I remember hearing the Prime Minister's current executive assistant say on TV that we absolutely needed a national shipbuilding policy, and that sometime in the coming year, that was in 1994, a summit on the future of shipbuilding in Canada should be held because the situation was urgent.

Naturally a summit would involve representatives from the shipbuilding industry. In terms of numbers, shipyards, small and big ones, account for 4,000 jobs. At one point, however, the industry employed up to 12,000 workers. A summit would also involve people for the shipping industry as a whole.

Who makes up the shipping industry? Shipowners, of course, and sailors. People who tow boats in harbours, and shipping companies. Even today, they represent 40,000 workers. This is no small industry.

Contrary to what my colleague from the Reform Party just said, the shipbuilding industry is not exclusively located by the Atlantic ocean or on the St. Lawrence, in Quebec City. There is the Pacific Ocean out west.

If we consider how interrelated the entire industry is, goods are also shipped by ship, as far as Thunder Bay. The western grain producers ship from Thunder Bay to other countries, in Europe and elsewhere.

The word “national” is not superfluous in this case, as the national interest is at stake. It is a national transportation mode, like rail, road and, of course, air transportation.

But which one of all these industries costs the least per tonne? The maritime shipping industry. Which is the most economical, the most environmentally sound, the most accident-free, and the one in the past that was most respectful of the environment because of the gross tonnage of each vessel? The maritime shipping industry.

As I told the hon. member for Saint John, and as the motion states, we have the world's longest coastline. We also have the St. Lawrence Seaway, which goes as far as the tip of Lake Superior, and constitutes the longest navigable waterway in the world. This should be a considerable plus for Canada. Navigable waterways may be one of the greatest natural resources we have.

In my opinion, the St. Lawrence is far more than that. It is the backbone of Canada's economic development. What does it do? It carries freight right across Canada from the port of Halifax to the markets of the U.S. From the Great Lakes, freight travels down the Mississippi and the Missouri to other water routes in the heartland of the major world market the United States represents.

My congratulations again to the Progressive Conservative Party for choosing shipbuilding as the topic today. That enables us to show that this is a truly national issue, more than just local interests or a fight against seasonal unemployment. It is strategic and vital economic development. Often in government, here in Ottawa, officials and politicians live in—I was going to say their shell—their own world and often forget the regions.

They say that it is a traditional industry, outdated, a lame duck. But when people know about it as I do or as does the member for Saint John or the parliamentary secretary, they know it is not the case. The parliamentary secretary knows too that in shipbuilding, they are as technologically advanced as in the aerospace industry. A ship has as many computers as a plane, even more. Navigation is by satellite, in the same way. The qualifications required for jobs are the same too. It is not an outdated field.

I would like to take two minutes to talk about the situation worldwide. What is happening in the world? There are Asian shipyards, where ships are subsidized as much as 30%. This is wrong. European shipyards get a 9% subsidy, and the small ones, 16%. We must speak out against this. Canada is complaining about it through the OECD, but as the United States opposes this policy, what do the European countries do while the OECD tries to convince the Americans to support this policy? They subsidize their shipyards. We are not saying that, no one here is saying that. Here we talk about tax measures.

And what are the Americans doing? There is the Jones act, and also title XI, which is a program for shipyards specifically. Finally, I drew on this for the financing program, which is exactly 87.5%. That is exactly what the Americans do. There is nothing scandalous about this. This is what they do. When it comes to refundable tax credits, this is what Quebec does. I weigh my words carefully when I say refundable. These are not subsidies. The parliamentary secretary has studied the leasing measures in depth.

He is obviously a little shaken by our arguments or the pressure exerted by us or by the union front all across the country.

The Americans are doing something worse that is detrimental to us. They do not allow Canadian shipbuilders to enjoy the same benefit as their American counterparts, who are not charged anything. The fact that shipbuilding was excluded from the free trade agreement is a national tragedy. Not many members knew about this, but it is a fact.

If shipbuilding had been included in the free trade agreement, and considering the exchange rate with the U.S. dollar, the contracts signed by Canadian shipyards would be incredibly lucrative. But this cannot be changed through legislation. Negotiations are required to make changes to an agreement.

We would need a summit, as the Liberals had planned in 1993. However, six years later, in 1999, they seem to have forgotten all about it.

A coalition of unions was organized across the country. A large number of Canadians signed postal cards, which the Prime Minister will soon receive.

It is no longer just the Bloc Quebecois member for Lévis-et-Chutes-de-la-Chaudière whining alone in his corner, but all the opposition members, with the exception of the parliamentary secretary, because there are only Liberals in Ontario. But where there is a shipyard, the riding is represented by a member of the opposition. Given their small majority in the House—only five members more than all the opposition parties put together—they should do something about this issue, because the two-year deadline is drawing near.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Mr. Speaker, I would like to pay tribute to my hon. colleague.

Last summer he worked hard on this bill. He will table a private member's bill this week or next week. This legislation will require the support of the members from all the provinces.

I would like to compliment his efforts and ask him about one particular initiative. The free trade act has been very solid for this country in terms of augmenting our trade. That is beyond dispute. However, given that the Jones act was exempt, even though we got a pretty good deal for the country in general, would it not be a decent idea for us to say to the Americans that we should develop some kind of bilateral accord for developing certain types of ships so we could get some market penetration? I would recommend perhaps shipshape drilling hauls where they are having a capacity problem.

We should begin an initiative sector by sector by going after certain types of ships as a starting point. Would he agree that is a good initiative in beginning to break down the trade barriers?

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, first of all, I would like to clear something up. I presented Bill C-493—it already has a number—on April 15. I have been seeking members' support ever since. This week, I am already close to the 100 signatures I need to have the bill introduced for debate more quickly.

As for the idea of a court, that would be consistent with what I said earlier about a summit, or negotiations with the United States. It is one suggestion that could be made as part of the negotiations to have Canadian shipbuilding included in the free trade agreement.

I would remind the House that, at the time, it was the United States that wanted shipbuilding excluded. The Progressive Conservative government of the day could not persuade them otherwise. They have two associations, one representing the seven or eight largest shipyards, and the other representing the others, and one of the two associations would not budge. At the time, the Republicans controlled the Senate and Congress and the idea was therefore defeated.

I will conclude by thanking the member for Fundy—Royal, the member for Saint John, and the New Democratic Party members for their excellent co-operation and their devoted efforts on this issue. Reform Party members were initially hesitant about a shipbuilding policy.

If we all put the national interest first, perhaps the Parliamentary Secretary to the Minister of Industry will at last be able to convince his colleagues to adopt a truly national shipbuilding policy.

[Jean-Paul Marchand, Bloc, Québec East, QC]

Mr. Speaker, I would like to congratulate my colleague from Lévis-et-Chutes-de-la-Chaudière for his most interesting speech on shipbuilding in Canada, and in Quebec in particular.

I have always believed that, since it boasts one of the world's finest rivers, Canada could have a shipbuilding industry. It is a leading edge industry. Maritime engineers have told me that we in Canada possess certain advantages for the development of a shipbuilding industry.

I would like to ask my colleague whether he has projected figures for job creation and wealth that would be generated by the development of a shipbuilding industry.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I will answer very briefly, since I do not have a lot of time.

The MPs who joined together to discuss this matter say that we would have to get back to the 10,000 to 12,000 job level we had in the past. At the present time, we are operating at only 40% of capacity. These are well-paid jobs, but no more so than in other countries. We are competitive. Even in constant U.S. dollar levels, wages here are no higher than elsewhere, with the exception of Korea.

The most important thing is the economic fallout of those jobs. In the export sector for instance, the number of jobs that would be created in Canada would be fourfold.

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, I am very pleased to have the opportunity to speak to this motion. It is a very important motion so I am going to read it again.

That this House calls on the government to develop a new national shipbuilding policy to support the revitalization of the Canadian shipbuilding industry by maintaining and advancing the degree of excellence and the technologies for which Canada is historically renowned, given that Canada has the longest coastline of any nation in the world and that historically Canadians are among the finest shipbuilders in the world.

The motion has been very well crafted and it says a lot. It is important that all of us give serious consideration to it this afternoon.

Undoubtedly there is a need for a national shipbuilding policy. I say that in all sincerity. Many times I have questioned the government with respect to a shipbuilding policy and I have often got back the reply that we do not need a policy, that we already have a policy. Yet, this policy seems to be long forthcoming. I requested a copy of the policy quite some time ago through the standing committee. I was told that it would be made available but I have yet to see anything.

What the government has is not a shipbuilding policy per se but a mishmash of little initiatives here and there which it can remotely tie into the concept of shipbuilding and it calls this a policy. What we are looking for when we talk about a national shipbuilding policy is something that is very clear and concise, that sets a sense of direction and gives hope and optimism to the people who work in the shipbuilding field.

Ships have been sailing between Canadian ports for many years. We believe firmly that they should be built in Canada, crewed in Canada and serviced and repaired in Canada. We know that the U.S. has the Jones act which ensures this for its industry, but we in Canada for some reason seem to want to go in a different direction. We do not want to ensure a sound industry for our citizens.

On December 31, 1996 there were 2,589 ships on order around the world. Yet shipbuilders on both coasts of Canada sit idle. One has to ask oneself why this is so. When there are so many ships being built around the world, why is it that in Canada, which has been historically known for its shipbuilding and technology in that regard, the shipyards are idle?

The U.S. provides generous long term loan guarantees for buyers. There are many other initiatives it takes to ensure the industry survives in that country.

On October 29, 1990 the right hon. Prime Minister, while he was in opposition, wrote a letter to the marine workers federation in which he said “It is safe to say that most people recognize that something has to be done to create a much more competitive shipbuilding industry. The government should now, as they should have done long ago and indeed as they promised to do, take steps to alleviate the problem”. The Prime Minister wrote that when he was in opposition. We heard quite a different story today from the government side in terms of what has to be done and the importance of doing something now to maintain this industry and to help it survive.

Employment in this industry has plummeted from 12,000 workers in 1990 to fewer than 5,000 in 1996. I would venture that today it has probably gone even lower.

Why is it in this day and age when there is so much unemployment we cannot do something positive to aid people to find the necessary work to feed their families and look after themselves? Coastal communities are facing economic stagnation and chronic unemployment. We see it in the fisheries industry. Now the same thing is happening in the shipbuilding industry.

We should look at ways of making sure the shipbuilding industry survives and picks up. We can bring in tough environmental standards, such as calling for double hulls. That would create employment and work within this area.

We note that the Liberal red book in 1993 called for provisional funds for the shipbuilding industry. Today we do not see anything happening in that regard.

The premiers in August 1997 unanimously passed a resolution aimed at helping the Canadian shipbuilding industry become more competitive on the international scene.

Even more recently we had a meeting here on the hill with the shipbuilding industry, the workers, management, the associations and so forth. All the parties except the government joined with these people to look seriously at what could be done to help this ailing industry, what could be done to put men and women back to work, and what could be done to ensure that our children had a secure future in the Atlantic provinces and on the west coast.

We have to ask ourselves, what is the problem? Perhaps part of the problem is that the majority of the members on the government side come from a province where they do not appreciate the importance of our marine industry, where perhaps they do not appreciate the importance of shipbuilding to the Atlantic and Pacific areas. This may be part of the problem. We know certainly that where there is a will and an understanding, there is a way to resolve these problems.

We have the equipment and the skilled workers. This is the important point. We have a battery of workers who are skilled, willing and able and wanting to work. Nowadays people are criticized far too often for being on the welfare rolls as people who do not want to work, who have no industry, no ambition or whatever. This is not the case with the shipbuilding workers. They have indicated over and over again that they want to work. They want to be productive members of society. They want to put into reality their experience, technology and skills.

We have the equipment and we have the workers, but do we have a government with the will to stand up for Canada's shipbuilding industry? No. If we did have such a government, we would see this industry moving forward.

A national policy should include such things as loan guarantees, fixed and comparable interest rates, long term amortization, and regulations to ensure that ships that are delivered to or from Canadian ports are subject to Canadian rules on health, safety and environmental standards. This is very important.

The shipbuilding personnel and the people involved in the industry whom we met with made it very clear that they are not looking for any handouts. They do not want handouts. They want to contribute their skills in a meaningful way to help this country move forward. Those individuals are sincere when they say that. We know these individuals and we know them to be honourable people.

For some reason it appears the government has a distrust of the shipbuilding industry and the people involved in it. The Liberals are constantly saying that they cannot subsidize the industry, that they do not want to do this or that. I assure everyone this is not what these people are asking for. All they are asking for is a fair chance, a fair opportunity to put forward a program that they know, based on their experience, will work and help make Canada a more productive society.

We have the workers but unfortunately we do not have a government with the will to help them. Many countries have shipbuilding and industrial strategies and policies. For example, the United States, France, Britain, Italy, Spain, Korea and China all have their specific shipbuilding industry policies. Is Canada so backward that we cannot match these countries and come forward with a strong policy of our own to ensure work for our citizens? I would say we are not.

We need some leadership to be shown by the government to give this matter its due consideration. The government should work together with the industry, work with all those who are interested in supporting the industry and make sure we move ahead. We know that where there is a will, there will be a way.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, it was brought to my attention that the present Minister of Finance said “I fought to have my ships built in Canada but was unable to convince the government of the need for an aggressive shipbuilding policy and if we are not going to do that, we cannot be a factor in commercial shipping”. The present Minister of Finance stated that he had his ships built in Brazil because Canada does not have a national shipbuilding policy whereby we can be competitive.

The present Prime Minister when in opposition said that we have to have a new national shipbuilding policy, that we have to keep that resource going. The present Minister of Industry when he was a critic kept saying that he was for a national shipbuilding policy. Now he says it is not part of his agenda.

I congratulate the hon. member on his presentation and I thank him for it. Does he see any support whatsoever from the present government sitting in the House of Commons today for a national shipbuilding policy to put our people back to work, to give them their dignity and to make us competitive?