Madam Speaker, I rise to respond to Motion No. 71 presented by the hon. member from the Tory party. The motion calls for the Standing Committee on Industry to review the policies in place which affect the Canadian shipbuilding industry in order to assess their ability to provide a competitive and equitable environment for the growth of the industry in Canada.
This is a noble cause. Canadians want to sympathize with the hon. member who laments the days when Canada was one of the great shipbuilding nations.
Lower taxes would help all factors of our economy. If the government would lower taxes it would help our industries. Lower taxes would help all companies across the country.
The official opposition policy calls for private sector self-reliance without the federal government providing tax dollars to support any specific sector.
Let us look at the shipbuilding industry in Canada. With only .04%, that is 1/25th of a percentage point of the world's shipbuilding production, Canada cannot sustain a shipbuilding industry. Rather than try to match these subsidies and other incentives offered by other countries, we should concentrate our efforts on negotiating down unfair export subsidies.
Far from guaranteeing loans to Canadians who purchase Canadian built ships, we should drop the 25% tariff we have on non-NAFTA ship imports so that all Canadian shipowners and ship purchasers are not penalized.
Industry Canada can tell us about the problems in the shipbuilding industry. It is a declining industry, a dead in the water industry. There is an overcapacity in the world of over 40%. Canada is not even in the ballpark.
What the Liberals and Tories have done to the shipbuilding industry in Canada is a study on what not to do in terms of productivity. Yet the industry department continues to have a shipbuilding policy which has technology partnership grants, research and development grants and the Export Development Corporation supporting it. Why?
The technology partnerships program is available to firms for research and development, if they so wish. It is repayable based on success. It is a risk sharing, reward sharing program. No one should use this program for shipbuilding because there would be no way to pay back the loan.
Let us look at the world shipbuilding industry. This industry has moved away from North American and European markets to southeast Asian markets. Japan and South Korea continue to control over two-thirds of the total international market for shipbuilding and ship repair. China is emerging as a rival. When combined, these three countries control over 75% of the world market.
Due to extreme pressure from Asian shipbuilders many traditional shipbuilders, including the Norwegian company Kvaerner, have chosen to get out of the industry altogether.
Canada cannot build major ships. We can manufacture only minor and smaller vessels here. Both of these markets are already operating at over 40% of their capacity. Demand and prices are already weak and are forecast to continue to decline. Prices for 1999 are down by 6% to 24% from last year.
The international market is experiencing a significant downsizing. Market conditions for shipbuilders are not about to change. The total employment in Canada's shipbuilding and ship repair industry as of May 1999 was about 5,000.
What should be done? We should not turn to taxpayers and make them pay for a shipbuilding industry in Canada that will never be a viable industry. On this side of the House we support de-politicizing economic decision making by eliminating grants, guarantees and subsidies.
What did the Tories do about the shipbuilding industry when they were in power for nine years? The destruction of the shipbuilding industry during their time in government was devastating to our eastern provinces and to B.C.
Let us look at subsidies as a solution. The Tories think, as the Liberals do, that all we have to do is get the industry committee to approve millions of dollars worth of subsidies and we can resurrect Canada's shipbuilding industry. That is typical. The Liberals use the industry committee and its minister to try to give millions of dollars of taxpayers' funds to hockey teams. This is all very disgusting to those of us who are building an alternative to the traditional way of doing things here in Ottawa.
In the last session the House debated shipbuilding. A Bloc MP wanted to establish a federal loan granting program that would cover up to 87.5% of the money borrowed to purchase a commercial ship built in Canadian shipyards. That bill would also have provided a favourable and generous tax treatment of lease financing for the purchase of Canadian built ships. The Bloc MP's bill proposed a refundable tax credit for refitting commercial ships in Canada. This was not just another attempt to do some Liberal bashing over this issue; maybe the Bloc Quebecois also wants Canadian taxpayers to continue pouring millions of taxpayer dollars into Quebec up to the last minute, until they leave Canada, but it is very clear that the people of Quebec will not be following the Bloc Quebecois anywhere.
Let us look at the industry committee. In November of last year the industry committee dealt with the shipbuilding matter. The committee heard the sad details of the worldwide industry, which spelled poor prospects in the industry for our country in the future.
The Liberals on the committee did not know or were not willing to admit that their minister for the homeless was secretly lobbying cabinet, trying to broker a common ground between industry and the government. Canadians think that she is in Toronto working on the homeless problem. We know that she is not in B.C. helping Vancouver with its homeless people. The media caught her working on shipbuilding. The Liberals only want to meet to talk about helping the shipbuilding industry. This garners votes in eastern Canada and Quebec, and they hope in B.C.
The government could be wrong, but it does not want to have to face Canadian taxpayers and our foreign trading partners with the facts and figures on actually how much money it would pour into the industry. That is a big question.
This is the same government that cannot account for $1 billion in HRDC spending, which we were debating earlier today. The concentration on this issue could be construed as a thinly veiled attempt to orchestrate the immediate building of five or six ships which the federal government plans to construct in four or five years. We are watching for an attempt to have these ships built this year or next. This may save the taxpayers money or it may not. Maybe the ships could be built cheaper offshore. That would save taxpayers some money. Let us look at a viable solution. Maybe the Liberals will have these ships constructed just before the next federal election so they can throw the industry a bone. No one will be fooled.
I will support the review of the shipbuilding policy. However, I will support it reluctantly.
The questions are: How many times do we have to review this matter? How much money is it going to cost taxpayers? Canadians know that the current Liberal government is maintaining a high, artificial level of taxation. It is hurting our economy, our productivity and our growth with high taxes, as the member from the PC party mentioned. It is hurting our consumers and it is discouraging foreign investors from coming to Canada. It has caused a brain drain that threatens our country.
Something has to be done about the high level of taxes that is killing jobs, our economy, our industry and the country. Our employment levels are too low. With our vast resources and our ability to create wealth with other nations in the global economy—