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House of Commons Hansard #45 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

Shipbuilding Act, 1999Private Members' Business

5:30 p.m.

Some hon. members

Hear, hear.

Shipbuilding Act, 1999Private Members' Business

5:30 p.m.

Bloc

René Canuel Bloc Matapédia—Matane, QC

Even on his holidays, he took time to visit shipyards. In the area of shipyards this is not always easy.

The purpose of the bill he introduced is to promote shipbuilding in Canada and to make Canadian shipyards more competitive. There is a lot of support for these demands. One hundred sixty thousand people have petitioned the Prime Minister of Canada. They sent postcards saying that something had to be done in this area in Canada.

In addition, the Shipbuilding Association of Canada supports the Marine Workers' Federation of Canada and the Shipyard General Workers' Federation of British Columbia.

All these people support the bill, which may help enormously. Some shipyards are nearly bankrupt, others are doing well. In my riding of Matapédia—Matane, one shipyard is doing very well—the Verreault Navigation shipyard.

I am not going to give the history of this shipyard, which is a family history. But they also need help. They are not asking for subsidies, they want the bill to be passed because it will help them enormously.

Yesterday, Ms. Verreault said the following at a press conference she gave “I do not necessarily want money. What I want is for certain standards to be eliminated and ones comparable to those in the United States to be set. That would be enough for me”.

Verreault Navigation's present project is to equip this shipyard with a second dry dock. Mrs. Verrault herself entered into alliances with the employers in order to reach a common agreement. This would result in a huge increase in employment. If there were a second dry dock, this would immediately create 119 more jobs on top of the existing 225. For a region like the Gaspé, that is really great.

We heard in the House today, and since Monday, that $1 billion had been squandered or at least not having been properly accounted for. I can say that, if we had standards, not subsidies but standards, government-backed loans as my colleague has called for, 129 jobs could be created immediately, or just about, with this $1 billion.

When we meet the minister, he tells us there is a moratorium and that it cannot be lifted. How can there be a moratorium when we are calling for job creation? Nowadays competition does not come only from Vancouver, the Maritimes or Quebec, but from all around the world.

The Canadian government has a duty to provide assistance to shipyards, and I cannot therefore see how one could not support this bill. It was introduced by my colleague from Lévis, and I will be going over certain provisions in a moment. It contains three major demands, and I will tell you more about them if time permits, but the House is already aware of this bill. These are our demands, and it is very important that the bill be passed as quickly as possible.

Mrs. Verreault is an extraordinary woman. My colleague came with me to meet her. We toured her shipyard with her, and it is quite impressive. We often think that something like that can only be found in large cities but, for once, it is in the Gaspé Peninsula. Mrs. Verreault wants to create jobs. She is not asking for money; she would just like to be granted loans like everybody else. I cannot see how such a request could be denied.

The problem is when people dig their heels in. The government implements a policy from coast to coast, but when a request is made that is a little bit too unusual, albeit very legitimate, they say “No. There is a moratorium. Everyone must comply”. I cannot help but think that, if we were a sovereign state, we would not have to beg, and the problem would be solved in no time. This is just one more reason. Even in the Gaspé Peninsula, people want to achieve sovereignty because the government bureaucracy is such that jobs are being lost, with the result that families are getting poorer and young people are leaving.

Moving to one of the demands contained in the bill, I will read our request concerning a loan guarantee program. a ) through the establishment of a program whereby a maximum of 87.5% of the money borrowed by a company from financial institutions to purchase a commercial ship that will be built in a shipyard located in Canada

(i) is guaranteed by the federal government in the event of default in the repayment of the loan,

(ii) bears a rate of interest comparable to that available for loans from financial institutions to large and financially strong corporations, and

(iii) is repayable on terms comparable to those usually granted by financial institutions to large and financially strong corporations for the repayment of their loans;

This is what we are asking the government for. Mere peanuts. It is only peanuts compared to the $1 billion boondoggle. I hope that, this time, the government will understand something must be done.

Going back to our shipyard in Les Méchins, I invite anyone who has never been to Les Méchins to come and visit this beautiful shipyard. This small village is an economic hub; a lot of development is taking place in surrounding areas. When people are working, they can help other people, and it snowballs.

I am asking for the co-operation of the House as a whole to pass this bill so that it can be implemented as soon as possible. Otherwise, this would be all the more reason to go the sovereignty way, as far as I am concerned.

Shipbuilding Act, 1999Private Members' Business

5:40 p.m.

Reform

Ken Epp Reform Elk Island, AB

Mr. Speaker, I am honoured to stand in the House of Commons in Ottawa, representing the people, the taxpayers from my riding on this issue of great importance.

I appreciate the member who brought this bill forward. He, like many of us, recognize that there is an economic climate in Canada which makes it very difficult for our businesses, both small and large, to compete in the international market. Having this bill brought forward helps to signal to all that we have to do some things better than they are currently being done.

However, right at the beginning I have to indicate that although I am much in favour of promoting industry, business, and especially international trade, at this stage in my analysis of the bill I will be voting against it because of reasons I will express during my speech.

I would like to outline some of the things that are included in Bill C-213. I know that the deputy leader of the Tory party, the member for Saint John, who has major shipbuilding interests in her riding, has expressed interest in this and has said repeatedly that this will not cost the taxpayer a penny. She keeps assuring us that this will not cost the taxpayer any money. However, in my reading of the bill I do not see how that can be avoided since there are several provisions in the bill which I believe will cost the taxpayer money in directly subsidizing and propping up an industry which is not viable under our present rules in the country.

I am not sure that members of the Tory party, the Clark party, are true Conservatives because they are also promoting this type of socialistic propping up of a company. I am sure when their turn comes they will express what they really think about this. I look forward to hearing their arguments. I will put forward my arguments now. When their turn comes they will say what they want to say.

This bill, in its purpose, indicates that it is to promote shipbuilding in Canada and to make Canadian shipyards more competitive. I cannot argue with that. That is a very high and viable goal. I think all members in the House would agreed to it. However, it then goes on to say that this will be done through the establishment of a program where a maximum of 87.5% of the money borrowed by a company from a financial institution to purchase a commercial ship built in a Canadian shipyard will be eligible for a couple of benefits from the taxpayer.

This is where the cost to the taxpayer comes in. Canadians may say that they want to do that. They may say that they want to pool all their money and give it to these other businesses whether they can compete globally or not and in that way they will keep them in business and keep people working. That is not a bad goal. When we come right down to it, it is good to have people employed. It is good to have them working on things, especially when it comes to an export market.

However, the first of the benefits that the taxpayer will have to pick up is the guarantee by the federal government in the event of a default in the repayment of the loan. I do not see how the taxpayer is off the hook on that clause. Very clearly, some of the people who will be entering into a contract with a shipbuilding company for the building of a ship will not be able to pay for whatever reason. That happens in some proportion in all industries. With this guarantee, the taxpayer will end up paying the banks the amount of the default. That is what this says and that is how I understand it.

The other members who are promoting the bill may try to convince me that is not what it says, but those are the words and I can only go by the words.

The bill goes on to say that there are some conditions of bearing a rate of interest comparable to other loans from financial institutions to large and financially strong corporations. This is not a bad idea. This one would cost the taxpayers nothing. To say that a company is maybe not as strong as it could be and guarantee that its interest rates would be lower should actually increase the probability that it will be able to pay back the loan and it would increase the probability that the taxpayers would not be on the hook for it.

Then we go on. The Liberals are saying that they want to improve the tax treatment for lease financing for the purchase of a ship built in a Canadian shipyard. I would venture to say that it is probably a laudable goal for all businesses to have better tax provisions so that business can thrive whether it is a shipbuilding company or any other company in the country.

I would love to hear an explanation from the proponents of this bill about the last item, which I also believe will cost the taxpayers money. It says that this will provide for a refundable tax credit for a portion of the costs relating to the construction or refit of a commercial ship in a shipyard located in Canada or the conversion of a ship in such a shipyard. This is a tax expenditure. It is a refundable tax credit that will go to either the shipyard, if the ship is being built for someone outside the country, or to the owner of the ship if it is a Canadian shipping company. Perhaps this would be a way to provide an incentive for our finance minister's company to bring its ships back to Canada and actually fly a Canadian flag on them and pay Canadian taxes. That would be very interesting. Maybe we can buy the finance minister back. The costs to the taxpayer are included in that.

As I said at the beginning, given my present analysis I will be voting against the bill because of the very broad principle that I do not think the government should have the ability to take money out of the pockets of hard-working Canadians right across the country in order to prop up businesses that are not able to compete on an international basis because we have gone international now. It is not a valid use of the taxpayers' money.

I know exactly what they are going to say now, “How about the western farmers?” How about them? I had a farmer in Saskatchewan say to me “If I would have had a reasonable tax rate in the last 30 years, thanks to the Liberal and Conservative governments, I gave so much money in taxes, I would now be out of debt and I wouldn't have to worry as much in hopefully this short time of an agricultural income downturn”. We are taxed to death in this country”.

We need to have a reasonable tax regime not only for the shipbuilding companies but for all of them.

Whereas rolling stock on the railroad has a depreciation rate of about 10% per year and there is a decreasing balance of up to 40% for rolling stock for trucks, we already have a rule in place that allows them to depreciate on a straight line depreciation of one-third of the cost per year. In four years, because it has only half in the first and the last year, the total cost of the ship is totally written off as a tax write-off. That is a very favourable provision. I think taxpayers are already giving a considerable impetus to this particular industry.

We also need to get really with it in terms of our negotiations with other countries, particularly our large next door neighbour, and insist that we get fair rules. It is generally known, for example, that ships that are built for the American market, both military and domestic, must be built and must be maintained in the United States, whereas in Canada that is not true.

I am so sorry that my time is up. I would like to say that my mind is still open but I have those questions about the bill. I think we have a better way of solving this problem.

Shipbuilding Act, 1999Private Members' Business

5:50 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, it is indeed a pleasure to have the opportunity to speak today on behalf of my friend and colleague from Lévis, Quebec who has been a strong advocate for the augmentation of the shipbuilding industry in Canada.

It is a pleasure to have this opportunity because we are starting to build a coalition in the House of Commons on the need to establish and develop a modern shipbuilding policy to ensure that we have a viable and sound industry based exclusively on a reduction in tax and not through subsidies.

I would like to share some of my comments with the hon. member for Elk Island. I agree with some of his comments, but I also disagree with some others.

Right now we have a new coalition of individuals trying to augment the bill: members of the Bloc, the New Democrats, the Progressive Conservatives and now a chink in the Liberal armour. Members of the Liberal caucus, who tabled a document on September 30, 1999, fundamentally recognize that we need to have a modern shipbuilding policy in Canada so that the men and women, whether they reside in Vancouver, B.C., Port Weller, Ontario, Lévis, Quebec, Marystown, Newfoundland or closer to my home in Saint John, New Brunswick, can work.

With respect to Bill C-213, I will touch on three basic principles that the hon. member is advocating in the bill. First, the member wants to revise the Revenue Canada leasing regulations and combine them with an accelerated depreciation. What that would do is recognize that shipbuilding does not play on a level playing field internationally.

I am not advocating that the taxpayers of Canada should actually shell out cash in order to prop up this particular industry. However, I would argue quite convincingly that it is much better to take in a certain amount of revenue by actually having economic activity going on in the sector than receiving no revenue whatsoever. This actually goes to the whole corporate tax regime that we have in Canada today.

There is only one industrialized nation, which is a principal trading nation of this world, that has a higher tax regime than Canada, and that is the country of Japan. What I am advocating here is that we have a more aggressive tax system with respect to lease financing in Canada. That means no dollar is transferred from the Canadian taxpayer to this particular industry. In fact, by having economic activity in the industry we actually bring revenue in.

The second component which my hon. colleague from Lévis, Quebec is advocating is the need to have a loan guarantee program. Some people might actually advocate that perhaps that is a benign subsidy of some form. What we are advocating they adopt is a loan guarantee program known as Title XI, which the Americans have had in place since 1936. Their criteria has been very prudent.

I say to the member for Elk Island that I would not want to be a Reform candidate running in Fundy Royal given the comments made about this being a dead in the water industry and that shipbuilding is not viable in Canada.

Does anyone how many loan defaults the Americans have had since 1936? I know the member from Lévis knows that answer. They have had absolutely none. It works. Because the Americans have that loan guarantee program to guarantee purchasers who actually reside outside the United States, they are actually building ships for foreign companies now compliments of Title XI.

A company in Atlantic Canada, Secunda Marine Services Limited in Halifax, had a ship built compliments of Title XI. The program has been in place since 1936 and they have not had a single loan default. The American taxpayers have not shelled out one red nickel in order to implement the program.

If we copy something in university it is called plagiarism. In the real world it is called being resourceful. Why do we not just adopt something that is actually working in the United States and implement it here in Canada?

I will give some credit to members on the government side of the House. They have headed in the right direction with respect to that particular issue. The Export Development Corporation is a loan guarantee program that will guarantee loans for the export of a ship. That is a step in the right direction.

However, what I am advocating we do is we use that program to guarantee the construction for domestic consumption as well.

Canada is a viable and competitive shipbuilding nation. Our labour rates are not only competitive, they are in fact less than the EU. What we are looking for is a competitive tax regime.

I know our finance critic, who is here listening to this speech, understands the Conservatives stand on tax reduction. Perhaps the Reform populace does not, but that is the principle that I am advocating.

I am proud to have the opportunity to take part in this debate, and to suggest some improvements.

The member for Lévis-et-Chutes-de-la-Chaudière has worked very hard on this issue, as the member for Chicoutimi.

There are numerous members who are trying to advance this particular debate, including the member for Saint John.

What I am advocating are four basic principles. Let us change our tax regime to make lease financing in Canada more cost competitive. Let us ensure that our shipowners have access to the best financing rates by guaranteeing their loans under prudent criteria like the Americans have with Title XI.

We also need to address the trade issue. Free trade has been wonderful for the growth of this country. Prior to 1988 our trade with the Americans was around $88 billion each and every year. Compliments of free trade, our current trade with the Americans is around $260 billion. Free trade was a win for Canada. However, we were not able to leverage the Americans to drop the Jones Act and their protectionist regime.

The Liberal government on countless occasions has said “It was you who negotiated the free trade agreement. It was you who negotiated the NAFTA. It is your fault”. The Liberal government has been in office for seven years and never once has it knocked on the door of a congressman or a senator in the United States to ask if we could open up some kind of bilateral trade agreement for certain types of ships, whether they be ocean-going tugs, offshore drilling rigs or any other type of ship. Canada has developed the expertise for the Hibernia site, off the shores of Newfoundland, which includes areas such as Terra Nova, Ben Nevis, White Rose and Sable Island. We have technology that has been developed in Canada that we want to export.

I will support this motion, even though I disagree with one component of it.

The member for Elk Island may be right with respect to the refundable tax credit. In my opinion, it is a direct subsidy. If Reform members had any clue about this industry they would support this.

We stand for tax reduction. We do not mind revising Revenue Canada leasing regulations. Even though it would be precedent setting, there would be no money coming from the pockets of Canadians.

We do not mind supporting the bill. Should we adopt the American style for the loan guarantee program? We could probably do that. However, we do not support the third item. We could modify it and not support that aspect of it.

If we had more parties standing for this particular industry we could advance this, especially given that we have some Liberal members heading in that direction.

The work that the hon. member from Lévis has done in advancing this issue should be commended, as well as the work done by the member for Saint John and the work done for my private member's motion, which we have discussed as well. We are advancing this debate. We need a quarterback to lead this issue. I do not think the Minister of Industry has done a respectable job in this regard. I think we should change the quarterback and involve the Prime Minister.

Shipbuilding Act, 1999Private Members' Business

6 p.m.

Reform

Ken Epp Reform Elk Island, AB

Mr. Speaker, I rise on a point of order. I am very eager to ask questions. I wonder if we could have unanimous consent to have two minutes for questions and comments.

Shipbuilding Act, 1999Private Members' Business

6 p.m.

The Deputy Speaker

Is there unanimous consent for a two-minute period of questions and comments?

Shipbuilding Act, 1999Private Members' Business

6 p.m.

Some hon. members

Agreed.

Shipbuilding Act, 1999Private Members' Business

6 p.m.

Some hon. members

No.

Shipbuilding Act, 1999Private Members' Business

6 p.m.

NDP

Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, I am pleased to rise today in the House to speak to Bill C-213.

First, I would like to congratulate my colleague from Lévis-et-Chutes-de-la-Chaudière. He has spent a lot of time on this issue. Since I was elected here two and a half years ago he has been fighting for this industry.

I believe this industry belongs just as much to Canada as to any other country in the world. When we look at our shipyards, we can be proud. Given that in Canada we are surrounded by oceans, the Pacific on one side, the Atlantic on the other side, it is important to look at the jobs that can be generated. Shipyards are a good example of that.

In 1993, in the red book, the Liberals promised Canadians a shipbuilding policy.

We are in the year 2000 and we have yet to see a policy. We are still waiting for a policy concerning shipyards; yet it could save the jobs of Canadian men and women. Instead, Canadians are currently forced to move to the United States to put their expertise to use. This is totally unacceptable.

Les Holloway was here on May 11, 1999. He met all the opposition parties and made suggestions, along with the unions, to save our shipbuilding industry. I do not agree often with the Irving company, but for once even Irving agrees with the unions. Irving is not the unions' biggest fan, but in this case, it is asking for the same thing as the unions. They want Canada to put in place concrete policies to save the shipbuilding industry.

I think it is really important that the Liberals keep their 1993 promise to implement such a policy. We are asking for loan guarantees with reimbursement, tax exemptions, anything to save Canadian jobs, because we can no longer accept to see good paying jobs being lost, jobs that we could have in our regions, for example in St. John, New Brunswick. A small shipyard in Caraquet had to close its doors. But we know how important it is to be able to create jobs in the Acadian peninsula.

I wish to congratulate the member for Lévis-et-Chutes-de-la-Chaudière on all the work he has done and the attention he has given to it. I wish to congratulate him on travelling throughout Canada, on coming to see us in Saint John and Caraquet in New Brunswick, on going to Nova Scotia, to Vancouver and to other countries to do the work of the Liberals elected in 1993, who have since cut jobs and who are not even able to save jobs here at home.

The Minister of Finance, who owns a shipping line, and who is not even able to have his ships built in Canada, tells Canadians that they must tighten their belts, that Canada is in trouble, that we must save money and be careful. He is not even able to help our own Canadians. He is not even able to save our jobs. In the Acadian peninsula, unemployment tops 40% in the winter but he has lumped us in with the major regions, which lowers it to 13%.

Our Minister of Finance has ships that he has not been able to have built in Canada. It is a real disgrace. Our Minister of Finance, who wants to run the country, be the leader of the Liberal Party and prime minister of Canada, has an industry that is not even able to support our Canadians. It is a real disgrace.

I strongly urge the Liberals to keep their promise to Canadians and not to take the approach they took with the GST, which they did not scrap even though they said they would in the 1993 red book. This was a promise made by the former leader of the opposition, now the Prime Minister. In 1993 he promised Canadians that he would develop a shipyard policy. He is not able to keep that promise either.

It is important to be able to save our jobs here in Canada because they are needed. They are needed in places like Saint John, New Brunswick, like Caraquet, Halifax and Dartmouth. Good policies such as those presented by our colleague from Lévis-et-Chutes-de-la-Chaudière, for example loan guarantees and tax exemptions, are what will make it possible to save this industry, which is so important.

The Minister of Finance, who owns a shipping company, prefers to go to Vietnam for his ships, instead of having them built here to save Canadian jobs. That is a disgrace. A minister with prime ministerial aspirations who is not even capable of supporting Canadians, that is disgraceful, and I am saying so here in this House.

In the Acadian peninsula and the Acadie—Bathurst region, we are losing over $65 million in employment insurance benefits because of the cuts made by the Liberal Party over there, which is in power today. That is what we are losing in our area. I can guarantee that the government party did not train the workers and create the jobs in our area. That is not true, and I am prepared to rise in this House at any time to speak out against the damage the Liberals have done in continuing the policies of the Conservatives, the likes of Valcourt, who took employment insurance funds back in 1986 to add to the consolidated revenue fund.

Since then, workers have had to struggle day after day, and there is no money coming in. Today we are calling for a simple policy, one which would make it possible for us to keep our jobs in our area. When you were in the opposition, you were opposed to changes in employment insurance. The Liberals were against that. And yet they have made changes as well. They were in favour of a shipbuilding policy and today they cannot even follow that policy. They should be ashamed of themselves. They should pack their things and leave, because they are not doing what they promised Canadians they would do.

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

Some hon. members

Hear, hear.

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

NDP

Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, it is important to look at the industries globally to find solutions. The NDP supports policies that promote shipbuilding. The Liberals on the other side of the House have a power that was given to them by Canadians, but not the majority of them, because I believe they got about 33% of the votes in Canada. Ontario is the only province that voted for you. You have basically killed health services with your policies.

I am asking you to think about what you are doing, about what you are thinking, and to be able—

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

An hon. member

Oh, oh.

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

NDP

Yvon Godin NDP Acadie—Bathurst, NB

I have nothing to learn from you, dear colleague. I take my cue from the Speaker.

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

The Deputy Speaker

If the hon. member has something to learn from the Speaker, it is that he must address the Chair.

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

NDP

Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, I have no problem with that. It is not up to the member to tell me about the rules of this House. It is the Chair's responsibility. I have no problem with that.

I will conclude by once again asking the Liberals, who were elected on the basis of the promises they made in 1993, to fulfil their commitments once and for all and to give us a sound shipyard and shipbuilding policy, so as to promote job creation and to keep our jobs here and not let them go to the United States.

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, I rise on a point of order. I want to bring something to the attention of the House that I think everybody here is concerned about. In a minute we will hear a speaker from the government side. I am very interested to hear those remarks, but I am a little concerned that not one Atlantic Canadian Liberal MP has ever had a chance to speak to this—

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

The Deputy Speaker

I am afraid that is not a point of order.

Shipbuilding Act, 1999Private Members' Business

6:10 p.m.

Liberal

Walt Lastewka Liberal St. Catharines, ON

Mr. Speaker, I would like to respond to private member's Bill C-213, put forward by my hon. colleague, the member for Lévis-et-Chutes-de-la-Chaudière. This is essentially a money bill. We could even call it a subsidy bill. The first time this bill was debated at second reading the hon. member argued that one way to promote the Canadian shipbuilding industry would be to improve the loan guarantee program of the Export Development Corporation.

There is a myth that loan guarantee programs are free of cost. This is not true. In fact, in 1998 in the U.S. the costs to the government were roughly $3 billion for contingent liabilities and almost $2 billion on default payments. Based on the experience in the U.S. it would be very costly to set this up. I have talked about this many times before. Taxpayers have told us repeatedly that they do not want more programming. They want tax cuts.

The hon. member also contends that if ships built in Canadian shipyards were exempted from the regulations relating to lease financing, the existing depreciation rates for ships would apply without any restrictions. In consequence, according to him, the tax disadvantage that prevents ownership or lease financing of ships would be eliminated.

The fact is that the shipbuilding industry already has access to the accelerated capital cost allowances, known as CCA. These are more generous than for any other industry and even more generous than tax credits in the U.S.

Furthermore there cannot be both an accelerated CCA and an exemption from leasing regulations. If such a thing were permitted, the cost of a ship could be written off more than once and this would constitute a tax shelter. This is just the kind of situation the current leasing regulations help us to avoid. Moreover, lease financing is contrary to the specified leasing property rules in the Income Tax Act.

The third measure in Bill C-213 is another subsidy, just like the loan guarantees and the exemption from leasing regulations. It would amount to creating on a national basis the same type of program that Quebec set up in 1996-97. Quebec decided to complement the federal shipbuilding policy by creating its own program. I would strongly encourage the other provinces to follow Quebec's example.

These tools are not only subsidies. They are the tools of the past. As we enter the 21st century, the way to take charge of the future is not by returning to the past by way of government subsidies that have proven so disastrous to Canada by nurturing uncompetitive industries. Instead, it is by investing in innovation, by training smart workers and giving them upgraded equipment and production techniques to do the job right, and by forging alliances that will lead industries in the pursuit of excellence.

Canada's shipbuilding and repair industry is quite a small one by world standards accounting for only .04% of the global market share and not the .4% as stated by the hon. member for Fundy—Royal in yesterday's debate. If the industry says it needs to reach only 1% of the world market, this would mean that the industry would have to increase its current share by 25-fold.

The top three shipbuilding and repair nations in the world today are Korea, Japan and China. Together they account for more than 75% of the global market. I think members realize that even the most generous subsidies will not enable the Canadian shipbuilding and repair industry to be competitive in these conditions.

The government's shipbuilding policy does not rely on subsidies. Instead it concentrates on the areas that can make a real difference and that use taxpayers' money wisely.

The acquisition of ships, their repair and refit in Canada by the federal government is done on a competitive basis but is restricted to Canadian sources.

Tax measures such as the accelerated capital cost allowance on new ships built in Canada allow purchasers to write off 100% of the entire cost of the ship over a mere four years.

We have in place a 25% tariff on all non-NAFTA foreign built ships of more than 100 tonnes that enter Canadian waters with the exception of fishing vessels over 100 feet in length.

In response to the shipbuilding and repair industry's conditions, the government spent $198 million on an industry led rationalization process between 1986 and 1993. This money was given directly to the industry for upgrading facilities and assisting displaced workers adjustment programs because the industry itself decided it was necessary to reduce its capacity so that the remaining shipyards could survive and continue to be competitive.

At present, shipyards in Canada employ some 4,950 Canadians. Under the federal government's procurement policy, yards have received more than $8 billion in federal shipbuilding and repair national contracts tendered through the competitive bidding process in the last 10 years.

Canada's research and development tax credit system provides more than $1.3 billion a year to companies that carry out R and D. This source of financing is available to the shipbuilding and repair sector as it is to any other sector.

The federal Export Development Corporation promotes export sales of Canadian products, including ships. For ships alone, this assistance provided on commercial terms has grown from $3.5 million in 1996 to more than $130 million in 1999.

Yes we should be doing all we can in an intelligent way to foster shipbuilding and repair in Canada, but surely this is a shared responsibility. Provinces also have a role to play. Currently only two have set up programs to complement the federal package: Quebec and Nova Scotia. Others may want to follow suit. The members for Fundy—Royal and Saint John if they are serious may want to get their cousins in New Brunswick to follow the Quebec and Nova Scotia lead. Maybe they should put their money up first and complement the Canadian shipbuilding policy.

Just a few minutes ago the member for Fundy—Royal was taking all his credits. He also may want to take credit for when the government was negotiating those agreements and giving everything away, it also allowed the Jones Act to continue in the United States. Now he says it needs to be changed. In other words, after he has given everything away, he now wants to go and resolve it. He might want to take credit for that in all his future speeches.

Our shipbuilding policy is very clear. We have purchased in Canada. We have an accelerated capital cost allowance write-off. We have a 25% tariff on all non-NAFTA foreign built ships. The Export Development Corporation is working with the industry. The more co-operation we get from the shipbuilding provinces, the sweeter the package might be.

Shipbuilding Act, 1999Private Members' Business

6:20 p.m.

Bloc

Louis Plamondon Bloc Richelieu, QC

Mr. Speaker, despite my hoarse voice, I too am very happy to support Bill C-213 introduced by the member for Lévis-et-Chutes-de-la-Chaudière.

I have great respect for the effort my colleague put into preparing this bill. He was tireless. He started from nothing three or four years ago. He has succeeded in rallying all the major players in Quebec and in Canada to unanimously call on the government to do something about the shipyard problem.

He formed parallel committees, here in the House. He visited every shipyard. He met with all the stakeholders, both unions and employers. In my 16 years as a member of the House of Commons, I have never seen anything to equal what the member for Lévis-et-Chutes-de-la-Chaudière has accomplished.

Shipbuilding Act, 1999Private Members' Business

6:20 p.m.

Some hon. members

Hear, hear.

Shipbuilding Act, 1999Private Members' Business

6:20 p.m.

Bloc

Louis Plamondon Bloc Richelieu, QC

The message to Liberal MPs in all the letters, petitions, and meetings was the same “Wake up”.

The Progressive Conservative Party's support of the member for Lévis-et-Chutes-de-la-Chaudière was solid and very determined. We heard the NDP member for Acadie—Bathurst speak on behalf of his party, which also supported this initiative. It is not a question of party politics. It is a question of logic. It is a question of getting this industry up and running, or better yet of getting it afloat. It is literally a question of survival.

I have been through a shipyard closing. I remember it well. It was in Tracy. I think of the families, the human tragedy that was played out there, when between 1,500 and 2,000 employees lost their jobs.

This was done in the name of restructuring, so there would be a single shipyard in Quebec and some in the rest of Canada, that would have be able to get repair work, contracts and tax relief to enable them to get off the ground, become competitive and provide a living for many workers.

Instead the government has once again reneged. This is the Liberal Party personified. This is the double talk party, as I call it. During the election campaign in 1993 and in the red book, it clearly promised to give the Canadian shipping industry comparative and competitive advantages and to promote a consolidation of research and development activities in the area of shipping.

It said things during the election campaign that it forgot right after. It did that with the GST. It said it would scrap the GST and cancel the helicopter contract. After the campaign, it forgot all that. This is the double talk party. All the while, the workers are waiting. The industry is waiting for help to become competitive with the rest of the world.

People are not asking for anything special, just a little needed support such as they get in Europe, Asia or the United States. It is as simple as that, and the government keeps blocking its ears. But now there are surpluses. The government could revitalize this industry, but instead it is trying to get into areas of provincial jurisdiction rather than look after its own business, namely shipping, which is under federal jurisdiction.

What were the Liberal members doing throughout this debate led valiantly by the member for Lévis-et-Chutes-de-la-Chaudière? The Liberal members were absent. They were absent from committees, from consultations; they did not meet with workers or with the shipping industry. Some came, like the last speaker, and quoted statistics, trying to convince us that it would be better under provincial jurisdiction.

This is always going on. I appeal to the Liberal members from Quebec who said “We will defend the interests of Quebec”. Well, now is the time. The shipping industry has called for help, but they still say nothing. I wonder if a change of name would not be in order. Maybe we should call the Liberal Party the muffler party, since we hear nothing from them. The muffler party; that is it.

Since 1993 they could easily have implemented some measures gradually. But no; they give us statistics. They say that something has to be done. They quote production data from Asia and Japan, like they did earlier. They talk about shipbuilding statistics in the United States. But if the Americans build ships, it is because they get help from their government. It is because some tax measures were implemented to help them. Their shipbuilding industry became competitive because it received some support.

As I speak, for example, they need an extra ferry between Nova Scotia and Newfoundland. Do you know what the coast guard is doing? They stalled for so long that they are now looking all over the world for a second-hand ship instead of seizing that opportunity to help the Canadian shipbuilding industry.

Such situations are unthinkable and they happen year after year. We do not have to look far to find those who destroyed that industry. They are right here. Those famous measures were first implemented under the Liberal government in 1983; that government did not know where it was heading then and it was wiped off the political map in 1984. That government, the Liberal government of the day, was instrumental in the demise of the shipbuilding industry and, when it came to power again, it never implemented measures to rectify the situation it had created.

It is unacceptable for the government to promise the help it had promised in the red book, and now to hide behind statistics, saying yes, something should be done, we are going to think about it, a committee of the House might consider it. They say the same thing year in and year out. In the meantime, the hardworking Bloc member in this House, the member for Lévis-et-Chutes-de-la-Chaudière, has been working on it.

He set about this task three or four years ago, bringing all the stakeholders together to conduct extensive studies, which now show that a sound shipbuilding industry in Quebec and Canada would yield major financial benefits within five or six years. In this way, the help given temporarily now would more than be compensated by tax revenues and economic benefits flowing from the building in our shipyards of ships ordered from all over the world.

The aerospace industry got some help. The farmers got some help, and rightly so. Why not support this important industry when we have two countries, Quebec and Canada, with the largest bodies of water in the world? Would it not be normal for us to build ships? No, this is something we do not think about. Yet it would be so logical.

I will conclude by asking the Liberal Party, the one in office, to accept to vote with the Bloc Quebecois, the Conservative Party, the New Democratic Party and many members of the Reform Party so we can put aside party politics and say with one voice, “yes, we are going to work together to help the shipbuilding industry”.

I am asking them to hear the distress call coming from several regions. I heard this distress call in my riding and I know what it would be to have an industry that would create 1,500 or 2,000 jobs.

Let us stop the hemorrhage. This is something I have been saying in this House for 16 years and I wonder how it is that no Liberal member was ever able to take a leadership role like the Bloc member for Lévis-et-Chutes-de-la-Chaudière has done with the help of many colleagues from our party and from other parties, in a non partisan way.

I salute him again and I hope his call for help, his work and his bill will be favourably received by the governing party, the Liberal Party.

Shipbuilding Act, 1999Private Members' Business

6:30 p.m.

The Deputy Speaker

The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved

Shipbuilding Act, 1999Adjournment Proceedings

6:30 p.m.

Progressive Conservative

David Price Progressive Conservative Compton—Stanstead, QC

Mr. Speaker, on October 18 I asked the Minister of Citizenship and Immigration about the troubling selection process for the chair of the Immigration and Refugee Board.

So many times well connected Liberals are appointed to positions of power and prominence in this country. I implore the minister to involve parliamentarians, specifically committee members, in this selection process. Parliamentarians have a mandate to represent and work on behalf of their constituents. How can Canadians be adequately represented when appointments are fait accompli by the time MPs are informed?

I refer specifically to the appointment of Mr. Peter Showler. He was appointed chair of the Immigration and Refugee Board by an order in council dated November 16, 1999. First, I applaud the appointment. Mr. Showler is duly qualified to take on the daunting task of chair of the IRB, a quasi-judicial post.

Despite that, the issue I have is one of principle. Why was the Standing Committee on Citizenship and Immigration not consulted? Allow me to refer to Standing Order 108(2) which mentions additional powers of standing committees. It says that the standing committees will be empowered:

—to study and report on all matters relating to the mandate, management and operation of the department or departments of government which are assigned to them—

Standing Order 108(2)(e) widens the powers of the committee to investigate:

—other matters, relating to the mandate, management, organization or operation of the department, as the committee deems fit.

Is the appointment of the IRB chair deemed to be not crucial to the administration of the Department of Citizenship and Immigration?

Standing Order 111 allows for the review of the appointment. Reviews are fine but do not allow the committee members any authority over the hiring in the first place.

Standing committees are intimately familiar with the issues and would be an excellent source of advice for an appointment as chair of the IRB. Even if it were a bad review it would not necessarily lead to the dismissal of an appointee.

I fear the committees, and indeed the House itself, are becoming rubber stamps for policies and motions already approved and formulated by the Privy Council Office and the Prime Minister's Office.

The House is consulted less and less by government but I remind the governing party that 38.5% of voting Canadians in the 1997 election supported it. That is far less than the majority. By not consulting with the House of Commons, the voices of a vast majority of Canadians are not being heard. This is not the correct practice in a liberal democracy like Canada's.

Committee members are powerless over anything the Prime Minister and cabinet wish to do. It is interesting to note that the Canadian Bar Association and the Canadian Council for Refugees are both on record as disapproving the present selection process. They want a more fair, more transparent hiring process.

The next time an order in council appointment is made, will the minister exercise some democracy, take the high road and consult the Standing Committee on Citizenship and Immigration?

Shipbuilding Act, 1999Adjournment Proceedings

6:35 p.m.

Kitchener—Waterloo Ontario

Liberal

Andrew Telegdi LiberalParliamentary Secretary to Minister of Citizenship and Immigration

Mr. Speaker, allow me to point out that under the Immigration Act, immigration and refugee board members including the chairperson are appointed by governor in council.

As a result of the government's commitment to transparency a notice of vacancy for the position of chairperson was published in The Canada Gazette on June 26, 1999. The notice allows the opportunity for any qualified candidate to submit his or her resumé to the Prime Minister's Office.

Subsequently a selection process was initiated and the governor in council announced the appointment of Mr. Peter Showler as chairperson on November 29, 1999. I appreciate the vote of confidence of the hon. member in terms of Mr. Showler's qualifications.

Let me review some of them. Mr. Showler has extensive experience as an immigration and refugee law practitioner. He has initiated numerous public education programs and has developed law reform initiatives. Mr. Showler has taught immigration and refugee law at an Ottawa university. Previous to his appointment as IRB chair, Mr. Showler served five years as a member of the convention refugee determination division.

I can only say that this was a very good appointment and we expect that Mr. Showler will serve the country well.

Shipbuilding Act, 1999Adjournment Proceedings

6:35 p.m.

The Deputy Speaker

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 6.37 p.m.)