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.