Debates of March 28th, 2000

Business Of The House

[The Acting Speaker (Mr. McClelland)]

Is there unanimous consent for the government House leader to move the motion?

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. McClelland)]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

(Motion agreed to)

[The Acting Speaker (Mr. McClelland)]

It being 5.30 p.m. the House will now proceed to the consideration of Private Members' Business as listed on today's order paper.

The House resumed from February 9 consideration of the motion that Bill C-213, an act to promote shipbuilding, 1999, be read the second time and referred to a committee.

Shipbuilding Act, 1999

[Derek Lee, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order. Discussions have taken place among all parties and the member for Lévis-et-Chutes-de-la-Chaudière concerning the taking of a division on Bill C-213 scheduled at the conclusion of Private Members' Business today. I believe you would find consent for the following:

That at the conclusion of today's debate on Bill C-213 all questions necessary to dispose of the said motion for second reading shall be deemed put, a recorded division deemed requested and deferred until Wednesday, March 29, at the expiry of the time provided for Government Orders.

[The Acting Speaker (Mr. McClelland)]

Is that agreed?

[Some hon. members]

Agreed.

(Motion agreed to)

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I rise on a point of order. As the member sponsoring this bill, I agree to this proposal. However, I would just like to make sure at the same time, with the unanimous consent of the House, of having the right to respond for the three to five minutes usually given all members sponsoring a bill.

[The Acting Speaker (Mr. McClelland)]

Habitually the right to a five minute response is for non-votable bills, but by unanimous consent it would be possible at the appropriate time. As members say, we can do anything by unanimous consent.

Is there unanimous consent that the member for Lévis-et-Chutes-de-la-Chaudière have the last five minutes of debate?

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. McClelland)]

There are 45 minutes left in debate, 40 minutes not counting the member for Lévis-et-Chutes-de-la-Chaudière.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I am very pleased to have the opportunity this afternoon to enter the debate on Bill C-213, an act to promote shipbuilding in Canada and to make Canadian shipyards more competitive.

First I congratulate the shipyard workers who have worked together tirelessly with industry representatives to press the federal government to keep the commitment it made, upon coming to office, to put in place a shipbuilding policy for Canada and, I might add, to do it before it was too late.

Why do I say before it was too late? Despite the proud tradition of our shipbuilding industry throughout the history of the country and despite its importance to our economy, our regional economies and our total national economy, it is unbelievable that through the 1990s the Canadian shipbuilding industry has been cut by more than one-half.

Seven thousand jobs and over $250 million in annual wages have been lost to regions that desperately needed that infusion into their economy but, most important, they were lost to families who depended upon those jobs and those wages.

I take the opportunity to acknowledge the presence in the gallery today of a number of representatives of those hard working shipyard workers. They have kept the campaign going, kept the issue before the Canadian public, and gained the support of municipal governments, provincial governments, industry representatives, labour representatives, and a very broad range of Canadians.

In part, this debate is about how in the name of heaven we will win the support of the federal Liberal government to put in place the Canadian shipbuilding policy that is so badly needed.

I wish to congratulate the member for Lévis-et-Chutes-de-la-Chaudière for introducing this bill. It is very brief—only three pages long. But I must say that if we could convince the federal government to establish a nationwide policy on shipbuilding, the impact would be enormous.

It would be enormous for shipyard workers throughout Canada. It would be enormous for the Canadian shipbuilding industry. It would also be enormous for our coastal communities, those of the Great Lakes region and the St. Lawrence Seaway.

In a way the fight for a national shipbuilding policy is about more than shipbuilding. It is about thousands of desperately needed jobs in the least prosperous areas of Canada. It is about skills that are crucial to our capabilities as a coastal and seafaring nation. In that sense it can be said that this is a fight that is not just about shipbuilding but is about nation-building.

Let me say as a member of parliament who is privileged to represent a constituency that is one of those communities with an important shipbuilding component, I am very concerned about the future of shipbuilding in Canada.

I would be less than honest if I did not say that I am extremely angry at the federal government. The federal government was given the privilege and the opportunity to govern. It promised the people in Atlantic Canada and across the country that if it were elected in the 1993 election it would make Canadian shipbuilding a priority. Some priority. Seven years and people are still waiting, seven very lean years for shipbuilders.

Last week I wrote to the Minister of Industry, as many people have done. I pleaded with him to be willing, at the very least, to respond to the pleas of shipyard workers and industry representatives to convene a national summit on the future of Canadian shipbuilding in a global marketplace before the entire shipbuilding industry sank in the wake of Liberal neglect.

What the bill before us proposes is very practical. It is concrete. It is doable. They are measures that should comprise part of the Canadian shipbuilding policy.

The aim of this bill is reasonable. It could allow Canada to enjoy the same opportunities as our competitors.

This problem has not just developed over this decade. The fact of the matter is that in the early eighties the then Liberal government removed some very important support to the shipbuilding industry. Since that time we have witnessed a steady severe slide in shipbuilding, particularly so for anything but government purposes, defence vessels or patrol vessels. The fact is that shipbuilding for commercial markets has been very limited because Canada has placed itself at a very severe competitive disadvantage.

Let us take one moment to look at what the situation is in the United States, our nearest neighbour and our largest competitor. The United States has put in place a comprehensive policy to support its own shipbuilding industry. It actually succeeded in getting Canada to agree to grandfather the Jones Act in the flawed free trade agreement which had in place and kept in place very distinct advantages that made perfect sense for an economy to protect for its own benefit. The Jones Act continues to apply and continues to require a very significant number of ships to carry the goods being transported in and out of the United States. It is also supplemented by title 11 financing.

What is title 11 financing? It is an aggressive industrial policy to build for rapidly growing new markets in shipbuilding. It is a policy that recognizes there needs to be a transition and in fact has put in place measures to ease the transition from military contracts to commercial vessels. Surely Canadians deserve no less than a comprehensive national shipbuilding policy for Canada.

Let me simply repeat the obvious and why it is so obvious to most Canadians and so obscure for the federal Liberals to understand. We need to put in place a Canadian shipbuilding policy or we will not have the shipbuilding capacity or the shipbuilding jobs we need. At the very least, we should convene that summit, face the challenges squarely and examine what our competitors are doing that makes it so difficult for us to compete.

I congratulate the member for putting forward the bill. I hope Liberal members will see the wisdom and the importance of supporting it.

[The Acting Speaker (Mr. McClelland)]

There are six members who would like to speak and we have 24 minutes left of debate. I realize this is a little unusual, but if we try to get everyone to limit their interventions to no more than four minutes we will be able to let many more people speak. We will do this with unanimous consent. Otherwise we will go to 10 minutes as we normally do and we will only get a few people in.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, I would like to ask for unanimous consent that for the remaining 24 minutes of debate members will speak for only four minutes each.

[Antoine Dubé, Bloc, Lévis, QC]

I rise on a point of order, Mr. Speaker. I understand that members may be excited to speak on this issue. I find it difficult to object, in fact I am pleased, but we have the same time limit. I think each party should be allowed at least one speaker. It would be important that each party be able to express its views on the matter.

[The Acting Speaker (Mr. McClelland)]

All parties have already had a number of speakers. We either have this before the House or we do not. We will do it or we will not.

Does the House give its unanimous consent that the remaining members will be limited to four minutes, with the exception of the hon. member for Lévis-et-Chutes-de-la-Chaudière who already has five minutes?

[Some hon. members]

Agreed.

[Pat O'Brien, Liberal, London—Fanshawe, ON]

Mr. Speaker, I would like to respond to this private member's bill, put forward by the hon. member for Lévis-et-Chutes-de-la-Chaudière. Frankly, the bill sounds a bit like a broken record and essentially repeats the same old demands for subsidies and tax breaks which our government has been hearing from the shipbuilding industry since 1997.

The industry is asking for a tax haven, but the Canadian taxpayers are asking for tax breaks.

Canadians are very clear. They do not want government to artificially prop up industries through interventionist and costly financial measures like the one suggested in Bill C-213.

During the second reading debate the hon. member for Elk Island argued that the bill's proposed loan guarantee program, similar to the American Title XI program, would be cost free. He said “The American taxpayers have not shelled out one red nickel in order to implement the program”.

Let me put this myth to rest right now. Loan guarantee programs are not free of cost. In 1998 costs to the American government were roughly $3 billion U.S. for contingent liabilities and almost $2 million on default payments. Based on our neighbour's experience it is evident that such a program would be very costly to set up.

The hon. member also contended 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. Consequently, he argues, 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 accelerated capital cost allowances. These are more generous than for any other industry in Canada, and even more generous than tax credits in the United States.

Furthermore, Canadian taxpayers would never accept both an accelerated CCA and an exemption from leasing regulations. If this were permitted the cost of a ship could be written off more than once and it would create a tax shelter. That is what the current leasing regulations help us avoid.

A third measure proposed in Bill C-213 is yet another demand for a tax break. It would create on a national basis the same type of program that Quebec set up in 1996-97. The tax measures proposed in the bill are not only costly to taxpayers, they are old, tired, interventionist tools from the past, the very tools which Canadians want us to stop using.

We must take charge of the future, not by returning to the past, but by investing in innovation, by training smart workers and giving them upgraded equipment and production techniques to do the job, and by forging alliances that will lead industries in the pursuit of excellence.

The policy instruments used by the federal government are modern instruments. They concentrate on areas that can make a real difference and that use taxpayers' money wisely. The acquisition of new builds in Canada by the federal government is done on a competitive basis and is restricted to Canadian sources.

I know that we have agreed to a four minute limit. There is much more I could say in explaining in detail why this is simply not a good suggestion in the private member's bill, however well intentioned. Canadians simply do not want to return to those kinds of mistakes from the past.

[Charlie Penson, Reform, Peace River, AB]

Mr. Speaker, I am not unsympathetic to the private member's bill put forward by my colleague, because I understand his concern. Canada was once a great shipbuilding nation and there are niche markets in which we could probably still operate, given the opportunity.

Unfortunately, there is a severe overcapacity in the shipbuilding industry worldwide. The origins of that overcapacity in shipbuilding relate directly to heavily subsidized operations in other countries. Indeed, protected markets and subsidies are major obstacles facing Canadian shipbuilders. Nonetheless, we do not help matters by slapping a 25% duty on non-NAFTA imports ourselves. I think that sets the wrong tone.

The world is fraught with overcapacity and trade distorting subsidies, and the future is not bright for these industries.

The Canadian government could help. It could do something about this. For example, we could take on the U.S. in trade negotiations and try to strike down the Jones Act, which is hurting Canadian shipbuilders to a great degree.

We could do other things. We could try to get relief by having worldwide subsidies reduced through trade negotiations at the WTO.

We could do something at home. We could reduce taxes, not only to the shipbuilding industry, but to all industries in Canada. That would be a big help. We could move to a different tax regime in which we would have accelerated capital cost write-offs. Those are things which we could do something about in our own backyard.

The Canadian Alliance believes that there needs to be a healthy shipbuilding industry as well. Certainly there are things like ferries and tugs and special niche markets in which Canada could operate, given a level playing field. Unfortunately, we do not have that level playing field, just like we do not have it in agriculture. Other countries are subsidizing their shipbuilding industries. Canada should not be the boy scouts in this kind of situation. We should not stand by when our industries are being severely affected. The agriculture and shipbuilding industries are severely disadvantaged. We have to take a much stronger stance at trade talks and we have to protect our vital interests.

Having said that, I believe that our shipbuilding industry, along with other industries, has to operate within the confines of a market economy. Once we are able to achieve those negotiations, if we are able to achieve them, then the industry should be able to stand on its own two feet and not receive subsidized loans from the federal government. That is our position. We should have a strong shipbuilding industry, but we have to put the proper environment in place.

[An hon. member]

That would only take about 10 years.

[Charlie Penson, Reform, Peace River, AB]

I hear a magpie from the other end of the House. I assume he will have his chance to talk sooner or later.

My point is that Canada has to set the proper environment through tough trade negotiations to set some of these matters straight, and then we could have a strong industry.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, in spite of the limited time at our disposal, only four minutes, I want to take a moment to congratulate the hon. member for Lévis-et-Chutes-de-la-Chaudière for his extraordinary work in the past two years to set up a coalition of employers and workers all across Canada.

During that period, our colleague managed to visit every shipyard in Canada, as well as some in Asia, including in Taiwan, and in the United States. He made numerous representations to the Minister of Industry and to the Prime Minister. He also had his bill signed by 100 members of the opposition, which allowed him to introduce it. Our colleague did an extraordinary job and the community in Quebec and Canada can never be too grateful to him.

It is to be hoped that, in spite of the comments made earlier by the Liberal member, the government will wake up and stop ignoring the perfectly legitimate demands of managers and unions on this issue.

Shipbuilding has traditionally been a key sector, and for good reason, since Canada is bordered by three oceans and we have the St. Lawrence River and the largest seaway in the world. It is only normal and legitimate for Canada to have had, and this should continue to be the case, such an important naval shipyard industry.

The hon. member for Lévis-et-Chutes-de-la-Chaudière has had to face incredible apathy from the members opposite. We just had evidence of that earlier, once more. In spite of all his representations, our colleague's efforts have so far been in vain, unless some Liberal members, in private and behind the scenes—the Liberal excel at that—have shown some form of openmindedness in the recent past.

It is most surprising and even vexing to hear such things as we just have, because in recent history the Liberals made commitments in the red book, as they had on the GST and NAFTA, saying that they would look after the shipyards. I can read a resolution passed in a recent Liberal convention, one filled with whereases, which states as follows:

Be it resolved that the Liberal Party of Canada strongly urge the Canadian government to immediately develop a national shipbuilding policy in order to provide assistance to that industry and thus to maintain and reinforce the level of excellence of the technologies that have earned us a high reputation we are now in danger of losing.

These are the words of the Liberal Party and yet the Liberal government will absolutely not budge on this matter. There is nothing but total lethargy; it refuses to do anything. To give an example, not only is it doing nothing, but as far as the measures are concerned which the hon. member for Lévis—Chutes-de-la-Chaudière is suggesting and which tax legislation can improve, loan guarantees and tax credits, the Government of Quebec has already established tax credits for Quebec shipbuilders.

What has the Liberal government done since then, despite its commitments in the red book, despite the proposals made at the Liberal Party's convention? They are taxing the tax advantages Quebec shipyards have received because of the Quebec government's tax credits. That is what collaboration and openmindedness means to this government, which is as lethargic in this matter as in others, a government the people are going to get rid of within a few months, perhaps.

There are thousands and thousands of jobs at stake. A few years ago, Canada's shipyards provided 12,000 jobs and now the figure is less than 3,000. What is at issue here is international competition, with Asia for example, where there is a 30% subsidy, with Europe and its 9% subsidy, and the United States with its protectionist measures with which everyone is familiar. The Canadian government must bring itself up to speed.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Speaker, I am very proud to speak to this issue. I want to congratulate my colleague from the Bloc Quebecois.

I am very pleased to rise to speak in support of this bill. There was no hesitation whatsoever coming from Atlantic Canada and coming from the Progressive Conservative Party in lending our unfettered support for this motion.

Shipbuilding has had a long and proud history in Atlantic Canada and throughout the country. My riding of Pictou—Antigonish—Guysborough has played a major role in the shipbuilding industry in Nova Scotia and around the world, particularly in the days of wood, wind and sail. The tradition has been carried on through the recent efforts of MM Industra in Pictou, Nova Scotia.

MM Industra constructs some of the finest yachts in the world and is contributing greatly to the local economy in revitalizing the historic Pictou shipyard.

The Progressive Conservative Party of Canada has been clear and consistent in its call for a national shipbuilding program. The government has yet to commit, in typical Liberal fashion, to Atlantic Canada, which led of course to its very poor showing in the election results of 1997.

Our party supports Bill C-213, an act to promote shipbuilding, which was introduced in the previous parliament as Bill C-493 by the hon. member for Lévis-et-Chutes-de-la-Chaudière. The bill does not involve direct government subsidies, as has been previously suggested, but rather it proposes tax measures which would create jobs and move toward a more productive and co-operative business atmosphere.

The bill essentially asks for three measures, which are called for as well by the Canadian Shipbuilding Association. First, the thorough 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 which would be built in a shipyard located in Canada would be guaranteed by the federal government. Second, it would bear a rate of interest comparable to other available loans from financial institutions. Third, it would be repayable on terms compatible with those usually granted by financial institutions to large and financially strong corporations.

There are a number of very positive aspects to the bill. It is aimed at enhancing the age old industry which has been very productive for Atlantic Canada and for other parts of the country.

Many Canadians in coastal regions have wondered why Ottawa has done nothing in this regard after other countries continue to announce and reannounce their support for shipbuilding in their countries. The government tries to rest on its laurels but the reality is that it does not have any to rest on. The government's legacy, which is becoming very tired, stagnant and arrogant—we know the terms—shows no vision. It rewards mediocrity. It prefers to do nothing, which is what it is bringing forward now.

It is ironic that an Atlantic Liberal report entitled “Catching Tomorrow's Wave” tabled in November 1999 stated that the Atlantic Canadian economy is hitting an all-time low and part of the solution to the problem is to bring the shipbuilding industry back up to its potential and proven strength by adopting a new national shipbuilding policy. Not a single member from Atlantic Canada on the Liberal benches had anything to say about this private member's bill, not a word. It is very curious that they have decided not to participate in the debate.

The Prime Minister shrugs and says “Higher taxes? Better jobs in the States? Go ahead and leave”. The same approach is taken when it comes to an important industry like shipbuilding. Shipyard workers are suffering and so are the spin-off industries and the Liberal government has chosen to do nothing.

It is like the Liberal promises on all kinds of other issues. It is like the dense fog before the election; after the writ is dropped and the election is over, it disappears. It evaporates. That is what we have come to expect from the Liberal government.