House of Commons Hansard #89 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was air.


Business of SupplyPrivate Members' Business

11 a.m.

Canadian Alliance

John Williams Canadian Alliance St. Albert, AB


That, in the opinion of this House, the government should fully implement the recommendations of the 51st Report of the Standing Committee on Procedure and House Affairs in the First Session of the 36th Parliament, entitled “The Business of Supply: Completing the Circle of Control”.

Mr. Speaker, I will talk about something that is near and dear to my heart this morning, which is making sure that parliament actually performs the work that it is supposed to do. I refer to the report on “The Business of Supply: Completing the Circle of Control”.

The report was prepared during the 35th parliament and has had a rather slow gestation period since then. The report was co-authored by myself and the chief government whip, the hon. member for Ottawa West--Nepean. Another major contributor to the report was the Secretary of State for Asia-Pacific, the hon. member for Winnipeg North--St. Paul. The Bloc Quebecois and the NDP also made representations. The Tories were not a party in that 35th parliament so they were not actually at the table. The report enjoyed all party support. It was later tabled at a procedure and house affairs committee and subsequently tabled in the House after receiving the unanimous support of the Standing Committee on Procedure and House Affairs.

I would like to comment on a couple of points from the report itself. In the introduction it talks about the need for the report:

The established procedures for handling supply in the House of Commons are based on two fundamental principles. If it is to continue with its activities, Government must have some assurance that its requests for funds be answered by certain fixed dates.

Nobody is debating that, and the government ensures that it has its money when it wants it and that it has it in bulk.

The other point is that parliament, on the other hand, must be assured reasonable opportunity to examine the requests before they are granted.

The report also talks about the need for parliament to hold government accountable. This ranks among the principal roles that parliament is expected to perform in our democratic system.

That leads to the motion to adopt the report. Some 51 different recommendations contained in the report would ensure that parliament does exercise its effective control and supervision over the estimates before they are approved and the government gets the money it wants.

Unfortunately, over the last many years, we have allowed parliament's authority to be eroded. We have allowed our authority over the public purse to be transferred to the government, and this Chamber unfortunately becomes little more than a debating Chamber and a rubber stamp on the $170 billion that the government now spends each and every year.

Let me quote from the auditor general just last week before the public accounts committee. She said:

I am concerned that Parliament has only limited means of holding the government to account.

Our current auditor general is very concerned. Her predecessor is also on the record as having said, in his December 2000 report:

It is discouraging to see new incidents of waste and mismanagement crop up hydra-like after older ones have been discovered and dispatched.

He also said:

All government spending should have Parliament's sanction.

Obviously it does not at this point in time.

He also said:

The principle that Parliament is the custodian of the public purse has been part of Canada's constitutional landscape since the country's inception.

All these issues are being eroded.

In 1977 the auditor general of that time, Mr. J.J. MacDonell, warned “Parliament is losing control of the public purse”.

Parliament should never lose control of the public purse. That is why we are here. The institution of parliament is to ensure that we as parliamentarians, the elected representatives of the people, hold the government to account on how it spends $170 billion each and every year.

That is an awful lot of money and an awful lot of taxes. Canadians deserve to know that someone is watching them and watching them closely to ensure value for money.

Everyday we hear of situations where money is wasted and spent needlessly. Money is spent even without parliamentary approval. The $1.3 billion heating rebate to Canadians was spent by the government immediately prior to an election. It spent the money without parliament's approval. It came to parliament after the fact and sought our approval once the cheques had been issued. That cannot occur.

As members know, I published a waste report that highlighted some stupid and incompetent ways in which the government spends money through grants and contributions. I remember $15,000 being given to someone who was hanging dead animals in trees in Manitoba. How can we tolerate that type of thing? Yet it goes on.

Therefore, this institution has a responsibility to ensure that if these things are not eliminated that they are at least kept to a minimum.

I will provide a short history lesson. Prior to the days of the Magna Carta, the monarch was completely and totally an autocratic dictator. If he wanted to lop someone's head off, the person's head was lopped off. People said that could not be done unless they were consulted first, and from the Magna Carta, which consisted of the aristocracy in Britain and England, said that the people had to be consulted first, developed the House of Commons, which is where we are today, and the Magna Carta stated that government cannot act without the authority of this place.

The monarch had the privy council, which consisted of his advisors. The monarch got smart one day and decided that if he picked an advisor from within the House of Commons, someone with stature, then perhaps the advice would be listened to by the commoners in the House of Commons. Lo and behold, that evolved and now we have the Prime Minister and the cabinet sitting in the front row. Therefore, the monarch by proxy has crept right back into this place and is controlling the House.

Unfortunately the backbenchers on that side of the House think of themselves as being part of government and the members on this side think of themselves as wanting to become government one day. We forget that the role of this institution on both sides is to hold the government accountable. That has been failing for years and is now, in my opinion, in a pretty sad state of affairs.

What are we talking about in the business of supply? First , as I said, there was $170 billion of spending but, unbeknownst to the vast majority of Canadians, the House of Commons only votes on about $50 billion worth of expenditures. The rest, $120 billion, is spent without any reference to this place. People may ask how that can be. It is because of the way we pass legislation. It is usually included in a clause that grants a new program money forever and ever. It never comes back to this place for a vote, for approval, for debate or for discussion.

I am saying that the statutory spending, where the authority is included in legislation, shall be subject to a program review. Once every five to ten years it should be subject to appropriate evaluation asking four simple questions. First, do we still want this program to continue and, if so, what is the public policy that this program is designed to address in society? If it is not addressing any problem in society one may ask why we even have the program.

First, let us articulate the public policy the program is designed to address. Once we know that, we can ask the second question. How well is it addressing the problem it is designed to address? If it has shortcomings or failures we fix them.

We then ask the third question. Is it doing this efficiently? In this complex and changing world,we also ask the question: Can the same results be achieved in a different or better way?

If those four simple questions were applied to all programs it would save enormous amounts of money because it would ensure accountability, drive up efficiency and drive up focus in ensuring that the programs delivered to Canadians were what Canadians actually wanted. There are $120 billion worth of expenditures and we could literally save billions.

We are also talking about tax expenditures. In 1992, for example, the auditor general cited as an estimate that in 1985 tax expenditures amounted to $28 billion annually.

What is a tax expenditure? A tax expenditure is a deduction on our income tax returns, for example, for those who contribute to an RRSP. It never shows up as revenue to the Government of Canada. It does not show up as an expense on behalf of the Government of Canada. It is just a deduction on the income tax return. Therefore, we feel that we should evaluate the value of these tax expenditures to ensure that they are worthwhile. Are they just freebies given by the government to get more votes? There can be some confusion there. I am concerned only with ensuring that a tax expenditure provides value for money, and through a registered retirement deduction we of course want people to save for their retirement. We want to give people an incentive to save for their retirement. Therefore we give them a tax deduction, but let us analyze it to see that the benefits equal the returns.

We also talk about loan guarantees. Loan guarantees show up in the public estimates as one single solitary dollar behind which may be a contingent liability for hundreds of millions of dollars. We will never know until the loan or guarantee goes sour and the government comes back to parliament and asks for hundreds of millions of dollars. By then it is too late. The ship has sunk and the money is gone. We need to evaluate these loan guarantees at the time they are being given to see if they are prudent and wise and are part of enhancing this country's prosperity. If so, no problem, but we need to have the right in the House to examine loan guarantees.

We also talk about net versus gross expenditure. Now that the government is into a significant amount of cost recovery and it only shows the net, parliament needs to have the whole story presented to it where we can see the gross expenditures, net recovery and how much the government is paying. Again, the auditor general stated in his October 2000 report, at page 17-15, that the result of net versus gross expenditure is misleading financial disclosure.

Then we have crown corporations, again something that is never subject to scrutiny by this place. In 1999-2000 crown corporations cost us almost $4 billion, yet that is never debated in this place. Many of these crown corporations are not even required to report to this place. I think it is time that crown corporations are subject to the scrutiny of parliament like everything else.

In addition to non-statutory spending, which we in the House somewhat review although that could certainly be improved, we are talking about statutory spending, crown corporations, tax expenditures and loan guarantees. Those are five areas that the House needs to be involved with and to scrutinize and check before granting approval and before the granting of supply for the government. We are not saying to cut it off. We are just saying to let us ask the appropriate questions of accountability, and if we are satisfied that the spending is legitimate and will benefit Canadians, then I am quite sure the House would not deny it. However, at this point in time the review is either perfunctory or non-existent. That has to change.

That is why the motion calls for the adoption of a new committee called the estimates committee, which would mirror the public accounts committee. The public accounts committee is a retrospective examination of problems, mismanagement and so on. We want an estimates committee that would look forward in analyzing and helping other committees do their job, to build the expertise and the knowledge, to hold the government accountable by asking the appropriate questions, by bringing in the appropriate deputy ministers and ministers and asking where they will be spending the money and whether it is appropriate.

This could be done by developing the issue of program evaluation. The president of the treasury board took a small step down that road when she introduced a new audit and evaluation policy last year. I would encourage her to think about moving that agenda even further and faster because it would ensure that Canadians get value for their money.

I could speak at length, but the notion we have to bring back to parliament is that the authority it has allowed to slip away must be recognized and it must be returned. How else will we ensure that Canadians right across the land get value for their money? The notion of accountability is fundamental to efficiency, honesty, integrity and everything else that is good in the world. When people are not accountable they run off the rails. Anything can happen. We see dictators around the world who have no accountability. They have slaughter, bankruptcy, fraud and corruption; they have everything.

What prevents these things from happening is having a government that is accountable, that has to live by the rule of law and not by whim. It is then that we get good government, and I want good government for Canadians.

I started by saying that the co-authors of the report were the chief government whip, the secretary of state and other members of the House and myself. I was not chairman of the public accounts committee at that time but I have been for the last few years. The report then came through the procedure and House affairs committee where it enjoyed all party support. There was unanimous support, Mr. Speaker. Therefore I would ask, because I am sure you will find it, that you seek unanimous consent to approve the motion.

Business of SupplyPrivate Members' Business

11:20 a.m.

The Acting Speaker (Mr. Bélair)

Is there unanimous consent?

Business of SupplyPrivate Members' Business

11:20 a.m.

Some hon. members


Business of SupplyPrivate Members' Business

11:20 a.m.

Some hon. members


Business of SupplyPrivate Members' Business

11:20 a.m.


Odina Desrochers Bloc Lotbinière—L'Érable, QC

Mr. Speaker, I am pleased today to speak to the motion by my colleague for St. Albert, the present chair of the Standing Committee on Public Accounts, of which I have been a member for the past year, within the second mandate entrusted to me by the people of Lotbinière-L'Érable.

I have had numerous opportunities to comment on auditor general reports, in particular those by Mr. Denis Desautels, who left that position last spring.

On many occasions, Mr. Desautels criticized the behaviour of the present government, and in particular the accounting system used by the Minister of Finance, who has often been faulted for his lack of accuracy in his budget statements to this very House of Commons since his appointment in the fall of 1993.

Last March, in his document “Reflections on a Decade of Serving Parliament”, Mr. Desautels described his experiences as auditor general, concluding that the power of elected representatives over budget choices and budget monitoring had decreased considerably. He voiced serious reservations concerning the creation of various crown corporations or agencies to replace existing departments.

Indirectly, the creation of these new government organizations prevented him from doing his job properly, given the administrative restrictions included in the statutes and regulations of those organizations.

I would like to draw to your attention the following comments by Mr. Desautels, first of all on the accountability of crown corporations:

I encourage Parliament to be more active in calling Crown corporations to account for their performance, their effectiveness in fulfilling their mandates, and the ongoing relevance of their mandates

In connection with the matter of control and accountability, he continues by saying:

As government moves more and more to delivery of services by arm's-length entities, it is essential that it do so with provisions for sound control and accountability. I urge it to draw on the successful accountability and control framework for Crown corporations and similarly establish new alternative service delivery and governance arrangements—many of which are now operating without an adequate regime of accountability and control.

Mr. Desautels' concern about the creation of crown corporations or agencies in place of departments is clearly reflected in the following comment:

Further, when the federal government reorganizes, it can create other problems. In 1997 the government established the Canadian Food Inspection Agency as a separate employer, merging parts of Agriculture and Agri-Food Canada, Health Canada and Fisheries and Oceans.

These three departments transferred over 4,500 employees to the new Agency and expenditures of about $330 million a year. The Agency was granted certain freedoms to manage its finances, human resources and contracting, in return for improving accountability through a corporate plan that included objectives, performance expectations and an annual report on its actual achievements. After three years, the Agency still is not providing a clear and complete picture of its performance to allow Parliament and others to judge how well it has carried out its role.

As regards the new Canada Customs and Revenue Agency, Mr. Desautels expected more concrete results, this time:

In creating the new Canada Customs and Revenue Agency, the stated goal again was to improve services to Canadians. Eligible taxpayers wanted their child tax credits returned faster, importers wanted faster clearance of goods at the border, and corporate taxpayers wanted audits to be expeditious. While the structure set up to manage the new Agency appears sound, its first performance report is not due until later this year.

This report has yet to be published.

The former auditor general also commented that the government must ensure good management of its operations and support its ministers in this regard. Once again, I quote Mr. Desautels:

The federal government does not have a head office like those of corporations; our system of government makes Cabinet ministers individually accountable for many of the government's activities and collectively responsible for many important decisions. Nevertheless, to be efficient the government must co-ordinate the management of its operations and help departments improve their management practices.

Mr. Desautels spoke as well of his concern about the transparency of crown corporations and their finances. I conclude with the final remarks of the auditor general. On the need for transparency, he said:

Special examinations, agency performance reports, and the annual financial report by the Minister of Finance could all be used better to open up the operations of government to Canadians.

I took the time to cite the main themes of the report marking the departure of Mr. Desautels, because the motion being debated today relates to the comments made by the former auditor general. In the context of this motion, we are also addressing the report entitled “Completing the Circle of Control”, a report tabled by the Standing Committee on Procedure and House Affairs, which proposes a solution for consolidating follow-up of the estimates by each of the standing committees of the House of Commons.

In its introduction, the report alleges that, according to a number of witnesses, departments and officials often consider appearances before the a committee to discuss spending to be a real trial. Sometimes members seem unaware of the efforts made by the departments to provide their services, despite cuts, or of the difficulty of the decisions to be made when plans and priorities are being set.

Oftentimes, in committees, witnesses and experts debate broad policy thrusts, passing quickly over the whole matter of estimates follow-up. The report is clear in this regard in pointing out that, since 1968, the standing committees of the House have examined the estimates. This is the most efficient way to put government requests for funds under the detailed scrutiny required. However, it has been clearly established that, in recent years, the standing committees have devoted little effort to this aspect of their work.

Let us come back now to the recommendations in the report by the Standing Committee on Procedure and House Affairs. The committee given the task of analyzing this situation undertook the task with three objectives, namely to increase individual member participation in the working involved in budget forecasts and supply, to increase the House's ability to demand an accounting from the government and to better examine the government's estimates.

For, with the way things are organized at the moment, the estimates of each department and agency are sent automatically to the standing committee involved. Although it is very logical, this approach, as indicated in the document under debate today, has had very disappointing results. Therefore, a new committee must be set up with very specific objectives and terms of reference, as indicated in the document we are considering today, to be called the standing committee on the estimates.

This new committee would have the mandate to examine the estimates and supply review process and to report to the House on at least an annual basis on the operation and improvement of the process; to provide, upon request, advice and support to standing committees engaged in the review of the estimates; to review certain estimates and proposed expenditures on a program basis when more than one department or agency in responsible for delivery, with the agreement and support of the appropriate standing committees; to review the mechanisms used by crown corporations to report to parliament and to its committees on their annual projected expenditures; to coordinate its activities with those of the Standing Committee on Finance and the Standing Committee on Public Accounts to avoid overlap and duplication; and to sit jointly with these committees to discuss common issues.

I will elaborate on several of these recommendations. Since time is limited, I will give another example of the importance of this committee. This standing committee on the estimates would make recommendations so that a maximum of 5% of the amount of the credits for each of the estimates could be reallocated. If the government rejects these recommendations, it should justify its attitude right here in the House.

I feel that this report and its conclusion to establish a standing committee on the estimates would be a step forward to improve democracy in this parliament. This is why my party supports this motion.

Business of SupplyPrivate Members' Business

11:30 a.m.

Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I am pleased to have an opportunity to add to this debate, I hope in all humility, on the motion brought forward by the hon. member for St. Albert. I commend him for bringing the motion forward. I have the utmost support for what he is attempting to do. He has been a long advocate for greater fiscal responsibility in the House and in the country. The fiscal thistle that he is, as Chair of the Standing Committee on Public Accounts, reflects his natural proclivity in this area.

I have an initial problem with debating the motion to concur in a report that was first presented to the House of Commons in the 35th parliament. We are now in the 37th parliament. The original motion that was brought forward was transported back to the agenda of the 36th parliament which refused to deal with it. That is hardly what the new Minister of Justice so often refers to as “in timely fashion”.

Few members now in the House were members of that original committee that wrote the report. Fewer still had an opportunity to hear evidence and, dare I say, even fewer have taken the trouble to seek out the report and read the evidence.

These objections could have been overcome if this motion would cause the government and the House to exert greater control over the scrutiny of spending. Sadly, this is not the case.

The search for better ways to examine the estimates and the scrutiny of public spending, as well as the performance of the bureaucracy, is hardly new. Regrettably, over the past four decades the House has not properly discharged its fundamental constitutional duty to properly examine government spending plans.

What is worse, we have willingly surrendered the procedural and constitutional tools needed by the House to examine the rightful influence over ministers and departments and government. In return for the supine attitude of members of parliament gaining predictable summer adjournments and the government getting unfettered access to the dollars and borrowed dollars of Canadians, the blunt reality is that members of the House of Commons are not willing to do the hard and complex work of leading estimates, becoming familiar with the overall activities of departments and then taking the time to demand answers to their questions or solutions to their grievances. The government caucus as well is only too willing to shut down any examination that makes it uncomfortable.

Look at the sad record of the government and the House, for we are all responsible for this shame. Departmental estimates of the multi-billion dollar annual expenditures routinely get less than 90 minutes of soft speeches in committees before the Liberals close the proceedings. Some departments do not even get that. Members of the House all know that the rules and the calendar will automatically approve the estimates.

The government thinks it is being accountable by making the minister available for a single meeting for an hour. We all accept this, tugging at our forelocks, pleased as punch to be in such august company for an hour. Yet we have the power to demand their attendance and to demand that they answer questions in full. We have the power to do the tough work that needs to be done. However, we act like mendicants, waiting for a crumb to fall from the cabinet table.

What is even more tragic is the Liberal backbenchers have been so pummelled and cowed into submission by the cabinet and the whip, they fail to realize that the estimates process is the only time when they can get ministers on the public record to sort out the problems of their constituents and to demonstrate to the Prime Minister that they know as much or more in the department as does the minister.

There are some members who are the exception to that and I commend them. They are few and their efforts are far between. I will be the first to admit that there are some members on the backbench that know a heck of a lot more about how the public should have its money spent responsibly than some of the ministers.

This means that year in and year out the annual expenditures of the Government of Canada, this year in excess of $165 billion, receive less attention than that afforded to the smallest town council in any of our constituencies.

We were reminded earlier this year by the Speaker's ruling that this government passed this year's main estimates in a way that is inconsistent with the standing orders of the House. The government trampled on the rights of all members of the House, and the majority of the members on the government side think that this is just fine. They wanted their vacations, they voted themselves a pay increase and moved on. That is not good enough.

We are not acting as prudent stewards of the public purse. This has been the case throughout the explosive inflationary spending history that has been created and the obscene debt load that is now borne by the country.

The current Prime Minister and the Minister of Finance during the Trudeau era liked to denigrate the Mulroney administration's financial record, but let us be intellectually honest.

When the Conservatives came to power in 1984, they inherited a $38 billion deficit and skyrocketing debt. Moreover, the Conservatives then went about putting in place a fiscal plan during extremely difficult economic times that resulted, in the very least, in efforts to control and bring down the deficit and that happened. The much hated GST tax was to be cancelled when this government came into office but the government has continued to pour money into the public purse which has allowed us to create these surpluses.

Arguably, we do not hear the Minister of Finance and Prime Minister crowing about the surplus with great aplomb now that they realize there is a deficit in things like our military, in our internal security and in many of our social programs. The surplus does not seem quite as rosy as it did a short six months ago. Yet, this all came at a huge cost to the Conservatives of the day who were willing to spend political capital as a way to accomplish greater fiscal responsibility in government.

The finance minister of the day, whose political biological clock is ticking quite loudly, has again been very silent when it comes to how that surplus should be handled today.

There is a deeper and even more dangerous consequence to surrendering the purse strings. The House of Commons has castrated its ability to demand answers from the government of the day. We cannot hold up spending, so we cannot demand and get answers to tough questions. Since we no longer hold ministers to public account, it is easier for the Prime Minister and those in his immediate circle, the PMO and the PCO dictatorship, to seize the reins of government.

Benevolent dictators are still dictators. We need a new Magna Carta. Until the House takes back the power of the purse, there will be no checks and balances on the new King Johns of the 21st century or peut-être roi Jean. All of us should be alarmed by the accretion of power in the office of the presidential prime minister. Congress counterbalances American presidents. There is no counterweight to the presidential prime minister when the House has predetermined that he shall have unlimited access to the treasury. Our principal instrument of parliamentary power, the right to deny supply and thereby to set into train the dismissal of the administration, is now in ruins so long as the House neglects the business of supply. It is for this reason that I am unable to support this motion.

Around 1994 the committee looked at the business of supply. In typical Liberal fashion, it concluded that something needed to be done and it wrapped itself in the language of fiscal responsibility and then did what this government has done so many times. It did a U-turn. It did an Olympian-style back flip.

Instead of looking for ways to save dollars or restrain spending, the government invented a new way to spend money. In recommendation 14 it states that committees of the House should be able to reallocate approximately 5% of monies within an estimate. That sounds innocuous does it not? In principle, it violates the doctrine of the ministerial responsibility and the spending initiative of the crown. Parliament does not govern. We have the right to probe and discomfort those who do, but when we attempt to run the government, we undermine the foundations of our authority and force the removal of a minister or a government.

We cannot hold a government responsible for decisions when we attempt to join them in making basic governmental decisions. Ministers and governments are responsible to the House. If they are not acting in accord with the wishes of the majority of the House, the House can force their removal. They ought not to be able to take the 5% buy-off route proposed by this report.

Ministers should not be kept in office under a system of putting in the fix in the House of Commons. Under this system, a recalcitrant minister could remain in office and the House would re-jig an estimate to meet the wishes of the House. The dynamic tension at the root of the power of the purse is compromised by this proposal.

What would be the real effect? Members of parliament are by nature spenders. This recommendation would claim for private members a new privilege, what the American politician, John Randolf called “That most delicious of all privileges; spending other people's money”.

Calvin Coolidge is reported as having observed “Nothing is easier than spending the public money. It does not appear to belong to anyone and the temptation is overwhelming to bestow it on somebody”.

In conclusion, I urge the House to put parliament first and to get serious about real scrutiny of estimates. That means taking away artificial deadlines and making ministers appear in committees of the House. It means unpleasant confrontations and it means we will need to be parliamentarians rather than social workers.

Business of SupplyPrivate Members' Business

11:40 a.m.


Ovid Jackson Liberal Bruce—Grey—Owen Sound, ON

Mr. Speaker, it is a pleasure to speak to the private member's business put forth by my colleague from St. Albert with regard to adopting the report on the business of supply.

I am reminded of people who get up nowadays to watch the 10 o'clock news. If we watch the news at fixed times, events unfold. We have a thing called real time and everyone knows that if we want real time news we go to CNN.

In the world today events unfold and there is technology and knowledge, yet the House and a lot of politicians fudge things. They make the way we address spending and the way we do business very political.

I will make a small point with regard to the ability of all citizens to monitor the government quickly and reliably. The government should have a transparent way of talking to people. To get the people's approval it should show them charts and explain the realities of what it is trying to do. That is done, as the member for St. Albert should know, by putting everything on the Internet where everyone can see it.

The previous speaker had some good ideas. He said the minister should appear before committee. There is nothing wrong with doing that at any time.

The member for St. Albert and his committee did some great work. The government was not sitting on its hands. It responded a number of times. In 1994 it tabled plans and priorities in the House. In 1996 the treasury board came up with performance objectives, which helped a bit. In 1997 House leaders got together and formed the modernization committee. Its work is ongoing and its recommendations are being worked on.

The member for St. Albert mentioned that the president of the treasury board in the year 2000 had a policies and evaluation report and a better method of accounting to parliament. Part of the recommendation is that we have some fundamental principles in the House. Through the act of 1867 the member is asking that the confidence convention on supply be reduced.

What are the implications of this request? It is probably a matter of debate. I do not have a lot of time today to discuss the pros and cons. However the current system functions well once we apply the initial reason the gentlemen quite rightfully put that in the act of 1867. It probably would have required a constitutional amendment and constitutional amendments are problematic, to say the least.

They are asking that they be empowered to increase or reallocate funds. We were elected as a government to do exactly that. We were elected to make sure we table the estimates, and we have done so.

The people elected our government based on a platform. In the platform are clearly stated priorities and objectives we want to accomplish. We were elected on that and we are accountable to that. We are not only accountable to the electorate but at the grassroots we have fireside chats with Canadians on a regular basis. The policies are fed back to the ministers who must account to the grassroots for how the policies are followed.

The events of the modernization committee have overtaken the recommendation. The member for Pictou--Antigonish--Guysborough alluded to it. He said this was in the parliament of 1993, and we are now into 2001. We have a whole lot of new players in the House and we understand how these things are done.

I was parliamentary secretary to the president of the treasury board. I was there when the program was reviewed. I know all those lines and am one of the few who knows exactly where the money should be spent. I have gone to the Senate for the estimates so I understand something about the dynamics of spending.

Business of SupplyPrivate Members' Business

11:45 a.m.

An hon. member

Will you support it?

Business of SupplyPrivate Members' Business

11:45 a.m.


Ovid Jackson Liberal Bruce—Grey—Owen Sound, ON

No, I will not support the initiative because it would take us backward in time. There are recommendations in it that are quite well documented. As the member for St. Albert said, many members have contributed to it. In one way or another we have tried to adapt and modernize it. Things done at the Treasury Board in the spring are tabled here in the fall so that parliament can be shown a results based analysis of what is happening on the files.

There are opportunities in the House for members to ask questions. However in a lot of ways these things are complex and require the auditor general to probe into them. I wonder if hon. members recall when the auditor general talked about military overspending. It was a boondoggle, according to my friend opposite.

A missile that cost quite a lot of money may be fired and not quite deploy itself. Should the military keep such a piece of equipment in its arsenal, attribute a number to it and never fire it, then get into a confrontation where it is fired and does not work? Is that a better scenario, where a lot of military people would probably be killed because a weapon does not fire?

Sometimes the opposition calls things boondoggles which are not boondoggles. Certain issues catch the eye of the electorate and the opposition talks a lot about them. However people make mistakes. We are not perfect. We always need oversight in what we do. We need to make sure we are accountable.

As far as I am concerned accountability rests with all of us. We must make sure we work with our colleagues on committees, that bureaucrats and ministers of the crown come to committees to talk about their plans, and that these things are posted on the Internet.

We need total transparency. Our methods of obtaining contracts, who we hire and all these things should be totally transparent. We should use all our scrutiny, oversight, accountability and efficiency to make the country better. We must stop getting into political games over how the government operates and spends money.

I cannot support the motion. As I have said before, it is not in keeping with the current situation. Current events have overcome the initial intent of the motion and it has lost its way somewhere in the system.

Business of SupplyPrivate Members' Business

11:50 a.m.

Canadian Alliance

Betty Hinton Canadian Alliance Kamloops, Thompson And Highland Valleys, BC

Mr. Speaker, it is no secret that I am new to the House and have had a lot of learning to do. Perhaps it is a benefit in this case because I do not consider anything the House has done to date as sacred and not able to be changed.

The initiative makes perfect sense to me. We are asking for transparency and accountability. I believe that is what the people of Canada want. Four billion dollars which is not accounted for goes to crown corporations in Canada. That makes absolutely no sense to me or to any other Canadian.

My background is in business. I have always had to be accountable. I have tried my best during the years to make sure I was fair. That is what Canada needs as well. It needs us to be fair to the Canadian people.

Government does not generate income. That is no secret. The income the government spends comes out of taxpayer dollars. It comes out of my pocket, the pockets of members and the pockets of every Canadian. Things must change, and this initiative would be a good way to start.

I had the good sense to marry an accountant, so I have not needed to do a lot of the book work that goes along with day to day things. However when it came to the office of MP that all had to change.

Probably the most interesting experience for me so far was attending an estimates meeting. I did not realize there was such a limited amount of time and so few opportunities to ask questions. I found it difficult to comprehend all the intricacies of the budget because I was not able to ask questions. The initiative would go a long way toward clearing up these things.

Anyone in my caucus will tell the House I do not follow the party line on issues I feel strongly about, so this is not about party politics or being partisan. It is about common sense. It makes perfect sense to me and to every Canadian that we should think about the way we spend Canadian tax dollars.

We are not doing that. We are spending $120 billion without any voice in the House. As members we represent people from across Canada. We have all been elected whether we sit on the opposition side of the House or the government side. We all have an obligation to make certain that money is spent properly.

I found it encouraging that both the House whip for the government and the Secretary of State for Asia-Pacific supported the initiative at the committee level. That is encouraging because it tells me this is not about partisan politics. It is about common sense and a better way to do things. We need to see the big picture in terms of where we are going, but we also need to be careful about how we proceed.

I have heard references today to the Internet. The Internet is a wonderful new tool that is available to some Canadians, though not all. The difficulty with the Internet is that while we are able to read information presented on it we do not have an explanation of it or an opportunity to ask questions.

We are talking about money here. We have come into a time when the world has turned itself upside down. We have many difficult problems to face. There are security risks we must take care of. There is a potential for a decline in revenue due to what is happening. I cannot think of a better time to take a strong and sober look at the way we do business in the House. This is important to us and we must do it.

We review every five years. There will be people in the House who will say the five year review is covered by elections. That is not quite the case. The Canadian people who fund the House can choose the person who comes here to represent them, but they do not have an opportunity or a voice to say how the money is spent. I do not see anything wrong with being accountable and transparent in our actions, especially when we are using money that comes from the pockets of Canadian taxpayers.

As I said earlier, nothing that goes on in the House is sacrosanct. We need to look at any way we can that might improve the way the House does business.

The most disappointing part for me as a new member of parliament is that if a good idea comes in front of the House, party politics quash it. When I summed it up to my children when I was talking to them about my new role, I said that when I hear a good idea I do not care where it comes from. If it makes sense I will support it.

Sometimes the attitude in the House can be summed up very easily: my dad is bigger than your dad. That is not what this is about. This is about looking after every person in Canada. It is not partisan party politics. It has to be common sense. Any time we have an opportunity as politicians to endorse accountability or transparency why would we not do so?

The reputation of politics in Canada has been tarnished. People have very little faith in their political representatives whether at the municipal, provincial or federal level.

Why? It is because we spend people's money without consulting them. We need to have an opportunity to take a good hard look at every dime we spend, stop thinking of it as found money and think of it as hard earned dollars. People are going without something in order to pay for that. If they are going to go without something in their own families where they work to earn their money and we have control over how it is spent, we had better spend it very carefully.

I will support the motion, not because it comes from my colleague the hon. member for St. Albert, but because it makes sense. I hope the House takes a different view of what is in front of it today and realizes that there was unanimous consent for it to go forward. It gives us an opportunity to ask those necessary questions and to make informed decisions.

I hope members of the House will join me today in supporting the motion. It may not be perfect, as my other colleague mentioned, but it is a pretty good first step and it is better than where we are today.

Business of SupplyPrivate Members' Business

October 1st, 2001 / 11:55 a.m.


Alan Tonks Liberal York South—Weston, ON

Mr. Speaker, I appreciate the chance to speak to the motion which calls upon the government to accept the recommendations contained in the House procedures committee report dealing with a review of the estimates. It is particularly gratifying since the review of the estimates is a key function of parliament.

However, as members know, finding an effective way of doing this often has proven to be a thorny issue for parliamentarians. It involves two vital principles that are difficult to reconcile, namely the need for government to have its request for funds dealt with by specific dates, thus allowing for the efficient administrative operation of the state, and the need for members to examine these requests in sufficient detail to ensure that taxpayer money is being spent wisely.

As parliamentarians our goal must be to balance these interests and to provide for adequate efficiency and oversight. The recommendations contained in the report are but one example of proposals tabled in the House aimed at resolving this issue.

I acknowledge the work of members of the House who have examined the issue. However simply rubber stamping all the recommendations as the motion suggests does not recognize the complexity and importance of the review process. It requires that we take a thoughtful approach to the issue.

We need to approach with some caution the report recommendation which calls for the establishment of an estimates committee charged with reviewing all estimates, particularly since existing committees have already been doing this work. According to the report such a system would allow for better review. Members would be able to devote themselves more fully to important functions and they would acquire a greater understanding of the supply process.

While it is a very appealing prospect, we know the devil is often in the details. It is not clear how this would be achieved. One way might be to ask some members to serve on more than one committee. However such an approach clearly has its problems. It would mean asking members who already are stretched to the limit participating in debates, attending caucus meetings, serving on committees and taking care of constituent needs to take on yet another responsibility.

Another idea might be to assign fewer members to existing standing committees in order to find the members needed. This also has its problems. It would mean depriving existing committees of the people needed to properly conduct their work.

How many times have we heard that we should be strengthening our committee structure? Having one committee consider estimates instead of letting all members review them could result in our losing the input and insights of parliamentarians who have indepth knowledge of individual departments. Such a situation would damage our ability to fulfill our responsibilities.

It is impossible to assess a department's spending estimates without first having a good idea of its performance, goals, priorities and knowledge which a number of members have acquired as a result of many years of experience. We need to recognize that a number of other benefits flow from the current system under which estimates are reviewed by the House and by committees charged with specific policy areas.

For example, it would encourage members to see the bigger picture. The current situation allows members to be able to connect the individual questions of budget with the overall policy issues involved.

While there is much good in our current estimate approach all of us agree there is room for improvement. That is why the House modernization committee made a number of recommendations aimed at increasing the role of the House and reviewing government spending plans.

Among them was a proposal that the House consider two sets of estimates each year. This would allow all members to continue to review estimates, provide a high profile televised reminder of the role that members have in granting funds to the government, and we all know how much we like that, and permit the House to benefit from the input of members with indepth knowledge of specific policy areas.

The adoption of this recommendation in the House would go a long way to improving how parliamentarians deal with the business of supply. Rather than pushing willy-nilly into improving these proposals we should allow ourselves to benefit from the new estimates review process which we have adopted.

Only then would we be able to do the best possible job of evaluating if further changes were warranted. If providing efficient government while at the same time ensuring proper accountability and saving taxpayer money is our goal, we have already gone a long way toward improving that process.

I will not be supporting the motion. Nevertheless I remain committed to working with all members of the House on these important issues, especially at the committee level. It is only by working together that we can find the right balance between promoting efficient government with efficient government procedures and holding departments accountable for the wise use of taxpayer money.

Business of SupplyPrivate Members' Business


The Acting Speaker (Mr. Bélair)

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.

The House resumed from September 28 consideration of the motion that Bill C-32, an act to implement the Free Trade Agreement between the Government of Canada and the Government of the Republic of Costa Rica, be read the second time and referred to a committee.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:05 p.m.

Canadian Alliance

James Lunney Canadian Alliance Nanaimo—Alberni, BC

Mr. Speaker, the bill that we are to discuss at this time is Bill C-32, free trade between Canada and Costa Rica, a bill that involves a large number of areas of interest. It would provide improvements in market access for over 90% of Canada's dutiable agrifood exports to Costa Rica and would provide overall for immediate elimination of tariffs on 194 of Costa Rica's 653 dutiable agrifood product categories.

An extensive list of products would be involved. Export interests in Canada involve agricultural interests such as chickpeas, canary seed, barley flour, canola seed, maple syrup, wine and whiskey in the immediate tariff elimination category. There is interest in the frozen french fry market and certain dried beans and dried peas in the seven year phase out category. Third, it would involve flour, canola oil, margarine, honey, breakfast cereals and certain dried beans and so on.

The bill certainly would offer some opportunities for Canada but one of our concerns is that there is a very significant trade imbalance between Canada and Costa Rica. Currently Canada imports about $186 million worth of products from Costa Rica compared to only about $86 million worth that Costa Rica receives from Canada. That is about a $100 million trade imbalance.

We recognize that free trade will be a give and take scenario. It always is. However the concerns from our standpoint have to do with the sugar industry in particular and the effect this would have on sugar in Canada. Canada currently has one of the most accessible sugar markets in the world. On refined sugar, we have about 8% duty. The Canadian Alliance promotes free trade and joint elimination of tariffs with our trading partners, but in this respect the bill would impact unfairly on Canada's sugar industry, particularly if it becomes a benchmark for other free trade of the Americas negotiations.

We have one of the most open sugar markets in the world, with an open tariff on raw sugar at zero and a refined sugar tariff at only about 8%. Canada produces almost enough refined sugar for its domestic needs and does so efficiently, as witnessed by our low tariff on refined sugar. U.S. and Latin American tariffs on sugar range from 50% to 160%.

The Canadian domestic sugar industry employs about 2,000 Canadians. It is directly responsible for full time employment for about 1,500 Canadians in refining operations as well as 500 beet growers and numerous seasonal workers.

There have already been extensive changes in the sugar industry. In the last number of years in Canada, the total sugar beet acreage, for instance, dropped from 56,000 acres in 1996 to about 33,000 acres in 1997 and tonnage dropped from about one million tonnes to about 650,000 tonnes. These raw beets are harvested and stored in fields. They are trucked to the factory where they are stockpiled outdoors. They are evaluated for their content, cleaned, sliced and pulped.

The industry has undergone extensive downsizing and reorganizing. The Canadian cane sugar refining and sugar beet processing industries experienced significant corporation consolidation and plant rationalization in the last 20 years. For instance, in 1981 there were five companies operating seven plants across Canada, including two beet processors. Today the industry has evolved into two corporate entities that operate five plants. Of these, only one processes beets. Cane plants are located in Vancouver, Toronto, Saint John and Montreal, port cities largely, for convenience of receiving the raw materials.

There is only one single beet plant, located in Taber, Alberta. Rationalization included the closure of the Winnipeg sugar beet processing plant in 1996 and it appears that the Saint John cane refinery may be shutting down.

I remember when I was growing up in Manitoba that Manitoba sugar beet growing and sugar processing was one of the industries we were aware of in our own community, but the industry has already seen quite a significant downturn. Our concern with this bill is that we are seeing a dropping of Canadian tariffs much more quickly than our neighbouring countries are. There have to be some lessons for us in what has happened in our agricultural sector where Canadian farms saw subsidies withdrawn much more quickly than American farms did. Other competing countries such as those in the EU have left our farm communities high and dry and in many cases struggling for existence.

Our concern is that if this bill as it stands were to become a template for other countries, particularly the other sugar producing countries in Central America, it could become a problem. We understand that currently Costa Rica does not refine sugar and that raw sugar imports are not a problem, but if it should get into sugar refining or if this should become a template for other countries it could become a real problem in sugar imports.

In regard to winners and losers we are concerned for jobs in the agricultural communities. If these tariffs are eliminated as quickly as it appears they would be, the jobs of 2,000 workers and spinoff jobs for thousands of others in the agricultural community could be affected. Of course there is an asset there and there would be a plus for sugar users, largely our big consumers in the cookie, bakery and jam industries, and those who use large quantities such as the soft drink and beverage producers.

However we are concerned about win-win solutions. If we pull down these subsidies or our own tariffs more quickly than other countries do, then we will sabotage our own producers. We have seen a lot of problems coming in where the winners are on one side of the country and the losers are on the other. Frankly what has come to be known as western alienation is a concern to us in this party because we believe in a unified Canada.

Canada is big country with a lot of interests represented. I suppose it is like a big family with 13 children, the 10 provinces and 3 territories. However so often we see favoritism in regard to just some of the members of this family. I remember when I was growing up in Winnipeg that we saw it occur with the Air Canada overhaul base. It was hauled out of Winnipeg and went to Montreal, along with hundreds of high tech jobs. I remember the impact that had on the city when I was only a teenager.

There were others. I remember the instance of Bristol Aerospace Ltd. when Canada's aerospace industry was getting going. Bristol put in a very competitive bid, but it all went to the east, to Montreal. Later, when the Canadarm bid came up, Bristol Aerospace had a very good opportunity but again was turned down in favour of concentrating the aerospace industry in one centre in the east. A little later, just a few years ago, the CF-18 maintenance contract was slated for Winnipeg but got pulled out and sent to the east.

If one side of the family gets favoured repeatedly I do not know how we can expect to keep harmony in the family or keep it functional. Right now in my riding in the softwood lumber industry we have hundreds of workers out and idle because of the current crisis. When people in my riding see what is going on with Bombardier, such as the Canadian government providing big subsidies to Bombardier to produce regional aircraft and giving low interest loans even to American firms to allow Bombardier to supply them with aircraft, they wonder why it is the federal government cannot come up with funds to help out with the bonding issue to keep our mill workers employed, who are idle at present. We see the same thing occurring with farm prices because of drought. Farmers are in need right now and looking for help. They look to the government for some leadership in this area.

While our party is in favour of free trade, we are concerned about tariffs coming down in a manner that exposes our own industry to harm because they are brought down in an unreasonable, quick manner. We are opposed to the sugar components of this bill which would expose our industry to losses.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:15 p.m.


Pierre Paquette Bloc Joliette, QC

Mr. Speaker, it is with great pleasure that I rise to take part in this debate on Bill-32, an act to implement the free trade agreement between the Government of Canada and the Government of the Republic of Costa Rica.

Today's debate will be an opportunity to continue the debate first begun this spring and last winter concerning the kind of free trade agreement we want to have, bearing in mind that we are engaged in negotiations for a free trade area of the Americas scheduled to end in 2005. This agreement must be viewed in the light of this negotiation process.

Obviously, we cannot disagree in principle with a free trade agreement with Costa Rica. In this case, opening up markets gives all the countries, Canada, Quebec and Costa Rica, an opportunity to improve trade and increase wealth. Since Costa Rica is a developing country, a southern country, and has a right to the development of trade with a rich nation such as Canada, it can only benefit. We think that it is in the interest of all trade partners for the ground rules from a trade point of view to be known and respected.

The interesting thing about the case of Costa Rica is that this very small country managed to use the rules of the World Trade Organization to make the American giant see reason when it did not want to let Costa Rican textiles in. Costa Rica filed a complaint. A WTO panel ruled in its favour. The United States agreed to open its market to Costa Rican textiles, not because it was Costa Rica that was asking but because it was the WTO.

Trading nations throughout the world therefore have an interest in principle in seeing that the rules are as clear as possible. It is because we agree in principle that we are going to vote in favour of Bill C-32 at second reading.

That having been said, our final position is far from certain, because we have very serious reservations, particularly with respect to the issue of investment and the anticipated effects of this agreement on the refined sugar industry in Quebec and in Canada. The preceding speaker mentioned this, and I will be coming back to the topic of the very significant risks of this free trade agreement with Costa Rica for such sectors as the Lantic Sugar refinery in Montreal, which was mentioned by the member for Hochelaga--Maisonneuve last week.

If no changes are made to those two aspects of the agreement we will, as I said, be forced to reassess our position at third reading.

Of course, we will be told that it is going to be very difficult to backtrack on an agreement the Canadian government has already signed with Costa Rica. That is the government's fault, because if the process had been more transparent, if parliamentarians have been involved, if civil society had been consulted as the Minister for International Trade had made a commitment to do, we would not be in this situation. We are, therefore, refusing to be held prisoner by a done deal and we are not going to hand over a blank cheque to the Minister of International Trade, or to the Liberal government, because this precedent with Costa Rica, as in the other cases, will enable this government to continue negotiation process with regard to the free trade area of the Americas with the same lack of transparency, not involving parliamentarians and not consulting civil society.

It is time the government understood that democracy and transparency are now essential conditions for the successful signing of any free trade agreement, whether with Costa Rica or the with regard to the free trade area of the Americas. Enough is enough. The Liberal government is responsible for getting us into this situation, and now it is being forced to face up to its responsibilities and to get back to our Costa Rican partners on two aspects, namely investment protection and the predictable effects of the agreement on the refined sugar industry.

I thought that message had been understood at the Quebec City summit. With the experience of the failed multilateral agreement on investment at Seattle and the difficulties at the Quebec City summit, I thought that it had become clear for democratic governments, particularly the Government of Canada, which brags about being a model in this respect, that the era of negotiations behind closed doors was over.

Costa Rica is not a good example because we never heard about it and there were no consultations, even though, as I said earlier, the Minister for International Trade told us back in January that he would consult industry officials and civil society. But he did not do it.

I also remind the House that in the winter and spring the Bloc Quebecois moved two motions to democratize the negotiation process on the free trade area of the Americas, but both of these motions were rejected by the Liberal majority.

In one instance, we unanimously adopted a proposal to implement a continuous process to consult parliamentarians and civil society, but nothing was done by this government; nothing was done by the Minister for International Trade.

During the debate on the free trade agreement with Costa Rica, the government will have to finally open its eyes.

This bill should also be put in the context of not only the negotiations on the free trade area of the Americas, but also in the context of the negotiations at the World Trade Organization.

If we miss this opportunity to have a substantive debate on the transparency and democratization of the negotiation process, chances are that, following some agreement at the World Trade Organization, the Liberal government will once again put us before a fait accompli.

The same goes for the ongoing negotiations with four Central American countries, namely Guatemala, Nicaragua, Honduras and El Salvador, in that we have absolutely no idea of what is going on with these negotiations. It is the same thing with the free trade area of the Americas.

As far as we are concerned, it is imperative that, in this agreement, we take into account the two themes or issues that I mentioned earlier.

The first one is the investment issue. The Minister for International Trade is playing with words. In the background papers that were distributed to us, we are told that there is no new commitment on investments and services, which is true.

However, this may suggest to some opponents that there is nothing in this agreement that resembles chapter XI of NAFTA on the protection of investments, which is false. There are no new commitments on investments, because these commitments were made in 1998, when the investment protection incentive agreement was signed.

This agreement, which the Costa Rica—Canada free trade agreement refers to specifically, contains provisions similar to those found in chapter 11 of NAFTA. These provisions, according to a number of people, present considerable potential problems. This was evidenced recently by the proceedings UPS launched against Canada Post and the Government of Canada.

So, the free trade agreement with Costa Rica refers to this agreement for the promotion and protection of investments, and I will read article XII of March 18, 1998, which provides that:

Any dispute between one Contracting Party and an investor of the other Contracting Party, relating to a claim by the investor that a measure taken or not taken by the former Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach, settled amicably between them.

The following article provides:

If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted by the investor to arbitration in accordance with paragraph (4).

Arbitration between a private party and a government is the prerogative of chapter 11, a chapter that was promised us. However, the Minister for International Trade had said that he did not want it in the final agreement of the free trade agreement of the Americas.

I note that the following appears on the federal government's website:

Canada is not advocating the replication of NAFTA investor-state rules in the FTAA and has not supported the proposals made so far by other FTAA countries to include such a type of dispute settlement mechanism.

As we can see, there is a blatant contradiction, since, once again, we see in the free trade agreement with Costa Rica provisions referring to another agreement—it is true—but they are the ones from chapter 11, which the government says it does not want to include in the final free trade area of the Americas agreement.

We might have expected that the federal government, the Minister for International Trade, would go back to the 1998 agreement to strike out the provisions and have disputes between countries, which are provided for in all the agreements, including that of the WTO, even those involving private business, settled by governments, by countries and not by private interests.

It is therefore essential to review this if the agreement is to be acceptable. Even though, as I mentioned, we support free trade in theory, we must ensure that it benefits the people of the Americas, in this case, the people of Costa Rica, Canada, and Quebec, rather than private corporations that would take precedence over the right of sovereign states to make decisions based on the interests of their citizens.

We have been told, and I think this is scandalous, that this agreement poses no threat, since there is very little, if any, Costa Rican investment in Canada. That is not the point. The point is whether we, as Canadians and Quebecers, believe that trade agreements must take into consideration the development of all populations, rather than defending the interests of our own capitalists. I believe, as a matter of principle, that this parliament must ensure that this situation is rectified.

In the case of sugar, which is the second aspect, and I believe that my colleague from Hochelaga--Maisonneuve outlined the difficulty, we gave Costa Rica better access to the Canadian market than what we would receive under this agreement, with respect to the Costa Rican sugar market. Obviously, we will be told that Costa Rica does not produce refined sugar, only a small amount of raw sugar. They export very little to Canada.

But that is not the point. Once again, we are setting a precedent, whereby in negotiations with the other four countries of Central America, including Guatemala, which is a very large producer--combined, these four countries export one and a half times the total industry production in Canada and Quebec--we will open up our markets to this raw sugar, and possibly refined sugar, since it will cost relatively little for Guatemalans to develop a sugar refining industry. We will be opening up our markets without them reciprocating.

Let us not kid ourselves. The market for refined sugar from Canada or Quebec will not be Guatemala, Honduras, El Salvador or Costa Rica, but the United States. The problem is that the Americans have a protectionist attitude and policy when it comes to refined sugar. As long as they refuse to open their markets, any opening in Canada's market for refined sugar from other countries will be a concession without an equivalent advantage.

We think it very important that this part of the agreement be dropped, not because we are protectionists like the Americans, but because we really believe in free trade. And because we do, we want this part of the free trade agreement between Canada and Costa Rica to be dropped and the Canadian government to propose multilateral liberalization of the refined sugar market, including, of course, the American market, as part of free trade area of the Americas negotiations.

In this context, our industry will have an opportunity to develop, to be competitive, and to hang on to existing jobs, as well as create more. As the House is probably aware, our sugar industry, especially the Lantic Sugar refinery in Montreal, has worked hard to become an international player. In this industry, we operate according to the rules of free trade, because the raw sugar refined in Canada is bought at market prices and not subsidized in any way.

If we truly believe in free trade, if we truly believe that free trade should serve the public and not just the private sector, it seems to me that we have a golden opportunity during the coming weeks to do something about it, to use free trade with Costa Rica as proof in the free trade negotiations that Canada wants to play a leadership role. The opportunity is there.

I think that government members were somewhat deluded about the real impact of the issues surrounding this free trade agreement. We are not at all sure that we are going to support this bill at third reading. Work will be done in committee. My colleagues and I will have an opportunity to present a number of amendments to correct the situation, in the hope that parliamentarians will match actions to words and that the free trade agreement with Costa Rica will truly serve Canadians, Quebecers and Costa Ricans.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:30 p.m.


Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Mr. Speaker, I find it interesting that we are debating a bill concerning Costa Rica. It reminds me of an example given us by Mr. Parizeau, an excellent teacher, on the positive aspect of free trade. He said the fact that small countries such as Costa Rica could win issues against very large countries, as they had in the past, had to be played up.

The member for Joliette has shown us fairly clearly that there is another side to the whole issue of globalization. If things are not done sufficiently openly, we could easily end up with agreements such as the MAI, the multilateral agreement on investment. Had this agreement been approved, governments would have been made dependent on multinationals, dependent in terms of capital. The remarks we heard this morning are relevant.

I would like this to be a lesson to us. Other agreements are currently being negotiated. The free trade area of the Americas is under negotiation. When I was taking part in the demonstrations in Quebec City in support of those who want to give globalization a human face, the question heard everywhere was “Will you as parliamentarians have the tools to ensure that what gets signed in the end is acceptable?”

I have a question for the member for Joliette. Should we not draw on the lesson of the negotiations with Costa Rica to see what will be done differently and which of our allies in society can help us attain satisfactory results in future negotiations, positive results and free trade agreements that promote equality among peoples and a better distribution of wealth, and not the reverse.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:30 p.m.


Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I thank my colleague, the hon. member for Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques for his question. I feel it is totally appropriate, even central, to this debate.

On the one hand, we are told that this agreement is not, in the end, all that serious because it repeats the terms of the agreement with Chile, more or less, which is inspired by NAFTA. It gets passed just like that, while they are fully aware that this is just one more agreement that is not seen as satisfactory by increasing numbers of people in the Americas, or in any of the democratic world.

In Quebec and in Canada, more and more people no longer accept the way governments negotiate these trade agreements with impact on all aspects of our lives, economic—and on that we are all in agreement, I think—social, cultural , or environmental.

Either we act as if there were no problem, and pass this implementing legislation because we have nothing against Costa Rica, which is true—in fact our feelings toward it are far from negative—or we take advantage of this opportunity, as my colleague has said, to hold an indepth debate, not just on this agreement but on the entire process leading up to free trade agreements, be they the one with Costa Rica or future agreements with Guatemala, Honduras, El Salvador or within the framework of the free trade area of the Americas.

For me, there is an extremely important principle at stake, one that has moreover been referred to by the French Prime Minister, Lionel Jospin. Mr. Parizeau has used it as well, often, but I believe it merits some thought. Within the framework of trade agreements, whether continental or international, countries may delegate part of their sovereignty in order to ensure proper administration, to ensure that an agreement is properly implemented and respected.

But in no case must the sovereignty of states, democratic states in particular, be handed over to private interests.

As far as Chapter XI of NAFTA is concerned, that is what is happening; the same goes for the agreement between the Government of Canada and the Government of Costa Rica for the promotion and protection of investments.

I believe we have an opportunity here to regroup, to ensure not only that this agreement is beneficial and gets signed, but also that the coming agreements with the four other Central American countries and with all the other countries of the Americas, meet our wishes that they serve the interests of the general population, not monied interests.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:35 p.m.


Robert Lanctôt Bloc Châteauguay, QC

Mr. Speaker, I congratulate the hon. member for Joliette for his very eloquent speech. However, there is one thing that I would like the public to hear again. My colleague has often explained to us chapter 11 of NAFTA and its impact on the negotiations on the FTAA.

The process is even more advanced in the case of this treaty with Costa Rica. I wonder if, for the benefit of our fellow citizens who are listening to us at home, the hon. member could clearly explain again the impact of this chapter 11 in the treaty, since it seems that they are trying to include it in every free trade agreement, whether it is the FTAA or with Costa Rica.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:35 p.m.


Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I thank the hon. member for Châteauguay for his question. There can never be too many opportunities to explain the shift that be triggered by some aspects of NAFTA's chapter 11.

We all agree in this House that foreign investments are entitled to some form of protection. However, there must not be an imbalance, as was the case with chapter 11, between the rights of businesses and the ability of the states to create the collective tools that the public wants them to have.

Under NAFTA, this was not fully duplicated in the Costa Rica--Canada investment protection and incentive agreement, two things present a problem. The first one, which is found in the agreement with Costa Rica, is that a private company can go directly to a court created under the agreement to take legal action against a government because of measures that it deems harmful to its profitability. This is the first problem and, in my opinion, a fundamental one.

The second problem with chapter 11 of NAFTA is the definition of expropriation, which is much too broad, as exemplified by the legal proceedings undertaken by UPS against the Canada Post Corporation, where UPS claims that Canada Post is guilty of unfair competition because it uses its infrastructures to provide courier services. We will get back to this later on.

I will wrap up my remarks by commenting on the matter of disputes. For a private company to sue a government directly, as part of an agreement which creates a tribunal, is most unusual. Apart from NAFTA, to my knowledge there is, no other agreement with such provisions.

In the case of the World Trade Organization, we have a perfect example involving Bombardier and Embraer in Brazil. Bombardier feels that it is suffering because of policies that allow the Brazilian government to subsidize Embraer's exports, especially those to the United States. Under no WTO agreement is Bombardier going to sue the Brazilian government directly. The company is represented by the Canadian government, which has filed a complaint with the World Trade Organization. The Brazilian government, on behalf of Embraer, is responding to this complaint. Governments speak for private companies. These are the sorts of mechanisms that we should have in NAFTA and in any free trade agreements we sign.

The impact of this chapter was underestimated. In an article that appeared in Le Devoir last May, Mr. Parizeau, who was in fact a supporter of the agreement, and no one would question his support for the North American Free Trade Agreement, admitted that he had underestimated the impact of chapter 11.

In conclusion, I know to his credit this summer, ministers for international trade from the three countries, Canada, the United States and Mexico, presented documents clarifying interpretation of this chapter. I examined these documents. In my opinion, they do not go far enough and the problem still remains.

The debate on the free trade agreement between Canada and Costa Rica is an opportunity to further consider this issue and to come up with solutions which serve the interests of Canadians and of Quebecers.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:40 p.m.


Wendy Lill NDP Dartmouth, NS

Mr. Speaker, I am delighted to add my voice to today's debate on Bill C-32.

I will begin by reiterating my party's friendship with Costa Rica as one of our main trading partners. It is truly inspirational how Costa Rica has prospered as one of the oldest democracies on this side of the Atlantic, surviving in one of the most troubled regions of our hemisphere without a standing army.

We live in troubled times and I look to countries like Costa Rica as examples of how we can live in a more peaceful world. I also express my party's fundamental support for global trade rules based on fairness for the people of the world and which support fair labour standards, the preservation and promotion of cultural diversity and support of a sustainable global environment.

If we take the impact of the bill and ultimately the FTAA, we see in the sugar industry, for example, the differences between free trade and fair trade. The bill does nothing to promote better wages for Costa Rican sugar workers so that they can get access to our markets, and believe me, Canadians love sugar.

The agreement does nothing to ensure that sugar producers in Costa Rica meet the same environmental standards as Canadian sugar companies. To suggest that this is somehow a level playing field, speaks to the narrow vision of the drafters of the agreement. Their vision only sees money and balance sheets. Their vision cannot see the economies that the moneys flow into, the workers producing the goods or services, the internationally recognized beautiful cloud forests of Costa Rica that need protection or the families displaced by the implementation of the agreement.

What we oppose and what the hundreds of thousands of protesters who have been demonstrating in Vancouver, Seattle and Quebec City oppose are special rules embedded in trade agreements that give special rights to corporations trying to run over the rights of people and their elected governments.

I have said before in the House that I support trade. I support the jobs that come with trade. What I do not support is the set of global rules that say that people and their governments do not matter, only corporations matter.

That is the premise of NAFTA and its chapter 11. That was the premise of the MAI and that is the spirit of the bill when we remember that Canada has already signed special investment agreements with Costa Rica that effectively supplement Bill C-32.

Let us be clear about the government's trade agenda: support chapter 11 and expand NAFTA throughout the hemisphere, ultimately through NAFTA but, in the meantime, through little agreements such as this one and the one with Chile.

I would love to suggest that this is a government plan but I really think it is a corporate plan. I say that partly based on the erratic behaviour that the government has shown in the matter.

We saw the Prime Minister running in 1993 guaranteeing that NAFTA would not be adopted unless he got changes to protect Canada. He then adopted NAFTA with only a few cosmetic changes. The protests started, first at APEC, then Seattle, then Quebec City and then Genoa.

We had a glimmer of reprieve when the minister was before the committee a while back and said that investor rights would not move into the WTO, into GATS or into FTAA. However once again we saw corporate Canada send the message and the Prime Minister crack the whip to drive the minister back in line.

It is hard to know which party in parliament is being less democratic, the government or the official opposition. Both seem to want to hide public discussion and dissent behind closed doors and tall fences.

Last spring I was in Quebec City where 50,000 people marched into the streets to protest the undemocratic process being used to make decisions that would affect human beings around the world. The most common complaint of the hundreds with whom I spoke was the inclusion and existence of investor rights outlined in chapter 11, which, according to a leak on the eve of the summit, were to be included and strengthened in the FTAA. The bill would extend the regime to our relations with Costa Rica.

I was there as a member of parliament. It was clear that the place to be to find out what was going on in the hearts and minds of perhaps millions of Canadians was in Quebec City. The obvious place for the text of the free trade area of the Americas agreement to be discussed would have been in the House, as brought forward by our government, and in public forums across the country. Instead the text of the agreement was not made public until far too late for real comment. We as the elected representatives were outside the fence along with everyone else while corporate Canada lobbied for their interests behind the comfort of the police line.

Chapter 11 of NAFTA is about denying democratic culture. It is about destroying the democratic spirit of those outside the fence as resolutely as the police were committed to protecting the mass of concrete steel and barbed wire.

Critics of mine and the critics of other protesters have tried to say that New Democrats are anti-trade but that simply is not true. We are pro-trade. We are pro-community. We want our voices to count through our democratically elected governments. We do not want past mistakes of trade, specifically the recognition of investor's rights as being equal to the rights of government, to be preserved and expanded. We believe that business, money and the wealthy should not have special legal rights. Special legal rights in this context means that corporations get something that citizens do not, but NAFTA's chapter 11 says that the investors' rights are more important than citizens' rights.

I would not consider these rights special rights if a citizen could not go to a NAFTA tribunal and say “I need protection for my children, my way of life, my natural environment, my ability to have more than one point of view on the TV or in my newspaper, my income, my community or my democracy”. However there is no way an individual can do this either as an individual or through a class action. Only corporations can.

It is a right in NAFTA under chapter 11 and it is a proposed right in the FTAA under section 15. Under chapter 11 a foreign company can sue a democratically elected government because the government chooses to operate state enterprises or allow for monopolies that it deems desirable for the public good. Under chapter 11, the company can sue a democratically elected government because through its actions on behalf of its citizens it has denied that company the opportunity to profit in a specific sector of the economy.

We can imagine how our history would have evolved if this had been true in the past: no railways, no Canadian broadcasters, no Petro-Canada, no national airlines, no post office. This is not to mention the real threat which is to our public hospitals, our schools, our environmental controls and eventually our democracies.

Bill C-32 and the Canada-Costa Rica free trade agreement follow the NAFTA and the FTAA models of free trade that the NDP has consistently opposed because they put corporate rights ahead of human rights, the environment and democracy. To point this out, I will use an example currently before a NAFTA tribunal. UPS is suing Canada because it opposes Canada Post couriering mail. UPS is saying that because Canada Post is a crown corporation, which it is, and that it accepts parcels for delivery by the equivalent of a courier service, which it does, then UPS is losing potential profit and our taxpayers should cough up a chunk of tax money and give it to UPS, which we may have to do. It could win this one.

Under NAFTA, we no longer have the right to have crown corporations that are efficient, that use new technologies and that update their business plans to deliver a service which we as parliamentarians say Canadians want and need.

I do not think we have ever debated this in the House but it is not rocket science to realize that we are a big country with a small population that is very spread out. Having efficient, reliable and affordable services to send each other mail, parcels and goods makes a lot of sense to me, but apparently we can only do this if we first compensate UPS.

This case shows how we are stuck with agreements with ineffective exemptions that never allow public enterprises to change or modernize or to survive. If we lose our courier services at the post office, how long will it be until we lose the whole thing? How long will we wait before we are before a tribunal defending our hospitals, our schools, our public broadcasters or our military procurement?

These agreements and the right of investors to sue for perceived loss of profits because of changes in public services mean that the public sector will eventually be extinct. I disagree with this. Investors should have no special rights.

Our democracy is our most special public right. Under our charter, four of the five sections deal with guaranteeing these rights. However I am frightened that unless we change our tune on chapter 11 and these types of agreements such as the one we are debating today, these rights will be traded away for the sake of guaranteed profits for transnational corporations.

I believe that my constituents and all Canadians deserve better so I will be opposing this bill at second reading.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

12:50 p.m.

Canadian Alliance

Gary Lunn Canadian Alliance Saanich—Gulf Islands, BC

Mr. Speaker, I am pleased to speak to Bill C-32, an act to implement the free trade agreement between the Government of Canada and the Government of the Republic of Costa Rica.

We have heard some interesting discussions this morning, most recently by one of the members of the New Democratic Party. I would like to put a few facts on the table as we hear a lot of the doom and gloom about the recent free trade agreements.

In the last decade or so, Canada has participated in a number of significant trade deals including the Free Trade Agreement in 1989, the North American Free Trade Agreement in 1994, the Canada-Chile Free Trade Agreement in 1997. More recently negotiations are well under way on the FTAA, the free trade area of the Americas, the goal being to bring 34 nations under a single trading area by the year 2005.

Let us look back at what the successes have been. Today, Canada and the U.S. enjoy $1.4 billion daily in trade between our two nations. There are over 200 million crossings a year between Canada and the United States. This is a huge benefit to Canadians as a result of the Free Trade Agreement. I acknowledge it is not perfect and I will get into a few of those areas, but today Canada enjoys an $18 billion trade surplus with the United States.

Trade agreements have been good for the Canadian economy, highlighting our competitiveness as a trading nation and strengthening Canada's national identity. Canada depends on free trade to promote economic growth, create jobs and sustain our standard of living. Trade generates over 40% of Canada's GDP. One in every four jobs in Canada is a direct result of these free trade agreements.

We have heard some concerns with respect to this latest free trade agreement with Costa Rica. I acknowledge that there are concerns on both sides, but by and large the benefits far outweigh the concerns. When NAFTA was being negotiated, similar concerns were being raised. People had concerns about various sectors, but by and large the Canadian economy has grown substantially. Again, Canada and the United States enjoy $1.4 billion of trade daily between our two countries.

Right now trade between Canada and Costa Rica is $269 million annually. By moving ahead with this free trade agreement I believe trade will grow and it will benefit Costa Ricans and Canadians.

Canada imports a number of goods from Costa Rica: fresh fruit, coffee, raw sugar, flowers, woven apparel, electrical machinery and preserved food. At the same time Canada exports paper, paperboard, fish, auto parts, plastics, wood, potatoes and wheat, among other things to Costa Rica. Our agricultural sector is looking for enhanced markets. There are opportunities.

One of the concerns on the Canadian side is that of sugar. The sugar refineries in Canada have raised concerns and I hear what they are saying. There are no sugar refineries in Costa Rica and only raw sugar is exported which our sugar refineries need. However, at the same time the Costa Ricans are worried about frozen potatoes, french fries. There are great opportunities for us there.

I am trying to make the point that there are always going to be concerns, as there were with NAFTA and other free trade agreements. However, at the end of the day Canadians have risen to the challenge. It has been great for our economy and great for producing jobs.

This free trade agreement would mean the elimination of Costa Rican tariffs on almost 94% of Canada's current agricultural and agrifood exports to Costa Rica. This means that our agricultural producers will get better access to these markets. The amount of $269 million annually is obviously not large but it is a base amount which can grow.

The reality is that our trading barriers, the economic borders between our nations, have been evaporating for years. We can look at what has been happening in Europe. It is becoming one of the most powerful trading blocs globally. It seems to have eliminated all of the economic borders and has come down to one trading bloc. That is what we are moving toward in the year 2005 with the free trade area of the Americas. This agreement is just one small part in the move in that direction. I think it is going to be good for Canada and Cost Rica.

Some members have raised issues about environmental and labour standards. It is important that we put all the facts on the table. Side agreements were negotiated which included two parallel accords, one on environmental co-operation and another on labour co-operation.

In the spring I was with the minister on a trip to Costa Rica for the final negotiations of the trade agreement. I had an opportunity to meet with some of the government members and the minister in Costa Rica on this issue. They were as concerned as we are about the environment and labour standards. I think this is a win-win situation for both sides.

An environmental side agreement will promote a strong, ongoing environmental partnership based on environmental commitments. The labour accord will provide a framework for dealing with labour issues in the context of trade agreements and demonstrates Canada's commitment to promote workers rights in the context of trade liberalization in the Americas.

It is no secret that there are issues regarding labour standards in Costa Rica. It is a developing nation. We should not be looking at this negatively. Canada has an opportunity to help improve Costa Rica's labour standards as it moves through this.

Our commitment to try and increase labour standards can help pave the way. We can be a model for two smaller nations population-wise because each has approximately 30 million people. We can demonstrate our impact on helping to bring up Costa Rica's labour standards.

I acknowledge the concerns of the sugar refineries in Canada. However, looking back to NAFTA and other free trade agreements we have signed, if every concern raised was enough to scuttle the deal or was enough to say stop, then we would get left behind.

The reality is that the Americas, Canada and North America are moving to a trading bloc. We have to lead the way. We want to be out in front. We want to ensure that we provide every Canadian with new opportunities. We want to ensure the opportunity for real permanent job growth. This is the way it is going to happen. Sitting back and taking a cautious approach is not going to help Canada. We need to be bold, to take risks and to move forward.

Industry will rise to the occasion. It will create real, meaningful, lasting jobs. We cannot sit back and wait for the government to create jobs. Those jobs are not permanent. That does not work. It gives people a false sense of security.

By and large although there are concerns on both sides, the positives far outweigh the concerns. The pros are there. It is going to set a model as we move forward in the negotiation of the free trade area of the Americas. That is happening between 34 nations, and both Costa Rica and Canada are a part of that.

Let us get out in front. Let us demonstrate that we can make this work. Let us increase that trade. Let us open up new markets for some of our agricultural producers who are looking for new markets. At the same time, as with our sugar refineries, let us try to deal with the challenges as they come forward.

As I said, right now Costa Rica does not refine sugar as it has no capacity to do so. It only exports raw sugar. There may be opportunities there for our sugar refineries to increase.

Again, we should be bold and move forward. The members of the Progressive Conservative Democratic Representative coalition will be supporting the bill.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

1 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, I would like to take this opportunity to point out some of the remarks that the very learned member for Saanich--Gulf Islands made with respect to free trade. He pointed out that the enormous amount of growth in our economy that principally has evolved from free trade and that we trade over $360 billion each year with the Americans. We have proven that trade actually can be very much a driver.

I would like to compliment the approach that the hon. member took in that there are always concerns about trade agreements. He commented that we could ratcheted some of the labour code issues up with emerging nations by dealing with a more developed nation like Canada. I also point out that we have had three provisions in those trade agreements on which we must maintain our sovereignty, those being environment, culture and our labour code.

What does the hon. member have to say about those other two additions that help us maintain our sovereignty with respect to the environment and culture, in addition to our labour codes?

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

1 p.m.

Canadian Alliance

Gary Lunn Canadian Alliance Saanich—Gulf Islands, BC

Mr. Speaker, that is correct. There have been side agreements with respect to labour and the environment. It will not only allow us to maintain our identity, our culture and protect our standards in these areas and expand on them, but it also gives us an opportunity to help Costa Rica if it has areas of concern. It can see what we are doing.

In my discussions with the minister in Costa Rica, I discovered the people were quite interested in learning about our standards. It is an evolving nation which is growing rapidly. It is not only for the betterment of our nation to maintain our standards, but it also helps to improve theirs, which I think is great for society.

Coming back to the member's earlier point about challenges. There is no illusion. Look at NAFTA and the softwood lumber mess. There is no place in the country where it hurts more than in my province. We have to work through that. I think we will. I am very confident that we will get through this, and hopefully very soon. However, we can work through it.

If we had scrapped the North American Free Trade Agreement back in 1994, we would not be sitting at $1 billion plus trade per day between our nations. There are 200 million crossings a year.

Yes, there are challenges as we go down this road and we need to rise to the occasion to deal with those. However, Canadians will be better off and so will the country.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

1:05 p.m.

Canadian Alliance

Gurmant Grewal Canadian Alliance Surrey Central, BC

Mr. Speaker, on behalf of the people of Surrey Central, I am pleased to participate in the debate on Bill C-32 regarding the proposed free trade agreement between Canada and Costa Rica.

The act tries to lay out the terms of a free trade agreement between two countries by gradually reducing trade barriers in goods and services. As we all know, free trade usually helps to raise the standard of living for both partners through increased competitiveness and lower prices. It can also do this if the agreement is balanced in its approach. If it is not, it will favour one partner more than the other. This is not the intention of free trade.

Taken alone, the bill may seem harmless, but if we look closer, the bill states that it would promote regional integration through an instrument that contributes to the establishment of the free trade area of the Americas (FTAA). Therefore, the bill is not just about Canada-Costa Rica free trade, but could be used as a model for a hemispheric free trade agreement.

We need to look at it very carefully. Canada already has a $100 million trade deficit with Costa Rica, so the relationship is already an unequal one. The bill would only make the situation worse.

One example of a sector where it favours Costa Rica over Canada is in the sugar industry. Sugar is currently refined from sugar cane and sugar beets. Sugar cane is grown in tropical areas, whereas sugar beets are grown in temperate regions, such as Canada and the United States.

Canada currently has three sugar refineries to process raw sugar. This is down from seven 20 years ago. While Canada has some of the world's most liberal rules regarding importing sugar, our tariffs on imported refined sugar are 8%, while we currently have no tariffs on raw sugar for processing in Canada.

In terms of exports, our only really viable market is to the United States which imposes strict quotas of 12,000 tonnes of sugar a year.

Other countries like Costa Rice hit us with very hefty tariffs when we export sugar to their countries. For example, Guatemala has a 160% tariff on sugar imports, whereas in Canada it is 8%.

There is a company in British Columbia called Rogers Sugar which stands to lose a great deal from this agreement. I invited its management to my office to tell me their side of the story. This 111 year old company supports the livelihood of 650 people, including 450 farmers, and produces 140,000 tonnes of sugar each year.

The House already heard the desperate shape that our farmers were in during the emergency debate on the agriculture industry last week.

Is it this government's intention to add insult to injury by taking away the livelihood of those farms and their families? What about the effects on communities such as Taber, Alberta where Rogers has its beet sugar refineries? What will happen to these communities?

This company currently injects close to $100 million into the Canadian economy through its operations in Vancouver and Taber, providing high quality employment to their employees, including 17 from my constituency of Surrey Central.

For companies such as Rogers, this agreement stifles the operation of market forces by giving Costa Rica more access to Canada than Canada gets to Costa Rica. So reciprocity is not fair.

Costa Rica does not currently use refined sugar, so there is no possible benefit to Canada on this score.

Trade agreements have to be negotiated fairly. The negotiations should be properly done effectively and efficiently for the benefit of Canada and Canadians. It should be a win-win situation over a period of time. An imbalanced approach cannot be used in negotiations.

I would say that this is not the only sector where this is true. One sector which is of great concern in British Columbia is the softwood lumber sector. We all know the fate of this industry. In this case, Canada is restricting trade to protect the domestic industry, not very effectively either I might add.

In the case of sugar, though, the government is signing an agreement which clearly benefits the other country more than us, and that is not fair. I thought CIDA was responsible for handing out foreign aid. I did not think that the international trade had similar intentions.

By not paying attention to the spirit of free trade agreements, our government is not providing our industries with a level playing field in bilateral trading relationships with Costa Rica.

As I mentioned before, this agreement does more than open the door for the exchange of goods and services with Costa Rica. It is a model for the whole FTAA framework and the rest of the world through the World Trade Organization.

Also, we must see that regional trade agreements, such as the FTAA, cannot conflict with our WTO agreements. That means we must provide the same benefits that we are providing Costa Rica to our trading partners. So then the agreement could be used as a lever for other countries to extract concessions from us in other sectors and other industries.

Free trade, when done right, leads to lower prices for consumers. However, free trade must also be fair trade. It must benefit both partners equally.

At the same time, at a time of economic uncertainty, we cannot afford to do anything which threatens jobs in Canada.

The people of British Columbia have already been hurt through the government's bungling of softwood lumber, tomato dumping in British Columbia, the mining industry, fisheries, tourism, the film industry and many others. We cannot let it do it to our sugar industry as well.

We owe it to the farmers and workers affected by these industries to oppose the bill and others like it. This will not be the last free trade bill that comes through the House. Markets work best where government intervenes the least. That is what a free market is.

When the government does intervene, it must try to promote fairness and look at the whole web of Canada's trade relations with other countries. We cannot afford to be too shortsighted about the issue. We must look at the bigger picture and its future implications. The bill sets a dangerous precedent so I must oppose it.

In conclusion, I would say that the elimination of the tariff on refined sugar imports from CA-4 countries would greatly enhance these countries' competitiveness in the Canadian market.

The cost of this to domestic producers could exceed $30 million Canadian in the short and medium term. The benefit to Canadian consumers would total between $9 million to $13 million Canadian.

The impact on the industrial end users and consumers and CA-4 producers and importers would depend ultimately on whether local producers concede market share or compete on price in the industrial market segment.

Also, given that the CA-4 producers would be able to supply the domestic market at a lower cost than the Canadian producers, the immediate removal of the tariff would result in an increase in competition in the local market.

Although we estimate that certain Canadian producers could compete with imported sugar on a cash cost basis, no industry is able to operate on this basis in the long term. However if the tariff were eliminated gradually, this would enable domestic producers to decide if and how they would respond to the new challenge and to implement their response accordingly.

In the longer term the FTAA will pose new and more complex challenges. In addition to opening up the Canadian market to imports of sugar from major sugar producing countries such as the United States and Mexico, both of whom have considerable logistical advantages in supplying Canada compared with the CA-4 countries and Brazil, which is an enormous and very low cost sugar producer, the FTAA would also increase the opportunities for industrial end users to relocate their production bases to other countries in the Americans.

This agreement does not have a balanced approach between Canada and Costa Rica. It is setting a precedent which would be dangerous for Canada and Canadians. Therefore I must oppose the bill.

Canada-Costa Rica Free Trade Agreement Implementation ActGovernment Orders

1:15 p.m.

The Deputy Speaker

Is the House ready for the question?