Debates of Oct. 4th, 2001

Softwood Lumber

[Pat O'Brien, Liberal, Parliamentary Secretary to the Minister for International Trade]

Mr. Chairman, I badly wish there were questions and comments because I have two or three very serious questions for the leader of the official opposition. I hope I will have an opportunity to take them up with him. Perhaps he will attend the trade subcommittee which will deal with these issues and we will have a chance for a fuller exchange there.

I am disappointed to hear the Leader of the Opposition reach into his bag of tricks and pull out the old regional fears of playing B.C. against Ontario and against the other provinces. The country deserves better at this time. The federal government cares about all regions of this country.

I would like to invite the Leader of the Opposition to come to Northern Ontario, to those communities which are very dependent on softwood lumber. I would like him to come with us to Quebec where he will realize that 25% of the softwood lumber exports come from the province of Quebec. B.C. is critical in this issue, but this is not just important to B.C. This is a national issue. It is important to all regions of Canada.

I hear hon. members opposite say of course, but they would not have drawn that conclusion from the partisan regionally divisive comments that we just sadly heard from the Leader of the Opposition. It really was regrettable.

The Leader of the Opposition is somehow very badly misinformed. He talks about non-partisan groups going to the United States. I participated in a non-partisan effort to go to the United States, Washington specifically, in June with colleagues from all parties of the House of Commons. I believe his party participated. It was certainly invited to participate. I understand the critic could not attend.

A second group went in July. I heard the critic say that he participated in that. I am glad he was there. Would he then inform his leader that the government has encouraged several non-partisan visits to the United States, efforts to build consensus and to look at the root causes.

The leader spoke about consumer groups that have appeared somehow magically in the U.S. and the business groups that support our position.

I would ask, Mr. Chairman, for a little indulgence from the other side. I did not once interrupt the leader of the opposition.

[The Chairman]

Order, please. Let us take a pause for a moment. I know sometimes when we get into a round of debate where we no longer have questions and comments we are not able to get some of that steam out of the air. Given the importance of the subject matter, with so many members here from both sides of the House to participate, and given the very limited time, I do not want to interrupt any more than absolutely necessary.

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

Mr. Chairman, the Leader of the Opposition says I incite them. They are easily incited.

I listened very carefully to the hon. member's comments. With all due respect, I just do not think he is correct in the statements that he made. Those statements need to be challenged by the government and they will be challenged.

This is the most serious trade dispute that exists bilaterally between our two nations. Hundreds of thousands of jobs are directly at stake. Some 300 Canadian communities from coast to coast to coast, including B.C., but not just in B.C., have 50% at least of their livelihood depending on the softwood lumber industry.

Of some 100 million jobs in all regions of Canada, including central Canada and B.C. and the Atlantic, one is six jobs of them indirectly or directly related to the softwood lumber industry.

What has the government done? It has repeatedly and consistently challenged the false accusations of the American industry and the American government that have been made about our softwood lumber industry. This is the fourth time that we face this challenge now from the United States. In the three previous cases these allegations were not substantiated.

The reality is this. This is an issue of U.S. protectionism and the fact that the Americans are very unhappy with the Canadian industry having gained a 34% market share in the United States. That is really what this is all about.

Through the efforts of the Canadian government, led by the Minister for International Trade, with the close co-operation of the Canadian embassy in Washington, we have for many months now been building alliances in the United States, exactly as the Leader of the Opposition suggests, belatedly. Action has been going on for a long time to recruit some 150 members of the U.S. congress who support our position to inform and work with major companies like Home Depot . They support our position to recruit consumer groups that understand that they could be paying up to $4,000 more on a new home. Why? To simply protect less competitive U.S. lumber operations.

Those efforts did not just come out of thin air. The Government of Canada has taken the lead in helping make sure that groundwork was done. The Leader of the Opposition put forward some good suggestions. It is just that they are late and they have already been going on for some time.

We have a good consensus of the industry in Canada, the provinces and territories, that what we want is free trade in softwood lumber.

As the minister pointed out, there was no sort of a willy-nilly decision that we just woke up and the softwood lumber agreement is over. There was a conscious decision after very wide consultations that this agreement would be allowed to run out. Why? Because what we desire is free trade in softwood lumber.

If the United States had not taken the action that it has taken, we would be in a situation where softwood lumber prevails. Unfortunately, the Americans again for the fourth time in 20 years have taken this protectionist action. Of course we have been and will continue to challenge that at every opportunity.

The Prime Minister has repeatedly raised this issue with President Bush, as I said. The Minister for International Trade has repeatedly raised the issue with Secretary Evans and with trade representative Zoellick. We are challenging these allegations of the United States at the WTO. We have requested a panel where five specific challenges will be launched about the American allegations.

We know that the United States congress is split on the issue. There are a few protectionist senators who are leading the charge against this and are now being mischievous, some sending letters to Canadian parliamentarians suggesting that we now self-impose a tax that will help them out of a situation that they know they will lose. They will lose this trade action again.

What is the unfortunate reality in this? My colleague, the Minister for International Trade, I and our government knows this very well. Unfortunately, this kind of a decision does not come really quickly. Unfortunately, there is pain to be borne unfairly by Canadian companies, producers and workers because the United States is not living up to what it claims to be, which is free traders.

Discussions went on in Toronto last week and are going on in Washington this week. Progress is being made to find the root causes of this so we can come to a solution outside of litigation. As long as those efforts are bearing fruit then they ought to proceed.

At the same time we are moving on several other fronts, whether it be ministers and government leaders talking to American leaders or whether it be Canadian officials taking the necessary steps for the WTO challenges.

The reality is that Canada is right in this issue. Our case has stood up every time it has been challenged and it will stand up again.

I applaud the Minister for International Trade for the wide consultation. A number of members on the other side of the House have indicated that there has been very wide consultation. That has continued and will continue. As long as there is a consensus in the industry for us to continue down this path then the government will continue to vigorously defend our interests in softwood lumber.

The solution really is free trade. It is not regionalism. It is not the unfortunate comments that I heard from the Leader of the Opposition to play B.C. against Ontario or Quebec. Those are not the sentiments that we need at this time. We need a united effort. The Canadian people will accept nothing else.

[Guy St-Julien, Liberal, Abitibi—Baie-James—Nunavik, QC]

Mr. Chairman, I rise today because it is not just that. All the political parties and provincial governments are getting involved.

I am first and foremost a former forestry worker in the Abitibi and the economy of the Abitibi—Témiscamingue region is largely based on lumber and mining.

As I said earlier, we too make the rounds of our vast regions. In Quebec's great Abitibi--Témiscamingue region, resolutions are being passed all over the place. People are getting involved.

On September 12, for instance, the Témiscamingue RCM proposed a resolution at a meeting where county councillors and mayors were present. The meeting was chaired by Philippe Barette, the mayor of Témiscamingue and reeve of the RCM.

These people say in their resolution, which they sent directly to the minister and to the federal government, that they are opposed to the imposition by the United States of countervailing duties on Canadian lumber. They ask that the government:

--energetically oppose the imposition of countervailing duties by the United States on Canadian lumber and ensure that resource regions are treated justly and fairly.

It is the same thing with the town of Senneterre. We see what is happening in resource and northern regions. It is important to say it and not just make fine speeches about what we do in the House of Commons. There are small municipalities that take the time to pass resolutions. I have one here from the town of Senneterre, a municipality administered by mayor Gérard Lafontaine and the councillors. They say:

Whereas the United States is unfairly invoking a sudden and massive increase in Canadian exports, and also subsidies to the industry to justify their action—

This an excerpt from a resolution passed on September 14. These are all resolutions that were adopted recently.

I want to go back to the case of Précibois in Barraute, a company that employs forestry workers. France Gagnon clearly indicated to the Quebec and Canadian governments that the value added sector must immediately be excluded from this trade war because it affects our forestry workers, either at the plant or in the bush.

Processing industries operate under unique conditions that were not taken into account by the United States. The decision made on September 4 by the United States trade department to impose countervailing duties of 19.3% on softwood lumber, based on our declared value rather than on first processing value, is contrary to American practice in previous disputes and will have serious consequences for our secondary producers and wholesalers in Canada. The Canadian government believes this decision is not based on any law nor any fact, and is urging the United States to cancel it.

One must read the papers. At present, people are afraid of retroactive measures. If, in the coming weeks or the coming months, a long term fixed rule is adopted, with one time countervailing duties applied retroactively for several months, during the summer, that will hurt, in the Abitibi and Quebec especially.

Nobody cuts wood on Wellington Street in Ottawa, or on Sainte-Catherine Street, in Montreal, or on Grande-Allée in Quebec City. That activity goes on in resource regions, especially if it is permanent. The Abitibi--Témiscamingue will be out of breath. I believe in Liberal minister's competence, I know he is working hard to get a victory for us and we will have that victory with the governments.

The government of Quebec decided to do everything it could to demonstrate, as it successfully did in 1991, that the forestry regime in Quebec does not in any way subsidize the softwood lumber industry. That is why Quebec is doing so well in its battle, with the help of every political party at the provincial and federal levels. However let me be clear on one thing. According to a study, referred to earlier, which was carried out in Quebec:

In Quebec, the price of timber stands on private lands is used as a benchmark to estimate the stumpage fees paid to the crown for trees taken out of a timber berth. The purpose of the study was to confirm the suitability and the legitimacy of this estimate in the context of free trade.

Consultants were asked to answer three basic questions: Are timber stands on Quebec private forests competitive? Are they representative of the world market for timber stands? And finally, are they properly assessed?

According to the study, the answer to all three questions was an unqualified yes. Therefore, the study confirms our claims and supports the answers we provided to the United States department of commerce last June.

I think it is important to stress that this recent study, which was very well done, confirms, clarifies and reinforces Quebec's position on this issue.

Under the current as well as the previous governments, Quebec has always been in favour of free trade, and we believe that we can benefit from easier access to the America market and still fully comply with the NAFTA and international trade rules.

The position, which is now supported by this study, is very clear: our timber market from private lands is competitive and representative. It is that market that determines fairly the level of stumpage fees for timber from public lands.

That means that free market rules are fully respected. We disagree with any measure that would limit trade, such as the introduction of quotas and countervailing duties, which would hurt Quebec's forest industry.

That is the most important thing. We must think about the industry, about workers, about families. Our forests are located mostly in our resource regions. I understand that there are certain disputes. I have to mention the James Bay situation. The James Bay Cree have vested rights in that area under the James Bay and Northern Quebec Agreement, and they defend those rights.

I hope that, one day, the Cree from James Bay will be able to sit with people from the forest industry to try to find a solution to the logging issue in the northern part of the James Bay area.

In closing, I must say that I trust the minister, to whom I referred earlier as the Liberal minister responsible for 2 x 4s. We will win this battle together, with the opposition parties and the government, and one day we will be able to refer to this Liberal minister as the minister responsible for 4 x 4s.

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

Mr. Chairman, I thank the hon. member of the Canadian Alliance for calling for this debate, and the Chair for allowing it this evening.

Softwood lumber is something we have been following closely for some months, because it requires constant attention.

For those in our audience who might not necessarily be very familiar with the issue, the American market for Canadian and Quebec softwood lumber is a very vital one for us.

The Americans have imposed a countervailing duty of 19.3% as the result of a preliminary decision by the American department of industry; this would be somewhat retroactive if maintained. The Bloc Quebecois has intervened on several occasions in order to seek massive support in the House for the return to free trade in softwood lumber. Why? Because softwood lumber producers in Quebec and in Canada have developed a highly competitive product capable of going for a better price in the U.S. market than many U.S. products. This is, moreover, acknowledged by U.S. consumers, who want to see quality lumber from Canada available in their country, because it would bring their house prices down.

We are fighting a major battle. It is vital we convince the Americans, at all levels, of the relevance of our position. I think that, in this regard, we must as members of the opposition serve as watchdog to ensure the government is not transforming the information and discussion sessions into negotiation sessions.

The Minister for International Trade has confirmed this was not the case. We accept his word and hope things continue this way. A lot of effort was put into winning the battle in the preceding months.

I myself went to Washington with a non-partisan delegation of members, including the member for Joliette and the member for Rimouski--Neigette-et-la Mitis. We went to meet American representatives. I met someone from Louisiana who thought Canadian softwood lumber competed with his softwood lumber production in Louisiana. We had a discussion and in the end he understood that the softwood lumber produced in Louisiana did not compete with that produced in Canada.

This sort of intervention, on a small scale, between individuals, means that today the Americans have a better understanding of the facts. There is still a way to go and we must make sure we carry on.

In that sense, the visit of the Bloc Quebecois leader in my riding in late August has shown that both producers and workers want to keep fighting until we reach our ultimate goal, to restore free trade.

Obviously there is a short term negative impact. For example, the price of lumber tends to drop in Canada. With a 19% tariff, we have oversupply on the Canadian market and that tends to put pressure on the price. Our producers will have to live with that. Also their benefits have dropped and ultimately jobs are lost.

Speaking of which, we will need to show solidarity if we are to stand fast to the end, until we get a final decision. One of the things we should do, and I urge the government to do it, is make sure that during that difficult period there is a special effort to diversify regional economies and to adjust the employment insurance plan.

The people who will be laid off a little sooner because there are fewer jobs in Quebec cutting, processing and shipping wood to the United States because of countervailing duties deserve a chance at EI benefits for a reasonable number of weeks.

For example, in all regions where forestry is a major industry, people could be allowed to qualify with 420 hours of work, rather than something higher if the rate of unemployment is not very high. There is therefore work to be done with respect to the EI plan.

Efforts could also be made to diversify forestry products. A particular effort is required in the next few years because, every time we export softwood lumber which has been processed, it is not affected by countervailing duties. This takes the pressure off and would give us an argument in our discussions with the Americans.

It is important that there be this kind of debate. It is important that we make it clear that we are behind the position Canada is now defending, provided that it defends it all the way.

The worst thing would be to return to an agreement like the one we had before, which expired on March 31.

We have come too far to go back to a position like that. Let us hope that there will be an outcome which sees the end of countervailing duties and that the Americans will also recognize that free trade is the way of the future.

The free trade agreement signed with the Americans concerned a number of areas. Why not respect it? It would be to everyone's benefit.

Talks are now underway. They are not negotiations but if they lead to a long term free trade solution, so much the better. That is what we must hope for.

Many people showed maturity in this area. The Quebec government mandated Pierre-Marc Johnson, a former Quebec premier, to ensure that the Quebec position was well championed. We also contributed to the study that my colleague from Abitibi--Baie-James--Nunavik referred to earlier, a very serious study, which showed that in fact Quebec was not giving any hidden subsidy to the softwood lumber industry, that we can compete on the North American market and that we are looking forward to an open market.

I hope that all of these positions, those adopted by Quebec, the other provinces and the federal government, bring us closer to a sustainable solution, a solution that will ensure that we will not have to deal with the present situation again in five or ten years.

Let us not forget that the five year agreement that came to an end on March 31 had a somewhat negative impact on productivity. American businesses took advantage of this period to catch up somewhat in terms of productivity, while the best would have won had the market remained fully open.

This is what we are prepared to live with on the competition level. We are ready to live with the Americans and the producers of North America. We believe we are able to take on the challenge and take our share of the market.

This is evidenced by the fact that, during the five years of the agreement allowing countervailing duties, those Canadian provinces that were not included had an advantage that I would describe as unfair in some respects.

If we could come back to full free trade, then there would be a level playing field. My riding is adjacent to the maritimes. In the last five or six years, exports have increased considerably throughout Canada, but particularly in the maritimes. Indeed, we had to predict the part of the duty that we had to make up for.

We must follow the situation very closely. Now that the international situation is stabilizing somewhat, that the terrible events of September 11, which we will never be able to put right, are behind us, we are trying to see if we can make up for the negative effects they have had on the economy.

In a region like mine, entire villages are economically dependent on the lumber industry. I am talking about villages that members do not necessarily know, small communities of 500, 1,000 or 1,500 in the Témiscouata region. I am also talking about small towns. All these communities depend on the lumber industry and we must find a satisfactory solution for their sake.

The workers who live in these communities that have achieved a good productivity level in co-operation with local industries deserve that we go to the end of the negotiation process. That is what I want. I want us to continue to apply pressure and to make compromises. Some interesting and promising meetings are going on right now and we want them to continue.

I was told that there was going to be other meetings in Vancouver and in Montreal. Let us give those meetings a chance to produce some interesting results. But let us not change our fundamental position. We want free trade again, not a compromise that would repeat the agreement that expired on March 31 of this year.

Right now, any tendency to soften our position would amount to recognizing our weakness and that would be unacceptable.

Let us continue to pursue this issue with the Americans and to argue our point, and we will find a solution. That solution will benefit both the lumber producers and the consumers who need that lumber to build houses and buildings throughout North America.

[Sarmite Bulte, Liberal, Parliamentary Secretary to the Minister of Canadian Heritage]

Madam Chairman, I am delighted to participate in the debate this afternoon. I am sure some of my colleagues will be wondering why a member of parliament from Parkdale--High Park, a Toronto urban riding, is interested in these issues because obviously I do not have any softwood lumber industries in my riding.

However I would like to advise my colleagues that as a lawyer who practised law for 18 years I have a very special interest in international trade law issues. I also had the opportunity to be a chair of the House Subcommittee on International Trade, Trade Disputes and Investments. I was a member of the committee that travelled across Canada a few years ago consulting Canadians from coast to coast on our position with respect to the WTO and where we should go from there. I must say that at that time, certainly in British Columbia but all across Canada, the issue of the softwood lumber agreement was prominent well before its expiry came up.

I would like to use my time to actually talk about the concrete steps that the Government of Canada is taking before the World Trade Organization to defend the rights of our softwood lumber industry and to guarantee the protection under law that it deserves.

While this is the fourth round of trade action taken by the U.S. industry in 20 years, the U.S. industry allegations do not merit a worthy response since they have not been sustained time and time again.

I would like to outline Canada's challenge to the five U.S. measures before the WTO in defence of our softwood industry and of one related measure that directly impacts on our lumber producers.

On August 9, 2001, the United States department of commerce made a preliminary determination that Canada's softwood lumber industry was subsidized by federal and provincial programs and furthermore, that our exports to the U.S. exceeded a 15% increase in exports to warrant a “massive importations” or critical circumstances determination.

Although these findings by the U.S. were only preliminary, they were made in a politically charged environment due to intensive lobbying by protectionist U.S. lumber interests. As a result, the U.S. department of commerce will impose a 19.3% duty on Canadian lumber exports to the United States.

To add insult to injury, as the Minister for International Trade stated earlier, the U.S. department of commerce will impose duties on our lumber, not only on what is first milled but also on its increased value when it enters the United States. In essence, the United States will reap duties on the higher remanufactured lumber rather than the so-called mill rate value. This is contrary to any previous decision we have ever seen before.

This decision follows an earlier preliminary determination by another United States body. The United States international trade commission found that although our industry is not injuring United States producers,our industry “may” injure U.S. producers in the future.

Although the U.S. allegations of subsidy have never been sustained in previous cases and our export monitoring data from Statistics Canada found that our exports from this year compared to a similar period last year increased by only 11.3% and not the 15% increase as the U.S. alleges, regrettably, the U.S. department of commerce is intent on finding against our industry, whatever the circumstances may be.

While these rulings have no basis in fact or law, we nonetheless must respond accordingly.

In response to the U.S. trade action, the Government of Canada has taken the following steps before the World Trade Organization.

Under the first measure, Canada requested that a WTO panel be established to hear our complaint that the U.S. treatment of our log exports restraints or controls is contrary to U.S. obligations under the subsidies and countervailing measures agreement, which is also known as the SCM.

As the Minister for International Trade noted at the beginning of this debate, the WTO panel in its final report on June 29 found that our export restraints do not provide a financial contribution and thus do not confer countervailable subsidies. This ruling is very positive for Canada and actually undermines the U.S. claims that log export controls confer subsidies in the current countervailing duty investigation.

Under the second measure before the WTO, Canada also requested a WTO panel to hear Canada's complaint that when the dispute settlement body has ruled that the U.S. anti-dumping or countervailing duty order is inconsistent with United States international obligations the U.S. must refund all duties collected. Those members who were in the House earlier will have heard that the Minister for International Trade said that in 1996 in fact the Americans had to pay back over $1 billion to our producers.

Our third action follows the U.S. department of commerce preliminary determination of subsidy in its countervailing duty investigation and the imposition of a 19.31% duty for Canadian softwood lumber imports entering the United States. Canada finds this ruling inconsistent with United States WTO obligations on a number of grounds.

First, the United States treated stumpage as a financial contribution on the basis that it is a provision of a so-called good. Rather, stumpage is a licence or right of access to cut timber, which is not covered by the financial contribution definition found within the subsidies and countervailing measures agreement. Second, the United States also wrongly determined that stumpage is a benefit and it based its findings on U.S. prices rather than on the prevailing market conditions in Canada. All of these actions are inconsistent with the subsidies and countervailing measures agreement and accordingly we will challenge these findings.

Our fourth action before the WTO concerns the U.S. department of commerce critical circumstances decision that resulted in the 19.31% duty now being applied retroactively to Canadian shipments made on or after May 19, 2001. This determination was based upon an alleged subsidy that was found to be de minimis, or less than 1% subsidy rate. This application of an alleged subsidy of less than 1% to justify the retroactive application of a preliminary duty rate of 19.31% is also inconsistent with the subsidies and countervailing measures agreement.

The fifth action we are taking before the WTO concerns the entitlement of Canadian exporters to seek a review of their circumstances when trade action is taken before them. Exporters subject to countervailing duty action are entitled to individual expedited reviews following an investigation in order to calculate company specific duty rates.

However, once again the U.S. regulations do not provide for individual expedited company reviews where subsidy rates are determined on a countrywide basis. Once again, this practice is inconsistent with the subsidies and countervailing measures agreement in that it denies exporters to such a review and the determination of an individual duty rate.

Canada is challenging these measures as WTO inconsistent and has requested accelerated consultations to discuss this matter. Those of my colleagues who were here earlier would have heard the Minister for International Trade talk about those consultations that are going on, up to today until 2.30, I believe, and they will continue to go on.

Canada is also challenging the United States on another measure. The sixth measure relates to softwood lumber and it includes a review of a certain piece of U.S. legislation known as the Byrd amendment. This amendment requires U.S. customs to distribute Canadian duties assessed to affected U.S. producers directly. This amendment creates a clear incentive for U.S. industry to file and support cases against Canadian firms exporting to the United States. In challenging this measure, Canada is joined by over a dozen other countries that also find the U.S. actions WTO inconsistent.

To conclude, I think it is important to remember that this is the fourth time that the United States industry has taken action against our softwood lumber industry in the last 20 years. Our actions and indeed, we are saying, U.S. actions must be based on a rules based system whereby everyone is treated fairly, impartially and without the ability to pick and choose which rules they want to abide by.

I want to assure members of the House that we will continue to take action that best defends our industry and that best supports the international agreements that we are all party to.

[Reed Elley, Canadian Alliance, Nanaimo—Cowichan, BC]

Madam Chairman, I am somewhat pleased to rise on debate today. I wish I did not have to. I come from a riding that has been hit very hard by this. Contrary to what the parliamentary secretary and the minister have inferred, we know that this is a far bigger issue than just British Columbia. We know it affects many people across the country.

However, after all, I am a member of parliament from British Columbia and I have been elected to represent my constituents. I think my hon. colleagues in the House need to know that people are phoning me to tell me about the hardships they are now enduring because they have been laid off.

We had nine major mills in my riding. We now have eight. One has closed completely, four are in a stage of lay off and are not producing at the moment. The other four are not by any means at capacity in terms of production. The people calling me are feeling, and I have to say this, that their government has failed them on this issue. That is about as blunt as I can be about it. They are the people who are directly affected by this. They are the people having to go on social assistance or EI and who may not have a job when this thing is settled. Their mills may not re-open. They are the people who are having to turn to help from family, churches, food banks and every other kind of support system that we have in the country when a major industry like the softwood lumber industry goes into such a serious position.

It is not unusual, then, for us to be standing and fighting on behalf of our constituents who find themselves in such a terrible state. I make no apologies for it at all.

It is on this basis that we believe the government has failed Canadians on this issue. This is a huge part of our economy, as has already been stated in the House during this debate. In 1995 it employed 100,000 people. It contributed $14.5 billion to our economy. Those are big statistics and mean that this industry has a significant contribution to make to the total economic well-being of the country.

I live in a riding that is a major producer of softwood lumber. It covers approximately 3,837 square kilometres. Any people going to my riding would agree, I am sure, that there they would be able to see some of the most beautiful tree covered mountain scenery to be found in the world. Anyone standing at the top of the mountains to look out over the riding would get an understanding of how dependent we are upon this industry.

There are approximately 115,000 people in my riding. Of those people, over 20%, or almost 23,000 of them, depend upon forestry as their primary income. That is 23,000 individuals plus their families. By the time the economists extrapolate the family members, the circulation of the dollars through the local community and so on, it is certainly crystal clear that forestry is a major industry in my riding. Until recently it has been the number one economic stimulator in the riding of Nanaimo--Cowichan.

Therefore I cannot just stand idly by and watch in silence as the government allows our forestry sector to be stalled due to the whims of a few American lumber barons, primarily in the American southeast.

The minister accused us of not having said anything about this in the House during the last three weeks. It is quite clear that international events have overtaken us in the House. It is still appalling for us to even think of the terrorist acts that took place and the loss of life. What we have done today is simply make sure that this issue does not go off the radar screen. It is at this point that we felt it was timely to bring it up. It ought not to slide.

The U.S. trade representative, Mr. Zoellick, stated that U.S. needs to join in with more free trade agreements around the world, that the U.S. needs to "advance the causes of openness, development and growth". He acknowledges that NAFTA has led to gains for the average American family of approximately $1,300 to $2,000 annually in income.

I believe that it is time, then, for our government to stand up to the American tactics and clearly say to them that it is time for them to act on their own words, if that is what they believe. Simply put, softwood lumber should be a freely traded commodity.

The devastating effect of the recently imposed 19.3% tariff on our softwood lumber exports has really negative consequences. In B.C. alone there are already an estimated 15,000 forest workers laid off. Without any changes it is estimated that this number will double to 30,000 by the end of the year. This, then, is a very serious issue and I hope the minister can see beyond the rhetoric, beyond all of the meetings and everything else that he has done and see that these are real people who are in a really desperate situation.

What can we do? I have several thoughts. Some of them have already been shared in the House. The first thing that must be done is to send a clear and consistent message. So many times Canadians have watched the evening news and have heard different government representatives make wildly diverse statements around this issue. That simply cannot continue. We need to hear clearly and unequivocally from our government what it is doing.

Part of the problem and the reason why we are having this debate today is that the government has failed to communicate to us as legislators and certainly to the ordinary British Columbians who are losing their jobs exactly what it is doing.

Therefore I would ask the minister and his department to make sure that he clearly shares with Canadians what he is doing. Somehow he has to get those communication tools working better so that Canadians understand that the government, the party in power, is doing something about this.

The second point is to negotiate from a position of strength. A weak bargaining position is tantamount to a losing position. Simply put, the Americans not only want our natural gas and other energy sectors, they need them. If we have something that the Americans want, let us make sure that we get something that we want, namely free trade in the softwood lumber sector. There should be no shame or any kind of hesitation for us to bargain hard with the Americans in terms of energy. In spite of three senior cabinet ministers at some point offering their support to the linking of free trade and softwood lumber to the energy sector, the Prime Minister has flip-flopped on this issue several times. He did it not too long ago on a trip to Alberta. Simply put, if the Americans want our energy they must allow free trade for our softwood lumber.

Third, the government must make a strong representation to the U.S. trade representative on behalf of all Canadian companies, stating our concerns and our position unequivocally. To date we have not seen the government helping this to take place in Canada. I urge the government to stand up and act in the interests of all Canadians whether they be in British Columbia, Quebec or any other place in the country.

Fourth, the government must work quickly to remove those parts of the forestry industry that should not be included in the U.S. 19.3% tariff, specifically in the case of a number of producers in British Columbia, from where I come, in the cedar industry. The stakes are high and more jobs are at risk if those things do not happen.

This is a very serious issue for us. We want to have the government continue to act boldly and decisively on our behalf. We want it to communicate with Canadians clearly what its position is. We want the government to get tough with our American friends. They can be nice, but they can be tough. We need to be able to say that at the end of day we truly have free trade in this commodity as well as any other.

[Stephen Owen, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Madam Chairman, I am pleased to have the opportunity to rise once more to address the immensely important issue of our softwood lumber trade with the United States.

The restrictions in the United States creates an immense impact on the industry and on all Canadians. They are of particular interest and concern to British Columbia. Softwood lumber is more than a $10 billion export industry and almost half of that lumber comes from British Columbia. As we have heard, 15,000 jobs have already been compromised in British Columbia and many more across the country. One million jobs across Canada are related to the forest products industry in some way. These countervailing duties are also having an impact on federal and provincial revenues.

We have to look at the motivation for the countervail action in the United States. The motivation by the American industry is simply protectionism. It wants protection for its industries. What is our motivation? Our motivation is free trade which has been our motivation all along. It is why we did not seek to renegotiate the softwood lumber agreement when it expired at the end of April. We have been working toward free trade.

In addition to the many important aspects that have been raised in this special debate this afternoon, let me briefly mention what I would see as the four key approaches of the government together with other governments and industry in Canada.

The first approach would be strength in unity. Since I have been in the House, the Minister for International Trade has been speaking publicly on a weekly basis and working across the country to ensure that we do not separate interests across Canada by province or by industry against industry. Unity and the strength that comes from unity has been the byword and the underlying fundamental strength of this approach, and it is holding and it is working. In fact if it does not work and we do not hold together then we will fail against this challenge. This unity is provincial governments to provincial governments, all provinces to the federal government and governments with industry. That is immensely important.

Industry has not had a difficult time. It is facing different circumstances across the country but also within any one province it has differences but it is holding together and it is supporting this strength in unity toward free trade.

Our second approach is to pursue every legal avenue and every available forum to challenge these countervail duties and these false allegations.

The first issue is around subsidy. As we have heard over and over again, Canada has won this challenge many times over the last 20 years in independent international tribunals. There is no subsidy.

In 1994, after winning this issue again, $1 billion in improperly collected countervail duties was returned to Canada and Canadian industries. Here we go again. There is no subsidy. Our differences in forest practices and the way we manage our forests in the two countries has led to some confusion perhaps but the rulings are absolutely clear. Our stumpage system and crown management system on public lands and public forests is based on sound forest management practices that protect the environment and create a sustainable flow in managed forests so that this is a sustainable industry into the future.

Subsidies, no way. It has been proven over and over again. What is the 19.3% interim countervailing duty based on? In this same time the price of lumber in the U.S. market has gone up 15%. How could there be a 19.3% entry. Moreover, it is calculated on a quarter to quarter basis rather than on an annual basis against the same quarter for the previous year which would have been the accurate calculation. The calculation is done by using the first milled price, which the calculation should be based on, yet the 19.3% countervailing duty is being imposed against the entry price which includes the added value from Canadian manufacturers crossing the border.

This is patently unreasonable, unfair and contrary to international trade rules.

We have looked at U.S. laws but U.S. laws keep changing. However time and again we have been told that this is clearly against international trade rules. The Byrd amendment that people have talked about has, thank goodness, been suspended by the president in response to the concerns expressed by Canadians, by our minister, by our Prime Minister, by our interparliamentary engagements, including members of the opposition to the president. We are being listened to.

What about the claim that Canada's log export restrictions are subsidies? The WTO has already ruled that those restrictions are not subsidies.

The U.S. law changed since the last ruling to prohibit the reimbursement of Canadian companies for improperly claimed subsidies. As we have heard, this is being challenged by Canada at the WTO and we will fight that to the end.

We will also fight in the U.S. courts. When the department of commerce makes its final conclusions on this matter, if it continues to support this false claim of subsidy and harm, then we will challenge it in the U.S. courts. We have judicial review there. The prime allegations in a judicial review are patently unreasonable decisions by public authorities, and that is clear from all of the evidence that has come together. We have submitted hundreds of thousands of pages of documents showing this patently unreasonable action. We will win the day in the end but what does it do in the interim?

The third approach is to have discussion with the U.S. involving federal and provincial governments. The third series of these promising discussions wound up in New York this afternoon. They were held in Toronto two weeks ago and they have been held in Washington over the last three days. They have been promising enough that all parties are being advised by Canadian industry to continue in Vancouver in the next short while and later in Montreal. These discussions are going somewhere. They are working on common ground and leading to a better understanding of the differences in forest practices and market conditions in both countries.

That leads to our final approach, which is building relationships with our natural allies in the United States. It involves parliamentarians. We have heard from over 115 congressmen, member representatives as well as senators, who have come behind the Canadian position to support our just claims for free trade. We are making progress with home suppliers and homebuilders who are seeing their costs rise simply because a few lumber companies in the U.S. are looking for protectionism in the trade of lumber products.

We are also speaking to the American consumer more and more effectively. We are strengthening unity and litigating on every point to win our just claims of free trade at the end of the day. In the interim we are working on discussions between all levels of government, with parliamentarians and government officials in the U.S., and with the solid support of Canadian industry.

Finally, in our communications and dialogue, we are speaking directly to a whole range of allies, the most important of which is the American consumer and voter in the United States, to ensure their government lives up to its obligations to all Canadians to ensure free trade in softwood lumber.

[Cheryl Gallant, Canadian Alliance, Renfrew—Nipissing—Pembroke, ON]

Madam Chairman, I thank the member for Vancouver Island North for the leadership he has provided on the issue of softwood lumber. It is clear that on this side of the House we have consistently urged the government to be proactive as we have been urging this government to take action.

I am very pleased to represent the softwood lumber producers of not only my riding of Renfrew--Nipissing--Pembroke and eastern Ontario but of all Ontario in this debate. Rural Ontario has been without a voice in Ottawa since 1993. In fact, rural Canada has been under assault by this government since it was elected.

Jobs have been disappearing at an alarming rate in rural Ontario. The need to keep jobs in the lumber industry to maintain our way of life is paramount.

The government needs to re-orient its priorities and jump at the first sign of trouble in the same way that it jumps when the presidents of large corporations, like Canada Steamship Lines and Bombardier, call when looking for government assistance. The big difference is that, unlike the friends of the government who are big multinational corporations looking for handouts, the softwood lumber industry in my riding is characterized by small operations, many family owned, and by people who are not looking for handouts, just fair treatment.

The Liberal government's softwood lumber policy is causing significant unemployment in my riding. Worried softwood lumber producers call my office on a regular basis with the hope that a resolution regarding this crisis can be found. Families with their principal breadwinner unemployed wonder how they are going to survive the winter.

In rural areas jobs are hard to come by. Ben Hokum and Son Ltd. in Killaloe, Murray Brothers in Madawaska, Gulick Forest Products Ltd. and Thomas J. Newman Ltd. in Palmer Rapids, and Bell Lumber in Renfrew are just a few of the businesses in my riding affected by this softwood lumber dispute.

It is clear this softwood lumber crisis could have been avoided. We all knew the softwood lumber agreement would expire when it did last March. If the minister had been paying the slightest attention he would have known that the American lumber industry was pushing for countervailing duties. The government talks now of building alliances with American consumers and other interested groups to fight the countervailing duty imposed on the industry. This should have been done long before we hit this crisis.

The government has a lousy record when dealing with a crisis. Whether it be Canada's response to the terrorist attack of September 11 or the current crisis with softwood lumber, the government lunges leaderless in every direction and the people pay the price with unemployment lines.

Softwood lumber is big business in Ontario, exporting $2 billion worth of goods annually and employing 20,000 people directly, many of whom work in eastern Ontario. The gross regional income of the central and eastern Ontario economy is $5 billion annually in the forestry industry alone. The region employs 133,000 people. In the Ottawa valley the forest industry supports nearly 4,500 jobs. That translates into 2,055 direct jobs, which is 19.3% of regional goods producing sector employment, over 1,000 indirect regional jobs and another 1,295 indirect provincial jobs.

Primary wood manufacturing is over 10 times the provincial average. In actual dollars and cents our forest industry output is $294 million annually. I can identify over 100 forest product companies that make their home in Renfrew county.

What is even more important in this debate over softwood lumber is how it is affecting our trading relationship with the United States. For value added products, the United States market is number one in Ontario.

More than half of all forest products in Ontario is exported. Members will understand why we on this side of the House use the term crisis when we refer to the state of the Canadian softwood lumber industry. Those products have the largest export market in the United States. Exports from Ontario have increased by more than 100% since 1991.

The United States construction industry is worth nearly $700 billion U.S. every year. It will continue to be the focus of Canadian wood product shipments. It is imperative that the government respect the special trading relationship we have had in the past and priorize the need to resolve this trade dispute.

[Andy Burton, Canadian Alliance, Skeena, BC]

Madam Chairman, I am pleased to speak to this emergency debate on softwood lumber and the trade dispute between Canada and the United States. This is an issue that is very near and dear to my heart and to my riding of Skeena in northwestern British Columbia.

My riding is heavily dependent on the forest industry. This is not a partisan or regional issue. British Columbia accounts for 50% of Canada's annual export of softwood lumber to the U.S. at an approximate value of $5 billion. One would imagine an industry that generates this much income would be the top priority of any government to look after and to fight for.

The Liberal government has shunted the issue year after year. We are standing in the House of Commons once again pleading for some action on the part of the government to help the logging and sawmilling industries. Tens of thousands of employees across Canada go to work every day uncertain if it will be their last day of employment at a particular manufacturing plant or sawmill.

On August 10 the U.S. commerce department announced a 19.3% penalty on Canadian lumber to counter what was ruled as subsidies given to the Canadian lumber producers by the government. This is a ridiculous and unconscionable level. This has been challenged three times in the past and Canada has won every time. It is unfortunate that it was allowed to get to this level before the government reacted in an attempt to try to resolve it.

The government's minister of fisheries quite rightly urged the government to step in and help B.C. He suggested that the federal government should assist the industry by posting a customs bond to cover the new tariff. He was shot down by his own government. I find that very unfortunate.

This is not just an opposition issue; it goes right across Canada. How many government members are from ridings that depend on lumber export? Tens of thousands and possibly hundreds of thousands of jobs are involved. It is a huge issue for people across the country.

On April 5 Liberal members from the Atlantic provinces stood in the House and asked their minister for continued free trade of softwood lumber to the U.S. They were given the same no answer that was given to opposition members. The parliamentary secretary to the minister as reported in Hansard said:

We will continue to fight for free access for Atlantic softwood lumber, but in the context of free access for all Canadian softwood lumber because that is supposed to be the agreement. Alan Greenspan, chair of the federal reserve, yesterday cautioned against protectionism on softwood lumber and everything else.

We totally agree with that but that was six months ago. We are now into October and we still have no resolution of the issue. Free access is required, demanded and needed. We urge the government to achieve that immediately.

The government had no problem stepping into the trade dispute with Brazil over aircraft. If the lumber industry had closer ties to the Prime Minister's Office it may have been afforded the same consideration as Bombardier. I do not know but possibly.

The U.S. Byrd amendment has been suspended. It was a ridiculous amendment that put our lumber producers in the position of subsidizing their competition. It was absolutely ludicrous. It should never have been in place, but that is out of our control.

Canada is not the only country that is challenging the legislation. We have challenged it in the past and we will win. However time goes on. In the meantime the industry and families are suffering. People are losing their homes. It is a very difficult situation.

A growing number of Canadian lumber producers are being bought or have been bought out by companies owned and operated in the U.S. The countervail issue has depressed Canadian forest company stocks while U.S. companies grow and possibly are in a better position to take over these Canadian companies with 50 cent dollars.

Who knows what the ultimate result of that will be in the future? That trend is out there. U.S. consumer groups such as Home Depot and the coalition for affordable housing are on side with Canadian producers as they see the cost of lumber rising. There is a great deal of support out there for our industry. We need to continue to build on that support. The government needs to continue working on it and push as hard as it possibly can.

Senator Baucus has asked for an anti-dumping case that would put an export tax on top of the CVD. It would mean a double tax when markets are soft. This is not acceptable or sustainable by the industry. We need to work toward more open borders to be able to trade our goods back and forth.

This also raises the issue of the perimeter safety network that has been talked about and pushes the issue a bit harder. We need to consider that in terms of free trade to make sure our borders remain open to our goods without undue delays.

There is also the option for stumpage changes. This would mean that Canadian provinces would have to change the way they sell their standing timber. This could be impractical or even impossible. It is hard to say. However these things are being worked on.

British Columbia is looking at putting in a market based stumpage system down the road that may possibly help the situation.

There is a company in my riding called Skeena Cellulose that was in serious trouble prior to the softwood lumber tariff. The wood profile in that part of British Columbia is 70% to 80% pulpwood. The small volume of saw logs and lumber that is produced has to be produced economically to subsidize the cost of logging the pulp logs which have to be removed as well. This countervail duty makes it that much more difficult.

I sent a letter to the Prime Minister and the minister in August requesting some responses as to where the situation might be. I have yet to receive a reply. I would appreciate a reply, as would people in my riding in northern British Columbia, as to the status of the ongoing talks as soon as possible.

I go back to a statement I made in the House on April 3. The government was about to host the summit of the Americas where the topic of discussion was the free trade area of the Americas. Today there is talk about a free trade agreement between Costa Rica and Canada.

I worry as to what will come of it when we have not even sorted out a dispute that is hanging over our heads with our closest trading partner and friends in the United States. I look forward to a quick resolution of this terrible situation on behalf of not only the people of Skeena but the people of Canada.

[David Anderson, Liberal, Minister of the Environment]

Madam Chairman, I take my place in the debate as senior federal minister responsible for the province of British Columbia because of the importance of the forestry industry to the economy of my home province. The forestry sector's contribution to provincial tax revenues is nearly equivalent to the provincial government's entire expenditure on all education costs from kindergarten to grade 12.

Forestry activity affects 14% of the workforce in British Columbia. Fourteen per cent of British Columbians are employed directly or indirectly in the forest industry. The industry is worth some $17 billion to British Columbia's gross domestic product.

Excluding the GVRD, the forestry industry dominates the economies of more than half the communities of British Columbia, possibly even two-thirds. In many such communities forestry accounts for 50% of the economy. In the greater Vancouver area alone forestry makes a substantial contribution in terms of 120,000 direct and indirect jobs. It is a critical issue throughout the province.

In British Columbia we have 850 mills, many of which are closed. We have 47% of the total Canadian exports of softwood lumber. Some 16,000 people have been directly laid off since the United States imposed a 19.31% duty on softwood lumber on August 9. The importance of softwood lumber to British Columbia cannot be exaggerated.

I will deal briefly with the previous speeches and move on to what has been done. I was deeply disappointed by the speech of the Leader of the Opposition. He represents a British Columbia constituency. If he wishes to come from Alberta to British Columbia and represent the people of the province he should take his responsibilities as a British Columbia elected official seriously. I was deeply offended by statements which set one region against another by suggesting if this had happened in the heartland of Canada the government would have acted instead of doing nothing.

The comments of the hon. member who preceded the last member were similar. Indeed the previous speaker made the comment that if there were closer ties with the Prime Minister's Office something would have been done. The effort to smear hon. members of the House and suggest the issue is being ignored because of its regional importance in British Columbia is despicable.

The hon. Leader of the Opposition has not asked a question in the House on softwood lumber since April 23 of this year. Yet he spent the entire time since we returned to the House in September on a wild spy chase. He has gone into every part of the country desperately trying to find a connection between security in the United States and possible errors of Canadian officials. He spends his time doing that while the softwood lumber problem has become worse because of the actions of the United States.

He should be ashamed of that type of approach. As a British Columbia member he should be ashamed. It is clear why so many of his members have decided his leadership is something they can no longer tolerate.

Canada should take a united front on the softwood lumber issue. I congratulate the premier of British Columbia, Gordon Campbell. I congratulate the minister of forestry for British Columbia, Mike de Jong. I congratulate the industry in British Columbia. I congratulate the Minister for International Trade who has done a splendid job representing Canada on this file.

The type of performance we have had from the official opposition is simply not good enough. It has been pounced on with glee by our opponents in the American softwood lumber industry as an example of how we in Canada do not have a united front and how we can continue to be horsed around by the types of actions that have taken place over the last few months.

I believe the hon. member for Vancouver Island North who proposed the motion is sincere in his concern for the industry, unlike the hon. Leader of the Opposition. Let us look at the opposition leader's performance on the issue. He has not asked a question about it in the House since April. Yet he comes in here and criticizes my colleague the hon. Minister for International Trade.

The minister has been working on this file day after day, week after week and weekend after weekend in contrast to the absolute absence of activity by the Leader of the Opposition. The opposition leader's critical remarks suggesting this is somehow a regional issue are thoroughly improper.

That is my view of the approach taken by the hon. Leader of the Opposition. I do not know how long he will remain here or how long the members who have spoken will continue supporting him. However if he keeps this up the people of British Columbia will reject him firmly and clearly.

As to the approach taken by the Canadian government, we will continue to fight this U.S. trade action wherever we can. We are willing to discuss with the United States, not negotiate but discuss, any aspect of the issue it wishes to discuss with us. We want a long term and durable solution that avoids litigation.

We will continue to mobilize U.S. consumer groups to increase advocacy efforts in the United States. We will continue to defend our industry wherever we can. We will fight in every legal venue available although our preference is not to get involved in litigation.

The Prime Minister has kept on this file time after time not just with President Bush but with his predecessor President Clinton. The Minister for International Trade has done exactly the same thing with his counterparts in both the Bush and Clinton administrations. Thanks to their efforts the U.S. is fully aware of our concerns.

We have every reason to believe the imposition of the 19.3% duty on Canadian softwood lumber is unfair, punitive and wrong. Furthermore, it fails to meet the standards of the World Trade Organization the United States alleges it adheres to.

The decision to impose duties on the entered value and not the first mill value is contrary to longstanding U.S. practices and adds yet another unfair burden on our Canadian producers. We will continue to press on behalf of our remanufacturers at every forum and in every way to get back to the first mill value.

We categorically reject as having no basis in fact or law the decisions of the U.S. department of commerce that Canadian softwood lumber exports to the United States are subsidized by provincial and federal programs. We have gone into the issue time after time. We have won every time, but the United States in a protectionist move has changed or varied the rules so it could come back at us yet again.

We will be challenging the United States contention regarding stumpage and every other practice of our provincial governments. We will be doing so in the United States and before the WTO.

Some have suggested there should be short term bridging solutions such as an export charge. There is no consensus for such a measure among provinces and industry because it would not get to the root of the problem.

Canada and the United States need a long term solution. That is exactly what my colleague, the Minister for International Trade, supported by me at every turn as the minister responsible for British Columbia, will work to get.

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Madam Chairman, I rise on a point of order. I do believe that the minister used a profanity in describing my request for a debate tonight. I may stand corrected, but I do believe he used a profanity. Others may not think that he did. I will take his word that he did not use a profanity.

[David Anderson, Liberal, Victoria, BC]

Madam Chairman, it is strange that this member should rise, as I recollect he is the only one of his party that I praised in what I said and with some reason. I appreciate the fact he has brought forward the motion.

I am happy to have the record checked, but certainly nobody I have spoken to in this room has heard profanity. Maybe this is the type of problem the Alliance has: they keep seeing these imaginary conspiracies in central Canada and hearing imaginary words.

[The Assistant Deputy Chairman]

Time has run out for the minister for debate. To put this on the record, I cannot look at the blues and we cannot check what the hon. member said before 6.15. As he said to the hon. member, and while I as the Chair did not hear profanity, nor did the clerks, if tomorrow we check the record of the debate and if that is the case, I am sure the hon. minister would come back.

We will resume debate because we have to end debate at 6.15.

[David Anderson, Liberal, Victoria, BC]

Madam Chairman, perhaps the words were the sincerity of the hon. member. If that is the phrase in question, I am happy to say I stand by it. I think he is a sincere member. I do not know of any other words, nor has anybody I have spoken with or seen in the room suggested that any other word was used, but if there were any words used that were inappropriate, I of course would immediately retract them.

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Just to clarify, Madam Chairman, I will talk to the member privately. I do not want to say the word that several of us thought the hon. member may have said in case he did not say it. It would be inappropriate for me to say it. I will talk to the hon. member privately.

[David Anderson, Liberal, Victoria, BC]

Madam Chairman, there was only one member from that party in the room other than the hon. member. I wonder where these several are.

[The Assistant Deputy Chairman]

I would like to remind the hon. minister that we are televised. We will resume debate.

[James Lunney, Canadian Alliance, Nanaimo—Alberni, BC]

Madam Chairman, the umbrage and bombast from the minister on the other side is certainly inappropriate and highly offensive. For him to use this occasion on a very serious debate to attack the Leader of the Opposition is rather outrageous. In fact the patronage of his party has been well known.

He might stay for just a minute to hear that in my riding in British Columbia, we had arts and culture week in March. People wanted to know why, when $76 per head is the national per capita given for arts and culture, Quebec got 147%, Ontario got 107% and British Columbia received 34% of those dollars. The comments made earlier do in fact have a basis. It is a pity that the minister tried to cover for this with umbrage and accusation.

On behalf of my constituents, mill workers and industry workers who are suffering in British Columbia, I am pleased to enter this softwood lumber debate. I will say right off the bat that this is hurting people in my riding. Since we have been here the past few weeks, hundreds of workers have been idle in my riding of Nanaimo--Alberni. We have saw eight mills close in Port Alberni over the last number of years. Of 1,025 mill workers employed just a few months ago, there are now only 200 working.

In Port Alberni there were 950 loggers gainfully employed and now there are 185. Right now communities in my riding are hurting. They are sitting idle wondering when or if they will get back to work because of the situation that has arisen.

The problem has roots stretching back many years and the government has been inactive on this file. It should not have been surprised by it. We have had five years to prepare for this.

I noticed earlier the minister said that the government was waiting to see what the U.S. would do. Of course we know that the old softwood lumber agreement expired in March and we saw what the U.S. did. It immediately responded with a 19.2% tariff.

Having seen that, mill workers in my riding want to know why Canada did not do anything. Why did it not have a plan ready to take action? Many people in my riding would like to know why the government does not step up to the plate and take action to get our mill workers back to work. It is time to offer some leadership and it is time to get behind the industry.

One of the suggestions put forward was the issue of bonding. If our mills are going to be allowed to export into the United States, the regulation by the department of commerce and customs requires that they have to put up a bond immediately. People in my riding want to know why the government has not stepped up to at least help the companies put those bonds in place.

The bonding issue for the big companies is perhaps something that can be negotiated with banks regarding loans, but many of the smaller companies are simply not in the position to deal with that. They do not have the capital base and many of the marginally profitable smaller producers may be pushed over the edge. Jobs will be lost and families will suffer.

I will quote Rick Doman, the CEO of Doman Forest Products, one of the largest employers in my riding. He said the bonding guarantee is an important issue. This was stated in the Victoria Times Colonist August 25. Mr. Doman stated:

As a short term fix for companies struggling to post a bond, pending a final resolution on the duty, federal aid is being considered in the form of the Export Development Corporation.

That corporation gives bonding at commercial rates but it isn't specific to any one company or industry and it would be optional whether companies took advantage.

That's great news, according to Rick Doman, chief executive of Doman Industries, Vancouver Island's largest lumber producer.

Doman said he's been pushing the B.C. and federal MPs to consider this route as a way of delivering foreign aid without aggravating the Americans.

We would like to know why the government has not stepped up to the plate to help our industry in this manner is an issue?

Canadians have suffered because of the inaction of the government on other issues: the farm crisis; leaky condos in British Columbia; continued high debt and high taxes; the immigration crisis; the low dollar; and the decaying military response and ability. It is time to demonstrate some leadership in this area.

On the bonding issue, the Minister of Fisheries and Oceans was quick to come to the plate in Vancouver shortly after the tariff was announced. I will quote him from the Vancouver Sun . He said:

A loan guarantee financed by the federal and provincial governments could help firms avoid insolvency while Canada fights the duty before international tribunals.

Our mill workers and mills cannot afford to wait one and a half years or two years for the WTO process to work its way through.

We heard the umbrage expressed by the minister over allegations that the government is much quicker to step up to the plate on behalf of industries in other parts of the country. People in my riding watched the Bombardier-Embraer events unfold. The government stepped up to the plate to support an industry in another province. It even offered low interest loans to American firms to secure purchase of regional aircraft. Those people want to know why the government cannot step up to the plate to offer some temporary support to keep our mills open and our workers working while we work through the dispute resolution process.

Unfortunately, we have not seen action that has been helpful to our members at the present time. Believe me, people are hurting, families are suffering and many people are wondering whether they will have a job to go back to.

Members of the House recently received a letter from a U.S. senator suggesting that we sit down and negotiate a settlement. Reaching compromises is appropriate at times but in this case we do not need to compromise. We have a binding agreement but we need some support to get through this dispute mechanism which is already in place with the World Trade Organization.

We will win the argument with the WTO but what will our mill workers do?

[The Assistant Deputy Chairman]

It being 6:15 p.m., pursuant to order made earlier today, the committee is adjourned and I now leave the chair.

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

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Madam Speaker, I questioned the Minister of National Defence on May 8 with respect to the position that the Government of Canada speaking on behalf of the people of Canada would take on the proposed national missile defence scheme being advocated by President George Bush.

I urged the Canadian government to get off the fence, to take a clear stand and to join with the majority of Canadians who strongly opposed this missile defence scheme. This is a dangerous new escalation of the arms race.

In the most recent poll 58% of Canadians opposed the proposed anti-ballistic missile system that is presently before the United States congress. That was in May and we are now in October and still waiting for the Canadian government to take a stand on the issue.

We all look at the impact of the terrorist attack of September 11 and ask ourselves whether this has had an impact on the American proposals for missile defence. Tragically it would appear that it has.

Among the casualties of September 11 was the democratic senators' resistance to missile defence. Prior to September 11 democrats on Capitol Hill indicated that they were prepared to trim back the $8.3 billion first year missile shield program and place tight restrictions on testing and development.

Unfortunately that opposition appears to have collapsed and the scheme is now proceeding. Those who would benefit are the global arms merchants like Boeing, Lougheed Martin, Raytheon and TRW. They are eagerly anticipating the possibility that they might get their hands on some of the $60 billion that the U.S. government intends to spend on this dangerous escalation of the arms race.

The Minister of Foreign Affairs indicated that he was opposed to the creation of weapons in space. Canadians also share that opposition. Yet it is very clear that the U.S. missile defence scheme would lead to the creation of weapons in space. United States senior air force officials have made very clear that is their intent.

I call on the Canadian government to speak out on behalf of Canadians against this escalation of the arms race that would lead to the creation of weapons in space and lead to the possible abrogation of Start I and Start II treaties. Russian President Putin has made that very clear.

The sanctions on Pakistan have been lifted in the aftermath of September 11. That is a matter of deep concern. Prior to September 11 the United States government indicated that it was prepared to accept an escalation of China's nuclear missile program.

It is not acceptable that Canadians, along with people from around the world, should be charged with peaceful and non-violent protests. Guy Levacher from Montreal was charged in July when he protested this action peacefully and non-violently.

I appeal to the government to speak out on behalf of Canadians and tell our friends in the United States to stop this madness and instead work toward the abolition of all nuclear weapons on the planet.

[John O'Reilly, Liberal, Parliamentary Secretary to the Minister of National Defence]

Madam Speaker, the Canadian government has not been asked by the United States to participate in a BMD system. What is more, we cannot very well make a decision for or against BMD without first knowing what the system will look like, how much it will cost, where it will fit into and how it will affect the global security framework. The Government of Canada is keeping an open mind about the proposed U.S. ballistic missile defence system and has not taken a position for or against it.

Ballistic missile defence has the potential to play a positive role in global security without jeopardizing arms control and disarmament. However, the outcome will depend largely on how missile defence is pursued. We are continuing to assess the U.S. plans for a missile defence system as they emerge and to consult closely with our allies.

A Canadian decision will be taken only after an analysis of the new global security framework into which the U.S. would fit a BMD system and a comprehensive review of the implications for Canada. In line with Canada's defence policy, and without prejudicing any future decisions on BMD, the government continues to examine the issue of ballistic missile defence and the details of the U.S. system as they develop. The American proposal does not yet include a timetable for deployment or specific details about the architecture of the system. U.S. officials have made it very clear that Canada will be consulted on the issues affecting our longstanding defence partnership, including NORAD.

We are pleased with the U.S. intent to reduce its nuclear arsenal and welcome the American commitment to consult with China and Russia on ballistic missile defence. The government has a longstanding tradition of consulting parliamentarians on major foreign and defence policy issues. At the moment, and in line with the 1994 defence white paper, Canadian participation in ballistic missile defence is limited to research and consultation.

I know I am out of time, but let me say that there has been no Canadian decision made with regard to BMD and our efforts remain within the perimeters of current Canadian policy.

[The Acting Speaker (Ms. Bakopanos)]

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

(The House adjourned at 6.22 p.m.)