House of Commons Hansard #92 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was leader.

Topics

Business of the HouseOral Question Period

3:05 p.m.

Some hon. members

No.

Business of the HouseOral Question Period

3:05 p.m.

NDP

Svend Robinson NDP Burnaby—Douglas, BC

Mr. Speaker, I would suggest if I may that immediately upon adjournment, as is the practice in the House traditionally, there be an opportunity for the adjournment proceedings and debate.

Business of the HouseOral Question Period

3:05 p.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Yes, Mr. Speaker, we would agree to that. After a visual consultation with my colleagues I think there is unanimous consent to do that at the conclusion of the debate under Standing Order 52, notwithstanding our usual practices and standing orders because this is unusual in that sense.

Business of the HouseOral Question Period

3:05 p.m.

The Speaker

What is unusual is that the motion under emergency debate is a motion to adjourn the House. One would have thought that once it was carried perhaps the House would adjourn. However, if there is unanimous consent, perhaps we can have another adjournment debate after the first one and have a second go at it. Is that agreed?

Business of the HouseOral Question Period

3:05 p.m.

Some hon. members

Agreed.

Business of the HouseOral Question Period

3:05 p.m.

The Speaker

Is the motion proposed by the government House leader agreed to?

Business of the HouseOral Question Period

3:05 p.m.

Some hon. members

Agreed.

(Motion agreed to)

Business of the HouseOral Question Period

3:10 p.m.

Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

Mr. Speaker, I will ask my usual Thursday question. Could the government House leader bring us up to date on what we will be doing for the rest of the week and when we come back from Thanksgiving break?

Could he tell us if the anti-terrorism legislation will be ready when we return? If so, what areas will it be covering? Could he give the House an assurance that between now and when we return on October 15 there will be no leaks about what is in the legislation other than what he will advise us of today?

Business of the HouseOral Question Period

3:10 p.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, I would be pleased to inform the House of the business statement. As announced and unanimously adopted by the House, we will now proceed with the emergency debate under Standing Order 52 concerning softwood lumber.

Tomorrow we will consider Bill C-35, the foreign missions bill. Should that legislation be completed tomorrow I do not propose to call any other legislation or government bill.

Next week the House does not sit.

On Monday, October 15, we shall have an allotted day. I have consulted with opposition House leaders about a bill we propose to introduce that day and debate on the following day. The bill will introduce measures to implement the United Nations conventions; amend the criminal code, the Official Secrets Act and the Canada Evidence Act; and propose other measures to improve security and protect Canadians. We hope to commence consideration of the bill on Tuesday, October 16.

I take this opportunity to inform the House that we are making arrangements to give the relevant critics an advance briefing of the contents of the bill on the morning of October 16 prior to its introduction. I intend to discuss this with House leaders at the earliest opportunity. I will arrange to do so early on the morning in question so critics can have an advance copy of the bill. Obviously we intend to make quantities of the bill available on introduction.

We intend to seek the consent of the House to have introduction of government bills at 11 o'clock that morning rather than 3 p.m. We want to give hon. members additional time to familiarize themselves with the bill because by exception we would be dealing with it on the floor of the House the next day.

Hon. members have been very co-operative in this regard. I take this opportunity to thank all House leaders for the co-operation they have demonstrated in the face of these important events. I thank them for their co-operation in advancing other legislation and the consideration they have thus far given my suggestions in that regard.

Business of the HouseOral Question Period

3:10 p.m.

The Speaker

It is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of the second adjournment debate is as follows: the hon. member for Burnaby--Douglas, National Defence.

Pursuant to Standing Order 52 and to the order made earlier this day, the House shall now resolve itself into committee of the whole to consider a specific and important matter requiring urgent consideration, namely softwood lumber.

I do now leave the chair for the House to go into committee of the whole.

Softwood LumberEmergency Debate

3:15 p.m.

The Chairman

House in committee of the whole to consider a specific and important matter requiring urgent consideration, namely softwood lumber.

Softwood LumberEmergency Debate

3:15 p.m.

Canadian Alliance

John Duncan Canadian Alliance Vancouver Island North, BC

moved:

That this Committee take note of the softwood lumber industry.

Mr. Chairman, does the minister not speak ahead of me? I ask because we have had three days of meetings in Washington this week and I understand there may be late breaking developments. I do not want to find that whatever I might say is pre-empted by more recent events. That is the only reason I ask if the minister would like to precede me. I am pleased that the minister and others in the House are interested in hearing what I have to say.

We have had two other debates in the House since we came back on September 17. One was about the airline situation, an obvious area of priority. The other was about the situation on the prairies, another obvious area of concern.

Anyone who suggests softwood lumber is not a major concern in Canada would be incorrect. As of today in British Columbia alone somewhere in the order of 15,000 workers have been laid off. Estimates are that 30,000 may be laid off by the end of the year. On a national basis 40,000 to 50,000 people could be laid off at either end. Obviously this is an unhealthy situation for workers, their families, their communities and their employers.

If free trade in lumber between Canada and the U.S. cannot triumph over protectionist U.S. legislation, Canada and the U.S. will both be losers. The Government of Canada must take this situation with the utmost seriousness. So far its track record is not good.

I will offer some solutions, but a bit of background is in order first. Until March of this year, the same month the quota driven and detrimental five year softwood arrangement expired, the government had no publicly enunciated direction on softwood. When it finally adopted the free trade position the Canadian Alliance had been promoting for months, we were encouraged by its action.

At a time when there is every reason for optimism about achieving free trade in lumber there needs to be strong representation from the Prime Minister. There is no sign that this is happening in a real sense.

We have had several optimistic signs from the U.S. administration. On September 20, U.S. trade representative Robert Zoellick wrote an important piece in the Washington Post called “Countering Terror with Trade”. I will quote a couple of statements from the article:

Our nation has drawn together in shock, mourning and defiance. Now we must thrust forward the values that define us against our adversary: openness, peaceful exchange, democracy, the rule of law, compassion and tolerance. Economic strength--at home and abroad--is the foundation of America's hard and soft power...To that end, U.S. leadership in promoting the international economic and trading system is vital. Trade is about more than economic efficiency. It promotes the values at the heart of this protracted struggle.

Zoellick went on to say:

Congress, working with the Bush administration, has an opportunity to shape history by raising the flag of American economic leadership.

With the stroke of a pen the Bush administration removed tariffs on some of the products of its trading partners to solidify the coalition against terrorism. Indonesia had duties removed from plywood exports to the tune of about $200 million per year. This demonstrates what is possible.

On Monday of this week the American Consumers For Affordable Homes, who represent 95% of lumber consumption in the United States, wrote to President Bush and asked him to reverse the commerce department's preliminary countervail duty of 19.3%.

The American Consumers For Affordable Homes organization has consistently promoted free trade in lumber. It represents many more jobs in the U.S. and represents the consumer interests as opposed to the U.S. lumber lobby.

With these series of events and with senior Bush administration officials and U.S. federal reserve chairman Alan Greenspan all promoting free trade and suggesting that U.S. protectionist legislation is counterproductive, the stage is set for a push by the Prime Minister to break through and appeal directly to President Bush to set aside the CVD determination imposing a 19.3% duty on Canadian lumber.

The American consumer group pointed out to the president this week the importance of a strong housing sector in a fragile economy and that U.S. gross domestic product growth could be reduced by 15% to 30% because of the 19.3% tariff.

What is concerning me today is that we are hearing, as a consequence of talks going on in Washington, that there may be an arrangement whereby these talks have actually turned into negotiations which have strayed from the free trade path and have now taken us into an area where we may have direct negotiation between the U.S. trade representative and our provincial jurisdictions. If this is the case, and I am waiting to hear from the minister on whether it is, then I want to put a warning shot out there that this is betraying free trade and the strong coalition that has been built up over the last two years on both sides of the border to pursue free trade in lumber. If that is the case then I can only say that I am disappointed that this government can lose its vision and its principles.

We entered into a very bad deal in 1996 when we got into the five year softwood lumber agreement. If we agree today to these kinds of balkanized negotiations I can only say that would be a total abandonment of the consumer interest, local governments and the greater Canadian interest.

This will only lead to a situation where the U.S. lumber lobby will have divided and conquered. It will only lead to a lack of accountability where the federal government can say that it has washed its hands of responsibility for these bilateral trade negotiations. This is a federal area of jurisdiction and it will place us further from free trade in lumber than we have been in a long time and I do not know how we would ever get back there.

What is clear is that if we appeal at the highest levels, as other countries have done, if this is the number one priority of the Prime Minister and he talks directly to President Bush, the Bush administration is sympathetic if we can get the right priority placed on this file.

The government and almost everyone else who is involved in this circumstance agrees that if we stay the course, go to the World Trade Organization and to NAFTA panels, we will win.

I just want to make it clear that any deal with the U.S. beyond free trade will cause us permanent long term damage. It is already clear from the likes of Senator Baucus from Montana and others in government who are part of the U.S. lumber lobby coalition that any negotiated deal would have to include restrictions on Canadian lumber.

Softwood LumberEmergency Debate

3:25 p.m.

Canadian Alliance

Gary Lunn Canadian Alliance Saanich—Gulf Islands, BC

Mr. Chairman, I would just like to ask the hon. member a question.

The question that comes up all the time and one we hear at home is whether we should be linking other commodities. I think most people are aware that it is generally bad economic policy to start linking one commodity to another. There is no question about that. It is a very slippery, dangerous road to go down.

Having said that, the United States is looking for $30 billion to $50 billion in oil and gas. Does the member think there could be some significance to our Prime Minister getting directly involved with that? Could it have an impact on the positive outcome of this dispute in the long term?

Softwood LumberEmergency Debate

3:25 p.m.

Canadian Alliance

John Duncan Canadian Alliance Vancouver Island North, BC

Mr. Chairman, when it comes to linkage, I think what is clear to everyone is that what is linked is our two economies. Any restrictions on softwood lumber are detrimental to both economies. The consumer movement in the U.S. recognizes it, the Bush administration recognizes it and obviously Canadians recognize it.

A vastly greater number of jobs in the U.S. are related to the lumber consuming business rather than to the lumber producing industry. Both of our economies are somewhat fragile, particularly after the events of September 11. As housing starts are a big part of that, it is crucial that lumber flow freely in order to maintain those levels of housing starts.

Softwood LumberEmergency Debate

3:25 p.m.

NDP

Svend Robinson NDP Burnaby—Douglas, BC

Mr. Chairman, I would like to ask the member for Vancouver Island North what his position and the position of the Alliance is with respect to the issue of raw log exports.

Many Canadians, certainly British Columbians, are deeply concerned about the level of raw log exports and are calling for more value added in the British Columbia forest industry. I wonder if the Alliance member would agree that we must resist any suggestion of increased export of raw logs from crown lands and in fact should be doing whatever we can to end the export of raw logs and ensure that we process those logs and create jobs in Canada.

Softwood LumberEmergency Debate

3:30 p.m.

Canadian Alliance

John Duncan Canadian Alliance Vancouver Island North, BC

Mr. Chairman, on the issue of raw log exports, I think the member was referring specifically to British Columbia which is the one jurisdiction we have where this is a contentious topic.

What I have endorsed is British Columbia, with federal authority, imposing a border tax equivalent to the 19.3% countervailing tariff imposed by the U.S. It would level the playing field in terms of whether the exports are lumber or logs. Some of the industry in British Columbia has determined that this is a good idea also.

Softwood LumberEmergency Debate

3:30 p.m.

Bloc

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

Mr. Chairman, I was a bit surprised at the last remark by the Alliance member.

Do we not in this House all think that, on the essence of the question, we are fundamentally right, that there is no market where there is no competition and where Canada's international agreements are not honoured? Should we not instead be looking for a solution that would eliminate this type of tariff?

It seems to me, from his position, that the member is quitting before any steps can be taken toward really settling the matter and eventually being successful.

I would like him to give me some reassurance, and ascertain that some form of consensus still exists so that we can claim a victory in the end. On the essence of the matter, I have no doubt we are right. We must show appropriate solidarity with our workers and industry and arrive at a long term solution that does not penalize them.

If we go back to paying this kind of rates, we will not have gained any ground in the present battle.

Softwood LumberEmergency Debate

3:30 p.m.

Canadian Alliance

John Duncan Canadian Alliance Vancouver Island North, BC

Mr. Chairman, I agree with the member. We would not want to impose these in the long term. I was simply suggesting that as long as a lumber tariff there, which I would like to see gone, it is only appropriate to have a similar tariff on logs.

Softwood LumberEmergency Debate

3:30 p.m.

Papineau—Saint-Denis Québec

Liberal

Pierre Pettigrew LiberalMinister for International Trade

Mr. Chairman, I appreciate your allowing me to rise in the House today to debate a matter of considerable concern to me.

I am a bit surprised that the Alliance has decided to consider this to be an emergency debate but has not found the opportunity to ask any question on this file for the past three weeks.

For anyone to say that this has not been a top priority for the government is absolutely wrong. On the advice given to us by the member from Vancouver Island we have been working on it. The Prime Minister has raised it with the president.

I hear a member saying something but it is my opportunity to speak. Yesterday the party opposite told the whole House that the government had not met its targets. It was completely wrong again because it does not do its homework. The Alliance members have a hard time.

Softwood LumberEmergency Debate

3:30 p.m.

The Chairman

I would interrupt for a moment. I understand that this is a very important debate and that is why we are having an emergency debate. I am not taking sides on this issue but I caution members on both sides of the discussion to make their comments through the Chair otherwise we might just get away from the topic and get into something else very different and not as beneficial.

Softwood LumberEmergency Debate

3:30 p.m.

Liberal

Pierre Pettigrew Liberal Papineau—Saint-Denis, QC

Mr. Chairman, I appreciate the opportunity to speak to this, but I want to be quite clear. The Government of Canada has been working very hard on this file and for a very long time. If we let the softwood lumber agreement die last March it was not that we had not foreseen its end. It was that after narrow consultations with industry from all over the country, narrow consultations with the provinces and the advice of opposition parties there was a consensus of not renewing that agreement, of letting it die precisely to see what American producers would then do.

We have been bitterly disappointed with the attitude of the American producers. We have been extremely disappointed that the Bush administration has listened narrowly to the U.S. producers' protectionist demands and has given them everything they have been asking for. We find the 19.3% tariff absolutely indecent. We have found, of course, that in regard to the inclusion of re-manufacturers, these shops trying to enter value into the softwood lumber, their inclusion in this litigation is wrong. We also find it amazing that they found the critical conditions to put that countervailing duty retroactive.

We have been saying these things loud and clear. I was in Washington on September 10 and met with both trade representative Zoellick and secretary of commerce Evans. We made our position very clear: we do want free trade and we do not believe that we have been subsidizing our softwood lumber industry.

We reminded them that in 1994 we had a similar dispute. Panel after panel and court decision after court decision, the softwood lumber producers lost their case. A billion dollars in taxes that had been collected by the Americans was given back to the Canadian producers. We won in 1994.

We intend to work very hard. Saying that we have not done a thing is just so wrong. The member for Vancouver Island North himself has quoted all the successful things we have done, precisely because of the very hard work and leadership that our team Canada, non-partisan, above parties, from all provinces, the east and west of the country, has been able to do in the United States. A team of members of the House and Senators obtained great success in Washington. We obtained a letter from a hundred congressmen, both senators and representatives of the house, who wrote to President Bush siding with Canada. That has never been seen before.

We have, and the member has quoted it, support from the consumers, from the coalition for affordable homes in the United States and the Home Depot people. We have it because we have been doing our work, providing the leadership that is necessary, promoting our cause in Washington and across the United States. We had gone through legal action to the WTO before the actual cases that the Americans have put as pre-emptive strikes in order to gain some enlightenment from the WTO and to gain some time. We had gone there months before the end of the softwood lumber agreement, precisely in order to gain some time.

What we have been doing is with respect to an extraordinary team Canada that has been really working hard on this front. I am very pleased that the industry from British Columbia and Quebec and the provincial governments are participating very well and very strongly in the discussions in which we are involved. Yes, we are pursuing the WTO and we will pursue every legal venue that we can to challenge the American allegations. This is our duty, this is our right and we will win. We know it will take some time and that is where I fail to understand where the Alliance is on that.

The Alliance says the only thing they want me as minister to negotiate is free trade. This is precisely what we want, this is precisely what we are engaged in and this is precisely why we are having all these legal challenges. At the same time Alliance members say it is urgent because people are losing their employment, so they want us do something other than the legal challenges. That is what I think the position of the Alliance is although it was pretty vague and I am not sure I understood.

We are having sets of parallel discussions, some that just finished at 2.30 today. For three days we have been meeting in Washington. Provincial governments are there. Our international trade experts are there. It is the third such three day meeting we have had and we are finding common ground, comparing forestry management practices on both sides, finding common ground to make sure that we can have a better dialogue and hopefully find an alternative to litigation. However, that has to be done on solid grounds. That has to be done on grounds that will help our industry.

A member suggested an export tax. He says Americans want to slash the 19% tax and asks why do we not do so. It would be as bad for our industry whether I do it or the Americans do it. We want to access the American market at the level where we should be accessing it. We won in 1994. They had to give back $1 billion in tax they had collected. Since then all the provinces have increased their stumpage fees. Therefore, how could we win in 1994, then increase the stumpage fees and not win this time? It is so clear. The Americans know very well that their case is a bad one and that they will lose before the WTO.

In order to gain time, because we know that for many enterprises and many businesses time is of the essence, and unfortunately legal courses and challenges take time, we have set up these discussions with the Americans. I want the thank the provincial governments for participating so well in them. We are really making progress on that front.

The Prime Minister has raised it with President Bush and we are pursuing every venue possible to find more allies in the United States. I do believe that our team Canada approach has provided the right and the best possible eventual outcome for us. However, it is not the time to cave in. It is not the time to move to any quick fix that some U.S. senators might be trying to push us into because they realize that they have a bad case. I ask members to please let us resist their request for a quick fix, thus harming ourselves, rather than having them harm us for a while but losing eventually.

With respect to softwood lumber, enormous progress has been made in the past five, six or eight years. We have built Team Canada, in which Quebec's industry works closely B.C.'s industry and provincial governments have had long discussions to compare forestry practices.

We know that we do not subsidize our wood. We won in 1994, and since then we have increased our stumpage fees in Quebec and elsewhere. If we won in 1994, and increased our stumpage fees since, how could we lose our case this time? Except that, as we know, time is of the essence, and the courts often take time to decide.

At the moment, we are making considerable progress in our discussions. I think we could eventually open a dialogue with the Americans on a basis much more constructive and solid than the previous U.S. bias with respect to the situation in the Canadian softwood industry.

Softwood LumberEmergency Debate

3:40 p.m.

The Chairman

The Chair takes note of the interest in asking the minister questions. I would hope that with your co-operation I will be able to accommodate as many of you as possible and also that the minister will respond as succinctly as possible.

I will begin with the sponsor of the motion, the hon. member for Vancouver Island North.

Softwood LumberEmergency Debate

3:40 p.m.

Canadian Alliance

John Duncan Canadian Alliance Vancouver Island North, BC

Mr. Chairman, I have a couple of quick comments. First, the official opposition is very aware of the events of September 11. Although we did not ask questions on this file we certainly made statements in the House.

I would also like to point out that the minister is accepting into his rhetoric some revisionist history in terms of the consumer groups in the U.S. and how they were actually the main architects, long before the minister even started working with them on some of the congressional support we got in the U.S.

I would also like to point out that Indonesia seems to have more leverage than Canada when it comes to forest products. That should be of some concern to all of us.

My question is, have there been some specific developments from the three days of talks in Washington which the minister could announce today? Is that yet to come or is it just that the talks have concluded and there is nothing of note for us to take home?

Softwood LumberEmergency Debate

3:45 p.m.

Liberal

Pierre Pettigrew Liberal Papineau—Saint-Denis, QC

Mr. Chairman, this was the third such meeting we have had. I understand that some common ground has been further developed in the set of meetings that finished this afternoon, so much so that the participants on both sides, including the provinces, have agreed to a further set of meetings in two weeks' time precisely to continue the solid work done so far. The discussions are continuing, which I think is a very healthy outcome of the parallel track in which we have engaged.

Softwood LumberEmergency Debate

3:45 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Chairman, I have just one simple question. I have received information to the effect that during the discussions over the last three days, there was talk of temporary measures before a return to full free trade.

I would like a very clear answer. Is the government in the process of negotiating temporary measures to reach a settlement with the United States, which would have the effect of restricting access to the American market, as was the case in 1996?