Debates of Nov. 6th, 2001

Softwood Lumber

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, first, I want to say how much I empathize and sympathize with the people who have spoken in this place expressing concern over the possible job loss, particularly at this time of year, but at any time of year. They fear what may happen in their communities as a result of the closing of mills and the loss of business resulting from these punitive actions and movements by the United States government.

While I do have some northern Ontario roots, as my friend from Algoma mentioned, being from Sault Ste. Marie, I also represent a riding that is very reliant upon the lumber industry in a community like Mississauga. I cannot imagine the damage that would happen to the housing industry if we lost our mills or if we had to resort to importing wood from Mississippi or Tennessee, perhaps at exorbitant prices as was referred to earlier. This would have a rippling effect and could affect not only jobs and economies of places like Thunder Bay and other parts of northern Ontario, Quebec, New Brunswick, B.C., but it could have an effect throughout the country.

Canada controls something in the neighbourhood of 21% of the world market in lumber, so it is an important sector of the Canadian economy. It is important for my riding and for urban ridings equally, perhaps not as obvious at first blush, because of the impact it could have.

When the NAFTA agreement was entered into, I was not in this place but rather in another place at Queen's Park. I recall the debate wherein people used the phrase “It's like getting into bed with an elephant”. If that elephant rolls over or decides to do whatever, it is done and a person has no defence. The reality is that the elephant in this case has attempted to roll over onto the mouse in the past and the mouse has kicked back, challenged and won at the WTO.

It continues again. The elephant is a little twitchy, nervous and does not quite understand how this can happen. The most powerful nation with the biggest lobby groups in the world feels it should have its way on this particular issue.

I have thought about this and asked myself: What is the real issue? People I talked to in my community get confused with all the acronyms such as WTO and NAFTA and the words countervailing and duties to be paid. They hear all this and wonder what is going on.

In my view, this is much more than simply a trade dispute. This is potentially an attack the sovereignty of Canada. I have heard it said before, and I have often thought it was a bit of a knee-jerk reaction, that we can determine our own sovereignty and that no one can take it away from us.

Let us analyze what is happening.

Canada has a system of licensing out to corporations the harvesting rights on crown land so they can harvest the wood under a reforestation plan, or an under an environmental plan or working in with groups like MNR and local communities in Ontario to determine how much of the forest should be harvested. Let me call it stumpage. We have that all over the country. Stumpage is a public manner in which we manage our forest inventory.

The United States system is quite different. The lands are privately owned. Corporations go in and simply do what they want. There may be some environmental constrictions, remembering that they respond to the shareholder on the bottom line. They have to decide corporately how they will manage their particular inventory.

If times are tough maybe they step it up a bit. If times are good maybe they back off and move somewhere else. Do they pay attention to reforestation policies to the same degree as our provincial governments do? We all know that forestry comes under the jurisdiction of the provinces. That is another issue. They want to tell us how we should interact as a federal government with our provincial partners and our industry partners. We should simply do it the way they do.

The Americans say that stumpage is an unfair subsidy because it is crown land and we do not charge enough for the licences that we give out. Yet there is so much more to it in terms of reforestation.

I want to share with the House a small example of the detail and the level to which our officials in the province of Ontario and elsewhere in the country actually manage their forests. My wife and I own a small cottage property in the Parry Sound area. We were told that a licence had been given out to a forestry company to come in right behind us and take out a number of trees. We called and found out that the ministry of natural resources had assigned the responsibility to a consulting firm to do a complete inventory and analysis of the site in question.

We met with those folks. The bottom line was very interesting. Two separate licences were given to the same company in the same general area on our lake. The nest of a red shouldered hawk was discovered on the crown land behind our property. Everything came to a grinding halt because of this red shouldered hawk.

The level of detail had an individual actually walking through the forest doing an inventory of the trees, marking the trees that could be removed under this licensing agreement and then discovering that there was a species at risk nesting in the area and calling the whole thing off. I was not afraid to have a bit of culling done in the forest behind our property, but I was quite impressed with the conservation attitude.

How does my story relate? It seems to me that the Americans would like to take away the opportunity for our officials to do that and that we should simply operate like they do. That is to go in, clear cut, do whatever and worry about reforestation later.

Why is this sovereignty? We have a right as Canadians and an obligation as members of parliament to ensure that it is our policies that are determining the future of the forest industry and, perhaps more important, the future and the conservation of the forest itself.

In addition to hockey what else identifies this country more than the forest, the forest industry, the jobs and all benefits that come from that?

We can stand and get excited about this debate. However we have to realize what is next. Is it bulk water? We all know the debate. Is it oil and gas? We all know what they want. We know the crunch in the United States.

It is impossible for anyone to publicly criticize the United States ever since September 11. God bless America. We are their family and friends. We will not be ridden roughshod because a certain lobby group or sector in that country decided that it does it the right way and that Canadians do not.

We will not be told how to manage the future resources of this great land. We will not be told by the Americans how to do business, no matter what sector it happens to be in.

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Mr. Speaker, I will be splitting my time with the member for Okanagan--Shuswap. My riding contains the most vibrant and active softwood lumber area in the province of B.C. Prince George is right in the central part of British Columbia.

Our mills are the finest in the world as far as technology goes. These mills can produce softwood lumber in such an efficient manner that we can put a 60 foot tree through the system and come up with a handful of waste. That is how efficient it is.

That is not so in the U.S. The big softwood lumber manufacturers have the company owned forests. The mill owners are the principals behind the lobby group. They call themselves the coalition for fair lumber imports. They have been successful in getting the ear of the senators and the United States government. They have claimed time after time that Canada is being unfair to them because they say we subsidize our softwood lumber industry.

We do not subsidize our softwood lumber industry. We use a system that ensures there is a price paid for the harvest to the government. The other costs are all relative to what the costs are in the industry for labour, technology and taxation. As a matter of fact we can argue that we pay too much to harvest and produce our softwood lumber.

We have been to the WTO three times to fight the cases that their coalition has brought against our country. We have been successful every time. No evidence exists to date that was sustainable in the WTO courts. There was no subsidy, no dumping and no evidence of injury to the U.S. market.

The decision of the U.S. government to proceed with yet another countervail anti-dumping imposition of a duty only confirms the protectionist attitude of the American government. The prior administration to this one did the same.

The fact that there has been no evidence of subsidization and dumping only confirms that this is all about the big southeastern American firms wanting to make more money and wanting to secure a greater share of the market because they could not produce softwood lumber like we could.

They are so inefficient that they are trying to offset their inefficiency with the imposition of a countervail tariff and by saying that we subsidize softwood lumber production in Canada. It is just a veil to help with their bottom line.

We had WTO disputes and we won them every time. Someone came up with the idea that we should develop a five year program to put an end to all the countervail threats. We came up with the softwood lumber agreement in 1996. It was to be the end to all these types of threats from the U.S.

When the Liberal government was in power in 1996 and this was coming into force we in the Reform Party, now the Alliance, questioned the government about its foresight and suggested that the deal was wrought with peril.

I remember the Minister for International Trade and the Minister of Industry saying to us that they did not know why we were blaming them as it was the industry that put it together. They were partially right because the large firms in the softwood lumber industry were involved in putting the package together.

We went down that road and when we were about halfway through the SLA some flaws started to show up, particularly with the quota system. As it turns out the large manufacturers did just fine as far as the quota but the small and medium producers were having trouble. They employ Canadians who also have to feed their families.

We brought these concerns to the Liberal government and we were ignored. We told the government time after time that everything we hoped for was not so good any more and that some of the flaws in the SLA were starting to show up. We did not get any attention from the government.

We told the government halfway through that this SLA would expire in May. We had already determined that it was wrought with peril. We had to do something so that when we got to May 2001 we would not be caught wondering what to do and then again be at the mercy of the American coalition for fair lumber imports.

That was exactly what happened. The government did not get involved in the issue until about November 2000. That was much to our dismay because we had been talking to it about this since the beginning when all the flaws started to show.

The Minister for International Trade became involved. Suddenly he was gung-ho and making a lot of pronouncements with six months left in the SLA. Where was the government three years ago when we told it things were going bad? Suddenly it was in panic mode because the SLA was running out.

The Americans were rattling their sabres and we ended up in the situation we are in. We had the countervail tariff put on, the anti-dumping tariff put on, and now we have to go through the WTO again. This is all because the government refused to get involved until about six months before the SLA was to expire in May.

It is because of the government's lateness that we are in the crisis we are in. The Americans are saying Canada is subsidizing lumber and dumping it. Therefore they will charge us extra fees and we will fight it out in court. In the meanwhile we must pay them.

Our producers are having trouble with their money. What does it take? It takes a bureaucrat doing some negotiation. It takes the Minister for International Trade getting involved, but most of all it takes the Prime Minister of Canada, the top politician in Canada, to recognize just how important the softwood lumber industry is to the country.

First, the Prime Minister must recognize that. Second, he could consult with his experts who would confirm the impact on the economy. Third, he could phone the president of the United States on an ongoing basis.

If the Prime Minister realizes how important the softwood lumber industry is, he would be on the phone every week telling the president that this can be fixed. If our bureaucrats and junior ministers cannot do it, they as the top guys would fix it. That is what he should be doing. I hope the message is taken to him and he reacts to it.

[Darrel Stinson, Canadian Alliance, Okanagan—Shuswap, BC]

Mr. Speaker, I rise tonight in what is more of a discussion than a debate. I am not what we would call a happy camper. As the hon. member for Prince George--Bulkley Valley stated in his speech, as did other members in the House, the government was warned for a long time that this crisis was about to happen.

I would like everyone in the House and those who are listening to be assured that not all the Americans are on board with what a small band of special interest people is doing down there, not by a long stretch. As a matter of fact, the majority of American people are against exactly what is taking place here. Not only is it creating havoc in this country, it is creating havoc in the United States.

When the softwood agreement expired, the government acted as if it was a revelation that this would hamper our industry and create problems. Let me take members back. This dispute has been going on since 1962. Time and time again the Americans have challenged us and time and time again we have beaten them at the WTO in regard to these duties. It is not as if the government members could stand here tonight, and I have heard them, and say in all innocence that they should not have any concerns on this. They should have. History repeats itself until we do something right.

We went into the softwood lumber agreement with basically a five year understanding to get this worked out. When we stood up in the House and stated the concerns we had in regard to softwood lumber, I remember the minister saying it would give us five years of stability in the industry. That is what the minister said. The minister said that it would give us time to work on it.

There was no work done and now there is no work for our loggers or for those who depend on the logging industry, because the government refused to do absolutely anything. It treated it as a non-issue.

I would like to quote something from a gentleman whom I kind of agree with. David Emerson, the president of Vancouver based Canfor Corp., said:

If this was the auto industry or if this was Bombardier or the aerospace business or if it was split-run magazines, we'd have had high-level emissaries flying back and forth daily and it probably would have been resolved by now.

He is right. We have seen that happen in the House.

I will step away from probably the party and everything else because I really have a problem with free trade. The problem is that when we went into NAFTA and we talked about free trade it was sold to the people in Canada as free trade. To me free trade means free. We know it is not happening. We know it never did happen. Maybe we should be looking at fair trade. We should start looking at that issue and get rid of this concept of free trade because it is not free. It is costly.

For those who think that this has impacts only on those working in the forests, I have news for them. Everyone who is laid off in the forest industry, whether it be in the mills or in the bush, has impacts on the communities they live in, right down to the teachers, because if there are no jobs, people move to find jobs. It has impacts on the classrooms, the stores and the hospitals. It impacts everything. The government does not seem to understand that. This impacts not only small communities in our rural areas, it impacts right across Canada. Every time people have to go on unemployment or assistance of some sort, it has impacts on the social safety net. The government has to understand this. I am sure that if this was the textile industry or it was taking place somewhere close to home here in Ottawa that the government would understand exactly what we are talking about.

I find this situation highly degrading for a number of people, particularly those in British Columbia because they are who was referred to when the parliamentary secretary stood in the House and called them nervous nellies. They are losing their homes. They are losing their trucks. I find it quite exceptional that someone could even conceive of standing in the House to say “quit acting like nervous nellies”.

We have to come to some kind of agreement. We cannot stay on this route with the Americans. In my own opinion, and only my own opinion, it is time the government got tough. It is time the government got tough on these issues. The Americans depend upon us and we depend upon them. It is that simple. There is nothing wrong with bargaining hard, the same as they have been doing with us. We can do it. All we need to have is the will from the government. In my opinion there is nothing wrong with using linkage, if that is what it takes to resolve the issue.

I heard a member from the other side of the House say, and quite rightly so, that since September 11 nobody wants to take a hard line with the United States. I do. I will say that right now on this issue. The Americans are wrong. It is a small interest group that has driven this agenda to where it is now. The Americans are right in some respects. Their foremost interest right now is the security of their nation. That is one way in which they are right, for those on the other side of the House who wanted me to name one. Their primary interest is the security of their nation and rightly so.

If somehow we could loosen up those concerns, and they have come to us on a number of these issues, we would then be able to free up some of the senators who we know are sympathetic to the issue we have here regarding softwood lumber and we would be able to have them pay more attention to what is going on in this industry, because we do have support on the issue in their senate and their congress. We have consumer support in the States. There is overriding support from consumers to get rid of these countervailing duties on our lumber. They should not be there.

A lot of people do not even understand what softwood is and where it comes from. We need time to better educate the people. It is pine and spruce. They like to throw in cedar and fir. It has impacts across all aspects of the building industry in the United States.

I find it very strange that the government has had all this time and yet has done absolutely nothing in this regard except during the last five or six months. The Americans have lost their challenges in regard to this issue with Canada, yet they keep coming back. Now is the time to get a final agreement on this and really force the issue. We have to. Our people out there are depending upon us, not only in B.C., Quebec and Ontario but all across Canada.

All I can do is implore the government on behalf of the working people in Canada, those who depend on this industry, to please finally do something and do it fast. This is a crisis. If the government cannot do anything on the governmental side to fix the crisis with regard to the trade dispute, it should at least look at some way of offsetting the costs of the layoffs. This is a crisis as big as any the government has seen, bigger than the ice storm crisis. The government has to be responsible because it is a trade dispute and it is out of the hands of the workers. It is a trade dispute and the government is responsible for trade.

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

Mr. Speaker, I will be sharing my time this evening with the member for Durham. I am pleased to rise this evening to speak in this take note debate on the softwood lumber trade dispute. In fact this is the second time that I have had the opportunity to participate in debate on this issue. We had an emergency debate a couple of weeks ago on this issue.

At first glance members might wonder why the Parliamentary Secretary to the Minister of Canadian Heritage would participate in this debate and what I, being an urban member, could possibly know about this issue. Let me begin by saying that I know this is an issue that is important to all Canadians, rural Canadians and urban Canadians. We heard my colleague, the member for Mississauga South, speak to us about how this issue is affecting home building in his riding.

I also want to say that as a former chair of the subcommittee on international trade, trade disputes and investment in the last session, we considered this issue years ago when we did our cross-country hearings on the WTO. Also, as a lawyer I have a very strong interest in international trade issues and I think it is also very important that Canadians try to understand and learn about this trade issue.

The last time I rose I took the opportunity to outline Canada's case before the WTO. Tonight I would like to actually inform Canadians about what the leading advocates in the United States are saying about these trade actions.

Again, while we are pleased that Canadian and American officials are meeting regularly to discuss a long term solution to our softwood lumber, at the same time it is very important to highlight some concerns that have been raised about protectionism in the United States and the U.S. trade action. I want everyone to realize that I will speak about what the Americans are saying about Americans in the United States.

The first and foremost concern is something that has not been mentioned by the U.S. lumber producers, that is, U.S. consumers are hurt by protectionism. The United States National Association of Home Builders estimates that at least one-third of any tariffs would be passed along to U.S. consumers. Estimates indicate that duties on Canadian softwood lumber exports would increase United States house prices by up to $3,000. While some families would have to pay a few months' mortgage to justify lumber duties, hundreds of thousands of others would in fact be priced right out of the market for new homes.

Other groups that are looking into the negative impact that duties will have on U.S. consumers include: the coalition American Consumers for Affordable Homes, the United States Census Bureau, and the Cato Institute, a U.S. think tank that has been following the Canada-U.S. softwood lumber dispute.

The second concern about the Canada-U.S. dispute is the reality about the United States industry. Softwood lumber production in the United States has fluctuated around 31 billion board feet yearly between the years 1991 and 1996. United States production increased to a peak of 35 billion board feet two years ago.

What U.S. companies and the U.S. lumber lobby will not say is that the supply of timber in the United States is increasingly constrained. Lumber from federal lands, which accounts for only 10% of the total U.S. harvest, is dwindling and subject to increasing environmental protection. In the south the industry is almost totally dependent on private lands for supply and yet annual harvests from private lands are exceeding replanting rates. All in all, U.S. producers cannot meet their own demand for lumber. Canadian producers helped build this market demand by providing up to 35% of lumber to U.S. consumers.

What is it the Americans are saying? What does Alan Greenspan, the U.S. federal reserve chairman, say about U.S. protectionism? He recently said to a congressional committee:

There is no question in my mind that as the economy slows we must accelerate our endeavours toward free trade. If we were to move in the direction of protection, that would create some very significant problems for the American economy...It would have been a great tragedy were that process stopped or reversed...The evidence has become increasingly persuasive that opening up trade to significant international competition is a major force in economic growth and rising standards of living wherever it occurs.

What else are Americans saying? What does Mark Suwyn, chairman and CEO of Louisiana-Pacific, one of the largest forest products companies in the U.S. and a former key member of the U.S. industry coalition, say? Mr. Suwyn has noted that U.S. producers find it difficult to compete with Canada because “...Canadian mills have modernized at a faster rate than producers in the United States”.

He further says “mills in the U.S. can't compete in today's market no matter what the stumpage fees in Canada are”.

What does Auburn University in Alabama say about Canadian forest practices? The university study reported that:

—Canadian lumber producing provinces rank at the top of a list of provinces and lumber producing states protecting their lands from commercial development. States in the U.S. south fall at the bottom of this ranking.

The American Coalition for Affordable Homes notes that affordable housing continues to be a cornerstone of the American dream, yet limiting trade substantially increases the cost of producing new housing or remodeling existing housing and excludes many Americans from home ownership. There are a million more jobs in the U.S. that depend on availability of reasonably priced lumber than there are jobs in domestic lumber production.

Current restrictions on domestic timber harvests means that the U.S. cannot increase lumber inputs significantly. The number of jobs in lumber production, about 200,000 for logging and lumber mines combined, will continue to decline.

In refuting U.S. industry claims and preliminary U.S. department of commerce findings, the U.S. congressional research service reported that “the evidence to demonstrate this possible disparity between U.S. and Canadian stumpage fees is widespread, but inconclusive”. It also noted:

—other factors also affect stumpage fees. For example, the management responsibilities imposed on the timber purchasers differ. In Canada, licensees are generally responsible for reforestation and for some forest protection. In U.S. federal forests, timber purchasers generally make deposits to pay for agency reforestation efforts and some of those deposits are typically reported as part of the stumpage fees.

Finally, it noted:

Economic theory suggests that U.S. restrictions on imports of Canadian lumber have probably raised U.S. lumber prices above what they would have been with no restrictions.

The Consumers for World Trade have said:

Just jacking up the price of lumber hasn't solved this problem in the past and it won't solve it in the future.

While I could go on to quote a number of other industry organizations and individuals, I think the above quotes have epitomized what the real problem seems to be. Let us look at what the leading U.S. media have reported.

In a lengthy article, entitled “Logjam--U.S. should drop lumber threats against Canada”, the Dallas Morning News reported:

Americans need affordable shelter. That's why they (the U.S. Department of Commerce) should resist U.S. lumber producers' heavy-handed attempts to reduce imports of cheaper Canadian softwood lumber.

The article goes on to say:

The department should avoid a bitter, protracted and probably fruitless battle. Canada's real sin (if sin it be) is to have a different system.

I think this is the key. When we look at the WTO and we go there, just because it is different does not make it wrong. That is what the Americans need to learn and I think that is what the paper was saying.

I am pleased that both countries sat down to discuss the root problem of our differences and I hope a reasonable conclusion can be achieved. If not, history will prove us right again and for the fourth time in 20 years the U.S. industry's allegations will not be sustained.

[Alex Shepherd, Liberal, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, it gives me great pleasure to enter the debate on softwood lumber and to be sharing my time with the eloquent member for Parkdale--High Park.

People are probably wondering why a member from Durham, a riding with not much forest industry but a lot of agriculture, would be interested in the debate but, of course, Liberal members can actually visualize this country from sea to sea to sea.

I was very fortunate to travel to British Columbia back in 1994. I actually sat down in Cranbrook with representatives from Crestbrook Forest Industries, which is now called Tembec, one of those few unfortunate companies that has been hit not only with a countervail duty but with additional duties due to trade restrictions.

I was able to go back to B.C. in 1998 and once again get involved in the issue of trade disputes. At that time it was the harvesting of the old growth forest in the lower mainland of British Columbia. Once again our lumber exports were being restricted not only in the United States but also in Europe, and inappropriately so. As we got involved in that debate we discovered that in fact it was not based on logic. It was based on a lot of emotion and so forth.

The debate today has been going on for well over 20 years. I will elaborate on some of the background history.

Forty per cent of Canada is covered by forests and 10% of the world's forests are in Canada. Softwood lumber accounts for 3.1% of our gross domestic product. Canada exports $23 billion or 15% of its softwood lumber products. The forestry industry accounts for 311,000 direct jobs and 446,000 indirect jobs.

When the opposition members say that the government does not care about those jobs, they are totally wrong. We certainly feel for the people out in British Columbia and in other parts of our country who have lost their jobs, especially with Christmas coming and so forth. Our hearts go out to them tonight. We are trying to resolve this problem. Unfortunately, the opposition has used this as a matter of confrontation when what we should all be doing is getting behind this and trying to solve the problem.

Seventy per cent of our softwood lumber is exported and 75% of that is to the United States. Softwood lumber accounts for half the manufacturing in British Columbia and in New Brunswick.

In Canada 80% of our forests are owned by provincial governments. This is the problem. Only 11% is owned by the federal government. In the United States it is totally the reversed: 70% is owned by private industry and only 20% by the federal government.

Here is where the problem starts to come in. In 1952, Canada exported to the United States three billion board feet or 7% of the U.S. market share. By 1998 it was 18 billion board feet or 33% of the total U.S. market share. I think what we are starting to see is that Canadian companies are able to go down and compete effectively with their American counterparts in the United States and as a consequence have taken a market share.

What is the historical problem? What we are trying to do is stop Canadians from importing lumber from the United States. That is the first desire of those people who have a vested interest in the forestry sector in the United States.

The first allegation is that we are unfairly subsidizing our forestry industry with the use of stumpage fees. We have been through this whole issue a number of times, as I say, over 20 years. It has never been proven that the cost of stumpage fees is an undue subsidy or even a subsidy in fact to the forestry industry. This is pretty much a bogus thing. Once again we have to go back to the World Trade Organization.

Why is it that we have to go through this process? In some ways the process is successful for the Americans for one particular reason: it embargoes trade for a brief period of time, maybe two or three years, before this all gets resolved, people get back to duties and so forth, but the reality is that it has been hurt.

The reality is that Canadians were not been able to access that market during that period of time. In reality, embargoing our trade, while perhaps not legal, is very successful and very profitable for these companies in the United States.

The second issue is export restrictions. This is the concept where the province of British Columbia, for instance, does not allow the export of raw logs from provincially owned lands.Many other provinces have the same legislation. On federal government lands in the United States, it does the same thing. Why is that? Essentially, it wants to create jobs in Canada. In other words, obviously exporting raw logs does not particularly create a lot of jobs in Canada. There is nothing inherently wrong with that. Clearly, Canadians do not want to be hewers of wood and carriers of water. They want to have good, solid jobs to live in their area. As I said, half of the economy of British Columbia is dependent on the forestry sector.

It has been mused that somehow these export restrictions cause an undue subsidy by governments, that in some way, by creating these export restrictions, if the logs were sold directly they would cost more money or something. Once again there has been no economic theorist or any other person who has been able to substantiate that the export restriction in fact creates a subsidy.

We should actually start looking at the pure economics of it. Why is that there has been this great market growth in the United States and why is that Canadians have been so able to capture that market? I think we should look at some of the other basics.

From 1952 until now, the Canadian dollar has shrunk in half. Would someone not think that would be more of a competitive issue? The Canadian dollar dropped in half and all of a sudden Canadian imports into the United States are significantly cheaper. I do not know why we are sitting here talking about subsidies and so forth because just the change in the Canadian dollar alone would tell us that Canadian softwood lumber is going be cheaper freight on board the United States than it was back in 1952.

My colleague who spoke before me mentioned that American mills have not kept up with capital improvements and have not kept their operations efficient. This is actually symptomatic of the United States.

We are having the same problem in steel. We all know that Bethlehem Steel went into receivership recently, mainly because it had not kept up with capital improvements. It ran its company on the basis that it was going to fail. When I say running a company on the basis it is going to fail, I mean that a company does not keep adding to its capital stock and making the company inefficient. If that is done over a long period of time, competitors become more efficient, are able to price their product more efficiently and, as a consequence, the company cannot compete.

In the United States it is cheaper to hire lobbyists to stop or impede trade than it is to put new capital equipment in plants. In reality, this is a perverse situation of which the Americans, quite frankly, should be ashamed. The great purporters of free trade and capitalism create a situation where it has inefficient industries and now it is dealing with legislation to impede efficient industries in Canada.

By the way, Weyerhaeuser bought out MacMillan Bloedel. Twenty per cent of the Canadian forestry industry is owned by Americans. Some people might ask whether they are trying to cripple our industry so they can buy more of it. I am not alluding to that as a conspiratorial theory but it certainly is plausible.

As I conclude my remarks, this issue really needs to seen in an American perspective. We seem to be on the receiving end of this constantly. I think it is time the Americans woke up and realized what their own government is doing to them.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I would like to point out that I will be sharing my time with my colleague from Churchill.

I am pleased to take part this evening in the debate on lumber. Since the opening of this session of parliament, lumber has become the culmination of the work of this House, because of its importance.

Since the beginning of 2001, the threat of blackmail has hung over Canadian lumber exports. The dispute over the export of softwood lumber to the United States threatens to weaken and disrupt our greatest source of jobs. In fact, lumber has been the greatest single item of trade between Canada and the United States.

Ever since the agreement on softwood lumber between Canada and the United States expired in March, the American government has decided to impose an import duty of 19.3% on softwood lumber. Now the lumber industry is facing anti-dumping duties of 12.58%, which were introduced in October. I must also point out that these two customs duties were applied separately, one after the other.

Under the previous agreement, the American government guaranteed Canadian exporters access to their market for a five year period, thus permitting the duty free importation of $14.7 billion worth of lumber. Unfortunately, this agreement expired, and we are now facing a national crisis. The federal government, having failed to get these duties eliminated, we have had to turn to the World Trade Organization to rule on our dispute.

How long will this take? Every day the Canadian industry sees businesses in this sector fall behind and accumulate a financial burden. All the employees of this sector are wondering if they will be next to have to go home and apply for employment insurance or find a new job, while the market remains fragile.

The current crisis in the lumber trade is simply the latest in a seemingly continual round of protectionist action by the U.S. The ability of the American lumber coalition to repeatedly harass Canadian exporters and hold to ransom our companies, workers, governments and communities indicates one of the major weaknesses of the North American Free Trade Agreement.

The lumber industry is central to the economic and social development of several regions in our country. In this era of market globalization, it has invested thousands of dollars to implement new technologies.

These investments have been very important in enabling businesses to increase their production capacity and to improve their competitiveness on international markets with quality products at competitive prices. How will our forest industry be able to perform on these international markets with these duties?

In my riding, the forestry and forest services sector created 7,550 jobs in 1996. It is one of the most important primary industries in New Brunswick and in my riding.

In 1996, Nova Scotia and New Brunswick accounted for 5% of Canada's softwood lumber production. Over the last five years, their production skyrocketed, increasing by 62%, which represents softwood lumber sales totalling $1.2 billion.

In New Brunswick alone, 90% of the softwood lumber production is exported to the United States. Not being party to the 1996 agreement that expired last spring and being supported by crown lands and by private companies, the Atlantic provinces thought that anti-dumping duties would never be applied to softwood lumber. It was a surprise when they learned that all Canadian softwood lumber producers would be subject to these duties.

As I indicated this afternoon in my question, we are talking about free trade rules, we are talking about fair trade rules, but all we have in fact are the American rules.

During consultations with the forestry industry some representatives told me the United States had done a study on lumber exports from six big lumber companies. Not one was from the Atlantic region. Following the study the U.S. decided to impose an anti-dumping tax on all lumber exported from Canada.

Atlantic companies have had an anti-dumping duty of 12.5% imposed on them. These companies have never been consulted by the United States but must now pay this outrageous tax. How can the United States base its research on six Canadian companies when the forestry industry is composed of hundreds of companies?

What has come over our government to give us such a slap in the face? Have all the fine words and great gestures of the Liberal government during the 2000 election campaign vanished just like that? Or has our government already lost its memory as far as commitments are concerned? This would not be the first time, moreover, for that to be the case.

In recent months, we had a kind of premonition that the federal government would be giving in to such affronts. Just yesterday, the federal government indicated that it had no plan of action for arranging a meeting with the U.S. in order to explore other avenues besides the 32% that is being forced upon the forest industry.

This situation is all the more difficult for workers in this industry, because close to 373,000 people depend on it. Thousands of jobs have been lost because of the anti-dumping tax. The province of B.C. alone has lost 15,000. This is terrible. Unfortunately, we will be seeing even more layoffs if the situation is not settled soon.

The forest industry is in disarray. Those in the industry affected by this tax, the workers and the communities, have great expectations.

The New Democratic Party has, moreover, called upon the federal government to ensure that the trade of manufactured wood products is carried out under equitable and fair trade rules.

What we are now experiencing is exactly what the NDP has always feared about free trade: one way trade that benefits only one country, at the expense of other countries and their industries.

No restrictions should be allowed, as the Prime Minister mentioned yesterday in the House.

The NDP has always fully supported Canadian forestry workers' unions and their employers in this fight to obtain fair access to the U.S. market, and we will continue to support them in the current context. Not at this price however.

The government must work toward levelling the playing field for workers and businesses on both sides of the border. An export plan that offers fair and unrestricted access would not harm lumber producers in any region of Canada.

The NDP supports the idea that the results of the ongoing discussions must lead to unrestricted access to the U.S. market for producers from all provinces and regions of Canada. In addition, we must protect our rights when it comes to managing our forests, especially crown forests.

In closing, the U.S. wanted free trade, but what we have today cannot be described as free trade. This is affecting Canadians. We are therefore asking the federal government to put its foot down and resolve the issue of softwood lumber once and for all. It is high time, because families are suffering.

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, I rise once again on behalf of the New Democratic Party and Canadians everywhere who have a stake and an interest in our forestry industry. I call on the Liberal government to start standing up to the bullying U.S. tariffs that are devastating companies, communities and families that depend on the forest industry.

It gives me a slight feeling of déjà vu to be taking part in yet another emergency debate on the issue in the House of Commons. It was exactly one month and two days ago that we last had an emergency debate in the form of an opposition day motion on the issue. It is disappointing that in the month since the Liberal government has continued to do what it has done all along: sit on its hands and do nothing.

So little has changed that I could take a copy of the Hansard from last month's debate, read back my comments word for word, and they would still be relevant and timely. What an indictment of members of the Liberal government. Despite this they continue to insist they are working hard on the file, as though if they repeat it enough people will start to believe it.

We in the New Democratic Party are not fooled by the Liberal government's empty talk. Neither are Canadians who work in the forestry industry and have to deal with the fallout of the government's inaction.

While the Liberal government has been sitting on its hands the U.S. government has been very busy. Last week it slapped yet another massive tariff on Canadian softwood lumber, bringing the total tariff on our forest products to over 30%.

It is outrageous when we think about it. Canadian softwood products entering the U.S. are slapped with this huge tax and then supposed to compete on the shelves next to U.S. products. Obviously that is almost impossible. That is why many Canadian forestry companies are facing huge losses and we are seeing thousands of layoffs in the sector. It is something our economy can ill afford as we slide into a recession.

The Liberal government's passive laissez-faire attitude is stunningly irresponsible. Days before the U.S. slapped on the new tariff last week we had reports that it would happen. We knew it was coming. The day before it was announced by the U.S. government I asked the Parliamentary Secretary to the Minister for International Trade in question period if the government would put an income support plan in place to help people whose jobs would be affected. The parliamentary secretary dismissed my question as hypothetical. The next day of course the hammer dropped.

What are we supposed to take from that? Was the government so clueless that it did not see this coming? Did the parliamentary secretary think I was asking a hypothetical question, or did he see it coming and not want to deal with the issue of assistance for the people losing their jobs? Either way it is of little comfort to the people wondering how they will pay their mortgages because the Liberal government is not standing up for them.

The government says it is pursuing a two track approach to the dispute with the United States. First, its lawyers are challenging the U.S. tariffs in a World Trade Organization tribunal. Second, it says it and the provinces are negotiating with the United States.

This is something but it is clearly not enough. The provincial governments which the Minister for International Trade claims are his negotiating partners are expressing a distinct lack of confidence in the federal government's handling of the issue.

The government of British Columbia has so little confidence in the federal Liberal government that it is exploring the possibility of making a side deal with the United States. This is something none of us want to see. It is crucial that the federal and provincial governments stand together and show a united front to the U.S.

I asked the Minister for International Trade about this last week in question period. He agreed about the need for a united front. What the minister apparently does not understand is that for the federal government to maintain a united front it must inspire confidence in the provincial governments. The provincial governments must be convinced the federal government is handling the crisis competently or they will be tempted to go off and cut deals.

The cracks that are starting to show in the federal-provincial coalition are a clear signal that the federal Liberal government is dropping the ball. Its provincial negotiating partners are not confident in its ability to reach an appropriate solution. The federal government is thus having big trouble holding the coalition together.

The people and companies affected by the dispute do not have confidence in the Liberal government's handling of the crisis either. People with families to feed and mortgages to pay who find themselves out of work are the real losers in this regard.

I would like to read from a letter that was sent to one of our national newspapers by Val George of Terrace, B.C. because it speaks volume about how the people affected by this view the Liberal government's response so far. The letter mentions one of our colleagues in the House of Commons by name so where it does that I will just substitute the member's title. The letter in the November 5 National Post states:

[The Parliamentary Secretary to the Minister for International Trade's] calling some B.C. lumber executives “nervous nellies” for being concerned about the softwood lumber issue is despicable. Would he like to come out to British Columbia and tell the more than 10,000 laid-off workers in the forest products industry that those who are defending their interests are being overly concerned? If he were to come out here, he would discover that it is attitudes like his toward western Canada's issues that are the reason for this government being held in contempt in the region of the country that generates a large proportion of the country's wealth.

Instead of making such insensitive comments, [the parliamentary secretary] should be urging his bosses, the Prime Minister and the Minister of Trade, to give this matter the priority it deserves. Come to think of it, perhaps he should tell them that they should have been giving the softwood lumber issue some priority four or five years ago, in which case we might not now be faced with this devastating situation.

That pretty much says it all because that is exactly what has been coming out for the last while. The Liberal government has left this so long, instead of dealing with the issue ahead of time. Now we are in a situation of absolute crisis within the industry.

I would like to talk about solutions in my last couple of minutes. I talked about the need for long term solutions in the last emergency debate so I will not use up my time repeating them. The New Democratic Party is on the record about this but one of the things the letter mentioned was the number of laid off workers in B.C. alone.

For months my fellow New Democrat MPs and I have been calling on the Liberal government to provide some assistance to those people who have lost their jobs through no fault of their own. The government has slashed EI so much in the past few years that people who get laid off cannot rely on it to get them through the hard times anymore. That is the case not just in the forestry industry, but in all industries. We have brought this up time and time again over the last number of years with little results from the government. It would much rather use the dollars going into the EI fund as a general revenue slush fund for the finance minister to make it look like there is a huge surplus when in reality there is a huge social deficit within Canada to laid off and unemployed workers.

The Liberal government should take some responsibility for the fact that it was its failure to deal effectively with the U.S. that resulted in these layoffs. Instead it just says that people should be patient. It is hard for them to be patient when they do not know how they will pay their bills next month.

If the government would provide some temporary income support to these people until the dispute is resolved at least it would look like it cared. That is what Canadians need from the government right now, they need it to care. They do not need the patronizing comments on how they just need to plug on through, how they need to be patient and how they are overly concerned. No one needs that.

We need some absolute effort from the government to support the industry. There are a number of ways of doing that. I will not mention the amount of business we have in exports to the U.S. However now is an absolute crucial time for the government to come forward with a national housing strategy to support our industry. We could pour more dollars than we have into housing. Just over $1 billion per year for ten years would address the total housing concerns in our country nationwide, in our aboriginal communities and in our urban communities. This is the time for the government to do that and show that it is supporting the industry as well as supporting Canadians.

[Mark Assad, Liberal, Parliamentary Secretary to the Minister of Citizenship and Immigration]

Mr. Speaker, I wish to inform the Chair that I will split my time with the hon. member for Vancouver Quadra.

This evening's debate is of course extremely important for members of the softwood lumber industry. There is no doubt in my mind that the Government of Canada, the provincial governments and the Canadian industry are determined to protect their rights in justice to settle disputes to their advantage.

In recent weeks, and even months—time goes by so quickly—I had the opportunity to meet people from the softwood lumber industry in my region. These are major entrepreneurs who export in huge volumes. In doing so, they created many jobs in the region. It goes without saying that the industry was doing very well.

I also had the opportunity to meet business people from British Columbia's softwood lumber industry. I travelled there on business. I met these people and I was very interested in getting their views, in order to compare them with those in Quebec. I was rather impressed by how they wanted to settle the issue. Needless to say I listened to them with interest.

I would like to share with my colleagues a view that is not often heard, but which is from people who work in that industry. These people are very well informed, and I think this is a golden opportunity to present their view on this issue to the whole country. Of course I trust their judgment, because they have years of experience, they know the industry very well. Some have been working in it for over 25 years. So, these people know what they are talking about.

Over the last two decades Canada has been subjected to at least three unwarranted oppressive actions by the United States in the softwood lumber arena. People of goodwill might be willing to characterize one action as merely that of ill-informed. Subjected to a second episode these same people, given common sense, might characterize such an action as unscrupulous. A third action based on the same strain and proven false logic as the first two will cause anyone to say enough is enough.

There should be at least no other consequence, namely we should ask ourselves why the United States continues to persist in such activity knowing the difficulty it creates in our industry, and after all we are supposed to be living under a free trade agreement.

From the perspective of American industry, the most important consequence is on companies in the affected industry within the country targeted for trade action; in this case the Canadian softwood industry. As intended, each time a foreign industry, like ours in Canada, is subjected to unwarranted punitive trade measures its member companies are significantly weakened. Collateral impacts within these countries, like our own: the workers who are directly employed are affected; companies and workers whose sales, jobs and incomes are affected directly and indirectly; and, of course, government revenues and the capacity of governments to sustain social programs are also affected.

During the trade action, United States competitors sell larger volumes at higher prices with the same cost base for an extended period and capture business that normally goes to Canadian suppliers, reap a share in punitive duties and build their financial strength.

Oppressed Canadian companies have restrained or limited revenues and in some cases no revenues because of the complete shutdown, while having to cope with ongoing overheads and cuts.

Immediately after the trade action, American competitors work hard to keep the new customers, cushioned by windfall profits accumulated during the period of unwarranted trade tension.

In the case of softwood lumber, once regular Canadian production and transborder shipments resume, prices invariably drop significantly as Canadian suppliers compete aggressively in a desperate effort to regain market share and rebuild their cash position.

The impact on the competitiveness of companies within the targeted foreign industry, namely our own, should not be underestimated. I refer only to the capacity of these foreign companies to compete for sales but is important to their capacity to compete and retain capital, supplier credit and confidence, customer confidence, top management talent and, among other items, motivated and trained personnel.

Being subjected repeatedly to the likelihood of being placed in a weakened state, drives those affected, in this case our Canadian softwood lumber companies, to act more intensively and at times perhaps selfishly than they would otherwise do because of the threat they are facing. Strong, vibrant companies grow and acquire other companies. A company needs many things to go right over an extended period to achieve and maintain a position of market strength. That takes years of work to build.

Companies incapable of achieving a position of strength and vibrancy over time, no matter what their natural potential is, are relegated to a position of also-rans, incapable except under unusual circumstances of being an acquirer, at least a weak company acquiring weaker operations. Most of them for the same reason are in difficulty. They become prime material for acquisition. One case in point is the Canadian company of MacMillan Bloedel.

If any major Canadian solid wood forest companies have been sufficiently strong over the past two decades to sustain significant international expansion and investment in research and development, the United States is structurally unable to submit international trade disputes on a timely basis for resolution to impartial review panels and abide by rulings from such panels until there is compelling evidence that the underlying circumstances have changed. The U.S. industry exploits this fully.

In the case of softwood lumber, even if the Canadian position is upheld in the long run, Canadian industry loses both in the short and long runs. Within the United States, the current softwood dispute is a sly manoeuvre for greater market share and dominance masquerading as a free trade issue. It is politically sanctioned commercial oppression that is permitted. It causes tremendous damage to the softwood industry in the country.

Canada must now stand firm on this issue and it must stand collectively. To win the battle we have to make sure the government takes all measures necessary to protect our softwood industry.

There were some rather radical steps recommended. For instance, it was recommended that Canada should declare an economic state of emergency whereby the government would have the power to stop all exports to the United States and force the U.S. to deal with an export fairness panel in Canada to make sure that we were not victims of unfair trade practices.

In conclusion, I am convinced that the government will not blink. Along with the provincial governments, it will do everything in its power to address this problem once and for all.

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

Mr. Speaker, I am pleased to speak tonight on this topic which is critically important for all Canadians and of particular concern for the people of British Columbia.

This is a major crisis. We cannot pretend that it is anything but that. In British Columbia thousands of people are out of work, we hope temporarily. Thousands more are at risk. Communities whose major source of economic strength is in the lumber industry are at risk and are worrying through this terrible time. The whole economy and revenues of British Columbia and the revenues and the economic security of our country are at risk in this situation.

In the short time, less than a year, that I have been in parliament I have not seen another issue that has been given this prolonged and serious consideration. We have to examine what has been done.

At every week's meeting of the B.C. caucus this issue has been at the top of the list. We have regular meetings with the Minister for International Trade. This issue is brought up regularly in national caucus with the utmost urgency.

Support has been given by the B.C. caucus for the position of the international trade minister and the government, particularly for unity across the country. Different regions should not be treated differently, in particular regions like Quebec, Ontario, Alberta, and Manitoba, with British Columbia leading all making up almost half of our exports to the United States.

The important thing is all of the concentrated effort. This has been difficult. The issue is complex and obviously is not being solved quickly, but it must be solved fairly and finally. There has been a concentration of effort and constant communication, the Prime Minister with the U.S. president, the trade minister with the American commerce secretary, the U.S. trade representative and now with Governor Marc Racicot, the U.S. emissary appointed by President Bush.

Let us look at the history for a moment to see how we can bring this together at this time. These arguments across the border have been going on for 100 years but increasingly, and we have heard many people speak of it over the last 20 years, Canada has faced charges of subsidy in particular. Canada has taken the issue to various dispute resolution tribunals and courts and has always won. This is not an issue of subsidy. Let us put that to rest.

We have a public land management system in British Columbia and in many other parts of Canada. That is pointed to by some U.S. producers who favour protectionism and protecting their own perhaps inefficient practices.

I can speak of British Columbia with knowledge. We have high standards of sustainable logging practices. These have costs. It is not a matter of low stumpage. It is a matter of sustainable logging. It is a matter of sustaining employment in the communities. It is a matter of managing forest practices for biodiversity. It is a matter of ensuring that roads are built carefully and decommissioned. It is a matter of making sure there is protection for streams and if damage has been done in the past to restore them. It is a matter of ensuring that reforestation takes place in the most varied, healthy and realistic way for the continuation of the wealth and health of the forests.

This is not a matter of subsidy. It is a matter of protectionism in the United States. What action can we take? Let us look at two of the major Canadian and American forest products companies, Weyerhaeuser, the largest forest products company in the world, and Louisiana-Pacific.

Weyerhaeuser and Louisiana-Pacific operate on both sides of the border. Their corporate message to all of us is that there is no appreciable difference in economic returns between logging in British Columbia or anywhere else in Canada and on the U.S. side. These simply are not subsidies and the courts keep telling us that. What do we do?

Leading up to the expiry of the softwood lumber agreement at the end of last March, the unified Canadian position led by the Canadian government with the agreement of Canadian industry and the Canadian provinces was that we wanted free trade. We did not want an extension of that agreement of managed trade and quotas on exports. We wanted free trade. That is our right. That is what we bargained for and that is what we want to get. That was the position of all of us.

What happened after the expiry? It is punitive action that is discriminatory, biased and unrelated to the true facts of the situation and it is patently unreasonable. That is the problem we are facing.

How do we go ahead? We stay unified. That unity must be preserved. We also have to litigate. The Canadian government is litigating now before the World Trade Organization.

We saw today in the Globe and Mail a report on business written by David Emerson, the president of Canfor, the largest Canadian forest products company. He announced that he and his company are taking the U.S. government to the NAFTA tribunal before an impartial panel under chapter 11 to sue the U.S. government for $250 million in damages for the dumping penalties that it has introduced. This is an important act. This is the rule of law. This is the free trade we agreed to. It is good to see Mr. Emerson and other corporate leaders in Canada standing up for their rights in the same way. Canada is doing the same at the WTO.

Talking about sustainable logging practices and the beauty of British Columbia old growth forests, it was interesting to see the painting that Mr. Emerson was standing in front of in that major newspaper article. It is a painting of a magnificent old growth forest on the Queen Charlotte Islands. It is by one of Canada's greatest modern artists, John Koerner, a constituent of Vancouver--Quadra. I am very pleased to say he is also my father-in-law. That painting and Mr. Emerson's actions in front of it, if anything, can represent the beauty, the wealth and the health, but the health at high cost to our forest companies, of the sound logging practices in British Columbia.

We litigate but we also engage. We must remember the engagement from last fall. Whom were we to engage with other than to say we were going to insist on free trade when the softwood lumber agreement expired? There was a change in administration and there was some confusion about who was president. The U.S. trade representative was not even appointed and confirmed until March. In any event, we were unified in terms of going for free trade.

Let us engage. We have had a series of discussions now. The provinces, the states, our national governments have gotten together, advised by industry on all sides. The understanding is growing. Let us think. President Bush has appointed his close confidant Governor Racicot to act as his emissary. He is engaged with our trade minister. He has said that he wants this issue settled in four to five weeks. Increasingly Canada has allies in the United States and I am speaking of the American people who are going to pay higher prices.

Let us turn finally not from subsidies, not to the Canadian situation, but to what do the Americans want? Do they want fewer imports? Do they want higher prices? The American public is made up of home builders and suppliers and consumers. What do they want? The answer is clear and it is going to come together quickly, we hope. We will support industry and the people who are affected directly as much as possible, but we are going to solve this once and for all with free trade on a just basis.

[Jay Hill, Canadian Alliance, Prince George—Peace River, BC]

Mr. Speaker, I will be splitting my time with the hon. member for Fraser Valley.

I am privileged to have the opportunity this evening to lend my voice to the members who have spoken previously on the need for immediate government action and intervention to protect the jobs, and more important, the way of life for Canadians who earn a living in the softwood lumber industry. I consider this opportunity to speak a privilege in that not only am I the elected member of parliament for Prince George--Peace River, but it is also the riding I am pleased to have called home for my entire life.

For me the debate is not about the North American Free Trade Agreement or the World Trade Organization. It is about helping the families and towns that are being devastated by outrageous and punitive trade sanctions levied against the Canadian softwood lumber industry. My only regret this evening is that the debate is not being heard and participated in by all 301 members of this Chamber.

I am reading my speech tonight because this issue is so upsetting that if I were to ad lib I would become so emotional and angry about it I would miss some of the points I want to place on the record. The crisis that is crippling our softwood lumber industry is not a partisan issue nor is it a regional issue. It is a Canadian issue, a matter of national sovereignty and one that should supplant our previous political affiliations.

There is a harsh reality before the House this evening. It is the affirmation that as a result of government inaction on this file, Canadian families are losing their homes. Towns are losing their only employer. The only fault of those affected is that they believed the government when it said it was working on a solution, that they would have to be patient because it would take time. These families do not have the luxury of time. Rarely does the bank heed a request to be patient before it forecloses on a house or repossesses a car. Patience does not pay university tuition. It is difficult to feed a family on patience. While the government continues on its path of negotiation, discussion and raising the issue, Canadian families are going bankrupt.

The members opposite are often quoted as defending their vision of Canada. I find it hard to believe that their vision includes impoverished Canadian families losing all of their worldly possessions just weeks before Christmas.

In my riding of Prince George--Peace River the feelings of anguish and despair over government inaction have given way to feelings of anger and frustration. The residents of Prince George--Peace River are angry that their government has allowed this situation to deteriorate to a point where innocent Canadians are being punished for the failure of their government to resolve the dispute over softwood lumber.

The frustration has inspired many of my constituents to take the time to share their comments with me. I would like to read just a few of these letters so that members present can get a feel for the anger that these people are experiencing.

Steven Shier, in a letter to the Minister for International Trade and copied to my office, wrote:

How can you let this happen? It is shameful. When will you or (the) Prime Minister stand up to the Americans and say “You go too far”. I realize that you are pursuing judicial means against the U.S., but really, in the short term you must be more reactive. We are being set up for a slaughter and still you seek only judicial changes. Don't be so naive. This is economic warfare and we are being badly beaten.

Trevor Chan of Fort Nelson, up in the northern reaches of my riding, in a letter to the Prime Minister and copied to my office, wrote:

Please show leadership and ensure that this dispute gets resolved as quickly as possible. The WTO rulings will take too long and by then any wood cut in western Canada will have to be sent to the northwestern states because the majority of Canadian mills will have been mothballed. Frankly, someone has got to show some guts and finally stand up to this economic bullying, why not this government and why not now?

Finally, Cassandra Muir of Prince George, B.C., wrote to me and to the Prime Minister as follows:

Please keep Canfor running. Without Canfor Prince George will go downhill. Canfor is one of the biggest mills. There will be many families without jobs, and without paycheques. So many people depend on the paycheque they get from Canfor... for example, my Dad.

I am not sure how old Cassandra is but she is old enough to appreciate the severity of the impact that the punitive American sanctions will have on her family, her town and her country. This is only a sampling of the letters that my office received and their concerns are valid. They are probably representative of letters that have been sent to all members from all parties. That is why I say this not a partisan issue.

It is not as though this crisis snuck up on the government when it was not paying attention. The previous agreement, after all, had an expiry date. Now in the face of 32% protectionist penalties the inaction continues with weak assurances from the Minister for International Trade that he will give the Americans an earful at the earliest opportunity. It is unfortunate the government is not as strong on action as it is on words.

Strong action would require the Prime Minister to acknowledge that the Minister for International Trade made no progress in the six months since the previous agreement expired. Strong action would be for the Prime Minister to use his personal relationship with the president of the United States to influence his intervention in the dispute and to overturn the sanctions levied by the U.S. department of commerce.

Unfortunately strong action is not a trademark of the government. Nor does the Prime Minister have a strong personal relationship with the president of the United States. Would Canada find itself in this predicament if our Prime Minister had spent a sufficient amount of time cultivating a worthwhile relationship with the leader of our most important trading partner?

Earlier this evening we learned that the Prime Minister raised the issue of softwood lumber with the president but that lately he was spending less time on the issue. This is hardly the time to be giving up the fight.

The residents of northern B.C. will attest that government inaction on softwood lumber is not only limited to economic disasters. The government failed to take action on an equally severe environmental disaster that our province faces. The interior of British Columbia is under attack from a relentless predator, the mountain pine beetle. At last count 5.7 million hectares of working forest, an area twice the size of Vancouver Island, had been infested.

The lumber industry presented a very comprehensive plan to combat the infestation that would require government action and funding to make the plan workable. Despite assurances from the government that it was taking infestation seriously there has been no action to assist the industry with this equally damaging crisis.

There are still some optimistic northerners in my riding working hard to make the best of a bad situation even in the darkest hours for the softwood lumber industry. One example is the value added wood incubator initiative that was launched by community futures in Prince George in partnership with the College of New Caledonia, the city of Prince George, other governmental agencies and the private sector. Community futures is intent on having this business incubator running at full steam as soon as possible.

What needs to happen? The Prime Minister needs to become engaged in the negotiations. He needs to make softwood lumber his number one priority. The Parliamentary Secretary to the Minister of Justice referred to these terms: let us get engaged. On an issue as important as this to Canadians, it is not good enough to have a two minute conversation as a friendly aside while standing around at a photo opportunity at the APEC conference in Shanghai.

The Prime Minister should go immediately to Washington and remain there until this issue is satisfactorily resolved. The Prime Minister is famous for his so-called team Canada trade missions to China, Italy and Cuba. If there ever was a need for a high priority trade mission, it is now and the destination should be the White House.

[Chuck Strahl, Canadian Alliance, Fraser Valley, BC]

Mr. Speaker, I add my voice to the voices of concern we are hearing from all sides of the House tonight on the future of the lumber industry in Canada.

I grew up in this industry. I was a member of a fairly successful small to medium size business with my two brothers. I made my livelihood in the lumber industry as did my father before me and as do tens of thousands of people in British Columbia who look to the logging industry for their bread and butter.

Lumber exports as well as the jobs that come with them are still the most valuable export product in the entire country. It is the number one industry. The reaction from the government in the last few days that it is doing all it can and that we must be patient is just not cutting it.

It is an industry that has been on the ropes for a number of reasons such as loss of habitat, loss of working forests in different areas, loss of access because of aboriginal land claims, and on it goes. However this is the cruellest blow of all.

On the British Columbia coast alone 21 of 35 mills have shut down with a loss of 12,500 jobs. That is just on the coast. It is being said that 30,000 more jobs are at risk. The Independent Canadian Lumber Remanufacturers warned on the weekend:

The duties are up to a level we've not seen before. Most of my members called me and they're not sure how they'll survive the next 45 or so days.

John Allan, president of the B.C. Lumber Trade Council, said in the Vancouver Sun of November 1:

Thousands of jobs have been lost and thousands more will be lost unless our nations find a way to resolve this dispute once and for all.

On October 15 West Fraser Timber Co. Ltd. said it would temporarily shut down all its Canadian mills for two weeks. This would include six operations in British Columbia and two in Alberta. The move will affect about 1,400 workers.

Carrier Lumber Ltd. said it would cut back production at its Prince George sawmills by reducing the number of shifts from two to one. Thousands of forestry workers have been laid off already in British Columbia.

On September 25 Weyerhaeuser Canada Ltd. announced the closure of three of its B.C. mills affecting nearly 1,000 workers in Port Alberni, Vancouver and Nanaimo.

These are good, well paying jobs. They are the kinds of jobs on which one can raise a family. When we say 20,000, 30,000, 40,000, or 50,000 jobs, we are not talking about part time jobs, jobs for pin money or jobs for money to buy some extra Christmas presents. These jobs put bread and butter on the table of 50,000 families, the majority of which are in British Columbia.

The response we get from the Liberal government in the House is that there is a special envoy. A special envoy is not the answer and will not help. When we ask about the possibility of a stakeholders meeting the Liberals say it will not work. When we ask if the Prime Minister will get on a plane and go to Washington they say it will not work.

We asked about the possibility of a meeting of the first ministers or the forestry ministers from across the country. We could get them all together to talk about a Canadian position. The Liberals say that will not work. According to the Liberals, nothing will work. They say that we will hope for the best. We will go to the WTO dispute settlement mechanism and hope for the best. That will not take place until next spring and then it is a two year process.

Every time we come forward with an idea, a plan or a suggestion, the Liberals tell us not to worry because we cannot do any of those things and all we can do is hope.

The Prime Minister said today in the House that when he was in Shanghai he turned to the president during a photo op and said to him that this was a real concern. The president answered “Yes, I heard that. Let us smile for the camera”. That is not good enough. That is not a good enough response for the number one export industry in Canada.

If this were just a one off deal we could say that the government was ignoring it. It does not understand the industry or it does not want to listen to the industry and its leaders. It does not want to listen to the forest minister from British Columbia who was here today and with whom I had a meeting. It just does not want to listen because it is obstinate or something.

It is part of a trend by the government that it does not have a plan on hardly any issues. The House has shut down four times in the last two weeks because there was no legislation in front of this place. It does not have enough legislation to keep the doors open around here. It does not have a plan on hardly anything.

It does not have a plan on perimeter security. When it does not have a plan it is doomed to be ruled by those who have a plan. That is why we begged last week to talk about perimeter security. The government says that it is just too big a job, that it cannot deal with it or come up with a plan. It is dooming us to react to the American plan again.

When the special envoy comes up here on softwood lumber, guess what? He comes up with a plan, an American plan looking after the American interests, the American industry and the American border states. The government's response is to sit here and claim that it does not know. It asks the Americans to tell us what they think and then reacts to it.

Last week we came up with a plan on dealing with perimeter security. We said that it was not good enough to sit back and hope for the best. We need to come forward with a plan and put it before the Americans. It worked on free trade when we put one forward. That was not an American plan; it was a Canadian plan. It worked on the International Joint Commission. It was a Canadian plan sold to the Americans. It worked on the acid rain treaty. It was made in Canada and sold to the Americans.

It will work again but we need a plan. The plan that says that it will sit back here, wait for the envoy to come and hope for the best is not a plan. That is capitulation. That is a recipe for disaster. It is a recipe for a two year waiting list of 50,000 families who will not have anything to put on the table let alone underneath the Christmas tree. That is not good enough from the government and it is not good enough for Canadians. What is with the government?

Let us pick our favourite issue or the least favourite one. In this case it is the softwood lumber agreement, but whatever issue we pick in each case it is reactive. In each case it is playing catch up. Whether it is reacting to the September 11 crisis, whether it is a failure to develop a perimeter security issue, whether it is a failure to deal with the border crisis evolving around our just in time industries and many other industries that say they cannot get proper and timely access to the Americans, or whether it is the lumber issue we are dealing with tonight, in each case we are told not to worry, to be happy, to go home and hope for the best.

That is not good enough. It is not good enough for my province. It is not good enough for the industry that I came from where people have put their economic lives on the line. They have put an entire province on the line, a province that is just hanging in the balance when it comes to its economic viability.

Instead we are told by the government not to worry, to let it go to the WTO, to take our chances, and a couple or three years from now we will know what are the results. In the meantime we can have 80% unemployment in the industry. We can have no income to look after health care or education needs, the basic needs for which a province like ours and other provinces across the country rely on taxable income from the lumber industry.

It is our number one industry. It should seize the government like the September 11 issue should seize the government. It should be on par with it. It is about economic security. It is about job security. It is about the future of an industry that does not see much of a future right now. It is about a quality of life and a standard of living that Canadians have a right to expect. They have a right to expect the government to get off its hind legs, get into this game, get down to Washington State, sit there, pound on a desk and give our case aggressively until Canadian interests are looked after.

It is time the government got at it. It has not done it. I am urging and begging it on behalf of British Columbians to get at it and get into the game.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, I will share my time tonight with the member for Etobicoke North who is in the Chamber with us. I have listened with significant interest to the debate in the last few hours. I will change the tone of the debate and look at a bit of the history and background of the lumber industry, both in Canada and in my riding of Miramichi in New Brunswick.

In the 1780s the first Hubbard, George Hubbard, came to the Miramichi. He came to be involved in the masting industry. At the time they were providing masts and lumber for the British navy which was involved in a war in Europe with France.

For a number of years the Miramichi was famous for its pine masts. We were also involved later with selling lumber to the American states. The point is that in the 1780s my family came from the New England states and moved to the Miramichi to be involved in the lumber industry.

In the 19th century people from the Miramichi travelled all across North America and worked as lumberjacks in Michigan, Wisconsin, Minnesota and, later in the 20th century, in the woods of northern Ontario in places like Thunder Bay, the old Port Arthur and Fort William.

In moving across North America the names of the Miramichi can be found. I am not sure if they were involved with the famous lumberjack Paul Bunyan and his great blue ox Babe, but they certainly were involved in opening up the American west.

My people in the Miramichi have been historically involved in the lumber industry. In the 1870s my great-grandfather died in a lumber camp in northern Michigan, so we have a long history.

If we go back in that history we find that our connection with our American neighbours has involved sharing not only a common continent but a common industry. The industries of Canada included the fur trade which opened our nation to white settlers, farming and lumbering. Primary industries have always been very important to our country.

I was doing a bit of research today. I was reading a book by a former professor of mine, Stewart MacNutt, which reviews one of the famous treaties written in the 1850s, the reciprocity treaty of 1854.

In the context of that treaty it took about three or four years for the British colonial office and our local so-called colonies in North America to negotiate trade with the Americans in lumber, fish and other products.

It is interesting to note the similarity to the problems we have today with our American friends who are trying to make us pay heavy duties. In 1853-54 two states held up the treaty for a significant period of time. The treaty dealt with coal from Nova Scotia, something the states of Maryland and Pennsylvania felt should not enter into the United States duty free.

There is a long history of our relationships with Americans. Of course we are concerned today. I hear members from British Columbia being critical of what our government is doing.

The forests today, as members know, are shared by federal and provincial trade regulation. When Americans look at our forestry practices they spend a lot of time looking at the forestry practices of British Columbia which apparently supplies about 60% of the lumber that goes to the American states.

Last summer in a place called Blue River, British Columbia, I met with an American group of senators and members of the house of representatives. We discussed the issue of lumber and what they call forestry practices and stumpage.

They were from lowland states where lumber is cut by people who walk on level land. As we looked up into the hills of British Columbia I asked them what stumpage would be worth in British Columbia if they had to go up the side of a hill with a power saw or a machine to bring the lumber out. They then realized that the stumpage business was different in different areas.

British Columbia has a definite responsibility to look at the stumpage practices the previous provincial government placed on the industry. It was concerned about jobs and was able to modify its stumpage to make sure the jobs continued.

Tonight we are talking about tariffs and trade but the real people we need to talk about are those who work in the forests and sawmills. There has been a tremendous change in our forestry practices.

About a year ago the Senate wrote a report on forestry. For that study the senators not only visited Canadian forest centres but went to the United States and travelled throughout Europe. One senator said to me recently that in the forest industry, and the Canadian forestry industry in particular, the tremendous mechanization which has occurred has meant that one forestry worker today does the same amount of production that 20 to 25 people did 20 years ago.

Although we want to mention the importance of jobs, sometimes in the House we fail to recognize these tremendous changes and the displacement of workers that has occurred in the forest industry in the last generation.

There are machines today which can cut 100 cords of wood in an eight hour period. They have put a great number of people out of work in my province, in Ontario and across the country. Mechanization has changed the whole principle of how our mills operate. With new techniques such as the use of laser beams to make cuts, the production of lumber is being done with an ever smaller workforce. As a country we must somehow make up for the loss of jobs in the industry.

All of us are perplexed with the way the Americans have treated us in terms of trade. What is most perplexing to me is that the Americans seem to want to centre on a specific product. Last year as chairman of the Standing Committee on Agriculture and Agri-Food I was perplexed by the attitude the Americans had toward people in Prince Edward Island and their potatoes.

We hear that mussels today in Prince Edward Island are being looked at. We hear about the tomatoes that are produced in the greenhouses of the country. As a House and as a government we must deal more effectively with Americans and get better attitudes from them in terms of trade practices.

I was in Kennebunkport, Maine, in 1992 when the then president of the United States was there visiting. It is unfortunate that the current president perhaps does not have such a good attitude toward us in this part of the northern hemisphere. His study and his stay in Texas probably mean that he does not pay enough attention to his northern neighbours.

I hope that in our relationship on the governmental level our Prime Minister can impress on the president and the American people that it is they who are suffering as a result of these trade embargoes and duties, and that as householders and builders it is they who are paying the extra costs.

I know the people using our lumber want Canadian lumber products. They are some of the best in North America. I hope they will get them.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I am pleased to enter the debate on the softwood lumber dispute with the United States. The border harassment actions by the Americans have nothing to do with alleged subsidies and everything to do with market share. Whenever Canada's share of the U.S. softwood lumber market climbs over 30% the Americans launch another countervailing duty.

This year they launched an anti-dumping action at the same time. Each time they lose, and they have lost every softwood lumber action, they ignore the rulings by independent tribunals and change their trade rules to suit their own purpose.

The U.S. administration speaks of an integrated North American market. From a business perspective the energy and softwood lumber markets are integrated North American commodity markets. The main difference is that for softwood lumber the U.S. administration gives only lip service to the integrated North American market concept. If it were truly integrated the U.S. would use different approaches to the resolution of trade disputes. I will give three alternative approaches.

First, we could resolve Canada-U.S. softwood lumber trade disputes by looking at them through the prism of competition policy. This would mean the Americans would have to show that actions in Canada were anti-competitive in nature. Allegations of subsidies and dumping would be gone. If the Americans like competition why do they not look at trade disputes through the prism of competition policy?

Second, we could look at net subsidies. The U.S. countervail process does not allow Canada to attack U.S. subsidies to its own lumber producers. These subsidies are well entrenched, particularly at the state and local government levels. They include cheap industrial land, sales tax abatements, property tax holidays, cogeneration agreements and many more.

There is clear evidence that many U.S. forest service timber sales to loggers do not cover the agency's costs. Is Canada allowed to look at the U.S. system? No, it is not. We must defend our system by their trade rules. The net subsidy methodology would require the U.S. administration and agencies to show that subsidies in Canada were greater than those in the U.S.A., something they could not prove as things stand now.

Third, if we wanted to be creative we could use the concept of serious prejudice. However the net subsidy and competition policy approaches seem to offer the most potential. What we need is goodwill south of the border.

Another myth being generated in the United States is that forest management practices in Canada lag behind those of the U.S.A. This is not the case. While forest management practices in both Canada and the United States are evolving and in a state of continuous improvement, as they should be, Canada is an acknowledged world leader in forest stewardship. Our industry is second to none in silviculture, harvesting and reforestation practices.

American producers argue that Canadian producers pay too low a price in Canada. That is of course in relation to the price they pay. Maybe they are paying too much. That is a fair question. Has it ever been asked?

There is a lot of evidence to suggest the price U.S. producers pay is in many cases not economic. Lands taken out of active forestry production because of environmental pressures, particularly in U.S. states like Washington and Oregon, have resulted in an imbalance in supply and demand for timber. In other words there are too many loggers chasing too little timber.

Auction prices have been driven sky high and out of line with economic realities. When futures contracts mature loggers are often faced with prices for timber that could leave them devastated. The White House has intervened on a number of occasions to let logging companies off the hook. They say this is how the market works and that it is a market based auction system. I am sorry, but when we let people off the hook for auction prices we do not have an auction system.

Auction prices in the United States are in many cases uneconomic, particularly if we look at the state of some of their sawmills. They have not modernized their mills as we have in Canada. While I have a lot of respect for the power of the markets they are not in every case the proxy for economic value. All we need to do is look at the behaviour of Nasdaq in the last few years to see that the market sometimes gets it wrong.

When it comes to the pricing of timber the United States has it wrong. It should be looking at trying to improve its own system rather than coming across the border to Canada to look for a scapegoat.

What is at stake here is a matter of sovereignty; it is our ability to set our own forest policy, nationally and provincially.

The Americans basically argue that because their timber is on private lands and ours is principally on crown lands their system is right and ours is wrong. That is hogwash. It shows an amazing arrogance, if I may say so.

Let us look briefly at the economics of the forest products industry in Canada. If it is so subsidized, it must be doing very well. Sorry, but historically the returns on investment for the forest products industry in Canada have been in the range of 3% to 5%. Does that sound like a heavily subsidized industry, particularly when we acknowledge and understand that this is a very innovative and productive industry?

For the year 2002, the following Canadian forest products companies are projected to be in loss positions, and this is before the dumping duty: Canfor, Abitibi, Doman, Interfor, Nexfor, Tembec, Slocan and Riverside. These are some of the world's leading forest products companies. Does this sound like a heavily subsidized industry? They are all world leaders and they are all losing money, and that is before the dumping duties. They are losing a lot of money.

A forest industry analyst recently reported that Canfor Corporation, Canada's largest lumber producer, spends about $260 U.S. to produce one thousand board feet of lumber. That is against a benchmark price for western Canadian 2x4s of about $220 U.S. per thousand board feet. It is no surprise that they are losing money. That is $40 U.S. a board foot. That is on cash only, and forget depreciation and other non-cash items. Does this sound like a subsidized company? Canfor has some of the best mills in the world.

Let us take the discussion of the forest industry economics a step further. What do forest products companies in Canada pay for the right to cut down trees? It is called stumpage, or royalties in some cases. As I understand it, stumpage is currently in the range of about $50 to $70 per thousand board feet. That represents, as a per cent of selling price, about 14% to 21% of the benchmark selling price for 2x4s. That represents solely the right to extract the timber. It does not include logging costs, transportation costs, milling costs, processing costs, packaging, transportation, marketing, selling, and distribution. By any rule of thumb, that is not an unreasonable amount.

Who benefits and who loses? The lawyers win. The U.S. lumber producers benefit. The Canadian lumber producers and workers lose. At a combined rate of 32%, many mills have and will shut down and many workers are and will be unemployed. U.S. consumers lose. It costs an additional $1,000 U.S. per home by keeping out Canadian softwood lumber. The U.S. contracting community prefers Canadian softwood because it has less warp and wane and it nails better. Contractors like to use it. They prefer it to southern yellow pine.

Is it not ironic that in a country that says the market should decide everything the consumers and the home builders cannot even buy the products they want?

What do we do next? I think we must fight with tenacity against these duties at the WTO, which will take some time. In the meantime our industry will be really hard hit and the workforce will be hard hit. Perhaps we will have to help them, I do not know, but the Americans have lost every countervailing duty case that they have brought on softwood lumber and we will show once again that these charges are trumped up and this will be demonstrated by an impartial, objective panel.

The forest industry and governments at all levels need to stay united and work together. I must say that our trade minister and the Prime Minister have done a great job of keeping everyone together and united.

We need to fight this very hard. We need to never forget that the forest industry is so important for Canada. Communities across Canada depend on the forest industry. We need to fight for those people and their families.

[Rick Casson, Canadian Alliance, Lethbridge, AB]

Mr. Speaker, I will be sharing my time with my colleague from Kamloops, Thompson and Highland Valleys.

Our country is suffering. If the fear that washed over the continent nearly two months ago was not enough bad news for Canadians, waking up to find they have lost their jobs could very well be the last straw for some.

There are huge problems being faced by our constituents from coast to coast to coast. While my constituency in southern Alberta is struggling through a terrible drought, our cousins over the Rocky Mountains in British Columbia and, indeed, Canadians right across the country are facing a bleak Christmas because of the softwood lumber dispute.

The numbers are staggering. Thousands of people do not have jobs today because of this ongoing, dragged out, unfair dispute. Canadians are looking for something more than a stern talking to from the international trade minister to his American counterpart. They want the minister to give him more than an earful. We must have a concrete plan to deal with this problem. We must get answers, fairness and guarantees from our largest trading partner.

The situation is totally unacceptable. The softwood lumber agreement expired on March 31 and the softwood lumber dispute started the next day. That was seven months ago. Canada has gone for over 200 days without a trade agreement, without guidelines for one of our largest and most lucrative exports. This is not responsible management. It is like being a real estate agent and having no deeds to the houses being sold.

We are in a mess today because the Liberal government in all its wisdom did not think it was an issue important enough to raise or to address before it turned around and bit our citizens in their pocketbooks. Even now when we have so many suffering from these unfair tariffs and duties some felt it was prudent to call these people nervous nellies. I would like to get someone to stand in front of a logger who cannot support his family because he is laid off and call him a nervous nellie. I would like to see the response then.

The minister is finally meeting with former governor Racicot of Montana, but we need more than talk. There have been no dates set and no deadlines given. What are we to tell families when they call our offices and ask what their government is doing to help them now that their job is gone and their family is under severe stress? What do we say as members of parliament? Do we tell them that the government is talking about it? That does not buy groceries. It is just more rhetoric and emptiness. We need action. With so many Canadians suffering, this should be at the top of the list of this government's priorities.

The Prime Minister said that he chatted with the U.S. president about this issue while he was in China. He has stated that if the United States wants our oil and power, it had better take our wood too. However this is just more talk, not concrete action.

The industry is facing revenue losses of more than $1 billion and that is just to date. There is no deadline given to end this hemorrhaging. Even though I will talk just about British Columbia, this is really a countrywide problem. On the British Columbia coast alone, 21 of 35 mills have shut down as a result of the first duty, with the loss of some 12,500 jobs. This latest tariff has put 30,000 more jobs at risk. These are not just jobs. These are people and families. This is an entire industry.

Rip the heart out of a province like B.C., and let us not kid ourselves, softwood lumber is the heart of British Columbia, we will not have a healthy, functioning province. We will have another have not province through no mismanagement or fault of its own. Like I said, this problem is not confined to British Columbia alone. When 40,000 well paying jobs are knocked out of the workforce we can forget the ripple effect: it causes a tidal wave of economic woe flooding over the people and businesses surrounding them.

Let us put this into context and really look at who this is affecting and how it impacts a community. With no market for softwood lumber, it leaves the fallers in the woods with their saws silent. They are now laid off and at home. Camps are empty. Many of these people have young families to support. Truck drivers do not have a product to ship. They too are out of work and will not be buying anything other than the bare essentials. Again, the whole community suffers as a result.

Gas station owners have no trucks to fill or drivers to sell coffee or lunches to. Employees are being laid off. Many of these workers are students and young people who are trying hard to make ends meet. It also has impacts on the heavy duty mechanics and shop owners. The vast majority of the rigs they work on are logging trucks. The bays are now empty and the pits are silent. It has impacts on the parts suppliers for those rigs. With no work being done in the woods there is no need for maintenance.

It also has impacts on the general business owners. When people are out of work they are not likely to purchase anything but the essentials of life, never mind a washing machine, a bed or a television set. When those sales are not made by the business owners, then their employees get laid off and they go into zero spending mode too. It has impacts on the mill workers who do not have a log to cut and on the work experience student without a floor to sweep.

The list goes on and on. We cannot have the cornerstone of the foundation of a country's economy crumble and expect everything to be fine. The government and the Prime Minister need to deal with the problem at a rapid pace because this is an emergency and it could not have hit at a worse time. A recession is already in full force, a gloomy scenario at best.

Let us look at the U.S. lumber lobby's case. U.S. producers have alleged that they have been injured by unfair Canadian competition. They argue that the Canadian provinces set stumpage fees at less than market value and that the system where the provinces own 94% of Canadian timberlands, meaning crown lands, contrasts sharply with the United States where only 42% of the timberlands is publicly owned and where both private and government timber generally is sold competitively at auction.

The U.S. industry does not even produce the quality or quantity that Canadian producers can provide. Home builders and other lumber user groups in the states agree with us. They support the free trade of softwood lumber. The consumer groups in the states support our position.

U.S. producers argue that they have been injured by imports of Canadian softwood lumber. They point to the steady growth in Canadian exports and market share, from less than three billion board feet and 7% of U.S. lumber consumption in 1952 to more than 18 billion board feet annually since 1998 and a market share of more than 33% since 1995. The fact is that the U.S. industry has been unable to satisfy the growth in its own domestic demand. U.S. home builders and other lumber users point out that Canadian lumber is needed to satisfy U.S. demands. The quality of the product speaks for itself.

This is totally unjustified action by the U.S. lumber lobby and those lobbying know it. We have been cleared of any wrongdoing time and again, as has been mentioned many times this evening. The Canadian industry has been challenged three times. No subsidies were found in 1983. In 1986 preliminary subsidy findings led to a memorandum of understanding with a 15% Canadian tax on lumber exported to the United States and 6.5% countervailing duty in 1992. In 1992 the countervailing duty was challenged under the U.S.-Canada free trade agreement and it was terminated in 1994.

A U.S.-Canada softwood lumber agreement was reached in 1996 and we all know who was in power in 1996. It is this government that created this softwood lumber agreement, which expired, as we have said, on March 31.

Will we be found to have played by the rules and will all penalties be lifted and reimbursed? Certainly, but these proceedings take an excruciating amount of time and money and frankly we cannot wait that long. If we do not have action in the meantime, more mills will have long since been shut down before the agreement is finalized.

We empathize with the people and their families who are suffering as a result of these ludicrous duties and tariffs. I hope the minister hears them too and takes them seriously. We owe it to the men and women of the country who are all affected by a major blow to the economy such as this to hammer out a fair, strong, long term solution: a free trade agreement on softwood lumber and nothing else.

I would like to close with a couple of personal comments. Members from all sides of the House went as a group to Washington, D.C. in July and lobbied elected senators on the issue. We met with many of them. Some did not know much about it but some had been told that we were heavily subsidizing the industry. We tried to give them the facts. We met with consumer groups that support our position 100%. These tariffs are driving up the price of a home in the United States by as much as $3,500, some say, so there are consumer groups that support what we are doing in Canada in looking for free trade in softwood lumber.

Mr. Racicot, former governor of Montana, is on the file now and working with the trade minister, which gives us some hope, but we should be looking to our government to end this dispute very quickly. The families and people depending upon the industry need it done.

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

Mr. Speaker, the United States lumber lobby has influenced the United States federal department of commerce to make a political statement that will hurt not only Canadians and the Canadian lumber industry but also its consumers. Thousands of jobs have been lost in Canada and thousands more will be lost unless our two nations find a resolution. It is especially detrimental to my province of British Columbia.

The Liberal government was given five years' notice that the U.S. lumber lobby was planning to take action against our lumber industry. Our federal government did nothing or next to nothing. During last year's federal election, the Liberals still had no position on the issue. When the first tariff was levied against Canada in August, the Liberals feigned utter surprise. Politically, only the Canadian Alliance has been working tirelessly to raise awareness.

Forestry is the foundation of the economy in many British Columbia communities. The lumber, pulp, plywood, poles and other wood products sold from the interior of B.C. represent more than $2 billion in annual revenues. In my riding of Kamloops, Thompson and Highland Valleys, there are literally dozens of operations dealing with timber in various forms. Their payrolls include logging contractors, sawmill workers, truck drivers, cleaners, fallers, mechanics and engineers.

More than 30,000 people in my riding are being adversely affected by the cavalier attitude of the government toward this extremely important sector of our economy. Add to this the number of businesses that will feel the effects and the number doubles. My constituents expect the federal government to make this very big industry a very big priority.

Two weeks ago I conducted public meetings in my riding to discuss local economic conditions. The job losses in the forestry sector were the number one concern. My constituents sent a very clear message; the federal government is not doing enough to defend this industry. Their frustration was evident. They asked how they could help me to make their voices heard in Ottawa. In response I developed what I call the tree card. The message to the minister on the tree card is very simple. It states: “Do your job. Protect my job. Keep Canadian forestry alive”. At last count 2,200 cards had been printed. It is my sincere hope that they are littering the top of the minister's desk. Hopefully he will get the message.

On October 17 two sawmills in my constituency announced that they would be cutting lumber production. That will impact over 250 employees. The community of Louis Creek is anticipating a two week Christmas shut down. In the town of Clearwater 500 people have had their work hours cut.

In Chase the Adams Lake mill has laid off 150 workers for at least two weeks. Adams Lake lumber is one of the most efficient mills in North America. Jill Atkinson, a small business owner in the community said the layoff sent a chill through the town. The local grocery store has already noticed customers cutting back on their purchases. Why? The owners said these mill workers “hear there will be extensive layoffs unless we get a decent agreement”.

In Kamloops, a city of 85,000, more than 750 people have well paying jobs at Weyerhaeuser. According to Weyerhaeuser, the United States depends on Canada for about one-third of the softwood lumber used in their housing construction and remodelling needs.

That is what free trade is all about. We cannot allow special interest lobby groups to squeeze more than a fair deal out of Canadians. We should use NAFTA and the WTO to resolve the situation. Only then will Canada's lumber industry be permanently protected.

Jan Lingford of the Kamloops Chamber of Commerce recently wrote an editorial. She believes that Canada needs to stand up to the U.S. lumber interests. She said:

This is not about the U.S. lumber producer's claim that government subsidizes the Canadian industry. This is about the U.S. producers needing the economic protection only their government can provide. This is about U.S. companies that cannot compete on a level playing field, as they have not reinvested in modernizing their mills as Canadians have. This is about Washington, D.C. being run by lobbyists working to prop up their industry at our expense.

She concluded by saying:

With 50 percent of all Canadian lumber originating in B.C. this is a crisis for our province. Our federal government must make a resolution of this issue its highest economic priority.

Jan is right. We are in agreement.

The U.S. claims there are unfair subsidies given to Canada's lumber industry. This is categorically wrong. On three different occasions binational committees have found unanimously that there was no evidence that Canada subsidizes its lumber industry. Even American economists support our position. Canadian lumber prices do not vary significantly from U.S. prices and in some cases ours are actually higher.

Agreeing to a tariff is an admission of guilt and we are not guilty of anything. Imagine how people who work in Canadian forestry feel when they see the U.S. government offering protection to U.S. wood producers, while our side wavers back and forth, neither protecting our forest sector nor taking a stand for fair and just trade.

When the Minister for International Trade sits down with his U.S. counterparts to talk about softwood lumber, I want him to remember the depth of despair being felt in the communities of Chase, Clearwater, Barrière and Kamloops.

The people who work in forestry have worked long and hard to keep up with emerging technologies and environmental concerns. They have worked hard to upgrade the mills and change harvest methods. Canadian operations are efficient, well maintained and competitive. The minister has to stop being an apologist and start fighting for this industry.

[Karen Redman, Liberal, Parliamentary Secretary to the Minister of the Environment]

Mr. Speaker, I will be sharing my time with the member for Yukon.

I am pleased to have the opportunity to participate in tonight's debate on softwood lumber. Ensuring an equitable resolution to the softwood lumber dispute is a top priority for the Government of Canada. That resolution must ensure continued access to the U.S. market for Canadian softwood lumber exports, following the expiration of the softwood lumber agreement on March 31.

My constituency of Kitchener Centre does not have an abundant forest industry, but Kitchener does engage in a good deal of business with our southern neighbours. Through a vibrant and innovative technology sector, Kitchener contributes to technology exports, the fastest growing sector of our nation's overall exports. Certainly the high tech sector of Kitchener-Waterloo enriches our community and presents a greater range of opportunities for employment and economic growth.

In addition to providing better jobs and more opportunities for Canadians, trade finances the social system that Canadians cherish, reflecting our values of fairness, inclusion and equality.

Clearly all Canadians in all regions have a stake in our continued trade success. The far-reaching implications of the softwood lumber trade action have an impact on our Canadian economy and our local communities. The decision of the United States department of commerce to impose this additional 12.58% duty on our softwood lumber is punitive and unfair. It has a negative impact on Canadian jobs and on our competitiveness.

Just like the countervailing duties of last August, this decision to impose anti-dumping duties is unfounded. Moreover, the U.S. action is based on protectionism and politics. Canada's more efficient and more modern sawmills are a source of pride to our nation. Accusations of subsidies and dumping are an erroneous attempt to poke holes in Canada's vibrant softwood lumber industry. Just like countervailing duties of last August, this decision to impose anti-dumping duties is simply unfounded.

The Liberal government will continue to challenge U.S. laws and policies at the World Trade Organization. We will also pursue our discussions with the U.S. administration to find a durable, long term solution to this trade dispute. The rights of Canada's softwood lumber industry will be defended. Canada will continue to co-ordinate discussions with the industry and greatly appreciates the collaboration of provinces which are responsible for the management of natural resources.

Given Canada's strength in this industry with 21% of the international forestry market and 34% of the U.S. market, there is consensus among Canadian industry and governments that the move toward free trade is indeed a positive one.

I am confident that the rules based system of international trade will once again dismiss the U.S. claims and grant Canadian lumber industry its rightful access to the U.S. market. The Canadian-U.S. trade relationship has been mutually beneficial. Canada and the United States are each other's largest trading partners, moving about $1.8 billion worth of goods and services across the border each day.

In 2000 Canada exported $360 billion in goods to the United States and imported $268 billion in return. Service exports totalled $33.3 billion during the same period with corresponding imports of $39.4 billion. Fully 86.1% of Canadian merchandise exports are destined for the United States market.

Since the implementation of the free trade agreement in 1989, two-way trade has more than doubled. It is not surprising that a trade relationship of this magnitude has been plagued with challenges. The government is determined to continue to work with the United States to ensure the free movement of goods, services and persons across the Canada-U.S. border.

Canada is a trading nation. Clearly, without trade, without the opportunities it brings, without the demand it generates and the jobs it creates, our economy and our economic position would not be as strong as it is today.

We are committed to free trade and to fair trade. If we are to continue to generate the high standard of living, if we are able to continue to provide good jobs and bright futures for Canadians, we will need to work hard to promote the benefits of trade and ensure that Canada remains one of the greatest trading nations in the world.

For our part, the Government of Canada will continue to negotiate trade agreements, seek access to the most dynamic markets of the globe and ensure that our companies are treated fairly.

This is an issue where we have looked to the provinces to partner with us. We have responded and there are issues and structures in place that will allow us to take this to a higher court, which is the World Trade Organization. I would contend that we have taken a measured, balanced approach to this. We have in the past taken issue with some of the United States protectionism and we have won every case. I have every confidence that we will be victorious on this issue and we are taking the right approach.

I have appreciated this opportunity to address an issue that impacts on all Canadians.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, members from all sides of the House have been speaking tonight about this serious issue in our economy. I appreciate that we have all been working on this for the better part of this year. We need to because this is a major impediment in the Canadian economy.

Last spring I was a member of the parliamentary association that spoke with congressmen and senators. As on every occasion when we can talk about trade disputes, we raise the issue of softwood lumber. All members of parliament have been working hard on this. We need to raise it time and time again so that those people in the United States who are taking these unfair remedies realize our point of view and the facts of the situation.

I will speak, as I did the last time we had a special debate on softwood lumber, to any American friends who may be watching. I would remind them that because a few lobbyists have put this in place in the United States it increases housing prices, and, in this fragile time in the U.S. economy, this is the last thing to help the economy.

I urge Americans to speak to their congressmen and make sure that these trade remedies are removed and we can get back to free trade in lumber.

In my riding of Yukon, in the far north, this action by the U.S. hurts my constituents. We have a very small margin of profit in the north. We have some significant forest resources in the Liard basin and we have some very unique forest resources in lodgepole pine and white spruce. White spruce is a specialty market because it takes so long to grow. It is very fine grained and fine furniture can be made from it. However it takes a long time to mature, is expensive to harvest in the north and does not replenish itself quickly.

How can this be a threat to anyone when one thinks of the extra heating costs for production facilities, the wages for employees and the transportation costs in the Yukon? Most of our lumber is hundreds of miles from tidewater. With these costs of producing it is hard to imagine how anyone could think that we could hurt them or compete with them, but in this round, although it was not in the last round, Yukon lumber has also been attached to these duties.

We have to keep on fighting, as we have tonight and as we have all year, to ensure that a fair remedy is won through the World Trade Organization. We also have to educate the people in the United States so they realize what is happening and how important trade is between our two countries and how unfair this situation is.

Canada and the U.S. have the biggest trade in the world and free trade is important for both of our economies at a time like this, especially our fragile lumber economy in Yukon.

We will continue to fight and make sure that in the end a fair remedy is found.

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

Mr. Speaker, I am thankful for the opportunity to raise this critical issue in the House tonight and to enter into the debate along with my hon. colleague who has just spoken.

The softwood lumber crisis has really influenced my riding. We have thousands of mill workers down in my riding who are very concerned. They are concerned about when or if they will get back to work, if they will have a job to go back to, if they will have a livelihood and if they can pay their mortgage. This is a serious issue affecting thousands of lives in my riding.

The job losses in British Columbia are mounting. On the coast we have between 12,000 and 15,000 Canadians out of work. We have 21 of 35 mills that are closed and another 5 may be closed in the next two weeks.

The latest employment numbers are now out. British Columbia has been hard hit with joblessness growing half a per cent in just one month to 8.3% in October.

Growth for the province, once projected to be close to 4% for the next year, is now predicted to be less than half that number by most bank economists.

Lumber companies have been hit hard. Virtually every company in the sector will lose money next year according to analysts at National Bank Financial.

The total hit companies are going to take will be in the range of $362 million.

The direct losses in the lumber industry are compounded by job losses in the support industries. As Brian Zak, spokesman for the B.C. Coast Forest and Lumber Association, said:

It's easy to see [the effect] if you go to Vancouver Island...you've got all the equipment suppliers shut down, you've got all the fuel carriers shut down, you've got all the power-saw shops and truck dealers shut down.

Mr. Zak is right. In my riding of Nanaimo--Alberni, thousands of workers and their families have been directly affected by this problem.

I want to mention a couple of those workers to help put a personal face on this problem.

In my riding there is a gentleman who lives just a few miles from my home. He is a constituent who manufactures a specialty heat exchanger unit. The technology was honed on the logging and forestry industry over the past 10 years. His equipment is used in hydraulics and refrigeration, fluids, pulp mills, logging trucks and yarders.

Last year his business grew at a rate of 65%. Since the softwood lumber dispute, his business is down 98%. He had seven employees. He is now down to none.

He has an opportunity to supply heat exchangers for the latest U.S. military order for between 7,000 and 12,000 light trucks. He needs a patent to protect the type of heat exchanger that he would use in this order should it come through next year.

Should he last until next year, he would be able to hire 10 people on a full time basis, provide profitable sales for his company and retain the manufacturing rights for an invention which other engineers say is the best improvement in the industry in the last 10 years.

A second constituent, another gentleman in my riding, is a planer man at Coulson Specialty Mill. The Coulson sawmill has been down since the softwood lumber duty came into existence and accounted for 105 jobs.

The Coulson planing mill is now down and Darcy is one of an additional 75 people thrown out of pay. He has a mortgage he will not be able to pay. He has tried to run a B&B as a sideline but there will be no income from that until next summer. He has some EI benefits that he will collect but they will not meet his monthly bills.

I would also like to relate some of what the mayor of Port Alberni, Mr. Ken McRae, has been sharing with me. As the mayor of a town at the centre of the coastal lumber industry, he knows the situation all too well.

Mayor McRae says that 40% of the community is in the 30 to 40 age group and out of work and they are devastated. In the past, shutdowns were known to be for a certain period but this one is indeterminate. He also claims that there has to be leadership on the federal level but the appearance at this point is that there is none. He said that smaller companies who support the community will collapse. He says that we must stop the export of logs from private lands, a federal jurisdiction.

As well, the mayor said that western red cedar should be exempted from this duty. He says that it is not a trade irritant and is unfairly included in the products the duty applies to, simply for the purposes of increasing pressure on Canada to capitulate.

Mill workers in my riding are getting desperate. Many, including the mayor of Port Alberni, are calling for a ban on the export of raw logs to the United States. They are joined by several other municipalities, including Courtney, Duncan, Ladysmith and Tofino.

Jack McLeman, president of the IWA local, says “No more raw log exports”. In a two week period, October 9 to 23, there were 177,000 cubic metres of raw logs exported to the U.S. Jack has been doing his homework. That is enough to keep a sawmill with 400 employees busy for one full year. The problem is that sawmill is not in Canada. It is in the United States. Extrapolated, it will be one million cubic metres by year end. This is a substantial increase over what we have been exporting in the past. Normally there are three million cubic metres a year.

At a time when our mills are shut down, it is highly inappropriate and offensive to people to see U.S. mills gearing up to mill the logs with which our workers should be working.

The workers, the unions and the mayors hope to place pressure on U.S. mills to help reach a solution to this dispute. They believe our government needs to take a harder line.

A raw log ban is something that may have to be considered but there are three things the Government of Canada could do immediately before committing to such a move: get behind our industry with a guarantee for bonds, have the Prime Minister get personally involved and convene a national meeting of softwood stakeholders. We have been calling for that for some time. People at our end of the country do not understand why the government has been slow to move to this call.

I would like to focus on the third point for a moment. Last week we had a parliamentary secretary refer to some softwood producers as nervous Nellies. He claims to have apologized for that remark but in fact he did not. He then went on to say "We are calling on people not to play the east versus west divide game. That is what the United States is hoping we will do". I could not agree with him more.

With the second remark of the parliamentary secretary, we do want to present a united front to the Americans. If they are able to play off Canadian interests one against the other or Canadian provinces against each other we will surely lose. However, if the government really believes in presenting a united front, why not call a national stakeholders meeting that we have been demanding for many months now?

Unfortunately, the government will not do that. It tells us to trust it because it has the matter under control. The fact remains that we have had over five years to resolve this problem and we are no closer to free trade in lumber than we were the last time that the government caved in to American demands.

David Emerson, president of Camfor, which has just launched a $250 million lawsuit against the U.S. over the issue, has called on the Prime Minister to get personally involved. We have had some fine rhetoric from the Prime Minister but no action for five years.

The last hike in the countervailing duty smacks of desperation on the part of the Americans. They know we will beat them at the WTO just as we have beaten them at tribunals three times before. They know the commerce department will settle on a much lower permanent duty than the present countervail. However, to sustain our industry, we need the government's help.

We need a guarantee on bonding for our smaller producers. We need a national stakeholders meeting. We need strong leadership from the trade minister and from the Prime Minister.

Canadians, I am afraid, are losing faith in this government to do what needs to be done to protect Canadian jobs, Canadian families and Canadian interests. Perhaps they are right. Perhaps the government has been in power too long. Perhaps the nervous Nellies are actually those sitting on the government side of the House unwilling to lift a finger in case they may rock the boat.

I remember when the first countervailing duty was introduced and the Prime Minister said that he had telephoned President Bush, had talked tough with the president and had told him what our feelings were in Canada about free trade in softwood lumber. The president said to him, “Tell them you gave me hell”.

I heard the trade minister say just yesterday in the House that he was going to talk tough to the U.S. trade representative.

We need more than posturing. We need real action. Canadians are looking to the government to provide leadership on this issue. The government must bring us some resolution so that our mill workers can have a future and our families can have a Christmas to look forward to.

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

Mr. Speaker, it is with disappointment that I rise once again for an emergency debate on softwood lumber. The news that an additional 12.6% has been added to the already existing tax of 19.3% imposed in August of this year is bad news to the people in my riding of Renfrew--Nipissing--Pembroke. Canadian softwood lumber producers find a total of 31.9% slapped on in punitive duties.

What does this mean for the people of my riding and for many other people across rural Ontario? First, jobs are hard to come by in rural Ontario and the jobs we have are becoming increasingly harder to keep. It is not like my colleagues in big cities such as Toronto, Hamilton, Kitchener, Guelph and so on whose constituents have options and cash to tide them over. When my constituents do not work, the impact is manifold. When we draw those dollars out of a small community there is less to go around for everyone.

It is a case of the job multiplier in reverse. For every two jobs the federal government eliminates in eastern Ontario in the forestry industry, an additional job is lost for the people who supply and service the forestry business.

People in rural Ontario are frugal, proud and self-sufficient. Members from urban ridings are surprised to learn that people from rural ridings like Renfrew--Nipissing--Pembroke supplement their winter diet with game meat. They can see why we hate the Liberal gun law so much. The Liberal government is literally taking food out of the mouths of rural Canadians.

Renfrew county is the only county in Ontario that allows Sunday hunting in a majority of its small rural communities. This was done at the urging of the big lumber mill owners. In days gone by the wages paid by the mill owners barely allowed a man who worked in a mill the money to feed his family.

The man worked long and hard six days a week. The Sabbath which was supposed to be a day of rest was the only day available for the breadwinner of the family to go out and hunt game to put food on the family table. The tradition of being able to hunt on Sunday continues to this day, except the Liberal government has taken the job away in the forest and the ability to put meat on the table.

Ontario's softwood lumber producers, already furious over the existing 19.3% duty imposed by the U.S. department of commerce, are further angered by the additional U.S. duty of 12.6%. The U.S. commerce department has specifically targeted six companies, four based in British Columbia and two based in Quebec, alleging that they are dumping products into the U.S. market at below cost prices.

Those companies that have been identified will be required to post bonds of between 6% and 19.2%, while all other Canadian softwood lumber exporters, including Ontario producers that have not been targeted in this dumping of products, will be subject to a standard of those six charges which will average to about 12.6%. The Ontario softwood lumber producer will pay about 31.9% in duties with these new charges.

We have followed this route before in 1982, 1991 and 1996. A trade action was brought forward in 1982 and there was full adjudication. Canadian provinces were found not to be subsidizing. Ontario does not subsidize the lumber industry.

Through the sound forestry management practices introduced by Frank Cochrane, who was a provincial Conservative cabinet minister from eastern Ontario, and continued by the current provincial government, we have maintained government ownership of the majority of Ontario's forests and have made sure that the highest environmental standards are respected, harvested yield is sustainable and our forests are usable for the enjoyment of all citizens.

When I last spoke to this issue the first round of layoffs had just occurred among the lumber producers in my riding. This new duty will have the effect of catching those employers that may not have been initially affected but will now be affected as a consequence of additional duties or being in a spinoff industry or service trade.

For example I have Temple Pembroke MDF in my riding. This plant produces high quality softwood and medium density fibreboard. This product is used in furniture, mouldings and millwork. It can be used in kitchen cabinet doors, decorative baseboards and trim, and MDF laminated flooring because the panels can be machined into shapes,.

What is significant about this plant is that it brings an environmentally attractive solution for local softwood lumber mills. The MDF product is made with pine sawdust, shavings and chips. This mill waste was landfilled or burned in the past. This plant when fully operational consumes 480 tonnes of these raw materials every day and it uses 1,300 tonnes of bark residue daily as fuel to produce energy for board production and building heat.

With a current workforce of 119 employees and a local payroll of about $8.5 million, Temple Pembroke MDF is a significant local employer. Through local spinoffs it injects more than $50 million annually into the local economy. Access to product is paramount to keeping this plant running and keeping people employed.

The employees at this plant are already feeling the effect of the coming recession because there has been a cut in the number of running days at the plant. No product, and this plant shuts down which impacts on the jobs in the plant. There is also an impact on the small mills and the truckers who bring the product to the plant. We can see why the people in my riding of Renfrew--Nipissing--Pembroke are so concerned whenever softwood lumber is mentioned.

When we see the state of the art operation of this plant and the money Canadian mill owners have put into their operations, we see why the Americans are afraid to compete.

One of the side effects of the softwood tariff that was put into place in 1996 was the effort by our mill owners to modernize their equipment to low their costs and remain competitive. At the same time American producers, protected behind a tariff wall, had no need to increase their productivity, further widening the gap between our efficient softwood lumber producers and their inefficient American counterparts. This is a common occurrence when industry uses politics to shore up shortcomings in its business practices rather than in the marketplace.

We have heard the daily denials from the Prime Minister and his junior ministers that there is no relationship between Canada's response to the war on terrorism and the fact that the trade dispute regarding softwood lumber grows worse. The Liberal government would have Canadians believe it is a mere coincidence that a similar lumber dispute with Indonesia was quickly settled once that country firmly established where it stood in the war against terrorism.

Noted military historian Gwynne Dyer said recently in a speech in Pembroke that the price of free trade has been a loss of Canadian sovereignty.

The government has consistently taken the trading relationship we have with our largest trading partner for granted since 1993. If we were talking about cars or steel, the government would have settled long ago.

The Prime Minister is being entirely unhelpful to the cause when he suggests that somehow we have leverage in the sale of our other natural resources and that we could withhold things Americans need to get our way with the softwood lumber dispute.

I say to the Prime Minister that he should not make threats unless he is prepared to carry them out and he should not wish for something too much because he just might get what he wished for.

It has been the practice of the government to take our entire lumber industry for granted as part of its neglect rural Canada policy. Nowhere is that more evident than in the shortsighted decision to shut down the Petawawa National Forestry Institution, PNFI.

Since its establishment in 1918 the institute made substantial and recognized contributions to forestry research and development until its closure in 1997. The research forest at Petawawa had a variety of projects that included forest ecology, growth and yield, silviculture, forest genetics, remote sensing and forest fire ecology. There were over 1,000 annual visits by students, dignitaries and forestry colleagues from all over Canada, North America and the world who came to witness firsthand the work being done at PNFI.

Why did the Liberal government close PNFI? Was it because PNFI could not find enough high powered friends in government like the former president of Canada Steamship Lines, now the finance minister? Was it the same neglect of our softwood lumber industry at work in 1997 that created the crisis today?

This is a trade disaster that could have been avoided. Anyone who was paying the slightest attention to the softwood lumber trade relationship with the United States knew that when the current agreement was set to expire the American industry would push for countervailing duties. However the crisis and the lack of leadership rest with the government.

[Andy Savoy, Liberal, Tobique—Mactaquac, NB]

Mr. Speaker, a 12.6% duty was levied on October 31 on all Canadian softwood lumber producers including those in Atlantic Canada. Aside from Atlantic Canada the total duty imposed across the rest of Canada was upward of 30%. Based on an all others clause, six companies were investigated. An average was determined for those six companies and applied across Canada. It was very appropriate that this decision came down on Halloween. Certainly the U.S. is masking the real situation of the softwood lumber industry in Canada.

Canadian firms have adopted technology more readily than our friends to the south. They have been more innovative, productive and price competitive in the industry in North America.

I had the pleasure of working at Juniper Lumber, now Nexfor, in Juniper, New Brunswick, during a $7 million refurbishment program. In that program we looked at laser technology, computer technology, effective utilization of the entire log and efficiency. This process was carried out across Canada.

How important is softwood lumber to my riding of Tobique--Mactaquac? Exports have slipped recently from a high of 2.7 billion board feet in 1996 to 1.9 billion board feet in 2000. Canada exports $10 billion of softwood lumber and one in sixteen jobs are dependent on softwood lumber. In New Brunswick there are 29,000 jobs or one in eleven people who rely on softwood for their employment. In my riding of Tobique--Mactaquac that figure is one in six jobs.

Several communities are very dependent on softwood lumber. The small community of Plaster Rock is one example. The Nexfor sawmill employs approximately 400 people directly and indirectly.That represents about two-thirds of employment in this small town. The softwood lumber situation is critical. If the mill shuts down it would devastate the community.

Mills are struggling in my riding. Prices have recently fallen drastically and profit margins are very slim. Softwood lumber producers in my riding estimate a drop in profits from 5% to 7%. That percentage does not allow for a 12.6% duty to be imposed. If we look at 5% to 7% margins with a 12.6% duty being imposed, the long term viability of those mills is certainly in question. Ultimately we are concerned that mills will be shutting down.

New Brunswick has an historical free trade agreement with Maine dating back to the Webster-Ashburton treaty signed in 1842. This treaty guaranteed free trade in lumber along the New Brunswick-Maine border specifically where the Saint John River separates New Brunswick and Maine. This action breaks the spirit of that 159 year old agreement and is certainly a sad day for the citizens of New Brunswick including the constituents of my riding.

Let us look at the U.S. situation for a moment. The American department of commerce has caved into the interests of southern U.S. producers. The main reason the U.S. has been lobbying for this is that it cannot produce at the same cost Canada does. In the industry there is a saying that one innovates or one stagnates. I suggest that the profits in the southern U.S. have gone into the pockets of the lumber mills whereas the profits in Canada have gone into reinvestment in technology.

It is very ironic that in many instances there is no direct competition between U.S. southern pine and much of the softwood lumber produced in Canada, specifically eastern Canada. Atlantic Canada softwood is structural in nature due to its density whereas the southern pine is not strong enough and does not have the integrity to be used for structural purposes. Home Depot recently said that it could not stock its shelves with Canadian softwood and would have to go elsewhere. It mentioned Europe specifically.

There is a case for optimism. We are faced with a situation and we have an ally that we have never had before. It is the American coalition for affordable housing. In a recent visit to the U.S. with some of my colleagues we spoke to the American coalition for affordable housing for three hours.

It explained that it represented 15 or 16 organizations, such as the Canadian Manufactured Housing Association, the Consumer Products Safety Commission and Home Depot. It is involved in a campaign to educate the American consumer on the exact impact that these duties will have on the U.S. consumer.

For instance, the coalition estimated that the price of a new home could rise as much as $3,000. It said that hundreds of thousands of people would not qualify for first mortgages because of the increased prices. To the American economy, this represents a serious threat when housing starts to go down by that amount.

We have been through it three times. It is like the bully on the beach kicking sand in our face. In each situation we have come back and embarrassed them in front of their friends on the beach, which we see as the rest of the world. In this situation we will again come back and embarrass them in front of their friends, the world community.

The government is taking action in this area on two fronts. First, we are looking at the legal opportunities to pursue this with the World Trade Organization via NAFTA. Second, we have had discussions with the industry, industry associations, the provinces and, recently, with the U.S. in Vancouver. We have had discussions in Montreal, in Ottawa today, and we will be in Washington, D.C. on November 12. We are making strides in that effort.

In closing, this issue is my top priority. It is a top priority for Minister for International Trade and for our government. We are united in our condemnation of this unfair trade action. We are united in our position. We are united in our resolve to find a solution for all Canadian softwood lumber producers.

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

Mr. Speaker, I sought and obtained the permission of the Chair for this emergency debate on softwood lumber—and I take this opportunity to thank the Chair—because I had been struck by the very difficult situation and the judgment and firmness required of the federal government in dealing with the current offensive by the U.S. government.

As the House knows, March 31, 2001 marked the end of a five-year agreement, the ultimate purpose of which was to manage the softwood lumber trade, despite a free trade agreement which should have covered this sector. People realized that the agreement had particularly penalized Quebec with respect to the quantity of softwood lumber it was allowed to export. This is also true for other provinces of Canada. It must also be recalled that the maritime provinces were not affected by this agreement. The result was therefore an increase in exports in New Brunswick, particularly in ridings bordering on my own, which was due solely to the punitive aspect of the agreement for Quebec and for the other provinces concerned.

We therefore decided collectively that a return to free trade was necessary, that we had to develop a common collective stand in order to be sure to have a strong position against the Americans. We had foreseen the present situation, which is a very difficult one, particularly for regions like the one I represent, including the RCM of Témiscouata, where the lumber industry is the main industry.

There are many plants whose future is now very uncertain because of the 12.58% anti-dumping duties imposed by the Americans in addition to the countervailing duties of 19.3%, which had already been imposed. So we are talking about almost 32% in duties which have been added on top of the regular price. Companies are being asked to make a profit, pay their employees and run their operations cost-effectively all the same. If this were allowed to go on, it would be completely impossible for them to succeed.

There is light at the end of the tunnel. As regards the decisions the tribunals and quasi tribunals will have to make in this dispute, we have had considerable success in the past and we may well win on the essence of the issues. However, we are facing a difficult period now. The Americans are putting on maximum pressure with the means at their disposal. I heard Mr. Racicot, the representative of the American president, say he expected a solution by Christmas.

A solution by Christmas is probably what everyone wants. However, we want no unacceptable compromise. I think there are three options to determine who our allies might be.

The behaviour of the Americans is really very difficult to understand. First, it seems to be more of a lobby of businesses than of consumers. It is to the advantage of American consumers—and they are aware of it—to have Canadian and Quebec lumber available on the American market. It means, for example, that houses can be built for less, which allows for a better return on their investment in their house or construction of other sort.

However, the business lobby is very strong and very much present. We have seen it in the past. It is our opponent. We must present arguments to consumer associations, use support like we got from the owners of Home Depot, who, as major intermediaries in the sale of lumber, know that the entire American market benefits from having Canadian and Quebec lumber available.

The American position is even harder to understand given that the American economy needs a boost. At the moment, things are not exactly rosy in economic terms. Adding the anti-dumping and countervailing duties raises the price of Quebec and Canadian wood on the American market and, consequently, it costs more to build houses at a time when a hand is needed to get the economy back on its feet. This too is hard to understand.

This also means that there is a necessity to play on the American stage. If there is one thing that the Canadian government has not done enough of, it is intervening more aggressively with the president of the United States, via the Prime Minister, repeating what he has already said, but adding all other arguments required.

The consumers must also be approached, and as I have said, the American stakeholders, so that they will be even more convinced that they will not be successful in the end, and would be better off working at finding something acceptable. As far as acceptable things are concerned, I have drawn up three hypotheses about what can happen.

The first one is an agreement to restore what died on March 31, 2001, something that would, in my opinion, not be very beneficial to either Quebec or Canada. It would even be absurd for us to revisit that solution, after the pitched battle that we were involved in to win our case, and now to beat a retreat and again accept an export tax, either a permanent one or one that would be for five or ten years, as was the case previously, but without a return to free trade in the end. That, to my mind, is unacceptable.

The second hypothesis is that we must have a position that is firm enough to take us to the decision stage with a tribunal or quasi-tribunal, where we have a good chance of winning. At that point, we would revert to free trade.

The third hypothesis to be looked at is not necessarily the outcome of negotiation, but may have been nourished by the discussions over recent weeks and those yet to come in subsequent weeks, and that is a return in the long term to free trade.

If we could negotiate an agreement whereby, over the next five years, in a gradual manner, we could end up with free trade, and the U.S. would acknowledge the fact that, indeed, in the end, we would end up with free trade, we would have won a major victory for the softwood lumber producers of Quebec and Canada. We would also be able to guarantee jobs for the people back home.

I will end my presentation on that. Right now, it is the workers in the mills and the people in the forests back home who are paying the heaviest price in this fight for a free softwood lumber market between Canada and the U.S., and Quebec too, and it is these workers who are being asked to make a considerable effort of solidarity.

I think we should be able to expect the federal government to come up with support measures that do not contravene free trade when it comes to softwood lumber, but that would allow, for example, through the employment insurance plan, to qualify with a minimum of hours.

The Bloc Quebecois proposed setting the minimum at 420 hours, as is the case right now for all of the regions with high unemployment, while ending the discrimination against youth, those who are coming into the labour market for the first time.

We also asked that the maximum benefit period be extended by five weeks. The minister once told me that about one unemployed people in five uses the maximum benefit period to which they are entitled. Currently, because of the economic slowdown triggered by the September 11 events, in the regions affected by the softwood lumber crisis, there are many more than one unemployed person in five who will use the maximum benefit period. There could be two or three in certain regions.

Allowing these people to get five additional weeks of benefits and perhaps make it to the next production period should alleviate the reform's negative impact.

It is also important that the government use some of the money stashed in manpower training programs. A little over $250 million are available but are currently not accessible by the provinces under the manpower training agreements.

The federal government should make this money available to allow more people who have lost their jobs because of the softwood lumber crisis to get training in a different area.

In conclusion, the situation we are facing is not an easy one. We feel it is important for parliamentarians to be able to express their views, to be able to represent what their constituents want. I did the rounds in my riding on this issue. I asked plant workers if they agreed with the position we had taken to get the Americans to agree to free trade. We had fairly widespread support on this.

Now we must deliver the goods and ensure that workers, those who are losing their jobs, those who are penalized by the situation, have the necessary tools.

What I want is for the Government of Canada to continue to take a firm stand with the U.S. government for a return to free trade for softwood lumber, and to take into account as much as possible the particular situations in each province. In Quebec, we obviously showed, five years ago, that there were no unwarranted subsidies in this area.

I hope that the final solution will give the softwood lumber industry of Quebec and of Canada free access to the American market. I think this is what we deserve with our production and with all the efforts that have been made on this issue by all stakeholders.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, it is now my turn to take part in this debate on the American measures that are penalizing our forestry workers and those who earn a living working in sawmills in particular and in other components of the softwood lumber industry.

I will quote some figures tonight, not a lot of figures, but enough to make members understand what is at stake here. I will talk about Quebec since I am more familiar with the situation there.

There are 40,000 jobs linked to the softwood lumber industry in Quebec. The sawmill industry accounts for 20,000 jobs and the forestry industry, for 10,000. There are 250 municipalities in Quebec whose development hinges on forestry, including 135 towns and villages where all of the jobs are related to this industry. So it has a major impact. It is extremely important.

As a matter of fact, last weekend, I was in Taschereau, in my riding, where a company called Tembec is located. It is one of the companies targeted by the U.S. government in its decision to impose penalties for alleged dumping on the market. People were obviously concerned. To give you an idea of the situation, Taschereau is a small village, but over 400 people showed up to meet with the company president. Of course, there were other themes for discussion, but it showed that not only were people interested in their development, but they were also concerned about the softwood lumber issue and its impact on jobs in their community.

The company president was reassuring. That business can afford to absorb these measures over a certain period, but not in the long term. We must find a solution, and I will conclude with that later.

There is just one solution for us and it is a return to or the establishment of true free trade for softwood lumber.

A coalition was established across Canada and Quebec. A number of businesses gathered around an association, the free trade lumber association, to promote the establishment of real free trade for lumber. Regionally and throughout Quebec, businesses like Abitibi Consolidated, les Produits forestiers Alliance, the Landrienne mill, the Gallichan mill, Tembec, Kruger and many others are involved in this issue. At home, these are names well known by the public, since they create many jobs in our villages, and many people work in forestry.

In the current context of economic downturn, there was no need for this on top of the rest to further fuel the uncertainty that consumers must be feeling at the moment. The economy needs people's confidence. At the same time, it is hard to encourage them with a speech on confidence when they see the threats made by the U.S. government, which is being protectionist in this matter.

I recall the advent of free trade between the States and Canada. I am one of those who believes in the virtues of free trade. We promoted it and said to people “It is a good thing. We must support it”. The public, particularly in Quebec, followed. In the federal election it was the main issue. The party advocating it won the most seats in Quebec. At the time, some people opposed it. Today, I hear people saying “We told you. With the Americans, you can have free trade when it suits them”.

I must say that we sometimes run out of arguments because, where we wanted free trade everywhere, we ended up in a situation in which a few American producers felt disadvantaged compared to competitors in Quebec or Canada. They put pressure on their government, which decided to establish protectionist measures, such as charging duties of 19% and adding another of 12 %, claiming that dumping is going on. All this increases the cost of our products sold on the U.S. market by 30%.

Needless to say, this makes some people skeptical and leads to grassroots feelings that are not very favourable toward the U.S. government. People who lose their jobs and feel threatened by this decision are saying “Hold on, now”.

These same Americans are asking us to liberalize the energy field, for example, because they have a major energy problem. They turn toward Canada, Alberta and Quebec in particular, and say “Oh, you folks have a lot of energy, and we would be interested in greater access to it”. This is being discussed. The government does not always tell us when discussions are being held, but it is clear that there seem to be some in this area. So, in parallel, they would like to have access to our energy. They want to be humoured in that, but then when it comes to softwood lumber, they do not want to buy our products, or not in the context of free trade.

At some point, there has to be consistency. The government must be very firm with the Americans, and tell them “Now, people cannot talk out of both sides of their mouths at the same time. If you are in favour of free trade, then that is what we will have. Period”. That is what will be done for softwood lumber, and no other direction will be taken. The negotiations must not address anything other than the implementation of true free trade, so that this debate will not have to be started over again every five, six, ten or whatever number of years.

This is nothing new. Five years ago, we went through nearly the same thing. The rates may have changed a little, but it is the same American strategy, of imposing taxes on our imports, putting pressure on our industry, and putting us in a position where they can say “Accept a compromise or go all the way through a legal process, and all the time that there is uncertainty will be costly”. So here they are with their threats and attempts to intimidate us, so that we will accept on a more permanent basis to either reduce our exports or impose a rate on ourselves, saying “Yes, that's true. We will set our own export tax”.

We must not head down this path, because that is what we did five years ago. Four provinces were affected by a quota system. Exports from Quebec, Ontario, Alberta and British Columbia to the U.S. were limited. In this respect, the system can often be arbitrary.

When quotas have to be divided among businesses, it is difficult to come up with a process that satisfies everyone. Many members who live in forestry regions know people who would have liked to have export quotas for softwood lumber, but never received any. They had to export while paying the tax. It was a difficult situation. They were not on a level playing field with businesses that were given a quota to sell to the United States tax free. The other provinces were not affected, in the meantime.

So the market is hardly fair. There are frequently highly arbitrary factors, influenced by politics, that define how quota systems are generated. We accepted this, and five years later, we are starting the process all over again. The U.S. is using the same threats: a tax, countervailing duties, and accusations of dumping. They are pressuring us by saying, now we will negotiate. After clobbering us with taxes, they want us to sit down and negotiate.

We need to show them that it is not going to work. Yes, we will carry through to the end on the legal front. It must be understood that we are not just talking about five years. The United States has been complaining about our systems for twenty years, because they claim that we are indirectly subsidizing the market with deflated stumpage fees. That is essentially their argument in court. They have private forests, we have many public forests. This represents our different approaches and our different perspectives. They claim that their system is better and that ours provides direct subsidies to business.

However, whenever they have gone before legal bodies, they have always lost these disputes. So, we must go to the end of the process. When we negotiate about free trade, there is also a dispute settlement mechanism. When we are part of organizations such as the World Trade Organization, there is also a process to settle disputes, but we have to use it. These mechanisms are designed to protect the little ones from the big ones. We must use them. We must go to the end of the process. We must tell the Americans “We will not give up unless you immediately agree to go back to free trade”. Then we will stop. Otherwise, we will go to the very end of the legal process. We will settle this once and for all, we will not go through this every five years. This is what we must do.

I hope that in the discussions that are taking place right now with U.S. government officials, who came to Ottawa, or in the talks between the Prime Minister and the U.S. president, the government is very clear. I hope it is firm and clear. Yes, the government did raise its voice. We noticed it in the past few days. But we have seen this problem coming for a long time. I hope this is not the first time that the government raises its voice and that it has done so in private for quite some time with the U.S. government. We must say “Listen, this is not going to work. It cannot work like this”. We must be very firm. We are not negotiating. We are saying “We want to achieve free trade, nothing else”. We must be very clear and firm, because there is only one solution.

Many jobs are at stake. Forestry workers are watching us and they are concerned. Their jobs are at stake. This affects local economies. These economies are already fragile and they need all the help they can get to make it through the current crisis.

So much the better if the softwood lumber dispute is settled quickly and the U.S. government buys our arguments. Otherwise, the government must go all the way. With all the leeway it has, with its EI fund and so on, this government must come to the aid of the workers affected by the length of this dispute, which might take some months yet to sort out. If it does, the government must put measures in place to help those in the industry, go all the way, and not resume this debate every five or ten years.

That is what the Bloc Quebecois wants. I hope that it is what the government wants as well and that it is what it is going to do. Finally, I hope it is what we will ultimately obtain.

[Andy Burton, Canadian Alliance, Skeena, BC]

Mr. Speaker, I will be sharing my time tonight with my colleague from Delta--South Richmond.

I am pleased to take part in yet another emergency debate on the state of Canada's softwood lumber industry. It seems that this is becoming a habit and one I might add which we would all do well to kick. While we are all here still talking about the state of our industry, there are thousands of workers back in my riding of Skeena in northern B.C. and all over Canada who are waiting for the Liberal government to put an end to the talking and start taking some action.

Last week we received the news that the U.S. was imposing yet another duty on Canadian softwood lumber being shipped into the U.S. This now takes the amount of duty on Canadian softwood lumber to over 30%, 31.5% to be exact. The U.S. government is saying that this duty is being imposed because Canadians are dumping lumber into the U.S. market at cut-rate prices.

The head of Canada's largest lumber producer, Mr. David Emerson, has been quoted in several papers over the past week saying how bitterly disappointed he is at Ottawa's foot dragging. Imagine that, foot dragging. He is wondering why this has not been placed on the Liberal government's priority list when it is a situation that affects so many people and communities across Canada. Of course we all understand that after the attacks of September 11, both Canada and the U.S. have been focusing on national security. However it seems curious that the U.S. has put its lumber lobby back in motion and our government is unable to look at more than one problem at a time.

Mr. Emerson went on to wonder what if this were a problem that was facing the auto industry, the aerospace industry or perhaps even Bombardier or a split run magazine. Then would the government be on flights back and forth between the two countries getting the matter cleared up quickly? It is very likely. This is something I brought up in my very first take note debate which took place at the end of March. We in the official opposition were begging the Minister for International Trade and the Prime Minister to do something to protect Canadian interests before the agreement expired at the end of March. Yet here we are once again.

This is getting to be like a bad dream. It is sad to think that everyone else seems to see the urgency of this matter, everyone that is but the government. It seems willing to jump through hoops to help Bombardier win contracts to the point that it is given guaranteed loans and now has put us in trouble with the WTO.

Will the government help out with the lumber industry? All one has to do to see how much the federal Liberals are willing to help is look at comments made in the House of Commons. The latest slap in the face to British Columbians is when the member for London--Fanshawe stood up and had the audacity to call the British Columbia lumber industry nervous Nellies. It is really nice to have government on one's side although it is obvious that British Columbia will have to wait for that day to come and it will probably take a change in the members on the other side of the House.

I suggest that the government should take a look at its exports and see how much income lumber really does generate for the Canadian economy. Surely the government will fight these duties at the WTO and that is great, except that the World Trade Organization will take years before it will reach a ruling on this. We do not have that kind of time. While the WTO lumbers around taking a kick at the can, Canadians go jobless.

We understand that we have to go through channels, that any help that is given has to be done very carefully so that the U.S. does not misconstrue it as a government subsidy. God knows, we do not need further action to be taken against us but it would be nice to know if the Liberals here in Ottawa have any plan to help the workers that are depending on them now. Is there a plan to do anything to help them out when their mills get shut down?

It sometimes makes me wonder about trade laws. At the U.S. government website for the Department of Commerce there is a link that shows the cases the U.S. is charging with countervailing duties and anti-dumping. The cases are listed by country. In fact there are 29 of these cases against Canada alone. If that is not protectionism, then I do not know what is. There are 17 countries listed on that site and on the WTO site there are many more. Countries have made complaints to the WTO about this unfair protectionist law the U.S. has. We cannot go on like this any longer.

We are supposed to have free trade. We signed the agreement with the U.S. and are in talks to expand it to the hemisphere. What can we expect to come as new protectionist laws when the area is expanded? What will be the next target? Will the newly signed partners take a page from U.S. trade law? Not to be a fearmonger but it is very disconcerting when we think of what could or may happen.

This issue should have been dealt with from the beginning when NAFTA was signed. This is a point that cannot be made enough. Since we do not yet have the technology to go back in time, we will be unable to fix the situation that way.

The government should fix the mistakes made by the government of that day. The duties facing Canadian producers are crushing and they need help. We need a government that will stand up and help.

In British Columbia we are facing these duties, the shutdown of mills and the layoff of workers. To top it off, British Columbia lumber is threatened by an infestation of bugs. For those members who not know what these are, let me inform the House.

Over the past year the mountain pine beetle outbreak in the west central plateau of British Columbia has increased fourfold affecting just under 300,000 hectares of forest in that area. This tiny black insect, native to North America, burrows into lodge pole pine and transmits a blue stain fungi that can destroy the connective tissues within a tree and lower the grade of lumber. This in turn reduces the market value. All we have to do to see the vast destruction is to fly over the province. Where we see green below, those are healthy trees; where we see a red tinge, that is the work of the mountain pine beetle.

With the knowledge of the destruction these beetles cause, one would think the federal government would take some action, but in a recent report published by the Department of Natural Resources this topic only got a tiny mention, just one small paragraph, in fact 13 lines. When we thumb through the rest of the report called “The State of Canada's Forests”, we will find that the tall bugbane gets as much mention and the night snake gets a longer write-up than the mountain pine beetle.

This shows where the Liberal government places the forest industry on its priority list. Chalk this up as yet one more item the Liberals here in Ottawa are not putting any brainpower behind, but I digress.

I would be very interested to know what action our government is taking to help the four B.C. lumber companies and two Quebec companies that have been the target of these new duties and the industry as a whole.

From the time that the first duty was levied against us, which by the way excluded the Atlantic region, we have lost 18,000 jobs in the lumber industry in B.C. It is expected that with this new duty there will be an additional 12,000 layoffs before Christmas. Will that not make for a merry Christmas for families who work in forestry.

I think I speak for the majority of loggers, mill workers and owners and all those who are fighting this ridiculous situation that the Liberal government has allowed our forest industry to fall into when I say enough is enough, it is time to take some action. It is time for these two governments to sit down and get this worked out. How many people have to go jobless? How many mills need to be shut down? How many more times do we have to sit in this place and listen to the Prime Minister say he will talk to the president about this? How many more times are we the opposition going to have to stand and beg the federal government to help our citizens and our industry? How much more money do we need to give the U.S. lumber interests before our government, our protector, will start working to help Canadian citizens and our forest resource based economy?

This situation must be resolved. No more waffling. Our forest industry workers need an early Christmas present. The Prime Minister and the U.S. president need to get together and resolve this issue on a free trade basis now.

[John M. Cummins, Canadian Alliance, Delta—South Richmond, BC]

Mr. Speaker, it is unfortunate that we are having this debate this evening. It is unfortunate that our American neighbours are treating us so shabbily again. We recall that they have unjustifiably interfered with the free flow of trade in hothouse tomatoes in British Columbia, with mussels and potatoes in P.E.I., and again for the last few months with softwood lumber.

Many in the House have worn a pin with both the Canadian and American flags on it to show our solidarity with our American cousins over the events of the last few months. It is upsetting, to say the least, that in return for our generosity and support we would be treated by the American government in this way.

Having said that, it is unfortunate that the government has ignored this critical trade issue until it has become a crisis.

Recently, Gordon Gibson, a noted British Columbian, wrote an article. I will quote his comments because they are worth repeating. He said:

If scientists detected a small asteroid headed toward us with a high probability of taking out a continent-sized chunk of Planet Earth five years hence, chances are something would be done about it. No matter how hopeless the case, rockets would be launched and so on. It might or might not work, but by God, the world would try.

Unless of course the space rock was pointed only at Canada, in which case nothing would be done, if the current lumber export crisis is any example.

Our governments have seen the softwood lumber attack launched by the U.S. forest industry and its senatorial supporters coming at us for five years, and hey -- surprise -- here it is! Communities and companies are already forecast to lose 14,000 jobs in British Columbia alone. Double that for Canada, escalate for the longer term. If there is no solution, expect a further decline in the Canadian dollar, important loss of government revenue and an eventual humiliating capitulation to the Americans.

There are, in fact, no surprises here. All of the actors are playing their assigned roles as predicted. The trade asteroid that might have been diverted five years out is here now, and the only option is damage control. The politicians we pay to look after these things should be tarred and feathered sometime in the future, but for now we all have a problem.

Mr. Gibson notes a further decline in the Canadian dollar. It is interesting to speculate on why that is.

The B.C. Lumber Trade Council points out the significance of forestry to the British Columbia economy. It claims that it represents 17% of all output and about 14% of all direct and indirect jobs in the province. Tax revenues from B.C. forestry help fund vital services that B.C. and Canadian residents value, such as education and health care.

B.C. exports roughly half of all the country's softwood lumber to the United States, almost $4 billion Canadian in 1999. Used mainly in home building and renovation, softwood lumber products, spruce, pine and fir, represent Canada's single largest export to the United States. That is why this issue is so important not only to British Columbia, but to Canada.

Last March when the expiry deadline of the previous agreement was forthcoming, Diane Francis notes in a column that Jimmy Carter, the former U.S. president, had written an article on it, an op-ed piece, which she claims, and I think quite rightly so, is totally off base and smears Canada as an unfair trader. She notes that the comments of former President Carter are a combination of propaganda and mistruths. She suggests that the anti-Canadian campaign which has been waged for years is simply a thinly disguised attempt by American forest industry interests to subsidize their lumber business.

She points out the real facts of the matter, that Canadian lumber exports are not subsidized in the way that Mr. Carter suggests. She notes that the trees which are harvested are publicly owned trees, but that they must be replaced by law.

She notes that log prices, for example, and the taxes on them are on landed costs. The taxes may be lower in British Columbia due to the long distance the logs have to be taken to get them to market. They have to be hauled across and through challenging terrain.

She also notes that if taxes are taken into consideration, Canada is hardly a low tax regime. Corporate taxes and income, sales, royalty and other government compliance taxes or costs are routinely higher in Canada.

In closing, she notes that U.S. lumber interests, not Canadian ones, are often directly subsidized by their governments. It is not unusual for local or state governments to offer tax breaks to forest industries and she says that in the U.S. the companies ship on roads which are owned and built by the government, not privately.

How did we end up in this mess? I think the facts are quite clear. There is no free trade in lumber such as some would suggest. When the North American Free Trade Agreement was signed, lumber was not included, as we know. What we are facing is really just a clever form of anti-competition practice.

If we look at the history of the issue we notice that since 1982 Canada and the U.S. have been involved in three lumber countervailing duty cases. The softwood lumber agreement avoided a fourth one.

However, those agreements were not wins for British Columbia or for Canada. In fact they were not victories at all. The B.C. Lumber Trade Council makes that point very clearly and I would like to quote from a document it has printed because I think the comments are valid and worth noting. It stated: “Some have also argued that since Canada has previously won softwood lumber disputes with the U.S. at international trade tribunals we should pursue that strategy again. That reasoning demonstrates a fundamental lack of understanding of the dispute which has hit industry with the highest duties in history and has already resulted in the loss of 16,000 mill and logging jobs across B.C.”.

The council continued, stating that: “The previous wins were hardly victories for Canada and, in particular, for British Columbia. The cost of successfully defending against three earlier trade cases came after some two decades of constant litigation and restrictions on the free trade of B.C. lumber across the border. It cost industry over $100 million in legal, research and other costs. Finally, those so-called wins have handed us the largest duty in history at a whopping 32%. If that is victory one shudders at the notion of defeat”.

In conclusion, the council stated that: “Further, at the urging of the U.S. industry lobby, the United States has changed its trade laws this time around. They are more complicated and onerous than ever and the U.S. lumber industry has stated outright that if it loses this round at the World Trade Organization it will lobby again to have the U.S. rewrite its trade legislation to suit its own purposes. The U.S. industry believes it is not bound by international trade law but by domestic law. Its actions to date bear this out”.

The lumber trade council goes on to say that it is why it believes the only responsible approach for Canada is to negotiate a constructive long term resolution that will provide us with stable, free and unfettered access to the U.S. market, or in short, free trade.

It is interesting to look at some of the comments made in the United States on this issue. What are Americans saying about this dispute?

Federal reserve chairman Alan Greenspan suggests that anti-dumping suits and countervailing duties have often been imposed under the label of promoting free trade but oftentimes are just simply guises for inhibiting competition. Protectionist trade barriers could become “a great tragedy” for the country.

Other concerns are expressed by Americans as well which suggest that all is not well in the states, that not all Americans support this action by their government. The problem is that there is a powerful lobby in the United States and the issue was ignored by our government for the previous five years. It has done nothing to solve the dispute in time.

[Odina Desrochers, Bloc, Lotbinière—L'Érable, QC]

Mr. Speaker, I am very pleased to rise tonight to take part in this emergency debate, which was requested by my party and deals with the economic crisis affecting Quebec and my region because of the softwood lumber issue.

First, I would like to thank my colleague from Joliette for all the efforts he made over the last few months to try to prevent this crisis, as well as my colleague from Laurentides, who travelled to Washington twice to try to resolve this issue.

Personally, I made representations at the Canada-United States parliamentary association, particularly at the annual meeting that was held last May in Blue Rivers, British Columbia, and just recently, on Monday morning, in the presence of a representative from the U.S. congress.

Once again, despite all the diplomatic and political efforts, Quebec and Canada are facing economic turbulence. Once again, Quebec is facing a problem that was created by the U.S. government.

The Americans are increasingly protectionist, and I would even say increasingly selfish. They ignore the free trade agreement and impose economic measures that slow down softwood lumber production considerably.

In recent years, the U.S. government has become the killjoy of bilateral and multilateral agreements by not complying with trade rules.

I would like to address the Americans' attitude as far as agreements in the agricultural area are concerned. The U.S. has not even respected the GATT agreements by maintaining the heavy export subsidies and grants to sustain their domestic trade, which results in a market distortion. Most countries that do business with them are forced to constantly appeal to the WTO tribunals to get their rights respected.

While Canada is battling before the courts to win its case, thousands of jobs are being lost in Quebec.

As the member for Lotbinière—L'Érable, I have risen in the House on numerous occasions in defence of the economic interests of my region. Today, the decisions of the U.S. government on softwood lumber are jeopardizing hundreds of jobs in my riding.

When they were already reeling under the 19% countervailing duties, the U.S. government last week delivered the final blow to companies directly or indirectly connected to softwood lumber, by adding anti-dumping duties of 12.5%.

In our riding of Lotbinière, a number of companies were already severely affected by the U.S. countervailing duties. In Daveluyville, Doucet Machineries has experienced a considerable drop in purchases and orders. Since the countervailing duties have been introduced, the company has been operating on a job-sharing basis.

In Plessisville, countervailing duties have had an impact on the For-Min group, which includes Carbotec and Vibrotec, which is also slowing down production. Forano U.S.N.R is also suffering as a result of the U.S. government's decision.

The Government of Canada must demonstrate much stronger leadership when dealing with the Bush government, which is not at all shy about interfering with all kinds of economic measures to slow our economy. The Prime Minister needs to tell President Bush clearly that he is wrong on the softwood lumber issue.

It is American consumers who are directly affected by their government's attitude. In fact, as we know, our softwood lumber is of better quality, and costs less to produce than the lumber from U.S. mills. American families who want to build a house are being penalized because they are being denied access to our 2x4 lumber.

On behalf of the thousands of employees whose jobs are threatened, I urge the Government of Canada to demand that the Bush government return to free trade for softwood lumber, and that the U.S. respect its signature.

Softwood lumber producers cannot afford to wait for 10, 20 or 40 days. The U.S. government must immediately suspend the countervailing duties that are choking our provincial and regional economies.

The Bush administration knows that it is wrong. I am asking the Minister of International Trade to settle the issue quickly and efficiently, not through negotiations that will drag on interminably. Time is of the essence. Quebec's economy, the Canadian economy, and regional economies are already suffering in the wake of the attacks of September 11. Quebec, and Lotbinière—L'Érable cannot afford to wait. The United States has the power and the responsibility to act immediately. And it must.

The softwood lumber crisis has become cyclical. We need to come up with a permanent solution for this issue.

The Minister for International Trade should not be going it alone here. He should immediately call all stakeholders to a meeting in order to hear what they want and to work out a common strategy with them in order to resolve this issue for once and for all.

In the last few minutes, I have been critical of the U.S. government in this issue. I would now like to address the Minister of Human Resources Development, who seems unaware of the softwood lumber crisis in our regions. She too must do her job.

In fact, the minister has the authority to relax the EI rules by removing the waiting period, and increasing the number of eligible weeks and the amount of benefits. This would show her solidarity with workers affected by the softwood lumber crisis.

Every time a crisis hits the regions of Quebec, the Minister of Human Resources Development drones on about Bill C-2, which made only small improvements to the EI system, which is leaving our regions poorer every year.

Again this afternoon, the auditor general pointed a finger at the current EI system, which is building up a surplus year after year. The minister therefore has the financial leeway to take action now.

A treasury board document shows clearly that, since 1998, the surplus in the EI fund has grown at the rate of $7 billion a year. So, over the past three years, this surplus has grown to $21 billion. Despite this huge amount, the minister is still waiting.

Perhaps we should ask the person who decides everything in her department, the Minister of Finance, why the government is doing nothing.

Again, I call on the Canadian government to find a speedy and permanent solution to the softwood lumber issue. Quebec, the second largest producer of softwood lumber in Canada, with over 25% of Canadian production, must receive massive and tangible support from the Canadian government in order to end what I would describe as these unjust and unfair actions by the U.S. government, which are now paralyzing a vital sector of our economy.