Debates of Nov. 6th, 2001

Canada National Marine Conservation Areas Act

[The Speaker]

I declare the motion carried.

Softwood Lumber

[The Speaker]

The House will now proceed to the consideration of a motion to adjourn the House for the purpose of discussing a specific and important matter requiring urgent consideration, namely, softwood lumber.

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

moved:

That this House do now adjourn.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I wish to advise you that members of the Bloc Quebecois taking part in this emergency debate will be splitting their time in 10 minute segments.

First, I want to thank the member for Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques for requesting an emergency debate on the softwood lumber issue. I think everybody will agree that this emergency debate has become necessary after last week's announcements.

We requested an emergency debate on this issue because we are both concerned and appalled. Obviously, we are appalled by the decisions made by the Americans, which we find outrageous. With countervailing duties of 19.3% to which anti-dumping duties averaging 12.58% were just added, we are talking about duties totalling about 32%. This will be extremely detrimental to our industries, our businesses, our jobs and our regions in Quebec.

It is outrageous because in this process that the Americans just put in place, they are both judge and judged. That enables overly protectionist lobbies to constantly harass the Canadian and Quebec industry, as we have seen not only over the last 15 years, but also over the last century.

What is somewhat sad is that this surtax, this practice used by the American industry of calling upon trade tribunals to impose this type of surtax, is detrimental to the American economy and goes against the interest of American consumers, an interest that would be well understood.

As I was saying, these duties exceeding 32% that will apply for the next six weeks represent a surtax currently estimated at $637 million for Quebec alone. This means that on $2 billion worth of shipments to the United States, the Quebec industry could pay $637 million a year in duties, should these decisions, which are just preliminary, be maintained as final decisions.

We are appalled by these decisions that are totally unjustified. In this regard, I think everyone in the House will agree that our industries are not subsidized, as recent investigations have shown. What we must face is deeply rooted prejudice on the part of American officials, American elected representatives and the industry to the effect that, because our forests are publicly owned and managed, they are automatically sold at low price to the industry, which would be a form of subsidy.

So, as I have already said, we are concerned because, until December 17, there will be this 32% surtax, which is a threat to our exports, to our jobs and to our industries, not to mention our businesses.

I would remind hon. members that Quebec is the second largest producer of softwood lumber in Canada, after B.C., with 25.5% of total production. We produce approximately seven billion board feet annually. This provides 40,000 jobs directly related to the industry, whether in sawmills or in the bush.

In Canada, there is talk of 130,000 jobs related to this industry. They are threatened at the very moment that we are undergoing an economic downturn, perhaps—although we would not wish for it, but it is a strong possibility--the beginning of a recession. In Quebec, this is an industry which generates $4 billion in revenues annually. There are more than 250 Quebec municipalities which have developed around it. There are 135 towns and villages 100% dependent on the softwood lumber industry for their jobs in manufacturing. As hon. members can see, this is an extremely important industry not only for Quebec as a whole, but also for its regions and the municipalities in those regions.

Half of our production for export goes to the U.S., and the other half to Canada. As I have pointed out already, we are talking about annual exports of CAN $2 billion. For all of Canada, we are talking some $10 or $11 billion. This is, therefore, an industry of great importance for Canada and for Quebec.

We are concerned because the Americans' protectionist actions will impact, and have already impacted, employment in many regions of Quebec and Canada. They have also had an impact on a number of businesses, particularly smaller businesses, which are more financially vulnerable. However, we are also concerned, more than when parliament reopened, about the current government's real will to bring us to free trade.

I will not hide the fact that I am concerned that the situation in which we currently find ourselves closely resembles the situation that led to the 1996 agreement, which, I will remind hon. members, penalized the industry in Quebec considerably. Even though we had managed to prove that we were not subsidized, we were subjected to a 6.5% export tax, which was the average that was negotiated with the Americans. For us, this was additional proof of the federal government's inability to defend Quebec's interests. Our exports were unfairly subjected to a quota, and we do not want to go through that experience again.

I am concerned because there are currently discussions under way between the provinces and American officials. We are in favour of such discussions. The Americans were quite clear about their demands. They want to discuss stumpage fees and long-term contracts, also known as the tenure system. They want to discuss mandatory requirements, in other words everything having to do with the requirement to harvest the volumes allocated by governments, particularly in Quebec and British Columbia. They want to discuss transition measures to ensure that during the time it takes for the provinces to modify their forest management systems, there are certain measures and bridging mechanisms to lead to free trade. They are also asking that both parties respect the agreements, which is completely understandable. They especially want Canada to abandon its procedures before the WTO, and eventually, before the NAFTA panels.

But what did we ask for from the Americans in return? Nothing. This is what I do not understand about the discussions. Clearly, for now, these are not what you would call negotiations.

We know for a fact that there are adverse effects from American practices, which create distortions in the United States, but which also create distortions in how we manage the softwood lumber industry. Because of these chronic softwood shortages in the U.S., we are forced to periodically increase our production capacities, not to meet demand from Canada or Quebec, but to meet demand from the United States.

They are the ones then calling for help. When their forests resume production, then we are in the way. Periodically, we have gone through these protectionist crises to restore portions of the market. Especially since Canada and Quebec in particular have invested in technology and reorganized the work. I know whereof I speak, because I used to be the secretary general of the CSN, and we were well represented in the lumber industry. I was a party to the discussions which arose in these companies, especially in the early and late 1980s, about how to reorganize the work, and move on from an approach which was perhaps a bit easygoing to one which was performance-oriented.

Now, because we in Quebec and in Canada have done our homework, we should pay the price, while the Americans did not invest enough in their industry. It is the federal government's responsibility to ask these questions to the personal envoy of the U.S. president. The provinces should not have to do it. They are currently working very hard in their discussions on forest management systems. I know that, particularly in Quebec, a number of proposals were put on the table. In any case, these proposals were necessary, and the government had intended to put them on the table. They will satisfy, partly for sure, U.S. officials.

However, this will not be enough if the federal government does not take its responsibilities. This is why it is important to maintain, both in the rhetoric and in the practice, a will to return to total free trade with the United States. I am concerned when I hear the parliamentary secretary refer to negotiations and discussions at the same time. I am also concerned when I hear the Prime Minister of Canada tell us, as he did yesterday, that we had an agreement that worked for five years. It did not work for five years. It penalized us for five years.

A summit meeting with all the players is necessary to ensure that the consensus achieved in May still exists in November. The next six weeks will be extremely difficult, and understandably so. Some manufacturing associations, such as the Canadian Lumber Remanufacturers Association and FTLC, the Free Trade Lumber Council, asked for such a meeting. We are also asking for a meeting at the earliest opportunity.

Some measures are in order, I am convinced that the hon. member for Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques will elaborate on this, and more specifically on employment insurance, to help workers make it through this difficult period.

I will conclude by saying that the Prime Minister must absolutely get the U.S. president to order the withdrawal of these countervailing and anti-dumping duties, until the WTO panels have validated our position.

[Suzanne Tremblay, Bloc, Rimouski-Neigette-Et-La Mitis, QC]

Mr. Speaker, I am really pleased to have the opportunity to take part in this emergency debate tonight. I live in a region that has been feeling the negative impact of these decisions made by the Americans.

Particularly last weekend, everybody was asking me “What is happening with the softwood lumber issue? What can you do against the Americans? Why are they doing this?” People are wondering why the Americans are acting this way. Why did we take our case to the international tribunals? What good did it do us to take our case to the WTO and to win, if it does not change a thing?

People are getting tired of this situation where it seems that we are engaged in a battle like the one that opposed David to Goliath, a battle of the poor against the rich, the weak against the mighty. They are getting tired of seeing that we keep going back to square one and that this situation is hurting us more and more. They are wondering how things could change.

Things must change. We cannot go on like this. We must find a way of getting through this wall that is preventing us from asserting our rights.

In 1996, the government signed an agreement. As mentioned by my colleague from Joliette, it proved to be a negative agreement. It was not beneficial to Quebec and British Columbia, and it was not beneficial to Canadians.

When it expired and even before that—we knew it was due to expire on March 31, 2001—we kept asking the government “What will you do? The agreement is about to expire. We want free trade. We signed a free trade agreement and now we want it to be honoured”.

We know what has happened since that time. The American government has made decisions that are truly detrimental to us.

What conclusion should we draw from all this? We realize that Canadian officials refuse to use the word “negotiations”, as if they were afraid of it. They do not want to talk about negotiations; they say that they are having “discussions” with the U.S. government. They are discussing, and not negotiating, with the American government.

They should really be negotiating. In a negotiation system, a relationship of power is established and there is some give and take. They have to start saying to the Americans “We want to change our policy now. We have lost our sympathy for the United States. You will not get any more of our oil, our natural gas or whatever else you want”.

The Americans want our drinking water. Well we better tell them right off that if they do not give us what we want in terms of lumber, they will get nothing. Let us put that in the negotiations. This is the sort of thing we negotiate for. A negotiations mindset is required, not a defeatist or cry-baby attitude over the corner of a table. We must negotiate.

The Americans are negotiating; they have appointed a negotiator, the former governor of Montana, Marc Racicot. If there is no one opposite them to negotiate, the Americans will negotiate all by themselves. Canadians have to get it into their heads that they have to negotiate too. This is a very important attitude to have from the outset.

Without the right attitude initially or if the idea is simply to go and parley, chew the fat, talk over coffee, how will they get down to negotiations? I think this is important. Negotiations are underway, at least the Americans have started them.

The industry is unhappy about not being involved in these negotiations. It was simply told “You can roam the halls, lobby all you want around us, and entertain our court, as an industry, but we will do the negotiating”. The government sends officials to negotiate, but perhaps it should consider sending those who know which side is up.

We must therefore pursue the battle with the Americans and explain to the public that something has to happen. I have seen articles referring to a two by four war. This is an image that is very important, for the people of Canada anyway.

Everyone has seen tractor trailers on the highways hauling loads of two by fours. Very often, it might be something else but, very often, it looks like two by fours. Often they are wrapped in paper. One end is painted green and the other blue. It depends on the company.

In my area, almost everyone knows someone directly or indirectly related to a lumber worker. Lumber workers are those who work right in the forest or who transport wood from the forest to the sawmill. Some of them work in the sawmill and some of them take the resulting lumber somewhere in the United States, because that is where over 50% of our production goes.

Last summer, the hon. members for Joliette and Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques and I met with the Americans. We met senators and members of congress. I must admit that I was astonished. There were several other people. There were Liberals and people from all parties. I do not think that any party was not represented—or perhaps one—but we all tried to be there because we had an interest in doing so. We were all there. As I said, we met senators, members of the house of representatives, and even lobbyists. The vice president of Home Depot was there.

These people spoke with us and understood the situation. Very often, Canadian wood is of better quality than American wood. In addition, Americans do not produce the same wood that we export to the United States. These trees do not grow in the United States.

What struck me was the complete ignorance of American parliamentarians. They understand nothing about our system and they are wrongly accusing us of subsidizing an industry when this is not the case at all. I was truly astonished to see senators say quite simply “Oh, so that is how it works.”

We must therefore develop some method for informing the staff of the U.S. department of commerce, the senators and the representatives, the ones making decisions, on how the situation is being experienced on our side of the border, so that they can at last grasp that we are not competitive with them in the least.

This we need to do. It is very important for us to eventually arrive at a solution that is to our local industry's advantage. Things cannot continue the way they are.

In my riding, at least 600 jobs have been lost. A loss of 600 jobs in a region like mine is the equivalent of 10,000, 15,000, 20,000 in a larger centre.

It strikes me, therefore, as very important for this to be given a great deal of attention, because of all those direct and indirect jobs. The situation is a difficult one, but the Americans must not complicate it further by not properly understanding the situation and by their decisions, which smack of protectionism as well as a desire, as the giants that they are, to impose their will on everyone.

I feel we must be able to stand up to them. As my colleague from Joliette has said, we must go to the United States and negotiate. We must not negotiate with petty functionaries, but with the top man, the president himself if need be. Our Prime Minister must make this his cause.

Perhaps he is seeking a cause, since I see we are not that busy in parliament. So perhaps the Prime Minister is looking for a cause. Let him set off on his pilgrimage with his pilgrim's staff. This time we will close our eyes to how much he spends on travel. He is the one who must go to the U.S. to settle the softwood lumber situation.

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

Mr. Speaker, I am pleased to rise in the House to debate the issues put forward by the hon. member for Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques.

The member's motion on softwood lumber is timely and important for all Canadians. The Canada-U.S. softwood lumber dispute is ongoing and it continues to be our country's latest trade concern with our neighbour to the south.

Last week's decision by the U.S. department of commerce, while not surprising given its protectionist leanings, is punitive for our industry in terms of job loss and mill closures and for U.S. consumers who will pay needlessly high housing prices to cover unwarranted duties.

This dispute, the fourth in 20 years, directly impacts hundreds of thousands of Canadian jobs and many more indirectly. Over 300 Canadian communities are at least 50% dependent on a strong lumber industry and on positive softwood lumber trade relations with the United States. Almost one million Canadians' livelihoods, or one in 16 jobs, are related to the lumber industry. Canadians in these communities know first hand of the impact that the U.S. trade action has on our country's economy, on their individual communities and on their families at home.

I will speak today on what the Government of Canada has done to defend the interests of its industry and what it will do in the days ahead.

Since the U.S. lumber industry petitioned the U.S. department of commerce in April of this year alleging that our industry is subsidized and is dumping lumber into the United States, the government has responded forcefully and clearly that these allegations are false and not based in fact. During the past 20 years three previous cases have not been sustained. Once again these allegations will be refuted. Based on protectionist sentiments, the U.S. industry's trade action has brought uncertainty, mill closures, job loss, reduced exports and lost opportunities to Canada's lumber industry.

Having said this, let me say that we in Canada are not the only ones hurting. As a result of the U.S. trade action, American consumers are feeling the impact of a needless dispute. As a result of U.S. duties on our lumber, American consumers will have to pay higher lumber prices and, accordingly, increased housing costs. The United States will see reduced housing starts, the only shining light in a lagging economy, and a weakened ability of hundreds of thousands of Americans to buy a home.

What impact does this have on those who want to purchase a home, a couple's first home, let us say, or on those who are concerned about affordable housing? The coalition American Consumers for Affordable Homes and other housing groups in the United States estimate that 32% duties on Canadian lumber will needlessly raise housing costs by up to $3,000.

Incredibly, the levying of duties by the United States administration on Canadian producers will greatly hurt the U.S. public, who will have to pay up to four months' mortgage just to cover the cost of needless trade action against Canadian lumber producers. Ironically, in an attempt to satisfy big lumber interests in the United States, the U.S. department of commerce has indirectly hurt those who are bystanders in this trade dispute.

In the face of the trade action and the difficulties it causes on both sides of the border, I would like to congratulate the many Canadian interests that have stood together prior to the investigation and since the trade action began in April. Canadian lumber producers, the provinces and territories and the Government of Canada have met regularly to determine the next steps. They have worked in a united fashion and have indicated in clear terms that we will fight the U.S. trade action based on the merits of our case, a case that has been successful for Canada many times before.

I am proud to say that our government has been active in defending our interests and in leading the way forward. To those say “what more can we do?”, I will summarize what we have done already and outline what we can do together in the near future.

Our Prime Minister has frequently personally engaged President Bush on the trade dispute at every opportunity. As the Prime Minister said in the House today and as he has said repeatedly, he had the opportunity to raise this issue a week or so ago in Shanghai with President Bush and has committed to again in the next few days raise this issue with the U.S. president. Let there be no doubt that the Prime Minister is personally engaged in this issue in a most serious way and has repeatedly raised this matter with the American president.

Our Minister for International Trade has forcefully made our case and has engaged in high level discussions on numerous occasions with commerce secretary Evans and U.S. trade representative Bob Zoellick. In answering a question in the House today, my colleague the Minister for International Trade indicated that he had met with the new special representative, Marc Racicot, appointed by President Bush. He indicated that they met earlier today and that Mr. Racicot now knows in no uncertain terms from the Minister for International Trade just exactly what are the concerns of the Canadian lumber producers, the Canadian workers and the Canadian government in this dispute.

Our minister and officials have been holding regular federal-provincial meetings. I applaud the provincial governments for sticking together in tough times and for advancing our common interest with the Government of Canada.

In order to counter protectionist views, we have built alliances with U.S. consumer groups and with companies that are dependent on Canadian lumber. For example, Home Depot, the large U.S. lumber retailer, has been a great supporter of our position and has actively lobbied members of the U.S. congress on the need for free trade in softwood lumber. That is the best answer: free trade in softwood lumber. Home Depot was instrumental in the recent team Canada mission to Atlanta. It has been a key player in the United States, advocating for free trade and not for trade action.

In response to the U.S. allegations, the Government of Canada has filed over 250,000 pages of evidence refuting categorically U.S. industry allegations. We have helped individual companies prepare applications for exclusion from the countervailing duty investigation and recently submitted 334 applications to the U.S. department of commerce.

Our embassy in Washington and our consulates across the United States have been very active in lobbying decision makers and in educating the American public on the impact that duties will have on them, U.S. consumers. To date, some 115 members of congress have agreed with the position of the Government of Canada. As well, many articles supporting the Canadian position have appeared in U.S. newspapers.

This is a new phenomenon and a positive one compared to the last time we had this dispute with the United States. The American public and the American congress are more informed now and we are actively building and cultivating an alliance south of the border that supports us in arguing for free trade in softwood lumber. They just want their government to stand up to what it says it is and be a free trader in softwood lumber like it is when it chooses to be so in other commodities.

Canada's answer to the preliminary determinations of subsidy of the United States department of commerce and to its trade action has been to level the playing field so that big U.S. lumber does not rule the day. Our decision to challenge the United States on its protectionist softwood lumber rulings before the World Trade Organization is the best means of achieving success for our industry once again.

I know that we are challenging U.S. law and department of commerce rulings on five separate measures before the WTO. Our challenges are directly related to softwood lumber and I am pleased that the WTO has already ruled in our favour with respect to log export policy. In conjunction with a dozen other countries we are challenging another measure of U.S. legislation that impacts softwood lumber, the infamous Byrd amendment. While we are fighting the countervailing duty case on its merits, the Government of Canada in conjunction with the provinces is working to seek the individual exclusion of hundreds of Canadian companies from this trade action. Our government's success in having all of Atlantic Canada's producers exempted from the subsidy case is a recent victory that we hope to extend to the many Canadian producers that should not even be considered a part of the United States trade concern.

What are Canada's next steps? I agree with my colleague, the Minister for International Trade, and with the assessment of our industries and provinces that we should continue to fight the U.S. trade action with every single legal means at our disposal. Continued challenges before the WTO and a pending free trade agreement challenge of the U.S. relating to softwood lumber should also be in the works.

The meetings and discussions with U.S. officials to try to find a long term solution to the situation between our two countries can only help, not hurt, our industry. The series of ongoing discussions is part of the two track approach to this problem that the government has been engaged in for some time now: litigate if necessary and start the procedure necessary to do that, but also discuss at the highest level, from the Prime Minister, to the minister, to officials both American and Canadian, involve the industry widely in consultation, which the minister has done, and involve the provinces widely as part of these discussions to see if we can find the root causes once and for all of what is it the Americans do not accept. They have been repeatedly proven to be incorrect when they challenge that we subsidize.

Once and for all, let us get to the root problem. Let us come up with a solution that will be long term, that will give us free trade in softwood lumber and that will not find us back in these positions every few years fighting and winning this old battle once again, which is what we have had to do.

We understand why the United States industry continues to make false claims about our industry. We know that its concerns are based on protectionism and fear of losing market share. This is all about market share. Our producers have an excellent product at a good price. They have managed to capture 34% of the U.S. market and the American producers do not like it. It is not the fault of our producers that they do such a great job. They want free trade, they deserve free trade and the government will continue to fight for free trade for all Canadians.

While our exports have remained steady at about one-third of the U.S. market, this being the fourth attempt to erode our industry we know what the game is all about. We will not stand by while misinformation about our industry attempts to rule the day. Our government and indeed all MPs have a duty to set the record straight and defend the best interests of our industry. Our communities, the jobs that build them and the families that depend on a strong lumber industry deserve no less.

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

Mr. Speaker, the ongoing softwood lumber dispute has a long and tangled history. My greatest frustration is the lack of urgency or hands on attention the Prime Minister has shown the dispute.

I am not alone in this thinking. It is the opinion of a majority of forest industry workers, people representing forest communities and political participants. If it is observable to us that the Prime Minister is not fully engaged then it is surely observable to the U.S. administration and the U.S. special interest lumber lobby.

Yesterday in the House of Commons during question period the Prime Minister said we had a softwood lumber agreement that worked for five years. It did not work. It led to a massive loss of investment and jobs. It led to distortions in the market that proved costly and divisive for producers and customers.

We are in trouble when we expect leadership on our largest trade commodity and the person from whom we require leadership makes such uninformed statements.

Last week the U.S. department of commerce announced a preliminary duty of 12.6% on top of an existing countervail duty of 19.3%, which brings it up to 32%. What did we hear from the Prime Minister? Did we witness a sense of urgency or direct action resulting from the announcement? I could ask the question again but I would not get much of an answer because we saw no urgency or direct action from the Prime Minister.

The U.S. administration has in some respects been much more engaged than the Prime Minister although the U.S. department of commerce has not. The administration has appointed a representative, Mr. Marc Racicot from Montana. He is in Ottawa today.

The Prime Minister assures us he is in communication every two or three weeks with the president and that he spent some time with him in China. That is the extent of it. I am embarrassed that the Prime Minister of Canada would stoop to suggest this would count for anything.

I read that the Prime Minister finagled a photo opportunity with the U.S. president while in China. Once again I am embarrassed. This is not how a Prime Minister behaves. He should not seek a photo opportunity with an unwary president to look good at home while achieving nothing. This is serious business. Communities, workers, their families and enterprises are at risk and we get glibness from the Prime Minister.

Let us talk about today. Today I asked the Prime Minister why he is not fully engaged. Once again he made reference to his overlap along with dozens of other leaders with the president of the United States in China. This was before last Wednesday's anti-dumping announcement.

Is anybody home over there? Are we to believe that the Prime Minister is fully engaged on softwood lumber? I am not a lawyer but the evidence is overwhelmingly clear that he is not.

I cannot overemphasize how large and significant a problem this has been, is and will continue to be unless we witness a dramatic reversal. The dispute may be resolved or it may go to long winded litigation. Does the government have a contingency plan? Since it does not have a plan it probably does not have a contingency plan.

I welcome the appointment by the U.S. of a representative on the softwood lumber dispute. I welcome the litigation announced yesterday by Canfor Corporation. Canfor announced its intention to file a $250 million legal suit under chapter 11 of NAFTA, claiming that the U.S. department of commerce has acted in a capricious and biased manner against its interests. This logic would apply to many other Canadian companies operating in the forest industry.

This protection exists under NAFTA but some in the House of Commons argue it does not belong under NAFTA. The sum of these members resides in the New Democratic Party.

This is the only way to get to a neutral body on this dispute. It is a good move on the part of a Canadian company to let the administration know that in the longer term biased behaviour from the U.S. department of commerce on what is clearly an unsubsidized industry is not acceptable.

When we describe the dispute it is important to recognize that we have strong U.S. allies on this file. A consumer lobby has been in effect in the U.S. for the last two years which has been lobbying legislators and congress to make them aware of the negative impact of the dispute on their constituents, the American public, from the standpoint that putting tariffs on Canadian lumber going to the U.S. is costing American consumers.

This is not a Canada-U.S. battle. It is a fight between Canada and the special interest U.S. lumber lobby. It is completely unproductive and unnecessary and it hurts both nations.

In the longer term I am optimistic because the consumer movement in the U.S. represents 95% of lumber consumption. We have seen an expansion beyond lumber consumer groups into the larger consumer group involved in all aspects of the American economy which says the dispute is hurting everyone in the American economy whether or not they are lumber consumers. That is a positive move.

In the longer term we will see U.S. protectionist legislation change. We may even see litigation deriving from some of the larger players in the consumer movement. I hope that occurs.

Canada cannot alienate the U.S. consumer movement. Whatever we do in the settlement of this dispute we must be cognizant of that. Canada must also rule out any arrangement where we would end up going back to a quota arrangement.

The old quota arrangement for Canada's forest industry that has just expired was a negative one. After yesterday's comment by the Prime Minister it concerns me that it was called a good agreement. I suddenly have a new concern that the government might consider another quota arrangement.

The Canadian Alliance has been pursuing free trade in lumber for a long time. The 1996 to 2001 softwood lumber agreement that recently expired created a softwood lumber quota system that cost Canada thousands of jobs. The federal government orchestrated the arrangement in 1996 with selected industry support. When the deal turned sour and its negative implications became clear to virtually everyone, the government washed its hands and said industry had made it do it.

The Canadian Alliance took the issue seriously and set out a clear analysis and policy statement in June 2000. The Minister for International Trade finally came to a free trade position in March 2001, days before the softwood lumber agreement expired. Much of Canadian industry, the official opposition and American Consumers for Affordable Homes worked hard to ensure the softwood lumber agreement would not be renewed or extended when it expired on March 31.

Canada cannot enter into any arrangement that would impair our competitiveness in the future or reinforce the belief in the U.S. that it could impose its will without concern for international trade rules. The Prime Minister has a strong role to play by talking to the Bush administration. The Prime Minister's Office should have no role in pushing a deal on to the minister against Canadian long term interests.

Some American politicians in the U.S. department of commerce are pushing for a crushing victory for the U.S. lumber lobby. This is producer driven politics at its worst.

What must the government do? The Prime Minister and his senior officials must continue to point out to the Bush administration the benefits of free trade in lumber. They must point out that Canadian industry is not subsidized. The Prime Minister must deliver on his promise that the U.S. cannot call for more Canadian energy while restricting Canadian lumber exports. He can do this in terms of any proposed continental energy discussions.

Now is the worst possible time for governments or industry to concede to the U.S. lumber lobby. Canada has a strong case for free trade access before NAFTA and WTO trade tribunals and the U.S. lumber lobby knows it. Fifteen years of harassment have taken a major toll. If we do not get back to free trade now we will see further permanent job losses and loss of investment in the industry.

Where do we go from here? We need a cost effective analysis to compare litigation with negotiation. I think we will find litigation comes out fairly well in the analysis.

For example, the softwood lumber quota arrangement we all lived with for the past five years effectively cost industry in the range of 15% to 20% although there were haves and have nots depending on who had quota or duty free access and who did not. There was no fairness there.

Now more than ever we need leadership and resolve from our Prime Minister and the federal government. The U.S. lumber lobby did not anticipate that Canada would hold out as long as it has. The U.S. lumber lobby has shown itself to be a self-serving special interest group contrary to the interests of both nations.

There is much pessimism today but there is room for optimism as well. We need to hold our alliance together. We need to fix this thing once and for all.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I will be sharing my time with my colleague from Vancouver East who comes from the province where the forestry industry, workers and their communities have been hardest hit by this ongoing softwood lumber crisis.

I listened carefully to the comments of the Parliamentary Secretary to the Minister for International Trade. I do not question for a moment that the parliamentary secretary shares with members on the opposition side the frustrations about this continuing, unresolved dispute.

I do not question whether he is concerned about the impact that it is having on forestry workers and their families. Christmas is coming and some 16,000 workers have already lost their jobs in British Columbia alone. They do not having any idea about what will happen in the future. In fact they are losing hope for any possibility of getting up off their knees and working in the industry in which they have proven themselves to be highly skilled and competitive.

I share with those workers the incredible frustration they feel when government members, including the Prime Minister, the trade minister and the parliamentary secretary, I am sorry to say, wring their hands and speak about how meritorious is the Canadian position.

The government only deals with the symptoms. It is not willing to talk about the underlying causes, the root problems, the reasons we are in this difficult situation yet again. People are losing their homes and communities. They are literally faced with personal bankruptcy and in many cases family breakdown because of the pressures involved.

It is high time for the government to speak about the reasons we are in this situation with the U.S. We will continue to be harassed as we have been time and time again unless we face the real problem: that we do not have a fair trade deal with the U.S. We will continue to face that kind of harassment until we have proper trade dispute mechanisms that can deal with this kind of unwarranted, unfair attack or until we are able to be highly competitive in various sectors.

I had an opportunity to question the Prime Minister earlier this afternoon on his tough talk yesterday about finally getting up off his knees and standing up to the Americans on softwood lumber. Unfortunately it turns out that it appears to be a very temporary tough talk. Temporary indeed. It is not the first time we have heard this.

The Prime Minister met with President George Bush after his election. He boasted that he had stood up to the American president on the issue of softwood lumber. Yet, to the embarrassment of not just the Prime Minister but all Canadians, the American president's own staff came forward and said that he actually did not say those things to the American president.

Once again we end up being a laughing stock. We end up being seen on the one hand as saying that we are prepared to fight for our forestry industry, our workers, their families and communities and on the other hand we backpedal like Olympic cyclists when it comes to following through on the concerns. That kind of bluffing and rhetoric, not backed up with solid actions, is a source of frustration.

I was asked if I identify with the incredible frustration that those forestry workers and their families are feeling and facing at this time. Darned right I do.

We have to begin to recognize that 16,000 jobs have already been lost in British Columbia alone. The prediction is that 30,000 jobs will be lost in that province. We know what a devastating blow that is to those families and to the entire economy. Some 50% of the impact is predicted to rip through British Columbia, but let us make no mistake. There will be a devastating impact on other communities across the country.

Two weeks ago the government was talking as if it were on the verge of signing a new deal on softwood lumber. It appeared to be ready to step up to the plate and insist that the supposed free trade deal into which Canada entered in 1989 would be the start of a free trade deal relating to softwood lumber.

The fact of the matter is that we have been hit with an even more punitive measure of an unwarranted 19.5% duty on the already imposed dumping levy of 12.5%. That cripples many of our lumber mills and forestry industry in many parts of the country.

The reality is that the so-called free trade for which we paid a very heavy price over the years has turned out to be no such thing. We remember the sales pitch for the free trade agreement. This party stood alone, but there was also a lot of talk from the Liberals that they too were opposed to that flawed free trade agreement. Members will recall that in the early 1980s the U.S. tried and failed to get countervailing duties levied against Canadian lumber exports to the U.S.

Ronald Reagan agreed to curb lumber imports from Canada when he was trying to get fast track authority from the U.S. congress. The U.S. set about putting in place a punitive tariff and warned that free trade talks would be in peril. The Mulroney government quickly succumbed to those pressures and agreed to impose an export tax of 15% on Canadian softwood lumber that remained in place for five years until 1991.

In 1992 the U.S. imposed a 6.5% tax on Canadian softwood lumber which Canada appealed to a NAFTA panel. Canada won the appeal but still the U.S. pressure remained. The current Prime Minister, like Brian Mulroney, surrendered to U.S. power and agreed in 1996 to an escalating penalty on shipments in excess of 14.7 billion square feet.

IWA President Dave Haggard had it absolutely right when he said “We cannot capitulate our way into an acceptable agreement with the Americans”.

It seems that when we win these disputes in international tribunals we lose. Why is this? It is because the U.S. is prepared to ignore, challenge or tie up in endless adjudication any case which it deems contrary to its domestic political interests. Softwood lumber has always been a powerful lever for U.S. harassment in Canada.

Six months ago U.S. lumber interests were threatening to seek punitive duties of up to 40%. Then they upped the threat to 76% with the full support of Bush's trade representative Robert Zoellick who extols the benefits of free trade while advancing protectionism.

We have again heard the trade minister and the Prime Minister huffing and puffing that Canada won those rounds before international tribunals. Yet we have ended up having to pay again for the privilege of free trade in softwood lumber.

There could be no better way to sum up what the current situation is and what the best advice is to the government than to quote one of the B.C. forestry workers who came to state his solidarity and support for the NDP against this harassment of our softwood lumber industry. He said that negotiating on our knees is not working and it is high time that Canada stood up to the Americans.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to follow the leader of the NDP in the debate today who has spoken eloquently on this issue. The member for Halifax has been present in the House and has put a lot of pressure on the government to come clean on its softwood lumber agenda. She has attended many briefings and was at the NDP federal council meeting on October 14 when we passed an emergency resolution on the issue.

This is an issue that is at the top of the agenda for members from B.C. in terms of expressing a very strong concern about what is taking place with the softwood lumber market.

I represent an urban riding in east Vancouver. There is a perception that this issue affects smaller communities that are dependent on the forestry industry, but there is no question that the forestry industry is an economic driver of urban communities as well. Jobs are affected in Vancouver as well as in smaller communities.

This industry is the largest source of Canada's export earnings. It does about $10 billion in exports. It directly employs 350,000 Canadians and indirectly employs about one million Canadians in over 1,000 communities. It gives us an understanding of the significant impact and devastation taking place right across the country and certainly in British Columbia.

As a result of the very unfair countervailing duties that have been dumped on the industry it is estimated that up to 30,000 jobs will be lost and as many as 90,000 additional jobs will be lost indirectly. This is absolutely staggering. These figures cannot be repeated often enough to understand the magnitude of what we are facing.

In British Columbia alone 15 of 25 mills on the coast have been closed entirely due to the U.S. tariff, throwing about 12,000 people out of work. For example, three Doman mills were closed on Vancouver Island and 400 workers from Cowichan Bay, Ladysmith and Saltair have been put out of work. Hammond Cedar and two value added mills in Maple Ridge have been closed with another 450 workers losing their jobs. This closure has meant that Interfor, one of the major companies, has only 1,000 of its total 3,000 workforce currently employed.

The issue that we have to grapple with and the issue we are confronting the government with is: What is the possible way forward? What is the government's agenda on this issue?

The New Democrats have pressed the government to respond to this issue by making it a priority. It must recognize that it is the workers who need immediate assistance. They are either unemployed now or will be facing unemployment with enormous insecurity and anxiety.

There is nothing in trade laws that would prevent the Canadian government from assisting workers who have been adversely affected. We only have to look at what happened on the east coast when the northern cod stock disappeared. Ottawa assisted displaced workers who were crushed by the collapse of the industry.

We can look at the Mifflin plan and the restructuring that took place subsequent to the Mifflin plan. We had our criticisms about that program, but the Canadian government recognized the priority of what was going on and recognized that there were individual communities, families and workers who needed help.

The government has been considering assistance to the airline and tourism industries as a result of what happened on September 11. We have to recognize that the lumber industry is the backbone of thousands of communities and is a very significant economic factor.

We in the NDP want to say loud and clear to the government that it cannot let the workers bear the brunt of this unfair trade action. It needs to step in immediately.

Today in the House, my colleagues, the member for Churchill and the member for Acadie--Bathurst, asked with the government what support there would be for the workers who have been affected. The response they got was pathetic. The government says that there is EI. Well most workers consider EI to be a joke. They pay into it but they get nothing out of it when they are hurting and need help.

When we confronted the Minister of HRDC today to ask whether she would provide a top up or income support to those workers, we heard some vague grumblings and it was back to EI.

We in the NDP say that is not good enough. It is not just a sellout of our resources in terms of what is taking place with these unfair trade practices but it is also a sellout for workers who are now affected.

It was interesting to note today that other members in the House from other parties were calling for a summit to be held for all the parties that are affected. Members of my party have also raised this matter on other days. In listening to the response from the trade minister, I noticed that he was very reluctant to specifically deal with that issue. It led me to wonder what exactly the government's position was on this.

Does anyone actually understand what the government's position or strategy is for dealing with this?

We know the U.S. has appointed a special envoy. We know the minister apparently had a very nice meeting today. However, when we cut through all the rhetoric, does any of us really have an understanding of the government's plan and of what it is actually going to do?

Having listened to the debate today and in earlier days, I really do not have an understanding on what the government is prepared to do specifically to get us out of the mess, to make this a priority and to help the communities that have been affected.

We in the New Democratic Party want to be very clear and say that it is incumbent upon the government, in working in consultation with opposition parties, to have a game plan. I think have heard other members in the House say that today. It is not just me who is wondering where is the game plan. I think we are all feeling like that.

We want to say that the words “this is a crisis” and “this is a problem” are simply not good enough. We want to know what the government is proposing to do to negotiate, to make this a priority and to make sure that these unfair trade deals are put aside. It needs to negotiate a settlement that will support what has already been proven in international tribunals, that Canada is not dumping into the U.S. market.

I want to put forward a message to the B.C. government. The IWA and other organizations have an enormous concern that as this crisis begins to unfold it would be very easy for this provincial government or another provincial government to be picked off.

We want to say very loudly and clearly again that this is another key reason why the federal government must develop a national response and a national strategy to ensure that, for example, the B.C. government does not completely capitulate to American interests by giving away protection to workers, the tying up of manufacturing to harvest rights or increasing raw log exports.

We are very concerned that while this crisis continues if the federal government does not step in and show the leadership that it needs to show, then we will have provinces, whether it is British Columbia or elsewhere, cutting deals and basically ripping off the workers in those communities.

In closing I want to say that it is good we are having this debate but we want the government to tell us its plan, its strategy to deal with the crisis and where its support is for the workers in the communities.

It is not good enough for the minister to say that he met the CEOs and that he has been in contact with them. The livelihoods of thousands and thousands of people are at stake and we want to know what the government will do to protect those communities.

[Joe Clark, Progressive Conservative, Calgary Centre, AB]

Mr. Speaker, I am pleased to take part in this debate. I want to congratulate the Bloc Quebecois for bringing this issue forward.

I will be sharing my time this afternoon with the member for Saanich--Gulf Islands.

As the hon. member who just finished speaking said, this is literally a life and death issue for thousands of Canadians who live and work in rural areas and in the forest industry right across Canada.

I do not know if the Prime Minister has been out to talk to the Canadians, whose jobs are in jeopardy, on this issue, but I have been and my colleagues have been. This is a real threat, both to a major Canadian industry and to men, women and families who count on the government to protect their interests when they are unfairly attacked.

Many of the workers in this industry have been laid off already. Many of our companies, small and large, simply cannot stay in business with their money locked up in American hands. Now they have the additional burden of dumping duties that are both severe and unjustified.

Two months ago, I went directly from meetings with British Columbia lumber producers to take Canada's case to Washington myself. I told Vice-President Cheney that this dispute, serious in itself, also risks undermining support in Canada for the very principle of free trade. I committed my colleagues to supporting a reasonable agreement either in Canada or at the World Trade Organization.

However, two months later, the Government of Canada has not moved this issue forward at all. As on so many cases, the only imaginative leadership has come from some of the provincial governments.

The Government of Canada cannot claim to be surprised. It knew the dumping decision was coming. It knew the former agreement was expiring and yet it sat back and let small Canadian sawmills and ordinary Canadian workers suffer because Ottawa was asleep at the switch.

The United States is the main customer of Canada's softwood lumber industry. We ship $11 billion of softwood lumber to the U.S. each year.

The latest blow to the industry was the imposition of dumping duties of 12.57%. It may be that the Prime Minister knows he lost credibility with the White House when he was so slow to respond to the terrorist crisis, but the answer to that is to build that credibility up again.

The Prime Minister has to act, not sulk. He has to rebuild Canada's relations with the United States, not force the thousands of Canadians who work in the softwood lumber industry to suffer because of his indifference.

There are two important points to raise with regard to free trade. The first one is that softwood lumber is not directly covered by the free trade agreement.

However, when the softwood lumber issue was examined in the context of the free trade agreement, Canada won. We also win most times before the World Trade Organization, even though these processes are extremely complex.

The problem today is that the United States has managed to circumvent the spirit of the free trade agreement. This means that we must strengthen the agreement and not let it go, because such free trade agreements are essential to the growth of the Canadian economy.

I would like to raise a second point and indicate that the problem is the result of an attack from American interest groups and not American consumers. On the contrary, American consumers support our position since we offer them a product at a much lower cost.

The terrible thing is that the government could have prevented this problem, had it been effective in mobilizing American consumers, our supporters, to counter the efforts of lobbyists employed by the American softwood lumber industry.

The Canadian government has simply failed in that regard. We have a passive government that does not defend the interests of the average Canadian. This government is drifting at a time when we need a strong and active government that is not afraid to vigorously defend Canada's interests against the United States.

Of course the issue is complicated. Provincial jurisdictions are involved. The interests of the industry vary from region to region. It makes sense to seek a united front on this issue but the national government cannot simply sit back on issues of this kind. One of the reasons we have a federal government is to take the lead in solving complicated issues. On this question, as on so many other questions, there has been no one home at 24 Sussex Drive.

Three fundamental failures by the government stand out. The first is a failure to foresee. The government knew the five year softwood lumber agreement was due to expire at the end of March this year and that we would be subject again to countervail, yet it took no effective steps to stop a countervail or to protect Canadian interests. It was as ill-prepared for this action as it was for the terrorist attacks, yet in this case it had five years warning.

The second is a failure to bring together the Canadian industry in a common position that Canada could carry aggressively to the United States. Instead, the minister preferred to rely on persuading Robert Zoellick, the American trade representative, who everyone knew would be of scant help to Canada because his major priority was to get, what used to be called, fast track authority on other larger trade issues from the very congressmen who support the softwood attack on Canada.

The third is the Prime Minister's personal failure to solve the dispute at the very highest level. The Prime Minister claims he has raised this with President Bush. He claims he is on the phone all the time. He should get off the phone and get on the road. The Prime Minister should take Canada's case directly to the president of the United States. That is where this issue will be solved.

As long as the Prime Minister of Canada sits back and lets people in the softwood lumber industry across Canada lose their jobs and lose their hopes then this issue will not be solved.

[Gary Lunn, Canadian Alliance, Saanich—Gulf Islands, BC]

Mr. Speaker, this is the second emergency debate we have had on this issue in just over a month. The duties imposed by the U.S. commerce department now total roughly 32%. I do not know what it will take to get people in the government to listen. We just cannot keep having more and more emergency debates without any action.

This is the fourth round of trade litigation on this file since 1982. Fifteen of the past eighteen years have seen the lumber market disrupted by threats of countervailing duty. Canada defeated countervailing and anti-dumping allegations in 1982 and again in 1991. I have no doubt that we will prevail again.

The issue is that the litigation process can take years and these families will be facing bankruptcy and personal losses because people are losing their jobs. Again, there will be hardships on families and the destruction of relationships. We cannot even measure that toll.

There is plenty at stake. An estimated one out of 16 Canadians work in the forest sector. Of 337 communities in Canada, more than 50% of the people in those communities depend on the forestry industry for survival. More than 384,000 Canadians are directly employed in logging, wood industries and paper. The death of our lumber industry will create ghost towns across the country. With the stakes so high, where do we go?

Although there is no question we are morally and legally right, it is never easy to face the economic might of America. We must act in concert. We must think in long term. We must make use of our allies in the United States. We must present our position from the highest level, and I want to emphasize that.

In question period today the Prime Minister talked about being engaged on this file. The Minister for International Trade said the government was doing everything it could, that the Prime Minister was engaged on it and that more people were involved. I want to emphasize that it is not working.

In the 18 year history, have we had 32% tariffs? Have we had 20,000 people out of work and going up to 50,000 people? Have we had people declaring bankruptcy? Have we had families being torn apart? No. It is not working.

If members would come to my province of British Columbia, they would see the human toll that this has caused. There is no other trade issue right now facing this country. The Prime Minister has to make this his number one priority.

We had a quota of 14.7 billion board feet in the past. In the past we were restricted on the softwood lumber agreement. What I am suggesting right now is that another bad deal like we had in the softwood lumber agreement is worse than no deal at all. The facts speak for themselves.

The provinces were covered under the softwood lumber agreement in the past, from 1995 to 1999. Their market share fell by 14.5%. The market share of regions which were not covered in the softwood lumber agreement rose by 130%. Third countries increased their market share by 106%. What happened? Canadians lost with the bad deal which was as a result of the Liberal government.

During the five years of the softwood lumber agreement, what was it supposed to do? It was supposed to give the government an opportunity to find a long lasting solution. Government members sat on their hands. By their own admission, they did nothing. They said that we had to wait until the agreement expired before they could challenge it, instead of being united, having one voice taking the message to Washington, at the very highest level, and letting the Americans know that this action was not acceptable.

We have many allies in the United States. More Americans support free trade than support the protectionist, bullying tactics of the U.S. lumber industry.

In fact American consumers of forest products and lumber dependent industries in the United States outnumber lumber producing industries by a factor of 18 to 1. Lumber tariffs hurt American housing starts and slow its economy. Ultimately the attempts by the lumber lobby to close access to American markets hurt more Americans than it helps.

On August 14 an editorial in the Wall Street Journal stated:

Let's hope the Bush Administration recognizes this irony and abandons its unsophisticated South Park strategy of blaming our friends to the north for our own lack of competitiveness.

One U.S. consumer group referred to the Coalition for Fair Lumber Imports as “one of the biggest multi-million dollar bullies on the international trade playground, and it's about time everybody stopped tripping over themselves to appease them”.

To date 100 members of the United States congress have asked President Bush to protect the interests of consumers and workers from potentially onerous import duties seeking to limit the amount of lumber imported from Canada.

We do have friends in the United States. Unfortunately they have been speaking louder than our own government. Some of the lobby groups in the United States have been doing a better job fighting for the Canadian forestry workers than our own Prime Minister. This is not acceptable. It has to change.

Of course the Prime Minister will say the government has been doing everything. I say look at the facts. Look at the job losses. Look at the duties that are being paid in the country today. Nine million dollars a day is what is being paid in unfair lumber duties because of the ineffective ability of the government.

It gets worse. There is the Byrd amendment. It is a piece of U.S. legislation wherein the money that is collected by the U.S. government from Canadian forest companies, at the rate of 32%, is passed on to the U.S. lumber industry that filed the complaint against Canada. I questioned the parliamentary secretary on that specific fact in the House on October 4. Of course he stood up in the House and advised that the Bush administration had suspended that amendment. He was wrong. I accept that.

The point I am trying to make is he is being advised by Canada's trade officials. When mistakes as elementary as this are made on such an important issue, it does not give confidence to our lumber industry. It sends a message that the government does not have its act together and that officials are not on this file. Where is the Prime Minister? We have to think in the long term.

Marc Racicot, the United States trade envoy, was in Canada today. He stated that he hoped for a solution within 30 to 45 days. It is not surprising that the United States seeks a resolution to resolve this issue. On December 15 the 19.3% countervail will expire and cannot be reinstated for at least two months.

How can we get a fair deal quickly? The Prime Minister has to do more than he is doing now. The phone calls are not enough. I was outraged by the first 10 or 15 minutes of question period today. Members were making jokes and laughing. They were talking about people shaking their hair. Everyone was laughing and having a great time. That is not--

[An hon. member]

That is not so.

[Gary Lunn, Canadian Alliance, Saanich—Gulf Islands, BC]

Government members participated. The Prime Minister got involved. Everyone on the other side was laughing. People are losing their houses, their jobs and families are being torn apart. I emphasize that. There are tens of thousands of workers.

We need the highest level of intervention. We need a Prime Minister to pay more than lip service. We need a Prime Minister who will recognize that this matter deserves a flight to Washington. He should stay there until it is resolved. He should make sure the Americans knows the past and know that this is not acceptable.

I will close by saying that, although the U.S. lumber envoy is looking for a four to six week window, this matter has to get resolved this year.

Next year is not good enough. The toll will be absolutely immense across the entire country. The person who needs to get engaged is the Prime Minister. He has a duty and an obligation to resolve this matter. I ask him to quit playing games in the House, to quite making jokes and to take this matter seriously. I ask him to think about the human toll, the families and the cost to this country and its economy.

[Joe Comuzzi, Liberal, Thunder Bay—Superior North, ON]

Mr. Speaker, I will be sharing my time with the Minister for International Trade who will follow me in this debate.

It is a privilege to participate in this debate today inasmuch as it may be the most serious economic matter that is facing our country and has faced our country since April 1 of this year. It continues to be a very strong irritant in our relations with our friends in the United States.

I keep repeating this, but the forestry industry is still Canada's largest single industry. It employs more Canadian men and women than any other single industry. It contributes more to the balance of payments with our friends in the United States than any other single industry in our country. It is Canada's foremost and most vital industry. Canada was born on the forestry trade and it still is the backbone of what we are as an economic unit in world trade. It goes without saying how important the forestry industry is to us.

We are faced, as we have been over the last 15 years or so, with that horrible dilemma of having to defend ourselves again because of the unfair subsidies that the Americans claim are being forced upon them, causing unfair competition and anti-dumping in their country. As we know, and as we have proven over the last 15 years, this is so untrue.

In this instance, by the very fact that the Americans have launched this claim against us again, it is no different from any other action. Our industry started to suffer the moment the claim was launched by the United States on April 2. All of a sudden our banking facilities became weaker. People who financed us did not want to continue with their financing.

People who are creative of new innovations, which we are so good at and of which we should be so proud, are no longer spending money on research and development to enhance our forestry industry. This is one of the few instances where we see that the start of an action is where the penalty begins. That is why it is so important that we bring this to a conclusion.

I agree with everybody in the House that it has gone on too long. There are many people in the Chamber who say we should have done some other things. Maybe we should have prepared for the advent of the ending of the softwood lumber agreement a couple of years ago. That may be true.

Other people have said we should have been at the World Trade Organization long before we were and used the new procedures under the World Trade Organization for an accelerated process. That may be true. There could be other things we could have done.

In the area I represent, which is Thunder Bay--Superior North, the most vital industry is the forestry industry and the softwood lumber industry. I can say unequivocally that from the time we have been involved the Prime Minister has said that this is the most important file that he has on his desk. He wants the file resolved and will do most anything to get it resolved. He is abreast of developments. We talk on a regular basis about the softwood lumber dispute and how concerned he is about it.

We can be partisan, but I have to come to his defence in this sense. He is very cognizant of everything that is happening with this file and truly wants to see a solution to it. He knows the injury it has caused our companies because of the actions by the United States.

One of the important issues we may not have considered is the issue of ownership of all these companies involved in the forestry industry in our country. It is something that we as parliamentarians sometimes fail to realize. Although we have these huge corporations that through management rights, timber limits and so on claim they own the forests and would like to think so, they do not.

Every tree in Canada is owned by every Canadian. Since forestry is under provincial jurisdiction, all the trees in British Columbia are owned by the people of British Columbia. All the trees in Alberta are owned by the people of Alberta. All the trees in Quebec are owned by the people of Quebec. All the trees in Ontario are owned by the people of Ontario. That is critical to our debate. Unless people feel they are getting advantages out of owning this huge natural resource, the advantages of having and living a better quality of life, they are not interested in carrying on with the ownership of these companies. What we have to do is guarantee our people that they will have a better quality of life because of these natural resources.

Having said that, let me say that sometimes we have to be parochial. As we know, over 8,000 people in northwestern Ontario rely directly on the forestry industry. We have to get parochial about Ontario because we know, Mr. Speaker, you and I, that we do not subsidize in any way, shape or form the harvesting of trees, thereby not giving an unfair advantage to anyone. If there is an advantage through the stumpage rates in Ontario it goes to the people of Ontario. We in Ontario are very comfortable with having any kind of review of the stumpage rates in the province of Ontario.

I would like to impress this upon the minister, because I think it is his position. In the discussion process being taken on today with the former governor of Montana, since forestry is a provincial jurisdiction Ontario should retain its right, in any discussions and any proposed settlement, to carry on with the eventual goal that we have all agreed on in this House. We have agreed that it is time we had free trade in lumber under the NAFTA rules without using the areas of NAFTA under chapter 19, the dispute resolution mechanism on anti-dumping and the countervail. We in Ontario reserve the right to make this determination.

The U.S. has started the fight. We must take this determination to its final conclusion. We can have a review and go to the World Trade Organization. Let us carry our position forward to an eventual resolution. I am sure the Prime Minister, the Minister for International Trade and the opposition would agree that we must finally have free trade with the United States. We can do this if we stay together as a nation, as provinces. It can be accomplished and it has to be accomplished now. There should be no further argument with respect to free trade in lumber going to the United States.

[Pierre Pettigrew, Liberal, Minister for International Trade]

Mr. Speaker, I would like to thank the member for Thunder Bay--Superior North for sharing his time with me. He shared with us his perspective, which is very interesting and which reflects the tremendous importance that we in government have given to building a strong team Canada, with involved provinces and an industry that is closely consulted.

I believe that our team Canada, our united front right now vis-à-vis the U.S., and American producers in particular, will be a determining factor. I would like to thank all those who have been working on the softwood lumber issue, the provincial governments, industry and representatives who shared their perspectives with us. It was all very useful.

I would also like to thank my colleagues, members, from both sides of the House, who came to Washington and who demonstrated in no uncertain terms to the Americans that their own best interests were served by free trade in softwood lumber, by having access to Canada's quality product at the best possible price, especially at a time when the economy is faltering as is now the case.

I am really very pleased to respond to the motion put forward by the member for Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques.

The U.S. commerce department decision last week to add a 12.5% tariff on dumping on top of the 19.3% countervailing duty was a very punitive and unjustified gesture. This is a finding which is completely unjustified. I have conveyed my views to U.S. secretary of commerce Evans and I will continue to argue that very strongly.

I would like to thank the provincial ministers and the industry for the support and co-operation they have shown in presenting a common and united front in the defence against these unfounded actions. I can tell the House that I believe we will be able to make a lot more progress as a united team than otherwise.

I had the opportunity of meeting with former governor Racicot today, a close ally of the president of the United States and a good friend of his. He is a man who knows the issues very well. He is a man who can listen, who can go beyond the prejudices the American producers have about crown lands in Canada and look at the reality of the file. I believe he is someone we can really work with. I appreciate as a very positive signal his appointment by the president of the United States.

Too, I would like to say in the House how very supportive the Prime Minister of Canada has been on the file. The Prime Minister has not lost one opportunity even in very delicate times, such as his first meeting after September 11 with President Bush, to raise the situation of the softwood lumber issue.

I had many discussions over last weekend with chief executive officers from British Columbia, Ontario and Quebec, who told me that in 20 years they had never seen a Prime Minister so completely and personally engaged on the softwood lumber file. They said that the previous prime minister would never have been that deeply involved. I would like to thank the Prime Minister for being so supportive.

The government is extremely sensitive to what is happening in the communities across our country that are most dependent on softwood lumber. I had the opportunity this very afternoon to talk to mayor Colin Kinsley of Prince George, British Columbia. I had the pleasure of talking with mayor Jamie Lim of Timmins, Ontario. I am very pleased to see that they are here with us in the House today. They have explained very well what their communities are going through. I know there are dozens of other communities that live with the same situation. I would like to tell them that the government realizes how very punitive and unfair it is to them and that it affects other workers beyond the softwood lumber people, because of course whole communities are affected by it.

I want to thank them for having come here to explain to us how much they support our work, how much they are part of that team Canada and how much of our problem is protectionism in the United States, protectionist producers in the United States, that it is not east and west. I am glad that they are the mayor of Timmins, Ontario and the mayor of Prince George, British Columbia, provinces from both the centre and west. The regions do not count here. What really counts is that we remain together in promoting free trade in softwood lumber. I believe it is imperative that we go in this direction and of course the discussions in which we have been engaged have been very useful.

We had these discussions on the basis of provincial practices. I hear opposition members say “Why are we letting the provinces explain their views to the Americans?” The answer is very simple. In 90% of the cases, the allegations made by U.S. producers concern provincial programs.

Our government's way of doing things is to have the Minister for International Trade lead and co-ordinate these discussions with the Americans, but we also have at the table those responsible for forest management practices in our country.

The way to free trade is to make sure that, beyond the slogans and biases that Americans may have about the crown lands that are part of our Canadian fabric and our way of doing things, we have forest practices that are fair and equitable.

I want to congratulate the provincial Government of British Columbia, which has had the audacity and the courage to really tackle this issue and really wants to do constructive work for the long term by addressing the reality of its provincial practices, to do the right thing for its industry, not to please the Americans. No, we want to do the right thing for Canadians, but we realize that by addressing and improving these forestry management practices we might be denying the Americans many of their arguments, their prejudices and the allegations they are making. I want to say that I have appreciated its contribution a great deal.

I am also very pleased that the Quebec government agreed to take part in these discussions. To be sure, the dispute resolution system is there. The hon. member for Thunder Bay—Superior North said it earlier, we are before the WTO to challenge the allegations made by Americans, because we know full well that they do not make any sense. We also know that we will win if we go to the end of the process.

However, in the meantime, there are communities that are really suffering. This is why we are also trying to find a human and long term solution that is leading us toward free trade, by solving the issues that may exist regarding free trade, and by making sure that we will have a large common market open to free trade, as we do for the rest. I think we have accomplished an enormous amount of work in recent months.

I am extremely impressed by where we are as a country at this moment. The times are difficult. It is very tough to be met with the punitive actions that Americans have imposed on us on the softwood lumber issue but this is not the time to blink. We are committed to free trade in the long term. In years to come we will be very pleased to have addressed the issues at its very heart. That takes some time and I know how hard it is in the communities. I am begging people for a little patience. I know how tough it is but I can tell everyone that this is the number one priority of our government. This is the number one priority in the U.S.-Canada agenda of our Prime Minister and of the Minister for International Trade.

I can tell members that following the meeting I had today with representative Racicot I do believe that the discussions track might really lead us to a constructive long term solution, which is softwood free trade. That is what we deserve.

[John Reynolds, Canadian Alliance, West Vancouver—Sunshine Coast, BC]

Mr. Speaker, I rise today as a member representing thousands and thousands of constituents who are facing job loss as a result of the government's mishandling of the softwood lumber file.

It was nice to hear that the minister met with the former governor today and that he is enthusiastic about that. It was nice to hear that he was speaking today to some mayors from across Canada. It was also nice to hear him say that he was impressed by where we are as a country today on this issue.

However I submit to the minister and to his government that we have known for a long time that this agreement was going to be up and that we should have started these talks two years ago because, as I mentioned, I have thousands of people in my constituency out of work today.

Not only are we facing a general economic slowdown across the country but also, through the government's inactivity, Canada is facing a prospect of losing a further 15,000 jobs in the forestry sector. This is on top of the estimated 15,000 jobs already lost because of the government's handling of the softwood lumber file.

Just last week we heard the Parliamentary Secretary to the Minister for International Trade calling British Columbia lumber leaders and workers nervous Nellies.

I submit that someone losing his or her job has strong cause to be nervous. If the parliamentary secretary were losing his job tomorrow would he not be nervous? If the major employer in his riding was going under would he not be nervous?

Forest workers are worried about how they are going to pay their mortgages and how they are going to feed and clothe their families. They are wondering how and when they will get back to work. That is why this file should have been opened up a couple of years ago, not eight months after the contract was over.

I am sure a mill worker in Squamish, British Columbia is pleased to know that the parliamentary secretary of this government is taking such a personal interest in the situation. I invite the parliamentary secretary to come to British Columbia to tour a mill and hear the reaction firsthand. I hear the parliamentary secretary saying that he already has. I invite him to come to my constituency with me because I probably have more papermills and more people cutting down trees than most constituencies in British Columbia. I would love for him to come there and sit down, as I have, and talk to those people and see how concerned they are.

Before I finish today, I will read some letters from a few of those people from my constituency.

These workers, their families and the communities are the innocent victims in a ridiculous trade dispute between the two countries that are supposed to be best friends. I agree with the minister, this is a ridiculous dispute.

The 19.3% countervailing duty has already cost an estimated 15,000 Canadian jobs and forced the shutdown of dozens of mills. Many lumber producers are now facing a 12.58% anti-dumping duty on top of the countervailing duty. Export duties on Canada's lumber industry now total 31.9%. What industry can afford an additional one-third in costs?

The government was urged almost two years ago to begin addressing this issue, knowing full well that the five year softwood lumber agreement was soon to expire, yet the Prime Minister and the international trade minister failed to act or even recognize the importance of engaging the United States early on.

So here we are, some eight months after the expiry of the agreement, Rome burning around us, and all the government can say is that everything is under control. To quote the minister, he said that he was impressed by where we are in Canada today.

Analysts suggest that job losses resulting from the countervailing and anti-dumping duties could reach more than 30,000 as more companies are forced to post bonds covering what they would have to pay if duties are made final next March. Let me repeat that 30,000 jobs have been lost or threatened and still the government dithers.

Thirty thousand job losses means hardship for workers, bankruptcy for small businesses that serve their communities and the eventual destruction of some of these communities.

Since last week we are already feeling the impact of the additional punitive duties.

In the past week, Interfor closed its Hammond Creek cedar mill in Maple Ridge, putting 450 people out of work, along with the primary mill, two remand mills, McDonald Cedar and Albion, will also close.

Forestry company Tembec is closing its mill at Cranbrook, British Columbia next week as a result of the latest U.S. penalties on Canada's softwood lumber. The Quebec Lumber Producer said Friday that it would shut down the mill in southeastern B.C. on Monday, affecting another 37 jobs.

Norseskog is shutting down mills. Shutdowns are planned at the company's mills in Crofton, Elk Falls, Port Alberni and Powell River.

Over 500 more job losses in less than a week, and this looks like just the beginning. Yet from the government we see nothing but an inadequate response. We have dismissive attitudes and even insults.

The government is standing by and allowing the very lifeblood to be sucked out of the province of British Columbia. The forest industry in B.C. is B.C.'s number one industry and is a huge economic generator. It contributes more than $4 billion a year in revenue and taxes, and employs more than 270,000 people, directly and indirectly.

The government pays more to turbot than it does to lumber. It pays more attention to split run magazines than it does to lumber. It pays more attention to Bombardier than it does to lumber in British Columbia. It pays more attention to a mismanaged national airline than it does to workers in British Columbia. If any of these were losing 3,000 jobs, let alone 30,000, the government would jump. Why is the forest sector being treated differently?

I heard a member from the other side say that it is not fair to compare. I am from western Canada and I am telling him that it is damn fair to compare because we see it too often. It is a long way from British Columbia to downtown Ottawa. These people in my riding are out of work. They cannot buy shoes for their kids. Christmas is coming up. There are 30,000 of them, not 3,000. We have seen the government operate a lot quicker closer to the central Ottawa area than it does in British Columbia.

The Prime Minister's response has been tepid at best. He is travelling to Vancouver this week, not to calm the fears of workers in communities but to hold a Liberal fundraising dinner. He is going to the province where the number one industry is getting the stuffing kicked out of it and he is going asking for money. It is a cruel and insensitive twist but a glowing example of the government's lack of understanding of the issue and of its compassion for jobless British Columbians.

We can almost get the sense that the government gets some perverse pleasure out of encouraging western alienation. Why else would such a double standard be applied to such a significant part of our export economy?

Yesterday Canfor Corporation took aggressive action in the softwood dispute. With patience straining, forced into a corner and abandoned by the federal government, Canfor Corporation initiated a lawsuit under chapter 11 of NAFTA against the United States for $250 million, the amount it is losing in this protracted exercise. Canfor Corporation and other lumber companies will be on their knees before the government acts.

Let us not be deluded here. The Canada-U.S. trade relationship is the largest in the world and forest products make up the largest part of that relationship. What we are talking about here is the largest export market in the world for any product anywhere. We are talking about a $44.2 billion a year export market, of which 31% is lumber. For those in the government not paying attention, that means lumber accounts for almost $15 billion a year in exports from Canada.

Lumber exports alone are double our agriculture and fishing exports. They are almost equal to our energy exports. Our Prime Minister has time to contemplate a North American energy policy while at the same time ignoring an industry of equal size.

Where is the logic in the government's trade policy? Why is it so hard for the government to understand? What the government does not realize is that if our lumber industry suffers we all suffer.

Canada needs to act now to protect these thousands of jobs at risk. It needed to act two years ago, not when we are into this panic situation.

The government must make solving the softwood problem its number one trade and economic priority. We cannot wait years for a litigated decision. We cannot afford to spend years at the WTO just to have the Americans change the rules of the game once again.

How many times do we have to beat them before we can sit down with them between Prime Minister and president and solve this problem?

I agree with what the Prime Minister said today about natural gas. We are all paying more for gas in western Canada because of free trade. We agreed to pay the same price as the highest bidder anywhere that bought our natural gas in North America. Because the people in the southern United States like our natural gas we are shipping a lot to them, and we are all paying a little more for it. That is part of free trade. It is part of what we do as brothers and sisters living on a continent that we all share, but the softwood lumber agreement is not sharing.This agreement is to help a few Americans but not even the masses.

Many hardworking Americans trying to buy their first homes will be gouged another $1,000, $2,000 or maybe even $3,000. Has our government taken ads out on American television to tell those consumers that this is what some of their wealthy people, people like former President Carter, are pushing on Canada? Why have we not gone after them to tell Canadians and Americans the facts of this matter?

The American Lumber Coalition has said that if it loses at the WTO it will just turn around and lobby for a rewrite of its trade laws. It has definitely declared that it will not be bound by international trade laws. Its actions to date have proven that because we have won every case up to now.

Three times Canada has fought for free trade at the international level. Three times we have won and three times the Americans have changed the rules. Why should this time be any different? Does the government enjoy being made to look like the fool?

British Columbians and other Canadians employed in the lumber industry cannot wait. Mortgages cannot wait. We sit here in these wonderful buildings. We all make good incomes. We all have guaranteed salaries for another two or three years but tonight 15,000 people in British Columbia, with Christmas coming, are wondering how they are going to make their mortgage payments. Their kids cannot wait. Credit card bills cannot wait. These people are no different than we are. They have credit card bills and other things and we are not doing anything to help them while they are in this situation.

It is time the government recognizes the country's dependency upon the forestry industry. It is time the government recognizes that there is a country west of Ontario.

Forest industry workers across the country want the government to finally turn its attention to the problem. Simply waiting for the lawyers is not enough. I urge the Prime Minister to direct the Minister for International Trade to enter into serious negotiations with the United States to end this problem before it is too late for the communities in my riding.

I urge the Prime Minister to instruct the minister responsible to consult regularly the provincial ministers, particularly the British Columbia minister of forests who seems to have a clearer understanding of the issue than the Minister for International Trade. The government might say that the provincial ministers were here today, yes, but where were they here two years ago?

The question is not what we are doing today. The government can say that it met with the governor and the ambassador today, and that the Prime Minister talked to the president in Shanghai, but where was the government two years ago when it knew this problem was going to be here? Perhaps it was more concerned about winning another election than getting at the real issues of the country.

The government allowed the last softwood lumber agreement to lapse without a plan. The government has allowed our largest export industry to suffer immeasurable harm without any consideration for the impact on the lives of those Canadians who are suffering. Now foolish pride refuses to allow the minister responsible to take the necessary action to reach a negotiated settlement quickly. Tough talk is easy when one is not impacted but the loggers and mill workers in British Columbia cannot wait for the minister's ego to deflate.

I urge the Prime Minister to direct the minister to move negotiations to the next level or assign the file to someone more suited to the task. I am sure the forest industry and the forest workers would not begrudge the Prime Minister for recognizing the current minister's failure on this file and assigning the task to someone with a better understanding of the industry and its importance to our country.

Canada cannot afford the loss of 30,000 taxpayers. Small communities cannot afford the loss of 30,000 consumers and their families. Families cannot afford the loss of 30,000 wage earners.

I have received expressions of concern today from some 15,000 B.C. forest workers who face unemployment, the ones that the Parliamentary Secretary to the Minister for International Trade called nervous Nellies. This is the human side of the softwood lumber crisis.

Before I close, I would like to read some concerns of constituents which include signatures on petitions and signatures on cards and letters collected on weekends over the last couple of weeks in shopping centres in British Columbia, mostly in my riding. These arrived today by Federal Express. One says:

I am a concerned citizen of the community of Squamish that is concerned about the softwood lumber dispute with the U.S. This dispute is about more than lumber, it's about jobs, communities, and families.

A 19.3% duty on softwood lumber exports is unfair, unjustified and wrong. Cedar products should be excluded from this dispute completely, as they have nothing to do with structural building products.

That is a fact. It goes on:

We urge you to beat this situation with great urgency and ensure that all stakeholders are represented with a strong, unified free trade position.

There are cards addressed to the Prime Minister and to the minister. Another letter addressed to the Prime Minister reads:

I am profoundly concerned about the future of the western red cedar (WRC) industry in Canada. Thousands of jobs will be lost unless the Canadian government acts now to have WRC removed from the current U.S. trade action against Canadian softwood lumber. Already thousands of people have been laid off as a result of the 19.3% duty imposed by the U.S. Department of Commerce on Aug. 10, 2001.

As you know, the U.S. lumber dispute with Canada is over structural products, like 2x4s. WRC is not a structural product. It is a high-value appearance product that is more than triple the price of U.S. structural wood products. The U.S. needs our cedar. They don't have any suitable wood product substitutes. There simply is no reason why cedar is part of this lumber fight.

I urge you to demonstrate your commitment to the thousands of jobs, hundreds of businesses and dozens of Canadian communities that depend on the WRC industry. Please tell President Bush that cedar should not be part of this dispute.

That letter was addressed to the Prime Minister.

There are literally thousands of names on a petition to the Prime Minister which states:

We are profoundly concerned about the future of the western red cedar (WRC) industry in Canada. Thousands of jobs will be lost unless the Canadian government acts now to have WRC removed from the current U.S. trade action against Canadian softwood lumber. Already thousands of people have been laid off as a result of the 19.3% duty imposed by the U.S. Department of Commerce on Aug. 20, 2001.

We the following urge you to demonstrate your commitment to the thousands of jobs, hundreds of businesses and dozens of Canadian communities that depend on the WRC industry. Please tell President Bush that cedar should not be part of this dispute.

I could go on and on. As I said, there are 15,000 people just in a short period of time.

It is nice that the government and the minister met with the former governor today. It is great that they are talking to mayors in British Columbia. However they should not be impressed as to where we are as a country today. Think tonight about the 30,000 people who will be unemployed at Christmastime because we did not do our job as members of parliament. I do not blame just the government. I blame us in the opposition as well. Maybe we did not put up a big enough fight two years ago to get the Liberals off their seats to do the job. That is why people are unemployed.

We asked the questions, but we did not get any answers.

[An hon. member]

You did not have a trade critic.

[John Reynolds, Canadian Alliance, West Vancouver—Sunshine Coast, BC]

The parliamentary secretary says we did not have a trade critic. I do not know what he was reading, because we did. That is an inaccurate statement.

We are concerned. We have asked the questions. We have tried to get the government to move. The Liberals are moving now and I give them credit for that. They are putting on good action now. They probably have every spin doctor in the PMO working on this file right now because the government knows people are unemployed and are getting mad.

I beg the government to solve this problem. Solve it for the people in western Canada and others who are going to lose their jobs across Canada. I met with the people in my riding. Again I invite the parliamentary secretary any time he wants to visit Squamish or any other city in British Columbia, I would be happy to take him personally in a very non-partisan way. I would like him to listen to what these people have to say.

[Mac Harb, Liberal, Ottawa Centre, ON]

Mr. Speaker, I will be splitting my time with my capable colleague from Eglinton--Lawrence.

It is quite ironic that we are debating this particular issue at this point in time. One would think this issue should not even be an issue for debate given that our two countries share the longest border in the world and that we do more trade with one another than any other countries in the world. Over 87% of our trade is with the United States as compared to over 25% of their trade being with Canada.

To a large extent we are friends, neighbours and partners whether we like it or not. In the interests of people on both sides of the border we are forced to work collectively.

The issue of softwood lumber represents less than 3% of the overall trade with the United States, slightly less than $10 billion on an annual basis.

If we were to look at the overall relationship between Canada and the U.S., it is excellent. Frankly, it is those small irritants that are causing a tremendous amount of frustration on this side of the border. Simply put, the softwood lumber issue is clearly creating a tremendous amount of problems in different parts of the country.

Thousands of families, as colleagues on both sides of the House have indicated, are suffering as a result of the countervailing duties and the punitive duties the Americans have decided to put on softwood lumber.

This is not the first time the issue has surfaced. It is now three or four times that we have fought with our friend and trading partner to the south in courts and before tribunals and almost every time we have won. The last time we had a dispute, the Americans had to pay Canadian companies in excess of $800 million along with interest on taxes illegally collected from those companies on goods that had been sold on the other side of the border under an arrangement we had with them for many years.

The American administration is moving again like a pit bull with an imposition on our industry in excess of 30%. Frankly, it is totally unacceptable. As the minister clearly stated, the challenge the government mounted at the World Trade Organization is very much wanted. The government and industry on this side of border will win again. The bottom line is, what does it take for the American administration when it comes to this particular issue to understand that enough is enough and that we have to move on?

The bottom line is not a question of subsidies or no subsidies; it is a question of protectionism or no protectionism. The question that needs to be asked of the American administration is why it continually seems to buckle under to the pressure of special interests in the United States, whether it comes from Montana, Mississippi or wherever. Enough is enough.

The unfair duties being imposed on the Canadian industry not only penalize the industry here in Canada, but they penalize American consumers. American consumers are absolutely outraged at the administration. American homeowners have to pay in excess of $3,000 as a result of this unfair tax being imposed on softwood lumber imported from Canada.

We could tell consumers in the United States to buy wood from Mississippi but consumer group after consumer group told us when we were in the United States that they do not like Mississippi wood. Even if we were to give it to them for free they would not put it in their homes simply because the wood from Mississippi is not good enough quality to put in homes. It may be okay to use for chairs, tables or whatever else, but it is not of sufficient quality to put in homes. That is the problem. That is the crux of the matter.

American consumers are smart. They are intelligent. They are consumers who will pay for the high value goods they receive. The administration is robbing those consumers of their right to choose. How is it doing that? By imposing this unfair tax of 30% on products being imported from Canada.

We can talk all we want. The government was asked to do this and that but the bottom line is the government has done exactly what it is supposed to do. After the agreement expired on March 31, 2001 what kicked in immediately was free trade. With free trade an agreement is not required. Everyone follows the law.

Two things are being asked of our government. First, we want the government to know it has our unequivocal support in what it does in terms of its challenge at the World Trade Organization so the laws of the land are upheld. Second, if and when the industry itself in Canada asks the government to sit down and look at ways to come up with a mutually conclusive agreeable type of arrangement then it should look at that.

For us to try to undermine the process and criticize the government, whether it is the opposition, special interest groups or whatever, is highly unfair. At the end of the day the government is doing exactly what it is supposed to do, which is to stand up for the interests of consumers, the workers and the industry and to do what is fair and important to the industry in Canada. Whether the industry is in the west or the east, it should stick together and maintain the common position that it has maintained all along, which is free trade in softwood lumber. That is what we were told in the United States when we met with consumer groups and when we met with the industry here.

The subcommittee on international trade held a number of hearings with all of the stakeholders. They are totally and unequivocally in support of free trade on softwood lumber. Therefore the case is closed. Let us move on. The bottom line is, will our friends to the south move on? One can only say the test of time will tell.

Our colleagues in both houses, the senate as well as the congress in the United States had better stand up for the rights of their consumers. They had better stand up for the rights of their constituents who are calling on them. We want free trade in softwood lumber. The very same consumers have called on us in the House to defend the interests of the consumers in the United States and to defend free trade as we know it now.

To that extent I am very happy with the way the Minister for International Trade, his parliamentary secretary and officials have conducted themselves over the past few months. They have been trying to provide strong leadership. They have been trying to do what is right and fair on both sides of the equation.

To that extent I can say this debate is very timely. However, in the interest of time we had better come to grips with the fact that free trade must prevail at all times. There cannot be a double standard where on the one hand products are bought under the rules of free trade and on the other hand taxes are imposed on them. It is not right. It is not free trade and it is not acceptable. We will not let that occur without a challenge.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, I am delighted to follow my colleague from Ottawa Centre, in part because he has given a big city member's perspective on the issue but, more important, because he has begun to focus the debate.

For me the issue has not been so much about how we should say woe is us and look at the plight we are in. We should not point fingers at government inactivity or activity that is perhaps not what we would have liked. The member instead did something no one else has done. He said the ambassador is presumably following this debate. The issue is of interest to the Americans and it should be.

What message would we give them? Should it be that we are whining, finger pointing and playing partisan politics? Should it be that we are ready to cast blame on the Prime Minister or other members in this place if not the industry itself? No, it should not.

Thanks to the member for Ottawa Centre we now know what we should be doing. The message the ambassador and the embassy should be getting, as well as the people in the U.S. commerce department who are entrusted with this file, is that the resolve of the Canadian public, Canadian parliamentarians and Canadian industry has never been as firm as it is now.

The hon. member indicated, as has my colleague from Thunder Bay--Superior North, that the industry is of vital importance to Canadians. Of course it is. Everyone knows that. Some 350 communities throughout Canada rely exclusively on the industry. It is important to everyone in the House. Eight per cent of our GDP relies on the timber industry. I am not yet taking into consideration the after market or downstream industry that develops from it.

Mr. Speaker, you were on our natural resources committee about a year ago when we studied this issue. You will know and understand where I am coming from. The city of Toronto consumes about $1 billion of lumber on an annual basis. We consume about $.75 billion worth of plywood, an additional $200 million worth of wood panels and $1.5 billion worth of pulp and paper.

The industry is important to all of us. Yet in terms of international trade, as the U.S. secretary of commerce has said, it amounts to only about 2% of trade between Canada and the United States. My colleague will correct me if I am wrong because we went down with delegations of parliamentarians to meet with our counterparts in the U.S. congress and senate.

The U.S. secretary of commerce said lumber was an important issue but that it accounted for only about 2% of the trade between our two nations. Our response was that he was right but that for this 2% he was buckling under the pressure of one timber lobby that operates primarily out of three states.

He was doing so because the U.S. system allows him to knuckle under to the bit of pressure some people may bring to bear as a result of whatever contributions they make to the democratic process during an election. For that 2% he would skew the entire relationship of two partners on the same continent.

I would be embarrassed to admit that if I were in a position of authority. I would be ashamed to admit it if I were a congressman or a senator. I would have to look those people in the eye and ask wherein lies the interest of the American people and American industry. I would have to ask wherein lies the interest of the political and economic relationship we have with our neighbour to the north. It certainly is not in the pocketbook of the U.S. timber lobby.

Thank God Canadians are prepared, as are many of my colleagues here, to say no to the government. Those of us who went down to the United States to meet with our counterparts are prepared to say no to the government. Under no circumstances will we give in.

We go to the WTO. My colleague from Thunder Bay--Superior North asks why we go to the WTO. It is because it is the one institution whose rules have an impact on American legislators and whose decisions carry with them the concept of precedence.

We do not go to NAFTA. We have already won at NAFTA. Hon. members and my colleagues on the opposite side of the House know well enough that we have won at NAFTA not once, not twice, not three times, but every time we have gone to an FTA or NAFTA panel. We do not have to apologize for anything.

What is the problem? It is not a Canadian problem. We are playing by American rules that were designed for Americans in an American system. It is a system where the executive must respond to congressmen and senators who insist that the commerce state department come up with the figures and facts that will support their contentions, invalid as they might be.

What defence do we have? We have one defence. We go to the WTO. That is where we have said our interests lie. That is where all of us have said we find resident those decisions on which we will all abide while we concurrently pursue legal actions in American courts. It is costly but 350 communities depend on it.

Canadian industries, including those in your riding, Mr. Speaker, are among the most competitive, innovative and technologically advanced in the entire world. That is why they are causing difficulties for the Americans.

Our counterparts in the U.S. senate told us when we went down there that they would abandon everything. They told us not to drill holes and put grooves in our lumber. Why not? It is because those holes and grooves reduce the cost of housing by about seven days worth of labour. While American industry has been shipping logs to the Asian market, Canadian companies which do not have the same access to the Asian market have been improving their technology. They are the most competitive and environmentally sound worldwide.

What happens? Instead of being rewarded for this they are being penalized. The Canadian government must come to the aid of such industry.

I will speak for a moment about Ontario. We need a government that says yes, we will go to the WTO. Yes, we will be in trouble over the next while. My colleague from B.C. says we are losing thousands of jobs. There is no one on either side of the House who is more sorry that is the current situation, but we must look beyond today.

The way we look beyond today is to say we have the methods available to us. What are the methods? We have EDC. We have financing abilities. We must give all these companies the opportunity to come up with the appropriate bonds while we pursue long term solutions.

Will we be criticized for this? When someone is drowning we do not worry about where the life jacket came from. We make sure it gets on the drowning person. That is what we are doing. That is what we will do. That is the message we must give to embassy officials, the ambassador and all Americans watching today. There are no milquetoasts on this side of the House.

My colleague from Thunder Bay indicated there are provincial governments that want to do much more and some that have quite frankly left leadership to others. That is not our problem. Ontario wants to be aggressive. As a member from Ontario I support that position. We know it is a solid position that can be supported by members from Quebec. We know it is a position that industry leaders from the Atlantic provinces would support because it is a long term solution.

All of us who have taken the issue to heart and want to defend the interests of our constituents at least as aggressively as those American senators, few that they are, want the Americans on the other side of the television screen to know we have resolve.

Senator Graham, the one who wanted to be president, said that if one believes in free trade one must take everything that comes with it. We in my party are free traders.

[Antoine Dubé, Bloc, Lévis-Et-Chutes-De-La-Chaudière, QC]

Mr. Speaker, I would like to inform the House that I will be sharing my time with the member for Champlain.

It is my pleasure to speak today in this emergency debate proposed by the Bloc Quebecois, and accepted by the Chair on Thursday last. In the end, this debate is taking place tonight because I believe it was more convenient for most members. I am also thrilled to hear from the Liberal members, because we often criticize them for being so silent. However, tonight it is fair to say that they seem to have found their voices, and we agree with what they have had to say.

This really is an emergency debate, since on October 31, the U.S. department of commerce began charging an additional duty of 12.58% on top of the 19.3% countervailing duty charged in August.

This is what three businesses in my riding were fearing when I met with their senior management on October 9. These three companies are Les bois Blanchet, owned by Leggett Wood, Moulin de préparation de bois en transit and Perfect-Bois. Together they employ 262 people.

This may not seem like a lot of people when compared to Davie Industries, which was mentioned frequently yesterday in the House. However, 262 employees is considerable, and the consequences are considerable for them and their families. This also has an economic impact. It has an impact because it supports manufacturing, and that is important.

I would also like to speak on behalf of the neighbouring ridings, because I am from the Chaudière—Appalaches region. This is one of the main areas in Quebec in terms of private forests. There are even businesses in the Chaudière—Appalaches region that process lumber from Maine, and then ship it back to the U.S.

This is somewhat exceptional. It may well exist elsewhere, but a number of companies in the Beauce region depend on this. It worked well for people on both sides of the border. On the American side, as we know, around Beauce, there is a fairly large area, and the Americans were happy to come and process their lumber in Quebec, and then turn around and take it back to the U.S.

Following recent events, the position of the Bloc Quebecois has not changed. I will repeat it and I know that several of my colleagues will do it also, but it cannot be overemphasized. As was mentioned by the Liberal members who just spoke, we want a complete return to free trade.

If I may, I will make a remark of a somewhat partisan nature here. I will say in all friendship that it is reassuring now to hear Liberal members speak in favour of free trade in their speeches. I remember the 1993 election campaign when the Prime Minister went as far as to talk about tearing up the free trade agreement. It is kind of amusing to see the change, but it is also interesting to see that these people have understood the importance of free trade in today's context.

We are calling for a meeting of all stakeholders to review Canada's strategy in this matter. For the past week, I have heard the Minister for International Trade say on several occasions “Yes, I talk to them. I phone them individually”.

However, as a group, the stakeholders want a summit to give everybody the opportunity to discuss this issue at the same time, to ensure that the agreement between the stakeholders continues to exist, to ensure that there are no backroom negotiations or last minute concessions.

We are concerned in Quebec because we are the second province that is the most affected by this issue, after British Columbia, of course. Quebec has 25% of Canada's production in that industry, which represents 40,000 jobs.

The sawmills employ 20,430 people and the forestry industry 10,000. We know that the total in Canada is in excess of 130,000 jobs. The softwood lumber industry injects more than $4 billion into the Quebec economy annually. That is a lot of money.

More than 250 Quebec municipalities have developed around lumber processing, and in 135 towns and villages 100% of manufacturing jobs are connected with it. The U.S. receives 51.4% of Quebec softwood lumber exports. The value of these exports is some $2 billion. This is all extremely important.

An aside here, for a rather special point. Yes, the Liberal MPs are fervent promoters of free trade. That is all very well, but I would point out that certain things like Davie Industries, shipbuilding and shipping were excluded from NAFTA. This is something I have always found regrettable and still do.

The American attitude is very often protectionist. Even in another area—not the subject of debate this evening—this was the case for tomatoes. Yet the Americans need us, particularly when it comes to fighting terrorism. We agree with them, but they often do need us. So they also need to play fair with softwood lumber.

The Bloc Quebecois is calling upon the Prime Minister to intervene personally with President Bush in order to get him to understand this. Today, during Oral Question Period, my leader called for a publicity campaign to raise the American public's awareness of the problem. It is in the best interests of the U.S. consumer to have more affordable, quality lumber for construction.

One cannot be pro-free trade just when it suits one country. One must be pro-free trade all the time and in all areas, if one believes in the principle.

There is one aspect of the problem the Liberal MPs have not addressed, although I believe they are sympathetic to these proposals. Emergency measures would have to be adopted to help those who are unemployed because of the softwood lumber crisis. First, by reducing the number of hours required to qualify for EI. Let us keep in mind that all this started in August and lumbering is a seasonal job.

The Bloc Quebecois is calling for a single minimum threshold of 420 hours for seasonal workers to be eligible for employment insurance.

Second, the Bloc is calling for an increase of five weeks in the maximum benefit period. Third, it wants longer benefits for older workers who have been laid off and who lack the skills needed to find another job quickly. Fourth, the Bloc proposes an increase in the coverage of insurable earnings from 55% to 60% to allow low and medium income workers to better endure a lengthy work stoppage.

I know that my time is passing quickly, but we have heard Liberal members, the Prime Minister and the Minister of International Trade speak of free trade. This last person sometimes uses words that make us a bit nervous. Without speaking of negotiations, he talks of discussions and of the fact that they will do something based on free trade. This hints at a certain compromise that will not exactly be free trade and at certain conditions.

I am delighted by the speeches of the Liberal members who spoke before me. I think they sort of reminded their government of the way to go, although I realize that to be a member of the party in office is like diplomacy. They cannot proceed quite as directly as a member of the opposition.

Still, I enjoyed the speeches I heard, and I hope this will be the line followed by the current Liberal government, the Prime Minister and the Minister of International Trade.

[Marcel Gagnon, Bloc, Champlain, QC]

Mr. Speaker, at this time of the day, and considering the number of speeches heard on this issue, one is under the impression that everything has been said, or almost.

Still, I want to add my voice to those of my colleagues and thank the Bloc Quebecois for proposing this emergency debate. As we know, an emergency debate does not always enjoy the unanimous support of the House. But I sense that today we are close to it. I am convinced that if there are forestry workers listening to us, at least they will be unanimous.

My region is one of Quebec's most important forestry regions. In the riding of Champlain and surrounding areas, there are close to 3,800 forestry workers. I recently had the opportunity to meet some of them and I can say that, for them, it is urgent that the situation be settled.

When forestry workers in the Haute-Mauricie or elsewhere in Quebec lose their jobs, possibly the only jobs that they can have, they hope for a quick settlement.

In La Tuque and in more remote areas in the bush, the choice of jobs is limited, particularly at this time of the year. When we see plant closures, or when we live in fear of such closures, it is extremely difficult, particularly just two months before Christmas, at the beginning of winter.

Earlier, the minister congratulated the Prime Minister and congratulated himself on the debate and on their efforts to try to settle the softwood lumber issue. I agree that they worked hard, but the fact is that so far their efforts have been in vain.

Perhaps the strategy could have been different. Perhaps the minister could have sought out all stakeholders across the country so that, together, they could present a common front. He said he let the provinces and industries negotiate; but this is perhaps not the time to negotiate, because the negotiation has already taken place.

It took place when we signed the free trade agreement. Will we have to launch into negotiations all over again every time there is a problem? I do not think that the minister wants to negotiate. I think that he wants to see the free trade agreement respected. But, for that, a very firm approach will probably be required.

For workers in our region, as for workers elsewhere in Quebec and Canada, who face losing their jobs because of the arrogance—and perhaps, a bit, the contempt—of the American government, I think that this is a bit contemptuous.

We heard that, at the meetings, the American government said that lumber accounted for barely 2% of trade. But it is 100% of the earnings of forestry workers. It is 100% of their worries about the winter ahead. It is 100% of their income, with respect to all the things they will have to pay for to provide for their families.

For a big government, for a big country which not only thinks it is rich, but is, this 2% is perhaps a way of flexing its muscles. It is perhaps only 2% of trade, but it is 100% of the problem of workers who have to contend with this arrogance.

Recently, some workers asked me to explain free trade to them, to explain who it was for and why we had it. I am for free trade. We said this today, and I think that most people are for it. But must it all be one-sided?

Can a government, through its arrogance or because of the pressures from influential people, interfere at any old time and create a mess elsewhere claiming that free trade applies more or less in some cases, because they claim there are subsidies that should not exist? If free trade is going to work, then it has to work both ways. When we sign a free trade agreement, it has to be respected by both sides.

We cannot forget that this issue has already been heard by the WTO, and we won. The minister once said here in the House that we need not worry, that we would win again. He said that at some point, the U.S. government would be required to pay back hundreds of millions of dollars in duties it had charged us for nothing.

But the workers who lost their jobs, their homes and who, in some cases, had to take their children out of school, because they could no longer afford it—in the case of a child that wanted to go to university—they were not paid for their damages. They had to suffer.

It would seem to me that in this day and age, especially given the events that took place recently, people should start governing with more compassion, keeping in mind those they have made to suffer and whom they could help with the laws and regulations they adopt.

From time to time, I have the opportunity to meet Americans, since half of my family is American. When it comes to incidents such as this one, I find it difficult to congratulate their government. Some have talked about American consumers. But it is not all American consumers who agree with the pressures that have been brought to bear. American consumers are not done any favours when they are forced to pay, as the member mentioned, something in the order of $3,000 or $3,500 more for a house because of duties.

At some point, there needs to be pressure so that when an agreement is reached, when it is also important for the future of workers, the agreement needs to be respected and arrogance and contempt have to be put aside.

I am asking the Canadian government to show as much leadership as possible in this matter, not to negotiate and not to make any tradeoffs. We cannot make tradeoffs on such an agreement by saying “If you honour your agreement, we will give you increased access to our resources”. It simply cannot be done.

Such an agreement must be honoured. I think that the government and the Prime Minister must take a strong stance, with the support of all those who have a say in this matter, so that we have a common position to solve this problem once and for all, and not at half price. Softwood lumber must be included in the free trade agreement.

We must also think about the workers who, inevitably, as I said earlier, will suffer the consequences. It seems to me that with an accumulated surplus of $35, $36 or $37 billion in the employment insurance fund, now is the time to show a little more compassion. That money belongs to forest workers as much as it belongs to anybody else. Now is the time to show a little more compassion by relaxing eligibility requirements somewhat.

When workers lose their jobs with winter fast approaching and, on top of being unemployed, they cannot get EI benefits because of stricter eligibility requirements, even though they paid premiums, that qualifies as hardship.

On behalf of these workers, I am asking the government, as did my colleague who spoke before me, to relax EI eligibility requirements to help them get through the winter.

Message from the Senate

[The Acting Speaker (Mr. Bélair)]

Before resuming debate I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill S-33, an act to amend the Carriage by Air Act, to which the concurrence of the House is desired.

The House resumed consideration of the motion.

Softwood Lumber

[Brent St. Denis, Liberal, Algoma—Manitoulin, ON]

Mr. Speaker, I will be sharing my time with the member for Mississauga West, who like myself has his roots in Algoma district. I am pleased to be sharing this time with him.

This is a very serious subject and all members of the House share that sentiment. While we might argue over the details and over what should best be done in this very difficult time, we do agree that what the U.S. industry in conjunction with its government is doing is truly unfair to our softwood lumber sector.

When we think of the sector, we think of the mills and their workers. Some think of the investors without whom it would not be possible to build and expand mills. However, let us think more carefully about the families of those workers. Let us think of the bush workers who do not go to the mill with their logs but who are a very important part of the industry and, of course, the truckers, without whom the logs would not get to the mills. The bush workers, truckers and suppliers have families as well.

The loss of a job in a mill because of the unfair U.S. approach to trade with Canada on softwood lumber has an impact well beyond that worker. It is a small business and many more people are affected.

In my large northern Ontario riding of Algoma--Manitoulin, there is a large number of small communities that depend upon the softwood lumber industry. I will not name them all, but communities like Chapleau, White River, Espanola, Thessalon and a number of others would not have a major employer in their communities without the softwood lumber industry.

You are from northern Ontario, Mr. Speaker, and you know very well that our economy has depended for many generations upon the primary resources of forestry and mining. Fortunately in the latter decades tourism has come along to create jobs and augment our economy. However, we always go back to our primary sectors, in the case of my riding to forestry, to maintain our local economy, to make sure our people are not forced to move away to find employment and to make sure there are jobs in the industry for young people to come back to once they graduate from college or university.

The forestry sector is quite a high tech sector. This is probably one of the root causes of our problem with the Americans. The American industry has not kept up. It has not made the investments in its mills and bush operations that would have allowed it to be as competitive and efficient as our mills.

Members of the House may have been to mills where computers are used to maximize every bit of the log to make sure that the optimal number of board feet come out of a tree so that there is very little waste. Without computerization our industry would not be the leader it is.

It also seems to me that we are jeopardized because we happen to have vast resources in forestry. We also happen to have vast resources in energy. I doubt that when it comes to energy our American friends will complain if we can provide them with energy at a very competitive price. They should look at our plentiful energy and our plentiful forests as a resource over which not to fight, but over which we should be allowed to compete fairly.

We each have our domestic advantages. The Americans have a longer growing season. In many cases they have much better terrain on which to harvest their forests. These are their natural advantages. They perhaps have a more extensive road system simply because they have a greater population. Those advantages are not present in Canada, but we have other advantages so it is all balances out.

I believe that as this works its way through the system, and I remain confident that a solution will be found, a solution will be found, one that is for the long term and not a five year patch as we have been forced into too many times over the last few decades.

I have great confidence in our international trade minister who has spoken with a very strong voice. He has brought together the industry and provinces in a way that we have not seen in past attempts to deal with our American friends on softwood lumber. I have great confidence in his ability to get us through this.

I know we are coming to the 11th hour. It will not be too many weeks from now that the final determinations will be made. To remind those who question the commitment of the government, and they should not question it, the Prime Minister has on numerous occasions over the last weeks and months, if not years, raised the softwood lumber issue with the president of the U.S. Year in and year out the issue was raised with the American secretary of trade. However there is no accounting for the ceaseless attempts by the U.S. forest lobby to undermine, criticize and incorrectly characterize Canada's softwood lumber industry.

For the benefit of my constituents and others who may be listening, I reiterate that the minister talked about a two track approach. The legal side would require preparation for a WTO challenge. Hopefully the Americans will respond appropriately should they lose that challenge, but in the meantime Canada and U.S. officials, at the industry, provincial and federal levels are having ongoing discussions with our American neighbours to try to find a solution once and for all. I am confident that will take place.

It is about not negotiating. Canada does not have to negotiate from the position that it already takes. We do trade fairly in lumber. We do not subsidize our industry. Our industry does not dump product into the U.S. market. There is no real proof of injury to the U.S. producers. I do not believe it to be necessary for us to negotiate but I agree it is important to discuss. Maybe it is a matter of the U.S. finding a way to get through it on its side which mollifies its industry.

I accept and understand that some provinces are looking at the way they contract out tracts of forest with so-called stumpage fees. Maybe there is some room for improvement there, although I have heard it said that should our forest resources be tendered or auctioned out at market, that in many cases the prices will be lower than the stumpage fees charged, so our American friends may be in for a surprise. They might want to be careful for what they wish.

Some of my colleagues across the way call for the government to do more. I doubt that we can do more except to remain diligent. It is naive to believe that we can tell the Americans what to do on any given subject. They have to see the resolution in terms of what is best for them, an understandable position if one is discussing an important subject from two different points of view.

I believe at the end of the day the Americans will realize that it is in their best interests to deal fairly under NAFTA and under the emerging rules that govern world trade. It is incumbent upon them to accept the discipline that comes with free trade.

As a nation we are free traders. We are attempting to adjust as we must to the new world trade realities. I call upon our American friends to do the same.

I appreciate this chance to say a few words on a very important subject. I know that all colleagues in the House agree that we have to find a long term solution.