Mr. Speaker, I wish to inform the Chair that I will split my time with the hon. member for Vancouver Quadra.
This evening's debate is of course extremely important for members of the softwood lumber industry. There is no doubt in my mind that the Government of Canada, the provincial governments and the Canadian industry are determined to protect their rights in justice to settle disputes to their advantage.
In recent weeks, and even months—time goes by so quickly—I had the opportunity to meet people from the softwood lumber industry in my region. These are major entrepreneurs who export in huge volumes. In doing so, they created many jobs in the region. It goes without saying that the industry was doing very well.
I also had the opportunity to meet business people from British Columbia's softwood lumber industry. I travelled there on business. I met these people and I was very interested in getting their views, in order to compare them with those in Quebec. I was rather impressed by how they wanted to settle the issue. Needless to say I listened to them with interest.
I would like to share with my colleagues a view that is not often heard, but which is from people who work in that industry. These people are very well informed, and I think this is a golden opportunity to present their view on this issue to the whole country. Of course I trust their judgment, because they have years of experience, they know the industry very well. Some have been working in it for over 25 years. So, these people know what they are talking about.
Over the last two decades Canada has been subjected to at least three unwarranted oppressive actions by the United States in the softwood lumber arena. People of goodwill might be willing to characterize one action as merely that of ill-informed. Subjected to a second episode these same people, given common sense, might characterize such an action as unscrupulous. A third action based on the same strain and proven false logic as the first two will cause anyone to say enough is enough.
There should be at least no other consequence, namely we should ask ourselves why the United States continues to persist in such activity knowing the difficulty it creates in our industry, and after all we are supposed to be living under a free trade agreement.
From the perspective of American industry, the most important consequence is on companies in the affected industry within the country targeted for trade action; in this case the Canadian softwood industry. As intended, each time a foreign industry, like ours in Canada, is subjected to unwarranted punitive trade measures its member companies are significantly weakened. Collateral impacts within these countries, like our own: the workers who are directly employed are affected; companies and workers whose sales, jobs and incomes are affected directly and indirectly; and, of course, government revenues and the capacity of governments to sustain social programs are also affected.
During the trade action, United States competitors sell larger volumes at higher prices with the same cost base for an extended period and capture business that normally goes to Canadian suppliers, reap a share in punitive duties and build their financial strength.
Oppressed Canadian companies have restrained or limited revenues and in some cases no revenues because of the complete shutdown, while having to cope with ongoing overheads and cuts.
Immediately after the trade action, American competitors work hard to keep the new customers, cushioned by windfall profits accumulated during the period of unwarranted trade tension.
In the case of softwood lumber, once regular Canadian production and transborder shipments resume, prices invariably drop significantly as Canadian suppliers compete aggressively in a desperate effort to regain market share and rebuild their cash position.
The impact on the competitiveness of companies within the targeted foreign industry, namely our own, should not be underestimated. I refer only to the capacity of these foreign companies to compete for sales but is important to their capacity to compete and retain capital, supplier credit and confidence, customer confidence, top management talent and, among other items, motivated and trained personnel.
Being subjected repeatedly to the likelihood of being placed in a weakened state, drives those affected, in this case our Canadian softwood lumber companies, to act more intensively and at times perhaps selfishly than they would otherwise do because of the threat they are facing. Strong, vibrant companies grow and acquire other companies. A company needs many things to go right over an extended period to achieve and maintain a position of market strength. That takes years of work to build.
Companies incapable of achieving a position of strength and vibrancy over time, no matter what their natural potential is, are relegated to a position of also-rans, incapable except under unusual circumstances of being an acquirer, at least a weak company acquiring weaker operations. Most of them for the same reason are in difficulty. They become prime material for acquisition. One case in point is the Canadian company of MacMillan Bloedel.
If any major Canadian solid wood forest companies have been sufficiently strong over the past two decades to sustain significant international expansion and investment in research and development, the United States is structurally unable to submit international trade disputes on a timely basis for resolution to impartial review panels and abide by rulings from such panels until there is compelling evidence that the underlying circumstances have changed. The U.S. industry exploits this fully.
In the case of softwood lumber, even if the Canadian position is upheld in the long run, Canadian industry loses both in the short and long runs. Within the United States, the current softwood dispute is a sly manoeuvre for greater market share and dominance masquerading as a free trade issue. It is politically sanctioned commercial oppression that is permitted. It causes tremendous damage to the softwood industry in the country.
Canada must now stand firm on this issue and it must stand collectively. To win the battle we have to make sure the government takes all measures necessary to protect our softwood industry.
There were some rather radical steps recommended. For instance, it was recommended that Canada should declare an economic state of emergency whereby the government would have the power to stop all exports to the United States and force the U.S. to deal with an export fairness panel in Canada to make sure that we were not victims of unfair trade practices.
In conclusion, I am convinced that the government will not blink. Along with the provincial governments, it will do everything in its power to address this problem once and for all.