Mr. Speaker, I am pleased to speak on this issue because it is a critical issue to my party, my region and my country. It is the number one issue that has occupied our attention for the last little while. It is not a simple issue and there will probably not be a simple solution.
For one thing, people should understand that it is a very unique situation, where the United States government deals with Canada under three different sets of rules. One is the softwood lumber agreement, which includes the four provinces of Quebec, Ontario, Alberta and British Columbia. Then there are four provinces under the maritime accord, the four Atlantic provinces of New Brunswick, Nova Scotia, P.E.I. and Newfoundland. Then there are Saskatchewan and Manitoba, perhaps the most important provinces.
In any case, it is an aberration in international trade when one country deals with another country under three different sets of circumstances. It does cause a lot of trouble, but there are reasons for the different approaches in these three different areas.
In the case of the four provinces under the softwood lumber agreement, Quebec, Ontario, Alberta and British Columbia, the American industry and the American government perceive that they have subsidy under the program of supplying stumpage or softwood resources from crown land. The Americans have said that they will consider that a subsidy and they want quotas, taxes or some kind of tariff on those four provinces.
In Atlantic Canada, there is a completely different situation. In 1995 when the SLA was negotiated, 61% of all the softwood exports from Atlantic Canada came from private woodlots, much the same as the lumber industry in the United States. The American industry said the four provinces in Atlantic Canada operated the same way as it did, so it said it did not require a quota and would not impose taxes or tariffs.
In fact, over the last five or six years those provinces have increased that percentage from 61% to 74.5% in order to address the concerns of the American industry and maintain their position, because under the maritime accord the four Atlantic provinces have, they virtually have total free trade, exactly as this bill calls for. It is free trade and protection from litigation, which perhaps is actually even better than free trade because of the protection part of it.
The Atlantic provinces are adamant that they keep the same criteria they have now under the maritime accord, which is total free trade.
Manitoba and Saskatchewan somehow evaded the net that was cast by the American industry and government and are under no obligations or restrictions at all. They are not part of the maritime accord or of the SLA, but they are there and do ship smaller quantities of lumber but of an excellent quality, especially from Manitoba.
We would certainly agree with the motion, which reads:
That this House support the government's efforts to restore free trade agreement rules for lumber and inform the United States that it rejects any obstacle to the free trade process.
We would also agree with the amendment, which reads “by establishing quotas and trade barriers”. We are against quotas. We are against trade barriers of any kind, and that includes an export tax imposed by the Canadian government.
We are free traders as a party. We are the party that brought free trade to the country and to the North American continent. As a region we are free traders now in the softwood lumber business. I am from the maritimes and our region is a free trading region. We have free trade now under the maritime accord. The provinces are adamant that they keep that free trade agreement in place.
The Atlantic provinces are very concerned that, under the current scenario of negotiations and all the things that are going on behind the curtains which we do not know about, the government may be trading away some of these things because we really do not know what it is saying.
My biggest fault with the government on the issue is that it has not gained consensus in the country. It has pitted the west against the east. We have two completely different positions and then another one in the middle. I believe that in any negotiation we must get all our ducks in a row on our own side before we can start negotiating with the other side. The government has made little or no effort to reconcile these differences.
The western provinces under the SLA want to do away with the SLA and establish free trade. The maritimes are already under the maritime accord, which is total free trade. It is a different position. There has been no attempt that I know of to try to reconcile these positions.
Meanwhile the B.C. Lumber Trade Council comes to Ottawa to give its side of the position and lobbies hard for it. The Maritime Lumber Bureau comes from Atlantic Canada with Diana Blenkhorn, the chairman and CEO of the Maritime Lumber Bureau, and presents its side. Bob Plecas comes from British Columbia and presents his side. The problem is that we are going into the negotiations divided. The government does not have a clear mandate on what to do because it has not got consensus from the provinces.
The maritime provinces have tried hard to address the concerns of their customer, the American market. They have dealt with the private woodlot sector. They have increased their percentage of production from private woodlots. In my view the maritimes have earned free trade, deserve free trade, have free trade now and should keep free trade as the motion prescribes.
However, this is the motion. The efforts of the government are not clear because the rumours are that the government is negotiating or considering imposing an export tax. One of the rumours is that some of the western provinces' industry representatives are down in the U.S. lobbying them to pressure Canada to apply an export tax. There is even a tentative formula floating around of 10% next year for an export tax, 5% the next year and 0% the next.
There is yet another concern in this whole environment that the government is rushing into something to try to avoid any dispute as the free trade agreement of the Americas approaches. It does not want outstanding issues with our number one trading partner. If we cannot resolve issues with our number one trading partner how can we expand to free trade of the Americas?
We are very much afraid that the government will not get a consensus or an agreement from all the provinces, and that it will dive into something just for the purpose of coming up with a tentative temporary deal to overcome the embarrassment of going into the free trade agreement of the Americas without an agreement with our number one trading partner.
We have just gone through the Brazilian beef issue, which I and most Canadians do not think was handled well. It seemed to be a knee-jerk reaction to another industry's situation completely but the government applied it to Brazilian beef and banned Brazilian beef. However, an hour after the U.S. lifted its ban, Canada was forced to lift its ban. This shows that there is total mismanagement and a total lack of thought and planning.
This agreement and all trade agreements are critical for the whole country but we are afraid the government will take the same knee-jerk reaction approach that it took on the beef and apply it to the softwood lumber issue in order to avoid embarrassment at the free trade agreement of the Americas.
There are so many rumours and proposals floating around now that it is very disconcerting to all of us. Every day in the House, when members ask the trade minister, the Prime Minister or the parliamentary secretary about free trade, whoever stands to answer says that nobody in Canada wants to go back to the previous arrangements and the previous agreements. We take exception to that because it is not exactly right. Four Atlantic premiers, that is four out of six provinces, have written and signed letters to the Prime Minister saying:
Failure to continue the current agreement and arrangements would have a devastating impact on our region's softwood lumber industry.
The four premiers go on to say:
We respectfully request Canada take the steps to—ensure no lapse in this important and strategic arrangement.
The parliamentary secretary, the minister and even the Prime Minister continue to stand and say that nobody in the country wants the agreement extended. There has been no effort to try to reconcile the differences between the different ends of the country. The Atlantic provinces clearly want the maritime accord renewed and continued, yet the minister stands and says that nobody wants the arrangement restored and continued.
I put the responsibility totally on the Minister for International Trade for not reconciling these differences before he goes into trade negotiations with another country. We have a split in Canada that has not been reconciled. I do not know how we can go into a debate with another country without having all our own country's industries onside and going in one direction. There is no leadership.
When we talk about free trade, Atlantic Canada has had free trade with the United States in softwood lumber since 1842. Under the Webster—Ashburton treaty signed in 1842 we have had free access to that market. Atlantic Canada has always had free access to that market. When the dust settles at the end of the little negotiation we are about to enter, we will still want free trade with the United States. We want the rest of the country to have free trade as well.
We do not want an export tax in Canada. We do not want to be subject to countervail. We do not want to be subject to anti-dumping. All these are possibilities if the government does not take action and at least get the Canadian side organized and get some consensus so that we can negotiate from a position of strength.
The issue is absolutely critical to the Conservative Party. Atlantic Canada delivers about $1 billion worth of softwood lumber a year to the U.S., with a total market from Canada of $11 billion. It is a very important market to Atlantic Canada. It is absolutely critical to us. It is critical that Atlantic Canada keep the free trade arrangement it has now. It is important that the rest of the country establish free trade with the United States as well, but not at the jeopardy of the area that already has free trade.
The Conservative Party is not satisfied that the government even recognizes the differences in the two parts of the country. We are not sure the government understands how the maritime accord even works. Government members never acknowledge it when they answer questions in the House. The bottom line is that they have never reconciled the differences between the two parts of the country.
We have all heard the expression, united we stand, divided we fall, and right now we are already divided before we go into the negotiations.
My party supports the motion to honour and respect the rules of free trade. We do not want quotas or trade barriers but we also do not want an export tax charged by Canada on softwood exports to the U.S. Many of us feel the government is leaning that way, providing a tax against our softwood lumber exports to the United States in order to avoid embarrassment at the free trade agreement of the Americas.
The Government of Canada should stand up for free trade but it should not bargain away our right to ship softwood lumber to the U.S. by saying that we will have a 10% export tax now, a 5% export tax next year and a 0% export tax the next year. Some have even suggested that it may be 20% to 22%, which would be absolutely unacceptable.
I call on the government, before it even starts negotiations, which it probably already has started, to pull the industry together in Canada and get a consensus before it tries to negotiate in the U.S. If not, we will have a hodgepodge of agreements again as we do now. We have three different agreements in Canada. It makes no sense. It is very difficult to monitor and even difficult to explain.
In conclusion, my party will be supporting the motion, as amended, which would avoid any trade barriers or quotas and would extend the rules of free trade in the softwood lumber industry.