Debates of March 15th, 2001

Points Of Order

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Speaker]

Order, please. I am ready to rule on the point of order raised on Thursday, March 1, by the hon. member for Richmond—Arthabaska.

The hon. member's concerns stem from the adoption by the House, on February 27, 2001, of a government motion to amend the note to section (5) of Standing Order 76 and the note to section (5) of Standing Order 76.1. As you no doubt know, these sections deal with the Speaker's power to select amendments at the report stage. The hon. member's problem lies in the fact that the notes contain the following phrase:

—in exercising this power of selection, the Speaker shall be guided by the practice followed in the House of Commons of the United Kingdom.

The hon. member argues that, to do his job properly if he has to draft amendments, he must have access to the rules governing the selection of amendments in his own language, French. He indicates that documents from the United Kingdom are available in English only and that, as a result, he cannot do his work effectively, since he cannot understand the nuances and subtleties of the rules.

He asks the Chair to suspend the implementation of the adopted amendments until his rights and those of other francophones are protected and respected.

I wish to thank the government House leader, the whip of the Bloc Quebecois, the parliamentary secretary to the government House leader, the leader of the Progressive Conservative Party and the member for Regina—Qu'Appelle for their interventions.

As hon. members know well, the role of the Speaker is to preside over the business of the House of Commons and to rule on procedural matters, whether this involves interpreting standing orders or deciding issues of privilege or decorum.

The discussion on this point of order made various references to specific statutes. The hon. member for Richmond—Arthabaska referred to the Official Languages Act and the Constitution Act, 1867, while the parliamentary secretary to the government House leader referred to the Parliament of Canada Act, noting that act's specific reference in section 4 to the House of Commons of the United Kingdom.

While these references are an interesting backdrop, it must be remembered that it is not the Speaker's role to rule on the application of any act, but rather to examine issues in light of possible transgressions of procedural practice and procedural precedent.

The hon. member insists that he will not have access to the rules governing the drafting of amendments because they will be “in English”.

I would point out that the House has simply decided to amend the note to section (5) of Standing Order 76 and the note to section (5) of Standing Order 76.1 by making explicit reference to the practice followed in the House of Commons of the United Kingdom.

Moreover, Standing Order 1 states the following:

In all cases not provided for hereinafter, or by other Order of the House, procedural questions shall be decided by the Speaker or Chairman, whose decisions shall be based on the usages, forms, customs and precedents of the House of Commons of Canada and on parliamentary tradition in Canada and other jurisdictions, so far as they may be applicable to the House.

This Standing Order stipulates that if, during proceedings in matters of public interest, a procedural question arises that has not been provided for or mentioned in the Standing Orders or other order of the House, the Speaker of the House must base his or her decision first on the usages, forms, customs and precedents of the House of Commons of Canada; then on parliamentary tradition in Canada; then on that in other jurisdictions, to the extent that it may be applicable to the Canadian House of Commons. This provision does not refer directly to the codified rules or standing orders of other jurisdictions, but primarily to the tradition on which they are based.

Standing Order 1, which has existed since 1867, recognized the origins of our Westminster Parliament and stated that this House would be guided by British precedent. From 1867 to 1986, it stated this explicitly:

In all cases not provided for—, the rules, usages and forms of the House of Commons of the United Kingdom—shall be followed.

In 1986, the House amended Standing Order 1 recognizing that parliamentary practice in Canada had evolved to the point where, in unprovided cases, it might seek guidance from the wider community of parliaments. The members of the Special Committee on the Reform of the House of Commons considered that the practices of the Canadian House of Commons need no longer be tied to those of any other assembly or any other country. However, they recognized that in unprovided cases, there was still great usefulness in examining the precedents and authorities in other legislatures and parliaments, especially those in the Commonwealth.

Thus, on the committee's recommendation, the House adopted the current wording for Standing Order 1 to reaffirm that the House of Commons had the freedom to tailor its procedure to its own needs while preserving Canadian traditions.

I have drawn such a detailed history of Standing Order 1 to show you that the House of Commons of Canada has often turned to the United Kingdom in cases that were not provided for. Of course, the situation has evolved, and now we also consult other jurisdictions to the extent that their rules or practices are applicable to the House. However, the fact remains that if, at the report stage, a situation arises that is not covered by our practices or by the practices of the United Kingdom, I would be required, under Standing Order 1, to consult the practices of other jurisdictions.

In such circumstances, the availability of documents in either of our official languages is not a consideration. Instead, I would respectfully suggest that it is the interpretation of such practice and the Chair's judgement on how such practice will be applied in this House that is the key concern for members.

The House has a long history of consulting the precedents in other parliaments that have followed the Westminster tradition, and the language of these documents has never seemed to be an obstacle. When we discuss procedural matters during the daily business of the House, we frequently consult the various editions of Erskine May to develop our arguments. The wide range of documents that we consult on parliamentary precedent are not necessarily available in both official languages, but we have been able to work with them.

The House recognizes that members are entitled to receive service in both official languages. Simultaneous interpretation is provided in the House and in committees and members have access to free translation services. One of the roles of the Speaker is to protect and defend members' rights to work in the official language of their choice.

In that regard, in keeping with what I said earlier about the application of other practice in this Chamber, I am currently studying the application of these notes to Standing Orders 76 and 76.1, and I will return to the House with a statement on how this note will be interpreted. The statement will, of course, be available in both official languages and members can govern themselves accordingly.

Meanwhile I cannot grant the request made by the hon. member for Richmond—Arthabaska to suspend the implementation of the amendments in question. Because the motion was adopted by the House, these amendments are now part of the Standing Orders of the House, and it is my duty to be governed by the Standing Orders. Only the House can decide to change the Standing Orders. As always, the Chair is in the hands of the House, which may decide if and when it will modify the rules under which its deliberations are conducted.

I wish to thank the hon. member for having raised this issue, and all those who made a useful contribution to the discussion.

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

Mr. Speaker, I rise on a point of order. For my clarification, does that mean that it is no longer a requirement that documents respecting the procedures of the House of Commons be in both official languages?

[The Speaker]

The hon. member will want to read the judgment the Chair has just given. I think he will find the answer in that judgment. I do not want to confuse him by giving answers to questions. I think the judgment is quite clear, and I know that he will find it so when he has a chance to review it.

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, I simply would like you to clarify for me what you just said.

Am I right to think that the motion, as passed, does not change the standing orders of the House of Commons, but is meant to provide guidance to the Chair? May I ask you also if the subject matter of the motion in question does not involve a number of existing practices in Canada, which would eliminate the need to look at what is done in the United Kingdom?

I do not know, Mr. Speaker, if you understand what I am asking. I will make it clearer. I would like you to tell me if this motion is simply meant to guide you in your rulings and does not change the standing orders of the House of Commons.

The motion refers to a practice followed in the United Kingdom. However, according to the ruling you just gave, foreign practices have to be taken into account only when there is no existing practice here, in Canada.

My question is this: since there is a practice that has been followed in Canada for a number of years with regard to the selection of motions at report stage, does what you just told us eliminate the need to refer to a foreign practice?

[The Speaker]

Once again, I think the member will find the answer to his question in the Speaker's ruling I just made, which he will soon be able to read.

I also indicated in my ruling that there will be another presentation by the Chair regarding the acceptability of amendments at report stage. There will be something on this subject soon.

With the ruling I gave today and with the presentation I will soon make to the House, the member will certainly have all the answers he needs, or at least I hope he will.

The House resumed consideration of the motion and of the amendment.

Supply

[Lynn Myers, Liberal, Parliamentary Secretary to Solicitor General of Canada]

Madam Speaker, I listened with great interest to the member opposite who in his usual eloquent and studied fashion made some interesting points.

If we look at the facts with respect to this particular issue, and more to the point in terms of Quebec, the Canadian government ensures that Quebec's interests are very much assured in this particular area, and in other areas as well, because of our economic and political clout, and quite frankly because of our reputation around the world.

I point out that I think Quebecers understand the importance of a federal system and how federalism works in the country. I remind the hon. member that in the last 20 years Quebecers' standard of living has risen 30%, as it has in other parts of Canada, such as in Ontario. I also point out that the unemployment rate in Quebec has dropped to 8.5%.

Most recently the CHST transferred $1.5 billion from the federal treasury. It represented 80% of all the money that was given in the country. An additional $429 million will be given over as soon as the ceiling on the equalization payments has been eliminated.

My point is simple, Quebecers understand the benefits of being in this great country called Canada.

I would ask the member a specific question, contrary to his sovereignist kind of protestations. Over the last number of years the softwood lumber industry and the sales to the United States from Quebec have gone from 20% to 25%. That is great news for Quebecers. How does he explain that? If things are so terrible and the Canadian government, as he seems to indicate, cannot do its work right, how can that be?

The hon. member opposite should be congratulating the government and saying what a good job the government, and especially the minister, is doing on this important file. At the end of the day it is good news not only for Quebecers, but for people in British Columbia, Alberta and others as well. It underscores the commitment of the government in this very important area to ensure that all Canadians benefit, especially Quebecers. Sales have gone from 20% to 25%. That is good news, and we should be congratulating everyone involved.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Madam Speaker, if I were asked why Quebec should become a sovereign nation, I would without any hesitation use the softwood lumber issue as an example.

Do people realize that Quebec producers were hit by countervailing rights 100% higher than the price in effect in the U.S.? The hon. member, who is just as naive as he is guileless, rose in this House to say that the federal government stood up for the interests of Quebec.

If there is one area where the federal government neglected Quebec's interests, it has to be the lumber industry. We urge all members of parliament to vote in favour of this motion so that we can go back to full and comprehensive free trade, as we should have done in 1996.

Lastly let me say that the day will soon come when Quebec becomes sovereign.

[Grant McNally, Canadian Alliance, Dewdney—Alouette, BC]

Madam Speaker, obviously the member for Waterloo—Wellington is again using his extremist divisive tactics which is unfortunate. There is agreement among other members of the House, including his own government, on the motion.

What does my colleague see as being the most important issue? How might we be able to move forward together to solve the issue of softwood lumber, which is so important in my riding and across the country?

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Madam Speaker, I will be very brief. The hon. member is a moderate man, with a moderating influence and a balanced approach. He has called for calm. For his call to be heard, a consensus must emerge. That consensus is for all members to support the Bloc motion, even if—

[The Acting Speaker (Ms. Bakopanos)]

I am sorry to interrupt the hon. member, but time has run out. The hon. member for Charlesbourg—Jacques-Cartier.

[Richard Marceau, Bloc, Charlesbourg—Jacques-Cartier, QC]

Madam Speaker, it is of course a bit intimidating to rise just after my colleague from Hochelaga—Maisonneuve who is always so eloquent, funny and lively in his speeches. However, with all the humility that I am known for, I will try to vie in skill with him.

I think that on this file the Bloc Quebecois has once again acted as a catalyst for common sense. For months now the Bloc Quebecois has pushed for a return to a common law between Canada and the United States, this common law being free trade.

The softwood lumber industry is a vital industry for Quebec as a whole. More than 30 000 jobs in Quebec alone are related to the lumber industry.

In 1999, 20,430 people were employed in the sawmill industry and 10,000 in forestry management. The lumber industry injects more than $4 billion each year in Quebec's economy. It is therefore very important.

This important segment of Quebec's industry and economy has been adversely affected by federal government policies.

It is well known that Quebecers strongly support free trade in principle. For that matter, it is very interesting to see the Liberals joining a free trade position, and I am pleased to see that, while Quebec sovereignists supported it long before them. I remember that in 1993 the Liberals were campaigning against free trade, while we were strongly in favour of this politico-economic philosophy.

The Bloc Quebecois, which supports free trade as Quebec does, has seen the federal government set its interests aside to sign an agreement with the Americans. The Parliamentary Secretary to the Solicitor General boasted, saying that Canada stood up for the interests of Quebec and that, thanks to Canada, Quebec's interests were protected. In this case, we can see it is not true.

Quebec producers were subjected to a countervail tariff of 6.51% even if they were not subsidized. Is this what you call standing up for Quebec? Is this a government really concerned by Quebec's interests? I wonder on what planet the Parliamentary Secretary to the Solicitor General lives. The fact is that this government's action has been detrimental to the interests of Quebec. The subsidy rate for Quebec exporters was actually one-tenth of 1%. A countervailing tariff of 6.51% was imposed on the Quebec industry.

Non-subsidized exporters in Quebec bore the brunt of quotas, when in fact they should have been exempted, as was the case in the maritimes for instance. Many rallied to the position of the Bloc Quebecois, among others the Canadian Alliance, which is now supporting us, as does the federal government—and I am glad it finally did, because its position was not clear.

Members know as well as I do that the position of the Minister for International Trade was not clear. On February 22 and 23, there was talk about free trade being a long term goal for Canada and the need for a transition period.

On February 22 the Minister for International Trade said:

Now the matter is how we will live the transition toward free trade.

The 1996 lumber agreement is due to expire in a few days and only a month ago we did not even know what the federal government's position would be. Thanks to the work of the Bloc Quebecois and other organizations, the federal government finally listened and rallied to the common sense, deciding to come back to the common law which the free trade agreement between Canada and United States is.

For once, and this is rare, I cannot but congratulate the federal government for having listened and rallied to the Bloc's position, which is based on common sense, not only on the economic interests of Quebec but also on those of the rest of Canada, and for supporting the Bloc Quebecois motion. This motion will ensure that exporters from Quebec and Canada have access to the large U.S. market without any tariffs or other barriers.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I welcome the opportunity to comment on the remarks of the member opposite on the softwood lumber situation.

I have spent 15 years of my life in the forestry sector and mucking around in countervailing duty problems. First of all, the problem is not Quebec versus B.C. versus Alberta versus the maritime provinces. The problem is that the Americans have a different system. They have mostly private lands. The timber is auctioned. In Canada most of the timber is on crown lands and is subject to stumpage and royalties.

In that relative sense, I can tell hon. members that Quebec is not exactly lily white in terms of the relative standing vis-à-vis other provinces. All provinces in Canada have the same battle. We all have to fight the same common system.

In fact it was in 1996 that the industry came to the Government of Canada and, in a pretty broad consensus, argued very strenuously for a five year quota agreement, a managed trade agreement, because the industry was sick to death of these trade wars. The minister at the time, Roy MacLaren, who was a free trader to whom managed trade was anathema, consented to managed trade because the industry wanted to buy five years of trade peace.

When we look at the situation, especially in the maritimes because the member draws the story out of the maritimes, the maritime provinces were excluded because most of the lands there are private lands, as he well knows, and if Quebec could have been excluded, it would have been. However, there had to be a willing agreement on both sides.

I agree with the hon. member on one point. I applaud the Minister for International Trade. He has been speaking out very strongly in a very unified manner on behalf of the industry across Canada. I am very confident that we will prevail.

I would ask the member opposite, what do you think about the relative positions? If you look at the American system compared to the Canadian system, why should we have to defend our system when they do not have to defend their system in the countervailing duty process?

[Richard Marceau, Bloc, Charlesbourg—Jacques-Cartier, QC]

Madam Speaker, first I want to thank the member opposite for his question. He used the pronoun you, so I assume the question was for you. I will answer it anyway, if only to relieve you from this responsibility and to prevent you from having to take a stance, you who play such a neutral role in the debates of this House.

The member opposite mentioned the fact that most woodlots are privately owned in other provinces, whereas Quebec has a different system where 92% of woodlots are publicly owned.

He said Quebec was not “lily white” on this issue. I assume it means beyond reproach. Perhaps we can rely on an organization that is not from Quebec or from Canada to assess the impact of the public ownership of woodlots in Quebec.

In 1992, the U.S. department of commerce concluded that the method used by Quebec to establish stumpage fees on publicly owned woodlots was equivalent to a subsidy rate of 0.1%, not 1% but 0.1%. I remind members that this rate is 100 times lower than the limit above which a countervailing duty must normally be imposed.

Going back to the previous question, why is it that, if the subsidy rate in Quebec was 0.1%, the federal government negotiated an agreement whereby Quebec exporters were subject to a countervailing duty rate of 6.51%? That is the question.

[Marcel Gagnon, Bloc, Champlain, QC]

Madam Speaker, earlier, some members seemed to find it bizarre that Quebec would sponsor a motion asking the Canadian government to protect us. We were told that this is contrary to our ideology.

Would the member for Charlesbourg—Jacques-Cartier agree that a sovereign or independent Quebec could better defend itself and would not have to ask another government to do so?

[Richard Marceau, Bloc, Charlesbourg—Jacques-Cartier, QC]

Madam Speaker, I know I have very little time. It is unfortunate because I would have liked to dwell on the subject.

Indeed, I do think that in political life, as in day to day life or the life of nations, we are our own best advocates. For example, I never saw Canada ask Washington to represent Canadian interests in the international arena. Of course I would prefer that Quebec be represented by Quebec and not by Ottawa.

[Claude Drouin, Liberal, Beauce, QC]

Madam Speaker, it is a pleasure to add my voice to those of other members who have already spoken to this most crucial issue. As the Minister for International Trade said, the softwood lumber industry is a basic element of the Canadian economy and we must protect it.

The stakes are extremely high. The softwood lumber industry creates thousands of jobs for Canadians. It is the lifeblood of hundreds of communities across Canada. It is one of the main export sectors in Canada and it plays a crucial role in our trade balance. I would also add that in Beauce, my own region, hundreds of jobs depend on this industry which affects a thousand individuals if you include families.

Our softwood lumber exports to the United States represent nearly $11 billion. About a third of the lumber Americans need to build and improve their homes and businesses comes from Canada. There is absolutely no way the United States can meet their needs by themselves, but they still insist that access to their market by Canadians be limited.

What is the cost of this protectionism? American homebuilders suggest that the cost for the consumer is $1,000 for every new house built in the United States. This is a very expensive protection for the American lumber industry.

The softwood lumber trade has been regulated for 5 years by the softwood lumber agreement. This agreement provides for quotas of softwood lumber that can be exported duty free to the United States from British Columbia, Alberta, Ontario, and Quebec. It has bought us five years of relative peace in a long, endless, and costly conflict. The industry endorsed the agreement almost unanimously, but now, it is almost unanimous in its determination to fight for the free access to this crucial market.

The softwood agreement will expire on March 31. If no other agreement is reached, two things will happen almost for sure. First, we will come back to the WTO and NAFTA rules, both of which give us access to the U.S. market. Just as important is the fact that WTO and NAFTA provide us with a rules based system and dispute settlement mechanisms that we will not hesitate to use.

Second, for all intents and purposes, in the U.S., this industry which relies on government assistance will try to have countervailing duties imposed on Canadian softwood lumber exports. From what we hear, the American industry wants to take antidumping measures against Canadian producers.

Such a protectionist approach is unacceptable and, as my hon. colleagues pointed out, it is contrary to our trade agreements. These agreements prohibit the United States from imposing quantitative restrictions or customs duties on Canadian softwood lumber exports unless and until they can demonstrate, through fair enforcement of trade rules, that these exports are made possible because of unfair trade.

The United States must prove that we are subsidizing our industry or that we are dumping softwood lumber on their market; they must prove not only that we subsidize our industry and dump lumber, but that we do so in a way that is prejudicial to American producers.

They have never been able to prove their allegations. In the last 20 years, there have been three investigations on potential countervailing duties and none of them has proven their allegations. That does not deter them.

If the United States make new claims, we will defend our positions, you can be sure of that. The Government of Canada will ensure that our rights under WTO and NAFTA are upheld.

How will we go about it? As my colleagues have mentioned, our government has been proactive. Twice, we have used the WTO dispute settlement process against the United States to help clarify the rules governing new trade measures.

The first case is a challenge of the declared intent of the U.S. to consider our export controls on raw logs as subsidies giving rise to countervailing duties. It is obviously an important issue at a time where we are faced with the possibility of new trade action by the Americans.

We also had consultations at the WTO on a new U.S. legislative provision that is both unacceptable and, in our opinion, contrary to our trade agreements. It relates to countervailing and anti-dumping duties that are not implemented in the appropriate manner. Under this provision, the U.S. government would keep the customs duties already paid, even though the countervailing or anti-dumping duties have been successfully challenged and repealed. This is totally unacceptable.

Finally, as our minister said after his meeting in Washington with the U.S. trade representative, Mr. Zoellick, we are trying to get some clarification about what is called the Byrd amendment. It would allow U.S. customs to distribute the product of countervailing and anti-dumping duties to the very companies in the U.S. that petitioned for those duties. This seems totally unacceptable. Not only is it contrary to United States obligations as a WTO member, but we believe that that cannot be applied to Canada under NAFTA.

The United States should not be allowed to pick which ones of their trade obligations they are willing to respect. The United States have not only signed the trade agreements, they even led the movement for their negotiation. Therefore the time has come for the United States to abide by them.

The Government of Canada is firmly committed to having the rights of Canada under those international trade agreements respected and upheld. We deeply believe in a rules based trade system. That is why we took advantage of the mechanisms provided in those agreements to make sure that U.S. protectionist measures do not prevail.

We respect our obligations and we expect the United States to do the same.

If we are faced with an inquiry about the potential imposition of countervailing duties, we will fight it and we will win. We are ready. The provinces are ready. The industry in Canada is ready, probably more than ever. We have allies more powerful than ever before, in the forms of groups of consumers and retailers and of associations of home builders in the United States.

We continue to ask insistently that impartial envoys from Canada and the United States be appointed to explore the issue from all sides, to consult with all the stakeholders and to bring forward non-binding proposals to resolve this longstanding dispute. We will examine every possible option for the resolution of this dispute so that our softwood lumber industry can resume the activity it does so well.

Therefore I am pleased to indicate my support for this motion and our firm intention of pursuing Canada's goal of free trade in softwood lumber across Canada and particularly in Quebec and in my riding of Beauce.

[Greg Thompson, Progressive Conservative, New Brunswick Southwest, NB]

Madam Speaker, there is something that I want to bring to the attention of the House, especially the government, regarding the softwood lumber agreement.

The Atlantic provinces are subject to what is called the Maritime accord which was signed in 1996. This accord exempts Atlantic Canada from the softwood lumber agreement, and there is a reason for that. I sometimes get the feeling that that is lost in the halls of government. It ignores the fact that 75% of all lumber produced in Atlantic Canada comes from private land. That is why it was excluded.

In addition to that, stumpage fees in Atlantic Canada are much higher than they are in other parts of the country. That is why we have this special recognition or exemption. That is why we were included in the Maritime accord, signed in 1996.

The concern that we have on this side of the House is that the government, in its negotiations with the United States, has ignored this very fact. What we have is an agreement that might come about, or penalties that might be imposed on Canada which might be a better way to express it, that are going to punish Atlantic Canada. It is going to punish us despite the fact that we have managed our forests well and have what we call market prices for our stumpage. We have never been part of the problem. If we want to look at that, we are part of the solution.

Is the hon. member aware of recognition of the special status of Atlantic Canada in regard to the Maritime accord signed in 1996, and has he made that case to his cabinet colleague who is carrying this file for the Government of Canada? In addition to that, going back to 1982, we have always been exempted from the lumber agreement, the SLA.

[Claude Drouin, Liberal, Beauce, QC]

Madam Speaker, I can assure my colleague from the opposition that I was indeed aware of the fact that the Atlantic provinces were excluded from the agreement. Four provinces were party to this agreement.

The Government of Canada represents all provinces, and I am sure our Minister for International Trade and our government will continue in that direction.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I listened closely to the comments from my colleague for Beauce. I know they have a very active and very important forest products sector in that area. Of course, we all know what the issue is. The issue is market share. Every time we take more than 30% of the softwood lumber market share in the United States, it comes back, it reinvents the rules and changes them to suit its needs.

I find it quite astounding that we have a system of countervail where we have to defend our system but we cannot attack the American system. We know there are subsidies in the U.S. system. They take place at the state and local government levels, whether it is property or sales tax abatements, industrial land or co-generation. Because of the process in the U.S. system, we cannot attack its system.

I think there is a much better method which is called net subsidies. The U.S. could only launch a countervail if there was a net over a de minimis, a net subsidy difference that was important; net its subsidies against ours. However, why should we have to defend our industry and our process because it is different from its? We cannot attack the U.S. system? The Americans are now alleging that lumber from crown land is moving through the maritimes into the U.S. market. That is equally false as well.

Could my colleague tell us why we cannot come up with a better system where we could challenge and attack American subsidies? Why do we have to defend our own system? Is that not wrong?

[Claude Drouin, Liberal, Beauce, QC]

Madam Speaker, if I understand the question, of course we have to defend our position. However, we can also launch challenges, to show our determination and to ensure that we are treated fairly and that NAFTA and the WTO agreement are complied with.

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

Madam Speaker, the debate today centres on what we perceive to be the softwood lumber industry but it is really a larger debate. Today what is being challenged by the expiration of the agreement on March 31 of this year really affects the forest industry in Canada.

Needless to say, and I am sure it has been said here today, the forestry industry is Canada's largest single industry. It employs more Canadians than any other industry. It has more communities directly involved in the forestry business than any other community. It adds about $25 billion to $27 billion a year to our balance of payments.

We are not talking exclusively about the softwood lumber industry. We are talking today about Canada's largest single industry of which softwood lumber is about half of the forestry industry.

When we talk about that and why the Americans are trying to influence our market penetration on this business, what we have to do is understand what happens in the forestry business when we harvest a tree and maximize its utilization. I want to explain why it is so important to the total concept of what the forestry industry is all about. It is not exclusively making 2x4, 2x6 and 2x8 lumber.

When we harvest a tree, the bark is stripped off and it is put through the mill. Out of the mill we will get 2x4 and 2x6 lumber, whatever that tree will provide. When that process is over, the residue of that tree is then turned into chips. Those chips are then shipped to the paper plants and used to make the fibre for our wood products, our crafts and so on that are so necessary for the total forestry business.

The bark that we stripped off that tree is presently being used as biomass to generate the very power that is running and operating these mills throughout Canada. That includes eastern Canada, the province of Quebec, Ontario and western Canada. We are not dealing exclusively with regions, rather with the productivity throughout Canada as it comes out of the forestry industry.

It has become our largest industry. On top of that, it is a sustainable development. By the very fact that we are utilizing everything on that tree, means we are being prudent in the use of a resource. Given the changes in our forestry practices over the last seven to eight years, Canada can be looked upon as the leading country in operating its sustainable forests and utilizing its natural resources to their maximum potential.

Let us stop beating around the bush in finding out just what we are trying to accomplish. What the Americans are trying to accomplish in the debate, although they use the softwood lumber as a ploy, is the release of the raw logs that we are collecting and harvesting in Canada. They want the raw logs shipped to the United States so they can use their manufacturing process by using our basic natural resource.

They want to eliminate our ability, proven over the last five years, to value add to the products of our forestry industry. Just take into account the rougher headed lumber that we were shipping to the United States. It was a value added product. Take into account the drill studs that we were sending to the United States. Those are all value added products that the Americans put an embargo on because they did not want them included in the 14.7 billion board feet quota system, that was allowed under the agreement. That is what they are trying to do.

The United States producers are using the softwood lumber debate as an economic advantage. In Canada, and to the credit of all of the softwood lumber industries in Canada from coast to coast, a good part of the profits in the last several years have been applied to the new technology that is working so well in our mills. A lot of the profits have been reinvested in plants. As a result, we have perhaps the best technology in softwood lumber production in the whole world. I could take anyone to a mill in Nakina, in the furthermost regions of northern Ontario, where the production methods are so sophisticated that one would not believe the amount of production that can come out of that one mill because of the advanced technology employed in that particular mill.

What the Americans have failed to do during this period of time in this particular industry, which they are complaining is being abused and injured, is that they have failed to take their resources and apply them to their businesses in order to produce more and in order to better this type of business. What they are trying to do is harm the Canadian industry and take away its competitive advantage, because in their industry they have failed to keep up with the rapid progress the industry needs.

The end result is that the Americans want to utilize our trade laws, a threat of a countervail and the threat of the anti-dumping legislation in order to enhance the position of their industry in the marketplace.

Our industry in Canada today takes up about 33% of the United States industry. That is because of the restriction to the 14.7 billion board feet. Let me explain why we get such a large section of the United States market. We get 33% of it. We could get a lot more if we had a free trade agreement with the United States without the threat of the countervail and without the threat of the anti-dumping.

First and foremost, Canadian lumber products and forestry products are the best in the world. There is no question that the softwood lumber we produce is one of the best products in the world. A little known fact is that when an average sized house in the United States is built and the carpenters insist on using Canadian lumber, they can take between seven and ten days off the production time of that house because of the sturdiness, quality and lack of water content in Canadian lumber. Our lumber is rigid, is treated properly and is more competitive than their lumber. It is better than American lumber and it sells on the floor of the hardware store at the same price.

They cannot compete with that today. As a result, they are using the trade measures that we have in Canada in order to harm Canada's largest single business.

That is the problem, but what should we be doing about it? Let me offer a couple of suggestions. In Canada, with the market conditions we have seen in the last several months, and with the new technology, e-commerce, we have seen what has happened in the marketplace in the last weeks. Every time this happens, Canadians and the Canadian economy have to revert to where we began. We are a resource based industry. What are our natural resources? They include natural gas, and its shipment to wherever we can. They include the production of crude oil and its shipment to countries that want to buy crude oil. Our natural resources include all the products that we mine from the ground. Our natural resources also include fresh water, which we have in abundance, particularly in the northern parts of our country.

The point I want to make is that these are the natural resources of Canada. At the bargaining table, whether it is with the United States or any other country, we cannot isolate those areas that are natural resources at the expense of every other national resource.

When we deal with our friends in the United States, we deal in natural resources, which include mining, forestry, natural gas, oil and the production of electricity.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Madam Speaker, I listened to the member for Thunder Bay—Superior North with some interest, because obviously he has taken some time on this and has a background in and knowledge of the subject.

Softwood lumber is one resource that Canada has. I appreciate the fact that he brought others forward, but I would like to focus my question on the softwood lumber debate.

Perhaps because of lack of time, there were a couple of factors that the hon. member did not get a chance to bring up. One is the fact that lumber prices have fallen, within the last year especially. When the market gets expensive and the market is demanding lumber products, we can ship across the border with a fair amount of impunity because the Americans want our raw materials.

However, what also happens when the price of lumber is higher is that there are a lot of substitutions in the construction industry. More concrete is used and a lot more steel studs are used. A lot more timber or softwood lumber replacements come into the construction field at such a time.

The issue, I believe, and the issue I would like the member to reply to, is the very motion that is before us, that we want free trade in softwood lumber. As I mentioned earlier in the debate today, we now have free trade in six of ten provinces in Canada. We have a softwood lumber agreement that covers up to 14.27 billion cubic feet of lumber coming out of B.C., Alberta, Ontario and Quebec. The issue is that we need the government not to include all of Canada in one agreement.

We need to support those four provinces in getting free trade in softwood lumber, which we certainly will do, but in regard to the other provinces that have free trade in lumber now, we need to maintain it and assure those provinces that they will not be lumped in on countervail, that they will not be lumped in on any duty coming out of the United States.

I am sure the hon. member understands that and would like to comment on it.