Mr. Speaker, I am pleased to rise today to speak on the matter of the upcoming summit of the Americas in Quebec City on April 20 of this year. I will address my remarks to the issue of trade and, more specifically, trade in softwood lumber between the U.S.A. and Canada.
It would seem the Liberal government is not taking the matter seriously. We on the Alliance benches want to see the current agreement end and free trade instituted, as was supposed to be the case when NAFTA was signed. We do not feel enough is being done to ensure that.
Trade in softwood lumber will revert to NAFTA rules in the absence of a softwood lumber agreement. On June 7, 2000 the Canadian Alliance posted on the Internet its position to return to free trade in lumber. During the November election we could not smoke out the Liberals on their free trade position, and only in dribs and drabs since January has it been clarified somewhat.
After signing a misguided agreement in 1996 that placed all kinds of restrictions on Canadian lumber producers, Canada is now staring down the barrel of the U.S. trade gun. The Liberal government let down Canadian lumber producers by not staking out its ground a long time ago in favour of free trade in lumber. One wonders what it has been up to.
I will give some background as to why the matter is important to me and to my riding of Skeena, British Columbia. B.C. accounts for more than 50% of Canada's softwood lumber exports to the U.S.A. Those exports have an approximate value of more than $5 billion annually. With the end of the Canada-U.S.A. softwood lumber agreement and no free trade agreement in place, my riding, as well as many others in B.C., Alberta, Ontario and Quebec, will suffer.
In my riding the major producer, Skeena Cellulose Inc., has no U.S. quota as it has focused their exports on the Asian market. However now that those markets have gone cold, SCI is looking to the U.S. as a potential market. The problem is that the softwood lumber agreement is based on trade history. What one has shipped into the U.S. in the past determines what one is allowed to ship now. SCI, a major producer of lumber, has no history of shipping to the U.S. The potential for shutdowns and layoffs is imminent.
Over the past five years, the four provinces that signed the 1996 agreement have struggled to meet and not exceed their quota to the U.S. while the six exempt provinces have seen an increase in market share of up to 130%. B.C. alone has seen its share reduced by 20%. Quebec's share has seen a modest increase of 2.8%. The four covered provinces combined have seen a total reduction in U.S. market share of up to 14.5%.
The government needs to set things straight with the U.S.A. before the argument costs Canada billions in countervailing and anti-dumping duties. The ministers on the government benches do not even have their stories straight. The Minister of Industry has been quoted as saying that a renewal of the existing agreement will be part of the negotiations, while the Minister for International Trade said there would be no renewal at all. Which is it?
How can Canadian lumber producers have any faith in what the government is willing to do for them when it does not know what it is doing? It does not instil a great deal of faith in my heart.
Meanwhile, 50 U.S. senators from both sides of the political spectrum have sent a letter to the president saying they need action to keep Canada from flooding lumber into the United States. What course of action will they be taking? According to the letter, they are calling for Ottawa to voluntarily impose a 20% export tax on Canadian lumber. That is a measure we had in the 1980s. Are we so far advanced that we must go back in time?
The U.S. is also looking into launching an anti-dumping and subsidy investigation under a rarely used trade law to make sure Canada pays when the current agreement is over at the end of the month. The critical circumstance law is used only when a flood of cheap imports threatens to enter the country. Under normal U.S. trade laws, import duties cannot be imposed for at least 90 days from the end of a trade agreement. Should the investigation find in favour of the subsidy claim by the U.S.A., the critical circumstance law will then allow the U.S. government to impose punitive duties retroactively for those 90 days.
What does that mean? It means that even though we will have some form of free trade for three months, when that time is up Canadian producers will be hit with duties for that month as well as for the months prior that were supposed to be open to free trade.
To make matters worse, Canadian producers have no idea what the duty amount may be. It could be anywhere from 15% to 45%. That could cost Canadian producers tens of millions of dollars. According to the Byrd Amendment enacted last fall, that would be paid to United States lumber producers. Not only would Canadian producers be unable to ship lumber into the U.S. without paying heavy duties, the payments would go to their U.S. competitors.
There is a subsidy there, Mr. Speaker, but it is too bad it is the Canadian producers subsidizing the U.S. producers. The real victims are American consumers and Canadian jobs and the recipient is a noisy U.S. lumber coalition. This could turn into a national crisis, but we would never know that by the way the government is handling the situation. Is it prepared to meet with its U.S. counterparts during this summit to ensure free trade in softwood lumber? Or, when the ministers meet later on in Buenos Aires to discuss the new free trade area of the Americas, the government should be prepared to ensure free trade in softwood lumber with the U.S.
At the moment President Bush is prepared to fast track the approval of the FTAA. This is the time for the Liberal government to take control and look out for the interests of the Canadian lumber producers and their tens of thousands of employees.
If under NAFTA the Canadian government cannot guarantee that the softwood lumber industry will ever have free trade with the U.S., then how can we be certain that, with the FTAA, when a U.S. industry feels threatened by a counterpart from Canada it will not go into protectionist mode like it has done with our softwood lumber?
Canada is just one of the major industrialized countries that is dependent upon trade. The trade sector accounts for one out of every three jobs in Canada. This nation has been a strong advocate of the FTAA as an opportunity to promote regional prosperity, increased business activity and jobs in Canada. It would stand to reason that part of this opportunity would come from the lumber industry, yet it would seem that the Canadian government would rather see trade centre on what is termed the new economy, the high tech industries. Do not get me wrong. There is always a need to improve our technology. However, should it be done at the expense of the other more traditional industries? No.
Every industry in Canada should be afforded the same opportunity to grow and prosper. It would be interesting to see, for example, if there had been a five year trade agreement with the U.S. in fibre optics that was to run out in three days whether the government would be sitting around on its hands or working toward a resolution of that situation to keep the industry from losing millions of dollars at the hands of their American counterparts. Would the government not try to work out a free trade agreement in that industry? Why then does it leave the softwood lumber industry to fend for itself when it comes to trade interests?
We get the strange feeling that the government does not realize that the country, as it grows, depends on these industries as much, if not more, than it did in its fledgling days. These so-called old economy industries are what drive the high tech industry into research and development. They are one of the biggest consumers of high tech advancements. Why would the government not fight for free trade in the lumber industry?
One thing this country does need is consensus. We need to join together as a country and face the American lumber industry as a whole, with all provinces in agreement, not the west versus the east as we are seeing at the moment.
We are all in this for the same reason. We must see that we do indeed have allies in the U.S., such as the group called American Consumers for Affordable Homes, which has much in common with the Canadian Free Trade Lumber Council. This group also enjoys support from 49 members of the House of Representatives, members who introduced a resolution at the beginning of March to simply allow the softwood lumber agreement to lapse. Why would they do that? It is because the homebuilders' coalition has said that restrictions placed on Canadian lumber add approximately $1,000 U.S. to the end cost of each new home built in the United States.
Former U.S. president Jimmy Carter came out in support of Canadian lumber in an editorial on March 24. He calls for an end to the current softwood lumber agreement and a permanent free trade agreement to be used to give both countries equal footing in the softwood lumber market. If members of the House of Representatives, U.S. citizens and even former presidents are willing to fight their own American government for Canadian lumber, why then will our government not?
We need action on this issue now, not later. I am calling on the Liberal Government of Canada to take a stand and save the Canadian lumber industry. Do not leave Canadian lumber producers out in the cold.