Madam Speaker, I will respond to the throne speech as the international trade critic for the Alliance Party. I will start by saying that the government just does not get it.
In terms of our international trade relationships under the government, our relations with our major trading partner, the partner for 85% of our trade, and that is our trade with the U.S., has gone backwards.
When we are trading with the United States I think we have to recognize that it is the most self-sufficient and developed nation in the world. It can and does focus very much on what kind of imports it is importing because it can afford to do that. It also has the strongest domestic trade legislation in the developed world.
It is also true that the World Trade Organization and NAFTA rules are strengthening and that has become a more effective way for a nation such as Canada to offset the strong domestic trade legislation of our trading partners. This is largely a consequence of the fact that the U.S. itself has found WTO and NAFTA legal routes a very effective way to go as well.
Canada must remain a reliable partner that pulls above our weight in terms of the international community. Under the present government, we have seen nine years of neglect. Canada pulls below its weight when it comes to our armed forces and that affects our diplomacy, our trade relationships and many other things in a negative way.
I would like to spend some time talking about the softwood lumber dispute which is the major trade dispute between Canada and the U.S. I also want to make reference to the steel dispute. This is an area where the U.S. has made a very good decision in exempting Canada from tariffs on steel. Here we have our very own international trade panel recommending that Canada put tariffs on U.S. steel entering Canada. Our cabinet has to make a decision. I do not understand why this has been so drawn out when it makes so much sense to just reverse that decision.
When we heard the throne speech, the major and most significant trade dispute in Canadian jurisdiction, remembering that Canada is the most dependent on trade of any developed nation, was not given a mention beyond the fact that the government would continue to behave as it has been behaving in terms of the softwood dispute. There was no mention of a financial assistance package in the throne speech in order to maintain Canadian resolve for our workforce in the forest industry, Canadian resolve for the companies and resolve within the broaden communities involved so heavily, the 200 and some forest dependent communities throughout Canada.
Finally, last Tuesday I was able to extract a promise from the trade minister that there would be a financial assistance package forthcoming. That financial assistance package was announced and it fails on all fronts to address the mission statement, which is to ensure Canadian resolve and morale is bolstered and supported so we can maintain a unified position until we resolve the softwood dispute with the U.S., which we will surely win with all our legal challenges because we are on the right side and all legal advice says so.
The current federal government inaction in our softwood lumber dispute with the U.S. is making Canada vulnerable to U.S. divide and conquer tactics. The minister's failure to provide leadership at the national level has led to the situation where we now have B.C., Quebec and other provinces holding direct discussions with the U.S. commerce department. Canada is in jeopardy of losing in two ways. We could lose the legal underpinning of our federally organized WTO and NAFTA challenges if one province makes a deal and we could lose like we did back in 1996 when we agreed to a deal that would turn out to be continually subverted by U.S. lumber coalition special interests and by the U.S. Congress.
All of this might make some sense if Canada were losing on the legal front or if Canada's forest policies and practices were unfair, but of course we are winning at the WTO and we will win at NAFTA. That is exactly why U.S. Department of Commerce Undersecretary Aldonas is currently attempting to lead softwood discussions in a different direction.
For 20 years Canada and the U.S. have fought over softwood. Some U.S. producers have lobbied the U.S. government for trade actions against Canadian producers, alleging that the Canadian product either harms their industry or is heavily subsidized through artificially low stumpage rates on publicly held forest lands.
As a result of all of this, the most recent trade actions by the U.S. lumber coalition have now provided a textbook example of the law of unintended consequences. Though the Canadian lumber industry has suffered greatly since the imposition of countervail and anti-dumping tariffs just this past May, the U.S. industry has not benefited. The price of lumber has actually gone down in the U.S. because of two factors. Some companies have increased production in order to reduce their unit costs to ensure that they beat the anti-dumping tariff formula. In addition, exports to the U.S. from Scandinavian and other sources have increased sharply.
Consequent to these trade actions, Canada launched multiple appeals at WTO and NAFTA . In July the WTO preliminary finding was that the U.S. had misrepresented and miscalculated its finding of Canadian subsidies. This was no surprise to us. I conclude that the U.S. Department of Commerce has concluded that Canada is likely to win subsequent decisions and consequently is trying to undermine these downstream decisions by co-opting the provinces into endorsing another path.
The U.S. commerce department will prepare forest stumpage policy bulletins for the provinces this November, with the understanding that the provinces will be able to somehow show compliance and have their tariff rates reduced. What a recipe for disaster it would be to have a Canadian consensus broken in that way. The U.S. commerce department would then be able to tell NAFTA and WTO panels next spring that there is no need for the U.S. to comply with legal rulings because they have a separate arrangement endorsed by the provinces.
While this U.S. strategy is playing out, guess what, the Canadian trade minister with responsibility for trade issues is missing in inaction and his department is sending only observers to the U.S. commerce department meetings with the provinces. What is the time line for all of this? Most optimistically, the commerce undersecretary's proposals are for a year and a half. This is not significantly different from what it would take us to pursue our legal options or challenges.
To conclude, the federal government should lead all softwood discussions and negotiations. It needs to immediately implement not what was announced this week but an effective forestry assistance program and it needs to relentlessly pursue our legal options to their ultimate conclusion. Canada requires free trade in order to secure the future for our softwood lumber and value added industries, for our workers, for our communities and for our companies.