House of Commons Hansard #156 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was americans.


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3:50 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I am glad to take part in the debate today. This is far from a new issue in the House of Commons or in the U.S. congress for that matter. The problem with free trade in lumber between Canada and the United States goes back some 25 years.

I thank my colleague from Vancouver Island North for raising this important issue for debate in the House. It is very timely because the Prime Minister is in Washington and the deadline of March 21 for the final determination on duties is looming.

Mr. Speaker, I am splitting my time with the member for Surrey Central.

There is a 25 year history to this issue and most of it has not been very good from Canada's point of view. Although we have won all the disputes in the past, we are continually being harassed by the United States on this issue and we do not have free trade in lumber. There have been many attempts to put Canada on the defensive. Canada's softwood lumber industry is far more competitive than that in the United States. It is simply a matter of protectionism by the U.S. congress, the U.S. department of commerce and the U.S. softwood lumber industry which is not as competitive as our Canadian industry and therefore tries to protect its interests.

It goes against the whole spirit of the free trade agreement between Canada and the United States which was negotiated in 1987-88. The trade law has put us in this position, the discussions which took place in 1988 in the softwood lumber and the free trade negotiations. There was an attempt at that time to do away with trade law, countervail and anti-dumping. The United States and Canada put many things on the table. Eventually we came to an agreement on the free trade agreement but there were a number of areas that both sides wanted to protect.

The U.S. did not want to give up its trade law. In fact the U.S. kept it. One of the reasons was that Canada was also trying to defend certain areas that it did not want to give up, such as the cultural industries, for example the magazine industry, and the textile industry. Canada did not want to give up the ability to subsidize other areas such as supply management in agriculture. There was some resistance on both sides to complete the whole process of free trade.

We have not had free trade. In fact, we have many integrated industries which have become more integrated with the United States some 15 years after the free trade agreement. There is not as much need or will in the United States to protect its trade law.

A panel was struck at that time to study whether there was a need in many areas for trade law between Canada and the United States. Unfortunately, the federal government dropped the ball. Those negotiations broke down in 1994 and never were completed as was intended. Had they been completed perhaps we would not be in the situation we are in today of having to defend an industry that we believe is right and is not being subsidized by the Canadian government. Because the Liberals did not continue to do their homework, that whole area of countervail and anti-dumping was dropped in 1994.

This is a huge problem in my riding in northern Alberta. A lot of very efficient mills are producing softwood lumber and exporting it to the United States. If we had a true free trade agreement, if we had the access we think we should have, there would not be a problem because lumber is manufactured cheaper in Canada and we are very competitive. Because we still have these barriers to trade, it is hurting people in my riding to a great extent. Their jobs are based on the softwood lumber industry and they manufacture and produce a huge amount of it. There will be future layoffs.

The minister says that we have to be all loving in here today and there is an all party agreement. I appreciate that but I have to point out nonetheless that the Liberal government dropped the ball. It let the working group between Canada and the United States on trade law drop.

I was there. I was the trade critic for our party for five years, from 1993-99. It was a different minister at the time, but I was there when the government signed the softwood lumber agreement with the United States. Many of us, including myself, said it was a huge mistake.

We are getting something less than we are entitled to under the free trade agreement. Why would we cave in and accept limitations on the amount of product we are putting into the United States? Others have pointed out that it probably cost our Canadian industry between $6 billion and $8 billion a year in lost opportunities.

Some claims were made by industry officials especially from some of the big corporations from British Columbia. They said they could not use the World Trade Organization because it would be a five year process and no one would know what would happen afterward.

The minister of the day did not challenge those claims. He did not say that the World Trade Organization was different from the original GATT. He did not say that improvements had been made. From the time this thing started until it concluded was probably more like two years. We know there are some problems with that agreement as well. Ultimately that is where the dispute has to end up. There has to be a clear decision. The issue has to be taken out of the hands of the two combatants, Canada and the United States.

Some 150 member countries signed on at the World Trade Organization, including Canada and the United States. I would welcome a panel at the World Trade Organization to hear this issue.

Canada is right. We have a different system than that in the United States, but that does not mean it is wrong and it does not mean we are subsidizing our industry. If the panel found that we were subsidizing our industry and agreed with the United States, we would have to change our domestic policy. This has happened in many other areas. I would submit that the United States is finding that it is actually winning more cases at the World Trade Organization and that this vehicle is not as suspect as it used to be.

There are still some problems. We do not know what will happen with the duties being charged to our industry in the interim, which may be up to two years. I submit that might be a better route to go than a poor agreement that we may be forced to sign in a negotiated sense.

I continually hold out the hope that things are going to improve and that the United States will come to its senses. I guess I am from Missouri. I want to see it happen. Although the minister has said that there is a good chance of a negotiated settlement, I am concerned it will not be a good settlement for Canada.

The Government of Canada should put the same kind of will and resources into protecting the softwood lumber industry as it does for the aerospace industry and as it does for Bombardier when it takes EDC's guarantees and helps it. The aerospace industry gets a lot of attention, but when it comes to supporting the softwood lumber industry, the government should put more resources into helping it get a final determination.

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3:55 p.m.


Pierre Pettigrew Liberal Papineau—Saint-Denis, QC

That is very unfair. That is unfair and wrong.

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3:55 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I hear the minister talking. Maybe he would show some respect because I did not do it when he was talking.

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3:55 p.m.


Pierre Pettigrew Liberal Papineau—Saint-Denis, QC

Show respect and stop doing divisive politics or regionalism. I am sorry, but I have had enough of that.

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4 p.m.

The Deputy Speaker

Order. I hope the hon. member for Peace River will be able to finish his intervention and then we will get to questions and comments and other members may choose to engage the hon. member for Peace River.

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4 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I suspect I have hit a nerve over there.

There seems to be a lot more attention paid to the aerospace industry and Bombardier than there is to the softwood lumber file. Perhaps we can come to an agreement in Washington.

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4 p.m.


Pierre Pettigrew Liberal Papineau—Saint-Denis, QC

You hate Quebec.

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4 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Please, Mr. Speaker, would you ask the minister to show some respect.

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4 p.m.

The Deputy Speaker

Only one member can have the floor at a time. Hopefully members will co-operate with the Chair and allow the member to have his say. We will have questions and comments and if other members want to seek the floor, the Chair will be quite willing to recognize them at the appropriate time.

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4 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I hope Hansard caught the comment from the minister. It was not very respectful I would say.

I hope that this issue can come to an appropriate resolution in negotiations, but I am not convinced it will happen. It would have helped quite a bit if the Prime Minister and our ambassador at the time who happened to be the Prime Minister's nephew had shown better judgment during the U.S. elections when they suggested they supported Al Gore and wanted him to be president of the United States. I suspect they burned some bridges in terms of goodwill and that has not helped the matter any.

There are some opportunities. We may even want to go to an expanded free trade agreement with the United States. The government had the opportunity for a five year review of NAFTA. The government did not choose to expand NAFTA. We have the opportunity to tell the United States that we need a third round of negotiations and expand this further with more integration and perhaps it could give up on trade law which is hurting our industry so much.

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4:05 p.m.

London—Fanshawe Ontario


Pat O'Brien LiberalParliamentary Secretary to the Minister for International Trade

Mr. Speaker, I listened with a great deal of sadness to the member's comments. Frankly, I do not know how my colleague, the hon. Minister for International Trade, was able to restrain himself so well in the face of code words, of the pettiest kind of politics of division, playing region against region.

It has been insinuated repeatedly in the House by the member that if only we had a Minister for International Trade and a Prime Minister who were not francophones from Quebec, that then they would care and act on behalf of the west.

It is the most petty, divisive, destructive, and regional kind of politics that we can see in the House. We saw it earlier from his former leader and frankly, I hope he is back as leader because with those kinds of attitudes he will never win government in this country. We certainly hope not and would not imagine that he could win government with those kinds of petty comments and they have all been backed up by this member. It is just terrible that in the House we have to be subjected to that kind of nonsense.

Can the hon. member not rise above that kind of petty nonsense and realize that one can be a proud francophone minister and Prime Minister and still stand up as both men do for this country from coast to coast to coast? Can he not rise above it and realize that?

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4:05 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I am not sure if that deserves a comment or not. I will let Hansard show what I said in the House and what the parliamentary secretary said and Canadians will be the judge.

Softwood lumber is an issue that affects all of Canada. My understanding is that Ontario, Quebec, Manitoba, Saskatchewan and even northern Saskatchewan, B.C. and Alberta are part of the softwood lumber agreement that failed and now are subject to either free trade in lumber or more harassment from the United States. The maritimes have a different situation. Part of it has to do with their private woodlots there.

Perhaps Canada has to make some change in its forest management system. Provincial governments are probably prepared to do that.

Forest companies have tremendous investments in their forest management agreements. They have investments in roads. That does not happen in the United States. Under the system in the United States companies have private wood and then the government pays for the infrastructure, so they have a different system than we do. Nonetheless on balance it is about the same.

If we were to change our forest management system to a private system under bid or auction every few years those companies that make investments in Canada would be lost under any new agreement. Canfor is a good example of that in my riding. It makes huge investments in roads and electrical services in the forest area.

I am not sure where the parliamentary secretary is coming from but it sounds like a very defensive sort of mood that he is in. I maintain that there are forests in Quebec, Ontario and all across the country. Those same people are concerned that the government may cave in to the U.S. again. It has done it many times before.

One thing has changed since we were successful in winning disputes under the NAFTA panel. A few years ago the United States changed its domestic legislation. It would be difficult for Canada to win a case under NAFTA. That is not to say that something new cannot be arranged, and that is what we are all hoping for.

I am suggesting that forward thinking people should move beyond the current NAFTA and think about negotiating new terms. Conditions have changed. Maybe the things Canada was protecting in the past do not need to be protected any more. Maybe the United States can find that its domestic trade law does not serve it as well as it thinks and that the new arrangements at the World Trade Organization would be better.

I am suggesting that terms are probably there for an advancement of the free trade agreement and progressive thinking governments should be thinking along those lines instead of going into the defensive shell that seems to be the case today.

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4:10 p.m.

Canadian Alliance

Gurmant Grewal Canadian Alliance Surrey Central, BC

Mr. Speaker, it is my pleasure to rise in the House on behalf of the people of Surrey Central and British Columbians in general to take part in the debate on the official opposition's motion regarding softwood lumber.

This is a very important issue in various communities, particularly in British Columbia, where thousands of jobs have been lost, businesses have been crumbling and communities have been hurting because of mismanagement of this issue by our federal government.

Today the Canadian Alliance is using its supply day for the important issue of softwood lumber. It seems to me that all parties in the House are supporting it. It is due to the ineffective, weak and submissive position of the Liberal government that led us into this chaotic situation. The hon. member for Vancouver Island North, who is the international trade critic for the Canadian Alliance and the former international trade critic, the hon. member for Peace River, who has just spoken on this issue, have highlighted some of the weaknesses in our trade policy. I would like to spend some time looking into the background of this issue.

In 1987 John Turner, then leader of the official opposition, said that Prime Minister Brian Mulroney had abandoned his federal leadership responsibilities by proposing higher prices for softwood lumber exports to the United States. The Liberals also said that in offering a 15% price hike as a substitute for a new American tariff, Mulroney sacrificed the national interest to regional concerns.

Back then Turner accused Mulroney of selling out the national interest which demanded that Canada resist the American duty through an uncompromising legal and diplomatic fight. When in opposition the Liberals called on the government to have the matter decided through the forerunner of the WTO, the GATT, to find a solution rather than dealing bilaterally with the Americans who were intent on imposing a hefty duty on softwood lumber. This was true when the Liberals were in opposition. Why is it not true now when they are in government?

Softwood lumber agreements were signed in 1986 and 1991 but when the Liberals came into power they signed the agreement in 1996. In a massive flip-flop Canada signed a softwood lumber agreement in which it agreed to cap Canadian shipments to buy some peace with the Americans. The peace was not to last or we would not be debating this issue here today.

They have been abetted in this by a Liberal government that failed to intervene earlier in the process before the 1996-2001 period when the softwood lumber agreement expired.

Turner called it the greatest sell out in the history of negotiations with the U.S. Today it seems not to be free trade but a managed trade dominated by the bigger elephant. It seems like a veritable capitulation by the Canadian government to pressure from the United States lumber interests.

What is at stake is our sovereignty and ability to create our own resource policies in our country. If the policies of the government are not working we should probably look into reviewing our international trade policies. Unlike the government, the Americans know they hold a stronger hand in any bilateral trade negotiations. Why? Because 87% of our exports are destined for their country. We have the largest bilateral trade with the Americans. Canada supplies about one-third of the softwood lumber used in the United States.

They take advantage of our trade, economic situation and dependency on them. They know that the Canadian government will not be doing anything to jeopardize all this trade by playing hardball with softwood or other industries. Like the Canadian Alliance they also know that the Canadian government is a soft touch when it comes to negotiations.

I was talking to one American senator who was surprised at how Canadians were negotiating with the U.S. He was talking to me in confidence. He said that when Canadians come to the negotiating table they are not well-prepared. When Americans are sitting at the table they are determined to win the negotiations whereas their Canadian counterparts are not fully prepared. They do not do their homework properly to prepare for negotiations whether it is on fisheries, softwood lumber or any other industry.

The motivation of the Americans, driven by U.S. lumber interests, is to keep as much Canadian timber out of their market as possible. The only motivation behind the measures being suggested by the Americans is to drive up the price of Canadian softwood lumber relative to U.S. timber to reduce its supply in the U.S. market. This is a demand and supply situation. This is true whether it takes the form of reduced stumpage fees or countervailing duties.

Part of the conflict arises from the Bush administration's backing of the U.S. forest industry's bid to hit Canadian lumber with billions of dollars in duties. Canadian exports south of the border are charged a 19.3% countervailing duty, a tax applied on imports found to be unfairly subsidized, that the American government imposed on Canadian exporters earlier this year. Then there is the anti-dumping duty of 12.57% introduced in October 2001. Dumping is a term used to describe the sale of goods to another country at less than what it costs to produce them.

The two duties were applied separately in the period since the expiration of the softwood lumber agreement between the Canadian and U.S. governments which governed exports from April 1, 1996 to March 31, 2001. Under the agreement, the U.S. guaranteed market access to Canadian exporters for five years and permitted the import of 14.7 billion board feet per year of lumber without fees. It applied to $10 billion worth of lumber manufactured in British Columbia, Alberta, Ontario and Quebec.

About two years ago, along with the member for Vancouver Island North, I organized some meetings in my constituency and neighbouring constituencies. We met with lumber mill owners and people who were working in the industry, as well as the remanufacturing industry of the wood. I was surprised at how those people felt. They felt that the government was not doing the right thing and they warned the government then. The international trade critic from the official opposition of Canada has risen from his seat time and time again and raised this issue but the Liberals did not take any action.

When the U.S. coalition for fair lumber imports commenced the court challenge against Canada's lumber industry on April 2, 2001, it asked for a countervail duty rate of 40%. When the department of commerce made a preliminary determination in August 2001, a duty of 19.3% was imposed.

The most recent request by the U.S. coalition for fair lumber imports is asking for a 50% duty. It is using this as a bargaining tactic. It is an attempt to gain some leverage for bullying and an attempt to stampede Canada into a bad deal prior to the March 21 deadline. It should not be given any credibility; rather, it should be vigorously opposed.

On March 21 the U.S. department of commerce will make its final determination. I ask the government to stand by its nerve, negotiate with the Americans and be firm on their position to protect our lumber industry. We all know that the Canadian government cannot negotiate with the Americans. When we were debating Bill C-55, the heritage minister threatened the Americans by saying they were affecting the steel, plastic, auto, and textile industries. However, when the stuff hit the fan and they started their offence, the minister caved in.

The Canadian government should not cave into the Americans. It should protect Canadian interests, the interests of British Columbians and others where the livelihoods of people are affected.

I urge the government that if its policy does not work it should change it.

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4:20 p.m.

Vancouver Quadra B.C.


Stephen Owen LiberalSecretary of State (Indian Affairs and Northern Development)

Mr. Speaker, it is an important thing for all of us today to rise in the House and speak to this most important issue, particularly those of us from British Columbia. I thank and recognize our colleague from Vancouver Island North for putting this resolution to the House. I also thank and recognize the House as a whole for demonstrating the unity of our purpose in insisting upon unhindered access and free trade in softwood lumber to the United States. Surely this is something we are all in favour of and are supporting today.

Being an MP and minister from British Columbia, this is something that hits me, like my colleagues and MPs from other parties and the government from British Columbia, particularly hard.

I will be splitting my time, Mr. Speaker, with my colleague from Chicoutimi--Le Fjord.

We know across the country that the impact on B.C., and I think it is appreciated, is particularly hard. Of the $10 billion in exports of softwood lumber to the United States, approximately half of that comes from British Columbia. The barriers that have been put in place, the countervail measures and penalties over the last year have led to approximately 16,000 people being laid off in the forest industry in British Columbia.

This has an immediate and immense impact on communities and on the wealth and health of the whole province of B.C. I listened to my colleague opposite from Peace River talk about the direct impact of this on his constituency. I can say that every constituency in British Columbia, and even in my constituency of Vancouver Quadra, is immensely affected by this impact. That is true of the economy as a whole.

Let me talk a bit on what this is about. We are not talking about crown management of forest land in Canada. It is not about subsidy to industry through low stumpage rates. It is not about poor forest practices. It is not about us taking advantage of the United States. Pure and simple, this is about protectionism. It is protecting market share in the United States by inefficient American mills. That is what we are talking about and we have to keep that firmly in our minds as we consider how to deal with this.

At the moment we have a unified country across industry, across provinces and between provinces and the federal government. However it goes beyond that. On Tuesday a delegation of 33 British Columbians led by the minister of forestry of British Columbia, together with mayors from resource communities, first nations leaders, labour leaders and corporate CEOs, visited us. Together they thanked our Minister for International Trade for his leadership on this file and the federal government for the unity of purpose across the country in fighting for unfettered access to the American markets, as we have the right to under NAFTA and the WTO.

This resolution today is a welcome one. It is a welcome opportunity for us again. I think this is the third or fourth time we have had open debate in the House on this critical issue in the last year. I have only been in the House over a year and there is no issue, not even anti-terrorism legislation and issues related to September 11, that has received more parliamentary time, and is of greater importance to my province of British Columbia, than this issue.

We have to look briefly at the history of this debate. The member for Surrey Central mentioned that we had managed trade under a five year deal and it expired at the end of last March. He asked why nothing had been done. Something was not done because we did not have an American president. Even after the November 2000 election in the United States, we did not know who the president would be until almost the end of January. We did not have a U.S. trade representative. We did not have a nominated and confirmed secretary of commerce. Very simply, with whom were we to negotiate? Quite apart from that and of much more importance was we were not about to negotiate.

Industry, the provinces and the federal government were unified in saying that we wanted free trade and would litigate for it. People were putting together defence funds, strategies and cohesion to do that. The suggestion that this was let go for five years and neglected is patent nonsense.

However over the last year, once we did have someone to negotiate with, there has been concentrated effort, not only in the House of which I have spoken, but between our Prime Minister and the president of the United States, among our Minister for International Trade and the secretary of commerce, the U.S. trade representative and the president's special envoy, to deal with Canada on these issues.

We have had interparliamentary discussions between congress and parliament. Many of us have been to Washington to speak directly with members of congress and senators. We have had concentrated effort. We have had discussions and discussions trying to educate members of the U.S. government and administration in Montreal, Toronto, Vancouver, and in Washington several times. We have been trying to educate them to the way of and the reasons behind our efficient handling of the forest products industry in this country.

It is a delicate web. We hope we are coming close to an end but we hear from members opposite, and have heard over the last year, that we should just have an export tax. It is a little more complicated than that. If we jump into an export tax, it is like admitting there is a subsidy. That may be something in the consideration of an interim deal but it just cannot be jumped into.

We hear from members opposite that we should link it to oil and gas. I can tell the House that in my province of British Columbia we make more public revenues through the sale of oil and gas to the United States than we do even from softwood lumber. That is cutting off our nose to spite our face.

Members opposite say to link it to all trade. We are immensely dependent upon trade with the United States. Eighty-four per cent of our trade goes to the United States. Only 25% of theirs comes to us. What would that do for us?

People say to link it to our fight against terrorism and our support for the U.S. in Afghanistan or perhaps in the future in Iraq. That is patent nonsense. We have a very clear mandate from the Canadian people and broad support in the government to set our own security policy. It may be in step with the U.S. or it may not, but it will not be linked to something else. It has to do with our security and our sovereignty.

Let us look at where we are today. We have pulled these threads, little by little, in British Columbia and in other provinces. We are looking at changing the way stumpage is charged and the way crown forests are managed, but those discussions have been going on in different provinces, certainly in British Columbia, for a long time. It is just another piece of this complicated puzzle which is now coming together.

Yes, if we have an interim deal we may have an export tax but that is only until we can do what we want to do anyway, which is perhaps change some of our forest management practices, stumpage charges and marketing systems. That is because it is good for Canada not because it is subsidized.

We will bring these together we hope for the benefit of all Canada. We are all highly dependent upon this industry. It is of special importance of course to British Columbia, That is why for the last year I have been proud to be part of the government that has not divided the country, that has insisted that British Columbia not be cut adrift and that there be no concession to the idea of subsidies or low forest practices, but rather that we would stick together as a country. We would consult and litigate against the Americans in NAFTA and WTO, while we had discussions with them, but we would stick together as a country.

Finally, this is not a battle of Canada against the U.S. This is very much in the interests of the U.S. consumer, whose prices of new houses are going up constantly, whose house building industries are being hobbled and whose building material companies are being hobbled by this. We can come together as we litigate, negotiate and help educate the American public that this is something that is good for both our countries and is something to which we are certainly entitled under the free trade agreement, the NAFTA, and the WTO.

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4:30 p.m.


Bev Desjarlais NDP Churchill, MB

Mr. Speaker, recognizing that I have agreed that the route to go is for Canada to stand firm and take the U.S. on in this trade dispute, I also recognize that the lumber industry, the companies and the workers, are in dire straits. They are feeling it. We know that. There have been literally thousands of layoffs nationwide, with the greatest impact, no question, being in B.C. and I believe Quebec.

There have been requests and submissions made to the government from those industries to put some programs in place to allow them to survive during this time of litigation and challenges through the WTO or the NAFTA.

I would like to know is exactly what the government is doing. What has it done to address the specific concerns and the specific suggestions that were made to the government by representatives of the free trade lumber coalition?

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4:30 p.m.


Stephen Owen Liberal Vancouver Quadra, BC

Mr. Speaker, I thank my hon. colleague opposite for raising that immensely important issue. How can we as the Government of Canada assist not only companies of course, but individuals who have been laid off and communities that are suffering greatly by the slowdown being caused by these restrictions?

Certainly we have to be very careful as a government to not directly subsidize industry to make up for the punitive actions of the United States. If we did that, it would simply add that amount of money to the subsidy claim and the countervail. It would simply flow more money to the U.S. against our interests and against the justice of the situation.

However we are looking at ways, through applications that have been received at EDC, of assistance at a market rate for the bonding requirements that have been imposed upon us. I emphasize we must do that very delicately and ensure it does not lay us open to perhaps a real subsidy. The subsidies that have been claimed in the past, and what the countervails are based on, have been bogus ones. We have to be very careful of that.

Also the humanity of the situation demands that we bring to bear, in the most efficient way possible, every support for individuals and communities available to us in our social safety net programs.

We have heard the Minister of Human Resources Development speak about the efficiencies and the programs that have been made available in the most efficient possible way. We have to continue to ensure that all people get the full benefit of those social programs.

That is why we in the government and some members opposite are so insistent that the social safety net programs of our country are such an important part of our social fabric.

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4:30 p.m.

The Deputy Speaker

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Pictou--Antigonish--Guysborough, Fisheries and Oceans.

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4:30 p.m.

Chicoutimi—Le Fjord Québec


André Harvey LiberalParliamentary Secretary to the Minister of Transport

Mr. Speaker, it is with pleasure that I will be sharing my time with my colleague from British Columbia. It is interesting to see all the solidarity that has been expressed in the country on this important issue.

At the very time that we have a unanimous motion in the House of Commons, supported by all the parties, let us not forget that the Prime Minister is in Washington to try to move matters forward. I think that we should have faith in his 39 years of experience as an elected official. Obviously, we hope that his experience will allow us to emerge victorious in this dispute with our principal partner, the U.S. government. I naturally wish him good luck on behalf of all Canadians and especially on behalf of the people in my area.

I take this opportunity to pay tribute not only to the Minister for International Trade but also to the parliamentary secretary, the member for London--Fanshawe. I have met many people in politics, but I wish to thank the politician, the Minister for International Trade, who has for many months now been responsible for an issue that is extremely important for each of our small communities.

The Minister for International Trade was in the lovely Saguenay--Lac-Saint-Jean area a few days ago, on March 4 to be exact. Together, we met with forestry industry stakeholders. We met with representatives from ten of the eleven sawmills in my region. The minister has succeeded in winning the unanimous respect both of parliamentarians and of all Canadians through his devotion to the task. He is very generous with his time, being very available to us all and to our constituents, with whom he meets regularly. I therefore wish to express the appreciation of the public for his efforts and to thank him once again for his extremely productive visit to my region.

As my colleague said, in politics, not all issues have a great impact on ordinary citizens. Sometimes there are some very important issues. One of them is research, which does not always have that much of an impact on most people. However, the softwood lumber dispute affects all our families in the vast majority of ridings.

I am pleased to have this opportunity to exchange a few words with my colleagues in the House today, obviously for the purpose of illustrating all the importance we attach to this matter. Considerable loss of employment has already hit those who work in this industry. The last debate we had in the House on this was four or five months ago. It is worth reminding ourselves, moreover, that this is not the first dispute we have had with the Americans.

Fortunately, the other was some time ago, and we have acquired some experience in our conflicts with the U.S. government. I am convinced that is what strengthens our position this time. Once again, I must congratulate the minister on his work. Where our strength lies is in the very solid consensus with each of the Canadian provinces and territories which our minister has obtained, and particularly that with the entire Canadian industry involved in softwood lumber. There is unanimity here such as has been rarely seen in Canada.

When the softwood lumber matter has been settled, it will certainly stand as a shining example of how successful a few people can be when they work first and foremost in collaboration and seek a consensus that will enable us to face up to a major economic adversary. When the Americans make a move, our economy is hard hit. Goodness knows it is a good thing to have a very strong consensus here within the country to be able to face up to them and get them to listen to reason.

We are trying to settle this through negotiation. We know we have some solid legal grounds: the Free Trade Agreement signed with the U.S. government, and NAFTA, the North American Free Trade Agreement, provide us with some heavy guns to use against the Americans' claims as far as surcharges and countervailing duties are concerned.

As we are acting in good faith, iwe believe that negotiating is the most productive approach on this issue, as it should be with all issues. This is why I have so much faith in the work the Prime Minister is doing today. I think that we should think of him, since he is representing the interests of 30 million Canadians, across the country.

The industry involved in this dispute is one that affects us all. Clearly, the presence of the Prime Minister in Washington is raising many hopes. I hope that the days that follow his meeting with Mr. Bush will bring good, constructive news to defuse this dispute.

The timing of the Americans measures, which stem from purely protectionist motives, and severe ones at that, implemented several months ago, is very poor and comes at a difficult time. We are in an economic context in which, following the events of September 11 and others, all western economies are trying to recover. I think that we are doing relatively well now and this is not the time to ignore international agreements and challenge measures that affect tens of thousands of jobs. This also affects the quality of our relations with the United States.

We must recognize that, in the vast majority of cases, the harmonization of our trade relations, through various agreements, makes us the world's most important economic duo. We want to continue to develop and promote these relations.

Following the work done by our government officials, particularly the Prime Minister and the Minister for International Trade, it is interesting to see all the support that we have among officials representing formal associations in the United States, including the consumers association, the Spanish builders association and a number of others. These organizations are in a position to objectively look at the issue and say “Yes, Canadians are right. Yes, Canada's Minister for International Trade, who spends hours trying to convince Americans of the soundness of the trade agreement that we developed and signed with them is right”. And this is very much to the credit of the Minister for International Trade.

I am convinced that the basic problem is related to the quality and expertise of the industry that our minister is currently defending before the U.S. government. This issue reflects the extremely competitive nature or our industry, and I think this is where the problem lies. The Americans want to protect their industry with compensating duties and additional tariffs to make up for its lack of competitiveness.

It is not for the fun of it that we have developed two approaches to arrive at a solution in this dispute. One is negotiation, which requires a considerable number of hours of work on the part of the government, particularly the minister, and the other is the legal process.

Fortunately, we are realizing that economies such as ours, which perform well in a context of liberalization and free trade, absolutely need tools to protect their claims when the other side is no longer acting in good faith.

I am convinced that we will benefit from this lumber dispute and I hope that the Americans will come to the conclusion that the Canadian position is perfectly legal and that it complies with the FTA and NAFTA. Some day, the Americans will have to apologize for having made us waste considerable time resolving this dispute, which, I hope, will be settled through negotiation.

In conclusion, I wish to pay tribute to the Canadian Alliance member for tabling a motion that was unanimously supported by the House of Commons.

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4:40 p.m.

Canadian Alliance

Jason Kenney Canadian Alliance Calgary Southeast, AB

Mr. Speaker, I am pleased to rise in debate on this very important motion which is critical to the economic future of many communities in this country and the economic future of a critically important and historic industry. I would like to say at the outset I am pleased to see that the government will be supporting the motion.

On Monday under a question in the House the Prime Minister was asked whether it would strengthen the hand of Canadian negotiators to lay out the Canadian position by means of a resolution of the House of Commons. The Prime Minister replied clearly and emphatically on this point, which is a rare change from the usual vagueness and obfuscation we see on the other side.

Excuse me, Mr. Speaker, I will be splitting my time with the member from Kamloops.

The Prime Minister said:

The position of the Canadian government is very clear. We want the American government to implement the free trade agreement that we signed with it. If the House of Commons wants to vote for that, it is fine with me.

Yesterday, in reply to a question from the Leader of the Opposition, the Prime Minister gave a similar answer when he said:

--we want the Americans to respect the free trade agreement that we have with them on all aspects, including softwood lumber.

The Prime Minister has set the bar: that we want free trade in softwood lumber in accordance with the Canada-U.S. free trade accord, and he has invited the House of Commons to express its support for unfettered free trade. I look forward to that and I appreciate the fact that the government is supporting the motion.

There are, however, consistent rumours that the government is ready to sign a negotiated side deal on softwood lumber with the United States. Now we in this party are political realists and we know that convincing the U.S. department of commerce, the U.S. lumber lobby and protectionist interests in congress to accept free trade in softwood under the FTA may be, practically speaking, unattainable, at least in the short term.

We also know that Canadian workers and companies could face layoffs and bankruptcies if the U.S. imposes new anti-dumping penalties. That is why there is pressure for a negotiated deal. However, we are confident that we could prove our case at the WTO or under a NAFTA panel, as our country has done in the past in similar disputes.

The U.S. department of commerce would rather not announce its final determination on this issue until March 21. This shows its hand. The members of the WTO are subject to scrutiny by the WTO and NAFTA panels. We have leverage, and it is not immediate imposition of tariffs, even after March 21. The international trade commission has an injury determination yet to make which would take us into May with only the current anti-dumping tariff of 12.6%.

Let me be clear. From our perspective, no deal on softwood is acceptable without certain specific guarantees. We must extract from the Americans a commitment that we will finally enjoy free and unfettered access to the U.S. market. That means no to tariffs, no to special taxes and no to quotas.

Second, we must win assurances that never again will the U.S. congress and the U.S. lumber industry be allowed to hold a gun to our head through outrageous protectionist threats.

We need a dispute settlement mechanism that has real teeth and can override domestic trade law if it is being abused for simple trade harassment.

Finally, if the government is pushing for a Canada-U.S. softwood commission, it too must have real teeth. It must be able to make binding rulings on both parties. A politicized working group with only advisory powers that can be overridden by U.S. protectionists in congress or in the commerce department would not be acceptable to this opposition party, and I hope not acceptable to the government.

If full free trade is not possible and the government feels that we have to get some kind of deal to protect our industry, we must ensure that this deal is not effectively another sellout. When Pat Carney agreed to the original softwood lumber deal in 1986, the Liberals were quick to call it a sellout of Canadian sovereignty and a major compromise in Canada's free trade bargaining position. In fact, the then opposition leader, John Turner, called the Mulroney government's acceptance of a 15% export tax the gravest sellout in the history of negotiations with the United States.

If a 15% export tax was the greatest sellout in history, what will we make of the rumours of an export tax approaching 25% which the government may accept? The 1986 sellout has only encouraged American protectionists to continue their harassment of Canada, notwithstanding the free trade agreement of 1988.

Fifteen years later things really have not changed. The Prime Minister cannot just grab a deal for the sake of a rose garden photo opportunity with President Bush. We must have guarantees that we will have guaranteed access to the U.S. market. We must have a dispute settlement mechanism that can override U.S. protectionist measures. We must have guarantees that our products such as western red cedar and value added and processed wood products enter the U.S. tax and tariff free. Only under these conditions will a negotiated settlement be truly a win-win situation.

Just signing a deal which says that Canada will impose an export tax, drop its trade actions before the WTO and NAFTA simply in order to keep talking would not be a good deal. It would be a sellout of Canadian interests and an abandonment of our free trade principles.

The motion before us sends a clear signal from the House that we will not accept a sellout deal and that the only acceptable negotiated settlement is one that puts us firmly on the road to real free trade.

I am glad the Prime Minister is in Washington today. At least he is in the right place at the right time. Earlier this year when the softwood dispute was reaching a critical point, the Prime Minister and the Minister for International Trade took off for a two week trip to Russia and Germany. To put this in perspective, we do more business with the United States in a single day than we do with Russia in an entire year.

Softwood lumber is the $10 billion question, but because it primarily affects communities in British Columbia and rural Quebec that do not support the government it seems that it just does not care as much as it should.

Workers and families in logging communities are not a priority of the government. The government would rather be flown off to exotic locations on team Canada corporate trips than meeting with the people who are suffering in Squamish or Prince George.

We have already lost over 10,000 jobs in British Columbia due to the duties on softwood lumber which have already been imposed. The March 21 imposition of dumping duties for a total of 32% could lead to thousands more layoffs and bankruptcies for mills and companies which are already on the economic brink.

The government has finally focused some attention on this issue just as we approach the final deadline. For five years the government knew this was coming.

Almost two years ago, in June 2000, the Canadian Alliance moved a motion in the House calling for the government to take action to prepare for the expiry of the softwood lumber agreement. It failed to do so. It waited until the agreement expired and then thought it had better do something about it.

Since then the government has blown hot and cold on the issue, one day threatening to go straight to the WTO and fight this in court, calling those worried about losing their jobs nervous Nellies and the next day they are the nervous Nellies leaking to the press that they might consider a sellout deal for a short term extension of talks.

Only now, with an execution in less than a fortnight, has the government's mind been concentrated by the real threat facing the lumber industry. The motion that we have proposed forces the government to state clearly what its free trade principles are. We will look forward with interest to see whether the Prime Minister's brave words on the floor of the House this week will be matched by their actions in the days to come.

In closing, I would like to say how disappointing it is from my perspective as an MP and a member of a party that strongly supports our alliance with the United States in matters military and economic to see a U.S. administration, which is ostensibly free trade, which preaches the virtues of free commerce and exchange throughout the world, stoop to this kind of trade harassment against its closest friend and best trading partner.

I hope all of us as parliamentarians will do our part in joining with the government to lobby those we know in congress to ask them to be consistent about their principles. If the United States stands for free trade now is the time for it to prove it. Enough talk. Now is the time to actually come to a binding agreement which ensures in the long run free trade and prosperity for people on both sides of the border.

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4:50 p.m.

London—Fanshawe Ontario


Pat O'Brien LiberalParliamentary Secretary to the Minister for International Trade

Mr. Speaker, I listened very carefully to my colleague's comments. He was as eloquent as always but I am afraid he seeks to claim a little more credit than is due his party. The government supports this motion for one very simple reason. All parties in the House support the motion. It simply reiterates what has been the longstanding policy of the government.

My colleague says that it has forced us to state our position on free trade. The position of the Government of Canada has been for several years that we need free trade in softwood lumber. We have been working toward that very clearly. We would have it right now and this debate would not be necessary except for the punitive trade actions unfairly taken by the United States to which the hon. member referred at the end of his remarks. I agree with him on that. If that punitive trade action had not been taken on the free trade that was in existence for a short few days until they did intervene, we would have free trade.

My colleague chastises the Minister for International Trade and the Prime Minister for doing their jobs and for going to Mexico and Germany on trade promotion. It is hardly an exotic sojourn in the month of February. During that trip the deputy minister was in Ottawa quarterbacking the negotiations with his counterpart at the very same level in the United States.

I would ask my colleague to be a little more reasonable. The Prime Minister and the Minister for International Trade were simply off doing their jobs. While they were doing their jobs they were in daily communication with industry and provincial leaders.

I understand we have different points of view to make from both sides of the House but I know the hon. member as a highly intelligent person. Surely he knows the government has been on record long before this motion as supporting free trade in softwood lumber. I almost got sick of hearing myself say it day after day in the House of Commons as a parliamentary secretary.

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4:55 p.m.

Canadian Alliance

Jason Kenney Canadian Alliance Calgary Southeast, AB

Mr. Speaker, let me begin by saying I have considerable regard for the member, particularly because he does such a marvellous job defending a very difficult policy on the part of the government.

Yes, the Americans are the culprits. I do not mean to suggest that the government or parliament is to blame for the tariffs being imposed by the Americans. I do mean to suggest, however, that we have had years to prepare for this. It really has not been the top trade priority of the government until the last agreement collapsed and the U.S. protectionists were on our backs again.

I am simply suggesting we should learn from history and not go through the cycle again. We should look in the long term and not the short term, stand firm for free trade principles and not collapse under American pressure like we have in the past under this and previous Conservative governments.

In terms of the government doing other trade work my point is simply that we need to focus on priorities. The trade we have with the United States just in the softwood lumber area exceeds the total trade that we have with most countries in the world, including most of the countries we visit on so-called team Canada missions.

In terms of the real, tangible economic interests of the country, the trade minister and the Prime Minister should be spending the overwhelming majority of their time on files like this one rather than engaging in photo op style trips that yield very few economic benefits for working Canadians.

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4:55 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, my first question for the hon. member is whether he feels the government's clumsiness in dealing with free trade issues comes from the fact that the party opposite fought so vociferously against free trade in opposition that it has taken nine years to completely swallow itself whole, to the extent that it is only beginning to realize how to actually exercise levers of free trade in a legitimate way. I would appreciate his comments on that. Hypocrisy being only half a mortal sin, perhaps the government is over that.

Second, he mentioned trade missions. Is he aware of the fact that without exception in the year after almost every team Canada mission the level of trade we have in the countries in which the missions occurred actually declines? Is he aware of the fact that team Canada missions seem to actually reduce the level of trade we do with some of the countries which are visited by the Prime Minister? I would appreciate his comments on that.

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4:55 p.m.

Canadian Alliance

Jason Kenney Canadian Alliance Calgary Southeast, AB

Mr. Speaker, the member obviously strikes a very acute point when he talks about the credibility of the Liberal Party and government on the question of free trade and hypocrisy. Somebody once said that hypocrisy was the honour that vice paid to virtue. It is nice to see that there are some born again free traders opposite, but I suspect if we scratch just beneath the surface there lie some real protectionists.

Canada would have a lot more credibility on the issue of free trade in general if we had a government that was consistently committed to it historically rather than having run an election campaign in 1988 against it.

However in terms of team Canada trips the member is absolutely accurate. There are very few real benefits that derive from them.

I have just one last point. I know many people who go on team Canada trips from corporations in order to have access to senior government ministers and premiers, not to sell goods or products abroad. It is a big travelling lobby show and it does not produce real results for Canadians.

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5 p.m.

Canadian Alliance

Betty Hinton Canadian Alliance Kamloops, Thompson And Highland Valleys, BC

Mr. Speaker, I will be much kinder than some of my colleagues have been today. I will leave it to them to be mean. Personally, I am happy to see this issue come to fruition today.

Today, finally, I believe members on the opposite side of the House have actually begun to listen to what I and my colleagues have been saying over and over for years. Today we agreed unanimously to uphold the principles of free trade in the softwood lumber negotiations. The motion came from the Canadian Alliance, from my colleague from Vancouver North, a man I am very proud to say I supported by seconding his motion. He did an excellent job.

What happened today is wonderful. My only regret is that people in my riding have been put at risk because the government failed to take the softwood lumber issue seriously. I will look at this from the more human side of the issue.

Leasing companies, banks and other creditors are busy placing liens against my constituents' assets, houses and payroll accounts. These constituents' companies ran into difficulty when the interior forestry industry spiralled into slow mode last fall. During October and November the mills turned away trucks full of logs.

We cannot blame the mills. They cannot be expected to operate properly with threats of large tariffs, stumpage fees and export duties hanging over their heads.

Managers and owners of both small and large mills in my area have been at the softwood lumber negotiating table. Individual loggers and truck drivers have lobbied everyone they could find. Business owners affected by the downturn spinoff have written their MPs and MLAs. I had several of these people in my office and the stories they told would break anyone's heart.

These people are counting on us to to ensure they free and unfettered access to the U.S. market. This means not giving in to all U.S. demands or in creating an agreement that requires Canadians to jump through so many hoops it becomes easier to leave the trees standing in the forest than it does to meet the demand.

The only people not 100% concerned with this crucial Canadian issue during this difficult winter have been the members of the Liberal government. I am pleased to say that there is more action in some of the communities in laid back British Columbia than I have seen coming from the government side of the House.

I can give an example of some of that action. I went from one area to another in my own riding and listened to the concerns of my constituents who were very upset and angry about the situation they found themselves in. As I was driving from one community to another, the people constantly asked me how they could communicate their pain and their needs to the government. They told me they knew I was doing the job I was sent to do but that the government did not seem to be listening. They wanted to know what they could do to back me up.

As it is with some really good ideas, they just come out of the blue. The idea that was put together was what we call the green lumber card. We composed a little green card not much bigger than a doubled sized postcard which carried a very simple message to the minister, “Do your job, save mine”.

The only good thing that I can think of in the last few months regarding this entire issue has been the fact that the minister could have 200 of those cards on his desk on one day, possibly 400 cards on another day and soon it could be 2,000 cards. The beautiful part about a good idea is that other people with good intentions pick it up and run with it.

Members of my caucus took those cards back to their ridings and duplicated them. I then had the great pleasure of thinking of the minister being buried up to his neck in these lovely green cards with the simple message “Do your job, save mine”.

Once again, as they have done many times in the past decade, resource based employers and employees in my riding are searching for ways to keep the important forest industry as viable and productive as it always was before. It is a very important part of our country's economy and in my riding it is especially important.

A recent meeting in Wells Gray saw forestry workers, chamber of commerce members and others gather to discuss an action plan for value added wood products. B.C. has a 16% share of the $35 billion primary wood businesses but only 1% of the $200 billion valued added wood sector. I congratulate B.C. for its forward thinking. It is planning.

It is a pleasure to be in my caucus because we represent real people. Most of us come from the business sector but some of us come from farms, some are lawyers and doctors, and some are economists and teachers, but we represent real Canada. When we stand up to speak we are the voice of those people who we represent. We are not here to represent an ideology, although we do have some very good ideas that could change the country dramatically and positively, but we are here to express the views of the people we represent.

As I said earlier, I am really happy with what happened today. I could not be more delighted. I will accept any face saving messages that have to come from that side of the House because I know in my heart that we have what we need now. I believe we have sent a message loud and clear and hopefully that message will be delivered to our American brothers with whom we trade.

American people are different from Canadian people. We do not even need to explain that. They are a more aggressive lot and, in this particular case, a small group of them will be fighting very hard to make sure they and not us come out on top.

I want members of our government and the negotiating team to go to the negotiating table in the United States with a clear picture in their heads of all the hardworking people from my riding and from ridings across Canada who are depending on them. I want them to think of those small children whose livelihoods will be cut in half because their parents will be unemployed. They need to eat. They need education. They need stability. Only the government and members of the negotiating team can give them that stability. When they go to the negotiating table I want them to remember those faces, do their jobs and help us protect Canada.

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5:05 p.m.

London—Fanshawe Ontario


Pat O'Brien LiberalParliamentary Secretary to the Minister for International Trade

Madam Speaker, I listened with interest to my colleague's comments. I am happy that she is happy that the House is supporting the motion. She seems to see it as some sort of historic event or extremely important decision today. If I can help her with that, quite frankly it was an easy decision for the government to support a motion coming from the official opposition which reiterates and supports the policy that the government has been following for two years.

Does the member not understand how easy it was for us to support a motion from the critic of the Alliance that reiterated the exact policy that we have been following?

The member said that her constituents were real Canadians and that she supported them. My constituents are certainly real Canadians, as are yours, Madam Speaker, as are all Canadians real Canadians. I would like to emphasize that.

She mentioned that her constituents wanted to know what they could do to get the government to understand. Would she explain to her constituents and to the House today why, a year ago when this file was breaking at the very critical time, her party went many weeks with no trade critic? Her constituents should know that her party was so engaged in its internal divisions at the time that the former leader, who again seeks to be the leader of her party, did not appoint a trade critic. Incredibly, the official opposition of Canada had no critic to develop this file at one of the most important times in the history of this country. That is a provable fact.

I asked the former leader earlier today to address that but he ducked it. Would the hon. member like to explain why her party showed such a lack of preparedness by having no trade critic? I think her constituents need to know the answer as much as the other members of the House. I am anxious to hear her answer.