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.