Debates of May 28th, 2002

Supply

[David Anderson, Canadian Alliance, Cypress Hills—Grasslands, SK]

Mr. Speaker, it is a great concern to me as it is to my seatmate for Nanaimo--Cowichan that members opposite do not seem to be interested in this subject at all.

I would like to talk about another failure of the government. It completely failed in informing the U.S. government about the impact of the bill. It is interesting that government members can stand over there now and have a lot to say, but they do not seem to want to listen to anything about agriculture.

The government has not been lobbying the United States. It has not let the United States know what our issues are. For example, months ago bureaucrats from Ottawa decided to announce that we would be attempting to influence the U.S. secretary of agriculture. I do not know if this was done deliberately or if it was a mess up by the bureaucrats, but as soon as a number of Washington senators heard that, they told the agriculture minister not to bother going down there. We are back to moronic bungling in our bureaucracy that keeps us from being effective with our American neighbours. We made one call to the secretary of agriculture and basically have shied away from letting U.S. politicians know what our issues are.

That showed up a couple of weeks ago when a number of MPs went down to the United States and met with some congressmen and representatives. The member for Lethbridge who does a good job was on that trip. They found that American politicians did not know there was an issue. No one up here had bothered to tell them that the U.S. farm bill would cause tremendous problems for Canadian farmers. We need to do a better job in letting our U.S. friends know what is going on. That was not done with the U.S. farm bill. We can say that the Americans do not care, but we also have an obligation to let them know what is going on and what we feel about the situation.

The government also fails to respond to threats in the agricultural area. Its response has basically been nil on all fronts when it comes to agricultural issues.

We were aware that there would be a massive increase in subsidization included in the U.S. farm bill. Our government chose to do nothing. We were aware for the last several months that new crops would be included in the U.S. farm bill. There was no response from our government. We were also aware that country of origin labelling would be brought in and there was no response from our government. This is one issue we could have headed off with a bit of co-operation and a bit of work with the government. The cattle producers and the Canadian Alliance offered solutions months ago that would have prevented the inclusion of country of origin labelling in the farm bill. The government refused to listen.

At the beginning of February the Liberals were warned that their refusal to expand the terminal feedlot protocol would result in the inclusion of country of origin labelling in the farm bill. That terminal feedlot protocol allows the free flow of cattle between U.S. producers and Canadian feedlots. It is currently restricted because Health Canada has concerns over the spread of disease. Research has been done showing that these fears are unfounded. The government would not remove the restrictions, thus the Americans left country of origin labelling in their farm bill.

In response to questions on February 8, the minister of agriculture acknowledged the link between country of origin labelling and the terminal feedlot protocol but he refused to act. In response to a question from the member for Lethbridge his answer was:

Mr. Speaker, there is some connection between the terminal feedlot protocol and the country of origin labelling. I discussed that with Secretary Ann Venamen as recently as 6.15 yesterday afternoon.

If the government had listened to the official opposition, Canada could have prevented the inclusion of mandatory country of origin labelling which will be a huge issue once it comes in. Once again, Liberal delay and indifference to western Canada is threatening Canadian industry and jobs.

A lot of other responses from the government have been lacking as well. I was amused by the public relations exercise conducted last week. We were told we could not get ministers of the crown to go to Saskatchewan to talk to the government and to the prairie provinces. As soon as trouble started here in Ottawa, ministers were all over the country trying to take attention off of what was happening here. The government sent three ministers: the one in charge of softwood lumber, who has been a complete failure on that issue; the one in charge of agriculture, who is in the middle of being a complete failure; and the other was the senior cabinet minister from our province, who has done little or nothing for our province in nine years.

The member for Peterborough commented that the government made a commitment to long term funding in the agriculture policy framework. The reality is that the estimates are down $650 million this year from last year. We need to pay attention to that and realize that if this government comes up with a plan that puts in $650 million, all it is doing is replacing the money it had in the program last year.

In conclusion, I would like to make three suggestions which are suggestions of the Canadian Alliance. First, we need to challenge immediately on the world trade level the new crop inclusion and country of origin labelling. Second, we must begin to compensate the producers and the people who are affected by this international trade damage. Third, we need change on two levels. We need a change in our attitude toward the United States government. We also need to make the necessary changes within the federal departments in order to make agriculture competitive and effective.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, it is interesting the member would suggest that MPs should be chastized for not bringing up the farm bill at the recent meeting with congressmen in Rhode Island. A number of Alliance MPs were on that trip.

[David Anderson, Canadian Alliance, Cypress Hills—Grasslands, SK]

Mr. Speaker, I am sorry if I left the wrong impression. I understand the farm bill was discussed in Rhode Island.

Basically we were discussing something after it had happened. The discussion needed to take place several months ago. We knew that country of origin labelling would be in the bill. We knew that new crops, pulses and those kinds of things would be put in the bill. We knew the subsidization would be increased. That discussion needed to take place through last winter and earlier on and it did not take place. We needed that to happen. It did not happen. Now we are stuck with a bill that will have a tremendous impact on this country because we did not let the Americans know it would be a problem up here. Some of them know now. More of them need to know.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Mr. Speaker, I would like the member to know that we in this party will be supporting today's motion.

We do have some concerns in terms of the view of the members of the Alliance Party. They have mentioned the word drought many times yet at the same time they deny that global warming even exists.

Regardless of the length of time it will take to negotiate these deals through the WTO or the NAFTA dispute panel, it will take a long time to do that. The member has indicated we need support programs for those people who suffer from the unfair trade practices and he is absolutely correct. The fundamental problem is NAFTA itself. When the U.S. cannot compete fairly it will use protectionist measures to protect itself. It has been doing that ever since we have been a country, since 1867. It did it with shipbuilding. It is about to do it with auto parts. Now it is doing it with softwood lumber and agriculture.

As a representative of the Alliance Party, the official opposition, what would the member's party do to fundamentally restructure that deal so that it is not just softwood lumber and agriculture but all the other things that we compete with the Americans in order to have a truly balanced and fair level playing field?

[David Anderson, Canadian Alliance, Cypress Hills—Grasslands, SK]

Mr. Speaker, we will not solve the issue of global warming here today. I would just like to point out that April was one of the coldest Aprils that we have had for decades, so I do not know if that was a sign of global warming or cooling.

There are a number of questions that the member raised on the WTO challenge issue. We feel that we need to initiate the trade challenges immediately, particularly with country of origin labelling. That will not become mandatory for two years but it has to be done now because those things take that amount of time to work through the system.

Another aspect of that is we have suggested to the government that there be a rapid response team and process put in place for when these trade issues arise. Although it would not necessarily be binding, people would sit down to discuss and sort those things out ahead of time so that they could be worked out. That way these things would not take three to five years to solve.

As the Leader of the Opposition mentioned earlier, we have a concern that the federal government has not been committed to the free trade agreement and is allowing it to not work properly. I would just like to point out that agriculture and softwood are not integral parts of that agreement. That is part of the reason, we would suggest, we are having trouble with these. Maybe we need to include more of these things rather than scrap the agreement.

[Paul Szabo, Liberal, Parliamentary Secretary to the Minister of Public Works and Government Services]

Mr. Speaker, the member spoke very well on this important issue.

We have had serious issues with regard to subsidies in Europe as well to the detriment of Canadian agricultural products. In fact, the subsidies are so large that we cannot possibly manage to compete with them. I expect the same is happening with the U.S. farm bill. It is an enormous subsidy.

Can the member tell the House whether or not the solution to this is to try to somehow match subsidies and get into a subsidy war, or is there a reasoned approach to deal with trade practices bilaterally and globally?

[David Anderson, Canadian Alliance, Cypress Hills—Grasslands, SK]

Mr. Speaker, our agriculture producers have succeeded in competing with people for years when there has been massive subsidization in other parts of the world. We have a good group of producers. We can compete if we are given a fair chance to do that.

I would suggest that one of the things we need and one of the ways to take advantage of low prices at the primary product level is that we must begin to value add. We have to start to do that. I know it is developing here in Ontario, primarily because there is freedom within the Ontario wheat board to be able to market one's own grain and develop value added. We need that freedom in western Canada as well in order to begin to move up that chain, to begin to value add, particularly for the crop we grow the most of, which is wheat. We must be able to do something with wheat to bring some value back into our communities.

[Reed Elley, Canadian Alliance, Nanaimo—Cowichan, BC]

Mr. Speaker, I want to thank my hon. colleague for his very kind remarks at the beginning of his speech and I want to reciprocate by saying that I think he is also a very hard working member. In fact I would venture to say that almost all members of parliament are hard working.

I rise once again to hold the government to account for its lack of strong action on behalf of the Canadian softwood lumber industry. I have spoken with constituents from my riding of Nanaimo--Cowichan who are astounded with the government's lack of response toward the softwood lumber duties and tariffs. I would suspect, without having conducted a scientific poll, that they would be very much in agreement with the motion which we are presenting here today:

That this House has lost confidence in the government for its failure to persuade the U.S. government to end protectionist policies that are damaging Canada's agriculture and lumber industries and for failing to implement offsetting trade injury measures for the agriculture and lumber sectors.

While my riding has an agricultural base, it is relatively small in comparison to the softwood lumber industry so I will focus my remarks on that area. I recently did a count of how many times I have spoken out on softwood lumber since I was first elected to the House in 1997. This will be my sixth major speech on this topic. I have had six member's statements and sixteen press releases. I have written countless letters to constituents and ministers, including invitations to visit Nanaimo--Cowichan, and I have given dozens of interviews with local newspapers and radio and television outlets. This is a hot topic in my riding.

There is no other subject that I have spoken more about and yet it seems there is no other subject that the government has done less about. The constituents of Nanaimo--Cowichan whom I see in the streets, at the stores and at community events all ask the same question: Why is the government not doing something to resolve this situation?

It is a simple issue to understand. The United States, for all of its grand talk about being a free trading nation, really is not. It is a protectionist country and will do everything to protect its own citizens, businesses and economy. In many ways, of course, we would find that admirable. However, it flies in the face of everything the United States says publicly to Canadians and to the rest of the world.

I agree with the premise that we do not want to have ongoing subsidies, trade wars and undue tariffs and duties at the 49th parallel, so what is the real problem here? May I suggest that the problem is that this government and ultimately this Prime Minister really have very little credibility, sway or force in Washington, D.C.? Is it any wonder that Canadians as a whole have lost much confidence in the government? When it has no effective voice with its largest trading partner, the Canadian people lose confidence in the government itself.

The government cannot say it was not warned about all of this by the official opposition. Time after time, year after year, long before the agreement expired, Canadian Alliance members, and the Reform before them, have risen in the House to ask questions, raise negotiating points and ask for the government's plan of action and details on how it was dealing with the changes to the softwood lumber agreement. For the most part all we received was the “don't worry, be happy” routine.

In the past, the secretary of state called the people of B.C. nervous Nellies when they raised public concerns. The Minister for International Trade stated that no jobs have been lost due to the current softwood lumber problems. When that sort of thing is heard in my riding, heads begin to shake.

The government does not seem to get it. I have challenged and invited members to tour my riding and meet some of the real people who have been affected by the government's lack of response. The people of Nanaimo--Cowichan, indeed all Canadians, should be nervous, nervous with the lack of response from the government concerning softwood lumber.

The minister needs a serious reality check when he says that no jobs have been lost. According to Human Resources Development Canada in my riding, there were over 725 new employment insurance claims up to the end of March 31 of this year that were directly related to the softwood lumber industry, and an estimated further 2,000 jobs lost through the spin-off effect of the regional economic downturn. These numbers do not reflect the people who have taken retirement from the industry altogether, who have taken a job in another industry or who have moved out of the area. Sadly, there have been many people in that last category. That is just in my riding alone.

With the 27% duty in effect, local mill owners and managers are now looking at their remaining staff. Employees are living on the edge, expecting the layoff axe to fall at any moment. These are people who are being thrown out of their careers through no real fault of their own.

The loss of confidence in the government has evolved through empty promises and platitudes stemming from the inability of the government to negotiate in a strong and forthright manner with the United States. Yes, I believe in free trade and negotiated settlements, but when we come to the negotiating table we must approach it from a position of strength and have something to trade.

My colleagues and I suggested long ago that we needed to put ourselves in a stronger negotiating position. We have heard that echoed somewhat by some of our own government ministers from B.C. Schoolyard children know this lesson well. They know that to trade their bag of marbles for someone else's hockey stick may require an incentive such as their baseball as well.

Canadians know that we have other resources that the Americans want. California not only wants our B.C. hydro, it needs it. Another hot summer of rolling brownouts and blackouts shutting off air conditioners will drive the point home. Chicago and the midwest would sure like to have our natural gas to heat their homes during the cold, windy months of January and February. The American energy companies are actively looking for ways to put in pipelines from Alaska to the southern 48 states.

Simply put, the time for this is long past, and we need to start negotiating and playing hardball at doing it. Why can we not protect and build our Canadian economy, save Canadian jobs and expand our softwood lumber industry? What does the government not understand?

Previous governments and many Canadians worked hard to develop a rules based free trade agreement with both the United States and Mexico that would bring some guaranteed access to their markets and keep Canadians working. Yet in this present dispute, our government has failed to keep even the market share in softwood lumber we had previously in the United States and has allowed it to be taken over by non-NAFTA countries such as Sweden and Brazil, which now are reaping the rewards of our hard work. That is simply unacceptable.

The U.S has attempted to tarnish the forest practices of all Canadians. Canada's timber supply is mainly through crown land, compared to the American system which is over 50% private woodlots. While the Americans want a Canadian public auction process, the government has failed to point out that most wood sold in the U.S. is brokered through private deals, not public auction.

The government has failed to adequately point out that while the Canadian softwood lumber industry has regularly upgraded equipment and technology, much of the American industry has not. In turn, the government has failed to point out that American softwood lumber policy is being run largely by lobbyists for private U.S. companies. Need I remind the House that some of these lobbyists work for companies which have profits that are individually far greater than those of even our biggest companies combined?

I come back to the fact that I have twice invited the Minister for International Trade and his parliamentary secretary to visit my riding for a reality check. So far they have been conspicuous no-shows. It is due to this lack of inaction on the part of the government to put a personal face to this economic tragedy that my constituents, and Canadians alike, see this as another failure on the part of the government. It is a part of restoring confidence in government to help Canadians.

I will be voting in favour of the motion, reflecting, I believe, the attitude of my constituents:

That this House has lost confidence in the government for its failure to persuade the U.S. government to end protectionist policies that are damaging Canada's agriculture and lumber industries and for failing to implement offsetting trade injury measures for the agriculture and lumber sectors.

[Pat O'Brien, Liberal, Parliamentary Secretary to the Minister for International Trade]

Mr. Speaker, I listened to the member enumerate the many speeches that he has given and the questions that he has asked and so on. I heard him say that there has been a lack of response from the government. That is simply incorrect.

There was wide consultation by the government before the softwood lumber agreement ran out. There was and still remains a national consensus. Even his own party critics agreed that to renew the softwood lumber agreement was not the thing to do, that it should be left to run out and then we would have free trade unless the Americans took punitive trade action. Unfortunately they have again done that and now we are pursuing every legal option available to us.

I would like to ask the hon. member to comment on this: If his party was so busy on this file, why were there at least two months a year ago when that party had no trade critic whatsoever? Weeks and weeks went by when neither that member nor anyone else could even get their House leadership to allow them to put a question on softwood lumber. These are verifiable facts. Maybe he could explain that inconsistency with all this concern of his party for the softwood lumber file.

[Reed Elley, Canadian Alliance, Nanaimo—Cowichan, BC]

Mr. Speaker, the member knows full well that there is far more important work done by the members of parliament than that which takes place in question period. If he wants to simply stand in question period and make some great point, fine, but we have had a trade critic who for at least two years now has been actively meeting and talking with people in industry, who has been talking with U.S. government people, who has been talking with stakeholders and who has been asking the government behind the scenes what its plan is.

The very fact of the matter is that it is the government's responsibility to come up with the plan. The government knew this agreement was expiring. It knew full well that something had to be in place. Yes, it is true we did not want to see another agreement as had been struck earlier. It was not working for Canada. However, it is the government's responsibility to negotiate with the Americans to make sure that something is in place so that we do not have these punitive tariffs that are destroying our industry.

If the constituents in my riding were asked the question, they would say, and we maintain, that it is the government's responsibility to do that kind of negotiating. It failed to do it long before this agreement expired. It is responsible for putting our industry into the kind of position in which it is today. It is not the opposition. It is the government. That is where the buck stops.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Mr. Speaker, I cannot help but agree with the hon. member that one does have to bargain from a position of strength.

He did mention gas and pipelines. That refers to linkage in the argument. One thing many Canadians across the country have asked me and our party is why Canada does not just turn off the lights and the gas lines to America until it comes to its senses and gets rid of this.

I am asking the official opposition, is that the opposition policy or does it think that what the government should be doing is adding linkage to the discussion? How angry are we? Will we stand up for our agriculture producers and our softwood lumber producers by shutting down the gas and the electricity from Quebec or the natural gas from Nova Scotia in order to teach the Americans a lesson? Is it referring to that in that type of argument? Because if it is, it would be a great debate, one that I would love to participate in.

[Reed Elley, Canadian Alliance, Nanaimo—Cowichan, BC]

Mr. Speaker, I understand what the member is saying. I know how very difficult it is in a huge country like ours, natural resource based in its economy, with every region of the country depending on primary resource industries that over a period of time seem to be getting deeper into trouble, but when we talk about even the concept of linkage, it causes problems right across the country. There is no question about this.

What we are trying to point out is that somehow the government must come up with a stronger bargaining position with the Americans and that these items need to be discussed. That is all we are saying.

[John Harvard, Liberal, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, I will be sharing my time with the Parliamentary Secretary to the Minister for International Cooperation.

Agriculture and agrifood trade accounts for approximately one-third of the balance of trade of all goods and services in Canada. A very important part of that balance of trade comes from an excellent bilateral trading relationship with the United States.

In 2001 Canada's agrifood exports to the U.S. were worth over $16.5 billion, which was 17% higher than the year before, and represented over 62% of the value of all of our agrifood exports.

Canada also imported $12.3 billion in agrifood products from the U.S. last year compared to just under $11 billion in the year 2000.

Canada-U.S. agricultural trade is a good news story. The vast majority of trade in agrifood products between our two countries occurs on a smooth and continuous basis.

Canada and the U.S. recognize the importance of a good trading relationship which benefits agricultural sectors in both countries. To assist in maintaining this relationship, Canada and the United States established the consultative committee on agriculture in 1999 as a follow up to a bilateral record of understanding, an ROU, reached the year before. The purpose of the committee is to monitor the implementation of specific items outlined in the ROU action plan, as well as to provide a forum for Canadian trade and agriculture officials to periodically review issues affecting bilateral agriculture trade. This mechanism serves as an important early warning system to help identify and resolve issues before they become full fledged disputes.

The Canada-U.S. consultative committee on agriculture achieved a great deal in its first two years of operation. Many of the items identified in the initial action plan were addressed and resolved, and other issues were taken up by a group as they emerged as potential trade irritants.

During 2001 the committee developed a renewed action plan that would help to provide more concise direction to its future activities. The action plan was endorsed by Canada's Minister for Agriculture and Agri-Food and the U.S. secretary of agriculture on May 3 this year.

This is not to say, however, that the agrifood trading relationship between Canada and the U.S. is completely devoid of any problems. For example, Canada, along with many other countries, is very disappointed in the direction of the U.S. farm bill, known as the farm security and rural investment act, 2002.

Along with many other countries, including the EU members, Australia, Mexico, India, Brazil, China and South Africa, just to name a few, our government has raised our concerns and frustrations at the highest levels of the American administration. The Prime Minister raised them with President Bush, and ministers have expressed our concerns to their U.S. counterparts throughout the legislative process.

Further, the Canada-U.S. interparliamentary group was able to raise it concerns earlier this month during its annual meeting in Newport, Rhode Island, a group in which the Alliance member from Vancouver North Island participated.

In particular, we Liberals are concerned about the increase in trade distorting support as well as a provision for retail level country of origin labelling for meat, produce, fish and seafood that becomes mandatory in 2004, and will have a significant and detrimental impact on Canadian manufacturers and exporters.

We are also concerned about the establishment of a new marketing loan program for dry peas, lentils and small chick peas which has the potential to cause long term market distortions for these crops.

We are also working on a number of fronts to pursue Canadian interests in the face of this legislation.

First, this legislation, and the high levels of domestic support by other countries such as the EU, underscore the importance of achieving fundamental agriculture reform. In the Doha declaration, WTO members undertook to achieve substantial reduction in trade distorting domestic support in the WTO agriculture negotiations. I know that the Minister for International Trade and this government are committed to achieving that objective.

Second, the government is working with other countries, such as other Cairns Group members, to press the U.S. to regain its leadership role which was so instrumental in achieving the launch of WTO negotiations. For example, on May 15 the Cairns Group issued a statement that expressed deep regret over the farm law and called on the U.S. to renew its commitment to global agricultural trade reform at the WTO agriculture negotiations. Many countries reiterated these concerns about the act at an OECD ministerial meeting in Paris the following day and repeated the call for U.S. leadership.

Third, the Liberal government is continuing a detailed analysis of the act and will be monitoring the implementation of the legislation extremely carefully to ensure that the U.S. conforms fully with its international trade obligations. We are also in touch with other trading partners on this and sharing information.

On this side of the House we are committed to working closely with the industry and provinces as we proceed on these various fronts. That was strikingly clear last Friday when the Minister of Agriculture and Agri-Food, the minister responsible for the Canadian Wheat Board, the Minister for International Trade and the Minister of Finance all met with provincial and farm group representatives to discuss the future of the industry in western Canada.

We will also work with our U.S. allies with respect to the country of origin labelling provision to ensure that Canadian trade interests are not compromised.

We recently emerged from a U.S. investigation which refuted allegations by U.S. wheat growers that Canada is underpricing or overdelivering on quality in its exports of wheat to the U.S. It is worth pointing out that in announcing its decision, the U.S. trade representative rejected requests from the domestic industry to impose tariff rate quotas on Canadian wheat entering that country. This would have been a flagrant violation of U.S. international trade obligations, a point that the U.S. administration recognized.

Nevertheless, the U.S. trade representative has indicated that the U.S. may request WTO consultations or prepare a possible countervail/anti-dumping case. We have consistently made the point that our wheat exports are market driven and respond to the demand in the U.S. for a consistent, high quality product. Canadian wheat is traded fairly and the operations of the Canadian Wheat Board are in full compliance with all of Canada's international trade obligations. The Government of Canada will continue to defend the interests of this important sector.

In spite of these very important issues, we should not overlook the fact that there are many examples of the excellent co-operation that takes place every day to keep very large volumes of product flowing unencumbered across our shared border. Canada and the U.S. work together on many agriculture and agrifood trade issues, including everything from biotechnology issues to food safety, to customs procedures, and will continue to do so in recognition of the very important trade benefits that each country enjoys.

Before I finish, I would like to say just how naive I believe the opposition is being by proposing that the farm bill is a policy directed at Canadian producers and the fault of the Canadian government. This was a move to protect political interests in the U.S. during an election year. It is a destructive step backwards in global trade liberalization and no amount of lobbying from a conservative President Fox in Mexico or a close friend and ally, Prime Minister Tony Blair, was going to persuade the American congress and senate otherwise.

I would also like to comment on the opposition's poorly thought out suggestion that offsetting trade injury measures should be implemented. Canada is a key beneficiary of the rules based trading system under the WTO and NAFTA. If we believe that a trading partner has violated its trade obligations and injured our domestic interests we have recourse to WTO or NAFTA dispute settlement mechanisms.This is what a rules based system provides. Seven in ten Canadians think that Canada should follow established trade rules. In contrast, any targeted assistance to a domestic sector could be countervailable and would invite a trade action against Canadian interests.

[The Deputy Speaker]

Before proceeding to questions and comments, it is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for New Brunswick Southwest, Public Works and Government Services; the hon. member for Cumberland—Colchester, aboriginal affairs.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, first, I would like to make a suggestion to the hon. member who just spoke. Perhaps he should speak to the speech writing department at DFAIT and suggest that it produce more than one template speech for Liberal members because much of what he just said was reiterated verbatim by some of his colleagues earlier.

I find it quite remarkable that Canada today is facing the greatest trade catastrophe in post-war history and yet not a single member of the government has evinced a patina of responsibility on their part for what has happened. It is all the Americans' fault.

Could it be that the lack of action on the part of the United States to our trade concerns has something to do with the fact that the Prime Minister and his nephew both suggested support for Al Gore in the U.S. presidential election, or that the president has written off and dismissed the Prime Minister as Dino, which is apparently the nickname the president has given him, a representative of a political past that is not in touch with the American administration?

Would the hon. member also comment on the government's failure to take up proactively with the United States the possibility of broadening and improving the FTA and NAFTA to include softwood lumber since 1993?

Why is it that the government did not take up the mantle of free trade and press more vigorously for the kind of agreement which would have precluded the sanctions that are now threatening the existence of our lumber and agricultural industries?

[John Harvard, Liberal, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, I do not know whether I can answer all those questions. It might take some time.

First, let me point out one thing to the hon. member. I guess he has something against repetition.

Yes, the government has repeated certain points since the beginning of debate today. However I have been listening to the official opposition members and they have harped on the same thing over and over again. How many times have I heard them say that this was all the fault of the Canadian government?

If the hon. member is really serious maybe we would be more than happy to enter into a pact not to repeat anything that we say if members opposite will do the same. I doubt very much that he would enter into that kind of agreement.

Now he is suggesting that if we somehow had a better relationship between our Prime Minister and the president, this U.S. wave of protectionism would disappear into the ether.

Let me just advise the hon. member that in the last 20 years there have been four softwood lumber disputes. President Bush has not been there for 20 years. Our Prime Minister has not been here for 20 years. I suspect something else is at work other than what he is suggesting.

The hon. member has also suggested that perhaps we should open up the NAFTA package or even the free trade agreement that was consummated in 1988. Is that what he is seriously suggesting?

If he thinks that the free trade agreement and NAFTA are working quite well does he and his Alliance Party want to open them up? I would ask him to ponder on that for a little while.

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Mr. Speaker, I have three questions for the hon. member.

First, Canada's largest trading partner is the U.S. Eighty-five per cent of our trade is with the U.S. However the Liberal government has been ineffective in diversifying our trade with the east, west and south.

Second, the government has not strengthened our trade relations with our neighbours, our largest trading partner. This weak Liberal government has been an ankle biter to the Americans on ICC, the international criminal court; on the national missile defence; on landmines; and on NATO. The Prime Minister has even bad mouthed the American president on Open Mike . The Prime Minister and his cousin have also made other remarks.

Third, the government has been ineffective in taking care of the regulations controlling the lumber industry, forestry, particularly with counterproductive regulations. Even the market practices have not been dealt with by the government. New technology has not been encouraged for the forestry industry to use.

I would ask the member what the government has done to show that it has been effective in dealing with our trade, technology, regulations and other practices in the lumber industry?

[John Harvard, Liberal, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, let me remind the hon. member that since the implementation of the free trade agreement trade has doubled. I think that says something about not only the effectiveness of the trade agreement, but also the effectiveness of our government on this side.

If he is wondering about our relations with other countries, especially in terms of free trade, since 1993 under the Liberal watch, we have entered into a free trade agreements with Chile, Costa Rica and Israel. We are in serious negotiations with the EFTA countries. I think we are doing very nicely on those fronts.

[Marlene Jennings, Liberal, Parliamentary Secretary to the Minister for International Cooperation]

Mr. Speaker, in my view, this afternoon's debate is quite an important one. It is an opportunity for us to examine the current trade relationship between Canada and the United States and to look at the tools available to the government and to Canada to manage that relationship.

Canada's trade and investment relationship with the United States is fuelled by the increasing integration of our economies and facilitated by a rules-based trade system offered by the World Trade Organization (WTO) and the North American Tree Trade Agreement (NAFTA).

This relationship is also quantitatively and qualitatively different from that with any other country. Canada's relationship with the United States is both solid and dynamic. The two countries share the largest bilateral flow of goods, services, people and capital between any two countries in the world.

In 2001, Canada exported $351 billion in goods to the United States and imported $218 billion in return. Services exports totalled $31.7 billion in 2000, with corresponding imports at $37.6 billion.

Since the implementation of the Free Trade Agreement in 1989, two-way trade has more than doubled, as my colleague mentioned earlier. Since 1992, two-way trade in goods has increased by approximately 12% per year.

Moving about $1.9 billion worth of goods and services across the border each day, Canada and the United States are each other's largest customers and biggest suppliers. While the majority of Canada-U.S. trade moves freely across the border each day, disputes inevitably arise. Given the magnitude and complexity of the relationship, management of the Canada-U.S. trade relationship is Canada's top trade policy priority.

I now wish to address certain dispute settlement mechanisms.

Many people focus on the dispute settlement systems under the WTO and the NAFTA, which we are using, for example, in our softwood lumber challenges, as the key means of resolving disputes. However, Canada has an array of tools at its disposal to deal with disputes and to address issues before they become more problematic. These of course include consultative and dispute settlement mechanisms under the WTO and the NAFTA.

Before looking at the consultative mechanisms in more detail, I want to re-emphasize the preferential benefits for Canadian trade that have been a direct result of the NAFTA.

You will recall, for example, that Canadian exports were exempted from the U.S. safeguard action announced on March 4, 2002, imposing additional tariffs on imports of 16 steel products.

The fact that our exports of these 16 products were not subjected to these additional tariffs is very important. Since NAFTA, there has been an integration of the North American steel production sector. This is an integration that is not necessarily seen in other North American sectors. Canadian producers will tell us this and have told me this. In addition, American and Mexican producers have confirmed that steel is the most integrated industrial sector in North America.

This exemption was pursuant to those provisions of NAFTA that allow imports from Canada to be exempted from actions if certain conditions are met.

Over the past several years, this particular provision of NAFTA has meant that Canadian imports were exempt from the application of American safeguard action on such products as steel wire rod, line pipe, wheat gluten, tomatoes and bell peppers, and corn brooms.

In addition, Canadian exporters have benefited from the dispute settlement provisions governing anti-dumping and countervailing duty measures established by chapter 19 of first the Canada-U.S. free trade agreement and then by the North American Free Trade Agreement. On 22 separate occasions, anti-dumping and countervailing duties were reduced following chapter 19 review and, on one occasion, the duties were removed entirely as a result of such a review—softwood lumber in 1994.

I think it is important to focus on this good news, these positive effects, which demonstrate that we are indeed an important vendor to the United States and they are an important customer of Canada, as far as Canada-U.S. trade is concerned. In a goodly number of cases, disputes are settled with no negative effects. The mechanisms are in place and they are more than ever useful and effective.

Then there are the consultative mechanisms. I note that under the NAFTA, over 30 entities were established to facilitate trade and investment and to ensure the effective implementation and administration of the agreement. Key areas of ongoing work include trade in goods, rules of origin, customs, agricultural trade and subsidies, standards, government procurement, investment and services and cross-border movement of business people. These NAFTA working groups and committees help to smooth the implementation of the agreement and provide forums for exploring ways of further liberalizing trade between members.

Another important mechanism for managing bilateral issues is the Canada-U.S. Consultative Committee on Agriculture, the CCA. The main objective of the CCA , which is co-chaired by Canadian and U.S. officials, is to reach solutions to emerging bilateral agricultural concerns before these become major irritants.

The CCA has proven to be useful in a number of instances in relieving bilateral trade tensions and in forestalling precipitous actions by Northern Tier states in particular. An important feature of the CCA is the formal role provided for states and provinces: the Province/State Advisory Group serves as a forum for provincial and state governments—usually at the level of the provincial agricultural minister and his U.S. counterpart—to discuss bilateral agricultural trade issues and to work together on areas of concern.

I have not been able to address the involvement and role of parliamentarians but I think I have been able to demonstrate that the government will continue to make full use of the various mechanisms—some of which I have listed—and will do everything possible to ensure prompt resolution of the inevitable disputes.

We are counting on the WTO and NAFTA to further improve access to markets and to fine tune the rules of international trade. I think this is the general strategy that is required.

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Mr. Speaker, after listening to the hon. member it is apparent that her speech was handed to her by someone in the department.

She has gone on about a number of different mechanisms. We all know those mechanisms exist but the reason we are in this crisis, which should be made clear, is because of the government's complete and utter mismanagement of the relationship between Canada and the United States.

Regarding the softwood lumber issue, we will get to the mechanism at the WTO and at the NAFTA. However in the meantime we have tens of thousands of softwood lumber workers unemployed. We have mills in a financial crisis and now they are having to face the burden of billions of dollars of tariffs imposed by the United States because of the way the government has confounded friendly relations with the U.S.

The government has mismanaged this portfolio in a huge way. A number of things have happened such as the ambassador from Canada saying during the U.S. elections that he was hoping for an Al Gore democratic win.

Does she not believe that rather than getting into the issue in February 2001 the government could have eased the burden of this crisis if it had dealt with it before the SLA expired?

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I have to wonder sometimes where some members of the opposition are. I will not say all as I do not want to generalize.

I understand that the member may not have been in the House of Commons for the past 20 years, but if we are to believe that he is as well read and as interested in the issue of softwood lumber, in the issue of agriculture and the protectionist attitudes of the United States, then he would know that in terms of softwood lumber there have been four disputes in the past 20 years.

The issue of whether or not Mr. Bush feels as friendly or has as heart warming sentiments toward our Prime Minister as he or his father may have had toward previous Canadian prime ministers simply is not an issue. It is silly. I cannot believe that the member, who normally tends to speak with a little more common sense than not, although I will not put a precise figure to that, would make such a statement.

Yes, there is a softwood lumber dispute going on now and Canadians know there is a dispute. The difference between the official opposition and some of the other opposition parties and the Canadian public is that the Canadian public thinks the government has taken the issue seriously. They know that the government did not just start negotiating when the agreement ended but it began working and negotiating years before, As a result of the government's action there was and still is a coalition between the provincial and territorial governments that are concerned with the sector, the players and with the unions.

It is interesting that the government was able to forge the front. The front did not just happen the day after the agreement. The specific agreement is as a result of the work of several years.

I would like the member of the opposition, if he should speak to this issue again, to at least recognize that the common front that continues to exist to defend the Canadian softwood lumber industry--

[The Acting Speaker (Mr. Bélair)]

Resuming debate, the hon. member for Medicine Hat.

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, it is my pleasure to rise and address the motion. I want to remind the House and the people who are watching on television exactly what the debate is about. The motion states:

That this House has lost confidence in the government for its failure to persuade the U.S. government to end protectionist policies that are damaging Canada's agriculture and lumber industries and for failing to implement offsetting trade injury measures for the agriculture and lumber sectors.

I want to address some of the things that my Liberal colleague said a moment ago. She talked about how ridiculous it is to suggest that some of the problems that we have right now might flow because of bad relations between Canada and the United States. I will give a little historical background.

Coming out of the second world war Canada and the United States established all kinds of unique arrangements and partnerships, especially on defence. The reason we could do that was because the Americans trusted us as an ally. They knew that we would stand by them shoulder to shoulder. There were all kinds of arrangements, from Norad to purchasing agreements that allowed the Canadian defence industry to participate in bidding on U.S. defence contracts. There were literally dozens of them. They were not agreements that were open to any other country, just Canada. They flowed from the fact that we were a trusted ally.

I want to argue that the government has eroded that relationship. It has poked the U.S. in the eye, over and over again. We had the Prime Minister running around campaigning and saying that he did not want to be a close personal friend with President Bush, like Brian Mulroney was with Ronald Reagan. He made a point of that. As though somehow we define our sovereignty by how we alienate the Americans even though they are our largest trading partner, the most powerful nation in the world. What good can come from that I do not know but that is what the government did. Now the government denies that it is a problem. I think that is complete hokum and it defies common sense.

I want to address a specific issue that is important for my riding. We export cattle to the United States. Alberta is the biggest cattle exporter of any province. In total the cattle industry is worth about $3.5 billion of exports into the United States. We export grain and oilseeds which have been pounded in recent years by low commodity prices. We also have other kinds of products, for example, vegetables and other commodities. They are all going to be hurt by the U.S. farm bill.

What concerns me is that the government knew for months, in fact years that this was coming, but it did nothing. For example, my friend from Lethbridge in February asked a specific question of the agriculture minister about country of origin labelling. He pointed out at that time in February that there was a connection between the insistence of the U.S. to push toward country of origin labelling and something called terminal protocol, which is effectively a way of allowing U.S. beef to come into Canada, be fed in Canada, turned around and sent back to the United States where it would be slaughtered.

The problem at the time was that some people were concerned about a couple of diseases, one of which is called bluetongue. There was concern that if these cattle came in there might be some chance that bluetongue could be spread in Canada. The Canadian Cattlemen's Association, although it had a few reservations said it was a manageable problem. The feeder said there was no problem, to bring them in, and it could work with that.

When my friend from Lethbridge asked the minister about it, first the minister torqued the issue and said that the Canadian Cattlemen's Association was completely opposed which was untrue and at the time he did acknowledge that there was a tie between country of origin labelling and the terminal protocol. However he did not do anything about it. Even though there is broad support to establish the terminal protocol and effectively get rid of the country of origin labelling problem, he did not do anything about it. The result is that Canada now faces at this point voluntary, but in a couple of years mandatory, country of origin labelling which will have a huge adverse impact on the cattle industry in Canada.

I remind viewers and the House that the prairie farm economy is reeling right now. Grains and oilseeds are in terrible shape. Commodity prices are low. There is a drought in my riding, in Lethbridge and much of Saskatchewan. The one pillar that has been fairly strong but has started to weaken recently has been cattle. It will be devastated if country of origin labelling comes into effect as a mandatory measure in two years.

The government had the chance to stop it and the minister as much as admitted that, yet it did nothing. That is unacceptable. It had the chance. It has absolutely blown the trade file in so many very specific ways. It is unforgivable at a time when agriculture is reeling. The government and the minister had a chance to do something and grab the opportunity. Unfortunately they did not do that.

This is a $180 billion program that the United States is implementing over all, or $280 billion Canadian. It will have a devastating impact on commodity prices over the long run. It will set back negotiations with the Europeans at the next round of GATT. I am worried that it will take a longer period of time to drive down subsidy levels overall, which means that many farmers, including farmers in the third world, will suffer.

There was a time when Canada had tremendous influence with the Americans. That was one of the selling features of Canadian foreign policy. We used to say that we had a privileged place at the ear of the Americans. We were their greatest ally, their greatest trading partner, and we could talk to them about these things because we had that privileged position. Clearly, we have lost that. We were not able to do anything on softwood lumber and the U.S. farm bill. It speaks volumes about how we have lost prestige in the eyes of our American neighbours.

I believe we need two things. First, we need a change of attitude over on the other side. We must start looking at the U.S. as our ally and friend. When we are called to stand beside the U.S. after an event like September 11, there should be no hesitation. We saw hesitation from the government. We have a moral and legal obligation to get behind the U.S. when that kind of reprehensible act happens. We did not do it. We dropped the ball. I was truly ashamed of the government in the wake of September 11.

Second, we need an action plan when it comes to these sort of trade disputes. The Mexicans and the Americans are working on a rapid response trade dispute mechanism. The U.S. senate today passed a bill that starts to address that. Canada has not done anything.

My friend from Lethbridge has a private member's bill or motion that begins to address those things but the government has done nothing. We need an action plan that has measures like that. We need an action plan that begins to think about trade injury compensation programs. The government has not even thought of a plan even though it knew that the softwood lumber agreement would come to an end after five years.

The government has really bobbled the trade file. It has done a terrible job in establishing long term good relations with the United States, our greatest friend and trading partner, the most powerful nation in the world, one that we have had a long friendly relationship with. The result is that Canadians are paying the price. They will pay the price in the form of our inability to export the way we need to do as a trading nation and that will result in a lower standard of living.

I urge Liberal colleagues across the way to pay attention to what they have heard from my colleagues today on this issue. If they do, I know that they would begin to produce a trade policy that would make some sense.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Mr. Speaker, one of the suggestions made by my colleague from northern Manitoba was that Canada should institute a national housing program so that we could use a lot of materials within our own country to help support national housing programs and build units across Canada so that no one would have to be homeless. It would do two things. It would provide quality homes and jobs for people, and provide homeless people with a place to live. Would my hon. colleague from Medicine Hat support that type of initiative?

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, I appreciate my friend's concern about the homeless. I know he is a pretty compassionate person and that he has thought of this idea which is wonderful. However what that would do is let the government off the hook on this issue.

I would love to have a debate sometime about how we deal with homelessness in Canada. It is a serious issue. What I am concerned about is that if we start to offer those types of solutions, we will never resolve this over the long run. We ultimately need to have a WTO ruling that would lend credence to what we already know is true: that Canada is correct on this issue.

Unfortunately, the government did not do a good job of preparing us for what would happen after the previous softwood lumber agreement came to an end. We are in the unfortunate position now where we are starting to think about those kinds of things. If we had started to deal with this a number of years ago, we would not be having a discussion today about the sorts of issues that my friend has raised. I think that is--