House of Commons Hansard #35 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was finance.


Committees of the HouseRoutine Proceedings

11:20 a.m.


Rahim Jaffer Conservative Edmonton Strathcona, AB

Mr. Speaker, I do appreciate the thoughtful question from the parliamentary secretary. I tried to approach the issue in two ways when we dealt with it at committee. The hon. member was present and we had a huge debate.

What the member is asking for specifically also was addressed by the industry. Can it remain competitive with this particular regime? Also, should we be phasing out the tariffs over time or should we do it over a certain time? How long should the duty remission exist?

Basically the feedback we received from the industry was that it could remain competitive if this were not in place, but obviously not overnight. This is the argument we are making. That remission order needs to be extended.

I cannot answer on how long it should be extended for, because clearly there are certain things we can do in order to deal with allowing for the industry to become more competitive. That is, where we do have trading partners, we can deal specifically with these tariffs that are charged on these types of products and start negotiating through the WTO and others, such as the Free Trade Area of the Americas, with the countries that are not dealing with reducing the overall tariffs.

The government can actually lead on that and try to lead the argument to reduce the overall tariffs. If that could happen more quickly, then we would not need this remission order in place for very long. Clearly our industries can compete once we address those issues of tariffs. Ideally, I would like to see them phased out quickly as long as we can do something on the flip side and deal with the overall tariff regime.

I know that initially we are calling for the extension of the remission order, so that will deal with the initial $30 million that the parliamentary secretary mentioned. We are willing to deal with that right away.

As for eliminating the rest of the tariffs, I am willing to open up that debate and look at ways to be able to phase it in. I know that it would be difficult to do it overnight, just as it would be difficult to eliminate the remission orders overnight. I would be willing to debate that and see how we could possibly phase it in, as I said, for the best interests of the industry.

Committees of the HouseRoutine Proceedings

11:25 a.m.


Bev Desjarlais NDP Churchill, MB

Mr. Speaker, my question for my colleague is in response to a comment he made earlier as well with regard to being surprised that the NDP members would say that they are not in favour of tariffs. I know that comments were made earlier by another Conservative colleague with regard to how we have to let the marketplace indicate how processes should evolve.

I wonder what my colleague's thoughts are on this issue we are dealing with today on the importance of having it resolved before the end of the year so that the industry is not jeopardized. As well, there were his comments on whether or not as a country we continually allow our resources and our jobs to go out of the country for the sake of globalization and letting the market set the standard, without ensuring that labour laws, human rights laws and all those types of processes are in place. I would like to hear his comments on that.

Committees of the HouseRoutine Proceedings

11:25 a.m.


Rahim Jaffer Conservative Edmonton Strathcona, AB

Mr. Speaker, that is a tough question to answer in the short period of time that I have, but I appreciate the question.

As I stressed in my presentation, we need to address the duty remission orders immediately. In fact, we raised it in April of this year in committee because we did not want to leave it until the end of this deadline that we are facing. We still have no indication from the finance minister if the department is going to extend these remission orders.

Clearly, I feel it is very important and that is one of the reasons we addressed it in April. I hope we will get some indication, after today's debate, from the Department of Finance and the minister that this will happen.

Regarding the other question that the member asked, it is clear that one of the reasons of addressing the issue of tariffs and dealing with this particular industry, which has been around for a very long time in this country, is to ensure that it remains competitive, employs Canadians and stays here at home. One of the fears that we have, by not addressing the issue of tariffs, is that these industries will leave.

Committees of the HouseRoutine Proceedings

11:25 a.m.


Gary Goodyear Conservative Cambridge, ON

Mr. Speaker, I support the motion that is before the House this morning. The unfortunate truth is that this motion is required to be before the House because the government has failed to act. It has failed to act in a timely fashion despite repeated requests, despite ample time, and despite instructions to do so by the House and the Senate.

Duty remissions which assist the Canadian apparel industry to solve previous problems created by unfair tariffs are set to expire December 31, 2004. This issue has been before the House many times. The government has shown a complete lack of interest requiring this action by the House today. The government has failed to act. I cannot tell if that is a result of a lack of interest, a complete inability to grasp the complexity of this issue, or incompetence, or maybe it is a bit of all of the above.

It certainly lends credence to the old adage that if this government owned McDonald's, a Big Mac would take three weeks to prepare. Frankly, the motion that is before the House this morning is simple. It is a simple fix to a simple problem. It is a fix that was unanimously supported, discussed and voted on by an all party committee. The finance committee made three relatively brilliant recommendations to what appears to be a debacle from past issues raised by the government and past attempts to fix mistakes.

What is this minister doing? The Minister of Finance is discussing it with his senior staff considering other things and looking at other solutions. That is great and indeed necessary, but these people need help now. The minister has taken it upon himself to go in a different direction. What for? He has his marching orders. He has been instructed by the House and by the Senate. If there are other solutions, and there will have to be to fix this package of bungled bureaucracy in government, then we can look at those too. No question about that, but please, deal with this issue today.

The amount of bureaucracy in this area is equally astounding as it is in all areas that the government touches. If it is not a study, or in the case of this present regime, an investigation or an inquiry, the government spends far too many tax dollars on programs that just do not seem to be necessary. Members will recall that this is the government that spends $20,000 to hand out $3,500. This entire tariff program is wrought with the same kind of bureaucracy.

Does it make any sense to anyone that if we were to import silk and claim we were going to use it to make a tie, we would pay a lot less than if we said we were going to use it to make a woman's blouse? Gender inequity is appearing everywhere in the government. Perhaps the minister intends to fix this bungling too and so he should, but that can wait. This cannot. This same solution was put forth by the Prime Minister who was then the Minister of Finance in 1997 and it had no global impact and no negative effect.

When owners of John Forsyth in my riding of Cambridge called me a few months ago, they said the issue had been going on for far too long and the deadline was fast approaching. They were at a loss to tell me how such a seemingly simple solution was not solved or implemented especially since the member in my riding at the time was from that side of the House. How is it that half of the factories are in ridings from that side of the House? How is it that it always seems to be the opposition that has to get the job done?

I offered to meet with the people from John Forsyth immediately. In fact, I offered to meet with them the very next day because I took this issue very seriously. I have since met with the owners, the manager and the workers personally. When I entered John Forsyth plant in Cambridge, above the rhythm of finely tuned sewing machines and expensive machines that precision cut over 100 sheets of fabric at one pass, I saw an industry that has remained on the cutting edge, not to use a pun. This industry, whether it is Hathaway in Guelph or Miller Shirts in Montreal, has done its very best to stay competitive.

I also saw bulletin boards with pictures of picnics and celebrations of these workers and a corkboard with hundreds of pins identifying the locations of the different countries from which these hard working Canadians came from. The most visually impacting thing that I saw was the people themselves and a management team which showed deep concern for its people. I saw an owner who was gravely worried, not only for his own future but for the workers that he had come to know. I saw 200 workers behind which were families with children, homes with mortgages, and educations waiting to be undertaken.

I saw Canadians with jobs. I saw people with worry, indeed many with tears. I also saw a careless government that has allowed these people to teeter on the edge of collapse and to go needlessly week after week while the minister sits, thinks, discusses it and appears to be doing nothing.

I have asked the minister by letter, by phone, by e-mail and in the House on numerous occasions, and still no action. I wrote a letter to every single member whose ridings had these very factories in them. I informed them of the problem and the simplicity of this particular solution. I asked all of them, Liberals, NDP, Bloc and of course my own Conservative members, to join me to pressure the minister into doing the correct thing, not in a few weeks forcing these people to suffer longer and longer, not in a few weeks debilitating the managers and owners of these companies from planning and forecasting, but now.

In my riding there are 200 workers and their families are in shambles because of the government's inability or refusal to act. Rather than flying around the country campaigning, perhaps the Prime Minister should have stayed home and addressed the inadequacies of his ministerial departments. Rather than standing in the House a few weeks ago, bragging and taking credit for jobs the finance minister claims his government created, any logical thinking person would give at least equal attention to the jobs we already have.

Let us talk about the minister singing his own praises. On November 5 in response to my question regarding this issue in the House, the minister bragged that the government had created thousands of jobs. The fact is that last year, of the jobs created, only close to 40% were in the public sector which is paid for by our taxes. Of those jobs that were created in the private sector that he bragged about, some 60,000 of them were classified as self-employed, which is defined as earning one penny or more.

Further, statistics during that same period the minister was bragging about creating jobs, unemployment went up by 10,000 people, 6,000 in the manufacturing sector. These were jobs we had and were lost. This is exactly why we are here today. We are here once again to speak to the government's inability to step up and step off its high horse, to stay in touch with Canadians, and emphasize its inability to come up with ideas that do not create more collateral damage than they are designed to fix.

We care on this side of the House for all Canadians, new and existing, those with and without degrees. Those we care about are with and without jobs. For the community of Cambridge and of course the entire country as a whole, I support this motion.

Committees of the HouseRoutine Proceedings

11:35 a.m.


Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I will be splitting my time with the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

It is a pleasure for me to take part in this debate. The Bloc Québécois will be supporting the motion of the hon. member for Winnipeg Centre. We feel that the government's attitude toward this motion and toward the report from the Standing Committee on Finance is totally incomprehensible.

Moreover, the speech by the member for Etobicoke North has not fully convinced me. In general terms, he is telling us that the committee adopted this report unanimously but that now the government is not obliged to apply it in its entirety. That is true, but the House could at least use it to encourage the government to act.

This position is all the more incomprehensible because the problem is unavoidable. We all know that, following on a decision made 10 years ago by the GATT and the WTO, on December 31, quotas will be disappearing and tariffs will start to decrease. This will pose a serious problem for our apparel industry and has already become a problem for the textile industry.

The report before us was a unanimous report. I was sitting on the Standing Committee on Finance at the time when it adopted this report, in April 2004. The Liberals voted in favour of the report, as did the New Democratic Party and the Conservative Party. This is even more incomprehensible, the problem is so impossible to ignore that, just this afternoon, the Subcommittee on International Trade, Trade Disputes and Investment will be looking into the issue.

We had the contribution of a committee that had been unable to table its report because an election had been called, which was a first step toward resolving a problem that cannot be ignored. Liberalization of trade will have, and indeed has already had, an impact in the textile and apparel industry.

The apparel sector is already benefiting from the effect of the decision, which we supported, to unilaterally eliminate tariffs on apparel from 40 of the world's poorest countries. This tariff reduction on apparel from less developed countries has had an impact. According to testimonies heard at the time at committee, in 2003, imports from countries like Bangladesh or Cambodia increased dramatically.

Nevertheless, I would like to come back to the substance of the issue. We support the motion put forward by the hon. member from the NDP, but we cannot understand the government's position. We have to look back at the recommendations made by the committee at the time. As hon. members will see, these recommendations make good common sense in the current situation. They are inadequate—and everyone will agree on that—because the problem is much deeper and more structural. They do however represent unavoidable steps in resolving the structural problems facing the textile and apparel industry.

The first recommendation was that the federal government immediately extend, for a further seven years, the duty-remission orders covering the apparel sector that are set to expire on December 31, 2004. What does this mean? The member for Berthier—Maskinongé and I had a chance to visit Empire Shirt, the oldest shirt maker in Canada. It has been making shirts for more than 100 years, and the situation became very clear to us. On the volumes that garment importers and manufacturers were importing in 1995, the federal government decided to remit the customs duties to them.

They, in turn, were able to invest that money to keep their plant competitive. As a result, the company that has been around for more than a hundred years still has a hundred or so employees. If it had not had access to these duty remissions, the company probably would have either closed or be on the brink of closure, and the removal of quotas on December 31 likely would have been a death sentence.

Nonetheless, thanks to these duty remissions, this company was able to invest, improve its technology and also make bids including some imported shirts and some made in Louiseville. As a result, it got contracts not only in Quebec, but throughout Canada and the United States. These contracts came from public companies, police forces, and retail or fast food chains.

The duty remissions were granted by the government in 1995. The whole list of remissions is included in the document. This company—like many companies, probably—adapted to the new rules of the game.

The question, then, is this: Why would the government let these duty remissions end on December 31, even though the tariffs are not disappearing? On December 31, the quotas for imported clothing from China, India and other places will fall, while the other less developed countries were already covered by the unilateral decision made several years ago. The tariffs will not disappear overnight.

Thus, my company, Empire Shirt in Louiseville, will continue to pay duties. Perhaps these duties will be reduced over three, five or seven years. I do not have the details; I will have them this afternoon when we meet departmental officials. Having paid these duties, such businesses can expect remission of duties for quantities on which the federal government has already granted them. If not, the businesses will not only have to face the challenge of the borders being opened in terms of quotas, but also will have to pay duty on imports of shirts or clothes, without any remission. At that point, of course, their competitiveness is in danger.

I have told the House about one case, but I am convinced that in the industry as a whole these duty remissions are one way to help companies face the new situation.

That was the first recommendation. I am convinced that we all now agree it is only common sense.

The second recommendation is:

That the federal government immediately end tariffs on inputs which are not produced domestically. Textile producers seeking continued tariff protection should be required to establish that they sell their products to Canadian apparel manufacturers.

I have an example of this. A textile product is manufactured in China and sold to a company in Bangladesh. The shirt or other garment manufactured in Bangladesh enters Canada without customs duties because such duties were unilaterally eliminated. As I mentioned, the Bloc Québécois agrees with this. On the other hand, what is incomprehensible is that a Canadian or Quebec manufacturer importing the same textile—the same cloth—from China, will pay the duties. Not only have we unilaterally agreed to drop customs tariffs on clothing coming from Bangladesh, but what is more, we penalize our Canadian and Quebec manufacturers making the same type of garment. It is hard to imagine someone being more masochistic than that. We have seen, though, that this is not the only area where masochism seems to be the rule.

This recommendation does not propose to completely liberalize the textile sector. On the contrary, it asks the federal government to immediately end tariffs on inputs which are not produced domestically, so as to give our producers a chance to compete with products that come from third world countries.

Again, we were in agreement with the unilateral abolition of these tariffs. We are simply asking that, in the case of textiles inputs not produced in Canada, the government immediately end tariffs, so as to give our producers a level playing field to allow them to compete with foreign products.

The third recommendation reads as follows:

That the federal government immediately undertake a study of temporary adaptation measures to enhance competitiveness, as well as the benefits and costs of eliminating tariffs on imports of fabric for use in the Canadian apparel sector, the types and quantities of products produced by the Canadian textile industry, and the practice of tariff differentiation on fabrics based on their end use. The results of this study should be tabled—

I agree with the former Chair of the Standing Committee on Finance that the two recommendations are a necessary but insufficient basis to solve the problem in our apparel and textile industry so that it can be competitive. What are proposed are adaptation measures.

There is currently a great deal of research and development going on in the apparel and textile industry, but these efforts are not recognized by the federal government the way they are in other industries, such as aerospace and automobile. In fact, this is just a matter of fairness.

Committees of the HouseRoutine Proceedings

11:45 a.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, my colleague from the Bloc Québécois has raised many fine points. We share the same view that the policies of the government make even more necessary the extension of the duty remission orders.

I am glad that he raised the least developed countries issue. In 2003 the Liberal government, without much consultation with the industry in Quebec or in the rest of Canada, introduced the least developed countries provisions which allow 48 eligible countries to import their products duty free. The manufacturers in Canada still have to pay duty on the raw product to the extent of, in many cases, 18% to 25% duty.

This puts unbelievable competitive stresses on the Canadian and Quebec manufacturers. It gives an advantage to those products manufactured in the least developed countries, even if the owners of those factories in the least developed countries may be global multinational companies. Would my colleague from the Bloc agree? Also, would he agree with me that the least developed countries provisions were absolute folly and in fact had contrary effects to the industry and give justification to extending the duty remission orders?

Committees of the HouseRoutine Proceedings

11:45 a.m.


Pierre Paquette Bloc Joliette, QC

Mr. Speaker, as I mentioned, we supported that measure. In fact, a number of developed countries made a commitment to the UN to unilaterally liberalize their market for the 40 least developed countries. However, we should all recognize that this measure has had an impact on employment and on the industry.

Therefore, just imagine what will happen on December 31 if there are no support measures for the apparel industry and for the textile industry. The situation could indeed become catastrophic. I believe the federal government has a responsibility. In fact, it recognized this by setting up an employment adjustment committee, albeit too late and without adequate means.

We must now repair the damage done and ensure that the apparel industry, like the textile industry, will get some support from the government to enhance its competitiveness and face foreign competition, particularly from third world countries.

I just want to mention some figures. According to the president of the Canadian Apparel Foundation, imports from Cambodia have increased by 328% since the liberalization of the market, in 2003, to $83 million, while those from Bangladesh increased by 115%, to $3 million. The 40 least developed countries only account for 3% of the Canadian market.

So, I agree that this measure has had an impact, but it is nothing compared to the one that the lifting of quotas, on December 31, will have on the apparel and textile industry.

I fully agree with the hon. member that the federal government has a responsibility that it has failed to assume to help this industry adjust, enhance its competitiveness, do research and development, and provide manpower training, which are the ways we will ensure the future for our industry.

Committees of the HouseRoutine Proceedings

11:50 a.m.

Scarborough—Guildwood Ontario


John McKay LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, the hon. member was on the finance committee when this report was written. He made a very thoughtful contribution as well to the work of the committee. At this point I am actually even missing him and his contribution at the committee, as unbelievable as that might be.

He did focus somewhat on the second recommendation, the immediate end to tariffs on inputs. We have CANtex, a program which generates about $26 million in direct assistance to the textile industry, but simultaneously the industry pays about $15 million in duties. It seems that the right hand is not necessarily talking to the left hand.

I would be interested in his comments as to whether, on the second recommendation, independent of the issue relating to the first recommendation, he thinks the government should proceed with that recommendation. If it does proceed, should it also keep in place the support programs for the textile industry?

Committees of the HouseRoutine Proceedings

11:50 a.m.


Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I thank the parliamentary secretary for his kind words. We must not throw the baby out with the bath water. The federal government's intervention to help the apparel and textile industry must be multi-faceted.

In my view, duty remission is still a necessary support. We are talking about a great deal of money, $13 million a year for the shirts alone. In a sector where we know the profit margin is relatively low, $13 million is a lot of money. It is probably money that is needed for investment. I think there is room for several types of aid.

I will conclude by saying that, in terms of textiles, according to what we are told, Canadian textile inputs in apparel do not exceed 30%. In other words, 70% of the industry is in other areas and that is where we need to help our textile industry.

Committees of the HouseRoutine Proceedings

11:50 a.m.


Paul Crête Bloc Rivière-Du-Loup—Montmagny, QC

Mr. Speaker, what a fine name for a riding. I rise today to speak to the debate on this motion and to congratulate the hon. member who presented it.

Reference was made to the report prepared by the Standing Committee on Finance in April 2004, in which a heartfelt cry was made to say that, in the apparel industry, as in the textile industry in Canada—but the report specifically talks about the apparel industry—there are some real structural changes that are the result of the GATT agreements. On December 31, the quotas will be eliminated and the tariffs will start to decrease. This industry will have to overcome an extraordinary and very difficult challenge, which it is already facing right now.

Knowing that these things are in place has an impact on investment choices. The apparel industry is the tenth largest manufacturing sector in Canada, with more than 93,000 employees working in 3,900 establishments. It accounts for 2% of Canada’s total manufacturing gross domestic product, 4% of manufacturing investment and 4.4% of total manufacturing employment.

This is an important field and also one where newcomers to the country often get their first job. People who work in this industry often have not had much formal schooling, but they develop expertise on the job, and now are likely to find themselves with no future.

The report asks whether, in preparation for the coming storm, certain measures could not be put in place. This is the outcome of consultations with the industry.

The first of these would be the remission of duties. It would be an exemption from customs duties, in whole or in part, from import charges or taxes on imported products.

Remission orders have been issued for a variety of products: tailored collar shirts; outerwear greige fabric; shirting fabrics; outerwear; blouses shirts and co-ordinates; apparel fabrics. All sorts of specific types of garments or fabrics have been allowed remissions in the past, particularly at the time agreements like the free trade agreement were adopted.

Now we have a new era, one that will start on December 31, 2004. The industry is asking for a least a chance to prepare so that it can come through this properly. Extending the remissions by several years so that it can continue to earn revenue on these products would help the industry out.

As my colleague has said, this is just part of a far more general program the government must take action on.

Today the House is going to send a message to the government that a far more structured intervention is required than there is at present, if only in connection with the third recommendation in the report.

The third recommendation states that the federal government must immediately undertake a study of temporary adaptation measures to enhance competitiveness as well as the benefits and costs of eliminating legislation on imports of fabric for use in the Canadian apparel sector. These are things that ought to have been done a long time ago, but we realize they were not done properly.

I am aware, particularly in my capacity as Industry critic, that there has been a kind of laissez-faire attitude in the Department of Industry on this, which is the source of the government's inaction.

The federal government, in its strategies for various international trade sectors, has made choices. It has accepted that some sectors must be sacrificed. The spirit which prevailed in the determination of these sectors is still active, but there are sectors that deserve to be specially supported.

The parliamentary secretary was telling the House about the CANtex program. Yes, it is interesting, but the amount of money involved in it is inadequate. In addition, there are concrete, short-term measures that should be taken, and that are not being taken, such as the measures in the report we have before us.

Would it not be appropriate for the members of this House to agree to ask the government to reply to the report? The parliamentary secretary had a question, namely, whether we were in favour of recommendation No. 2. Certainly, this is a field involving many complex choices. We must look at the consequences of our actions.

Nevertheless, the recommendation that has been made is logical in one way. It gives our garment industry access to textiles without it being penalized, while the rest of the world is given entry without tariffs into the Canadian market. The current situation is unacceptable. People producing garments in Canada cannot have the same advantages as people who produce garments outside the country. Something about that needs to be corrected.

Should we get into the specific details of the recommendation? With regard to imported textiles, we must be very clear that there is no question of their competing with textiles produced within the country. In my opinion, such things can be specified.

Nevertheless, today, the garment and textile industries are feeling abandoned by the federal government, which has engaged in a laissez-faire policy that is not properly applied to this sector and will have very negative consequences on the jobs involved.

Even in an economy like ours, which is working well at the moment—in North America and all over the planet, there is growth—there are sensitive sectors like this, which often have a major impact on communities.

It has become apparent that in the distribution of industries in the textile and apparel sectors, entire municipalities have been dependent to some extent on the continuity of employment by a business, and sectors in some big cities, such as Montreal, are also dependent. Thus, it is important that measures be taken by the federal government.

We have accepted the fact that there will be a free market. We have seen the benefits it can have for developing countries. We have accepted all that and that is what we want. We are prepared to work in that direction.

What we find unacceptable is that the federal government is making its own manufacturers less competitive than their foreign counterparts when it comes to selling products on Quebec and Canadian markets. That is what we find unacceptable.

The Bloc Québécois supports this report and wants it to be adopted by the House and to have the government respond to it as soon as possible. In any event, the federal government should—in this sector and in others—announce its industry strategy as soon as possible so that the industry knows what to expect—and not just piecemeal programs.

In my opinion, that is the message hon. members in this House must send by adopting this report.

Committees of the HouseRoutine Proceedings



Bill Blaikie NDP Elmwood—Transcona, MB

Mr. Speaker, I want to put a question to the hon. member who just spoke, but before I do I will preface it by saying that I was a member of the committee that produced the unanimous report that the Minister of Finance is now ignoring, refusing to sign these duty remission orders and, for that matter, to move on other aspects of what was recommended unanimously by the committee.

I wonder if the member would care to comment, if he has not already and for that matter even if he has already, on the strange position we find ourselves in today. We are in a Parliament where the new Prime Minister has made a big deal out of trying to address the democratic deficit and giving members of Parliament more say in the formulation of government policy, and here we have a perfect example of what a Prime Minister who was serious about dealing with the democratic deficit would do. A Prime Minister who was serious about this would respect the unanimous recommendation of a committee on this particular subject.

I know it is of particular importance to the member for Winnipeg Centre but also to myself as another MP from Winnipeg. Jobs are at stake in Winnipeg. It is not only an employment issue but it is also a democratic issue for this Parliament.

I wonder if the member would care to comment on how odd he may find it that we have to be doing what we are doing here today, holding up what would otherwise have happened today in the House of Commons, in order to try to get a government, that says it wants more democracy in this place and wants to extend more respect for the opinions of members of Parliament, to actually live up to its rhetoric about dealing with the democratic deficit. Why will the government not respect the unanimous recommendations in the committee's report?

Committees of the HouseRoutine Proceedings



Paul Crête Bloc Rivière-Du-Loup—Montmagny, QC

Mr. Speaker, I thank my hon. colleague for his question. I will give him an example to illustrate why I think the government is behaving the way it is.

Three years ago, a unanimous report on employment insurance was adopted. At the time, we had, across the way, a majority government, which acted as if it did not have to take this report into account. Today, I get the impression that we are confronted with a holdover from a government that has not yet got the message that the people of Canada have chosen to have a minority government. This means that they want their opinion to be conveyed through Parliament. That is what we are doing today by asking that this report be concurred in.

The federal government has not yet made peace with the idea that it has to take this state of affairs into account and that, when a will is expressed through Parliament, it has to be taken into account. I hope that, today, we will find significant support in this House, not only among opposition parties, but also on the government side, to ensure that the government will at least be required to respond to the committee's recommendations.

In April 2004, we were very aware of the problems to come. We had an election campaign. After the election, the government did not act, it did not implement the relevant measures. It is therefore perfectly logical to try again, to ensure that it will act; the matter has to follow its course.

The apparel industry in Quebec and Canada, which long provided a livelihood for many, is going through major changes. If we want this industry to continue and R and D efforts to produce results like the CANtex program, to which the hon. parliamentary secretary referred earlier, businesses have to be able to operate in the meantime. That is what we want, and what we have called for.

I think that this is a great opportunity for the government to show that it has indeed heard the expression of the will of the people of Canada to have a minority government, which will have to take into account the support for positions taken in Parliament. If this report is eventually concurred in, the government will feel compelled to evaluate it and to make recommendations as soon as possible, because organized and structured action is urgently required in this sector. At present, there is no indication that the current federal government is taking any action.

Committees of the HouseRoutine Proceedings

12:05 p.m.

West Nova Nova Scotia


Robert Thibault LiberalParliamentary Secretary to the Minister of Health

I am delighted to have this opportunity to discuss the motion.

I appreciate this opportunity to respond to questions concerning the first report of the Standing Committee on Finance entitled “Duty Remission and the Zero-rating of Tariffs on Textile Inputs”.

My hon. colleagues are no doubt aware that the Standing Committee on Finance agreed on October 19 to reissue the fourth report from the 37th Parliament in the current session of Parliament and to present it in the House with a request for a global response from government.

The report raises some important questions of interest to the Canadian textile and apparel industry. I can assure the House that it is a priority of this government to proceed as expeditiously as possible with its consideration of the committee's recommendations.

The Canadian textile industry is one of Canada's oldest manufacturing industries. It has evolved through innovation and modernization to become a key player in the provision of specialized fibres and textiles in a highly competitive international market.

Established over 150 years ago in small communities that offered a stable labour supply and rivers ideally suited for water generated power and dye and finishing, the industry was initially based on the manufacture of yarns and fabrics for natural fibres.

Currently the industry is located mainly in Quebec and Ontario. It is heavily capital intensive and uses natural and man-made fibres and yarns. It supplies over 150 industrial and other customers in Canada and worldwide.

While this industry, as I mentioned, is currently mostly in Quebec and Ontario, it is not exclusively. Windsor Wear still operates in Windsor, Nova Scotia. We still have operations in Truro, Nova Scotia. Regrettably, we lost two operations that were in my riding, Dominion Textile which operated for over 150 years, and Britex, which I believe operated for 40 years. We have another one, Bonda, which still operates, but not at the level that it once did.

That these three examples from my riding, very old and very good companies, were able to disappear speaks to the fragility of this industry. It is important that we take all measures possible to protect this industry and give it the chance of success.

We have to seriously look at what the market is doing over time, what industry is doing over time and how we can make sure it is there through some short term or maybe punctual examples of assistance or aid that we can give, such as what is being proposed here.

I look forward to seeing the minister's response and what actions are taken. I was a member of the committee that supported these motions originally. If there are other actions that are just as good or better, it would be important to review them. However, I am looking forward to the response.

As noted by the Canadian Textiles Institute, Canada's textile manufacturing industry has transformed itself in the last 22 to 25 years through substantially sustained capital investments. The result is an industry that is modern, efficient and increasingly capital intensive. It is a major user of high technology and a provider of quality jobs for thousands of Canadians.

In doing so this sector has clearly illustrated the role that progressive federal economic policies have played over the course of the last decade in encouraging the innovation and investment necessary for Canadian industries to compete in the 21st century global economy. However, we must never forget what I previously said about those industries that did not make it and where we may have been able to implement other measures that would have assisted. We have to look at every way we can assist the ones that might find themselves in similar situations in the future.

The report by the standing committee reflects comments made by witnesses from the apparel industry regarding the status of current tariffs and duties. I remind the House that the six duty remission orders for textiles and apparel noted in the committee report were implemented in the late 1990s.

Those companies that are eligible under these orders can import certain textiles and apparel products without having to pay duties on them. The orders were designed as a transitional measure to help textile and apparel manufacturers adjust to an increasingly competitive trade environment. These six orders are set to expire on December 31 of this year.

The government recognizes that Canadian textile and apparel industries are facing a competitive international environment. Export competition from low wage developing countries, such as China, Bangladesh and India, will increase in 2005 when all countries remove their quotas on textiles and apparel. The agreement to eliminate these quotas was made in 1994 under the auspices of the World Trade Organization.

The standing committee report has recommended the immediate extension of these remission orders in order to compensate for greater competition from low wage developing countries. It also calls for the elimination of tariffs on textiles not made in Canada and for a study to be conducted on the benefits and costs of changing the current tariffs on imports of fabric.

I would like to assure all hon. members that the government will consider the recommendations of the Standing Committee on Finance. It will continue to do what it can to help these important industries.

That said, I would be remiss not to mention the progress the government has already made working with the apparel and textile industry in Canada. We have already committed to continue to work toward an integrated North American market for Canadian apparel and textile products and to consider any proposals made jointly by the apparel and textile industries for new market developments through an outward processing initiative. We have committed to continue to protect against illegal transshipment of imported apparel and textile products and to use existing tools as appropriate to respond to industry complaints regarding injurious import surges.

I was listening to the member of the New Democratic Party. It would seem reasonable to me to assume that the NDP would agree with the motions that have been made on the actions taken to assist developing countries and the people most at risk. We must make sure that these are not contravened, that people do not get around what we want to do for assistance, to hurt our industry. That requires vigilance. We have to see if we are doing enough in that area.

We have committed to work through the employment insurance program to continue to meet the needs of workers adjusting to changes in the industry and to ensure, through ongoing support for human resource sector councils, that employees obtain the skills they need to respond to the challenges of a rapidly changing labour market.

The Canadian apparel and textile industries program was created on June 27, 2002 to increase the international competitiveness of the apparel and textile industry in Canada. It does so by supporting the application of new technology, better marketing strategies, identifying niche markets and diversifying products.

Many of the Canadian apparel and textile companies already compete successfully in international markets. By identifying and promoting the strategies and best practices of these companies, the Canadian apparel and textile industries program will help other companies acquire the tools they need to build and sustain a competitive advantage.

Britex which was in my riding was an example of such a company: niche market, high technology, very good workforce, but a large capital investment that it had to sustain. We will come to that later. We should use the example of Britex so that no other companies and no other communities suffer what that community has suffered. People who had worked nowhere else and who depended on that business to provide for their families have seen it disappear. Hopefully, initiatives will mean that there will be a reprise or a takeover of some of those assets to continue operations within those communities.

Another point is we have committed to making the remaining $6.5 million in funding from the company component of the Canadian apparel and textile industries program more readily available to companies when they take initiatives in advance of the removal of the apparel and textile quotas by January 1, 2005, if that is to happen. We ask the minister to consider that carefully and to consider carefully the recommendations of the report.

We have committed to identify and reduce tariffs on imported textile inputs used by the Canadian apparel industry so as to improve the industry's cost competitiveness. This initiative will amount to an approximate value of $26.7 million to the apparel industry over the next three years. These tariff reductions will generate an ongoing reduction in duties paid beyond the first three years.

We have committed to improve the competitiveness of Canadian textile companies through a new three year $26.7 million textiles production efficiency initiative. This program is currently being implemented by Industry Canada.

A further point is to continue to work through the national initiatives component of the Canadian apparel and textile industries program to address the technology support, branding, trade development and e-commerce needs of the apparel and textile industries.

All of these together respond to what was raised by the member of the Bloc Québécois on what we should be doing to modernize our industry and to ensure its competitiveness as well as that of our workforce and its security.

These initiatives and investments are still key to the future success of these industries in the global trading environment and their continuing contribution to the health of the Canadian economy. Therefore, it is also important to mention some of the steps the government has taken that have contributed to the dramatic rebirth of these sectors as competitive high tech innovators.

A competitive tax system is critical to fostering business investment in Canada. Investment supports economic growth and job creation. The Canadian textile and apparel industry has demonstrated clearly that with more and better equipment embodying the latest technology workers are more productive. Increased investment and higher labour productivity in turn leads to increased employment, higher wages and a higher standard of living.

The importance of improving the competitiveness of the tax system has been underscored in recent years by reductions in corporate tax rates in many of our major trading partners. The Government of Canada is presently taking measures to strengthen the Canadian tax advantage for entrepreneurs and businesses. These measures build on the five year tax reduction plan introduced in 2000, the largest tax cut in the country's history aimed at promoting investment and entrepreneurship within the country.

Supporting our businesses through tax reductions and other measures remains paramount to establishing a world-class marketplace. The Government of Canada actively promotes entrepreneurship through its competitive tax system aimed at supporting businesses of all kinds, small, medium and of large.

Budget 2004 identified small businesses as a key source of innovation and job creation and announced measures to help support this essential sector of our economy. The new capital loss carry forward period has been extended to 10 years, making it easier to weather the first and most difficult years of business. The government is also working with business, under an government electronic tendering system, to improve and reduce the costs of applying for government procurement opportunities.

Finally, the government is teaching businesses how to reduce the paper burden and get it right the first time to avoid duplication. For larger businesses with incomes in excess of the small business deduction limit, the five year tax plan reduces the 28% general corporate income tax rate down to 21% in 2004.

I would like to remind the House that Canadian businesses have a federal-provincial corporate tax rate more than two percentage points lower than the average U.S. state federal rate. Canadian businesses can look forward to the elimination of the federal tax completely by 2008. Compared to the U.S. equivalent, Canada also provides small businesses with significantly lower corporate tax rates than the U.S. on income above $50,000 U.S. or approximately $60,000 Canadian.

One area where the tax system has an important impact on new investment, particularly in capital intensive sectors like the textile industry, is the treatment of capital assets. Businesses use capital assets over a number of years. The capital cost allowance system determines how much of the cost of a capital asset a business may deduct in a particular year. CCA deductions are generally determined by assigning a rate of class of assets, and then applying the rate to the non-depreciated balance in the class to determine the allowable deduction for that year.

As a general principle, capital cost allowance rates should reflect the useful life of assets and thus provide adequate recognition of capital cost over time. The alignment of CCA rates with the useful life of assets can enhance productivity and standards of living through a more efficient allocation of investments across classes of assets.

In need of a segue perhaps, in the 2004 budget the government announced two changes to CCA rates, which have improved the environment for investment in Canada. First, we have made it easier for businesses to purchase computer equipment by increasing the CCA rate for computer equipment to 45% from 30%. Second, we have raised the rate for broadband, Internet and other data network infrastructure to 30% from the previous 20%.

As we know, using improved technology, increases productivity and competitiveness. This translates into greater demand for goods and services and for more new jobs, in other words, greater competitive advantage. These changes will allow firms to write off these investments more quickly, thereby ensuring that the tax system provides an appropriate environment for investment. The attractive environment for business investment in Canada has resulted in the Canadian textile industry investing over $300 million annually in state of the art textile equipment and facilities. Over the last decade, that represents $3.1 billion in investments in our country.

These capital expenditures contributed to an increase in labour productivity in this sector in the 1990s. While Canada is not a textile machine manufacturing country, textile machinery embodying the latest technological improvements produced worldwide is readily available to domestic manufacturers that must continuously reinvest to remain internationally competitive.

The hon. members may be assured that the concerns of the textile and apparel industries are very much on the government's agenda right now. In fact, the Minister of Finance recently met with a number of representatives from the apparel industry. Our government recognizes that increased competition from abroad represents a serious challenge for Canadian textile and apparel industries. For this reason, we are working closely with these industries to assist them in adjusting to the globalization of the textile and apparel markets.

The government's commitment is to support entrepreneurship and businesses through the pursuit of a competitive tax system alongside clear strategies for gaining the competitive advantages evidenced by the priority placed upon the apparel and textile industries in Canada. Our response to the finance committee report will no doubt reinforce our efforts to ensure that these industries remain world leaders.

I spoke of the energies that we spent in the programs that we have developed to work hand in hand with the industry to ensure its competitiveness in the future. We must also remember where it has not worked. We must remember where there has been a loss of industry. I remember when Domtex, Dominion Textile, went out of business in Yarmouth. It was an incredible loss to the community of some 500 jobs. We must ensure that we reduce the possibility of that ever happening in other places.

Britex developed its competitiveness, its high technology product and delivered worldwide to other manufacturers. People who had invested their whole lives in that industry lost their jobs. It was devastating to those communities. Bonda Textiles has found its competitiveness reduced compared to imports internationally.

No government program can guarantee the success of any industry or business. However, we must ensure that we bring them as close as possible or give them the potential to survive. Therefore, I think the minister will look seriously at the recommendations of the committee, and I will encourage him to do that. I was part and parcel in the drafting of those recommendations. I would encourage him to implement those or something that would be even better for the industry.

Committees of the HouseRoutine Proceedings

12:20 p.m.


Bev Desjarlais NDP Churchill, MB

Mr. Speaker, I would like to try to sort out exactly what my hon. colleague feels is the right thing to do. He mentioned the seriousness of job losses, the importance of supporting the industry and putting in place proper processes. We and our colleague are calling exactly for that, however, time is running out. We need a decision now. The deadline is December 31.

Over the last number of years, I have watched the Liberal government procrastinate on trade agreement after trade agreement. We ended up with the whole softwood lumber issue because the government did not come up with a plan to address it before we ended up in crisis. We do not want that same thing to happen in the garment industry. We do not want all those people without jobs. The government has to act now.

Does my colleague support the motion? We absolutely believe there need to be long term plans, but right now the finance minister has to sign on the dotted line not only to ensure that we have a plan in place for later, but also to ensure that the industry does not suffer. What is his plan? Does he intend to support the motion? Does he intend to ensure that he gets the government to sign on to this?

Committees of the HouseRoutine Proceedings

12:25 p.m.


Robert Thibault Liberal West Nova, NS

Mr. Speaker, as I mention, I was part of the committee that drafted those recommendations. Based on the information I had at the time, I thought that was a very reasonable approach.

As part of the parliamentary process, we presented the report, to which the minister will respond. I encourage him to do this or something that is better for the industry. That is also a reasonable approach.

Committees of the HouseRoutine Proceedings

12:25 p.m.


John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, opposition members talk about the garment industry. As much as we are support it becoming innovative, we forget one thing. For a garment to be produced, we need to have yarn. That segment of the industry has been totally forgotten by my colleagues. Yes, the LDC initiative is good. However, I am concerned that shops will be set up in the least developed countries and that in essence will eliminate what we have today.

My comments are related to not just innovating. In my view certain government offices, such as EDC, do not support this industry when it comes to exporting. I found out that they had increased their charges fivefold. No wonder my colleague from West Nova was so passionate when he talked about how Dominion and Britex disappeared, the heart of the community.

Some of our facilities, which are modern state of the art yarn manufacturers, are being impeded. As mentioned earlier by my colleague from Churchill, we have to get to the trade table. One table we are not at is the CAFTA table, Central America Free Trade Agreement. The Americans are there and are beating us out. They do not want subsidies. They simply want our government to be at the table to sign on the dotted line so they can compete.

Committees of the HouseRoutine Proceedings

12:25 p.m.


Robert Thibault Liberal West Nova, NS

Mr. Speaker, the hon. member as well the member for Ahuntsic have been very instrumental in bringing this forward at caucus and ensuring that the minister is apprised of the situation. We have encourage and implored him, and he has been receptive. He has been meeting with the industry. He is getting to understand it. He has received the report of the committee, as has the whole House. He is apprised of its recommendations. We encourage him to put those recommendations in place, or things that are even better.

Look at the international situation. We have been encouraging least developed countries and emerging markets, and the apparel industry has agreed with that. However, the fear is the system will be abused. We do not want to see that happen. We want to be good global neighbours, but we have to protect our industries and those jobs within Canada.

Committees of the HouseRoutine Proceedings

12:25 p.m.

Ahuntsic Québec


Eleni Bakopanos LiberalParliamentary Secretary to the Minister of Social Development (Social Economy)

Mr. Speaker, I will be supporting the motion also. I have had occasion to work with both of these industries. Although there is some competition between the two as far as government action is concerned, as the parliamentary secretary has said, the government has already taken several initiatives. We have not been sitting on our hands. I feel it is important to note that the government has acted.

It is, moreover, also true that I was opposed to the initiative for the developing countries. Not because I was opposed to the initiative, but I wanted to see measures in place to protect our workers as well.

I have a question for the parliamentary secretary. I do not think there is only the one solution to this problem, since there are several aspects to it. The government has some tools available as far as older workers are concerned. A program is already in place for them. I believe we all need to work together to encourage the minister to add a new older worker program. We know that there will be fewer workers in this industry, obviously, as the technology advances. This is an industry that is already high-tech.

I am aware that some of my colleagues have been active in this matter, particularly the hon. members for Scarborough Centre, Brome—Missisquoi and Beauce. When the latter was economic development minister, he invested a great deal to ensure that there was a program for these industries. In rural Quebec, as in other parts of Canada, these industries are the largest employers.

I have something to say to the parliamentary secretary. We have all worked together and we will continue to do so. The minister himself has provided an opportunity for a positive response to the recommendations of the Standing Committee on Finance. I believe we should provide workers with a new program for older workers, while continuing to develop new markets for this industry. Today, industry representatives are appearing before the Subcommittee on International Trade, Trade Disputes and Investment. They are there to confirm that they require assistance to seek new markets. It is also important to see that this moves forward more quickly.

This is not the only initiative; there must be a more comprehensive one as well. Thus, we must ensure, on an industry level, that we believe in this industry and in its future. I have always said that this industry has a future. Perhaps it will not be the same industry it was in the past, but it really does have a future. I think this House is unanimous in saying that we must give this industry some tools so it can continue to survive.

I would ask the question of whether there are other initiatives. The parliamentary secretary has spoken at length about the tax structure we have established, not only for this industry, but for a number of others. But should we go farther? My colleague was a member of the Standing Committee on Finance and heard what the industry representatives said. Are there other aspects we have not considered? There are the workers, the new markets, a different way of finding new tools. Are there other actions we ought to be taking?

Committees of the HouseRoutine Proceedings

12:30 p.m.


Robert Thibault Liberal West Nova, NS

Mr. Speaker, I thank the hon. member for her excellent question.

We have to review all government envelopes to determine how we can help these communities. We recognize that, even as the industry is modernizing its equipment and as investing—to the tune of $3.1 billion—in its equipment is being encouraged, there are people who are being displaced or whose jobs are disappearing. This is tough, and we have to assist them in either taking an early retirement or retraining for a new job.

We have also worked with the communities in other programs. I can think of, among others, the actions undertaken by the minister responsible for Canada Economic Development. In my case, in Nova Scotia, we lost Dominion Textile and, along with it, many jobs, but new ones were developed. We now have a spinning operation for rope and nets, and we manufacture for the fishing industry products that we used to import from Spain. Now, we are manufacturing them within the region.

We also produce webbing for the automotive industry, which we sell to manufacturers in Ontario, Quebec, the U.S. and other parts of the world. This is produced in our small town, our small community of Yarmouth. Because we have the expertise, this business got started. We have excellent workers. This particular project involved the Regional Development Authority, the town, the province, Human Resources Development Canada and, above all, regional development programs such as ACOA, which are familiar with the local community and can respond very quickly.

We have to look into all these sectors to find all the answers, because there is not just one answer. That is why I encourage the minister to respond to the report, even improving on it, should he come up with something better than what the committee recommended.

Committees of the HouseRoutine Proceedings

12:30 p.m.


James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, we welcome the motion and I thank the member for bringing it forward. As his colleague just said, it is very timely.

The member who just spoke said that it was very timely but that we had to look at all aspects. However I fail to understand why the government has not acted on the three recommendations which, as I understand it, were unanimous. Government members supported it and it was reported by the member who is now the Parliamentary Secretary for the Minister of Public Safety who did an incredible job. I do not understand why the government is not implementing it.

I want to state that we do support the implementation of these recommendations and, just for the record, I will read them into the record for the benefit of people who are following this debate.

The first recommendation reads:

That the federal government immediately extend, for a further seven years, the duty—remission orders covering the apparel sector that are set to expire on 31 December 2004.

That obviously makes one understand the necessity of acting upon this recommendation right now.

The second recommendation reads:

That the federal government immediately end tariffs on inputs which are not produced domestically. Textile producers seeking continued tariff protection should be required to establish that they sell their products to Canadian apparel manufacturers.

Again, that recommendation was supported by the Conservative Party.

The third recommendation, which is more of a broad recommendation, reads:

That the federal government immediately undertake a study of temporary adaptation measures to enhance competitiveness, as well as the benefits and costs of eliminating tariffs on imports of fabric for use in the Canadian apparel sector, the types and quantities of products produced by the Canadian textile industry and the practice of tariff differentiation on fabrics based on their end-use. The results of this study should be tabled in Parliament no later than 31 January 2005.

That indicates why the immediacy and why the timeliness of this specific motion. It is because of the importance of this industry and the fact that this industry does need these issues addressed very quickly. This report was tabled in the House in April, 2004 and it still has not been acted upon. The Minister of Finance says that he is meeting with the sector, which is a good thing, but the government should be acting on a report that its own members supported. The reason that it should act is because of the importance of the industry.

The apparel industry is the 10th largest manufacturing sector in Canada. It has more than 93,000 employees working in over 3,900 establishments that account for 2% of Canada's total manufacturing gross domestic product, 4% of the manufacturing investment and 4.4% of total manufacturing employment.

The industry critic for our party has gone across the country and has met with different manufacturing councils and the Manufacturing Council of Edmonton. What these people have said, over and over again, is that the federal government simply has to recognize the challenges facing their industries and their manufacturing industry in particular. As we went around the table in the room in Edmonton, on average these companies had been in existence in the Edmonton region for about 45 to 47 years. That means they have put roots down in the community and are investing in their businesses in the communities. They have a real stake in how the country is run, both economically and in government. We need to recognize that and ensure there is a climate surrounding these industries that enables them to grow and to thrive.

I do want to use the opportunity of the motion to raise some other challenges facing the apparel industry. The industry raised a lot of concerns with us prior to the election. In response to those concerns, we wrote the then minister of industry on May 21, 2004 but we did not get a response, which one can understand with the election. However we hope the department will respond to this issue.

What the letter addressed were some of the other issues facing the industry beyond the duty remission orders. One of the specific issues the industry raised had to do with the government's program for the import of garments from least developed nations. I wanted to identify this for the record because the industry supports this initiative. This initiative is for the federal government to provide duty free and quota free entry for imports of textiles and clothing from 48 least developed countries.

The industry supports the intent and the goal of that program and it thinks the initiative is sound, but it feels that the manner in which the government has implemented the program is unfair and has caused serious harm to its industry. The program has not just helped the truly poorest of nations, which the industry supports, but has in fact provided a comparative advantage to nations that have a large manufacturing sector.

I should at this time, Mr. Speaker, inform you that I will be splitting my time with the member for Kildonan—St. Paul.

On the LDC issue, under the rules of origin, up to 75% of the X factory price of garments made in the least developed country can be of non-LDC materials from general preferential tariff countries. The problem is that these countries include China, Korea and India. As we well know, those countries are turning into economic powerhouses and will become our main competitors.

When I was in Beijing in November 2002, I noticed more cranes than one could imagine, at least 20 cranes on either side of the street. Beijing has a very dynamic and growing economy and it is competitive, and in our party's view it should not be in the same category as the least developed nations.

We believe it is unfair for countries like China, Korea and India, which have huge and sophisticated textile and clothing industries, to be receiving assistance from Canada against our own industries.

The rules of origin deprive the LDCs of any incentive for foreign investors to establish textile manufacturing facilities in our country, investment that would lead to long term employment and advancement opportunities for the people who need it the most. This does not actually accomplish the program's goal, which was to establish some manufacturing facilities in the poorest nations so they could then raise themselves out of poverty.

The rules also relegate the LDCs to clothing assembly, and only as long as they remain the cheapest source of labour in the world by paying the lowest wages in the world, and that is unfair. This is not the objective of the program either. What happens is that an assembly will be set up there with the lowest wages but once the wages get a bit higher it can then be transferred to a nation that has lower wages. The lowest common denominator is obviously not the objective of the program.

We asked the minister in May 2004 to amend the LDCs rules of origin to require that products made in LDC countries would be eligible for benefits under the program only if they were made from LDC or Canadian inputs. In addition, we recommended that an appropriate and effective least developed country specific safeguard mechanism be instituted to deal with import surges.

We asked the government to respond to that in May but it has not yet responded. The biggest concern raised by member of the NDP was the fact that the industry needed a response and that the unanimous report with three solid recommendations should be implemented now.

The third recommendation hinted at some broader issues facing the textile industry. One dealt with least developed countries. However there are a couple of other issues that we think the government can act upon, for instance, dealing with the U.S. government and insisting that all NAFTA partners not be excluded from trade deals that are being negotiated with third countries. I think that is a fair and reasonable request by this industry, and fair under the rubric of the NAFTA agreement. I hope the Prime Minister raises that today with the president in stressing the importance of this industry.

Another recommendation was the implementation of an outward processing program for Canadian textile companies to actively try to export and support this industry and to take a sensible approach to textile tariff policy that does not damage the industry, which is what the committee recommended.

I hope the government will act upon this committee report.

I will digress a bit from this topic. It strikes me as odd, in this minority government, that the government does not act upon committee reports that have been fully supported. This example of the report dealing with the textile industry was supported in April 2004 and the Government of Canada can and should act upon it.

However there are other issues. The industry committee prepared a report well over two years ago on foreign investment restrictions for telecommunications companies and cable companies. It was supported by the Liberals at the time and by the two legacy parties of the Conservative Party. There are 135 Liberals and 99 Conservatives in this place, which is more than enough to pass any motion.

I encourage the government, in the spirit of a minority government and in a spirit of this dynamic Parliament, to work with other parties on as many reasonable issues like this as it can. I strongly encourage the government to act immediately. This industry needs action and it needs answers now, not after December 31 when these tariffs run out. I encourage the Minister of Finance to act on the recommendations proposed by the finance committee.

Committees of the HouseRoutine Proceedings

12:45 p.m.


Joy Smith Conservative Kildonan—St. Paul, MB

Mr. Speaker, could the member elaborate a little more fully on the impact this might have on the workers in the garment industry, if this is not passed quickly and if action is not taken quickly?

Committees of the HouseRoutine Proceedings

12:45 p.m.


James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, there are nearly 100,000 employees across Canada in this industry and they have been waiting for a response from the government for months. The committee tabled its report in April.

The fact is that combined with the least developed countries initiative that has been implemented in a wrong manner, frankly, the industry has told us that it will be severely harmed by this. If the government does not act on this, we could very well see the loss of a major part of this industry and the loss of a large number of jobs. That is why the government must act immediately to implement this.

Committees of the HouseRoutine Proceedings

12:45 p.m.


Charlie Penson Conservative Peace River, AB

Mr. Speaker, the member for Edmonton--Leduc and I have worked on the industry committee for quite some time. We understand how the tariff and the duty system works. What has been missing in this debate today is the fact that this duty that the industry is asking to have remitted is really just a tax on the industry. It is collected by the Canadian government because we have high tariffs on a lot of the products coming in.

One way of dealing with this would be through duty remissions. We all agree that is the most immediate thing that has to happen. However, in the long term, would it not be better to work with other like-minded countries at the World Trade Organization and reduce the tariffs on these kinds of industries so that we do not have the artificial barriers, and let the market take its course?

I would also ask the member for Edmonton--Leduc, is it necessary to make adjustments like we did in the free trade agreement with the United States for some of the industries that were hurt? Would that not be a better approach? Could we reduce the tariffs, phase them out, and make the adjustments to allow those industries to eventually make their own choices?

Committees of the HouseRoutine Proceedings

12:45 p.m.


James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, the short answer to that is an obvious yes. Principally, any time we can get tariffs down on a global scale, it has been proven time and time again that Canadian industries, Canadian workers, and Canadian companies succeed and thrive. That is the ultimate goal. I want to thank the member for reminding us of that, because he is right.

This is an interim measure to correct something in terms of our own public policy at the domestic level, but the long term goal must be to reduce these tariffs on a global scale. In the meeting with me, that is what the industry certainly emphasized and I should point that out. The industry said to me that as long as it could compete fairly on a global level, it does not need any government intervention or protection, and that is the ultimate goal.

Going back to NAFTA, the free trade agreement, a lot of people predicted that this industry would not survive. In fact, it has survived, but there are some government policies in place that if we were to amend, it would thrive and succeed even more.

Committees of the HouseRoutine Proceedings

12:45 p.m.


Joy Smith Conservative Kildonan—St. Paul, MB

Mr. Speaker, I would like to put some comments on the record that I feel are very important. The member for Edmonton—Leduc did a great panorama and detailed synopsis of the reasons why it is very prudent in this day and age, right now in November 2004, to ensure that these recommendations are pushed through and action is taken.

I want to go over one aspect that has not been touched on at great length. As members know, duty remissions, which underpin Canada's apparel industry, are set to expire December 31, 2004. As a result of this, employment decisions have to be made. The apparel industry is the 10th largest manufacturing sector in Canada and because of this point, we can see quite readily how this is going to impact on families all across our nation.

More than 93,000 employees, working in approximately 4,000 establishments, are employed and are counting on this employment to bring bread to the table. The apparel industry accounts for 2% of Canada's total manufacturing GDP and 4% of manufacturing investment, as well as 4.4% of total manufacturing employment. So this is a very critical issue.

The president of the Canada Apparel Federation told the committee that this industry draws on a large range of skills, including technology employment suitable for some entrance to the Canadian labour force. In urban areas, where the industry is concentrated, entry level jobs enable these apparel companies to play an important role in socializing new entrants into the Canadian workforce. These entry level workers develop their language, their work skills, and confidence that allows them to move into more skilled jobs here in Canada.

This infringes on what I believe to be a very important statement that we make to the immigrants of our country. I just signed 58 letters in Kildonan—St. Paul for new immigrants to my riding who are very thrilled to be in the country. I must say that none of them are in the exotic dancing industry. Having said that, these are people who are employed in the garment industry. These are people who are looking forward to advancement in Canada and the kinds of decisions that are made in the halls of the House reflect on the everyday lives of new immigrants to Canada.

We have to look at what is happening right now. We are coming close to the Christmas season. If we look at the statistical studies across Canada during Christmas time, even though it is a joyful time for many people, it is not so joyful for those people who are looking at losing their jobs because of the slowness of the government on this issue. It is not so joyful to those families who are wondering if they can afford to have Christmas dinner.

With all due respect, the Prime Minister has been away on a world tour and we hear on a daily basis how he drops into one country on one day, climbs on the jet and drops into another country on another day, and makes wonderful photo ops and wonderful press releases, all having to do with what he feels his treasured words do to these countries. I would like to bring forward that it is more prudent in this day and age for the Prime Minister to be here in Canada at this time when we have critical legislation and decisions that have to be made that impact on Canadians and on immigrants coming to our country in a major way.

We on this side of the House stay in touch with Canadians. We care about what happens to them. I am very much in support of this motion. As we look at this more closely, I would implore members opposite to ensure that they address this issue in a very speedy manner so that families, who are waiting to hear what is going to be happening to their jobs and how it is going to impact on their families, will be able to rest assured that they will have employment.