House of Commons Hansard #45 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.


Textile IndustryGovernment Orders

8:20 p.m.


Eleni Bakopanos Liberal Ahuntsic, QC

Mr. Chair, I am very much aware that the major challenge facing the industry is preserving jobs. Today's announcement is specifically intended to help the industry keep jobs in Canada.

Without going into detail on the situation in Huntingdon, which the Bloc Québécois is using to get its point of view across, hon. members need to understand that somewhere in excess of 200 employers across Canada are delighted with this announcement. I have been working with representatives of both sectors for some time. Today's announcement reflects what they were asking us for and what was contained in the report of the Standing Committee on Finance.

I would, however, like to explain why I announced the two pilot projects. One of these is, in fact, in my riding of Ahuntsic, and the other in Laval. We want to demonstrate once again that over $300,000 has been injected into an existing program designed to find new ways of retraining workers who lose their jobs.

While the industry is becoming more and more high tech, the older workers are not getting the opportunity of new training, for a variety of reasons. Through two NGOs we are helping them find new jobs. Through this type of assistance we are able to help workers in the industry stay employed, and as well, through Emplois Québec and our provincial government counterparts, to ensure that those who do lose their jobs can train for others.

I want to point out that there are other reasons as well. As I have heard from entrepreneurs, the more our dollar rises, the more jobs are at risk. Businesses are less able to be competitive. This announcement provides them with the tools to become more competitive. We do not have total control over the value of the dollar. This is bad in one way and good in another. That said, a variety of tools need to be found for entrepreneurs and for workers, and the various types of worker need to be taken into consideration.

As hon. members have heard, POWA is a program I am in favour of. I have indicated my support of this to the minister and will continue to let him know that more funding and new projects are needed. I feel, however, that the two projects announced today will help some of these men and women.

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8:25 p.m.


Alain Boire Bloc Beauharnois—Salaberry, QC

Mr. Chair, only a few days ago, Huntingdon Mills and Cleyn & Tinker garment manufacturers announced that they would shut down for good in the near future. Huntingdon Mills will cease its operations on Friday and will lay off 250 workers. Cleyn & Tinker has already started selling off its equipment, which is being exported. It will cease its operations next April. In total, the two plants will lay off 800 workers.

Let me tell you that all that makes me very sad, since we are dealing with a massive loss of jobs in my riding of Beauharnois—Salaberry. The Haut-Saint-Laurent RCM will have a very bleak Christmas, and I dare hope that the government will alleviate their misfortune by suggesting concrete measures to help them.

More than 800 jobs will be lost, and the measures announced today will not suffice to make up for them. They are coming much too late in the day, and I can hardly understand why the Minister of Finance is of the opinion that the Bloc Québécois is impatient with this matter: it is of the utmost urgency to act. Indeed, the plants had been employing couples, whole families, for generations. For those municipalities, they really were economic engines. For instance, 75% of the labour force of the town of Huntingdon was employed in those plants.

Located in Montérégie, Huntingdon is a municipality of 2,600 people. It is going through a serious crisis following the announcement of the closure of these textile plants, which will mean the loss of 800 jobs. The mayor of Huntingdon, Mr. Stéphane Gendron, is sending a cry of alarm and calling for an immediate emergency plan. Moreover, 43% of the people affected by these closures do not have a high school diploma and are over 50 years of age. Thus, you will agree that finding another job is hardly an option for these people. Whole towns and villages are threatened with closure, because these plants are their only hope.

Textile has always been a profitable sector of activity in Canada. This industry has been generating more than 150,000 jobs in Canada and over 70,000 in Quebec. Currently, several duty remission orders apply to the Canadian clothing industry, most of which are expiring on December 31, 2004.

Until now, the government seemed insensitive to the cry of alarm of these workers, and the assistance that was announced today is evidence that preserving these jobs is not a great concern for the federal government.

There may be several reasons why these clothing plants are closing in my riding. The forthcoming end of import quotas on textile, which will come into force in 2005 is one of them. It will be impossible to compete with Chinese manufacturers under the Agreement on Textiles and Clothing of which Canada is a signatory.

This new situation will put in jeopardy a number of textile and apparel businesses that are already suffering from the stiff competition, including because of the trade practices that are in effect in certain countries. Industry stakeholders are all the more concerned because several duty remission orders for manufacturers who import clothing will soon expire.

The Bloc Québécois has been working on this issue for a long time. On December 9, I tabled a petition signed by 2,845 fellow citizens and textile workers in my riding, calling on the government to solve the textile crisis. The Bloc Québécois also asked a number of questions in the House on this issue, but the minister said that we were too impatient.

This evening, the Bloc Québécois is urging the government to take immediate action regarding this issue. The federal government's lack of action has generated a real public show of discontent. Some concrete action must be taken now, because the announcement made by the Minister of Finance to triple the assistance provided to the textile industry is, unfortunately, of no help to the 800 workers in Huntingdon.

The workers from Huntingdon are asking the government to assure them it will maintain import tariffs on clothing, textiles and products in Canada; carry on with the duty remissions for clothing companies; maintain a quota on Chinese imports pursuant to the WTO access protocol for China; implement a program to help modernize the apparel and textile sectors stipulating research, development and creation; implement an aid package for older workers who will be unable to find other work; develop immediately a restructuring plan to compensate for the job losses; grant severance pay to those who have lost their job; increase transfers to Quebec to promote job training; and, in conclusion, develop a program similar to POWA.

The government must listen to this cri de coeur from an industry important to the upper St. Lawrence economy and take the necessary action to correct the situation.

The current situation of the textile and apparel sectors is a prime example of the need to implement an older worker adjustment program similar to POWA in order to pay benefits to those who may lose their job in any of the businesses affected by this new situation.

There is no shortage of solutions. The only thing missing right now seems to be the government's will to act to find constructive solutions.

Textile IndustryGovernment Orders

8:30 p.m.

Ahuntsic Québec


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

Mr. Chair, for the benefit of those listening, I want to say that we are very concerned about the situation in Huntingdon. This is not something we wanted to see. When jobs are lost, everyone is affected, not only the Bloc Québécois.

That party took the opportunity of this announcement to state its view. Nevertheless, when we hear a member of the Bloc Québécois say in his speech that we have done nothing for the industry, it shows that he is not aware of the measures implemented by the Liberals since 1994.

As a matter of fact, we have had remissions in place for seven years. We have been trying to support the industry with remissions for the last seven years. As I have already mentioned, a number of other programs have been implemented. Today, we announced two other pilot projects for workers.

However, we are well aware that this situation is affecting the industry worldwide. I believe that the announcement made today will help the industry to be more competitive and help it get modern equipment. In the case of the 900 jobs in Huntingdon, the minister mentioned during a press conference that the company can still benefit from the CANtex program and that those jobs will not be lost. I believe that if someone else wants to buy the plant, he will be able to take advantage of the programs announced today by the finance minister. I cannot agree with those who keep saying that those jobs are lost.

I know that the mayor of Huntingdon tried to organize a meeting with the Minister of Industry, who accepted the invitation.

Does the hon. member know that efforts have been made to ensure that this plant may nevertheless take advantage of the programs we have announced today?

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8:30 p.m.


Alain Boire Bloc Beauharnois—Salaberry, QC

Mr. Chair, I thank the member for her question. It infuriates me to hear her say that the program announced today can help the people of Huntingdon. I feel helpless. I can only come to the conclusion that the government does not even know what is going on.

The fact is that those plants had no future. The Cleyn and Tinker plant has been sold. Therefore, that is the end. It is official. There is no going back. We are beyond the point of no return. No government grant or anything of that nature could change anything now. The plant will move to the United States.

That is why I find it astounding that the government is not even aware of the situation. I am infuriated because there is no more hope now for the workers in Huntingdon. Their only hope is tied to programs provided after a plant closure. There is talk of POWA, a program abolished by this government in 1995. That is what people are hanging their hopes on.

The people in Huntingdon represent a number of families. We are in fact talking about an entire region, the Haut-Saint-Laurent RCM, with a population of some 22,000 people. I was saying earlier on that 43% of these people do not even have a high school diploma.

Something must therefore be done right now. Furthermore, empty shell projects will not help these people, because this is the end.

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8:35 p.m.


André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Chair, I want to congratulate my colleague from Beauharnois—Salaberry, who has been working relentlessly on this file. Already, during the election, there were rumours about it in his riding. Huntingdon is a town that essentially depends on textile. Through my colleague's speech and tireless work, one can see that he is very much aware of what is being done and also very sensitive to the fate of workers in the town of Huntingdon.

Twenty years ago, when I was twenty years old, in Victoriaville, three textile plants shut down, namely Rubin, Utex and Fashion Craft. At that time, some 2,000 people lost their jobs. Actually, I know very well the impacts of such a closure in a single town. In my riding, I remember very well the accounts given by families of workers who were totally flabbergasted and devastated by this situation.

Since getting this news, my colleague has no doubt heard from many hard-hit families that did not receive adequate assistance from the federal government. I would very much like to hear from him what these people have to say, how they feel the federal government treated them, as well as the kind of assistance that they have received or not. I am certain that we will hear, unfortunately, some very sad things. I would like to know how the member for Beauharnois—Salaberry feels about it.

Textile IndustryGovernment Orders

8:35 p.m.


Alain Boire Bloc Beauharnois—Salaberry, QC

Mr. Chair, I thank the hon. member for his question.

Indeed, the people of the riding are experiencing a tragedy. Economically speaking, it is also a tragedy for the Haut-Saint-Laurent RCM.

Concerning the textile industry, about 15 couples, some with children, used to work for Huntingdon Mills. I am thinking in particular about a family with three children. The situation is tragic when, on the eve of Christmas, the two parents are laid off, without any income. How will that family, these three children, spend Christmas? That was the question I wanted to ask.

On the other hand, some employees received a simple thank-you letter, having been employed more than 30 years by the same factory, one generation after the other. This letter is the only thing they did receive. They have no retirement plan. At this time, they do not even have the means to provide for their basic needs. That is pitiful. The government must take some concrete action. It is very important.

Employment insurance benefits must be paid now, without delays, since 43% of the population do not have post-secondary diplomas.

Inside the riding, some measures were taken by the former member. However these did not amount to anything. Some meetings were scheduled with the employers—

Textile IndustryGovernment Orders

8:35 p.m.

The Deputy Chair

I am sorry to interrupt the hon. member, but I must now give the floor to the hon. Finance minister.

Textile IndustryGovernment Orders

8:35 p.m.

Scarborough—Guildwood Ontario


John McKay LiberalParliamentary Secretary to the Minister of Finance

Mr. Chair, I would like to wish you and all members present a merry Christmas and a happy new year.

I want to compliment the member for Ahuntsic on her speech. The member is probably as knowledgeable, if not the most knowledgeable member in the House about these issues. In the previous Parliament, the member from Ahuntsic spoke in caucus about these very issues quite passionately and quite well.

I want to commend my colleagues for raising this particular issue in light of today's announcement. I am sure that they recognize the importance of the work that the government and the government caucus has done in dealing with these issues. I am sure that members opposite are taking wonderful opportunities as we speak to congratulate government members on the work that they have done.

The Canadian textile industry is one of Canada's oldest industries. Yet, 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 stable labour supply and rivers ideally suited for water generated power and dyeing finishing, the industry was initially based on the manufacture of yarns and fabrics from natural fibres. Currently, the industry is located mainly in Quebec and Ontario. It is heavily capital intensive, uses natural man-made fibres and yarns, and supplies over 150 industrial and other customers in Canada and worldwide.

As noted by the Canadian Textiles Institute Canada's textile manufacturing industry has transformed itself in the last 20 to 25 years through substantial and sustained capital investment. The result is an industry that is modern, efficient, increasingly capital intensive, 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 innovation and investment necessary for Canadian industries to compete in the 21st century global economy.

While we note the successes of these industries, we cannot ignore the reality of the current global trading environment. Clearly, Canada's textile and apparel industry is increasingly facing a very difficult marketplace. Competition from low wage developing countries will increase in the year 2005 when all countries remove their quotas on textiles and apparel as agreed to in 1994 as a result of the World Trade Organization's negotiations. I wish to read from an article in the Edmonton Journal that was commenting on this very matter. It said:

“Producing garments in North America is going to be a very niche-market type of business,” says Steve Kuchmak, owner of Hallmark Garments Mfg. Ltd. “Mass quantities will cease to be produced north of the Rio Grande,” he predicts -- as the U.S. quota also will end.

Further on it states:

Joga Punian, owner of Wildrose Garments Mfg. Ltd. says, “Everybody knows that they'll be flooding the market in jackets, golf shirts, coveralls and all regular items. We were heavy into polyester cotton coveralls for industry but now the competition will be tough. We are shifting to safety garments for the oil industry. Designs are done in-house with most of the materials coming from Montreal and the United States”.

This industry has proved itself to be remarkably nimble but in the process some industries and some companies do not make it. In light of this competitive situation, the Standing Committee on Finance re-issued its report on duty remission for the textile and apparel industry on October 19, 2004. The report, which raised some very important issues relating to the apparel and textile industry in Canada, reflects comments made by industry witnesses regarding the status of current tariffs and duties.

The announcement made today by my colleagues, the ministers of finance and industry, is evidence of our government's commitment to this industry. The plan announced today includes three elements to provide support to this important Canadian industry.

First, effective January 1, 2005, the government will remove tariffs on textile imports used in apparel production, and on fibre and yarn imports. This measure alone is expected to reduce input costs for both textile and apparel manufacturers by up to $90 million per year.

Duties will be kept in place on products where Canadian production can be substantiated. The Canadian International Trade Tribunal will be asked to work with Canadian fibre, yarn and textile companies to identify Canadian production. Importers will be required to pay duties while the consultation takes place and until final decisions are made regarding which imported inputs will benefit from tariff relief. If I may, I would encourage all of those industries to cooperate with government so that we may know what is the appropriate industry, an appropriate product, on which to keep duty relief.

Once a final decision has been made, importers will be able to request a refund of those duties paid on products since January 1, 2005.

Second, today's announcement will provide an additional $50 million. We started with $90 million. We have added to that $50 million over the next five years for the textiles production efficiency initiative, CANtex. This is in addition to the $26.7 million that was given to CANtex in February 2004. There is $90 million in duty relief, $50 million in new money, and $26.7 million that is already available to the Canadian textile manufacturing firms so that they can become more competitive and take advantage of new market opportunities, just like the two people I quoted in the Edmonton Journal article.

The initiative builds on the $33 million Canadian apparel and textile industries program, which has funded over 300 projects to help apparel and textile companies boost their productivity, lower costs, improve efficiency and identify new markets.

Beginning in 2005-06, this additional funding will encourage excellence and competitiveness in technical, specialty and industrial textile manufacturing. Again referring back to the Edmonton Journal article, that is exactly where one of the owners is going. The owner of Wildrose Garments is going into specialty products with respect to safety clothing.

It will also assist the manufacturers currently producing textiles for the traditional apparel sector to shift their production to other textile product markets. CANtex will allow companies to apply for up to $3 million in repayable contributions for projects, including the purchase of equipment and machinery.

Much has been made in the past several weeks of the upcoming expiration of duty remission orders for the textile and apparel industries. These orders were introduced in 1997-98, some seven years ago, as temporary--and let me emphasize that--measures to help textile and apparel firms adjust to a more competitive trade environment.

They gave companies in six textile and apparel sub-sectors a right to remission of duties paid on certain imports. Benefits have averaged in the order of $30 million annually.

So we have $75 million, which is brought up to $90 million, and we have the $50 million enhancement on the pre-existing $26 million, and we continue on with the average of $30 million per year in duty remissions.

Of that $30 million annually over the past three years, 90% of the benefits have been going to apparel manufacturers in the tailored collar shirts and women's wear sub-sectors. The current orders are set to expire on December 31, 2004.

The third element of the government's assistance package is the announcement that these orders will be extended for a further five years but will now be in a phase-out period over the final three years. Remission order benefits will decline to 75% of original levels in 2007, 50% in 2008 and 25% in 2009. They will expire entirely at the end of December, 2009.

As we can see from all of these initiatives on the part of the Government of Canada, prompted in large part by the drive of members of caucus, this is a substantive response on the part of the government to the needs and desires of this industry.

Thank you, Mr. Chair, and merry Christmas and a happy new year.

Textile IndustryGovernment Orders

8:50 p.m.


Pierre Paquette Bloc Joliette, QC

Mr. Chair, I am pleased to take part in this debate, not only because it seems that I will be the last to speak in the House in 2004, but especially because I want, with my colleagues from the Bloc, to continue to denounce the window dressing of the last few hours. We would have liked another outcome with respect to the federal government's support measures.

I very sincerely believe that the Bloc Québécois and the other opposition parties tried, in recent weeks and months, to convince the government, before and after the election, to give our textile and apparel industry the support it needed.

What happened? Last week, the Bloc Québécois, through the members for Beauharnois—Salaberry, Berthier—Maskinongé, Drummond and myself, put a number of questions to the government about the measures it planned to take to help the textile and apparel industry face the new situation that will come about on January 1, 2005, that is the elimination of import quotas for apparel and textiles coming from developing countries in particular.

In response to our questions, the government, through the Minister of Finance in particular, simply said that we were being impatient, that the process was underway, that there were consultations with the industry, and so on. That was last Thursday. Today, around 3:45 p.m., in a mad rush, the same Minister of Finance announced a so-called assistance package which is nothing more than the recommendations made by the Standing Committee on Finance seven months ago.

Seven months ago, in April 2004, the Standing Committee on Finance unanimously adopted a report containing three recommendations. These were submitted to the government, but nothing had happened until today. I am sorry to say that there is worse. Two weeks ago, at the Subcommittee on International Trade, Trade Disputes and Investment—in fact, my hon. colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup was with me—we asked a number of questions of the officials present, who told us that, regarding the finance committee report—containing the three recommendations I just referred to—which was first tabled in April, and again in October, following the June 28 election, they would not have an answer until March 8.

Two weeks ago, public servants were working on a response that was supposed to be ready on March 8. We thought that was completely out of line, considering that the problems were already right in front of us. And yet it seemed as if the government were working to rule. As hon. members know, when a committee tables its report, the government has 180 days to reply. So, the government announced that it would take the time it needed to answer the committee, and that might be until March.

That was two weeks ago. Last week, as I mentioned, the Minister of Finance had nothing better to say to us than that we were too impatient. Today, they announce the three measures that have been known since April. But now it is too late. In the meantime, jobs have been lost and investments have not been made. In the town of Huntingdon, in particular, the closing of six factories has been announced, putting 900 people out of work.

If the government, including the ministers of finance, industry and international trade, had done its homework after the election and come to us in October with a plan, perhaps some of the decisions made in the past few hours could have been postponed and reviewed. But no, there had to be a catastrophe in the Huntingdon region and a tempest in a teapot, producing one tiny drop of weak tea.

These three recommendations were the subject of a consensus in April, and we agreed with then completely. Even in the committee's opinion, these three recommendations were totally inadequate. Reading the report is quite interesting, though. The committee proposes taking three very easy actions. For the most part, they are already in place.

The first was to maintain the duty remission for importing manufacturers, those who import and are currently entitled to duty remissions on a certain volume of their imports. It was recommended this program be kept. Secondly, it was suggested that tariffs be removed on inputs, the fabric or fibre for making fabrics which are not produced—or no longer produced—in Canada and Quebec. Thirdly, it was suggested that the system of duties needed some housecleaning. In this sector, there is much that is arbitrary. Over the years, a patchwork tower of Babel has been constructed.

The government rushed to respond to the report of the Standing Committee on Finance. It was obvious during the press conference I attended. As I was saying, it was too little too late.

I will give an example. Among the three measures announced, there is the one to remove custom duties from textile products and fibres that we do not or no longer produce in Canada and Quebec. The Bloc Québécois entirely agrees with this measure since it had asked for it. This was even part of our election platform. However, the problem is that we need to know exactly which fibres and textiles we produce and which we do not.

To that end, we have asked the Canadian Trade Tribunal to conduct a study on this, which will take them more than a few days or weeks and may even take several months.

Meanwhile, apparel and textile producers will have to pay these duties without knowing whether the fibre or the textile they are importing will be considered a product not made in Canada or Quebec. They still do not know whether they will benefit from this measure, but they will have to pay out this money in the meantime. It says so in black and white in the government press release.

Had this measure been announced three or four months ago, it might have been possible to hope that the Canadian International Trade Tribunal would state, shortly, that a certain fabric or textile is manufactured in Canada and that we are able to meet market needs, and that this is not the case for a certain other fabric or textile. But the situation is otherwise. The resolution of a problem has just been put off until a later date. This does not alleviate the uncertainty these manufacturers are currently experiencing.

This is an example of what could have been avoided if the government had responded within a reasonable timeframe to the report of the Standing Committee on Finance.

As I mentioned, the Standing Committee on Finance considered its report to be insufficient. In fact, these are the easiest measures to implement because they relate to customs tariffs on textiles and fabrics produced here or elsewhere. However, a great deal of work still needs to be done. So, this was an easy answer.

We could have gone much further. For example, the government has not answered a very simple question: does it intend to maintain custom tariffs on textiles and clothings that will be imported even without quotas, be they from China or India? We expect such tariffs will indeed be maintained for some time.

The government is telling us that duty remissions over the next two years will be 100%. I gather that customs tariffs on our imports of clothing and textiles from China and India will be maintained. I am using these examples, but many other countries, particularly ones in Latin America, export their products here. However, we still do not have an answer. I looked in the press release and in the technical notes, but it is not there. I think this is it. However, no guarantees are being made right now. The government could very well have decided to rapidly reduce them.

We are told that the duty remissions will decrease gradually in the third, fourth and fifth years. At what rate? That we do not know. I am assuming that this is what we are being told about the duty on imported apparel and textiles being reduced in the third, fourth and fifth years, but there is nothing specific written down about that. I have to deduce it. This is a bit like playing Clue. I imagine some of us will have a chance to play that with our children over the holidays. In my case, I hope it will be the junior version.

So we will be forced to reach this kind of conclusion, whereas normally we would have expected the government to have been very clear on this.

There is one other element I want to address. Why not be like the Americans, that is allow Canadian textiles to be processed off-shore and then brought back into Canada duty free, as the U.S. does with the Caribbean.

Lastly, as I have already said, this is too late and too little. I hope that the industry will be smart enough to tell the government that. They could also have announced a very simple measure: maintaining the quotas on imports of apparel and textiles from China for the next few years, so that our textile and apparel industries would have the opportunity to develop, to keep their jobs, but also to keep our regions alive.

Thank you and Happy New Year.

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9 p.m.

The Deputy Chair

It being 9 p.m., pursuant to the order made earlier today, the committee will rise and I will leave the chair.

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9 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Let me extend my best wishes for a Merry Christmas and a Happy New Year.

Pursuant to the order made earlier today, this House stands adjourned until Monday, January 31, 2005, at 11 a.m., pursuant to Standing Orders 24(1) and 28(2).

(The House adjourned at 9 p.m.)