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.