House of Commons Hansard #18 of the 37th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was turkey.

Topics

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

The Speaker

All those in favour of the motion will please say yea.

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

Some hon. members

Yea

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

The Speaker

All those opposed will please say nay.

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

Some hon. members

Nay

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

The Speaker

In my opinion, the yeas have it.

And more than five members having risen:

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

The Speaker

Call in the members.

And the bells having rung:

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Mr. Speaker, I suggest that the division be deferred until 5:15 p.m. today.

Federal-Provincial Fiscal Arrangements ActGovernment Orders

3:30 p.m.

The Speaker

At the request of the Liberal Party whip, the division is deferred until 5:15 p.m. today.

Bill C-21. On the Order: Government Orders

February 24, 2004—The Minister of Finance—Second reading and reference to the Standing Committee on Finance of Bill C-21, an act to amend the Customs Tariff.

Customs TariffGovernment Orders

3:35 p.m.

Brome—Missisquoi Québec

Liberal

Denis Paradis Liberalfor the Minister of Finance

moved:

That Bill C-21, an act to amend the Customs Tariff, be referred forthwith to the Standing Committee on Finance.

Mr. Speaker, it is my pleasure to speak today about Bill C-21, an act to amend the Customs Tariff. I also welcome the opportunity to support the motion that this legislation be referred to committee.

Briefly, this bill provides for the continuation of a longstanding policy of providing preferential tariff treatment to developing and least developed countries.

The two tariff programs in question—the General Preferential Tariff (GPT) and the Least Developed Country Tariff (LDCT)—are implemented through the Customs Tariff Act and are set to expire on June 30, 2004.

This bill proposes that the programs be extended for another 10 years, from July 1, 2004, to June 30, 2014, as per past practice.

Before discussing the bill, I first want to provide some background, which will help to put these measures in context.

During the mid-1960s there was a growing recognition that preferential trade treatment for developing countries was a means of fostering growth and the well-being of poorer nations.

Following a recommendation by a United Nations conference on trade and development, developed countries implemented unilateral tariff preferences for goods originating from developing countries in order to help them increase their export earnings and stimulate their economic growth.

Canada's general preferential tariffs program, the GPT, was implemented on July 1, 1974, for a 10 year period and has been renewed twice since then, in 1984 and 1994. As indicated, it is now set to expire on June 30, 2004.

Under the GPT, more than 180 countries and territories are entitled to zero or low tariffs on a range of products that are covered under the customs tariff, with the exception of some agricultural products, refined sugar and most textiles, apparel and footwear.

In 2003, Canadian imports under the GPT were valued at $9.3 billion and accounted for 2.8% of total Canadian imports.

In 1983, Canada introduced the Least Developed Country Tariff—or LDCT—in an effort to provide even more generous preferential tariff treatment to goods from the world’s poorest countries, as designated by the United Nations based on a number of criteria such as national income, health and education. This program also expires on June 30, 2004, as I stated before.

Since January 2003, the government, acting on a commitment made at the 2002 G-8 Summit in Kananaskis, provides complete duty-free access under this program to all imports from 48 least developed countries, except for certain agricultural goods such as dairy, poultry and eggs.

In 2003, Canadian imports under the LDCT were valued at $408 million, accounting for 0.12% of total Canadian imports.

I have provided some background to these two programs. Now, I would like to explain why they should be extended.

To begin, extending the GPT and LDCT for another 10 years reaffirms the government’s commitment to promoting the export capability and economic growth of developing and least developed countries—the main reason these programs were initially established.

It also provides a predictable business environment to traders using these programs, both in the developing world and here in Canada.As well, an extension would be consistent with the practice of other developed countries, such as the United States, members of the European Union and Japan, who also continue to have similar programs.

Further, continuing these two longstanding unilateral preferential tariff programs sends a positive message to beneficiary countries who see such programs as an important factor in encouraging their development.

The decision on whether to extend the GPT and the LDCT affects a number of stakeholders.

First, it affects the exporters in developing and least developed countries that benefit from the preferential access provided by the two programs. The premise that originally led to the establishment of preferential tariff programs--that they would encourage and increase exports from developing and least developed countries and hence stimulate economic growth--still holds today.

Various studies by international organizations such as the International Monetary Fund and the World Bank support the principle that export expansion contributes to economic growth.

While these programs clearly benefit developing and least developed countries, Canadians also benefit from them. As a result of lower tariffs on goods from the developing world, Canadian consumers enjoy access to imported goods at competitive prices and will continue to do so if these programs are extended.

In addition, Canadian producers will continue to benefit from the reduced tariffs on inputs they import from the developing world and use in production of goods in Canada, which ultimately increases the competitiveness of Canadian industry.

If these programs were not extended, the increased duty costs incurred by Canadian importers and consumers would be approximately $272.8 million. Not continuing these programs would also raise questions about Canada's commitments to international development.

As noted earlier, all other major industrialized countries provide preferential access for developing and least developed countries, and some, such as the United States, Japan and the European Union, have extended similar programs in recent years. As such, not extending the GPT and LDCT would isolate Canada internationally.

Continuing these programs would also be consistent with our commitments to assist developing and least developed countries. These commitments have been reiterated on many occasions in fora such as the G-8, the World Trade Organization and the United Nations. Clearly, letting these programs expire could negatively affect Canada’s image internationally.

The reasons that justified the introduction of the GPT and the LDCT decades ago still remain.

The economies of many developing countries have still to make great strides if their citizens are to attain acceptable income levels. This bill constitutes one substantive measure Canada can take to continue to assist the developing world in achieving this goal, and continues Canada’s tradition of assisting the developing world.

In considering this bill, I encourage hon. members to keep in mind that Canada stands with all other major industrialized nations—the United States, Japan and the European Union—in supporting the developing world through such programs.

Before closing, let me review the advantages of extending the GPT and LDCT for an additional 10 years.

First, Canada would continue a longstanding international practice of providing preferential tariff treatment to goods from the world’s poorer nations.

Second, continuing the programs for a fixed period of 10 years will provide certainty and predictability to traders using them in Canada and in the developing and least developed countries.

Third, continuing the programs complements Canada’s foreign aid policies.

Finally, while these programs were mostly conceived as an economic assistance measure for developing and least developed countries, they also benefit Canadians by providing them with goods that are subject to lower rates of duty.

A 10 year extension of these programs is consistent with past practice, provides a predictable business environment to traders and reaffirms the government's long term commitment to international development.

In conclusion, the government is aware of the situation in the clothing and textile industry and is currently looking at additional measures to support the industry.

Customs TariffGovernment Orders

3:40 p.m.

Canadian Alliance

Deepak Obhrai Canadian Alliance Calgary East, AB

Madam Speaker, it is a pleasure to speak to Bill C-21, an act to amend the customs tariff.

The minister of state articulated the need to extend this program, which has been in existence for some time and will come to an end on June 30, 2004. He gave his Liberal spin on it, indicating that it would help everybody in the Third World developing countries. He said that we should continue with it.

We in the Conservative Party agree with the minister and will support the bill because of another aspect. If we do not support the bill, then there could be the possibility of no tariffs and this would result in our markets being flooded by uncontrolled goods coming into the country, which would impact Canadian jobs.

We need a regime of controlled access, giving preferential treatment to developing countries and the least developed countries as well as ensuring that our markets open up slowly to foreign goods, while at the same time taking advantage of it.

We are more in line with having what we call free trade agreements. In light of the fact that the WTO talks in Cancun collapsed, it becomes more important for the world trading regime to consider what to do about tariffs. That is critically important because, in globalization, all studies have indicated that a reduction of tariffs in foreign trade is beneficial to everybody, including Canada.

I will be splitting my time, Madam Speaker, with my colleague from Edmonton--Strathcona.

It is important to understand that a country like Canada, which is based on exports and has a GDP of 48%, now close to 45%, has a regime that regulates international trade. We would like to see this being done under the guise of free trade agreements or special agreements with other countries that would benefit our exporters, benefit other consumers and benefit other countries as well as, with lower tariffs thereby giving an advantage to everyone.

As things stand right now, due to the collapse of the WTO talks in Cancun, we do not know where the world trading regime will go. For that reason, we will support this bill because we need a regime that will control the flow of goods until we know the outcome of the WTO talks, should they carry on and what agreements will come into play.

We are talking about two tariffs, the GPT, or the general preferential tariff, and the least developed country tariff.

I think I have articulated the reasons why we will support the bill. In short, until the outcome of the WTO talks and other tariff regimes on controlling the flow of goods come into play, will support the bill.

Customs TariffGovernment Orders

3:45 p.m.

The Acting Speaker (Mrs. Hinton)

The hon. member indicated two or three minutes into his speech that he wanted to split his time with the member for Edmonton--Strathcona, but in a 10 minute speech splitting is not allowed. The member can continue on for the remainder of the time, unless he gets unanimous consent, and he can certainly ask for that if he wishes.

Customs TariffGovernment Orders

3:45 p.m.

Canadian Alliance

Deepak Obhrai Canadian Alliance Calgary East, AB

Madam Speaker, I would ask for the unanimous consent of the House to split my time with the member for Edmonton--Strathcona.

Customs TariffGovernment Orders

3:45 p.m.

The Acting Speaker (Mrs. Hinton)

Is there unanimous consent for the member to split his time?

Customs TariffGovernment Orders

3:45 p.m.

Some hon. members

Agreed.

Customs TariffGovernment Orders

3:45 p.m.

Canadian Alliance

Deepak Obhrai Canadian Alliance Calgary East, AB

Madam Speaker, there has been some confusion and we will not be splitting our time now. He will get his own spot.

Customs TariffGovernment Orders

3:45 p.m.

The Acting Speaker (Mrs. Hinton)

The member for Verchères—Les-Patriotes.

Customs TariffGovernment Orders

3:45 p.m.

Bloc

Stéphane Bergeron Bloc Verchères—Les Patriotes, QC

Madam Speaker, unless I am mistaken, you asked for the unanimous consent of the House to allow the hon. member to split his time and you obtained that consent. How is it that a decision of the House is being reconsidered? I seem to be missing something here. I would appreciate it if you could clarify this, for my benefit and the benefit of all the members of this House. I thought we had agreed to allow the hon. member for Edmonton—Strathcona to continue for the time remaining.

Customs TariffGovernment Orders

3:50 p.m.

The Acting Speaker (Mrs. Hinton)

The House did give unanimous consent and then the member withdrew his request to split the time.

Customs TariffGovernment Orders

3:50 p.m.

Canadian Alliance

Deepak Obhrai Canadian Alliance Calgary East, AB

Madam Speaker, I would like to now dwell on the point of preferential tariff and the least developed country tariff. We know that in order for developing countries to get out of poverty, it is more important that they engage in fair trade practices where they have access to the markets of developed countries.

I grew up in Tanzania, a country that is classified as a least developed country. We see the poverty over there on our televisions. We see Canadians helping building wells, hospitals and classrooms.

The pictures that we do not see are the people, like my family and other families who used to live over there, engaging in businesses. We never see the developed side of those countries. Now there is a huge element of development in these countries where businesses thrive and succeed.

To help them become an engine of economic growth, they need a market. For a long time the western world market was closed. It used to be one-way trade when I was there. Everything went from here to there, but nothing came from there to Canada. As a matter of fact those countries were just supplying raw products to developed countries. However, that does not create prosperity. Prosperity is when they have products growing over there, when they manufacture and make products in their own country and then they sell them.

Coming out with the general preferential tariff and the least developed country tariffs, where there is almost zero tariffs, gives this country the opportunity to access those markets, where it can help those countries. Of course, the problem now is we have to look at how we can help these countries with investment flows so they can take advantage of these tariffs. If there is no investment flowing to those countries and if they do not have an industrial base, what is the point of having preferential tariffs, if they cannot export anything to other countries?

I know the Prime Minister was appointed by the United Nations to look at private investment flow. As a matter of fact, I wrote to him, not in the his capacity of the Prime Minister, but his capacity as a member of the United Nations panel looking into private investment flow. I gave him my input on what I thought should have been part of his report on how we could assist in sending private investment to these countries so eventually they could enjoy economic growth.

It has become quite evident and all studies suggest that because of globalization almost 200 million people have been lifted out of poverty, both in China and India. There is concrete proof out there, contrary to what my friends in the NDP would say, that globalization has not worked.

In conclusion, we are supporting the bill. Although the bill is for 10 years, there are other venues that we have to look at to ensure that we reach the objective of tariff reduction, which is to help the least developed countries and developing countries.

Customs TariffGovernment Orders

3:50 p.m.

Bloc

Stéphane Bergeron Bloc Verchères—Les Patriotes, QC

Madam Speaker, I am informing you from the outset that I have no intention of splitting my time with anyone. I should normally use all the time that is allocated to me.

First, I want to say that the Bloc Quebecois will support this legislation. Bill C-21 seeks to extend, to June 30, 2014, those sections of the Customs Tariff that allow Canada to provide preferential tariff to imports from countries that are members of the World Trade Organization, and to imports from the least developed countries.

The Bloc Quebecois will support this legislation because we simply cannot disagree with it. To oppose it would be tantamount to reneging on our international commitments, including with the World Trade Organization. This would also be tantamount to reneging on our international commitments in the area of development assistance, particularly those made by Canada in Kananaskis regarding Africa. I will get back to this later on.

A few moments ago, my hon. colleague from the Canadian Alliance referred to the impacts of globalization. Heaven knows, globalization has many impacts, both positive and negative. As I said yesterday, in another speech, it is not about being for or against globalization. It is about benefiting from it while simultaneously trying to limit the negative impacts of the totally unavoidable phenomenon of globalization to which we must adapt.

As I also mentioned yesterday, the leader of the Bloc Quebecois has repeatedly said that asking if we are for or against globalization is a bit like asking, each and every day of our lives, if we want the earth to stop turning. We must deal with this phenomenon and try to benefit from it as much as possible and to limit its negative impacts.

There are benefits to globalization, of course, both for industrialized countries like our own and for developing countries that want to use globalization as a stepping stone to gain access to the international trade network. The bill before the House will give developing countries, those less developed, easier access to the international trading network.

However, there are also negative impacts. Earlier, I heard the Secretary of State for Financial Institutions say, at the end of his speech, that he will soon be announcing adjustment or assistance measures for the soft sectors of the Canadian economy that are hard hit by globalization, like the textile, footwear and apparel industries. Good. However, I happen to remember that, when we talked about the advisability for Canada to sign NAFTA, those who were against argued that it would have a negative impact on a number of manufacturing sectors in Canada and in Quebec.

They asked, demanded and begged the government for adjustment measures, not only for the workers in such industries, but also for the industries themselves. In fact, globalization does not necessarily mean that we must write off all manufacturing operations in industrialized countries. Globalization simply means that we must change, reorient and modernize our sectors and our economic niches.

When we talk about manufacturing industries, we must remember that we benefit from a certain number of advantages, such as the presence of significant capital and of technology that can be used to manufacture high value added products.

Instead of producing clothes just to be producing clothes, we have the technology and the capital that we could use, for example, to produce clothing and textiles in the health or food sectors, where we could carve out niches that would be unique to Canada.

Coming back to the speech by our colleague, the Minister of State for Financial Institutions, who said, nearly two decades later, that measures are needed to support the manufacturing industry in the textile and clothing sector, we would have expected the government to have taken action well before now.

The negative impacts are already being felt in our ridings and our communities. Very recently, a business in my riding, Genfoot Lafayette, which has been operating in Contrecoeur for over 100 years and makes the famous Kamik boots, announced that it will be closing its doors at the end of this week to move its operations—at least the production that was done in Contrecoeur—to the People's Republic of China.

What did this government do? Absolutely nothing. In the meantime, businesses are closing and workers in our communities are losing their jobs. At Genfoot Lafayette, we are talking about nearly 200 workers, many of whom are women over 50 who will have great difficulty finding another job. These workers are losing their jobs, and the government has no programs in place to assist them.

This government withdrew from the program for older worker adjustment, thereby adding to their plight. I hope that the Minister of Human Resources Development will agree, at the request of the Quebec minister responsible for employment and social solidarity, to renew the pilot project, which is helping—although not to any great degree, but helping nonetheless—place older workers in new jobs. There is still no news from the government in this regard.

Given the almost total lack of measures to help workers in soft sectors such as textile, apparel and footwear manufacturing, for example, the government must, at the very least, commit to rapidly renewing POWA to help the older workers at Contrecoeur who will lose their jobs by the end of this week.

It goes on. A company in Drummondville has closed its doors. It was not a Mickey Mouse operation. We are talking about a company that makes designer jeans closing its doors. Several hundred employees in Drummondville are going to lose their jobs.

What does this government do? It tells us that it will eventually come up with assistance measures for the textile, apparel and footwear industries. They should have thought about that in 1988, 1989 and 1990. It is now 2004, and the government is saying it still needs to think about it. In the meantime, jobs are being lost.

Of course, there are negative impacts from globalization, but there are, as I mentioned earlier, positive ones as well. We have to be consistent in honouring our international commitments with members of the World Trade Organization, and also in our relationship with a number of least developed countries and the 49 least developed countries on the UN list, including 34 African countries. We all know about Canada's commitment to African countries. We must therefore support this legislation.

I have statistics that were quoted in 1994 by my colleague Philippe Paré, who was the member for Louis-Hébert at the time. I must say this is a step back in time for me because, in 1994, I spoke to the bill for renewing preferential tariffs until the end of June 2004. My point is that the amount of money developing countries are losing because of protectionism in industrialized countries is much greater than any development aid.

This is an important and positive measure for developing countries. We have to vote in favour of this legislation.

Customs TariffGovernment Orders

4 p.m.

Canadian Alliance

Rahim Jaffer Canadian Alliance Edmonton Strathcona, AB

Madam Speaker, I believe that if you seek it you would find unanimous consent that the motion standing on the Order Paper for the Conservative opposition day tomorrow, February 26, 2004, be replaced with the following:

That the government reallocate its resources from wasteful and unnecessary programs such as the sponsorship program, or badly managed programs such as the gun registry, to address the agricultural crisis at the farm gate across Canada.

Customs TariffGovernment Orders

4:05 p.m.

The Acting Speaker (Mrs. Hinton)

Does the member for Edmonton—Strathcona have the unanimous consent of the House?

Customs TariffGovernment Orders

4:05 p.m.

Some hon. members

Agreed.

Customs TariffGovernment Orders

4:05 p.m.

An hon. member

No.

Customs TariffGovernment Orders

4:05 p.m.

NDP

Bill Blaikie NDP Winnipeg—Transcona, MB

Madam Speaker, let the record show that it was a Liberal who said no to that suggested amendment by the official opposition.

I am not here to speak to that at the moment. I am here to speak to Bill C-21, an act to amend the Customs Tariff. As has already been said by previous speakers, this bill would extend the general preferential tariff and the least developed country tariff for another 10 years as they were both due to expire in June 2004.

These regulations would allow for products imported from a list of 48 least developed countries and from other countries which have preferred trading partner status to be brought into Canada without having to pay customs duties.

Originally the list of products that could be imported from least developed countries was relatively limited, but as a result of the least developed countries initiative announced by the Canadian government after the 2002 G-8 meetings in Kananaskis, the list of eligible products includes everything other than certain agricultural products.

While it might be laudable to open the Canadian market to products from developing countries, the problem with this legislation--and we do not oppose it, but we do want to point out this problem--is that it reinforces the system that currently exists in which North American retailers can get cheaper products, especially apparel from developing countries. These are countries without labour codes, minimum wage or environmental standards.

Though it is important that developing countries be able to export goods to Canada, the Canadian government must take a much more active role than it ever has in ensuring that these products are produced in unionized and fair workplaces, a concern that is not reflected in the least developed country tariff.

We all agree that our markets should be more open to least developed countries because we know that to some degree this is key to economic growth for them. Although I must say that I think the model by which countries are expected to grow and develop their economies by an overemphasis on export markets can also be destructive, where stable and sustainable local economies have often been destroyed in the name of creating export markets. This has often had a terrible effect on the environment and on the sustainable way of life of peoples in these various countries.

We should not take for granted that the only way to development in the least developed countries is through this overemphasis on export markets. To the extent that export markets play a role in the development of the least developing countries, developed countries have a responsibility to open their markets. However, do we have a responsibility to open our markets for the products that then flow from these least developed countries without regard for how they are produced?

If the products flowing into our country, as a result of the reduction in tariffs, are products that are produced in sweatshops or are produced in workplaces that not only are not unionized but cannot be unionized because of no recognition or poor labour standards in particular countries, is this what we call a fair trading regime? Not at all. This is at the root of many of the objections to the current model of globalization, which everybody has been singing the praises of for the last 20 years.

We are not suggesting that any particular least developed country should adopt the same labour standards which we enjoy here in Canada. Sometimes I wonder whether we enjoy them any more, when we see that the CNR is able to import American scabs with impugnity into the current rail strike. But let us believe our own mythology for a minute and say that Canada has good labour standards.

We have been persistently--in all the forums in which I have spoken as NDP trade critic and many other New Democrats and social democrats around the world have spoken--asked that core labour standards be recognized and enforced.

What are core labour standards? Core labour standards are basically the right to form a trade union, the right to organize collectively, the right not to be a victim of slave labour. These are very basic rights. If even these rights were recognized and enforced around the world, we would move closer to what everyone says they want, which is a level playing field, but it is not a level playing field.

It may be a level playing field for the corporations in some way or another, but it is not a level playing field for Canadian workers. It is not a level playing field when they have to compete with workers in other countries who do not even have core labour standards, who cannot organize, who cannot defend themselves without ending up in the river or the victim of some death squad or losing their job, or whatever the various levels of punishment are depending on the country. That is not a level playing field.

This is the big lie that is at the root of the current globalization model, that somehow we are all moving toward this great level playing field where the competitive will thrive and those who are not competitive will fall by the wayside. There is nothing competitive in the best sense of the word competitive about exploitation.

What we now have is a global economic system that rewards countries on the basis of how much they persecute their workers. I do not call that competition. I do not think exploitation of workers should be a comparative advantage, to use a traditional economic theoretical term. I do not think exploitation is a comparative advantage or should be regarded as one in the global trading system.

That is why in the House back in 1994 when the legislation was brought in to implement the World Trade Organization, I moved amendments to the implementing legislation for the World Trade Organization that called on the government to prohibit imports from countries that were engaged in child labour.

Another element of what it means to have core labour standards is no child labour. Is this some kind of radical socialist idea, no child labour?

What we are saying is that when it comes to the global trading system, there should be the same zeal for enforcing a level playing field as there is when it comes to investors' rights. Right now we have this perverse moral hierarchy whereby for investors or a transnational corporation, their property rights and their investor rights have to be protected because that is a sacred thing.

However, a working person's job can disappear overnight if the owner can find a group of people to make it cheaper under more exploitive conditions somewhere else in the world.That is what is happening to manufacturing jobs here in Canada, in the United States and now even in Mexico because this capital keeps seeking the lowest common denominator. Therefore jobs disappear out of Canada into the United States, from the United States into Mexico, and now they are being lost out of Mexico to China, where we have the worst of all possible worlds.

In China we have the worst of capitalism and the worst of communism; a single party state running a capitalist economy. Yet our government is so far up the rear end of the Chinese market that we cannot even find it. It will not say anything critical of China because that might damage our opportunities for penetrating the Chinese market.

I was on one of the trips to China. It was disgusting to watch how uncritical the Canadian corporate elite and the Canadian government were when it came to China. Talk about the wilful blindness that the government has with respect to the sponsorship scandal. It pales in comparison to the wilful blindness that the whole world has right now about China.

What if everything could be made in China? What would the rest of us do?

These are just some of the concerns that we bring to this kind of legislation. We understand the intent but in the absence of recognition and enforcement of core labour standards, this kind of legislation is going nowhere. It is a recipe for exploitation and it is not going to solve the world's economic problems.