Debates of April 1st, 2004

Budget Implementation Act, 2004

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

The member said he is Conrad Black, Jr., this fellow over here. He actually looks a bit like him, except he has taken off a little bit too much weight.

He mentioned the GST. I want to remind people that it was his party, the Conservative Party, and his former leader, Brian Mulroney, that brought in the GST.

My uncle used to say, “A Conservative is a Conservative is a Conservative”. We had the member from Calgary and we had Brian Mulroney. They are all Conservatives.

I want to ask my Conservative friend across the way a question because he talks about debts and deficits. History would show that it was Conservatives that ran up the biggest debts. I was here for Brian Mulroney's days, his former leader. There were huge debts by Brian Mulroney. I was in Saskatchewan during the Grant Devine days and Grant Devine was a good friend of the member from Calgary and the Saskatchewan Taxpayers Federation. However, in those days he was a Liberal, not Grant Devine, but the member from Calgary.

The member knows about the huge debts and deficits of Grant Devine. It almost bankrupt our province.

Then of course, the best example of all is the hero of the member from Calgary, George W. Bush, the President of the United States. Billions and billions of dollars of deficit in the United States by another ideological conservative. This is the man who lied to the American people and lied to the world about weapons of mass destruction before he invaded Iraq. He is a hero of the Conservative Party.

Here are their leaders and heroes: Grant Devine, Brian Mulroney, George Bush, Ronald Reagan, debt and more debt.

Why is he preaching fiscal responsibility when he knows that the leaders of the Conservative Party around the world are the epitome of fiscal irresponsibility? He comes from Saskatchewan. He knows the proud history of the CCF-NDP and the social democrats in balancing budgets, people like Tommy Douglas, Woodrow Lloyd, Allan Blakeney, Roy Romanow, Manitoba's Ed Schreyer, Howard Pauley and Gary Doer. He knows all of that.

I know he is frightened. He has lost a lot of weight. That might affect him. How can he explain that with a straight face?

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

Mr. Speaker, after that performance, I do not know if I can answer with a straight face.

Let me remind the member that in fact I was not a member of Brian Mulroney's party at the time which he discusses. I was actually a member of the Liberal Party. In fact, I have to make a confession as a good Catholic, I was executive assistant to the current Minister of Finance at the time. I am doing penance for my sins.

Let me tell the member and I hope he hears, as a member who was elected to this place as a young socialist at 22 years of age. One thing I learned from Winston Churchill is that a young man in his twenties who is a Conservative has no heart, but a man in his forties or fifties who is a socialist has no head. I think that applies to this member.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I would like to bring this debate back to some level of reality.

It was interesting to have a Conservative member make a speech about a budget and not mention once that we are in the final year of a $100 billion tax relief package. That may have been what his party would have liked to have done had the people of Canada been so unwise to elect it as a government.

The member also neglected to mention that the threshold is up to $8,012. He neglected to mention that the brackets have been reduced to 22% for the first $35,000 and 25% for $70,000.

That was an interesting speech to make; however, there was not one word about tax relief in the entire speech.

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

Mr. Speaker, there is good reason for it. It is because there has been no real tax relief under the government.

The increases in CPP premiums and the effect of bracket creep over the life of the government has effectively increased the overall tax burden. This member knows that if he asks his constituents if they can discern any federal tax cuts they will say that they cannot.

The reality is that we still have the highest income taxes as a percentage of gross domestic product in the G-7. We continue to have the second highest income tax burden relative to GDP in the OECD. We continue to be uncompetitive when it comes to taxes.

We need to raise exemptions to take low income people off the tax rolls. We need to reduce marginal rates to increase the incentive for people to work, to save and invest, and to reduce business taxes and capital gains taxes to increase wealth in this economy.

The Liberals do not understand this because they are addicted to handing out tax pork to their Liberal friends.

[Karen Kraft Sloan, Liberal, York North, ON]

Mr. Speaker, about 11 years ago I stood in the House to deliver my maiden speech and it is very likely today that this will be the last opportunity that I have to speak in the House because I will not be seeking re-election.

I do not often speak in the House because I feel that every time I want to rise here, I spend an awful lot of time preparing a speech. I think it is very important that our words in Hansard are thoughtful, well articulated, and provide a good and deep understanding of the issues to which we speak.

I was asked just recently, a few minutes ago, if I would stand in the House and speak to the budget debate. It was 11 years ago that I gave my maiden speech and I am looking at some of the words from that original speech. I had said at that particular time that I was humbled by the history of this place. I think more than anything else, as parliamentarians, our first loyalty is to the Parliament of Canada.

I came here in 1993. It was a raucous time period and an exciting time for politics. There was a new party on the horizon, the western Reform Party. Those members came to Ottawa to turn politics upside down and indeed they did. In fact, they turned politics upside down for their own party several times.

At that time when I delivered my maiden speech, I talked about the long tradition of Canadian democracy. A lot of those new people who came to Parliament were saying we should toss parliamentary tradition out and that they would not be “Ottawafied”. Yet, I would suggest that parliamentary tradition is not static; it is not unchanging. It is dynamic and evolutionary. It has evolved and will continue to evolve.

The reason that we must have a first loyalty to Parliament is because it is the place where the will and the voice of the people of Canada have expression. We come here as representatives of the people of Canada. There are aspects of parliamentary democracy, for example, parliamentary privilege.

Parliamentary privilege is not for a parliamentarian; it is for the people of Canada. We must ensure that there is a proper balance, a fairness and equity that is demonstrated through our participation in parliamentary arenas, whether it is in this chamber, in our committees or whether it is other work that we do representing Canada abroad.

Parliamentary privilege allows us the opportunity to say what we want based on the kinds of things that we must say. I have a fear that in some respects parliamentary privilege is not well understood and in some respects, in some cases, it has been abused.

When we abuse parliamentary privilege, we abuse Parliament. We take away the very fundamentals that underlie Canadian democracy. We take away the will, the voice, and the expression of the people of Canada.

In 1994 I talked about the new finance minister, who is now our new Prime Minister. At that time, he set upon an unprecedented budgetary process. Up until that time, the ordinary Canadian, organizations, non governmental organizations, church organizations and all kinds of people across this land from coast to coast to coast did not participate in the budgetary process. In 1993 we set upon an unprecedented process of openness and inclusiveness. That is a very important plank in Canadian democracy.

I said at that time that Canada had a rightful place as a leader among the nations of the world in the 21st century. The kind of budgetary process that our finance minister undertook back in 1993, and indeed following in 1994, 1995, and 1996, was a process that we could use to export as a model for other countries in the world.

I also said at that time that the finance minister had given all of us a great opportunity to work together to let our voices be heard, our ideas tested, and to meld our vision of Canada with the rest of the world to form the Canada that we wanted. That is what democracy is all about.

It is the ability to participate in democratic forums to form the Canada that we want, whether that is something as simple as writing a letter to the editor of one's newspaper complaining about the member for York North, or whether it is to engage full time in election campaigns, or even to put one's name forward on an election sign and ballot.

I also underscored certain principles that were vitally important to the budget process at that time: fairness and equity. I said that these principles must continue to be the cornerstones upon which further budgets are based.

Equity is served when consultation is inclusive, when all perspectives that represent different aspects of Canadian diversity are respected and validated. Our diversity arises from geography, race, religion, ethnicity, age, gender and sexual orientation. Yes, I evoked sexual orientation in 1994 and was pleased to support a motion on same sex marriage back in the early days when it hardly even made the front page of the newspaper. Our diversity also arises from physical and intellectual capabilities, class, education, physical appearance and many other aspects.

Equity is served when our inter-generational responsibilities are acknowledged, and when our global roles and relationships are honoured. Equity is served when our natural environment is respected.

One of the things that I often feel is missing in the debates in the House, particularly budget debates, is the absolute final definitive fact that all of our material and cultural wealth is based on our biological wealth. There is absolutely no denying that. There is no way that we can mess with the account balance of mother nature.

When countries come together with respect to Kyoto and argue about the finer details of what will be included in sinks and what will be included in emissions trading, this is merely quibbling at the margins, because it is Mother Nature's account balance that in the final analysis is what really counts. It is the only thing that counts.

As governments, yes, we can learn an awful lot about the private sector. We can also learn about responsibility and we can learn about fiscal prudence. But the bottom line of government is not a financial bottom line. The bottom line of government is the health and well-being of its people. Our people will not be healthy and well, our economies will not be healthy and well, and our cultures will not be diverse or rich unless we preserve, protect and enhance our natural heritage.

I will continue to quote from a few more paragraphs, because I have the unusual opportunity as a member on the government side to actually have 20 minutes for my intervention.

My riding is now the riding of York North but back in 1993 it was the riding of York--Simcoe. I am delighted to say that we now have a new riding called York--Simcoe, because my riding has been split in two. Two new Liberal members will be welcomed to the House. The other new riding is Newmarket--Aurora and we have a fabulous new candidate by the name of Martha Hall-Finlay. She is a real go get it gal.

[An hon. member]

You've got Magna Corporation.

[Karen Kraft Sloan, Liberal, York North, ON]

They have Magna Corporation in that area, as the member opposite points out. They certainly have Magna Corporation in the area of Newmarket--Aurora, but it will be the citizens of Newmarket--Aurora who will be voting, not the shareholders of Magna.

I would like to go back to 1994 on a little historical tour, because I want to say something about the riding of York--Simcoe, and I quote:

...York--Simcoe is where the seeds of responsible government were first sown in Upper Canada. It was there that the rebel, William Lyon Mackenzie, joined forces with farmers and small business owners to challenge the Tory family compact.

Although it has been over 150 years since responsible government has been instituted, the descendants of those rebels have carried on the tradition of farming and operating small businesses in York--Simcoe--

That is the riding I represented before 1997.

My riding of York North was the riding of Baldwin and Lafontaine, the fathers of responsible government. When Lafontaine lost his election to a rowdy, unruly, disrespectful Conservative mob, Baldwin stepped aside and said, “Monsieur Lafontaine, we have a riding for you”. It was the good people of Newmarket who sent back a francophone in those days and it was my riding that ensured the unification of the two Canadas.

Allow me to continue. As for the farms of these rebels:

Today their farms grace the landscape of New Tecumseh, King, and east and west Gwillimbury. The world famous Holland Marsh is located near Bradford. Small businesses were and still are the heart of the economic engine in communities like Newmarket and Bradford. Their trades have always been carried out along the main streets of the villages of Sutton, Keswick, Mount Albert, Beeton, Tottenham, Pefferlaw and Schomberg.

The two ridings are now forming and making up the boundaries of those communities.

My riding is also graced with the beautiful beaches of Georgina along Lake Simcoe. A tourist trade booms here all year long, with boating in the summer and ice fishing in the winter.

We are also very fortunate to have a first nations band, the Chippewas of Georgina Island First Nation, and this community is determined to achieve its inherent right of self-government.

Mr. Speaker, I have to tell you that there have been remarkable achievements that I have been able to participate in with that community.

There are members in this House from all kinds of backgrounds and all kinds of ethnic backgrounds. They come in all shapes, sizes, colours, genders and sexual orientations. Each of us interprets our job as a member of Parliament in our own way, very differently, some more differently than others. Some members are very good in front of cameras and some not so good.

Unfortunately, the public does not have the opportunity to see what the vast majority of the members of Parliament in this House actually do. There might be a handful of members who actually appear on the front pages of national newspapers or actually get in front of the cameras of this nation, but the vast majority of the members of the House work quietly and diligently, acting on behalf of their constituents and on behalf of Canadians.

I hope that the last few weeks have not tarnished the image of members of Parliament, because indeed it is a unique privilege to serve Canadians. We do not come here alone. We can only come to this place because people participate in the democratic process. We have volunteers who support us, who cheer us on, who chastise us, and who remind us of who we actually represent and who we are. They come out on election day and put up signs. I have the best sign team around and that best sign team is going to be working in my two new ridings, let me tell you, Mr. Speaker. They put up signs, knock on doors, make telephone calls, make coffee, buy doughnuts and put on events for their colleagues and the volunteers. They drive buses. They make sure that people who would not otherwise be able to vote actually get to vote on election day. For all of those volunteers, I would like to say thanks from the bottom of my heart.

I would also like to thank the people I work with in my constituency office, Debbie McDonald and Rae Bowie, and in my Hill office, Alison Zinni, Tom Balint and Curtis Runions.

Most importantly, we do not come here unless we have the support of our families. My father, Alex Kraft, said, “You are going to Ottawa. Why wouldn't you go?” He always treated me as though I was the first male child of my family, and I have two other sisters. I have to say thanks to my dad. My mom is no longer with us but she is here shining on me today. Her humble, genuine respect of individuals is something that I hope will guide me through the rest of my days.

I have a husband who was the first male feminist I ever met, so I decided I had better marry him. Life here is very difficult and it is hard to hang on to those important relationships, but there is a guy waiting for me in Toronto tonight and I want to be on that 8 o'clock flight.

I would also like to thank my daughter Jessica and my son Patrick. Their courage, their maturity and their wisdom have helped me immeasurably.

For my colleagues sitting in the chamber on both sides of the House, let me say with no partisanship, because it is our loyalty to Parliament that is the most important thing, that we merely pass through this place. Some of us are here for decades, some for maybe only months. Some contributions are great. Some contributions are small.

We merely pass through this place. Even though our words in Hansard will crumble and fade away or get zapped into some electronic netherworld, this place will continue. It is this place that we must continue to respect, because this place is what Canadian democracy is all about. This place is not merely the House of Commons. This is the home of Canadians.

[The Deputy Speaker]

Order, please. I have the honour to inform the House that a communication has been received as follows:

Rideau Hall

Ottawa

April 1, 2004

Mr. Speaker:

I have the honour to inform you that the Honourable Marie Deschamps, Puisne Judge of the Supreme Court of Canada, in her capacity as Deputy of the Governor General, signified royal assent by written declaration to the bills listed in the Schedule to this letter on the 1st day of April, 2004, at 4:48 p.m.

Yours sincerely,

JoAnn MacKenzie for Barbara Uteck

Secretary to the Governor General

The schedule indicates the bills assented to were Bill C-16, An Act respecting the registration of information relating to sex offenders, to amend the Criminal Code and to make consequential amendments to other Acts--Chapter No. 10; and Bill S-15, an Act to amend the Act of incorporation of Queen's Theological College.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

The House resumed from February 10 consideration of the motion

Softwood Lumber

[Brian Fitzpatrick, Canadian Alliance, Prince Albert, SK]

Mr. Speaker, I am pleased to speak to Motion No. 397. The object of the motion is to replace the American dumping and countervailing regime on the lumber issue with a net subsidy approach. On the fact of it, this motion looks like a good initiative.

If it could be accomplished, we could quantify all industry specific subsidies and if both sides were roughly equal, there would be no countervailing duties. We would have a better regime if we could accomplish it. However, there are a number of roadblocks in getting to the destination outlined in the bill, and I think they are fairly major hurdles and roadblocks. I would like to go over those roadblocks and perhaps get a response from the person who is promoting this motion.

The first roadblock is we have attempted this net subsidy method before. Under the free trade agreement and the Uruguay round of world trade negotiations, we attempted to establish this approach. It failed because many countries, including the United States, were opposed to this method of dealing with subsidies and distortions. That opposition is stronger today than it has been probably for a long time.

The approach would not affect U.S. internal trade law, things like the Byrd amendment. These things would stay in place. The trade law still remains a major burden in getting full free access and open trade with the United States. These tools and internal trade laws that exist in the United States will not disappear if we can accomplish what the member suggests.

The other concern is the U.S. department of commerce would still be there. It would have the power under this suggestion to quantify the subsidies, not only in the United States but in Canada as well. It would be a rather naive assumption to expect the U.S. department of commerce to use the same measuring stick for both economies in coming to that determination.

I guess another difficulty with this approach is has its problems too. I can visualize trade lawyers in Washington and the various lobbyists and protectionists, who want to frustrate this sort of thing, killing the deal with a thousand needles. They could study every fine detail, every little aspect of this into the ground, and we would have a never ending process. It would go on and on, and we would never get any resolution.

Many trade experts would say, if we do not like the way trade is working with the United States today, that the best solution would be to reopen the North American Free Trade Agreement and renegotiate the agreement with the Americans. I think in all honesty the difficulty with that approach is the Liberal government has too many sectors in this economy that it wants to favour and protect. A lot of the problems we have in the airline industry is the policy by the Liberal government to create a sheltered, protected monopolistic air system in the country, and we are paying the price for it today.

We have it in the guise of culture and arts too, that we need to have our own regime in place. Basically, what we are really doing is protecting certain friendly industries in that sector which the government wants to protect. Generally, it is a monopolistic type arrangement again.

In the banking sector more often than not Liberals are more in favour of protectionism, giving a small group of people concentrated power rather than truly opening up the sector to the full advantages of a free enterprise, free market system and the benefits of real competition.

The grain industry would be another example, and the supply sector. If we were to reopen NAFTA, we would have to seriously put these things on the table to get any progress in dealing with the other issues where there is a concern.

I do not see the Liberal Party being the party that would want to really encourage free trade. It has not been supporters of it. I remember John Turner in 1988 saying that if we signed on to a free trade agreement with the United States, we would lose our border and sovereignty. Liberals sound like the NDP when they talk on trade issues generally and they generally take the same positions. They are trying to suck and blow at the same time. That is a hard thing to do but they try to do that.

They fought free trade, and everything they said about it in 1988 has basically backfired on them. We have a $50 billion to $60 billion merchandise trade surplus with the United States on an ongoing basis. We probably have the biggest trade surplus with the United States of all its trading partners, and the Liberal Party fought it tooth and nail saying that it would not be good for Canada.

However, I agree that the way to try to address a lot of these issues would to approach some reopening of NAFTA.

In conclusion and speaking to the motion itself, the best course of action from where we are right now, is to stay the course. We went a long way down the pipe with both NAFTA applications and World Trade applications, and I think we are getting very close to the end of the pipe where these things will come to a determination.

Any attempt at this time to try some other way to resolve this only plays into the hands of the special interests that are behind these countervailing and dumping charges in the United States. We realized that it would take a long time to work our way through these things and get to the end of the pipe, and get final determinations on these issues. We can see this coming. It just seems to me it would be a detour to abandon that process. To go to something else at this stage that probably would not work.

I wanted to deal with some collateral issues that pertain to this matter. My Prince Albert riding in Saskatchewan has some softwood lumber plants and a pulp and paper plant that are experiencing a lot of difficulty. The province does not have the fiscal capacity to deal with the problems, and a lot of that has been created by the equalization policy of the Liberal government. There really have been no measures taken by the government to help the industry through this stage of negotiations and trade disputes, and it is starting to show. A number of plants have closed down.

The largest player, Weyerhaeuser is now starting to put some of its plants on the market. It looks like the industry is basically downsizing in Saskatchewan and we are going to be looking at closed capacity and a lot of unemployment arising out of this matter. It is not a good situation.

I have never it seen it so bad in just about every sector of the Saskatchewan economy, in the farming sector, softwood lumber sector and livestock sector. It just is not good times. There are lots of problems in the province and unfortunately the federal government has been of very little assistance in addressing these matters.

[Andrew Telegdi, Liberal, Parliamentary Secretary to the Prime Minister (Aboriginal Affairs)]

Mr. Speaker, I am very pleased to enter the debate and speak on Motion No. 397. I commend my colleague, the Liberal member for Etobicoke North, for his fine work in this area which is so important to so many Canadians and is currently the subject of many debates.

Finding a solution to the softwood lumber dispute has been and continues to be one of the Government of Canada's top trade priorities with the United States. The Government of Canada has defended and continues to defend the interests of Canadian industry since the United States department of commerce initiated investigations into allegations of dumped and subsidized softwood products in April 2001.

We have also consulted extensively with the provincial and territorial governments and industry to craft an approach that is best suited to meet our objectives and that will benefit both Canada and the United States. The past year and a half has not been easy for Canada's lumber and forest industries. As a result of the financial pressure of the U.S. imposed duties, we have experienced job loss, mill closures and uncertainty for our industry.

Canadians affected by this dispute understand that free trade in lumber means jobs in the mills and greater stability in our lumber communities. Canadian lumber producers and the people who depend on the lumber industry for their livelihoods understand the importance of finding a resolution to this feud.

They realize that the long term viability of the industry depends on our industry finding permanent resolutions of this longstanding trade conflict. They recognize the value of being able to export their lumber products to the United States unhindered by protectionist measures. We are relentlessly working toward a resolution with those goals and with those affected workers, producers and communities in mind.

To preserve our united front, various federal, provincial and private sector representatives are meeting on a regular basis regarding the latest developments with respect to the negotiations and litigation.

Federal and provincial officials have met in Ottawa to discuss provincial concerns over the manner in which quota would be allocated to the provinces if we were to achieve a settlement involving quota.

Industry for its part has been meeting to discuss their position with respect to a settlement.

The Minister of International Trade had numerous discussions with his provincial counterparts, both over the phone and in person, regarding a number of alternatives for their consideration. The minister has toured sawmills and remanufacturing operations and has met with representatives from all the major industry associations across the country.

It is the government's position that it is by maintaining close consultations with our provincial and industry counterparts that we will achieve a resolution to this dispute that represents the prevailing view of our stakeholders.

As I mentioned earlier, the centrepiece of any negotiated settlement to this dispute would involve the publication by the U.S. department of commerce of a policy bulletin that would guide the department of commerce in reviewing changes in the provincial forest management practices that could lead to the revocation of the countervailing duty order for a province.

The content of the policy bulletin, which is the result of numerous consultations with the provinces, represents the first time that the United States has defined in detail the kinds of reforms that would be required to achieve a long term resolution of the dispute. This represents an important step forward in our efforts thus far.

Forestry largely falls under provincial jurisdiction in the country. Should a negotiated settlement be reached, it will be up to the individual provinces to decide if they want to proceed with modifications to their forest management policies and timber pricing programs.

Critics of this approach would have some believe that these policy changes are being dictated to us by the United States. The provinces have their own domestically motivated reasons for making these policy changes, such as increasing the competitiveness of their industry.

Some provinces have already begun to undertake changes to their forest management practices for their own domestic reasons. For example, the province of British Columbia has recently announced a significant forestry revitalization plan for its forestry sector and market-based changes to its pricing practices on the coast.

In view of the importance of getting Canada's message out in the United States with respect to our forestry practices, the government is contributing toward an extensive industry-government advocacy campaign under the direction of the Forest Products Association of Canada.

With the support of a grant from the Government of Canada, the Forest Products Association of Canada, whose membership accounts for nearly all the wood products and paper and pulp produced in Canada, has been responsible for coordinating an industry-led advocacy campaign aimed at creating political conditions in the United States conducive to a resolution of the softwood lumber dispute.

The primary message of the campaign is that the economic relationship between Canada and the United States is absolutely vital to both countries and that it is in their mutual interest to amicably resolve the issue of U.S. duties on Canadian softwood lumber before it causes real harm to this larger relationship.

The U.S. duties are punitive and unfair. Thanks in part to our advocacy efforts, the Canadian position in this dispute enjoys the support of various lobby groups in the United States who are also of the view that the U.S. imposed duties not only hurt Canadian producers and workers, but hurt small American producers as well. These groups include U.S. producers who purchase Canadian softwood lumber for their manufacturing activities and who now have to pay more for their inputs.

We are also benefiting from the support of housing and consumer groups, notably the American Consumers for Affordable Homes, who are lobbying for a return to free trade in lumber between the United States and Canada in order to promote affordable housing for consumers in the United States. It is extremely important for our industry to have this type of support internally in the United States. Support from these various groups goes a long way toward applying pressure on the relevant decision makers in Washington.

It is the government's priority to engage partners from across the spectrum of stakeholders with interests in the Canada-U.S. economic relationship in trade advocacy in the United States.

We should not have to continue to do battle with the United States over the same trade issue year after year and decade after decade. We should not have to face a cycle of protectionist U.S. duties and litigation at the WTO and under the NAFTA. The reality of the situation is that both Canada and the United States require a long term solution to a problem that has confronted us for too long.

We are committed to continuing to work with the provinces and industry toward a long term resolution. Along with provincial governments and industry, we are agreed that a durable policy based resolution is our goal. This united front has strengthened our position in our dealings with the United States. Maintaining this united approach will help us find a fair resolution to the softwood lumber dispute.

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, I too am very pleased to speak to this motion put forward by our colleague from Etobicoke North.

I must acknowledge right away that he probably has good intentions in trying to find a satisfactory solution to the unending softwood lumber dispute with the United States.

Allow me to read the motion in order to define the parameters of the discussion. The motion reads as follows:

That, in the opinion of this House, the government, in the context of the softwood lumber dispute with the United States, should: (a) negotiate an end to the United States' countervailing duty process by replacing this United States trade remedy with one which either focuses on net subsidies--taking into account tax-free bonds, sales tax abatements, property tax reductions, investment tax credits and energy co-generation agreements—which are available in the United States at the state and local government levels, or that focuses exclusively on whether or not policies in Canada and elsewhere are anti-competitive in nature; and (b) that, in addition to the foregoing, the government should launch negotiations with the United States' government with a view to eliminating tax competition, in particular manufacturing subsidies, which is ongoing between Canada and the United States.

As I was saying earlier, I think it must be acknowledged that our colleague from Etobicoke North is probably full of noble intentions in wanting to introduce innovative ideas to try to resolve the softwood lumber dispute.

First, I must say that we find the proposals to be highly commendable, but the first part—I will come back to that in detail in a few moments—is full of tactics that distract from the fundamental objective, which is to go all the way with the legal proceedings brought before the World Trade Organization and NAFTA, in order to get a ruling in our favour, which appears to be what is happening.

As we know, the World Trade Organization very recently issued a ruling to the effect that the United States has erred in determining that injury had been caused to the American softwood lumber industry, and in imposing anti-dumping and countervailing duties. We are also anticipating a positive ruling by NAFTA in the very near future.

My point is that these tactics are distracting us from the objective, which is to continue the legal proceedings, which we will likely win and, in the meantime, they are also distracting us from the obligation to help the softwood lumber industry and the workers who are directly affected by the consequences of that dispute.

In Quebec alone, since May 22, 2002, no less than 92 plants have been affected by the harmful consequences of the softwood lumber dispute. This means that over 10,000 jobs were directly affected by this dispute. And this is for Quebec alone.

While we are continuing our legal proceedings with the WTO and NAFTA to actively support our industry, it is important to also help our workers. What is the government doing? Nothing at all and this forces some of its own members to try to put forward some innovative ideas in an effort to find a solution to the dispute, because their government is totally silent, inactive and impassive despite the drama that is taking place in a number of regions whose economy is based, if not exclusively, at least very significantly on the softwood lumber industry.

Rather than present us with tactics like this one, I beg the government to implement phase two of its aid package for the industry and the workers, which it has been promising for so many months, knowing full well that phase one was not really any help to them. We hope that the government is going to bring phase two in promptly and that, this time, it will be a true aid package for affected workers and companies.

Let us now analyze, take apart, dissect this motion, which, at first glance, may seem very confusing. The first element, part a, may seem interesting and desirable, but it is absolutely utopian. Not only that, it would also have the effect of weakening Canada's position before the WTO and NAFTA. I will explain what I mean.

What is being proposed, outside of the verbiage in the first part of the motion, is the net subsidy concept. It means we would obtain this net subsidy ratio by subtracting from the subsidies applied on one of the two countries the ones applied in the other.

We feel that this would be to readily acknowledge that we subsidize the softwood lumber industry in this country, which is certainly not the case. It would also be requiring the U.S. to acknowledge that they too subsidize their softwood lumber industry, and they are certainly not in a position to recognize this, or prepared to.

One cannot be against motherhood and apple pie, so this initially appears to make some sense. But we must recognize that, in fact, it does not, as it is totally unfeasible.

During the Uruquay round, they tried to bring forward the net subsidy concept, but the United States said this was out of the question. Imagine us alone trying to impose this concept on them when they categorically refused it during multilateral negotiations. It is absolutely utopian to believe that we would succeed in negotiating such a thing with the United States.

As for the second component of this motion, it too struck us right off as totally unacceptable. It concerns tax harmonization with the United States. The first problem relates to Canada's fiscal sovereignty.

Obviously I am a sovereignist, but I would like it if, when Quebec becomes a sovereign state, it still had a little sovereignty left; I would like it if Canada had not relinquished on its behalf, even before Quebec emerges, great big chunks of sovereignty that currently belong to Canada. Therein lies the first problem with respect to Canada's fiscal sovereignty.

If we want to harmonize, we must not expect the United States to model their fiscal policy on ours. It is more likely to be the opposite. Purely arithmetical and mathematical reasoning, looking at demographics and economics, enable us to say such a thing.

However, this completely ignores the fact that both Canada and the United States are federations. Thus, there are states—in the case at hand, provinces, Quebec especially—that have fiscal policies and that would have to give up, to relinquish their jurisdiction over taxation in favour of the federal government so that it can negotiate fiscal harmonization with the United States.

The last time that Quebec and the provinces relinquished fiscal responsibilities, they were the losers. We can still see the consequences today. When the provinces gave the area of direct taxation to the federal government during the war, they hoped it would give it back later, but it never did.

For all these reasons, I urge my colleagues to vote against this motion.

[Eleni Bakopanos, Liberal, Parliamentary Secretary to the Minister of Human Resources and Skills Development (Social Economy)]

Mr. Speaker, let me once again state the government's commitment to finding a long term policy based resolution of this ongoing trade dispute which began following the expiry of the 1996 softwood lumber agreement in March 2001.

The Government of Canada has full confidence in the strategy followed to date to defend the interests of the Canadian softwood lumber industry since the American industry began claiming that Canadian softwood lumber exports are unfair with regard to trade.

As we said earlier, after indepth consultations with the provinces and the industry, Canada adopted a two-fold strategy, based on both legal recourse and negotiations, in order to resolve this dispute.

Canada has put forward strong legal cases to defend against the punitive duties imposed on exports of softwood lumber to the United States. Since Canada initiated its legal challenges, NAFTA chapter 19 dispute settlement panels have ordered the U.S. to correct its flawed anti-dumping, countervailing duty and threat of injury determinations.

Pursuant to these panels' instructions, the U.S. Department of Commerce issued new anti-dumping and countervailing duty determinations, which resulted in reducing the country-wide anti-dumping duty rate to 8.07% from 8.43%, and the countervailing duty rate to 13.23% from 18.79%.

However the government and other Canadian parties involved in these cases continue to believe that proper Department of Commerce determinations will find that Canadian softwood lumber exports are neither dumped nor subsidized. Consequently, Canadian parties have requested that a NAFTA panel review the Department of Commerce's remand countervailing duty determination.

On March 5, a NAFTA panel found that the U.S. Department of Commerce anti-dumping determination had no legal grounds in the U.S. and gave the latter new instructions to bring its determination in line with American law.

Furthermore, on December 15, in accordance with the NAFTA panel's instructions, the U.S. International Trade Commission issued a remand determination, which reaffirmed its original finding that imports of Canadian softwood lumber threaten to injure the U.S. domestic industry.

This latest unsubstantiated determination has also been challenged by Canada, and the NAFTA panel is expected to issue its second report on April 30. There is a possibility that the panel will remand certain issues of the latest threat of injury determination back to the U.S. International Trade Commission with instructions to issue a new determination that is consistent with U.S. law.

If the U.S. International Trade Commission cannot sustain its threat of injury determination, then there will be no basis for the imposition of duties against Canadian softwood lumber exports. However, it is important to note that litigation in this case could last another year.

The World Trade Organization's appeals branch overruled the panel's conclusions on the determination of benefit in its report on the dispute over countervailing duties.

The appeals branch stated that it was possible to impose duties in very limited cases but that there was insufficient evidence to determine if the United States had grounds to do so in this case.

It is worth noting, however, that, in August 2003, a NAFTA panel found that the United States had no legal grounds for imposing duties to prove the existence of a benefit.

Furthermore, a WTO panel also submitted a confidential report on dumping in January. This report should be made public on April 13.

We are particularly pleased with the recent report on threat of injury which strongly supports Canada's position that our exports of softwood lumber do not threaten to injure the U.S. domestic industry. The WTO panel ruled in favour of Canada on the crucial issue that the ITC finding that imports of Canadian softwood lumber would increase substantially, thereby threatening to injure the U.S. industry is not one “that could be reached by an objective and unbiased investigating authority”. This was the key ITC finding supporting its “threat” determination.

However, while litigation in these cases is going well, it is important to remember it will be some time before we see final results. This round of NAFTA cases could continue into 2005 and the WTO cases could take until 2006 to implement. Challenges of the administrative review results could carry on well beyond that.

We have always stated that challenging U.S. actions before NAFTA and WTO panels is a long process. We fully expect the United States to continue to defend its countervailing duty, anti-dumping and threat of injury determinations. In recognition of this fact, Canada spared no efforts in its negotiations with the United States in an attempt to reach a mutually acceptable resolution of this dispute.

Important progress has been made in laying the foundation for a lasting resolution to the dispute. The long-term political solution discussed with the United States over the past few years includes the publication of a policy bulletin by the U.S. Department of Commerce, to which the latter would refer in reviewing changes introduced by the provinces to their future forest management practices, which is what the U.S. countervailing duties are aimed at.

Such a review, if it were positive, would lead to the revocation of the countervailing duties for the province in question. The provinces are already making these changes, particularly British Columbia, which is well ahead of the others.

Also under discussion is a settlement that would replace the duties with a quota system, settle the litigation and allow provinces to pursue policy reform and achieve an exit from the quota. On December 6 the U.S. put forward terms for a settlement, which would provide a 31.5% market share to Canadian exporters of softwood lumber.

After extensive consultation with Canadian stakeholders, on January 12 we indicated to U.S. Secretary of Commerce Donald Evans that provinces could not support the proposed terms for agreement, primarily because of the lack of a clear exit from the quota for provinces that successfully reform forest policy. Other concerns include the market share Canada would have under the agreement and the split of the deposits.

Since his meeting with Secretary Evans, the Minister of International Trade has travelled across the country to meet with industry associations in all major softwood exporting provinces and with various provincial governments to discuss the components of a counter proposal. On March 24 he spoke with provincial ministers. There is strong support for a negotiated solution, but there is also a preference for waiting until after the April 30, 2004 NAFTA panel report on threat of injury. In the meantime, Canada continues to pursue its legal challenges before the NAFTA and the WTO.

The Government of Canada, which is very aware of the repercussions of American duties on the Canadian industry, has already allocated $365 million to help workers, communities and associations affected by the softwood lumber dispute.

This money will be used for various purposes, such as helping affected communities diversify their economy; helping workers through training and work sharing programs; investing in research in order to make the forestry sector more competitive in the long term; funding research and development on softwood lumber; and taking measures to expand the markets.

The federal government's assistance includes: $71 million for measures to assist displaced workers; $110 million for a national softwood industry and community adjustment fund to support community economic development; $95 million in funding for softwood lumber research and development, market expansion initiatives and advocacy efforts; $20 million in advocacy efforts to inform the U.S. public of the impact of the U.S. duties on U.S. lumber consumers; and $14.85 million in assistance to Canadian lumber industry associations. The funding assists industry associations to operate effectively under the burden imposed by a softwood lumber dispute.

The government has continued to assist and take the right approach throughout this dispute. In our consultations with various stakeholders, we have explored all the feasible avenues and analyzed all the options available to us in the context of this dispute.

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, I do not intend to take a lot of time on this motion as the issue of the softwood lumber dispute and the problems within the softwood lumber industry have been brought up time and time again in the House. They certainly have been raised in question period and emergency debates.

My colleague across the way indicated that the softwood lumber agreement expired in 2001 and that some discussions had been taking place before 2001. Here we are in 2004 and there is no resolution to the softwood lumber dispute. Quite frankly, the motion by my colleague from Etobicoke North is an indication of just how badly the government has failed the forestry workers and the softwood lumber industry throughout Canada.

I recently had the opportunity of being in the U.S. and I listened to a number of discussions that were going on in the U.S. legislature relating to patent drug legislation. I could not help but note the similarities. Canada had to change the way it did business. We had to change our legislation. We were told by an outside group that they did not like the legislation that we formed in our democratic institution, the Parliament of Canada. They did not like what Canadians said about how they wanted patent legislation. The government had to buckle under to a WTO ruling that said we had to change our legislation because they did not like it. Quite frankly, that is an intrusion on the sovereignty of a nation. It is an intrusion on a country being able to best represent its people.

It is the same situation within the softwood lumber industry. When I hear comments such as “When we successfully reform our forest policy” it says outright that Canadian provinces have not been doing things right. It says that they have been bad, that they have been wrong in the way they have been doing business. It is an intrusion by the federal government on the provinces by allowing this type of attitude to be put out and to hear it from members across the way.

Each and every province should have the right to deal with its lumber resources as it so chooses. On the east coast there are private lumber companies. Saskatchewan, B.C. and Manitoba have crown lands and they chose to put in place certain licensing agreements for forestry companies to log. They are being told that they are wrong, that they do not have the right to do that or to sell the product at what they think is the right price. For all those who believe in the free market system, I guess the free market approach is only okay if it means that a private company gets to sell off something the way it wants, but it is not okay for a province to do that.

In the case of my province, I am very conscious of the fact that our lumber resources and all of our resources in a good many areas are jointly owned. I say owned because they fall within lands that belong to first nations. We have tried to work out a process where first nations communities have access to benefits of resources.

When we start to allow another country to impose and tell us how to do business, it may affect all those different facets that we have to work into our way of doing business in Canada. It has been extremely disappointing to hear my colleagues on the governing side accept the approach that somehow Canadian provinces are wrong in how they do business.

Although it is not perfect, we have one of the best forestry practices in Canada. Reforestation takes place in the areas that are being logged. As I said, it is not perfect. From an environmental perspective improvements could be made and there are those within the environment community who want to see changes happen. However, overall, we have done far better than the U.S. companies have done. They do not have the same type of resources we have and as a result, they are moving in.

Some of those companies in the U.S. that want our lumber have the same company operating here. They want to be able to work things so they get the benefit on both sides of the border.

Much more is involved in this than a simple trade deal. Quite frankly, the basic principle we have to abide by is that as a country we should be able to produce a product and the provinces should be able to put in place whatever practices they want. We should not have to worry about the bullying by Americans just because they want things done in a way that will benefit them the most. They actually do not want inexpensive lumber going across the border because it will bring down their prices, which will result in large lumber companies in the U.S. losing out.

However, those companies that would benefit, as another colleague mentioned in the House, are organizations in the U.S. that are fighting for affordable homes. The nerve of a group in the U.S. to have a lobbying group to try and get affordable housing for the people in the U.S.

That group is one of our biggest allies in Canada in being able to continue with their business. The Government of Canada has not been our ally. The government has been looking at ways to change everything to satisfy the U.S., instead of standing firm and saying that as a nation we can do business.

I recognize that the Americans are our neighbours and friends but we do not want an in our face kind of attitude all the time. I was extremely pleased to hear Senator Kerry, a Democrat and U.S. presidential candidate, say that the U.S. had not been fair and done good by its northern neighbour, and that has to change.

His comment was a recognition that not all Americans are happy with the way the U.S., under the present government, has done business with Canada. It has been bullying in the area of softwood lumber and even in the crisis in the beef industry. This type of an approach has appalled a lot of Americans.

What do members think beef prices are like in the U.S. now that they cannot buy Canadian beef? Last summer a New York paper stated that it did not expect the beef issue to be settled because it would lower the price of beef in the U.S. This type of practice has been taking place for centuries. The bottom line is that it is annoying when a country suggests that it wants free trade but then puts in place roadblocks every step of the way.

I acknowledge my colleague's motion as being an effort to resolve a situation but what we need is a firm commitment by the government to stand behind our Canadian industry as we see fit as a nation as to how it should be. We need the government to put in place good enough supports for the industry.

If we had a national housing policy and a real all out effort to get behind it, it would not have saved the industry or accomplished everything that needed to be accomplished, but it would have given the industry much needed support.

I heard someone say that $350 million had been given to the industry. That is a lot of money, and I acknowledge that, but when I compare the boasting of $350 million to $100 million being wasted over an ad situation, it brings it into perspective. We can waste $100 million here and we will only be given $350 million there. That is when it is not acceptable.

We must put our priorities in line and it is time the government either got those priorities in line or packed it in.

[Andy Burton, Canadian Alliance, Skeena, BC]

Mr. Speaker, I would like to speak briefly to Motion No. 397. While I think the motion is very well intended, it definitely has some flaws, which my colleague spoke about earlier.

I will make just a few comments. Coming from British Columbia, I am very familiar with the softwood industry in British Columbia. B.C. exports 50% of the softwood lumber that goes into the U.S. market. That is basically a third of the total U.S. market in terms of consumption down there. It is a very significant industry in British Columbia, as it is in other parts of Canada.

We are very concerned about the effects of the softwood lumber situation. Any move to try to alleviate that or improve the situation and in fact come to a final solution would be welcome. I am not so sure, though, that Motion No. 397 would do that.

There is no doubt in my mind and in the minds of many of my colleagues that the ultimate solution we have to work toward is free and open access to the U.S. market through that border. We have to concentrate on that and make every effort to achieve it, hopefully in the short term but certainly in the mid term to long term.

Any negotiations in the meantime will have to continue at the WTO and NAFTA and we certainly hope that they will conclude as soon as possible with what I think will be positive results for Canada.

One of the members across the way spoke a short time ago about the softwood lumber community adjustment program. That has been a big concern. It was announced a year and a half ago or so with the intent of helping the communities across Canada and of course in British Columbia that were affected by the softwood lumber dispute. That program in British Columbia was worth some $55 million. To date, $5 million has been spent on bureaucracy, which is a heck of a chunk out of that program; almost 10% is already gone without achieving anything to speak of.

I understand that some $30 million has been approved in various projects for communities around British Columbia, but again, not a lot of that money has hit the road yet. The cheques have not been written to any large extent.

Two or three projects in my riding of Skeena have been approved, for which I am very grateful. The timing was late. The intent of the program was to assist some of these communities through the fall and winter months when times are very difficult and opportunities are somewhat limited. Unfortunately that did not happen, but certainly we are grateful for what we did get.

I am just a little bit concerned that the bulk of this money could end up being distributed just prior to an election, which to me appears to be a little cynical. We will take it whenever we can get it, but we have to be a bit cynical about it.

[The Deputy Speaker]

If the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques still intended to say a few words, he would have two minutes available. The hon. member.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I would just like to make one clarification. The member for Ahuntsic referred earlier to the federal program to deal with the softwood lumber crisis.

She neglected to say, however, that there was no new money for economic diversification in the regions affected by the softwood lumber crisis. For 2004-05, there is merely a transfer of money provided last year when they thought the crisis would be over by now.

The federal government needs to do more, particularly since there is no specific assistance for affected companies or workers. It is as if they had been sent out to the front lines and then abandoned.

I understand that the member for Etobicoke North wants to see a solution found to this crisis. So do we all, because people in our areas are going through really hard times.

Unfortunately, the proposal before us does not strike me as the most appropriate. I hope that the federal government will come back as soon as possible with a real aid package, with phase two, to ensure that our companies will still be around when we have won all the necessary legal battles back and have restored true free trade for softwood lumber.

[Joe Comuzzi, Liberal, Minister of State (Federal Economic Development Initiative for Northern Ontario)]

Mr. Speaker, I appreciate the opportunity for this intervention. I just wanted to shed some light on the assistance that the government has provided to the communities that are involved in the softwood lumber field and are affected.

The money, in excess of $300 million, was primarily set aside to assist all those communities suffering the effects of the softwood lumber dispute. We extended that program because the money that had been apportioned had not been allocated and had not been spent.

We extended that program for a year, but the onus and the impetus should come from the communities that are affected. If we get the communities involved and pushing forward on this, the money that is sitting there is there to help each and every community.

[The Deputy Speaker]

Under the rules of right of reply, the final five minutes go to the mover of the bill, the hon. member for Etobicoke North.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I want to thank all my colleagues in this chamber for participating in the debate on my motion, Motion No. 397, which deals with the softwood lumber dispute.

The purpose of the motion is to draw attention to this situation, which is totally unacceptable and which carries on from year to year. We need to be absolutely clear. It has nothing to do with subsidies. It has everything to do with market share. Every time our Canadian softwood lumber industry creeps over 30% of the market share of the United States, the next countervailing duty action is launched.

I would like to clarify a couple of points.

The member for Verchères--Les-Patriotes and others have said that I am suggesting in my motion that we should stop the appeals to the WTO and the NAFTA. I am clearly not suggesting that. In fact my proposal is much more long term. Colleagues are right. To get the U.S. to agree to this will be a bit of a challenge, but I do not think we should back away from a challenge because it is difficult.

Another comment from the opposite side was that by going to a net subsidy approach, we were accepting that we had subsidies in Canada. The motion does not say that, and I have argued very clearly that we do not have subsidies in Canada. If the member would think about it, if we have zero subsidies in Canada, how could the U.S. possibly launch a net subsidy challenge? It would be virtually impossible. Arithmetically it does not work.

The net subsidies approach is one that would be challenging to implement. I have argued that we could not hope to achieve that unless we negotiated with the U.S. on a whole broad range of issues, of which the countervailing duty process was one of them.

This is a totally absurd situation. For example, if we look at agricultural subsidies and the hypocrisy of it all, the subsidies in agriculture amount to about $350 billion U.S. a year. That includes the Europeans as well, but the Americans are definitely a part of that.

If we look at the automotive sector, the U.S. states and local governments are subsidizing their greenfield plant expansions, Michigan, Ohio and Georgia to the tune of 48%, Alabama at 21% and Mississippi at 32%.

The members in the Bloc and the NDP have suggested that I am proposing the harmonization of taxation between Canada and the United States. I am saying exactly the opposite. We do not have a chance of competing with these kinds of subsidies. That is why we need to eliminate harmful tax competition.

Our government announced in this last budget that we would work with the automotive sector. We will try to create an R and D differentiated product so we can attract more automotive investment to Canada, and I will be the first one to support that. Why are we doing that? Because the U.S. states and local governments are subsidizing new auto plant expansions to the tune of 48% and 52%. Let us wake up. We have to get into the game.

The members of the Conservative Party have argued that we should eliminate completely countervailing duty trade law and anti-dumping trade law. I would agree. If we could get to that world, I would certainly be supportive, but what I am proposing is an interim step, a step that has been proposed before and that has been on the table, as members have pointed out. Unless we have a comprehensive agreement with the United States, we will not achieve it, but we have to keep working on it. This is robbing Canadians of jobs and investment in the country. It is totally absurd, when it has nothing to do with subsidies at all. It has to do with market share.

I am glad we have had this debate. Our government is working strongly with the industry to try to come up with solutions. We need to pursue that, but ultimately we need a grander solution to this and that means something beyond what we have in terms of the countervailing duty and anti-dumping laws that are on the books today.

[The Deputy Speaker]

It being 6:32 p.m., the time provided for the debate has expired. Accordingly the question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

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

[Some hon. members]

Yea.