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.