Mr. Speaker, the trade compensation act proposes that the federal government provides compensation to Canadian industry associations or Canadian exporters who incur financial losses as a result of unjustifiable trade restrictive measures taken by foreign states which are signatories to trade agreements with our country.
Bill C-364 has two specific components. First, it would require the federal government to pay legal expenses incurred by Canadian industry associations or exporters in instances where a foreign state restricts Canadian exports in a manner that is found to contravene any bilateral or multilateral trade agreement between Canada and a government or state. It appears that the determination of whether a trade action is justified or not would be made by a tribunal established under the relevant bilateral or multilateral trade agreement.
The second component of the bill proposes that the government provides loan guarantees to cover deposits, sureties or bonds that may be required of Canadian exporters by the foreign state. Specifically, the bill stipulates that:
If the government of a foreign state requires that a Canadian exporter or a Canadian industry association deposit an amount of money with that government or post a surety or bond pending the final determination of a matter by the tribunal...the Minister [of Finance] shall provide a loan guarantee to the exporter or association in respect of that deposit, surety or bond.
When the hon. member for Fort McMurray—Athabasca tabled the bill he stated:
This bill is directed primarily toward those exporters who deal with foreign powers, specifically in this case toward farmers, on BSE, and toward softwood lumber.
Members of the House are quite aware that trade and all aspects of international commerce represent an important cornerstone of Canada's prosperity and economic success. With over $491 billion in exports of goods and services and over $437 billion in imports of goods and services in 2004, the role of international trade, and more precisely, unfettered trade, cannot be underestimated. This is precisely why the government is dedicated to further expansion of the defence of Canadian trade interests.
The government understands and appreciates the costs associated with the defence of trade disputes. Legal costs involved in trade disputes are often quite high. The length of disputes and the often numerous parties involved can explain why legal expenses can be significant.
That said, it has been the longstanding policy of the federal government not to accede to requests from Canadian industries for financial assistance to cover legal costs that they incur related to trade actions taken by trading partners. This policy reflects the extensive role of the federal government in matters of international trade. This role and expense incurred by the government must be understood. Like industry associations and Canadian exporters and like provincial governments with stakes in international trade disputes, the federal government also secures the service of legal counsel to assist in the defence of Canadian interests during trade disputes.
However the work of the government in this regard does not stop here, quite to the contrary.
The federal government devotes substantial financial and human resources to the defence and the representation of Canadian trade interests. This is particularly the case when a foreign state restricts or threatens to unjustifiably restrict trade.
There is no doubt that a unified Canadian position through collaborative work with all interested stakeholders represents the best tool in advancing Canadian interests at the international level. It is in recognition of this fact that the government has instituted over the years various consultative networks. These networks ensure that all stakeholders have the opportunity to work with the government in the defence of Canadian interests.
To begin, several federal departments are involved in international trade matters, including International Trade Canada, the Department of Finance, Agriculture and Agri-Food Canada and Industry Canada, just to name a few. They work in a concerted effort to ensure that the agreed international trade rules are respected.
In addition, the federal government coordinates closely with other Canadian parties, including provincial governments, industry associations and companies, for one common objective, to represent vigorously and champion Canadian trade interests in the face of unjustified measures. It is through these various established consultative channels that we can explore all feasible avenues and assess all available options in the representation of Canadian interests in trade disputes.
These joint efforts have allowed the carrying out of focused advocacy campaigns aimed at fostering support for Canada's position in other countries. They have also contributed to informing and persuading key decision makers in other countries to adopt and promote a position that is favourable to our country.
It is in this context that the role of Canadian embassies and offices abroad are so essential. Our foreign representatives monitor and send reports to Ottawa on a daily basis. Any intelligence that could strengthen the future advocacy group is provided. They meet with decision makers at every level of government and establish contact with industry leaders, particularly those allied to Canadian interests, to promote Canadian objectives and to collaborate and pursue extending awareness and perspectives favourable to Canadian interests.
Furthermore, the government is firmly of the view that fair and enforceable international trade rules provide Canada's business community with the environment in which commerce can flourish.
I believe the hon. members of the House can all agree that these rules foster healthy trading relationships which in turn help the initiation of new disputes between partners.
The evolution of the trade rules over the past 50 years has not only contributed to Canada's prosperity but, just as important, these rules have helped to address trade irritants before they developed into disputes.
Nonetheless, we recognize the current rules governing international trade are not perfect. That is why our government dedicates considerable resources to ensuring that the integrity of international trade rules are upheld.
It is in this context that Canada is an active player in the current WTO Doha negotiations. Our objective in these negotiations is to advance new proposals with the purpose of clarifying and imposing existing trade rules and dispute settlements and procedures. Clearer and more transparent rules will not eliminate trade disputes but they will certainly help to avoid and to reduce their occurrence.
As a party to numerous international disputes, the federal government fully understands and appreciates the costs involved in such disputes. We remain committed to defending Canada's international trade rights. The government will continue to work in concert with domestic stakeholders to pursue targeted advocacy efforts in foreign markets when they are necessary for the defence and resolution of trade disputes.
Finally, Canada will continue to push in the context of the WTO negotiations for clearer and improved trade rules with a view to providing a more predictable environment for commerce to flourish so as to reduce, to the extent possible, trade disputes between countries.
However for the government to formalize the funding program to compensate legal costs incurred by private organizations would not be the most effective and efficient use of our resources.