Madam Speaker, I rise in the House to speak in support of Bill S-38 today. Upon careful review, there are some glitches in the bill and more amendments will be needed. The gist and thrust of the bill are certainly something that the Conservative Party will support.
It is important to note that the bill would implement the final part of a bilateral agreement between Canada and the European community to provide wine and spirits with more certain trade rules and a framework for managing any future grievances in a cooperative manner.
It is also very important to note that the Conservative Party of Canada always has been in favour of rules based trading. This agreement is an example of that. It is meant to offer a simplified certification process for the export of Canadian wine and, more important, protection for Canadian and European wine and spirits geographical indicators.
Examples of Canadian designations that will benefit from these protections include the Okanagan Valley, the Niagara Peninsula, Canadian rye whiskey and grapes that are grown in the Annapolis Valley of great province of Nova Scotia. Most of the provisions of the agreement were implemented prior to the agreement coming into force in June of last year.
Bill S-38 would protect certain foreign spirit drink names by recognizing that these spirit drinks are exclusive products of the countries indicated in the schedule belonging to Bill S-38. Under the terms of the Canadian-European community agreement, the measures spelled out in Bill S-38 must be completed by June 2006.
Bill S-38 also would house existing trade obligations to protect other foreign spirit drink names, such as Canada's obligation under the North American Free Trade Agreement to protect certain Mexico and U.S. spirit drink names. The previous speaker already mentioned those names, tequila and bourbon whiskey. Provisions to protect these names are currently part of the food and drug regulations. However, it is important to note that Justice Canada has advised that these provisions are more than likely ultra vires the Food and Drugs Act. That means in layman's terms that they are beyond the power or authority of the Food and Drugs Act.
The bill would prohibit the use of certain spirit drink names other than in accordance with the schedule in the act. It also would provide for exceptions, including for existing trademarks which were registered or applied for before the January 1, 1996 date.
Bill S-38 would allow for cabinet to amend the schedule to allow for implementation of similar obligations in the future, international trade agreements. It also would imbue cabinet with regulation making authority to carry out provisions of the act. Of all the categories of the act, that is probably the most important. It would allow for cabinet, the government, to amend the schedule to allow for implementation of similar obligations in future international trade agreements. We have to give government the power to negotiate on behalf of Canadian industry. The bill would give the agriculture minister the power to designate inspectors and analysts for the purposes of enforcement of the act and spells out their powers and responsibilities.
Bill S-38 also includes provisions for offences and punishment. On summary conviction persons found guilty of contravening the act would be liable to a fine not exceeding $50,000 and/or imprisonment not exceeding six months. These are fairly stiff penalties which should prevent anyone in contradiction of the act. On conviction or indictment persons guilty under this act would liable to a fine not exceeding a quarter of a million dollars and/or imprisonment not exceeding three years. Again, these are quite strict regulations and a serious detriment to anyone trying to break the regulations. This bill also stipulates that the act would come into force on June 1, 2006.
With respect to certain amendments, and as a matter of due diligence, the definitions section of the act fails to give an explicit definition of what a spirit drink is. This is a part of the act that we would want to look at further. For instance, the Excise Act defines a spirit as any material substance containing more than 0.5% absolute ethyl alcohol by volume other than: (a) beer; (b) wine; (c) vinegar; (d) denatured alcohol; (e) specially denatured alcohol; (f) an improved formulation; or (g) any product containing or manufactured from a material or substance referred to in paragraphs (b) and (f) that is not consumable as a beverage.
As the bill contains a provision to allow cabinet to expand the act's schedule to accommodate future international agreements, there might be a need, and I believe there is a need, to have an explicit and unambiguous definition of spirit drink to guide the interpretation of the act for its future possible expansion. At a minimum, there needs to be an explanation as to why the Excise Act gives such a definition, but the spirit drinks trade act fails to do so.
The provisions of this act with respect to foreign spirit drink names under NAFTA are being introduced in this act partially because Justice Canada has advised that Food and Drugs regulations, which currently have these provisions, are likely unenforceable. As a matter of legislative and regulatory housekeeping and as a possible amendment, there should be consideration given to a provision in Bill S-38 that repeals the relevant portions of the Food and Drugs regulations.
Again, once passed, this act comes into force on June 1, 2006 and the government has not explained what allowances, if any, would be made with respect to old or pre-existing non-compliant inventories after this date. Would spirit drink vendors who have pre-existing inventories be fully subject to the offence and punishment regime of Bill S-38? Would they have to destroy these inventories to avoid fines and possible imprisonment? Are there no known, non-conforming spirit drink products in the Canadian market right now? It is a very remote scenario, I admit, but it is a scenario that must be considered nonetheless.
All trade bills should bring more security to existing trade related jobs and create new employment opportunities. Our trade agenda must focus on diversifying both the products we sell abroad and the markets into which we sell those products. We need to secure access to international markets through a rules based trading system.
A Conservative government would certainly strive to maximize all the benefits we have as a free trading nation, emphasizing the need to establish trading relationships beyond North America.
There also are financial implications under the act. Any fines levied under the act would generate revenue for the federal Treasury. As well, the bill is silent on how many analysts and inspectors the Minister of Agriculture may designate for enforcement of the act, and on their levels of compensation.
Also policy considerations must be taken into consideration. According to the government, the agreement, which this legislation helps implement, will uphold existing provincial Liquor Board policies and facilitate access to the European Union market for Canadian wine and spirits. The government asserts that the agreement has the support of stakeholders, Canadian wine and spirit producers. The government also maintains that the legislation will have no negative impact on the Canadian spirits industry because the spirit drink names protected under the legislation are not currently used on Canadian spirit drink products.
In terms of long term economic impact, the legislation would prevent the emergence of new, non-compliant spirit drink products on the Canadian market. It must be stated that Canada's existing system of protection for geographical indicators will not be undermined by this act.
It is all well and good to take the government's word on the limitations and the parameters of this bill, but as members of Parliament we need to accurately and clearly check its parameters to ensure that it will do what the governments says it will do.
Parliament's focus should be on due diligence and housekeeping amendments to ensure that a spirit drink is defined in the bill. We should also consider a provision that would suspend the portions of the food and drug regulations that this bill would replace and which have been declared by the justice department ultra vires under the Food and Drugs Act.
With respect to the remote possibility of pre-existing, non-compliant inventories, we might want to inquire as to what the government's thinking is on this issue. I would be very interested to know that. I would also like to know what allowances the government would be prepared to make for vendors with these pre-existing inventories.
Conservatives are supportive of rules-based trading systems which would help secure international markets for products produced in Canada and would help ensure that Canadian consumers have access to high quality products produced in other countries. In general, we support the thrust of this bill and the agreement that it would help to implement.
For the purposes of due diligence and legislative housekeeping, we are prepared to consider amendments to this legislation to make it better. As such, we have a couple of ideas which I have already mentioned.
We want clear assurances from the government about its assumption that there are currently no instances of products in Canada that are non-compliant with this bill. We also want clear assurances from the government that vendors would not be unfairly penalized once this bill comes into existence.