Debates of Nov. 3rd, 2005

Spirit Drinks Trade Act

[The Acting Speaker (Hon. Jean Augustine)]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

(Motion agreed to)

[The Acting Speaker (Hon. Jean Augustine)]

When shall the bill be read the third time? By leave, now?

[Some hon. members]

Agreed.

[Mauril Bélanger, Liberal, for the Minister of Agriculture and Agri-Food and Minister of State for Federal Economic Development Initiative for Northern Ontario]

moved that the bill be read the third time and passed.

[Peter Adams, Liberal, Parliamentary Secretary to the Minister of Human Resources and Skills Development and Minister responsible for Democratic Renewal]

Madam Speaker, I am very pleased to begin the debate this morning on Bill S-38, this initiative of the Standing Committee on Agriculture and Agri-Food. It is good to see something positive like this coming forward and to see the committee having being involved with it, particularly in these times when with respect to certain commodities across our border with the United States the negotiations have not been very successful, to say the least.

Also, it is something which is very positive at a time when all sectors of our economy are watching the WTO negotiations coming to a peak. These negotiations, which will culminate in Hong Kong at the beginning of December, represent all sectors of the community but particularly the agriculture community, which is represented in this small but very important step of negotiated settlements, the way things should be done. We should not constantly be faced with appeals and counter-appeals and so on.

As I have said, we have seen in recent weeks how adversarial trade negotiations can become, but this bill shows us just what can be done when people sit down, negotiate and accept that those negotiations are a win for both parties concerned.

Bill S-38 and the Canada-European Union agreements on wines and spirits, which it brings into force, are the product of close collaboration, not adversarial debate, on a number of different levels. One is the international level, which I have just been addressing. One is the federal-provincial level. By the way, so much in agriculture involves the federal government and the provinces and is different from one region of the country to another. Another is the government to industry level, in this case with the commodity group concerned. There is the parliamentary level, the standing committee which I just mentioned, and there is the interdepartmental level.

Many different jurisdictions have worked hard to bring this legislation forward for the benefit of the entire Canadian wines and spirits sector, from the processors to the producers to the thousands of Canadians employed in the sector, and indeed to consumers here in Canada and around the world who enjoy our world class wines and spirits. I must note here that although I will be mentioning the main wine producing areas of Canada, specifically British Columbia, Ontario and Quebec, we know that wine producing is a developing industry. Prince Edward County, for example, is a northward extension of the Niagara wine belt.

In my region, the Kawartha grape growers association is working with cold-resistant vines to extend our wine industry. The nature of this bill is important for those growers because it has to do with protecting geographic designations of wines and spirits. Thus, as the member for Peterborough, I am very pleased to be dealing with this bill.

In short, Bill S-38 is an example of very effective trade policy. It shows what is indeed possible when negotiations go well and when people put aside differences for the greater mutual gain.

The expedient manner in which members of the House have advanced this legislation is an example of what I am talking about. I would like to thank the members for the support that they have already given.

I was pleased to hear that a member from southwestern Ontario said at second reading that her party will support Bill S-38 because of the benefits it will bring to rural Canada. I have already spoken to that as a member for a rural area which is not yet a traditional wine growing area but which we hope one day will be.

She is right. It is going to bring benefits to rural Canada, where we need benefits at the present time. We know what the migration of people from rural areas to the cities is doing to the economies of many of our rural areas.

Likewise, I was happy to hear support for this same bill from a member from western Canada, from British Columbia, one of our great grape growing and wine producing areas.

As hon. members may know, there is some urgency dictating a timely passage of the bill because Canada has agreed to comply to the areas outlined in the bill by June 2006, but I sense that the will of this House is to move the bill forward for the benefit of the sector, for the benefit, as this member I have quoted said, of rural Canada and of all Canadians.

To understand Bill S-38, one has to put it in the context of the broader Canada-European Union agreement. The bill we have before us would allow Canada to implement an important obligation that we made in the bilateral agreement ratified by Canada and the European Union in 2003 after more than two years of negotiations.

This bilateral agreement is widely held to be a win for both Canada and the European Union. It covers a number of issues related to trade in wines and spirit drinks, including the protection of wine and spirit geographical indications. That is the aspect I referred to before. It also includes the mutual recognition of wine standards, including ice wine. We all know that Canada is not the only producer of ice wine but it certainly has been a pioneer in the area of ice wine and we all want to be sure that whatever is marketed in the name of ice wine is truly ice wine. As well, it includes the establishment of a dispute settlement process to resolve conflicts in the trade in wines and spirits.

For the Europeans, the agreement provides greater protection in Canada for their geographical indications, for wines such as Bordeaux and Moselle.

For the Canadian wines and spirits sectors, the gains under the Canada-European Union agreement are substantial. For example, the bilateral agreement allows the wineries of British Columbia and Ontario to continue to make direct sales from their wineries. It also allows Quebec to maintain its requirement that wine sold in grocery stores in that province be bottled in Quebec. It recognizes Canadian wine-making practices and labelling rules for the Vintners Quality Alliance, or VQA, the Canadian wine appellation system. It protects Canadian wine and spirit names in the European Union, notably Canadian whisky and rye whisky, both products in which I have a great personal interest, by the way.

The sector as a whole is very supportive both of the bilateral agreement and of Bill S-38, which would bring it into force. The Canadian industry has been consulted extensively during the development of this bill and is very happy with the results. The sector believes that this initiative, with a whole lot of upside potential and with little if any downside or negative impact domestically, is of great value to it.

The Canadian wines and spirits sectors are important to Canada's economy, with over $400 million in annual wine sales and over $1 billion in spirits sales. The wine industry believes that on the strength of this agreement it will be able to increase wine exports from about $1.5 million annually to some $5 million annually over the next 10 years.

We know that our remarkable agriculture industry as a whole, of which the great producers are only one part, is in essence an exporting business. More than 55% of the farm income of farmers across Canada comes from exports. Like the grape producers, they must export to maintain their quality of life and to maintain our quality of life. At the same time, we need a strong domestic agricultural industry in all sectors for our own security, so that we get good quality, healthy, low cost food to maintain our standard of living.

As well as bolstering export market opportunities internationally, here in Canada the agreement will help foster the growth of agri-tourism throughout our wine growing regions from Atlantic Canada to British Columbia. I regret that I did not mention the Atlantic Canada region earlier in my remarks, because it too, like the other regions and including my own, is a region where wine is produced, although we tend to think of Quebec, Ontario and British Columbia as the main areas.

To speak briefly to the technical details, Bill S-38 would fulfill those remaining commitments on Canada's part that were not addressed before the bilateral agreement came into force last June. The bill would protect the names of five European spirit drinks in the Canadian market; names such as ouzo from Greece, grappa from Italy and pacharan from Spain. These names could not be protected under existing legislation such as the Trade-marks Act because that particular legislation is not designed to protect generic names. Nor does it provide state enforced protection, something that is required under this agreement.

To clarify some confusion that arose during second reading, Bill S-38 deals with only one element of the implementation of the broader bilateral agreement, the protection of foreign spirit drink names in Canada. As for wine and spirit geographical indications, such as a Bordeaux or Beaujolais, these will be protected under the Trade-marks Act, as are Canadian geographical indications such as Canadian whisky, Okanagan Valley, Niagara Peninsula and Lake Erie North Shore. As well, I hope one day Kawartha region wines will be protected.

The proposed act will also house existing trade obligations to protect other foreign spirit drink names. This includes Canada's obligations under NAFTA to protect certain Mexican and United States spirit drink names such as tequila and bourbon whisky. Members should also be aware that the bill was amended in the other place, it is of course Bill S-38, based on interventions from both Spirits Canada and International Trade Canada.

Spirits Canada has made it very clear to us that it is in full support of the bill in its current amended form.

I again thank all members for their support of this important legislation. As has been said on a number of occasions, the bill is a win for Canadian wine and spirit producers and the growers who supply them. It is a win for rural Canada and it is a win for Canadian consumers.

For all these reasons, I urge all sides of the House to continue to support timely passage, and that is of the essence, of Bill S-38 into law.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

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.

[Peter Adams, Liberal, Parliamentary Secretary to the Minister of Human Resources and Skills Development and Minister responsible for Democratic Renewal]

Madam Speaker, my colleague's point about housekeeping changes was right on. This is the time to identify problems and deal with any problems associated with the bill. Time is of the essence, but on the other hand, we do not want to put something through which has errors in it.

In the spirit of that, no pun intended, I wonder if he would discuss the general definition of spirit drinks. If I can give him some thoughts, then perhaps he could give me some thoughts back.

After consideration of this matter, the feeling is that this legislation focuses on specific products. It does not focus on spirit drinks in general. We do not need a general definition in the legislation because it deals with specific ones. If a definition were put in the bill, it would not affect the protection of the specific ones because they are listed in the bill, but it might affect further negotiations or the names and other geographic indicators, which we might want in Canada. By putting a general definition in the bill, we affect the effectiveness of future negotiations.

Another point that has been made is that most of the stakeholders, the producers and processors, the people in the retail business, sufficiently understand for the purpose of this legislation the definition of a spirit drink.

Those are the arguments on the other side. I know my colleague was making the point that there might well be a general definition as well. For the sake of the record and the people who are following this debate, I wonder if he would give us his thoughts.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Madam Speaker, the issue of general definitions is one that we should not take lightly. I do not think a general definition would affect any future definitions of possible new products going into new marketplaces. That would be the most important aspect of having a definition. We know the parameters of our products going into existing marketplaces, but we do not know the parameters of our products that would go into new marketplaces. I would want to fully explore that.

Pre-existing inventories or inventories that are not included under the bill after June 1, 2006 have been left out of the bill. We need to make arrangements, through this piece of legislation, to ensure that vendors who own pre-existing inventories after June 1, 2006 are not found in non-compliance of the act.

[Réal Lapierre, Bloc, Lévis—Bellechasse, QC]

Madam Speaker, I welcome this opportunity to speak on Bill S-38, an act respecting the implementation of international trade commitments by Canada regarding spirit drinks of foreign countries.

To ensure the flow of their respective products, countries have to enter into marketing arrangements. Several existing international agreements are designed to facilitate international trade. For example, the free trade agreements and the WTO imply that, like its partners, Canada has to meet its commitments and that, in return, its enjoys the privileges associated with its participation in the specific agreement.

One of these commitments is a commitment to promote the trading of wines and spirits among all the signatories, including the Caribbean and the European Community. These agreements do not affect in any way the need to protect individual terroirs. At the same time, they provide guidance to help consumers make knowledgeable decisions about certain types of products based on the relevant information made available to them about their origin and composition.

The Bloc Québécois acknowledges that Bill S-38 is consistent with Quebec’s policy on the labelling and recognition of local products. It should be remembered that, in Quebec, transparency and consumer choice are integral elements of product marketing. Where the problem arises with this bill under consideration today, as with the others that preceded it, is that the Canadian government is tempted to sign these international agreements without first consulting Parliament. In acting this way, it is depriving itself of a key element, namely the opinion of the duly elected representatives of the people, the hon. members, who are here to facilitate and not to impede. It is depriving itself, and in so doing, the entire population of the most important democratic instrument at its disposal.

To illustrate, it would be appropriate to briefly review the legal scope of certain agreements reached between Canada and its partners.

According to the provisions of section 2, chapter 3 and chapter 8 of NAFTA, which concern trade of wines and distilled spirits, there are specific measures which determine listing, pricing and distribution practices, blending requirements, and labelling standards and requirements affecting various products. This is an approach which aims for equal treatment in the marketing of Canadian and American wines and spirits.

Under this agreement, the signatory countries are committed to respecting the protection of certain names, such as tequila, bourbon whiskey or Tennessee whiskey. With the introduction of such guidelines, consumers are in no danger of being disappointed with the product they buy, as its originality and quality are guaranteed when consumers make their choice.

The name “Caribbean rum”, for example, derives precisely from the protection of that product under an agreement signed between Canada and the Caribbean countries in 1985. The reputation of this product stems precisely from the fact that consumers immediately know the taste they can expect and have no doubt as to what exactly the product is.

The impact of the 1985 agreement is felt in all the other southern countries. In the protection of their products’ names they see a kind of aid to economic development.

The recognition of the distinctiveness of these products gives them the opportunity to distinguish themselves on foreign markets. This is a fine example of the positive effects of a unique and controlled trade name.

Similarly, the most recent of the accords between Canada and the European Community on trade in wines and spirits was designed to boost sales of their products while protecting certain trade names. This would apply to ouzo from Greece, Irish whisky, cognac brandy and armagnac brandy from France, Canadian rye whisky and Spanish pacharan.

In addition to this association between region and name, the agreement in question facilitates access to Europe for Canadian exports on the one hand, and on the other, internally, the use by wine producers of points of sale for exclusively Canadian products. Incidentally, the requirement for all wines sold in Quebec grocery stores to be bottled in Quebec is also protected by this agreement.

Although the Bloc Québécois considers Bill S-38 an improvement and a step toward better policies on the labelling and recognition of local products, it also feels that the government’s initiative does not go far enough. Allow me to explain.

Not only is the geographic designation essential, product ingredients must be clearly and specifically identified for at least two reasons. First, consumers are entitled to know what they are consuming. Second, international consumers need a clear reference with regard to the quality of the product on the market. This is ultimately what creates a brand image, is it not?

For example, drinkers of bourbon whiskey know that it contains at least 51% corn and that it is made exclusively in the United States. What about Canadian whisky?

Rye whisky must contain at least 51% rye. However, Canada does not specify the percentage of rye in its product. Are we not—particularly foreign consumers—entitled to ask if this is indeed whisky being marketed?

Accordingly, we can say that an exclusive designation should necessarily specify the exact quantities of the ingredients in the product. Do these ingredients not attest to the product's quality and true nature? Rye whisky is then a Canadian whisky, but this label is merely a geographic reference. Without an indication of the percentage of rye in rye whisky, no assumptions about its quality can be made, and this is a disadvantage in terms of competition, particularly on the international market where it is supposedly less well known.

Apart from the lack of specific guidelines on quality standards for our wines and spirits, the Canadian government is failing to be transparent in the House by negotiating all kinds of international agreements or commitments without considering the informed opinions of the members. Is this not a tool that it could use to its advantage?

Would it not be normal for international agreements concluded in good faith among countries to be submitted to Parliament before being signed?

Without opposing the principle of the bill, the Bloc Québécois considers this failure to consult a serious breach of democratic principles and values.

Bill S-38 is one more step toward the recognition of the various local products by suggesting among other things a better labelling policy associating the name of the region where the product is produced.

Consumers are entitled to know what they are buying. They therefore need the tools to be able to do so, and to really assess the quality and composition of their wines and spirits. This is along the same lines as Quebec's demands year after year relating to GMOs, trans fats and dairy products, among others.

As far as genetically modified organisms are concerned, several studies have shown that Quebeckers and Canadians want GMOs clearly identified. On the other hand, the food processing industry refers to the threat of job losses if it is forced to spend more, as it claims it will be, on labelling.

Let us face it; food processors are not always guided by a concern for transparency. Think of all the recent studies on the harmful effects of trans fats on health. Yet we are still not in a position to know the trans fat content of the food we eat.

How can this be acceptable, when we know that the government has a mandate to protect the population? If some current legislation has shortcomings, does the government not have a duty to improve it, as it could have readily done with Bill S-38, An Act respecting the implementation of international trade commitments by Canada regarding spirit drinks of foreign countries. The Food and Drugs Act sets out labelling and advertising standards, but at the present time there is nothing to require processors and retailers to disclose the trans fat content in their products.

If, in the short and medium term, food companies both large and small are going to be required to identify products high in trans fats, we do not see how companies specializing in wines and spirits could not be subjected to an identical process starting immediately.

The same approach could easily, and advantageously, be applied in the near future to identifying all dairy-based products.

WIth the GMOs, trans fats and dairy products, we see a new trend developing: better consumer information on the composition of food products. This trend is also valid for wines, which are becoming more of a presence at our tables and social gatherings, and for spirits.

We have to recognize that people have become more concerned about what they eat, hence the interest and the need for greater clarity in product definitions.

The Food and Drugs Act could be used in argument against what I have said. It prohibits the false and misleading labelling, advertising and sale of food in terms of its qualities, composition, value, benefits and wholesomeness. That would lead us to think that, as Aldous Huxley the British naturalist put it, it is all for the best in the best of worlds.

But, careful. Only the guide to food and drug labelling and advertising can help us separate the true from the false.

Unfortunately, however, it is not enforceable, and so we are left in the dark, not really any further ahead. Is it a falsehood to omit the amount of rye in Canadian whisky? It could be considered misleading at least. We can certainly be criticized for it by any inhabitant of the vast world beyond our borders without it being a personal judgment on the value of the product.

A good example of the sea of contradictions we are navigating at the moment can be found in Canada's not integrating nationally the rules it has supported internationally on the terminology in the Codex Alimentarius with respect to dairy products.

As national and international communities are demanding greater precision in product labelling, especially in the case of food, why not head in that direction post haste? No time must be wasted getting there, regardless of what the processors may think.

Would it not be smarter and more economical under the circumstances to proceed with legislation covering the whole field of responsible labelling, while looking for ways to make the life of the processors easier without putting them at risk?

Canada is lagging behind Europe in terms of labelling provisions. And yet, this is one of the biggest markets, especially when it comes to wines and spirits. Has it thought about the potential economic losses that could result from the lack of clarity and precision in its bill?

Canada wants to ratify the agreement, but it is not ready to get in step with the other nations it is dealing with. It keeps claiming to be a leader on the international stage.

Canada does ratify treaties. That said, it does nothing more than join the chorus and sing from the same songbook as the other nations, and in this case it seems to be singing off key.

The European Community made the effort to hold a meeting to define pizza and determine its ingredients in 2003 because the composition of food is important, as we know. Furthermore, a precise definition informs us on the nature and quality of a food item. This precision prevents misunderstandings about nutritional value and also prevents any fraud related to the actual products.

Where is the government singing off key, one might ask? It is off key in its laxity in not requiring content to be labelled.

In such an open global market, we cannot leave any doubt about the composition of our products, especially those sold abroad. On one hand, this helps inform the client on what we are selling, whether it is real whisky or real maple syrup. On the other hand, this helps reinforce the brand power of the product and to set it apart from other products on the shelves and enhance its reputation.

What is more, given Canada's visibility and recognition internationally, we must lead by example, especially in developing countries that are trying, and rightly so, to enter the market.

Considering the government's laxness with labelling standards, we maintain that there are still some grey areas in the Liberal governance, in a party that claims to be transparent.

Nevertheless, we support Bill S-38, which is a small step for Canadian legislation and for Quebeckers and Canadians. Who knows, it might be a big step in the eyes of the Liberals.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, I thank the hon. member for his very interesting comments.

He alluded to the government's lack of rigour. We are well aware that this government has lacked rigour regarding trade issues. That is also the case with Bill S-38. As for NAFTA, we saw the government's reaction or, rather, lack of reaction when President Bush and his administration made a mockery of our dispute settlement mechanism. This important NAFTA component was abused. Moreover, there was no reaction on the part of this government. We have been waiting for the past two months. One telephone call was made and that was it. There has been no action, just a lot of rhetoric.

The government is trying to avoid helping the softwood lumber industry. We had to go through this period because of the government's lack of reaction and rigour.

I have a question for the hon. member. The government has shown no initiative to support the softwood lumber industry. Moreover, it has done absolutely nothing to make the Bush administration respect NAFTA and the dispute settlement process that is clearly enunciated in that agreement. In light of all this, does the hon. member think that there is also a lack of rigour on the part of this Liberal government as regards the NAFTA issue?

[Réal Lapierre, Bloc, Lévis—Bellechasse, QC]

Madam Speaker, I want to thank the hon. member opposite for his question. I have to admit that his premises are a true reflection of the reality.

As we can see, when it comes to international trade, particularly when the United States is involved, if the rules are not completely defined, there is a risk of being disappointed. This is why we are saying that, in this bill, it might be appropriate to go beyond the product's geographical recognition. We should know all about the product, including its components, if only to eventually further control the quality of our products, and set even more specific benchmarks for international trade.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, I heard some very interesting points in the hon. member's speech. He has referred to bottle labeling. There is already pressure on behalf of clear labelling of the alcohol content of wines and spirits. The hon. member has called for more information on the label. I would like to ask him what else he wants on there?

[Réal Lapierre, Bloc, Lévis—Bellechasse, QC]

Madam Speaker, I thank the hon. member for her question. Quite simply, what I want is an indication of the ingredients required to produce spirit drinks, such as corn and rye. The percentage of these grains that make up constituent parts of a Canadian whisky, for example, would have to be specified, to ensure the rules were understood.

Even if there were a geographical identification, this would not necessarily validate the product as far as the intrinsic value of the component parts was concerned.

[Robert Vincent, Bloc, Shefford, QC]

Madam Speaker, in his speech, the hon. member said a few things that stand out regarding the international marketing and export of our Canadian wines to make them known internationally. That is a good idea. I believe that we have excellent wines in Canada, and particularly in Quebec. We would be well advised to promote them internationally. It would therefore be desirable to move the bill forward. The Bloc Québécois would be in favour of that.

Reference was also made to labelling. It is important to know what we are drinking. Why could we not label wines and spirits like we do everything else?

In addition, my hon. colleague noted that the government had once again failed to consult the members of this House, to see whether or not we were in favour. We always come last. It would seem that the government has forgotten us. In fact, it is forgetting everyone.

Since I am getting the signal to wrap it up, I shall be brief.

Why not serve only Canadian wines, wines from every province of Canada, on Parliament Hill? These wines would be available here, on Parliament Hill. I think that would be a good idea. This wine list could include a “parliamentary” vintage like Cuvée des patriotes, in a “sneaky red” or a “pure as snow” white.

What does my hon. colleague think of that idea? Would it be desirable that only Canadian wines, domestic wines, be served on Parliament Hill?

[Réal Lapierre, Bloc, Lévis—Bellechasse, QC]

Madam Speaker, I thank my hon. colleague for his question.

Obviously, it would be hard to disagree with the principle. If we could advertise in every renowned location, we would. For instance, if our wine selection included wines from the three leading wine-producing provinces in Canada, that would be a plus. I can hardly imagine that it could be wrong; in fact, it would be desirable. We could make sure that every effort is made to promote our Canadian wines and spirits.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Madam Speaker, it is interesting that the hon. member began his speech talking about chapter 8 of NAFTA, which deals with wines and liquors but specifically with cataloguing, price setting and distribution. We have heard a little bit of discussion here about NAFTA but, by and large, I think the member would have to agree that the parameters of NAFTA have worked well for most products.

What we have seen more recently with the question about softwood lumber is the failure of government to negotiate with the Americans and the Mexicans on a one to one basis with some respect for both parties. This legislation does not really deal with that.

Would the member be supportive of an amendment to the legislation to deal with leftover inventories of liquor that vendors may have that would be pre-June 1, 2006? Would he agree with a general definition of spirits? Would he expect, as we would expect, that the provisions of the Food and Drugs Act that now deal with spirits would be revoked under this legislation, so we would only have one department dealing with it?

[Réal Lapierre, Bloc, Lévis—Bellechasse, QC]

Madam Speaker, I thank my dear colleague for his question.

I will talk about measures that should be used for products that could still be in storage and that may have been made before the bill is passed.

We will certainly need to agree on a measure in order to determine the best scenario for disposing of the products in question, if necessary, until they are completely gone from the shelves.

In any event, it is important to take the necessary measures for the future. In my opinion, the real purpose here is to ensure that beyond the recognition and quality of the products, the agreements we sign are fully respected.

[The Acting Speaker (Hon. Jean Augustine)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Hon. Jean Augustine)]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Acting Speaker (Hon. Jean Augustine)]

I declare the motion carried.

(Motion agreed to, bill read the third time and passed)

Air Canada Public Participation Act

[John Godfrey, Liberal, for the Minister of Transport]

moved that Bill C-47, An Act to amend the Air Canada Public Participation Act, be read the second time and referred to a committee.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Madam Speaker, I am honoured to speak today on behalf of the Minister of Transport and the government.

I am interested in this issue because, of course, I have been a member of the Standing Committee on Transport since my arrival in the House. I am also interested in it because many Air Canada employees live in my riding. There are easily three families, at least one member of whom works for this airline, in my little neighbourhood.

Obviously, Bill C-47 seeks to amend the Air Canada Public Participation Act. These amendments will update the legislation to respond to Air Canada's new corporate structure, and will contribute to the February 2, 2004, Speech from the Throne commitment to nurture Canada's linguistic duality.

The Government of Canada was reassured to see Air Canada successfully emerge from bankruptcy protection on September 30, 2004. Over a period of 18 months, Air Canada, with the dedication and cooperation of its unions, suppliers and other key stakeholders, made significant progress in finding a private sector solution to restructure its operations and reduce the cost gap vis-à-vis low-cost carriers.

The Government of Canada recognizes that significant changes have taken place in the airline industry over the past few years. In view of changes in the marketplace, and in timely response to issues faced by Air Canada during its restructuring, the Government of Canada has moved ahead on many fronts to support both a successful Air Canada going forward, and a competitive Canadian air industry in a global market.

In the face of this new competitive environment, we have given serious consideration to the continued need for past measures.

Today, I wish to recall for the House the history behind the Air Canada Public Participation Act, and the continued relevance and importance of this legislation. Specifically, I will speak to the continued importance of the protection of official languages to the social fabric of Canada.

Second, I will recount the history of Air Canada, Canada's national airline, and its continued commitment to the provision of service to Canadians in both official languages.

Lastly, I will speak to specific aspects of the proposed bill before us.

The emblem of the Office of the Commissioner of Official Languages depicts Canada's linguistic duality as a fabric woven of many threads. Those of us who speak English and those of us who speak French, ourselves made up of many different elements, have joined together to weave a social fabric called Canada.

Canada's linguistic duality has been a defining feature of our nation since Confederation. In recognition of this shared national heritage, in 1969, the Government of Canada adopted the Official Languages Act, which provided formal mechanisms to ensure the protection of both English and French language rights, nationally.

Canada's commitment to the formal recognition of both English and French was reaffirmed in 1982, with the entrenchment of the right to linguistic equality in the Canadian Charter of Rights and Freedoms.

I would also note that, in recognition of the desire of consumers for service in the official language of their choice, Canadian air carriers are choosing to provide services to the public in both French and English.

As we know, Air Canada was established by Parliament in April 1937 as the national airline to provide essential air transportation, cargo and mail services across Canada. As a crown corporation, Air Canada has been subject to the Official Languages Act since that legislation came into effect in 1969.

In 1988, under the Conservative government of the Right Honourable Brian Mulroney, then Prime Minister of Canada, Air Canada was privatized under the authority of the Air Canada Public Participation Act, which authorized the sale of the Government of Canada's shareholdings in the air carrier.

At that time, the Conservative government imposed official language obligations on Air Canada through the Air Canada Public Participation Act in recognition of the importance of preserving language rights for the travelling public and Air Canada employees, and as a result of the carrier's history as a federal crown corporation.

Responding to Canadians in 2000, the Government of Canada amended the act when Air Canada acquired Canadian Airlines to include an obligation on Air Canada to ensure that its subsidiaries provided air services to the public in both official languages.

Today, due to Air Canada's restructuring and its new corporate structure as of October 1, 2004, without government action Canadians and Air Canada employees will face a situation where the Air Canada Public Participation Act applies to a reduced Air Canada in terms of both operations and number of employees.

While the Air Canada Public Participation Act continues to apply to Air Canada mainline, the principal air carrier, its obligations and those of the Official Languages Act no longer apply to the operations that have been moved out from under Air Canada and are now affiliates of Air Canada.

This includes Jazz Air Limited Partnership—the regional air carrier serving many designated francophone communities throughout Canada. Jazz was formerly a subsidiary of Air Canada, and, as such, Air Canada was obligated to ensure that Jazz provided service to the public in both official languages. Today, Jazz Air Limited Partnership is a limited partnership controlled by ACE Aviation Holdings Incorporated, the newly created parent company of Air Canada. Under this new corporate structure, Jazz has no official language obligations.

Furthermore, ACE Aviation Holdings Incorporated, the parent company that controls directly and indirectly all the entities within the new corporate structure of Air Canada, is not covered by language obligations or a requirement related to its head office location.

On several occasions, Air Canada has publicly stated that it is committed to providing service to the public in both official languages regardless of the law, as it is in its best interests to serve the public in the language of its choice. The Government of Canada acknowledges and applauds Air Canada's commitment to Canadians. Through this bill, the Government of Canada will ensure that Air Canada fulfills this commitment.

While Air Canada is the only air carrier in Canada subject to the Official Languages Act, I would like to point out that other Canadian air carriers recognize the importance of serving the public in both official languages. As other carriers recognize the business advantage of offering bilingual services, the cost differential between Air Canada and other Canadian air carriers for the provision of these services is diminishing.

Notwithstanding the fine example that Air Canada has and will continue to set in provision of service to Canadians in both official languages in the Canadian air industry, Air Canada has not provided the Government of Canada with the same assurance that it will continue to uphold the official obligations of language of work. It is also unclear whether the commitment by Air Canada is intended to cover entities in the new corporate structure other than Air Canada.

On October 5, 2004, in his address in reply to the Speech from the Throne, the Prime Minister stated that we as Canadians must be vigilant to prevent the erosion of our linguistic duality. The Government of Canada believes that monitoring and enforcement of Air Canada's commitment to official languages is necessary. Through this bill we are following through on the Prime Minister's commitment to Canadians of that vigilance.

On October 19, 2004, the Commissioner of Official Languages tabled her fifth annual report which recommended:

Transport Canada propose the adoption of the necessary legal amendments to preserve and protect the language rights of the public and Air Canada's employees, regardless of the modifications that are made to the structure and organization of the air transportation industry.

Through this bill Transport Canada is responding to that recommendation.

As hon. members may recall, the implications of Air Canada's restructuring became an issue during the federal election campaign. At that time, in response to Canadians, the Prime Minister made a public commitment that there would be no erosion in the application of the Air Canada Public Participation Act, and specifically the official languages obligations.

This issue has been raised on several occasions since then, and the Minister of Transport has publicly reiterated the Government of Canada's commitment to introduce legislation to ensure the status quo—no more, no less—on Air Canada. Today, through this bill, the Government of Canada is following through on this important commitment.

I would now like to share with the House the specific aspects of this bill that will achieve our objectives to ensure the continued protection of the official languages and maintain the status quo under the Air Canada Public Participation Act.

In order to preserve the status quo, this bill will ensure that full official language obligations would continue to be applied to Air Canada and would be retained for the former internal divisions of Air Canada that have been spun off and that are federally regulated undertakings.

In addition, Jazz Air Limited Partnership would be made subject to part IV—service to the public—of the Official Languages Act. As I have already noted, prior to restructuring, Air Canada was required to ensure that its subsidiaries providing air services offered services in both official languages.

However, as Jazz is now an affiliate of Air Canada, and not a subsidiary, the former obligation will now be placed directly on Jazz. Jazz will also be subject to parts VIII, IX and X—the enforcement mechanisms and policies—of the Official Languages Act. This ensures continued compliance with official languages obligations, a responsibility for which Air Canada was directly answerable previously.

The bill would require ACE Aviation Holdings Incorporated, the holding company, to provide communications to the public in both official languages and to keep its head office in Montreal. This would ensure that obligations consistent with those applied to Air Canada, as head body of the corporation, are extended to the new parent company owning and controlling, either directly or indirectly, all of the affiliates within the new structure.

As well, in order to maintain the status quo, any future airline subsidiaries established in Canada by ACE Aviation Holdings Inc. or Air Canada would be required to provide service to the public in both official languages. To ensure that these proposed amendments do not extend beyond the status quo, the following qualifications are included within the provision.

First, the language obligations would only apply to affiliates of Air Canada that ACE Aviation Holdings Inc. controls. Once control is lost through an outright sale or through the sale of a controlling interest, these obligations would cease. In addition, language requirements would not be extended to a future airline affiliate that provides air services exclusively outside of Canada. This ensures that Canada's air liberalization agenda does not adversely affect the ability of Air Canada to compete in foreign markets.

In conclusion, the adoption of the bill will respond to the Government of Canada's commitment to Canadians for the continued protection of Canada's linguistic duality and will update the legislation to respond to Air Canada's new corporate structure.