Mr. Speaker, it is a pleasure to speak again on behalf of an industry that I and other colleagues in the House have over the years supported, and continue to support.
The hon. member for Etobicoke Centre made remarks about my colleagues in his speech. I would like again to remind hon. members from the Bloc that the members for Beauce, Brome—Missisquoi, Saint Boniface, Winnipeg South Centre, Etobicoke—Lakeshore and Scarborough Centre have been on the issue for the last few years, of course with different challenges in each mandate.
As a member of Parliament who represents a constituency that had a number of apparel and textile manufacturers, I have had the opportunity over the years to take part in these debates. Let me pick up on something that was said by another member across the aisle. The government does not support people losing their jobs.
I think that all of us in the House would like to ensure that Canadians remain employed, and our record on that issue speaks for itself, as far as I am concerned. Let me also start by saying that the industry, both the textile and apparel, have worked with the government through certain committees and measures that we have put in place to try to find ways of assisting them to continue to create jobs or to keep the jobs that have been created by those industries.
I would like to remind you of the facts. Textiles and apparel make up the sixth largest industry in Canada. It is an industry that employs over 54,000 Canadians and generates more than $6.6 billion per year, a very significant figure.
To support this major industry, the Canadian government has participated in various programs over the years. I would also like to remind you of these programs, since there is a tendency on the other side of the House to forget the past and to simply make demands.
In 1974, the World Trade Organization implemented the Multifibre Arrangement, the MFA, as a temporary measure to protect the national textile sectors. Quotas were imposed on imports from poor countries that can produce apparel and textiles at far less cost than the developed countries.
The MFA was extended four times after 1974 and finally ended on December 31, 1994. I would like to publicly say that, at that time, I, along with other colleagues, was opposed to this agreement. I am still convinced that it is one of the measures that played a large part in the closure of a few textile mills, something that I also regret.
So that the quotas imposed by the MFA could be gradually lifted until they were fully phased out in 1995, the MFA was replaced by the Agreement on Textiles and Clothing, the ATC. This agreement was designed to achieve progress in free trade in the world textile industry from 1995 to 2005. The ATC aimed to increase import quotas so that Canada and other countries could progressively profit from the liberalization of trade. More specifically, the ATC obliged countries to eliminate all quotas on textile-related imports, thus exposing Canadian textile and apparel firms to all-out competition from countries with low production costs. So I repeat that I was personally opposed to this measure. I would also like to quote from the Bloc Québécois election platform, where that party proposes to “liberalize trade in all types of textiles except those manufactured by Quebec companies”.
So is the Bloc Québécois in favour of total liberalization of international trade or of adding certain tariffs? You see, the Bloc supports free trade, but not when it does not suit its interests. However, it should decide if it wants to be part of the big bad world or to play both sides against each other.
In 1989, under the Multifibre Arrangement then in force, the Canadian government paid $40 million a year to Canadian textile manufacturers in compensation for tariffs paid by them on imported textiles. Those payments were called duty remissions, and according to 1989 import data they were divided among various sectors of the industry. Basically, if you imported textiles into Canada in 1989, the higher your import volumes, the higher the duty remissions you were paid.
This system of federal payments has not changed since 1989. In other words, the same manufacturers have been receiving the same share of Ottawa's $40 million since 1989. So when we hear from across the aisle that we have done nothing, that is not true. Although some of those manufacturers have completely stopped importing and thus stopped paying high import duties, they are still receiving their share of duty remission payments, as in 1989.
On December 14, 2004, the government announced certain measures designed to make Canadian textile manufacturers more competitive in anticipation of the cancellation of all textile import quotas worldwide. The measures announced were intended to act upon the conclusions of the report that was tabled, as we said earlier, by the Standing Committee on Finance, whose chair at the time was the hon. member for Etobicoke. Specifically, those measures called for the phasing out of customs duty remissions by the end of 2009.
The government has also committed itself to the following allocations: $90 million per year to eliminate customs duties on imported textiles; an additional $50 million over five years for the textile production efficiency component, CANtex, which will help Canadian textile firms become more competitive and take advantage of new market prospects; and $10.9 million for the Canada Border Services Agency so that it can combat the illegal transshipment of textiles and apparel.
Once again, these measures will be over and above the federal allocation of more than $70 million over the past two years in support of the textile and apparel industries. It is absolutely untrue for the other side to say we have done nothing. I have now repeated all of the highlights. Thanks to these measures, annual assistance to these industries will more than triple.
Over the course of the last few years the government has progressively brought in other measures. The importance of improving our competitiveness of the tax system has been underscored in recent years by reductions in corporate tax rates in many of our major trading partners.
Establishing a Canadian tax advantage for investment, jobs and growth was one element of the government's five year tax reduction plan. As of 2004, the general rate of corporate income tax was lowered to 21% from its 2000 level of 28%. In the 2003 budget it was lowered to 21%. We have eliminated for these firms over $50 million of taxable capital.
One area where the tax system has had an important impact on new investment, particularly in capital intensive sectors like the textile and apparel industry, is the treatment of capital assets. I have spoken to businessmen in my riding and also surrounding ridings in Montreal, and this was a very important component of the type of aid that they had asked the government to implement.
The capital cost allowance, or the CCA system, determines how much of the cost of a capital asset a business may deduct in a particular year. As a general principle, CCA rates should reflect the useful life of assets and thus provide adequate recognition of capital costs over time. The alignment of the CCA rates with the useful life of assets can enhance productivity. I will not go into the details, but I want to repeat that in the 2004 budget we increased the CCA rate that applies to computer equipment.
As we all know, the industry has become more high tech than it ever was. We do not walk into a factory anymore without seeing mostly knitting machines. For those who have not done so recently, I urge them to go. It is a high tech type of industry and we have given assistance for that industry to continue to become competitive.
Since my time has run out, I would like to sum up.
Our government recognizes that enhancing competitiveness is a serious obstacle for the Canadian textile and apparel industries. The hon. member opposite and all the hon. members can be assured that this government will continue to work with these industries. My colleagues and I on this side of the House will ensure that these industries are sustainable and that they will succeed on both the national and international stages.