Mr. Speaker, it is a pleasure to speak to the motion.
I welcome the opportunity to speak on this motion today, and commend my colleagues for raising such a vital subject, one in which this government has continually seen as a priority. I regret, however, that this government cannot support this motion as written. The reason can be found in the very first line: that this House “acknowledge the inadequacy of the assistance plan for the clothing and textile industries.“
Far from an “inadequate“ plan, the December 14 announcement of new measures to make our textile and apparel industries more internationally competitive delivered. It offered tariff relief benefiting both the textile and apparel industries. It provided additional assistance funding for Canadian textile firms. And it responded to calls to extend the current duty remission orders benefiting textile and apparel manufacturers.
Those allegedly inadequate measures could be worth $600 million over the next five years. They will help Canadian companies improve their productivity and invest in new products and new markets, and they will provide them with the tools they need to compete in a changing global trade market.
This announcement also directly responds to the recommendations made by the House of Commons Standing Committee on Finance last fall. Specifically, the committee recommended extending the current duty remission orders and immediately ending tariffs on inputs not produced domestically. I could hardly call such a comprehensive package, one that explicitly responds to the concerns of the Commons finance committee, inadequate.
How specifically do these measures help these industries? Let us briefly summarize the measures announced by the government less than two months ago.
The first element of the recently announced textile and apparel package is tariff relief. The Government of Canada has eliminated tariffs on fibre and yarn imports and on imports of textile inputs used by the apparel industry, effective January 1, 2005. This single measure is worth approximately $90 million to the textile and apparel industries, every year.
The member from Joliette should remember that all apparel and textile companies can benefit from the elimination of tariffs on inputs they import. These benefits are unconditional, and apply across the country.
However, and this is a very important point, tariffs will remain on products where Canadian production can be demonstrated. The Minister of Finance has already asked the Canadian International Trade Tribunal to consult with the textile industry over the next three months to identify such products.
The textile industry now has an opportunity to provide evidence of actual production. Their input will be given great consideration in making final decisions on precisely which articles will benefit from tariff elimination. Importers will be required to pay duties while this consultation takes place and until final decisions are made regarding which imports can benefit from tariff relief. Once a final decision has been made, importers will be able to request a refund on the duties paid on these products since January 1 of this year.
Some may ask if apparel companies would be required to pay tariffs if the textile industry starts producing something that is currently not manufactured. It is a longstanding practice not to restore tariffs once they have been removed, to ensure that the tariff system is transparent and predictable.
Transparency and predictability benefit the Canadian economy by providing importing companies with the stability they need to make long-run investment decisions. Furthermore, domestic producers of goods not subject to duties know when they are entering a market that they will have to compete in a duty-free environment.
The second component of our December 14, 2004 announcement is assistance to the textile industry. The Government of Canada will provide a further $50 million in funding to the textile production efficiency component, or CANtex, over the next five years to encourage Canadian textile companies to adapt, to shift to higher value added products, focus on niche markets and improve productivity. All firms in the textile industry that make textiles for apparel use will be eligible to apply for further assistance under the enhanced CANtex initiative. I say further because this is not the first time this government has recognized the competitive challenges faced by the industry and acted.
In February 2004, for example, we provided $26.7 million to CANtex, and before that provided $33 million to the Canadian Apparel and Textile Industries Program—funding, which has been used in over 300 projects that increase productivity, lower costs, improve efficiency and identify new markets.
Mr. Speaker, the member for Joliette should recognize that this Industry Canada funding has made a difference. It is not funding designed to compensate firms having difficulty competing. It is there so that they can find their own solutions, by improving their production process, identifying emerging opportunities and purchasing the equipment that will beat their competition to market. It is designed, Mr. Speaker, to ensure our companies can take on the world and win.
The final measure deals with duty remissions. The December announcement included extensions to duty remission orders introduced seven years ago as a temporary measure to help textile and apparel firms adjust to earlier competitive pressures caused by increasing global trade. These gave companies in six textile and apparel subsectors the right to a remission of duties paid on certain imports.
Benefits have averaged $30 million annually over the past three years, with 90% of the benefits going to apparel manufacturers and the tailored collar shirts and women's wear subsectors.
These orders were set to expire on December 31, and I clearly recall many members of this House standing up and demanding that this government extend these orders and give these individual firms time to adjust.
The government heard from many firms in the apparel industry as well, which stressed the importance of the remission orders to their viability and called on the government to not let these orders abruptly expire at the end of last year.
That is exactly what we did, but we also introduced a phase-out period for these temporary measures. Firms benefiting from these orders have until the end of 2009 to adjust and to make the changes necessary to adapt to a changing trade environment.
Remission order benefits will decline to 75% of original levels in 2007, to 50% in 2008 and to 28% in 2009. They will expire completely on December 31, 2009.
In short, Mr. Speaker, in recent years, this government has repeatedly made the commitments necessary to help these companies face the competitive pressures they are dealing with. We lived up to that commitment once again on December 14, 2004.
And we will never back down on that commitment, no matter how many ill-advised motions are introduced by the opposition on “inadequate assistance” plans that are directly benefiting the workers on these companies across Canada.
There is something else missing from the member's motion today, and that is reality, the reality of a global economy that has more open markets and more trade between nations than ever before. We hide from this reality at our peril.
Clearly, Canada's textile and apparel industries face an increasingly competitive marketplace. Competition from low-wage developing countries increased this year when all countries, not just Canada, removed their quotas on textiles and apparel. This was the result of World Trade Organization negotiations 10 years ago, negotiations designed to open new trading opportunities for all countries, including Canada and, I remind members, Canadian manufacturers abroad.
As the hon. Minister of Industry said on the day these measures were announced, “There is nowhere to hide in the world of trade and textiles. The whole world is going through it right now”.
Fortunately, Canada has historically been a trading nation. Our industries recognize this even if some of their members of Parliament may not. As the Canadian Textiles Institute has concluded, the Canadian textile manufacturing industry in recent decades has transformed itself through substantial and sustained capital investment. They take such steps, Mr. Speaker, because they recognize the realities of today's global trading environment, not the trading rules of the past that the member for Joliette may pine for.
The Government of Canada understands today's realities too.
The December 2004 assistance announcement considered the risk of trade retaliation by other countries; in short, such a risk of countervailing duty measures would be low. This is a vital consideration if Canada's aim is to introduce measures to improve the competitiveness of these industries. Otherwise, the introduction of subsidy assistance measures encouraging the use of Canadian made products over imported ones, which this motion appears to be asking for, would likely be challenged by our trading partners in the World Trade Organization.
The WTO Subsidies Agreement explicitly prohibits subsidies that are contingent on import substitution. It is one more reason this motion cannot be passed as written.
The motion before us today calls for the use of safeguards provided for in trade agreements. These safeguards already exist.
Canada's trade legislation, like that of other trading nations, provides for various measures to protect domestic producers from any injury caused by import competition. The Special Import Measures Act, the Canadian International Trade Tribunal Act, the Customs Tariff and the Export and Import Permits Act together are what make this protection possible.
As well, under the World Trade Organization accession protocol, China agreed to a special textile and apparel safeguard. Under this provision, WTO members can protect their domestic textile and apparel industries from market disruption when imports from China threaten to impede the orderly development of trade in these products.
Here is how it works. If increased imports cause or threaten market disruption, domestic producers may request that the Minister of International Trade introduce the special textile and apparel safeguard. If consultations do not result in voluntary restraint, then quotas may be imposed. This special safeguard provision is in effect until the end of 2008.
My colleagues will speak further as to the numerous examples of this government's commitment to the textile and apparel industries. They will describe this country's efforts to work toward an integrated North American market for Canadian apparel and textile products and to consider any and all proposals made jointly by these two industries for new market development.
They will outline how this government continues to act to protect against illegal transshipment of imported apparel and textile products, and to respond to industry complaints regarding import injuries. They will summarize how the employment insurance program has continued to meet the needs of workers adjusting to changes in these industries. And they will elaborate on the many, many measures introduced in recent years to provide assistance whenever required to ensure these companies have the resources to compete.
These companies will have challenges, as we have seen recently, but then, they have also had to confront challenges. After all, the Canadian textile industry is one of Canada's oldest manufacturing industries, yet history shows it has evolved and modernized to the point where today it employs 50,000 Canadians across the country.
When markets for Canadian textile products change over time, these entrepreneurs adapted so that today the subsector producing textiles for apparel use comprises approximately 25% to 30% of the Canadian textile industry. Today they produce a wide array of textiles, including carpeting, industrial and specialty products, which would have been unimaginable a century ago.
Likewise, the apparel industry employs nearly 100,000 Canadians, and is centred in Canada's big cities, such as Montreal, Toronto, Winnipeg and Vancouver. The jobs it provides are often the jobs generations of new Canadians have turned towards, and today approximately 40% of apparel workers are first-generation immigrants.
I should also note that the textile tariffs paid by Canadian apparel firms, ranging from 5% to 14%, are much higher than the tariffs on inputs used by other Canadian manufacturing sectors. That is one of the reasons we introduced substantial tariff relief before Christmas.
Yes, they have faced hardship, and will continue to do so, but history says that they will make the changes necessary to continue to prosper. These are companies that can compete. They are modern and efficient. They invest in their production and are a major user of high technology. They provide quality jobs for thousands of Canadians.
They will ultimately succeed if government can provide them with the assistance that can help them compete in a world where other markets remain open to their products as well. They are more than capable of doing this, and recent years have illustrated how progressive federal economic policies can help them do that.
With government support and encouragement over the course of the last decade, Canada's textile and apparel industries have demonstrated the innovation and the investment required not only to simply survive, but to thrive in the 21st century global economy.
As a member of this government, I am proud of the steps taken to help them succeed. They are far from “inadequate”. And for those reasons I cannot support this motion.