Debates of Nov. 22nd, 2006

SOFTWOOD LUMBER PRODUCTS EXPORT CHARGE ACT, 2006

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, there are many things that can be done, the first of which is for the House defeat this ill-advised bill. Once that is done, members can use their wins at every level, especially the final win, which said that Canada was owed every penny of the $5 billion plus taken in illegal tariffs over the many years that this dispute lingered. That money should come back to Canada. The government would then be in a very good start and end position to ensure that our industry would get the money back so it could re-tool some mills to ensure we could do the value added here.

There is probably more we can do with regard to our natural resource forestry policy, which would see us maintain our forests for the benefits of Canadians. That is not to say we want to stop trade, but we want to ensure the trade is done in the interests of Canadian communities, industry and jobs.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I was very intrigued by the comments of my colleague, the hon. member for Vancouver Island North. Similar to my riding, the ability to attract investment, create an entrepreneurial spirit and add value to wood products is a struggle each and every day. She talked about examples of value added companies, the manufacturers that were able to get on their feet and put people to work.

Could she comment on what kind of message is being sent to small and medium size businesses that are struggling to make a go of it in rural parts of British Columbia and elsewhere in the country? What signal is sent by the government, without even allowing the possibility of hearings or any testimony to come from those communities and businesses, when it passes such fundamentally atrocious legislation as this one?

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, I know the member for Skeena—Bulkley Valley lives in an area similar to mine and he has many of the same issues. His riding is also surrounded by forest, water and beautiful scenery. I know he understands very well what the impacts are on industry and workers in his community.

The message the government sends to individuals, workers, communities and small business is that it really does not care what anyone thinks. Unfortunately, we will not hear their voices. They were shut out of the hearings and coming to the committee. This very bad deal, which will affect them in such an adverse way, basically tells them that they do not matter in society. To me, that is absolutely the wrong way to go.

It is time we stood up for our industry in Canada. Small business is the backbone of our country and we need to recognize that. We need to support it and ensure that the value added sector is able to thrive. We do not need to put restrictions on its ability to trade and get its product out. It is ludicrous. We want to ensure that the industry can do business, employ people and keep our communities going.

I thank the member for Skeena—Bulkley Valley for interest and commitment to his community.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, while it is a pleasure to join in this debate, it is a sincere displeasure to have to again rail against a government's misguided, arbitrary and bullheaded position on the softwood lumber file.

For many years the region and communities that I represent have sought certainty, resolution, and some level of justice when dealing with the unfair illegal tariffs that our American neighbours were slapping on our value added products. For years communities sought some sort of support. The businesses and industries sought some measure of effort and strength from the federal government to say to them that they matter, that the communities in our country that produce the wood products that are used throughout our country and around our world matter enough for the government to fight.

Lo and behold, there was an election last winter and a government came forward with a new mandate. Unfortunately, it used the same minister that was bungling the file before and it produced a deal that was flawed completely. It is so flawed in fact that mill managers in my communities, people who are deeply invested in this industry, who have their own personal money invested as mill owners are turning to me and scratching their heads, and wondering for what possible purpose the federal Government of Canada sold them down the river.

They asked me whether there was some kind of horse trade that went on between Ottawa and Washington to arrive at such a deeply flawed deal. Challenge after challenge and finally we arrived at the international court in the United States, the last place of refuge for the scoundrels in the United States who were perpetrating this trade fraud upon Canada. When we arrived at a decision that was favourable and every single dollar collected illegally from Canada was to be returned to Canada, Canada caved, completely rolled over, and asked the Americans to beat us again.

This time it was wood. The next time it might be cattle, fruit or some sort of product that will affect another part of this country. I can only wonder what will happen to those members in this place who represent communities that are trying to survive and trying to make it in the international competitive market. When their time comes calling, the Americans will go after their products when a very narrow interest and lobby group, and a few members of congress will get together and decide to target the next product out of Canada because they had so much success and fun going after softwood. They were able to beat us so soundly that even though we won in the courts, we were willing to throw the whole deal away at the last minute for some narrow interest, some narrow political victory that the government of the day was seeking.

The government came into office and said it was going to strike new relations with the United States. I almost wish back for the bad relations because if the new relations produce deals that hurt the communities that I represent like this one does, I worry for the future.

I will speak specifically of those communities because a lot of members listening to this debate and citizens watching it on television have a hard time contextualizing this. Who are we talking about? What kind of communities are we talking about? We are talking about Prince Rupert, Terrace, Skidegate, Queen Charlotte Islands, and communities right across our country. These communities have, in their very DNA, the hewing of wood and hauling of water. These are communities that were formed on the principle that they can make an honest buck, that people can go out into the woods, knock down trees, mill them, and send them to a market that will be appreciative and pay an honest dollar for them. These are communities right across my region.

My region is over 300,000 square kilometres, the most beautiful area in the most beautiful country in the world. In these communities we rely on our ability to use the natural resources we are endowed with and sell them on fair terms to the marketplace. Under the NAFTA, something we negotiated our energy away in order to have, we were meant to have the ability to go and freely, and fairly, trade with our partners to the south.

Lo and behold, when the deal did not work for some in the United States, they threw up tariffs and our government somehow caved. It caved to the point where we self-imposed a tariff that we know was illegal. We will impose a tariff on our own products that we know is wrong and impact the communities that have added value to this wood, and have struggled over the years to maintain those jobs.

Through ups and downs, thick and thin, they have been able to keep those jobs going, paying into the coffers that pay the salaries of members in this place, that pay for the functioning of the government, and pay for the health care services and education that we all rely on.

When those people needed the government to stand up for them, it could not be found. It was so busy running around K Street in Washington hoping to make nice with the Bush government. It did not for a moment stop to think about the economic future of the communities that I and other members in this place represent, and for the economic future of our country.

It is in the DNA of the people who I represent and we must consider the forests, the trees and the endowment with which we are privileged to be blessed. The first nations communities, for millennia, have relied upon these resources to sustain our communities. When the white settlers first showed up, it was one of the first things we did. We opened up these small lumber mills and soon the industries grew in sophistication and size, but were always based upon our ability to access a market.

These are hard-working people. They are honest people. They get up every day, go to work and bring their lunch pails. I was curious in my first term here in this place to find out how much in fact we contributed to the federal coffers, how much in fact we contributed just in economic terms to the health and well-being of this nation.

I asked the Library of Parliament researchers to do a little study for me. It turned out to be a long study, three months. I have boxes piled high in my office. I asked them to calculate, estimate as best they could, how much money was sent out of my region, out of Skeena—Bulkley Valley, into the federal coffers and then how much was returned in payments and services from the federal government.

After three months of study the researchers came back to me and said the very best guess they could make over the last 10 years was that there has been a 10 to 1 ratio every single year. For every $10 our community sent out, $1 came back in services. One would think we would be complaining about it, but these are honest hard-working Canadians who do not even mind a little bit. That is fair. We have the privilege of living in one of the greatest countries in the world and one of the best regions in which to live. That is well and good.

However, here we are working hard contributing $10 for every $1 that comes back. Money was sent from the good people of Skeena—Bulkley Valley to help pay for the negotiators, help pay for the lawyers, and the members of Parliament and cabinet minister who sit in the government to go out and fight on our behalf. What did they come back with? A complete and total failure.

They came back with the idea that we are going to leave $1 billion on the table, half of which is going to get used by the very lobbyists who launched this case in the first place to fight against us again another day. There was over $450 million left for that sole purpose, and another $500 million in change left over for Mr. Bush to fight another election.

The economic base of my communities are absolutely ensconced in this sector. The forestry sector provides over $120 million as an easy estimate annually to our region. The government response to the shutting down of mills, to the loss of jobs, and to the exodus of our young people across my region has been what? It has been to freeze the funds of Western Economic Diversification, to not allow any of that funding to go out that allows the communities to actually diversify their economies, to not in fact deliver on any of the pine beetle money because we have also had this near perfect storm created, an absolutely devastating infestation which according to the Forestry Council of Canada has been caused by global warming which the government refuses to address.

We have had a provincial government hell bent on providing as much raw log exports as is humanely possible and then ramping it up every year beyond that thereby eliminating any real incentive to add value to the wood products that we have in our communities. Add this to a promise made by the government to deliver more than $400 million in economic development money to compensate for what has happened with the pine beetle, which has not shown up, but in fact has been reduced by $12 million for some absolutely ludicrous reason.

The perfect storm has been created for my communities, a storm in which it is absolutely of no value or purpose for anyone to enter into our communities, to bring the investment dollars, and to create those industries, small, medium and large to add value to the wood products with which we are endowed.

I worry deeply for my communities and I worry deeply for the future that it holds. When I speak to high schools and colleges and I look upon the young people and talk about what their future means in our region, there is not a lot of hope.

I stood in front of a class in Hazelton, B.C., which has lost all three of its mills. I asked for a show of hands among the hundred students as to how many were planning to stay, live and work in the community of Hazelton. A single hand went up amongst the 100 students. The government response to this growing tragedy in my region has been silence and a sellout deal. It must be rejected.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, we know that there have been two court decisions recently, one on July 14 where the top U.S. trade court, the Court of International Trade, ruled that the payout, under the so-called amendment, to the U.S. firms that launched the lumber trade actions was illegal. Prior to that there was another court judgment.

Would the hon. member describe to us why this trade deal not only wastes Canadian taxpayers at least a billion dollars but what does it do to the NAFTA trade dispute resolutions that were supposed to save all the different court challenges caused by NAFTA?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, here is an incredible scenario before us. When the NAFTA was being negotiated and when the FTA in particular was being negotiated, the Americans very much wanted access to our energy. They very much wanted energy to be placed within the FTA and then eventually into the NAFTA.

Canada resisted and for good measure. Under the principles of the agreement, once the pipeline is opened up to a certain level, under no circumstances, even our own national interests, can we ever lower that amount of energy going forward. More than 50% is now leaving the oil sands in Alberta to the American markets. It is heading toward 60% almost.

What we did in trading away that energy profile and trading away that access is we said, “Give us this dispute resolution panel”. We realized and recognized there was at least some sense of sensibility within the trade negotiators at the time that there was an unbalanced relationship in power. The Americans knew that we depended so much on their market for our goods. Our negotiators realized in some small moment of brilliance that we needed to rebalance the power between the trade partners and establish this panel. This panel was meant to settle the disputes when one was overpowering the other, as is the case with the softwood lumber tariffs.

Lo and behold, the panel under this deal is absolutely null and void. There is no sense in even establishing it or having it any more because we have caved. We have said that even when the panel sided for Canada and even when the Court of International Trade sided with Canada, we are willing to take defeat. We are willing to accept less than what the dispute panel and all the other courts have decided in our favour.

Canada is not even accepting silver. It is not even getting on the podium. When we had the gold in our hand and the victory was ours and every dollar was meant to be returned, Canada said, “We would rather not have that. We would rather have something else”.

We thereby set a precedent that other industries within the United States who seek protectionist measures will follow and we have said as much because the practice has been borne out. If Canada is pushed hard enough, long enough, and far enough, it will cave. What we will do is offer up our future. What we will do is offer up communities that do not politically matter at this particular time.

It is a shame to be calling this negotiation a fair trade or free trade or anything. This has to be the greatest misnomer in economic trade history. It has allowed some pretence to Canadians to feel as though we actually have access to the U.S. market. Only 50% of our products actually fall under NAFTA. The rest fall under favoured nation status.

The illusion is perpetrated by the elites in this country, by Bay Street and others, that somehow this deal is a panacea. They say that it is a wonderful thing for Canada and that it also protects our access to the U.S. markets. This is even when we have completely lost, we have chosen the path of defeat, and we have chosen to not listen to the court hearings and to the decisions that have been passed down by U.S. and international courts alike.

Canada's willingness and determination to actually establish fair and free trade with our partners to the south, who we rely on and who we need for our future economic prosperity, will allow something else to take place. This will allow some absolute miscreation. This devilish deal perpetrates a complete apprehension of the idea of fair and free access to the U.S. market.

It is a shame and a travesty. I truly worry for the communities that I represent and for their ability to have any sense of representation from the government because it is gone under this deal.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, in the past month I have done a great deal of reading and listening with regard to the government's softwood lumber agreement and I have come to only one conclusion, which is that this softwood lumber deal is a sellout and it is bad for Canada. There are many reasons why and I would like to take some time this afternoon to list a few of those reasons.

First, it is based on the falsehood that Canadian softwood lumber industries are subsidized. This falsehood was exposed and rejected in every NAFTA and U.S. commercial court ruling, all of which have clearly sided with the Canadian industry.

Second, it gives away $500 million in funds owned by the Canadian softwood industry to subsidize the U.S. Coalition for Fair Lumber Imports.

Third, it provides $450 million in funds to the Bush administration that the President of the United States can use at his discretion, without congressional approval and without any accountability. One can only wonder at what George Bush will do with these ill-gotten Canadian funds.

If we put those two together, it is nearly $1 billion. This is $500 million so the U.S. Coalition for Fair Lumber Imports can come at us again and $450 million in the hands of the President of the United States. I do not know about other members but it gives me chills just thinking about that.

In addition, this deal can be cancelled unilaterally at any time and does not provide stability and predictability to the Canadian softwood industry. It constrains trade unreasonably by applying punitive tariffs and quotas that hinder the flexibility of the Canadian softwood industry. It also infringes on provincial constitutional prerogatives by not just Ottawa but by Washington. It is bad enough that Ottawa can interfere in provincial jurisdiction but to have Washington calling the shots is just unconscionable.

The softwood deal also kills the credibility of the NAFTA dispute settlement mechanism which would have ensured a full refund to the Canadian softwood industry of the entire $5.3 billion of illegally collected duties. Was it not just recently that both the Liberals and the Conservatives were delivering the siren call of the NAFTA deal and how important that was? To see it being scuttled and totally abandoned now is quite remarkable.

This deal sets a bad precedent not only for softwood lumber but for any other industrial sector in Canada. That should send shivers through this country, not just the softwood industry but every other industrial sector. It opens the door to U.S. attacks on all Canadian industries. They can target any industry and go after it because they were very successful with softwood. They will find a group and then follow the same plan as before.

The deal does nothing for the thousands of workers who lost their livelihoods over the past five years. There is nothing in the softwood lumber agreement to deal with the major disruption that the U.S. abuse of trade rules has caused to the working families in the communities of Canada. There is absolutely no compensation for people who have lost their jobs or for the communities that have suffered as a result of those job losses.

This deal will also potentially trigger significant job losses through further consolidation caused by the quotas and export taxes and by discouraging Canadian value-added production and stimulating raw log exports. Value-added industries are the key to our economic future. If we are to be hewers of water and those who can only use our resources to export, we will not progress at all in this modern economy.

The deal also forces a further downsizing of the Canadian softwood industry, with the accompanying huge impacts on softwood communities throughout Canada.

The deal discriminates against Canadian companies that refuse to sign the softwood lumber agreement by resorting to bullying and fiscal arm-twisting. This is an abuse of power.

This deal will not deter American litigation in the near future, as evidenced by the recent move of the Bush government to overturn the United States Court of International Trade, CIT, decision of April 7 and July 14 which ruled that the Byrd amendment could not apply to Canadian merchandise.

I believe I have given a significant number of reasons. In fact, I have just outlined 14 reasons why Bill C-24 is fiscally flawed. The payout is based on Canadian softwood exporters who are owed the equivalent of 95% of the total $5.3 billion in illegal duties paid to the U.S. We know that the Prime Minister has not reached the 95% target, which means additional costs to the Canadian softwood industry and to taxpayers. Taxpayers should be watching this bill very closely because they will be the worst for its passing.

The 15th reason is that the participation process was flawed. While U.S. customs has put in punitive taxes on about 1,500 Canadian softwood companies, the minister responsible initially conducted secret meetings with a core group of about 25 large softwood companies. The consultation process must be far broader than that.

The Standing Committee on International Trade passed an NDP motion in support of further hearings on the softwood issue in northern Ontario, Quebec and B.C. More hearings are needed, not fewer. More hearings are needed by the committee to ensure the recommendations that need to be in place are indeed in place.

The deal does not account for the seasonal nature of the market. Companies are not allowed the flexibility to sufficiently carry forward export quotas to other months, which would lead them to consistently undershoot their export ceilings.

Also, at current or potential market benchmark prices, the Canadian softwood industry would pay more in punitive tariffs under the softwood lumber agreement of 2006 than the current illegal American tariffs. Can anyone imagine making a deal in which we pay more? It is like asking someone to hit us over the head with a mallet. If we pay more and have more charges, we will be less competitive. It is like being asked to be hit again.

The quotas will not replace the export tax until 2007. As of October 1. everyone, east and west, will pay a 15% export tax for three months. This is a considerable sum of money. Also, Canadian softwood companies that seek a refund through the EDC could be losing interest on their money. They could forfeit about 20% of their return and pay an additional tax of 19%. So much for Conservatives the tax fighters. This is astounding.

Bill C-24 contains no contingency provision pertaining to entry into forest and softwood lumber agreement 2006. Consequently, when the tax of 15% goes into effect on October 1, a Canadian softwood company may still be paying an additional 10.8% to the U.S. on that day.

The 22nd reason, and we are logging up quite a few here if you will pardon the pun, Mr. Speaker, is that the Provinces of B.C., Ontario and Quebec are behind this deal for the wrong reasons. The reality is that the three provinces are overexcited about getting the money and have given little consideration to the longer term, broader implications of this deal.

I have many more reasons and I wish I had time to go through all of them but the current Prime Minister was clear on how the softwood lumber agreement should be negotiated. In Hansard on October 24, 2005, he said:

Most recently, the NAFTA extraordinary challenges panel ruled that there was no basis for these duties, but the United States has so far refused to accept the outcome and has asked Canada to negotiate a further settlement.

I will repeat what I have said before and I will be as clear as I can. This is not the time for negotiation or for compliance and that was before the final legal victories. I speak from the heart and for my constituents in the forest city of London when I say that this is a sellout. We cannot accept this deal. We must negotiate something that works for Canada and Canadians.

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

Mr. Speaker, the member for London—Fanshawe has done a remarkable job of addressing the many problems, errors and botching of this bill and of this softwood sellout.

The member represents a proud city, the city of London, which is currently in a byelection. The Liberals are saying that folks in London should be voting for them so they will have a good representative in Ottawa. However we have seen here in Ottawa that the Liberals, when the camera lights were on, talked about opposing the softwood agreement and opposing the sellout because they somehow understood it, but the second the camera lights went out they worked behind the scenes with the Conservatives to ram the bill through committee. The Liberals and the Conservatives, working together, said there would be no debate on half the bill and limited time on provisions that include errors around double taxation, a double export tax for companies and other huge egregious errors, and the Liberals and Conservatives, the dynamic duo of the devils, worked together to force the bill through committee. It is now in the House because of the Liberals.

I would like to ask the member for London—Fanshawe how the Liberals could be so hypocritical and why anyone in London would want to vote for a Liberal when they have shown such poor representation in the House of Commons.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, the immediate response is practice. It is very clear that there have been unconscionable attempts in committee to silence the hon. member in his attempts to bring the bill to a point where it would actually works for Canadians and for the people who are depending on the softwood lumber industry.

In terms of the member's question about London--Fanshawe, it is not just on jobs where we see that the Liberals have failed London. It is also in the realm of affordable housing. We had a Liberal minister in London North Centre who promised everything. He said that he could support the people who worked there but did the Liberals support anti-scab legislation? No. The same minister insisted that he would provide affordable housing. London, Ontario is second only to the city of Toronto in terms of homelessness in the province of Ontario.

This record is disgraceful. It underscores over and over again how the Liberals have failed Canadians, have failed Ontarians and have failed Londoners. I will tell the House that it will not happen again after November 28 because there will be another NDP MP in London and she will come to this place and she will make a difference.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I was paying close attention to my colleague's speech and one of the most compelling remarks she made was what she itemized as number six. I believe it talks about Canada as a sovereign nation signed on to this unprecedented clause in the bill that would require provinces to first vet any significant changes in their forest industry policy with the Washington, D.C. In other words, it is unprecedented that we would need to ask Washington if it were okay to change something like stumpage fees or our cutting levels.

What does the hon. member think of the significance of this dangerous precedent being set, surrendering our sovereignty and the Bloc supporting it?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, the hon. member has made a very salient point and has emphasized my concern. This is a sovereign nation and we make our own decisions when it comes to the determination of sovereignty in the north and to our industries and job creation.

We have lost a great deal in the recent past. We lost our Auto Pact. In my city, the automotive industry is a significant employer. Our economy depends very much on auto making and on the parts industry.

The Liberals signed away the Auto Pact and now we see the Conservatives signing away our authority, our autonomy in terms of the softwood lumber deal. One has to wonder what is next. When we look at our precious programs, like health care and the supports to our community, one has to worry about what indeed is next.

[The Acting Speaker, Conservative, Andrew Scheer]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Conservative, Andrew Scheer]

The question is on the motions in Group No. 1, starting with Motion No. 4. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Andrew Scheer]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Andrew Scheer]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Andrew Scheer]

In my opinion the nays have it.

And five or more members having risen:

Accordingly, the recorded division on the motion stands deferred. The recorded division will also apply to Motion No. 25.

The next question is on Motion No. 77.

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Andrew Scheer]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Andrew Scheer]

All those opposed will please say nay.

[Some hon. members]

Nay.