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House of Commons Hansard #52 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was companies.

Topics

Softwood Lumber Products Export Charge Act, 2006Government Orders

4:45 p.m.

Conservative

Christian Paradis Conservative Mégantic—L'Érable, QC

Mr. Speaker, first of all I would like my colleague to know that the position I am presenting today is not the result of mulling things over in an office but is based on what I discovered out in the field.

As members know, I am from the riding of Mégantic—L'Érable, home to several sawmills. I know what I am talking about because I gathered the information from those in the industry. An overwhelming majority are in favour of this agreement. We have been told to sign the agreement and get on with it because they are all virtually dying out there.

You can say what you want, that it is not this nor that, as members of the opposition and of other parties do. However, we have arrived at a practical solution that the industry can live with. And that is what it asked us to do.

Softwood Lumber Products Export Charge Act, 2006Government Orders

4:45 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I have just listened to the Parliamentary Secretary to the Minister of Natural Resources and I must admit that he is right. People in the industry are telling us that we have to support this agreement, not because it is good—only the government thinks it is a good deal—but because they cannot take any more, because they did not receive any assistance from the previous government. The Liberals refused to provide loan guarantees and to pay a portion of the over $400 million in legal fees. This has been the case also for the Conservative government.

Would it not have been more constructive to implement a support program for the industry and to take every possible legal action given that we were about six months away from having a final answer rather than doing what they did, that is selling out, and forcing us to accept the agreement because they refused to help the industry?

Softwood Lumber Products Export Charge Act, 2006Government Orders

4:45 p.m.

Conservative

Christian Paradis Conservative Mégantic—L'Érable, QC

Mr. Speaker, my colleague was there when the committees met this summer. Points were made at the first meeting. These points were respected by the Conservative government. We know the industry will be refunded by the government, who will be in charge of the process. It will also make sure it is reimbursed by the U.S. industry. Clearly, the loan guarantee mechanism becomes obsolete in that case.

The same is true for the famous stand still clause. Some 12 months are guaranteed and that is what the industry asked for.

My colleague will recall what Guy Chevrette said on behalf of the Quebec Forest Industry Council, that he was one of us once, that he had been involved in politics and that we could get into as much politics as we wanted as long as the agreement was approved.

That is what the government asks.

Softwood Lumber Products Export Charge Act, 2006Government Orders

4:45 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I wonder if the parliamentary secretary could clear the air a little bit and confirm some numbers. Will he tell us how much in duties was collected, how much in duties will be recovered by Canada, how much interest is involved, and where does that come out in the scheme of the finances of this deal?

Softwood Lumber Products Export Charge Act, 2006Government Orders

4:50 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

The Parliamentary Secretary to the Minister of Natural Resources has 15 seconds to answer this question.

Softwood Lumber Products Export Charge Act, 2006Government Orders

4:50 p.m.

Conservative

Christian Paradis Conservative Mégantic—L'Érable, QC

Mr. Speaker, that is a lot of questions to answer in 15 seconds.

One thing is certain, the Government of Canada will make sure the industry is reimbursed in the coming weeks. That is what we should remember. The industry is at the end of its rope and the government is here to give it the help it has been asking for.

Softwood Lumber Products Export Charge Act, 2006Government Orders

4:50 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I feel very bitter as I rise to participate in this debate.

Everything we see today, the whole mess, is the fault of the Liberals and Conservatives. Things could have turned out very differently if Canada—as it behaves at the WTO and in all the international trade forums—had not acted like a peewee, if not an atom, in the negotiations, starting with theMinister of Industry and his far-fetched statements last spring that opened the way to this cut-rate agreement.

I rise as well to be very responsible. When the agreement with the Americans was signed, we went around to the industries, unions and communities in Quebec. They told us, contrary to what the parliamentary secretary claimed, that the agreement was not perfect and needed to be clarified, but they were exhausted. They said that the Conservative government had smothered them and they were on the verge of bankruptcy. They asked us, therefore, to vote in favour of the bill based on this agreement but to go on saying that the agreement was cut-rate and far from the original objective. That objective, back in 2001, was for free trade in the softwood lumber industry.

This responsible approach led us to go and listen to what the industry, the unions and the communities had to say. This approach also means that the Bloc Québécois will vote in favour of Bill C-24.

I rise today not only to be responsible but also to be constructive. Everyone said throughout Quebec that this agreement was not enough to resolve the structural crisis that the forest industry is going through, especially in Quebec. It is probably the same everywhere in Canada, and the parliamentary secretary must have heard about it. We will need much stronger action to help the softwood lumber industry and our workers to survive this crisis.

If the Conservative government just sits on this bad agreement, thinking that people will forget the rest, it is sadly mistaken. I reach out to the Conservatives so that they proceed with the post-agreement phase and institute a real plan in support of the forest industry. It is true of Quebec, and I am sure it is true of Ontario, Alberta and British Columbia. If the Conservatives are happy just to pass Bill C-24 and think that that solves the problem, they will pay a heavy price in the next elections, which, I can assure the House, will not be long in coming. Our responsible, constructive approach should not lead the House to forget that we have not achieved the objectives that Parliament set for itself in 2001.

I myself introduced a motion, which passed unanimously, asking the Canadian government to do all it could to ensure that the softwood lumber industry was finally included in free trade. Unfortunately, as I said, the attitude, policies, approaches and directions of the previous government and the one that followed have led to this dead end. The industry needs a little oxygen.

Remember that Guy Chevrette said the industry needs some breathing room. He also said that if there were loan guarantees, he would refer the issue to his association for a vote, and that he thought people would be ready to fight to the end. The Conservative and Liberal governments refused to help the industry. They forced it to its knees and then suggested it accept the agreement, without which it would surely face ruin.

We refuse to let it be ruined. Saving it from ruin means more than just adopting Bill C-24; it also means instituting a whole series of measures to help the industry survive the structural crisis that, in Quebec, resulted from the Coulombe report, as the parliamentary secretary should know. Cut volumes will gradually be reduced by 20%. Energy costs have risen, the dollar has reached great heights, and there are a number of other problems Quebec alone faces. I will come back to this later.

I would like to review the order of events briefly. On March 31, 2001, the previous agreement fell. It, too, was a trade agreement administered with the United States. At the time, companies belonging to the American protectionist coalition submitted a petition. The Department of Commerce responded by imposing a 28% duty.

What was the Liberal government's strategy? That is the root of the problem. That government adopted a two-pronged strategy: negotiation with the Americans and legal proceedings.

Once the Canadian government sat down at the negotiation table, the Americans—both the American authorities and the protectionist coalition—expected to reach an agreement like the one before us now, which led to Bill C-24. The responsible thing to do would have been for the minister in charge at the time, Mr. Pettigrew, to say that we intended to pursue all legal avenues to resolve the issue once and for all. Indeed, sooner or later, we will have to find out who is in the right: the Americans, or Canadians and Quebeckers.

As you know, all of the courts, both the WTO and NAFTA, ruled in our favour. Our lumber is not subsidized and is not harming American producers. As such, the duties are illegal. However, we did not pursue this course to its end.

And a few months later, as I mentioned, the industry itself asked us to vote in favour of Bill C-24. Why? Because the Liberals not only pursued both paths, which sent a bad message to American authorities and the American industry, suggesting that we were going to bend sooner or later, but the government also refused to implement an aid program for the industry, although the Bloc Québécois has been requesting this since May 2002. I proposed this plan along with my colleague, the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup. I would remind the House that if we had achieved those elements, our situation would be different today. But, no, the Liberal government refused, just like the Conservative government.

First, to allow businesses to avoid bankruptcy, we demanded an aid program with loan guarantees on the basis that illegal duties levied by the Americans constituted accounts receivable. We were told that that was impossible, that international trade legislation did not allow for loan guarantees. Two weeks before the election, the Liberals, sensing they were in hot water, agreed to offer $800 million in loan guarantees for the next five years.

Even worse than that, in the agreement and in the legislation, the federal government is going to operate precisely through loan guarantees. It will buy back the illegal duties levied by the Americans because they are accounts receivable. We could have been doing this since 2002.

Second, we also asked for a relaxation of employment insurance requirements. We are still asking for this and still have not obtained it, not from the Liberal nor the Conservative government. Third, we also asked for support for processing activities in order to offer more job opportunities in Quebec forestry. We never obtained that support. True, the Liberals established a program to diversify economic activity in those areas suffering from the softwood crisis. However, not one business affected by this crisis received a single cent in aid from the government, apart from $20 million for legal fees, if memory serves. This was, moreover, the fourth point in our action plan, namely, that Ottawa would pay the legal fees of any businesses that fell victim to American legal aggression. At that time, legal fees totaled $350 million. As we know, that figure is now much higher.

So if this plan had been put in place, on the basis of our legal victories—we were not far from the end—we could have got through the legal proceedings. When all options had been explored, there would have been a legal victory. It is clear that a legal victory, and the Minister of Industry said so to us—and he is right on this—does not guarantee that the Americans were going to act on these legal victories. Still, they would have put us in a much better negotiating situation than what happened to us when, in early April or late March, theMinister of Industry went and said that, actually, we did not expect to receive all the duties collected illegally by the Americans. What a great message! That creates some negotiating power!

I have been a negotiator for a long time. When we say to our opponent, to the party across the table, that we know that ultimately we will not get everything we are asking for, even though it is our own money, there is a problem. Obviously, the Americans leapt at the agreement and, oddly, a few weeks later, on April 27, we had an agreement that was slightly improved—it must be admitted—on July 1, and that led us to Bill C-24.

As I said, if the Conservatives had continued on the path I have indicated, that is, right to the bottom of the legal issue, with an assistance plan for the industry, we might have been talking about a few months. We would have been able now to have negotiations with the Americans that would have enabled us eventually to go back to free trade. Unfortunately the agreement may be terminated in three, seven or nine years. We do not know. Let us hope that it will last as long as possible. I am not one of those who wish the worst for our industry, on the contrary. I want what is best so that we can have stable and flourishing communities, businesses and jobs.

As I mentioned, when it ends in three, seven or nine years, we will have to do it all over again. Do you think that the American coalition will stand around idly with this $500 million we have just given it? No, certainly not, it is going to start building its case. We can be sure that in maybe three, seven or nine years a fifth dispute concerning lumber will start again.

What are we going to do then? Is it better to give in immediately and say that we Canadians—not Quebeckers—are prepared to accept everything the American coalition wants, because we are not prepared to fight to the finish?

We have some lessons to learn from this episode, and the first one is never to open negotiations before exploring all the legal options. But the only way to explore all the legal options in this issue is to provide solid support for our lumber industry.

Unfortunately, in three, seven or nine years, I will no longer be here since Quebec will be a sovereign country. However, I want to leave Canada's parliamentarians with a constructive lesson that I am taking from this softwood lumber saga; during negotiations, never extend the hand of friendship to the American authorities and softwood lumber industry until the legal process is over. From day one there has to be an assistance plan with teeth, as the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup and I suggested in 2002.

I was saying that we had a responsible attitude in this case, that we toured the regions and the industries. The leader of the Bloc Québécois and I phoned big businesses, talked with people from the associations, presidents of the major unions, and representatives of the municipalities affected by this crisis. As I was saying, no one spoke publicly to encourage the Bloc Québécois to vote against the bill resulting from the agreement—the future legislation—or to say they were out of money, out of breath and in the process of suffocating.

Although the agreement is far from perfect, it is in this context that the Bloc Québécois will vote in favour of Bill C-24. As I said, the crisis is huge. In Quebec there have been 7,000 layoffs since 2005. In my riding, there were 400 layoffs just a few weeks ago. Louisiana-Pacific closed its sawmill and waferboard plant. In my opinion, there is not one region in Quebec where this industry operates that is not suffering right now or worrying. The Louisiana-Pacific closure is indefinite. Let us hope it reopens as soon as possible. But for that to happen there needs to be an assistance plan.

The FTQ and the CSN have issued press releases. We know that Mr. Chevrette also issued a press release immediately after the Bloc Québécois decision to support the bill resulting from the agreement, saying that the Bloc met the industry's expectations.

Nonetheless, I will read some excerpts from the FTQ and CSN press releases to show to what extent the Bloc Québécois is in tune with the stakeholders in Quebec, by taking concrete action on the ground. If the Conservatives want to do the same, they will need to use more than words. They need to take action. I will close later with what we propose they do to get through this structural crisis.

I will read the FTQ press release:

The Fédération des travailleurs et travailleuses du Québec (FTQ) salutes the Bloc Québécois decision, announced yesterday, to support the softwood lumber agreement.

Given the catastrophic situation of the forestry industry, the FTQ believes that this agreement, although far from perfect, represents the only possible outcome that will save the industry. “This agreement will now force the Conservatives to take concrete action to help the industry survive the major crisis that it has been living through for several years,” stated Henri Massé.

For many years, the FTQ has been calling for concrete measures to help the forestry industry and workers, as well as an assistance program for older workers.

“It is vital that the government listen carefully to the Bloc Québécois demands regarding assistance for the industry and for the workers,” Henri Massé pointed out.

This is the FTQ press release. As we can see, that is not the end of the matter. Once Bill C-24 is passed, I hope that the Conservatives will not sit on their laurels. There is work to be done and we will suggest avenues to be pursued.

I would now like to quote from the Confédération des syndicats nationaux press release:

The CSN gives its support to the demands of the Bloc Québécois, announced yesterday, which seek to support the workers, companies and communities that have been hit hard by the softwood lumber dispute.

The CSN press release goes on:

Referring to the dramatic situation many communities in Quebec are in because of massive job losses in recent months, CSN president Claudette Charbonneau said that the federal government must act quickly to put in place a structured assistance plan. “Older workers and companies in difficulty must have financial support. The hemorrhaging has to stop”, she said.

The release continues:

The CSN stated that the softwood lumber deal is far from perfect.

So two out of two. That seems fairly clear. The release goes on:

However, it is unrealistic to hope to re-open the agreement with a view to improving it in time to help workers.

A quote from the CSN president follows:

The federal government, which negotiated this bad deal, has a responsibility to make up for these deficiencies using effective support measures that will give new life to an industry that is on its last legs. The survival of whole communities in many parts of Quebec is at stake.

The CSN adds:

The federal government should have taken steps long ago to help the workers and companies. Now, it has a golden opportunity to demonstrate its good faith.

As hon. members can see, support for the deal is far more qualified than the Conservatives let on. As well, I have a hard time understanding how the Liberals from Quebec can oppose Bill C-24, which has arisen out of the agreement, just when the players themselves, while stating as we have that the deal is not perfect, are acknowledging that it exists and was negotiated with the Americans.

Given the series of mistakes that have been made since 2001 by the Liberal and Conservative governments, it is hard to go back. Back to the Future is a movie; it is not reality. We have to recognize this.

I will conclude by talking about the support measures that we have proposed to the Conservative government and that are mentioned in the CSN and FTQ press releases: first, an income support program for older workers.

We discussed it during question period. We want a program like the one that was abolished by the Liberals in 1998: a plan for workers 55 years of age or more all over Quebec in sectors hit by mass layoffs. We will not agree to an income support program for older workers aimed at a particular sector or region to the exclusion of others. There is a group of workers who need help making the transition from their lost job to their pension. We need this program back, which as I said, used to exist until 1998.

Insofar as communities as concerned, we suggest real economic diversification programs for communities dependent on forestry. I will mention them. The Liberals established one, but it did not help the industry, it just helped communities. We need not only that program back now but also programs for businesses. For businesses, we want the $4.4 billion in countervailing and antidumping duties that will be paid back by the American authorities to be subject to a tax treatment that will take into account the damages suffered by these companies.

Indeed the dollars in which the companies paid these duties three or four years ago are not worth the same nowadays. Companies will therefore be paid back in Canadian dollars that are worth much more. They will therefore get less back in Canadian dollars than they paid three or four years ago. The government should take this into account. According to the companies’ assessments, they will lose between $400 and $500 million because of the changes in the exchange rate.

Since the tax formula that the government is going to adopt takes changes in interest rates into account, we expect that changes in the exchange rate will also be taken into account. We have a request from the Canadian Manufacturers and Exporters that could be applied to the forest industry on an experimental basis, namely accelerated depreciation on machinery. Obviously, if the depreciation can be deducted faster, the taxes on earned income are reduced.

We also recommend setting up a program to stimulate innovation in the forest industry and improve its productivity, programs to diversify lumber markets, and financial compensation for maintaining the road network. Our last suggestion relates to the tax credit for research and development. In the case of the forest industry, this is not worth much because the industry does not pay much tax—in fact, it does not pay any. I have been told that several companies have accumulated enough tax credits for the next 10 or 20 years. We therefore ask that this tax credit be refundable—on a trial basis, no doubt—to the forest industry.

For example, Tembec invests $80 million a year in research and development, but cannot benefit from tax credits for these expenses. Refunding the tax credit could stimulate research and development in a sector that really needs it.

I would like to end by saying that the Canada-U.S. agreement provides for a bilateral committee to administer it. The industry has identified a number of problems. We hope the bilateral committee will be able to correct these problems. I would like to see the creation of a sub-committee of Canadian, Quebec and American elected officials to work alongside the bilateral committee.

In conclusion, one of the problems we are facing is complete insensitivity on the part of American elected officials to the realities of the forest industry in Canada and Quebec. They are under the thumb—let us be frank—of an industry lobby that buys elections and probably even buys some elected officials. It might be time to correct this situation by having more frequent and regular contact with them.

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:10 p.m.

Mégantic—L'Érable Québec

Conservative

Christian Paradis ConservativeParliamentary Secretary to the Minister of Natural Resources

Mr. Speaker, I listened closely to my colleague's speech. It contained much speculation and raised many points. He refers to post-agreement or post-application demands. This is commendable, but we are now at the stage of confirming the agreement.

As for speculation, the hon. member seems to be saying that the Bloc Québécois acted responsibly, while the government did not. As we know, this is an out of court settlement. We will never have an out of court settlement that can equal the best judicial decision. Furthermore, if we have a judicial decision, there is no guarantee that it will be easily enforced. This is so true that Pierre-Marc Johnson himself said that if the judicial process continued, it could last not only a few months, but could go on until 2008-09, and that everything could be lost, simply because of a procedural matter.

What is irresponsible about the government using the arguments advanced by a leading international authority such as Pierre-Marc Johnson?

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:10 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I know Pierre-Marc Johnson well. He is a good friend. He was mandated by the Government of Quebec, in the sense that once the agreement was reached, his job was to defend it, to explain it and to try to convince people. I can assure you, he did not convince me at all.

The hon. member just raised a very important point. I hope the U.S. authorities or a U.S. lobby did not hear what he just said. He just said that there will never be free trade in the softwood lumber industry. One day, sooner or later, we need to see the process through for a full legal victory. Then we could negotiate with the Americans to resume free trade in softwood lumber. There has never been free trade in softwood lumber. What the hon. member just said is totally irresponsible. Next time, the government needs to take the judicial route and follow through to the end, providing support for the industry in the meantime, and then negotiate. This would give us something to negotiate with.

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:10 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I would like to get an opinion from my hon. colleague who has just given his speech about the direction the lumber industry would likely take with the completion of a deal such as this one.

We can talk about the deal in terms of what it stands for today, but of course, as the Conservatives have pointed out, it is a seven year to nine year agreement. We need to understand what the deal would entail for the Canadian worker, for the governments of the country, and for the provinces, where there may be requirements for industry support over the next number of years with this type of agreement in place. We need to understand what this deal is going to do to our value added sector in the forestry industry.

Would the hon. member give us a vision of what he sees for the forest industry in Quebec under this agreement?

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:10 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I thank the hon. member for his question, because it gives me an opportunity to bring up something I forgot to mention in my presentation.

Our position is based on the reality in Quebec, on what the industry, the unions, the municipalities and communities have told us. The situation is not the same all across Canada. The softwood lumber crisis, the forest industry crisis, is much more serious in Quebec than elsewhere.

In part, this is because stumpage fees are much higher. Quebec's stumpage fees are the highest in North America. For example, stumpage fees are approximately $3 per cubic metre for birch and $5 or $6 per cubic metre for poplar. When we compare these fees to those in British Columbia, which are currently 50¢ per cubic metre, obviously it is hard to be competitive.

This is a unique situation. The pine beetle is attacking forests in British Columbia and Alberta, and wood has to be cut to avoid infestation. In Quebec at present, we have a series of regulations that were put in place properly but have resulted in higher stumpage fees. At the same time, we have all the problems I referred to earlier: a strong Canadian dollar, substantially higher energy costs and reduced cutting volume, which means that even companies have lumber supply problems.

The federal government has to step up to the plate so that we can weather this crisis, strengthen the industry in Quebec and turn it into a viable industry with a future. For the time being, we are getting by. Adopting Bill C-24 will breathe new life into the industry. But we need something more, otherwise the plant closures and layoffs will start again in a few months. The pressure on this government will be unbearable.

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:15 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, during the member's speech he indicated that the industry in Quebec was experiencing some severe difficulties, that there were bankruptcies and financial duress.

The reality is that the bill actually creates an export tax at current price levels that are actually higher than the current U.S. duties. The ruling and the opinion of the NAFTA and the WTO panels was that our industry was not subsidized.

What we have basically done is we have capitulated. In fact, this will not only affect the current situation within the softwood lumber industry but it will also have some ramifications for the softwood industry in the future, as well as other industries, because we have simply abandoned the integrity of the dispute resolution mechanism.

Does the member not believe that what we would be doing in Bill C-24 is accepting short term gain for long term pain?

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:15 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, the hon. member may be right. I said so earlier, this breath of fresh air may not last long. If no structural measures are proposed and adopted by the Conservative government, I think that several thousand more jobs will be at stake.

Many companies in Quebec are on the verge of bankruptcy. If they do not recover the meagre return on the duties illegally collected by the Americans to which they are entitled, they will close in a few weeks or in a few months, because the Conservative government—like the hon. member’s government—refused to help them in recent years. We have to choose between watching them go bankrupt with no hope of seeing them reopen and recover their jobs, and breathing in the little fresh air they are sending our way, in the hope that the Conservative government will assume its responsibilities. I agree with the member, it is a long shot.

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:15 p.m.

Bloc

Yvon Lévesque Bloc Abitibi—Baie-James—Nunavik—Eeyou, QC

Mr. Speaker, I congratulate my colleague on his presentation.

He knows full well that I was one of the fierce opponents of this agreement.

Since the majority of Quebeckers working in the industry were in favour of the agreement, the Bloc had no choice but to support it, partly to demonstrate its accountability to its constituents.

During his presentation, the parliamentary secretary said that all the people in his riding had accepted the agreement. The first question I would like to ask him is as follows: can he tell us what percentage of companies in Mégantic—L'Érable are affected by this agreement? And do all the companies really support this agreement?

My second question concerns the action by theMinister of Human Resources and Social Development, who is slow—not to say refusing—to take a position on the assistance she might give workers and the independent employment insurance fund. This might enable companies to decide for themselves, with the workers, on the employment insurance conditions that would apply to the groups of workers penalized by the lack of empathy shown by this government.

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:20 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I wish to thank the member for his question. The parliamentary secretary indicated that in the riding of Mégantic—L'Érable several sawmills are excluded from the agreement because they buy their wood in Maine. The member for Rimouski-Neigette—Témiscouata—Les Basques and the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup have similar experiences. They have an objective reason for supporting the agreement since most of the sawmills are excluded from the tax penalties. In this regard, these ridings are not representative of Quebec and Canada as a whole.

The Prime Minister himself said that the agreement was supported by 90% of the industry. I believe him. However, the bar had been set at 95%. That means they were not even able to reach the objective that they themselves had set for support of the agreement. They must have been disappointed, but they carried on. There was a great deal of flexibility in this case. It could be 90% rather than 95%.

As I was saying, once again almost all sectors in Quebec—and elsewhere— expect the Conservative government to follow up. I have read statements from the communities, the FTQ and the CSN. After breathing a little life into the industry, we expect this Conservative government to propose, in the short term, a true recovery plan that will restructure the softwood lumber industry to ensure its viability. It must also explain, in the long term, how softwood lumber will be covered once again by the free trade agreement.

This does not seem to have been an overriding concern for the Conservatives, who are usually diehard proponents of free trade. In this matter, they should perhaps be a little more supportive of free trade than they are at the moment.

Softwood Lumber Products Export Charge Act, 2006Government Orders

5:20 p.m.

Conservative

Bill Casey Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, I will be sharing my time with the very distinguished member for Edmonton—Leduc who will be speaking to the softwood lumber debate on behalf of his constituents.

I first want to thank the Minister of International Trade who has worked so closely with Atlantic Canadian industries and who has worked with us to try to resolve issues as they pop up all the way through this debate.

The softwood lumber agreement is critical to our area in Atlantic Canada. I was first elected in 1988 and the first thing on my table was the softwood lumber issue. It has been on our table ever since and with this agreement perhaps it will get off our table for a little while.

The Maritime Lumber Bureau represents the mills in Atlantic Canada and it has been totally focused on this for at least two decades. It has been very successful in negotiating exemptions from any countervailing or anti-dumping duties. It has negotiated with the United States governments and Canadian governments repeatedly and has been successful each time. It means that Atlantic Canada is not involved with this. We are totally exempt from the accusations of subsidies or interference with the marketplace.

The exemption was earned by Atlantic Canada. The Atlantic Canadian industry worked hard to get it and it earned it. It earned it by maintaining forestry practices that are exactly the same as they are in the U.S. It does not allow the United States to give complaint to our practices. Most of our woodlots in Atlantic Canada are privately owned, as they are in the U.S. Our lumber is sold at market value, as it is in the U.S. It removes the opportunity for anyone to accuse Atlantic Canada of having any subsidies or grants.

The industry in Atlantic Canada has consistently refused funding from a variety of programs offered by our federal and provincial governments because it does not want to be in a position where anybody can point a finger and say that Atlantic Canada received a subsidy, grant or benefit, a position that would allow the United States authorities to point a finger and accuse us of subsidies.

The last thing industry did to earn this exemption was quite amazing. After the industry earned the exemption, suggestions were made that some lumber was coming in from other provinces and funnelling through Atlantic Canada in order to get the exemption. The Maritime Lumber Bureau established its own tracking and certification system and now if a 2x4 pops up in Texas it can be traced back to an Atlantic mill and right back to the private woodlot from whence it came. There now can be no question that all softwood lumber from Atlantic Canada is coming from private woodlots.

There is no basis for any accusations of subsidies in Atlantic Canada, not now and not ever has there been a basis for an accusation of a subsidy, which has allowed the Maritime Lumber Bureau to negotiate these exemptions time after time, both with the American government and often with the Canadian government to convince it. Sometimes the Canadian government has seemed a little more difficult in the past than the American government but, in any case, the bureau has been successful in negotiating these exemptions.

The Maritime Lumber Bureau represents mills in the four provinces of Atlantic Canada. Its CEO and president is Diana Blenkhorn. I have to compliment her for her negotiating skills and her ability to understand the market, the challenges and the situation. She has negotiated with the Americans, with Canadians and with other provinces and she has been able to maintain, on behalf of the Maritime Lumber Bureau, this exemption. I believe she is the most knowledgeable person in Canada, probably anywhere, on this subject.

The softwood lumber agreement provides Atlantic Canadian mills stability. Atlantic Canadian mills do not want to spend their time in court. They do not want to spend their time with lawyers. They do not want to spend their time in tribunals. They want to spend their time making their mills the best and most efficient mills they can be and producing the best possible product they can produce.

From the beginning, when the softwood lumber agreement terms were finally ironed out, which took quite a while, the Maritime Lumber Bureau has supported the agreement wholeheartedly on behalf of all the mills in Atlantic Canada because again the agreement confirms the continuation of the exemption that has been so hard-fought and so justly earned in Atlantic Canada.

However, the bill actually does not provide the specific term exemption for Atlantic Canada. It does provide for zero rating, and some people may consider that the same thing, but for those of us in Atlantic Canada a zero rating is not the same thing.

At the end of this agreement, five, seven or 10 years down the road, we may be at this debate again. The Atlantic industry wants to maintain the exemption exactly the way it has been. We want the same words in the agreement that have always been there before, that is, that Atlantic Canada is exempt. It is essential that the bill we are dealing with now reflects the agreement and specifies that Atlantic Canada is exempt.

After discussions with the minister today, we have agreed that we are going to work together to come up with an amendment to clarify this issue and make sure the wording of the bill is the same as the wording in the agreement. Again, I thank the minister for his open-mindedness on this issue and his ability to react quickly and move forward. That is why we have the agreement we have today. It is because the minister has done that. He has worked with the industry from coast to coast. He has worked with governments in Canada and the United States. When there is an issue he deals with it, and we find a way to resolve it and we move on.

The Maritime Lumber Bureau has worked closely with the Department of International Trade throughout this negotiation. It has supported the agreement, but again, the bureau is very anxious to see the exemption clearly stated in the bill. I agree with the bureau. I think we can find a way to resolve this very quickly with the cooperation of the minister, who has agreed to take the steps to clarify it.

At the end of the day, this agreement will allow Atlantic Canadian mill owners and forestry workers to focus on what they do best, that is, working in the industry to try to improve the quality of their product and the efficiency of their businesses. This agreement will allow them to reinvest and to compete worldwide in the softwood lumber industry. That is all they want to do. With this agreement, they will be allowed to do that in Atlantic Canada.

Again I will say that we have had nothing but cooperation from the minister on this right from the get-go, right from the beginning. There were a lot of different things that had to be hammered out, ironed out and resolved, but they have been, so much so that not only has the Atlantic Canadian industry been quietly supportive, but it has been actively supportive of the softwood lumber agreement. It will have the same endorsement and same support for the bill if we can just get the specific wording changed so that it reflects the softwood agreement that was originally signed between the United States and Canada.

I again want to thank the minister and the department. This has been an issue for me for almost 20 years. It looks like there is light at the end of the tunnel. We might have a resolution to this. Although this agreement does have an end to it, perhaps if it works and everyone is happy it can be extended indefinitely and our industries can all go back to work and do what they do the best.

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5:30 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, the first words that I heard were that they are very happy to get this off the table for Atlantic Canada. Coming from the north and looking at the provisions whereby the north is not given any particular tariff on any of our exports of lumber from places such as Nunavut, I would say that probably I should go along with this agreement as well, but in reality we live in Canada. The whole country's lumber industry is at stake with the bill. The fact that one region is better suited under the bill than the other does not take away from the fact that we live in a larger country than the particular region the hon. member is talking about.

Coming from the north and being satisfied with an agreement that exempts northern producers from a tariff, that means nothing to the rest of the country. I think the hon. member should recognize that as well. Perhaps he would like to comment on how he is supporting the lumber industry across Canada as a whole. Perhaps he would put his comments in that perspective.

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5:30 p.m.

Conservative

Bill Casey Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, I agree with the member in that I think he should go along with the agreement, but he asked me to justify or explain why Atlantic Canada has this exemption. Again, Atlantic Canada earned this exemption. Those provinces worked hard at it. They have spent millions of dollars to get the exemption and to keep it. They have spent millions of dollars in legal fees. They have refused subsidies when other provinces have accepted them. They have established their own certification program, which cost millions of dollars to invent. They have their own private woodlots.

Many provinces have woodlots owned mostly by governments, but in Atlantic Canada we are different. We must have different terms for each province because each province has different forestry practices. We cannot say that everyone is the same. That is what we have been fighting for over the years: that Atlantic Canada has earned the exemption, is entitled to it and has had it all along. There has never been an accusation about a subsidy and there never will be as long as the Maritime Lumber Bureau is active.

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5:30 p.m.

Bloc

Christian Ouellet Bloc Brome—Missisquoi, QC

Mr. Speaker, I would like to ask the hon. member for Cumberland—Colchester—Musquodoboit Valley how, partisan rhetoric aside, he can possibly think the negotiators had excellent skills? It is pretty clear that the outcome of the negotiations was not very good. His own minister pushed the negotiators into a situation that, at the time, could only end in reductions, given that he had already said he would accept less.

Second, I would like to ask the member how he can talk about stability? Just because something has been signed for nine years does not mean there is stability. He even said it could go on beyond that time. I feel it is presumptuous to think so. We all know that in this kind of agreement, anything indefinite cannot last. Companies were wondering whether they should sign, and now they are already wondering when it will be challenged. How can anyone talk about stability?

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5:30 p.m.

Conservative

Bill Casey Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, the hon. member probably does not understand that I was a car dealer for 20 years and I know a good deal when I see one. This is a good deal. I am amazed at how the government has negotiated this deal. There was no splitting the difference on this. On almost every single issue we had our way, not 100%, but awful close to it, so much so that the hon. Minister of International Trade would have a great future in the car business.

This deal will provide stability. It will allow our mill owners to stop worrying about tribunals. It will allow the Maritime Lumber Bureau to stop spending all its money and time on legal hassles and flying to Washington or Ottawa to negotiate with bureaucrats and politicians.

They can go back to what they do: producing the best quality lumber in the world. This deal will provide stability and all of this worrying will be over. I hope it is over forever, but at least it is over for a great many years.

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5:35 p.m.

Conservative

James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, it is my pleasure today to rise to speak to Bill C-24, which outlines the government's resolution of the longstanding softwood lumber dispute.

It was interesting to listen to the member who spoke previously. He says it is a dispute that he has been following since he was elected in 1988. I have not been here for quite as long as the previous member or as long as the Speaker himself, but this has certainly been a dispute that has attracted the attention of Parliament and the country since I was elected in the year 2000.

It certainly affected our trade. It was the biggest trade irritant between us and our greatest trade partner south of us, the United States. It was certainly impeding what I would consider a very successful trade agreement, NAFTA. It was certainly having an impact on that.

It is perhaps helpful to remind ourselves just how successful that agreement has been in the sense that I believe softwood lumber consists of about 3% of the trade between Canada and the United States, while 95% of the trade between the two countries goes through irritant free. That shows exactly why it was so important to address the softwood lumber issue. That 3% in fact was very much affecting other trade areas.

I want to compliment the Minister of International Trade for tackling this head-on. I know he certainly did as much as he could in the former government, but certainly since this Parliament started he has been very active on this file.

I think it is important for us to remember exactly what we were facing as a government and as a country. We were facing two choices. The first choice was to continue the route of litigation, to continue to try to win disputes through NAFTA and the World Trade Organization to force the United States to recognize that we were not subsidizing our lumber industry, our forestry products industry, and to try to force the Americans to reduce the countervailing duties and repay the upwards of $5 billion they had collected to that point. That was the choice. The choice was more litigation.

Looking at that, I think we have to be honest with ourselves. The fact was that this was not a resolution. The fact was that we would be spending more in legal fees to go down that route. The fact was that we would probably be discussing some form of loan guarantee program and putting taxpayers' money at risk in order to support our industry.

The fact is that there was no real end in sight, because if we won another NAFTA dispute, another resolution, the United States could simply change its own legislation, start another series in litigation along this route and we would be no closer to a settlement than we were two, three or 20 years ago. So we had a choice. We had a choice between more litigation or this resolution.

In fact, I know that a lot of members of the House have been very critical of this agreement, but I will say quite honestly that this agreement is better than I thought we as a government could get in the first place. I thought the Americans would never sign an agreement of this type. In fact, I want to review some things that are in the agreement and some of the benefits that accrue to Canada.

The agreement eliminates the punitive U.S. duties and returns more than $4.4 billion to producers to provide stability for the industry. It spells an end to the long-running dispute. It obviously addresses the massive trade irritant between ourselves and the United States. U.S. countervailing and anti-dumping duty orders will be fully and completely revoked. The absence of U.S. trade remedy action under the agreement will offer a period of stability for the industry, which will allow Canadian companies to make the investments necessary to ensure that their competitiveness goes forward.

There is also an issue that some members are raising now in portraying what kind of export tax would have to be paid if certain provinces go over a prescribed limit. In fact, as members know, there are two choices. Option A is the export tax if our exports rise above a certain level, but there is also option B, which is the quota and a small tax. What this does is keep these moneys in Canada, in the provinces, thereby allowing the provinces to not only direct their own forestry practices but obviously address situations that may arise.

One of those situations is in my own province of Alberta. Members will know, and certainly members from British Columbia will know, of the seriousness of the pine beetle devastation in that area of the country. Two summers ago, I had the opportunity to survey from a helicopter how much had actually been affected by the pine beetle. It was incredible. One had to see it to believe it.

The concern from the Alberta industries is that the pine beetle will make its way into Alberta very shortly. It would cause some of the producers to want to harvest more quickly, as they did in British Columbia, and therefore the amount of exports would go up.

The agreement allows the Canadian government and the provincial government of Alberta to deal with that situation by having the resources come back to the province and then the province can deal with that situation. Rather than have the United States collect those duties, it allows the provinces to deal with it in a much better way. There is an option between litigating it with possibly no resolution, probably no resolution in sight. In my view, this is the best possible agreement that could have been negotiated.

As I mentioned, it makes a $4.4 billion immediate cash infusion into our communities across the country. It is one thing to talk to the industry itself, and the Minister of International Trade has identified that over 90% of the industry supports this agreement, but let us talk to the communities that are most affected.

Hon. members should talk to the people in those communities, mainly in the rural regions of our country. We should ask them if they want a situation where they will be paying duties, there is no resolution, and they do not know whether they will have a job in a year or two because this situation could carry on, or do they want to have the situation resolved? Do they want to have some stability? The companies in various provinces would then know what kind of situation they are dealing with and have some cash infusion to make their company more competitive.

It is incumbent upon members who are critical of this agreement to put on the table exactly what they are criticizing, to say what specific measures they would want to see in place that the agreement does not address. They should be realistic in the sense that there are two sides to a trade dispute, two sides that have to come to the table and two sides that have to come to an agreement.

In my view, the agreement is the best possible agreement that Canada could have signed. As I mentioned before, it is a better agreement than I thought we would have been able to get. I would like to encourage all members of the House to support the agreement. The Bloc Québécois is supporting it.

I am very surprised that the Atlantic Canadian members of the Liberal Party are not supporting the agreement. It is a very good agreement for Atlantic Canada. Responding to a previous question, a very good question from the NDP to my colleague from Atlantic Canada, I would agree with him. As a westerner, as someone from Alberta, I would say Atlantic Canada, by its forestry practices, deserves this exemption. I, as a Canadian from western Canada, support that.

I want to finish up by saying that I did have the opportunity, and companies across this country have been very open to all parliamentarians, to see firsthand what the industries do and what their workers do. I have seen all aspects of the forestry industry in this country and have been amazingly impressed.

We hear the expression “hewers of wood and drawers of water”. If anyone has been to a softwood lumber facility, and they should go to the one near Prince George, they would see the computer system that measures every single log and the IT system that follows that. If they went to the mill just outside Calgary in Palliser, they would see the way that all the employees, aside from just working in the plant, are also upgrading their skills, learning how to move up the system, and taking logs that other companies may not utilize and turning them into a wood product that they can then export. It is a fantastic industry and one that all Canadians should be very proud of, but it deserves some stability. It obviously deserves our government's support.

We have signed, in my view, the best agreement possible. It is obviously supported by the large lumber producing provinces and it should be supported by all members of Parliament. I encourage all members of Parliament to take a serious look at the agreement, to support it, and to support our lumber industry across this country, but most important, to support the families in the communities who really need a resolution to this issue.

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5:40 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I have heard this speech several times today. I guess they are just passing it around.

I think a basic point is worth repeating. Many members have argued that the current industry requires some relief, that some are facing financial duress. The fact remains that the deal under Bill C-24 creates an export tax that at current price levels is actually higher than the current U.S. duties.

It also means that there is an awful lot of money that has been left on the table, over a billion dollars. Half of that is going to the U.S. softwood lumber industry. We will likely have some future difficulties with regard to other matters as they arise in this matter.

The member knows that the trade panels, NAFTA and the WTO, both concur that our industry was not subsidized. Both trade panels, NAFTA and the WTO, said that our industry was not subsidized. Now we have a problem where potentially this is an abandonment of the dispute resolution mechanism. It puts it in jeopardy for not only the softwood industry but for other industries where there are trade issues.

How does the member square taking a bad deal for a little money today at the risk of costing substantially more to not only the softwood industry but other industries down the road?

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5:45 p.m.

Conservative

James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, there are a few things I would say in reply to the member's question. The member should be completely forthright in identifying that there are in fact two options available. There is option A and option B.

Option A is in fact the export tax, when exports rise above a certain level. Option B is a self-imposed quota system plus a smaller tax.

An important difference there is that the funds stay in Canada. As I mentioned during my speech, and I did not hear any other member talk about it, so it is not a speech that has been passed around, when a situation arises in Alberta where we may have the pine beetle infestation, it in fact will allow the province of Alberta to deal with that, where there may be a surge in exports caused by increased harvesting caused by the pine beetle infestation. In fact, I think this agreement addresses that.

The member talks about a little money being returned now and having a greater cost later. I know that $4.4 billion is a fair amount of money. The fact that we have 80% of the duties returned is, quite frankly, a tremendous achievement. I would applaud the Minister of International Trade for doing that.

I would also point out to the member that the Minister of International Trade was a member of the Liberal caucus prior to the last election. He says very openly that this agreement is better than the agreement that the Liberal government was prepared to sign with the U.S. administration.

I think the member should be very aware of that. This agreement is better than what his own government was prepared to sign. This agreement is just for the families and workers across this country. This agreement deserves to be supported.

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5:45 p.m.

Bloc

Yvon Lévesque Bloc Abitibi—Baie-James—Nunavik—Eeyou, QC

Mr. Speaker, the Conservative party member mentioned that this dispute has been going on for some time. All members of the House would agree with that. That is perhaps the only point on which the Conservative party and the rest of the House can agree.

The Conservative party is the only party that believes that this is a good agreement and, above all, that it will last. The hon. member mentioned that it is important for the people of Alberta because that province's forests have an infestation and they must sell off their wood. He said it is important that this agreement survive so they can get rid of their wood in the United States, no matter the price, as long as they can clear it out.

I would remind the House that the mad cow crisis also originated in Alberta. Quebec had to pay the tab. Today, the softwood lumber problem comes from the west, and Quebec is again paying for it.

Given all this effort and the $1.5 billion handed over to the Americans, would it not have been enough to pay the lawyers, in order to put an end to this endless process and, finally, reach a decision that could be enforced and facilitate negotiations with the Americans?

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5:45 p.m.

Conservative

James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, I suppose I should not be surprised, but the agreement was not signed to address the situation that may occur in Alberta. I think his comments about Alberta are obviously inappropriate, so I will not even dignify those with a response.

The fact is that we had a choice between further litigation and even if we won all of the current legal cases before the courts at present, the United States could easily alter legislation and start another round of litigation. The fact is that the only way, if we pursued that route, to recoup any of the over $5 billion would be to go through the American court system and do that. Is that what the member is suggesting?

The member is suggesting that we litigate for years and years, and go through the American court system to try to get any of the over $5 billion. That is the solution he is presenting.

It is a little surprising that the Bloc members are sort of standing up and criticizing the agreement and yet they are going to stand in the House and vote for it because their own provincial government is in favour of it. The industry in Quebec is in favour of it because it realizes what perhaps the Bloc does not, that what workers across this country need is a resolution to the dispute and not a continuation of litigation which may result in no benefits whatsoever.