Mr. Speaker, it is a privilege to stand today to address this issue.
Bill C-24 is, obviously, of immense importance to the people of British Columbia, a province that supports about half of the logging industry in the country. It is also of great importance to all of us.
We have heard variations from across the country of the impact in different regions and certainly in British Columbia itself there is a variety of impact on different aspects of the forest industry.
Value added manufacturers have a different interest than interior logging and mill operations. Coastal logging operations have a different interest than the interior ones. We have valuable coastal cedar being logged and being unfairly coupled with other types of timber being sent to the Untied States and it should have had a varied approach.
We have also heard the member for Cumberland—Colchester—Musquodoboit Valley talk about the private land logging in the Atlantic provinces which were never caught by the subsidies here.
We have companies in northern Ontario and Quebec that are hurting desperately. To answer the question of the Bloc Québécois as to why they would support it, I fear the softwood lumber companies are facing a situation where they simply cannot afford not to take back only 80% of what they have paid under illegal dumping and countervail charges and neither can their communities and the workers.
In the other cases, we have interior forest companies in British Columbia that are highly efficient, have rationalized, are some of the most efficient mills in the world and have been making profits, notwithstanding the illegal countervail and dumping penalties, and they of course cannot afford to take only 80% back.
We have a range across the country and it is incumbent upon the Government of Canada to ensure that it embraces all those interests, which, obviously, is a complicated thing to do.
Let us look at what has happened in softwood lumber over the years. The Minister of International Trade and I have seen various aspects of this over the last 20 years. We have watched the trade in softwood lumber with the United States and various disputes that have come about over it.
We hear often from the government that it has never been managed trade in softwood lumber with the United States. That was certainly true before the free trade agreement but after the free trade agreement it was supposed to be free trade, not managed trade, and yet in various iterations and agreements where governments have given in to the pressure from the American industry, we have had quotas and we have had export duties. Now we have quotas and export duties. I fail to see how that can be a victory in terms of the softwood lumber industry.
Let us say clearly and out front that this is not about subsidies for the Canadian industry. I hope we all know that. The World Trade Organization and NAFTA panels have said it over and over that it is not about subsidies to Canadian softwood. It is about protectionism in the United States. That is what it is, that is what it will always be and I think we had better call it as it is, put it right in front of us and remember that as we see what happens going forward in the future.
We have pressures from the United States that simply will not let up. My great fear is that with all the immediate, perhaps, benefits to some aspects of the industry, some communities and their workers, that this agreement might provide in the short term, this does not provide the stability that is being suggested.
Let us think about where we were a year ago. Yes, the former Liberal government had pursued this for over four years on a number of tracks. Litigation was certainly one of them and, my goodness, it was certainly expensive and continued to be expensive. However, going through the WTO panels and the NAFTA panels where we were in the minority against the Americans, where they had two members and we had one, we continually kept winning and we have finally came close to the end. After four to five years of expensive litigation, we have come before the U.S. court of international trade, which is an American domestic court.
The one thing the American administration, quite apart from Congress and the individual sectoral lumber industry in the U.S., has always said is that at the end of the day it will change its rules because it does not want to be subject to super national arbitrations or decision making dispute resolution systems.
We got through those and then into the U.S. courts and won at one level. Yes, that could be appealed, but it was getting so close.
Yes, it is fine to talk about and it is important to appreciate the cost of continuing litigation, but it is extremely important not to throw away all of the work that has been done by litigation with the agreement of lumber councils across the country, the softwood industry, individually and collectively, the producing provinces and the federal government. We went forward and finally got to the point where it could be won and it is being thrown away. Let us not forget what we are throwing away when we measure the value of the so-called stability of this agreement.
We fool ourselves if we think we can sit here and rely on the United States in all its complexity, whether it is the administration, the Congress or sectors of their industry, when it has shown in this case its persistence in flouting the rule of law and going forward with arguments that are not being accepted by the various courts and panels.
Will we get stability with this? We know it may go for seven years, it may go for nine years or it may go for three years. I would not put a lot of trust at this stage in the system. However much the administration may intend at this time to see it go for many years and provide stability, it is not entirely in control of this issue. I think the evidence of the past suggests exactly the opposite, that we should not count on stability into the future. The fact is there will be no stability without the rule of law, which is what we are talking about here. Can we depend on agreements, on international trade obligations, on rulings of dispute resolution panels and, eventually, which we were close to, U.S. domestic courts themselves?
Yes, litigation is expensive, but to throw it away now in the name of perhaps a false stability when we are so close to a good outcome in the American courts is a great risk.
We then look at the Byrd amendment. We keep hearing from the government, depending on how it wants to scale and emphasize the amounts, whether it is U.S. dollars or Canadians dollars, that we are giving back over $1 billion American to the United States, to be used by both the the administration and Congress for projects that may be of assistance in their re-election campaigns at various times and to help various sectors of different industries in different parts of the country. Half of that $1 billion will also go to the industry itself which has been using every opportunity to encourage its government and its Congress to flout the law and avoid its responsibilities. How can we put trust in that?
The reason only half of the money will be going to the industry is because the Byrd amendment, which would otherwise allow all of it to go to the industry, over $1 billion American, was found to be against the WTO rules. Now we find, even after this agreement was signed with Canada, the American administration is appealing that WTO ruling. How can we put trust in stability in the future and in the good faith of this agreement when no sooner have we signed it than there is an attempt to get double the amount to go to the softwood industry in the U.S. to be used against Canadian industry and Canadian interest? That is not much of a deal.
We heard the member for Edmonton—Leduc say, quite appropriately, that the softwood industry, as important as it is, and it is immensely important to the province of British Columbia, is only 3% of our trade with the United States. He asked why we would worry that we do not have perfect free trade in this area when it represents such a small percentage of our overall trade with the United States.
I will tell members why we should worry. We should worry because it is a bad precedent. Ninety-seven per cent of our trade with the U.S. could be exposed to the tactics that have proven successful through the government's agreement in the softwood lumber industry. What kind of a precedent do we want to set? What kind of a risk do we want to take with this type of agreement? I suggest it is a short-sighted agreement and it does not bring stability. There is nothing in this agreement that should convince us, from past behaviour, that this will provide stability into the future.
We are not just leaving $1.4 billion or $1.5 billion in the United States as the member for Edmonton--Leduc has mentioned, which may ultimately all go to a competing industry there. We have not talked about the other $1.4 billion that was presented by the former Liberal government a year ago to go toward a number of initiatives to assist the industry in this country, the communities, and the workers. This must be added to the other $1.4 billion. Now we are getting into really large sums.
Those adjustment projects were meant to go to a whole range of things. We have heard of loan guarantees, litigation support and coordination for further negotiation. We have heard of taking the argument directly to the American consumers, one of the parties, in addition to Canadians, who are being hurt over all these years by this illegal U.S. action against Canada. The homebuilding industry and the homebuyers with aspirations to afford a home are being hurt by this U.S. action.
Where has Canada been putting its initiatives in supporting communities, workers and the industry? I will just focus on something that has not been talked about a lot and that is some of the community economic adjustment initiatives of the former government that actually bore fruit, helped stabilize communities, helped get people back to work and helped to provide some strength and support to the individual firms that were threatened.
Let us take the British Columbia part of that softwood adjustment initiative as an example because it is the province I come from. Over the last three years in the last government, $50 million went through community economic adjustment to hard hit resource communities around British Columbia. It went to diversify the economy in those communities in a number of stabilizing, helpful and growth stimulating ways.
When we look at diversification, an industry, which is a commodity industry, or part of it is, that is boom or bust vulnerable given the fluctuations in international commodity prices, that makes us extremely vulnerable. We need to add value. We need to diversify the product by adding value to widen the profit margin so that if there is a fluctuation in commodity prices we can withstand those fluctuations within broader profit margins.
In British Columbia, 145 programs were funded by the federal government in the amount of $50 million. A further $95 million was leveraged which went into 140 communities. One of the important objectives of that was the diversification by adding value added industries and providing support for them. Otherwise, we look for diversification in resource dependent communities to diversify markets. That is where a lot of this investment went and it is where part of the $1.4 billion that had been planned by the previous government would have gone.
I know that 11 ministers in the last Liberal government visited China. Of interest to all of us when we were there was how to diversify our markets away from a dependence on the United States into that huge China market. Forest products, home building and forest product-related sales and markets were a major focus of our initiatives, and those can never be forgotten.
The third part of diversification that we have to look to as an industrial strategy to move ahead and ensure that our resource-dependent communities are not subject to boom and bust or to illegal trade action by countries such as the United States, our biggest trading partner and therefore the one that can have the greatest negative impact on us, is to diversify into other sectors of the economy.
These adjustment funds, highly leveraged through private investment, also went into tourism, into economic infrastructure of various types and into the value added part of the forest products industry. About 30% of the projects, 140 or 145 projects, that were supported went to first nations to help them in their economic adjustment and over dependence on commodity-based forest products.
This is the way we need to go forward, along with litigation and negotiation and along with considering loan guarantees or whatever might be put forward. It shows an understanding of the economy, the vulnerability in our communities and the need to take a broader approach.
I am extremely concerned that we have traded away an agreement in which there is no guarantee whatsoever that there will be stability going long into the future. If the behaviour of the past is any guide, it should suggest to us the opposite.
We have a quota. We have duties. These export duties, and let us not shy away from it, are nothing more than an additional tax, and that is a tax that is going to be on our industry. Where will that money go? We have not heard about that. We can be sure that it cannot go back into the forest products industry or we will have a cancellation of this agreement with countervail action by the United States as fast as we can blink an eye.
Canadian business is being taxed this extra amount. As we have heard a number of people say, if we think through this situation, before the ink is even dry, before the ink was even applied on the agreement, the export duty, for which our industry is vulnerable, already exceeds what the illegal countervailing and dumping duties were. This really goes beyond imagination. It may give some short term relief, and any relief is good, but this is not something that we should not count on or cheer about.
I am very curious that, with the much vaunted new relationship of the new government with the George Bush administration, all we get out of that tremendous new arrangement and relationship is a bad deal. If this is all we can extract from that new relationship, then I am not sure it is particularly helpful to Canadians, and that will be seen in the end.
There is another aspect to this that is somewhat troubling, and I think it should be, to all of us. I do not for the moment suggest that the Minister of International Trade or the government has intended this, but there is an aspect of bullying that has been going on, which sits there underneath the surface in a very troubling way. It is about taking advantage of an industry that is on its knees and the communities and workers who are dependent upon that industry.
It is an uncomfortable feeling that we have to be very cautious of as we try to craft trade and industrial policy in the country, which is so diverse. We do not want to extract, through undue or unfair pressure, from vulnerable areas of our country or aspects of our industry anything that is not in the long term best interests of the industry, its workers or the communities.