Debates of Sept. 25th, 2006

Softwood Lumber Products Export Charge Act, 2006

[David Emerson, Conservative, Vancouver Kingsway, BC]

Mr. Speaker, first, I do not accept the allegation or the premise that somehow this agreement is not a very good agreement. This is the best softwood lumber agreement that we have seen in Canada in the last three decades.

With respect to administrative charges by Export Development Canada, there are none.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Speaker, it is with some disappointment that I rise today to speak to Bill C-24, An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence.

In the last election campaign, there was very little discussion of softwood lumber. We thought, and a cursory look at the platforms would indicate, that there was very little difference in the positions of the Liberal and Conservative Parties in the last election.

Liberals campaigned on the following platform:

The recent string of NAFTA decisions in Canada’s favour continue to be valid and must be respected—the United States remains legally obligated to revoke the tariffs and refund, with interest, all duties collected, totalling more than $5 billion. A Liberal government will continue to wage a vigorous legal and political fight with the US government and industry and will continue to consult with the provinces and Canadian industry on the best way to achieve a final and lasting solution.

Page 19 of the Conservative platform says:

A Conservative government will: Demand that the U.S. government play by the rules on softwood lumber. The U.S. must abide by the NAFTA ruling on softwood lumber, repeal the Byrd Amendment, and return the more than $5 billion in illegal softwood lumber tariffs to Canadian producers.

Today we not only have the Conservative government breaking that very election promise, but it is going so far as to legislate its betrayal of the lumber industry, of local communities and workers, not to mention the Canadian electorate.

Despite the strength of our legal position, supported by numerous decisions of international trade tribunals and domestic courts both in Canada and the United States, the government rushed negotiations with an artificial timeline set to maximize the cynical political advantage for the Conservative Party. The Conservative agenda was put ahead of the interests of an industry, which is a significant element of the industrial strength of every region of Canada.

When the Prime Minister stood in the House last spring and outlined the parameters of the agreement with the Americans, he provided very little detail to the House. As we know and as our leader said at the time, the devil is in the details. What little we did know then was enough to convince us that this was a bad deal for Canada and a good deal for the American government and lumber industry.

It was clear on April 27 that the Prime Minister was abandoning Canada's position, pursued by successive Canadian governments and upheld by trade panels at both NAFTA and the World Trade Organization, that our softwood industry was not subsidized. This decision destroys the credibility of the dispute resolution provisions of NAFTA.

The repercussions of this capitulation will be felt not just in the future disputes surrounding the softwood lumber industry, but by many other industries that may face similar allegations from American competitors. It could also encourage other U.S. sectors to ignore trade rules and seek, instead, political decisions in their favour, resulting in increased trade uncertainty, seriously inhibiting investment in key Canadian export industries.

Do not just take our word for it. The Prime Minister has betrayed what he said when he told the Canadian people:

If the rules are simply ignored, then the very basis of a rule-based system is threatened and the future of all Canada-U.S. trading relations could be profoundly affected.

We also predicted in April that we would see draconian measures in the agreement that would punish our industry the minute market conditions in the United States deteriorated. Today, in Bill C-24, we see the creation of an export tax that, at current price levels, is actually higher than the U.S. duties currently being collected. Along with this export tax comes an unfair and unprecedented tax regime that will place a huge administrative burden on Canadian producers. At a time when they are having difficulty meeting their own payroll, the government is forcing them to hire more accountants and auditors.

When the Prime Minister stood in the House in April, we knew that he had left more than $1 billion on the negotiating table, that $1 billion belonging to Canadian companies. We anticipated that this money would end up in the pockets of American lumber barons, who have been constantly harassing the Canadian industry.

Once again we were right, only this time the Prime Minister threw in a wrinkle. The agreement gives $500 million to the American lumber industry to use to fund legal and political attacks against the Canadian industry. Apparently that was not good enough. Instead, another $500 million was left with the White House, in a time when we are heading into the run up for very difficult fall elections, all of this for 24 months of managed trade.

The government has acted in a high handed way with the Canadian industry, giving it an ultimatum, “Accept this deal or the government will abandon you”. The Prime Minister has given it a choice between a bad deal and the back of his hand. Loan guarantees put in place before the last election were taken off the table and the Conservatives threatened to abandon the industry if it chose pursuing its legal rights over accepting a bad deal.

The Conservative government has demonstrated that it will in fact punish the companies that have refused to sign on to this agreement. This includes the imposition of a 19% levy on all refunded duty deposits on the holdout companies. The Liberals believe the government should immediately cease this harassment and treat these companies with the fairness and respect that they are owed.

The Liberal Party has always been committed to supporting our softwood lumber industry. That is why we have proposed a supplementary aid package, modeled on the package put forward by the former Liberal industry minister, the member for Vancouver Kingsway, which includes: $200 million over two years to enhance the forest industry's competitive position, improve its environmental performance and take advantage of growing bio-economies; $40 million over two years to improve the overall performance of the national forest innovation system; $30 million over two years to improve the competitiveness of the workforce, promote upgrading of workplace skills and provide assistance to older workers impacted by forest industry layoffs; and $100 million over two years to support economic diversification and capacity building in communities affected by job losses in the forestry industry.

It is enormously important to support the communities that will be affected not only by this agreement, but by the forestry industry in general.

Communities in Atlantic Canada, in Quebec, in rural regions everywhere—often on the coasts—are affected by this industry to a disturbing extent.

The price of gas, the value of the Canadian dollar, and ultimately the price of softwood lumber on the American market are major factors and they are all behind the rather major crisis that industry is experiencing at present.

That is why we consider it to be so important that the government support not only those industries, but also the workers and communities. They are the ones who will ultimately pay the price for a bad agreement and for a global situation that will certainly lead to layoffs and serious trouble for some companies.

We had also proposed $30 million over two years to develop new markets for Canadian wood products and $200 million over two years to fight the spread of the pine beetle in British Columbia and Alberta forests.

Some forestry industry companies may opt not to sign on to the softwood lumber agreement and will continue to pursue their legal rights both under NAFTA and under domestic courts. The government should immediately make loan guarantees available to them to provide them with the creditworthiness so they will be able to fight to maintain their legal rights before the process simply runs over them, as dictated by the government.

The Canadian forestry industry is facing many difficult years ahead. It will be a difficult winter in this sector. As I said a minute ago, the high value of the dollar, the high cost of energy, the declining price for softwood lumber are among real dangers on the horizon for this industry. That is why we believe the government needs to stand by the industry and not simply bulldoze them into an agreement that many of them have said they would not sign otherwise.

As I said earlier, workers and communities are in urgent need of this government’s support. The industry is already under enormous pressure and needs our government’s basic support.

The minister correctly noted in his comments that the Atlantic provinces benefit from an exemption under this agreement. This was an essential part of the softwood lumber agreements negotiated over the last quarter century because the exemption in Atlantic Canada is based on a different forestry management regime where the vast majority of the land on which lumber is cut, on which logs are harvested, is owned by private landowners.

As the minister noted in his comments correctly, this distinguishes the Atlantic provinces from other provinces where unfair allegations have been made surrounding Crown land, leases, and the cost of stumpage.

The exemption that Atlantic Canada has historically enjoyed is not thanks to the actions of any government but because the American coalition did not petition the U.S. commerce department with allegations of subsidy against the four Atlantic provinces. This is why, in my view, the Maritime Lumber Bureau has done a wonderful job over the last number of years in maintaining this exemption in front of the American courts, in front of the American lumber coalition, and the American government.

Companies in my own riding like Delco Forest Products, for example, or Westwood Industries, or Goguen Lumber are small family businesses that employ hundreds of people in my riding. JD Irving has sawmills in my riding. Hundreds of people are employed in this important industry, and the exemption that Atlantic Canada has always enjoyed is the result of a much different system of land ownership.

That is why, if we are going to be sincere, we have to admit that the exemption that the government has claimed for Atlantic Canada has existed for a quarter of a century and not because of any political intervention from a previous Conservative government when Mr. Mulroney was prime minister or previous Liberal governments. It has existed because, in fact, the land ownership system differentiates to a great extent the four Atlantic provinces from other Canadian provinces.

As I also said earlier, we find this debate difficult because we believe that the government should have supported the industry, should have offered loan guarantees for companies that asked for assistance, and should have continued to pursue the legal route, which, we sincerely believe, would have led to a final decision to settle this question once and for all.

In conclusion, I would like to move the following amendment. I move:

That the motion be amended by deleting all of the words after the word “That” and by substituting the following:

This House declines to proceed with Bill C-24, An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence, because it opposes the principle of the bill, which is to abrogate the North American Free Trade Agreement, to condone illegal conduct by Americans, to encourage further violations of the North American Free Trade Agreement and to undermine the Canadian softwood sector by leaving at least $1 billion in illegally collected duties in American hands, by failing to provide open market access for Canadian producers, by permitting the United States to escape its obligations within three years, by failing to provide necessary support to Canadian workers, employers and communities in the softwood sector and by imposing coercive and punitive taxation in order to crush dissent with this policy.

[The Acting Speaker, Royal Galipeau]

The amendment is in order. Questions and comments, the hon. member for Cariboo—Prince George.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I am astonished at the hon. member's statements. He belongs to a party that just about a year ago was willing to consider and accept a deal that was of far less value than the one that our minister and our government has negotiated.

He says that the principle of the bill is to abrogate responsibility. The principle of the bill is to provide stability and certainty for the softwood lumber industry. That is what the bill is all about. That is what our minister has done.

Why do the Liberals and the NDP want to continue to ensure uncertainty in the softwood lumber business in this country, uncertainty that would most assuredly bring continued litigation under U.S. law in courts, challenge after challenge amounting to hundreds of millions of dollars in increased legal fees, bring that kind of litigation upon our industry, and bring foreseeable mill closures and job losses to our forest workers in this country? Why would they want to do that?

Everyone knows, even the Liberals and the NDP can grasp this one, that bankers and investors like certainty in any type of commercial or industry sector.

Under their wishes the uncertainty would drive the bankers away, would drive the investors away, and would result in continued litigation, job losses, mill closures and hundreds of millions of dollars in additional legal fees. That is what they want for this country.

This minister and this government want to bring prosperity back to the softwood lumber industry and this agreement does it. The Liberals and the NDP should get behind it and support it.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Speaker, the member for Cariboo—Prince George said that the previous Liberal government had not accepted a deal and he is right. We declined a deal that was considerably better than the one that the government has now imposed on the softwood lumber industry.

There were two main things that the previous Liberal government would not accept. We would not accept to reward the American lumber coalition with a half billion dollar Canadian tip for having harassed our lumber industry. That for the previous Liberal government was an unacceptable concession, one that this government quickly made.

The other thing which the previous Liberal government had refused to accept was a termination clause that would allow, contrary to what many have claimed, a quick exit from the agreement. As the Quebec industry spokespersons have said, it is an awfully high price to pay, a billion for effectively two years of managed trade.

Those are the things the previous Liberal government would never have accepted and that is why we declined a deal that in fact was better than this one.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, my question is for the member for Beauséjour.

I am always surprised to see the great sensitivity currently being shown toward the softwood lumber industry when, personally, I am convinced that the proposed agreement is the result of inactivity by the Liberal and Conservative governments since the start of the softwood lumber dispute. It is the result of inactivity.

Today, the member for Beauséjour is saying that the government probably should have continued to take the legal route, because we were winning cases before the NAFTA tribunals, and that, in addition, the government likely should have given companies loan guarantees.

Yet when the Liberals were in power, the Bloc Québécois demanded for weeks, even years, that the government provide loan guarantees for companies to address the softwood lumber problem.

The industry needed legal support, which the Liberals did not provide. During the election campaign, the Conservatives promised Quebeckers loan guarantees. Once in power, though, they said that loan guarantees were out of the question and that they would negotiate an agreement and stick to it even though it meant losing a billion dollars.

My question is for the member for Beauséjour. Now that the Liberals are in opposition, why do they seem to be changing their minds all of a sudden?

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Speaker, I would like to thank the member for Berthier—Maskinongé for his question.

When it comes to changing points of view, I think the Bloc Québécois should explain its own about-face on this issue. We were pretty surprised to find that, when the government put pressure on the industry and the Bloc Québécois, the Bloc simply dropped the arguments it had been making last April. Now they support what we believe to be a bad deal.

The member referred to loan guarantees. I agree with him that when the Conservatives were in opposition, they insisted on loan guarantees. I agree with the Bloc member. As soon as the Conservatives came to power, they dropped the issue.

I would like to remind the House that it was the current member for Vancouver Kingsway who, as a minister in the Liberal government before his own about-face, announced a loan guarantee program.

This summer, I had the opportunity to talk to Mr. Chevrette, the spokesperson for the Quebec industry. He talked about the Liberals' loan guarantee program, the very program that had been announced by the current minister of International Trade. He is not sure to what extent the Quebec industry supports the current agreement.

This means that if the Liberal program were still in effect, and if the Conservative government had not simply cancelled the program in an effort to threaten or pressure the industry, I think the Canadian industry would have been able to resist the pressure to sign on to a bad agreement.

We know that the money on its way back to Canada will not end up in the hands of companies to be invested in communities and new technology. In the end, the bankers will be laughing all the way to the bank. That is what the government will accomplish in the end.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Speaker, I have been listening to the member for Beauséjour and typical Liberal revisionist history.

I will try to make this fairly succinct with a couple of quick questions. In the little history lesson on Atlantic Canada's exemption on softwood lumber, the hon. member forgot to say that the exemption was started under a Conservative government. It was largely ignored for 13 years under a Liberal government and it was only, which he did mention, through the good work of the Maritime Lumber Bureau that it stayed in place at all. This is an industry driven group which really works by itself to maintain Atlantic Canada's exemption.

The hon. member for Beauséjour mentioned that exemption. He did not mention that the Liberals, prior to the election, were so eager, so desperate, to sign a deal on softwood lumber that they put Atlantic Canada's exemption on the table. They were willing to give up Atlantic Canada's exemption, which was not mentioned by the hon. member.

He did mention that somehow the Liberal deal was a better deal than the one we are debating today. I am happy to have the debate, but I ask the hon. member, what were the points? He should put them on the table, on paper. I ask him, what about that deal is better than this deal? I would like to see the facts.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Speaker, the last question posed by the member for South Shore—St. Margaret's: asks: What were the precise differences? If he were to look at Hansard in reference to my answer to his colleague from Cariboo—Prince George, he would see two very essential differences which I outlined a moment ago. I can answer that question by referring him to the Hansard of a few minutes ago.

My colleague from South Shore is a skilled parliamentarian. I did not realize he had an active fantasy life when he could claim, for example, that the Liberal Party had been prepared to trade away the historic exemption of Atlantic Canada. That is simply an invention that is not supported by any of the comments made by the Atlantic industry. It is simply an attempt to blur the facts and deal with the sellout proposed by his government.

[The Acting Speaker, Royal Galipeau]

Resuming debate, the hon. member for Sherbrooke. I would like to point out that we are now debating the amendment proposed by the hon. member for Beauséjour.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, quite frankly, I was not expecting a debate on the amendment proposed by the hon. member for Beauséjour. I do not have the French version of that amendment. Nevertheless, what I would like to say applies to this debate.

As we know, on April 27, 2006, Canada and the United States announced that a framework agreement had been reached to resolve the softwood lumber dispute. The official text of the agreement, which had been initialed by the two countries on July 1, 2006, and signed on September 12, 2006, gave rise to Bill C-24. I will spare Parliament the official title of the bill, since it lists practically every aspect of the bill. I will proceed in a simpler fashion. It is known as the Softwood Lumber Products Export Charge Act, 2006.

I would like to briefly remind the House that we have been selling softwood lumber to the United States for a very long time. Except for a very short period during the 1929 crisis, our wood has always entered the United States duty free. Since the early 1980s, the lumber trade has been a steady source of conflict, the U.S. lumber lobby becoming increasingly protectionist and uncompromising.

On May 22, 2002, after an investigation using methods invalidated by international tribunals, the United States accused Canadian producers of being subsidized and Canadian exporters of dumping on the U.S. market and thereby damaging the American industry.

Before the Free Trade Agreement with the United States, the industry had to go before American courts, which often played favourites. The Free Trade Agreement and the North American Free Trade Agreement contained bilateral dispute resolution mechanisms—more impartial courts and disputes had to be resolved within 10 months.

The softwood lumber dispute has been going on now for 40 months. It is the longest trade dispute that has arisen between Canada and the United States since the Free Trade Agreement was concluded almost 18 years ago.

The NAFTA panel clearly decided that Canadian lumber was not subsidized, contrary to the American allegations. After using all possible stall tactics, Washington decided for the first time since the Free Trade Agreement was signed in 1988 not to bow to a final NAFTA panel decision. The Canadian industry had to turn to the American courts in order to force the United States to abide by its own laws. This leap 20 years backward in time raises the question of whether the agreement is worth anything at all.

During all that time after May 2002, the Bloc Québécois demanded an assistance plan for the softwood lumber industry—something that the federal government, whether Liberal or Conservative, always opposed.

The Liberals said over and over that they would never yield to the American demands, while turning a blind eye all that time to the dire straits in which the industry found itself and refusing to set up an assistance plan. They have opened the door, now, to the request for loan guarantees that the Bloc Québécois has been making, even though they said that they opposed them so long as they were in power.

The Conservatives, for their part, promised in their 2006 election platform—which was not so long ago—never to submit to the American demands because the United States should “abide by the NAFTA ruling”. More importantly yet, they promised to “provide real help for Canadian and Quebec workers and businesses coping with illegal American trade actions” —a promise that they certainly failed to keep.

The attitude of the federal government, whether Liberal or Conservative, leaves a bitter taste. In failing to support the industry, the federal government has greatly weakened it and forced it to accept this agreement under heavy threat.

In Quebec, more than 7,000 jobs have been lost in the forest industry since April 2005 and 5,000 others are in danger, according to the Quebec Forest Industry Council. The forest is the main employer in 260 towns and villages in Quebec, and in 134 of them, it accounts for 100% of the jobs.

Bill C-24 contains legislation implementing the July 1 softwood lumber agreement between the Canadian and American governments. Its provisions will all come into effect on October 1, 2006. If the bill has not passed by that time, its provisions will be retroactive to October 1, 2006.

The bill would introduce a system of controls on exports in the softwood lumber industry. What is surprising, these controls would take the form of amendments to the Export and Import Permits Act, an act that is generally used to control trade in weapons and dangerous substances and to restrict trade with countries that are subject to economic and military sanctions. In this case, it is Canadians and Quebeckers who are subject to the restrictions provided in this bill.

In the case of Quebec, which has chosen a lower export tax and capped exports, it is necessary to obtain a licence or export permit. The basis for allocating export quotas is not set out in the bill; it will be determined by regulation. Quebec has proposed that 94% of quotas should be allocated to companies on the basis of past exports, and that the remaining six per cent be allocated on the basis of first come, first served.

Quotas allocated on a monthly basis create a great deal of uncertainty in the industry. This issue has not been resolved. Of course, there is a group representing both countries and the Bloc Québécois hopes that the government will try to relax the monthly export ceilings by means of the regulations.

How can you ask a company to plan its procurements or its sales on an annual basis? Should it simply be a blind division by 12, regardless of the season or regardless of conditions in the construction industry?

The bill also proposes a tax of up to five per cent when there are export limits, but it could be as much as three times higher for exports from provinces where there is no export ceiling.

The rate of the tax would vary depending on the price of lumber. The lower the price, the higher the tax. The amount of the export tax that would be refunded to the provinces represents another important factor. The bill also provides that with the removal of the countervailing and anti-dumping duty orders, the government will proceed with reimbursement of $5.4 billion illegally withheld by the United States.

Canadian companies will be entitled to 81% of the countervailing and anti-dumping duties currently held by Washington. In reality, that represents about 65% of the amount that these companies have paid, taking into account variations in the exchange rate over the past four years. What would have been 63¢ in the beginning now equals 90¢. Previously, one American dollar was worth $1.59 Canadian; today it is $1.11 Canadian for one U.S. dollar.

The excess duties paid should be refunded within six months of the coming into effect of the agreement. In the Office of the Minister of International Trade, it is expected that more time will be needed.

The companies that have signed the agreement will receive their refunds through Export Development Canada (EDC). They will first receive 90%, and then the rest once the calculations have been completed.

The companies that opt out of the agreement have not assigned their rights to the federal government. They will be refunded directly by Washington. The agreement provides that refunds will be taxed at about 19%. Of course this has been strongly criticized. Who would have imagined that these companies might end up with a bonus for not signing an agreement?

Because of the irremediable damage caused to the industry, an entire clause of the bill is dedicated to provisions respecting companies that did not survive the conflict because the federal government did not implement a loan guarantee program.

The game is not over. Actually this agreement is still theoretical because it cannot come into effect until all the complaints currently before the courts—both international and American—have been withdrawn, and this is not yet so.

Furthermore, Washington can terminate the agreement as of the 18th month after it comes into effect, on six months’ advance notice. We are a long way from a lasting agreement.

Washington provided for the possibilityof excluding a province from the application of export restrictions if its forest policies change.

So the industry is experiencing quite a lot of insecurity. I have made a list of some elements, and they will be studied in depth in committee so that we have some certainty and not just a few elements on which we cannot rely.

In the end, who really comes out the winner in this agreement? Of the $5.4 billion held in Washington, the Canadian companies will receive about $4.4 billion. The American companies that instigated the conflict, however, will get $500 million. A fund of $50 million will go to initiatives aimed to promote the use of wood in both residential and commercial sectors. This fund will be managed by Canadian and American companies. Left to the discretion of the American government will be $450 million, an unexpected windfall for the Republican Party, just in time for the mid-term elections.

For Quebec this means the imposition of quotas, for which the terms and conditions of assignment are not set by law, but by regulation. This is another a grey area. Of the 34% of the American market that will be accessible to the Canadian market, 7% will go to Quebec, or 20%, instead of 27% of the average Canadian exports in the past 20 years. At present, these are at 17% because of the competition of the Canadian and Quebec markets.

With the quota method, Quebec companies will be able to export one twelfth of the annual quota per month and have only some leeway based on the quota for the previous or the next month. Only those amounts will be transferable. This inflexible approach is not advantageous given the cyclical nature of the industry.

For all intents and purposes there are two big winners: the Americans—both government and corporations—and the Prime Minister, who has made a friend of G. W. Bush.

As for what the main stakeholders have to say, the Bloc Québécois consulted the forestry industry and workers over the summer. We heard the same thing everywhere: their backs are to the wall. Although this agreement is objectionable, the industry does not have the luxury of time. The industry is almost unanimous in stating that this agreement is unsatisfactory but it is at the end of its rope.

It is interesting to note that the Conservative government did not consult the industry prior to signing the text of the agreement, even though this agreement governs the distribution of money that really belongs to the industry.

Thus, the Bloc Québécois accepts Bill C-24 with little enthusiasm. The reality is quite simple: the free trade agreement no longer applies to softwood lumber.

We know that there have been a number of requests for assistance from the forestry industry, which is experiencing serious difficulties just as it is emerging, in a weakened position, from a long trade dispute. Several of these requests date back to 2002 and could have guaranteed the survival of some companies that have now closed their doors.

A multitude of actions could have been brought forward, brought into play to support workers, for example, income support programs for older workers. The amount disbursed—about $75 million to help older workers who lose their jobs—would have been minimal in comparison to the $1 billion paid to the United States.

Communities dependent on the forestry industry need programs to diversify their economies, a special tax status for 128,000 private woodlot owners in Quebec, and increased funding for the Canadian Forest Service's Model Forest Program.

Companies need the following measures: special tax treatment for the $4.3 billion in countervailing and anti-dumping duties that the American authorities will pay back, to make up for the losses companies have suffered; faster amortization on equipment; a program to promote innovation in the forest industry and improve productivity; a market diversification and wood marketing program; and financial compensation for maintaining the forest road network.

We know that large forestry companies have to maintain, at their own expense, major road networks that are also used by the public. The government should also provide support for this. There are many other possible measures, such as research and development credits.

Speed is of the essence, because some of these measures will become irrelevant if they are not introduced this year, which is a pivotal year for the industry. Many companies are still on the verge of closing, even though they will receive a portion of the money they invested. In some cases, it really is too late.

If the assistance plan the Bloc Québécois has been calling for since 2002 had been put in place, many workers in Quebec would still have a job in the forestry sector today.

This time, does the Conservative government plan to keep its 2006 election promise to “provide real help for Canadian workers and businesses coping with illegal American trade actions”, or is it waiting for this industry to die while it waits for the Americans to deign to pay companies what they have coming to them: a mere 65% of what they paid out, which the NAFTA tribunal deemed 100% illegal?

To sum up, I think—and nearly everyone agrees—that this agreement does not live up to the forest industry's expectations. In all probability, no one would have accepted this agreement if people had been in a positive financial situation. But neither the Liberal nor Conservative governments were willing to keep companies financially afloat during the dispute with the United States. The Liberal and Conservative federal governments are to blame for this situation.

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

Mr. Speaker, I listened with great interest to the new Bloc Québécois international trade critic, and I congratulate him on his new caucus portfolio. My question is very straightforward.

This agreement is not good for the softwood lumber industry across the country. We know that it is not at all in the best interest of the Quebec industry.

There are two parts to this. First, the Quebec industry has been asking for loan guarantees for a long time, and Parliament should be giving this to the Quebec industry. Loan guarantees could enable the industry to survive these last few months before we can finally declare victory. Victory would already be ours had the Conservative government not stopped the legal process. In short, what we have here is not what the industry asked for.

Secondly, and more importantly, this agreement will mean that any change to Quebec's forestry policy will be subject to Washington's veto—to the Bush administration's veto. It makes no sense that the Bloc Québécois should support measures that force the provincial government to get Washington's approval for any change to Quebec's forestry policy brought about by Quebeckers' democratic decisions.

My question is therefore very simple. Given that this motion deprives the Province of Quebec of its right to make important policy changes affecting the forest industry, why is the Bloc Québécois supporting it? Far worse than encroaching on this right, this agreement removes it entirely.

Furthermore, in light of what we know now—that both the agreement and the bill are a huge mess—is the Bloc Québécois reconsidering its support so that the three opposition parties can work together to institute loan guarantees, which is what the Quebec industry really wants?

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I would like to answer that question, and at the same time, of course, I ask myself about the New Democratic Party.

We know that there are certain fundamental ways of looking at things that the NDP and the Bloc Québécois share, but we take respect for forestry workers farther, workers who, even if they have not lost their jobs, are having a lot of problems, and we go farther in our respect for forestry companies and their desire, both in Quebec and in Canada, to continue to develop.

At the present time, those companies are in a chokehold. So what should we really do for the industry, and for the workers? The Liberals and Conservatives drew the line when they did not want to create measures to help the forestry industry survive, while argument continued before the tribunals and victory was imminent.

Why, at that point, did the Conservative Party lay down its arms? Maybe because of where they got their Minister of International Trade, who had not yet joined the Conservatives when they were writing their election platform, the Conservatives who would have rejected that agreement and continued to go before the tribunals to have them confirm the legality of what they were doing and the illegality of what the United States of America was doing.

The decision made by the Bloc Québécois was indeed a difficult one, because the agreement is very far from perfect, but when it comes to an imperfect agreement I prefer a company that still has a chance to survive.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I thank the Bloc members for their support for this monumental softwood agreement. I encourage them not to be swayed by the NDP and its descriptions of a good softwood agreement and the use of the words “botched, flawed and misrepresented”. The federal government, the Prime Minister, and the Minister of International Trade have the best interests of the softwood lumber industry and the workers in that industry at heart. That is why they signed this agreement.

The agreement will bring certainty to the industry. It lets the companies make long term plans. Its gives their investors some long term stability in order to make investments in the industry. It makes the banks more comfortable to know that long term business plans can be created. That is what we want for the industry. We want the workers in Quebec, Atlantic Canada and British Columbia to be working in the industry and to know that they have jobs for the next nine years.

That is contrary to the NDP that is willing to put at risk the mills and the workers' jobs all across the country. Under its option years of uncertainty and years of litigation would be guaranteed. I might point out that U.S. law is far different from what we would like to operate under here. Challenges could be changed; every time somebody wanted to speak it could be taken up in the courts and another few hundred million dollars in legal fees could be spent. That is what the NDP is offering.

I ask that the members of the Bloc not be swayed by the misrepresentations of the NDP and the misrepresentations and petty politics of the Liberals.

This is a good agreement. The Prime Minister, the Minister of Industry, the industry itself, the provinces and the mills in Quebec are all behind it. I encourage members to stand firm to get the softwood agreement through the House and give some certainty, peace of mind and stability to the industry and to the people who earn their livings and raise their families as a result of the softwood lumber industry in Canada.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I would suggest that the member for Cariboo—Prince George not be quite so enthusiastic that we are going to vote for this bill. We are not agreeing to it with joy in our hearts. The member says that it will provide us with stability in the forestry industry. It may be rather naive to place one’s absolute trust in the United States when it comes to softwood lumber, among other things, particularly given that we are talking about a government that is increasingly tending toward protectionism.

We know very well that there is nothing less certain than long-term stability and we also know that the American government can terminate this agreement on six months’ notice, for a period of 18 months. So once 24 months are up, it will already be over.

When the United States of America finds that the situation is not profitable enough for it, it will end it and will do what it ordinarily does, in its very arbitrary way: it will impose tariffs that will choke the forestry industry in Quebec and Canada all over again.

Once again, the agreement is far from perfect. The failure of the Liberal and Conservative governments to create assistance programs for the forestry industry is why we are where we are at this point.

[Gilles-A. Perron, Bloc, Rivière-des-Mille-Îles, QC]

Mr. Speaker, to begin, I would like to congratulate my colleague, the member for Sherbrooke, first for his excellent presentation and next on his appointment as international trade critic for the Bloc. I agree with him completely when he says that this is not a good agreement. Moreover, I am concerned by the fact that an impression is being created that, good or bad, the agreement is the solution to all the problems in Quebec.

Does the member believe that this agreement will save jobs in Quebec and prevent the closing of lumber mills?

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, that is what I am hoping for and what I wish for all the forestry companies that are still in business, as well as for the workers who still have a job in the industry. But, what must be remembered is that we have been swindled out of a billion dollars.

If the American government really believed that it was right to apply those countervailing duties at the border, why did it so quickly give up $4.4 billion while keeping the small commission of 19% for its work in collecting those duties?

I am convinced that if our government, the Liberals as well as the Conservatives, had really implemented a support program for the industry, we would not be in the mess we are in now and there would be many more jobs for people in Canada.

We have no great enthusiasm for supporting this bill. However, since the industry, the forestry workers and the governments have asked for our support, thanks to a healthy democracy in Quebec, we will support this bill.

Comments regarding Privy Council Office Document

[Jason Kenney, Conservative, Parliamentary Secretary to the Prime Minister]

Mr. Speaker, I am rising on a point of order at the first opportunity to clarify remarks I made during question period on Thursday and Friday of last week during which time I cited a memorandum, an e-mail from the deputy secretary of cabinet from the Privy Council Office, dated September 21.

The interpretation of this memorandum has been a point of debate in the House. I had an opportunity to reflect on the memo over the weekend and to recognize that I may have inadvertently misinterpreted one aspect of the memo. If that was the case, I would like to apologize, Mr. Speaker, to you and the House.

I would like to emphasize that if I did misinterpret the memo, it was done in no way deliberately. The evidence of that is that as soon as I first cited it on Thursday afternoon in question period, I insisted that the full memorandum be released to the media in the belief that it fully supported my contention and that of the government.

I also understood and interpreted the memo in the context of a series of facts related to practices of the previous government. I believe this matter will be coming before the access to information, privacy and ethics committee of the House, which will have an opportunity to study this matter at greater length. I believe that my principal contention about previous practices will be confirmed at that study.

However, I would certainly like to clarify that if I did misinterpret an operative paragraph of that memorandum I did so inadvertently and I regret it.

The House resumed consideration of the motion that Bill C-24, An Act to impose a charge on the export of certain softwood lumber products to the United States and a charge on refunds of certain duty deposits paid to the United States, to authorize certain payments, to amend the Export and Import Permits Act and to amend other Acts as a consequence, be read the second time and referred to a committee, and of the amendment.

Softwood Lumber Products Export Charge Act, 2006

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

Mr. Speaker, I am very happy to stand with my New Democratic Party colleagues to state that we will be voting against the bill, but voting for the amendment that has been offered, and I will be raising a subamendment at the end of my speech after question period.

I am raising the objections of the New Democratic Party, which has led the fight against the softwood sellout, because we believe that coercion is not consent and extortion is not gaining approval.

What we have seen over the last six weeks or so is an unprecedented use of bullying by the Conservative government, unprecedented use of the tax system and unprecedented use of government measures to force companies to accept a deal that they know is not in their interests.

The negotiations were badly botched. We saw at the end of April a framework agreement that was not respected in what the Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics on July 1 signed off on.

What we have seen since then are further concessions. For example, a deal that was going to last 23 months as of July 1 is now down to 18 months. What is particularly devastating is the continuing maintenance of the exit clause for the United States. It can, on an allegation of non-compliance by Canada, get out of this agreement at any time. In fact, it can take the $1 billion and run.

Given this situation, why would any responsible parliamentarian vote for what has been such badly botched negotiations, particularly when we look at the alternative?

I will be devoting much of my speech to the bill itself but I do want to mention the position we were in this summer. With the Tembec case results, which are subject to only one final appeal, and to the extraordinary challenge committee judgment that would have come out in August, without the government's botching of this file, we would have been in a position where we would be winning the last two non-appealable judgments.

That is not me speaking. That is Ambassador Wilson in his testimony on August 21 when he admitted that there were no appeals on the ECC judgment that would take off the punitive tariffs and that there is no appeal on the Tembec case after the circuit court of federal appeals rules.

We are in a situation where it is not a question of seven years of litigation, as the Prime Minister said so irresponsibly. We were in the final two hurdles, a few board feet short of winning those two non-appealable victories and the government has snatched defeat from the jaws of victory, which is highly irresponsible.

The industry knows this, which is why all the bullying, the punitive special taxes and everything else have not even allowed the government to get the 95% industry support that it needs to put this agreement in action. This is premature. We are having a debate in Parliament when the industry has not even signed on in sufficient numbers that would make this agreement legally able to be put into force. Despite unprecedented bullying, the industry has said that this agreement is not a good one. We know the reasons for that but I will come back to that.

I would like to start by talking about Bill C-24. Later on in my presentation I will give two dozen reasons, although there are certainly more, why this House and why members of the Bloc Québécois should be voting against it.

However, I would like to speak for a moment about the botching of the bill itself. It is important for Conservative members, who obviously have not read the bill if they are supporting it, to understand the implications of what is actually being put forward by the Minister of International Trade. I will mention a few of the key clauses because it is also important for the industry to understand the actual agreement that was signed on July 1, which the industry rejected substantially and to which it has maintained its objection despite the bullying, that even in the bill those key aspects of the agreement of July 1 have not been respected.

I will begin with clause 10. If Conservative members vote for the bill, they will have to respond to their constituents for voting for a badly botched bill. It would impose a 15% export tax on October 1 that is a double taxation above and beyond the existing anti-dumping countervailing duties.

What the Conservatives would be voting for is a double tax on softwood companies that have been badly punished after four years of inaction and now the bungling of the government over the last four months. In clause 10 we are imposing a double taxation on these companies.

In clause 18, because of poor drafting in the bill, there is a special punitive tax that was designed to hit those companies that are standing up for Canadian rights and responsibilities under NAFTA, actually taking it to the end of the litigation progress, which is in Canada's interest and certainly in the interest of every other industry that could be targeted if the government succeeds in its sellout.

It put the special charge in but there is also the EDC charge, so companies will now be paying approximately 37%. In addition, in this badly botched bill, the companies have an obligation to pay those EDC charges immediately. We are asking softwood companies to pay up front, to pay a double penalty and to pay double taxation because the Conservative government botched the drafting of the bill.

Every Conservative member should be hanging their heads in shame that they failed to read the legislation and see what the implications were, but that is what has happened. Oops, they blew the drafting. Oops, there is a double taxation. Oops, now there is a double charge. Oops, they are having to pay immediately. Yes, the Conservatives failed to do their due diligence on this like they failed to do their due diligence on the actual negotiations themselves.

Let us talk about some other aspects of the bill that some Conservatives said that they would vote in favour of.

Clause 48 would require a six year burden of record-keeping, another administrative burden imposed on the softwood companies. They have been hit hard by government inaction and government bungling over the last few months and now we will be imposing additional administrative burdens on them. We have already spoken to the fact that the export tax, the penalties, are retroactive. In addition, now there are burdens that will be imposed on these companies.

I could take my entire 20 minutes just to talk about the botching of this bill but let us talk about the fact that half of the legislation is punitive measures. This shows just how bullying the government is. The Conservatives have refused litigation and have refused to have Canada win those two final hurdles. They have certainly refused the loan guarantees that they promised in the election campaign. I can say that constituents in British Columbia will make the Conservatives pay for breaking their promise on the loan guarantees that should have been submitted to the softwood industry.

Despite the government being in a bullying mood and trying to force these companies to stop their litigation and to send in approval letters, it did not get the industry support that it needed to bring the agreement into effect. Half the legislation now punishes the softwood companies, the mom and pop shops in places like Vancouver Island North, the B.C. interior.

Let us see what this botched bill provides for them and let us see if the Conservatives can support it.

Clause 77 states that they no longer need a warrant to enter softwood businesses. They can enter these places any time, no warrant needed, to enforce this draconian, Orwellian bill for this badly botched agreement. It is important for the industry to know about this kind of draconian enforcement with the unprecedented bullying that we have seen from the Conservative government.

Clause 89 gives a blank cheque to the minister to demand payment from companies. We have already raised concerns throughout these months, as the NDP has led the opposition to the softwood sellout, about the fact that companies have no appeal mechanism. If there is a bad calculation, if they disagree with the calculation of moneys that might come back, there is no appeal mechanism for them. They are left high and dry. Under clause 89, the minister gives himself a blank cheque to demand payment any time. It is the type of draconian, Orwellian process that should make every Conservative MP in this House hang their heads in shame.

What company will want to do business with a Canadian exporter when a minister can now go into its workplace at any time, demand payment at any time, with no appeal process, no way of righting the wrong? If the government screws up, softwood communities across the country have to pay, small companies that are trying to make ends meet after years of Liberal inaction and now after the Conservatives' botching of the agreement. If there is any disagreement by the government, the minister can demand that payment.

However, there is more.

In clause 95, directors are now individually responsible. If the government imposes its particular figures and since there is no appeal process, the directors are individually responsible. Conservative members should look at clause 95. They should read the bill so when they say that they will support something, they understand the implications of that support.

We in this corner of the House have always talked about corporate responsibility, but not in this way, not with bullying in a type of environment where we have rights and appeal mechanisms. That is how it is supposed to work. However, small softwood companies across the country, which have been living under the inaction and now the irresponsibility of successive governments, will find their directors individually responsible.

If we look at clause 96, the government can take property from one's family because of that individual responsibility. Let us say people set up education trust funds in 1990 for their kids. Under clause 96, the government can come in and take that for export charges, which it has decided, unilaterally, that they owed in 2006.

This was a badly botched bill, but I can give this much to the Conservatives. They have been consistent. They badly botched the negotiations. They announced they were ready to sell out at any price at the end of April. They even had a date set for the end of June. They wanted a photo op with George Bush in Washington, so they were willing to give anything away.

The Americans, who are shrew negotiators, realized that our Conservative government was not willing to stand up for Canada on anything. As one of the industry's spokespeople told me, the result is Canada has capitulated on everything, with the single notable exception, and I will give the Conservatives that, the maintenance of the maritime lumber exemption, which is a crumb. Aside from that, they conceded and capitulated on everything else. Because the companies would not sign on, they bullied them.

The bill is just the latest in a long bullying process, coercion rather than trying to get any sort of consent, and extortion rather than gaining approval from the companies.

I must also speak about the aspects of this bill that most affect Quebec in this matter. It is clear that no responsible parliamentarian would vote in favour of such measures. That is very clear.

I ask my colleagues in the Bloc Québécois to think of the interests of Quebec industry. That industry is unaware of the factors that I have just listed. It does not realize that it will be affected by theses draconian measures. The industry does not realize.

Now that the members of the Bloc Québécois know very clearly the consequences of a vote in favour of this bill, which has obviously been botched by this government, they should vote in the interest of the Quebec industry. They should clearly vote in the interests of Quebeckers.

Simply put, it is not in the interest of Quebec that Washington should have the right to veto any decision to change Quebec’s forestry policy. The Bloc Québécois should not vote for that. That is normal and it is clear. One cannot vote in favour of measures that infringe on jurisdictions belonging exclusively to Quebec.

I should also mention, regarding the situation in Quebec, a few of the comments we heard during the testimonies given this summer. We are fully aware that, unfortunately, this agreement has not changed at all, except for the vested interests of Canadians, which are going to diminish.

Carl Grenier said:

This is the most restrictive agreement that we have seen since this dispute began some 20 years ago....The mechanism itself is very binding. Clearly, as we move forward with such protectionist measures, it becomes more binding every time.

We are losing $1 billion. We know very well that $500 million will go to the American industry. We are fully aware that this money will eventually be used to target not only the softwood lumber industry, but any other industry in Quebec or elsewhere in Canada. We know that this agreement can be cancelled at any time by the Bush administration. All it would have to do is allege that Canada had not respected its side of the agreement. There is no stability in any of this.

We know that the Bloc Québécois supported the motion in committee to indicate that loan guarantees are needed for the industry. We would prefer these immediate loan guarantees, not those aspects that undermine Quebec's jurisdiction in forestry. As Carl Grenier said, “Every victory obtained over the past three years under NAFTA has just been erased with the single stroke of a pen”.

This agreement is clearly not in the best interest of Quebec. We know very well what direction the Quebec industry would like to take: immediate loan guarantees and, of course, assistance to Quebec forest industry workers. However, the last two steps in the legal process must be completed first. If we do not do this, not only will the Quebec softwood lumber industry suffer the consequences, but so will all other Canadian industries.

That is really the point, the government's botched mishandling of this whole sordid affair. The latest examples I have given are on its botching of the actual drafting of the bill. What it does is it--

[The Deputy Speaker, Bill Blaikie]

Order, please. I regret to inform the hon. member that the time is up, and he has three minutes remaining in his 20 minute speech.

President of Latvia

[Peter Van Loan, Conservative, York—Simcoe, ON]

Mr. Speaker, it was 15 years ago that the Conservative government of Brian Mulroney was among the very first in the world to extend diplomatic recognition to the restored independence of Estonia, Latvia and Lithuania. For half a century, the three Baltic nations were held captive under a brutal Soviet Communist tyranny. Tens of thousands, including some of my family, lost their lives in Stalin's Siberian gulag. During this occupation of terror, freedom was extinguished, but hope was not.

Here in Canada, tens of thousands of expatriates, who fled Communism, also kept hope alive, working to maintain national cultures in the dream of freedom.

One of those remarkable people is with us today. Vaira Vike-Freiberga was born in Latvia, but lived most of her life in Canada. A true Canadian success story, this childhood refugee became a leading Canadian academic, but her work on Latvian culture made her a natural choice to become Latvia's president.

An uncompromising champion of freedom, an embodiment of Canada's potential to promote democratic values, and a respected world statesman, we salute Vaira Vike-Freiberga, President of Latvia.

Middle River

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Speaker, these are exciting times for Middle River, Cape Breton. It is located on the Cabot Trail, one of the most scenic drives in our country. Many of my fellow colleagues in this House would surely agree as they have had the pleasure of travelling it.

Middle River has been a beehive of activity this year. Being its 200th anniversary, I was pleased to take part in its bicentennial celebrations with the community. I also got to attend a great Ceilidh to celebrate a very distinguished citizen of the area, Thelma MacLellan. It was her 90th birthday and she never missed a step all night.

The future of Middle River, like all communities, depends on the education of its young people. In the September issue of Today's Parent magazine, Middle River Consolidated School was named in the top 30 elementary and middle schools in Canada. My congratulations go out to the teachers, parents and students for making this school a success story.

Middle River is a living, breathing community that is as important to our future as it has been in our past.

Luc Béland

[Caroline St-Hilaire, Bloc, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, at a memorial service this evening, friends, family and Longueuil's cultural community will gather to share their memories of a great local artist, Luc Béland.

On July 30 we were shocked and saddened to learn of his passing.

Luc Béland was born in Lachine in 1951 and lived and worked in Longueuil. He was a very talented visual artist who inspired and encouraged many young artists. For 30 years, he participated in many individual and group exhibitions in major museums. His works, which are known for his collage techniques, various assemblages, and multiform alloys, can be found in major public and private collections. He participated in over 65 exhibitions in Quebec and Canada, and in the United States, France, Switzerland and Germany.

On behalf of my constituents, I offer my most sincere condolences to the family and to all those who were lucky enough to know and associate with such an extraordinary person.

Liberal Leadership Candidates

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, we now know of at least two Liberal candidates who have been accused of trolling the cemetery for votes. Now I suppose this is not surprising. After all, that is a party habituated to finding new ways of undermining accountability. Neither, I suppose, is it surprising that the Liberals are so desperate for new members that they have taken to the ouija board, seances and grave robbing.

What is surprising is the shocking silence from the Liberal Party. Whenever a member of the Liberal elite is caught stealing money or undermining accountability, we hear nothing. There is no shame. There is no accountability. Forget the Silence of the Lambs. This is the silence of the wolves. The ethical lapses of the Liberal Party are like a B grade horror movie on the political landscape of the country.

There is one question to be asked. How many other Liberal leadership candidates will be relying on the walking undead to win on the convention floor?