Debates of Sept. 25th, 2006

Softwood Lumber Products Export Charge Act, 2006

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, it would have been good to keep the member going. I share his concerns. I did not catch the first part of my colleague's intervention, but I share his concerns about the loss of article 19, the dispute resolution mechanism that I think was held in high esteem by all free trading nations. It was seen as a premier mechanism.

Let us bring this down to the grassroots. In the value added sector in the riding of the member for Burnaby—New Westminster, how does this equate to jobs lost, to jobs missed in that sector?

[The Acting Speaker, Conservative, Royal Galipeau]

The hon. member will be mindful of the fact that he has less than 30 seconds for his answer.

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

Mr. Speaker, I could easily talk for 30 minutes, because this is a horrible sellout that is bad for Canada. I mentioned Stephen Atkinson's comments. What this does is essentially fuel American jobs through American mills by raw Canadian logs. That is the horrible aspect of---

[The Acting Speaker, Conservative, Royal Galipeau]

Resuming debate. The hon. Minister of Industry.

[Maxime Bernier, Conservative, Minister of Industry]

Mr. Speaker, I would like to inform you that I am going to share my time with the hon. member for Simcoe—Grey.

It is my pleasure to rise today in the House on Bill C-24. I want to ask all the hon. members in the House to join me in supporting this bill. Why? As most of my colleagues have pointed out here in the House today, the softwood lumber agreement benefits the industry, consumers and Canada as a whole. It is a practical, flexible agreement that puts an end to the trade disputes that have been going on for years and provides the softwood lumber industry with access to the U.S. market on very favourable terms.

The agreement eliminates the punitive American duties, puts an end to costly legal proceedings, and gets our softwood lumber producers out of the courts. Since 2002, this dispute has cost more than $35 million in fees that the Government of Canada has paid to help the softwood lumber industry fight this battle.

Now we have an agreement that will bring stability and recover more than $5 billion in duties that have been levied. I am proud to be part of a government that has found a solution that will give Canada and the United States a future opportunity to make North America more competitive in this sector.

I would like to explain briefly today how the concerns that the industry expressed during our consultations in the summer have been met in the agreement. We had the good fortune of being able to build on a strong Canadian position developed with the cooperation and contributions of the provinces and the industry. Ultimately, an agreement was reached of which all Canadians can be proud.

How were the concerns of the industry and the provinces taken into account? From the outset, they wanted the government to negotiate an agreement that would ensure repayment of the duties that had been collected. The industry asked the government and me personally, from the moment the new government came to power, to negotiate a real agreement with the Americans.

This objective has been achieved. Under the agreement, more than $5 billion Canadian will be returned to the industry by the end of this session. They asked that their deposits be returned quickly. They will be. Why? Because we developed a unique mechanism through Export Development Canada that will ensure that the money is repaid to our exporters in the weeks after the agreement comes into effect, that is to say, in the first few weeks after next October 1. This process will be much faster than the usual process, which was the American process under which people could have waited as long as two and a half years to get their money back if we had not included a quick repayment process in the agreement.

The government also managed to get an exemption from the border measures for the Atlantic provinces and the territories, as well as 32 companies including sawmills in Quebec, sawmills close to the border, that the U.S. Commerce Department did not consider subsidized. Among these sawmills are several in my own riding of Beauce.

The provinces and the industry have also called for flexibility in the regulations related to export quotas in order to respond to the needs of their American customers. As a result, our new government negotiated provisions that allow companies to carry forward up to 12% of the volume of their export quota from the previous month to the following month.

The provinces and the industry also asked for an agreement that ensures stability and predictability. I am pleased to tell you that this objective has been achieved. The agreement covers a period of seven years or up to nine years, if the parties wish to extend the agreement by an additional two years. During this time, the United States cannot intervene in the courts and it cannot apply other trade remedies. This will provide Canadian companies with a significant period of stability in which to invest in their businesses and to become more competitive. They asked for an agreement that gave the provinces the latitude necessary to manage their forest. We achieved that objective. We have negotiated anti-circumvention provisions that fully protect provincial forestry management policies, including complete exemption for the new market-based pricing plan in British Columbia.

This is an initiative that promotes management of the environment. It provides for payments to respond to the claims of First Nations and measures that are specific to the forest industry.

Following a meeting on August 9 with CEOs of the forest industry, additional clarification has been made to the agreement. Specifically, maintenance of the status quo in terms of American trade remedies for a period of 12 months at the end of the agreement. The cancellation notice period has also been adjusted to provide for a 12-month status quo period in the event that the United States requests a quick cancellation of the agreement.

We are pleased to announce that the United States has provided a parallel letter to this agreement, and these clarifications respond to the concerns of the government and the industry. This letter confirms that the Canadian industry will be well protected and that the duration of the agreement will be a minimum of seven years. All of these elements of the agreement respond directly to the concerns raised by the provinces and the industry during the negotiations.

As a consequence, I am pleased to say that the agreement enjoys broad support, both in Quebec and all across Canada. More than 90% of the industry is in favour of the agreement and, in Quebec, a major union, the FTQ, supports the agreement.

Given that level of approval, I am proud to lend my support to this agreement and to C-24, which will make the legislative amendments necessary to bring the agreement into force. I ask all honourable members to join with me in supporting this bill and to join us in our mission of making Canada a more competitive and more prosperous country.

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

Mr. Speaker, the Minister of Industry neglected to mention that, during the recent election campaign, the Conservative government had promised to provide loan guarantees. Instead of keeping its promises, the government forced companies to accept what everyone knows is a very bad deal. It told them that they would never have any loan guarantees, that the government would never give them anything, unless they signed this flawed agreement. As a result of this deal, Canada is losing jobs, as well as any rights it had in the dispute resolution process.

How can the minister defend his position when he is turning his back on the industry, breaking his election promises and refusing to act in the interests of communities across the country that depend on softwood lumber? Can he confirm that he threatened all these companies, telling them that they would never receive loan guarantees and that all they could do was sign this bad deal. The deal is very important to the government from a policy standpoint, even though it will devastate the industry across the country. Can he confirm that—

[The Acting Speaker, Conservative, Royal Galipeau]

The hon. Minister of Industry.

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, I am happy with this agreement and especially with how it was negotiated. My hon. colleague, the Minister of International Trade, negotiated this agreement very skilfully.

To answer my colleague's question, it is important to note that the softwood lumber industry did not ask us for loan guarantees, but repayment guarantees. The industry wanted its money. Today, over 90% of the industry supports this agreement. Canada is a free country, and people in the industry were free to get on board and sign this agreement. That is what people asked us to do. They were so satisfied with the agreement that we have the support of over 90% of the industry. People want their money as soon as possible. And they will have it by the end of the session.

[Helena Guergis, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, it is an honour for me to speak to Bill C-24, the softwood lumber agreement, which I respectfully ask all members of the House to join me in supporting.

The softwood lumber agreement is good for our industry, good for the lumber communities and good for Canada. I remind all hon. members that we have two national governments that support this deal. All of our major softwood lumber producing provinces support the deal, including those of the members who introduced an amendment and subamendment today. We also have 90% of the industry supporting the agreement and the deal in the legislation. One has to ask why the hon. members are not listening to their provinces and why they are not listening to the industry.

This deal eliminates the punitive U.S. duties. It ends costly litigation, takes our lumber producers out of the courts, provides stability for industry and returns more than $5 billion Canadian. It is a practical and flexible agreement that ends the dispute on terms that are highly favourable to Canada.

Let us remember that this disagreement has been going on for 24 years, this last legal agreement five years alone.

I am proud to be part of a government that has provided a solution that will put our two nations back on track for making North America more competitive for the future. I also want to give my appreciation to our Prime Minister and to our Minister of International Trade for their exceptional work on securing this deal on behalf of our softwood lumber industry.

Today I would like to outline some of the key features of the agreement. Let us begin with the return of the duties.

Clearly, one of the agreement's most important features is the return of $5 billion Canadian. This is a significant infusion of capital for the industry and will directly benefit the workers and communities across Canada that rely on softwood lumber for their livelihood. Without question, this dispute has been extremely difficult for Canada's lumber industry. That is why it is imperative that companies receive this money as quickly as possible so that they can continue to invest in their operations and their people, and to increase their productivity and their competitiveness.

An innovative deposit refund mechanism has been developed that will ensure that Canadian companies receive their share of duty deposits within four to eight weeks after the agreement comes into force. It is designed to help Canadian companies begin reinvesting in their enterprises and bring a measure of stability to an industry that has been hit hard for over 20 years of repeated trade action.

I also want to comment that we have seen the U.S. lumber trade coalition tell us that if this deal did not proceed, if we did not have this agreement, that it can guarantee Canada that there will be continued litigation regardless of the outcome of any lawsuits.

A second key feature is the revocation of the U.S. duty orders and the end to related litigation.

Let us talk about the flexible export measures. The deal also provides a strong measure of flexibility for our provinces. For the next seven to nine years no border measures will be imposed when lumber prices are above $355 per thousand board feet. When prices drop below this threshold, the agreement allows provinces to choose the option that best suits their particular economic situation.

Option A involves an export charge that increases in steps from 5% when the price of lumber is $336 to $355 per thousand board feet to 10% when the price is $316 to $335, and then 15% as the price of lumber falls below $315 per thousand board feet. Option B combines at the same price levels lower export charges of 2.5%, 3% and 5% with quotas.

I should point out that funds collected under either option will now stay in Canada. The Government of Canada will distribute to the provinces revenues from the export charge minus the administrative and perhaps legal costs that are associated with the agreement.

This is a significant improvement over the current environment. Currently the duties imposed by the U.S. are reassessed annually. In other words, the industry never knows from one year to the next what duty rate may apply. Under this agreement the industry will know and can take full advantage of a stable predictable business environment.

The agreement also contains a provision allowing provinces to seek an exit from border measures based on a process to be developed by Canada and the U.S. in consultation with the provinces.

I urge the members who sit on the trade committee with me to work with us in committee, rather than try to hijack it this session. Let us work together toward a better future for our softwood lumber industry. Let us work on this agreement.

It provides for reduced export charges when other lumber producing countries significantly increase their exports to the U.S. at Canada's expense.

Importantly, this agreement has a dispute settlement process for issues related to the implementation of the agreement. The process will be neutral, transparent and efficient.

Often we hear opposition members talk about chapter 19. What they are neglecting or actually choosing to ignore is the testimony that we heard in committee that clearly told us that never was softwood lumber to be included in NAFTA. In fact, there was a memorandum of understanding that was pulled out of the agreement so that it would not be there. We have been trying to apply this dispute to NAFTA when no one agreed that it should be there in the beginning.

This new dispute mechanism will no longer be U.S. trial law. It will be international trade law. There are many who suggest that signing on for this new dispute mechanism is reason alone for signing on to the agreement.

The agreement of course will provide a stable business environment. But perhaps the feature of this agreement that has garnered the most attention and continues to be the subject of myth and misinformation from those who do not understand it is the termination clause. Let me be clear. This agreement will last for seven to nine years, providing a stable market environment for our softwood lumber industry. During this time, the U.S. will be prohibited from initiating further trade action.

I should also point out that the U.S. has agreed to a 12 month standstill on trade action in the event that it may decide to terminate the agreement. This provides yet another measure of stability, one which I might add was added at the industry's request following an August 9 meeting with CEOs.

While the termination clause in this agreement is a standard feature of international trade agreements, I can tell the House that termination by either country is highly unlikely. This is a hard-won agreement and both sides have a clear interest in maintaining the rights and privileges under it.

Within Bill C-24 these features are key elements of the agreement. Bill C-24 will bring these elements into play and implement Canada's commitments under the agreement. In particular, the bill provides authority to impose an export charge in a manner consistent with the agreement. It also seeks to amend the Export and Import Permits Act to bring the export measures component of the agreement into action.

Today I ask all parliamentarians to join me in supporting this bill, putting an end to this long-standing dispute and building a brighter future for Canada's softwood lumber industry, for the workers, families and communities that rely on it.

I want to comment a little further on the proposed amendments. I find it very interesting that the member for Beauséjour tabled such an amendment, considering that the industry in his own province is unequivocally supporting this deal. The industry had written asking him to support this deal. In fact, it does not quite understand why he would not want to support the deal. I have the names of companies, such as the Maritime Lumber Bureau, J.D. Irving Limited, M.L. Wilkins & Son Ltd., Pro Lumber Incorporated, North American Forest Products Ltd., and the list goes on and on.

I am not quite sure where the member is coming from because this deal would provide market access by providing the stability and certainty that the industry has told us it clearly must have. This is exactly what the focus of the Prime Minister and the Minister of International Trade has been all along, to find a stable and predictable market for our industry.

The U.S. is not interested in escaping its obligations on this deal. It has no interest in backing out whatsoever. I remind everyone that it is only the Canadian government or the United States government that can terminate the deal.

We also know, as I alluded to earlier, that the softwood lumber industry was not included in NAFTA and that is why any attempts to try to govern it under NAFTA rules have not worked. The new dispute settlement will work. Canadian workers have always had the support of this government. It is the workers who will finally gain their job security who will benefit most from this deal. Over $5 billion will be returned to the industry ensuring that it can prosper and secure its workers jobs in the future.

In conclusion, I ask all members to can the rhetoric and to support this deal. Let us move forward for a stronger North American softwood lumber industry that will benefit all of Canada.

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

Mr. Speaker, the member said “can it”. Of course, the Conservatives gave away the can, as they also gave away the table and the rest of the House in this softwood sellout.

I did want to clarify something that the member said, which was completely and utterly false. It was on the issue of long term stability. Clause 34 says that the United States reserves the right to terminate the agreement without resort to dispute settlement or any other precondition for termination of this agreement. In other words, the U.S. can keep the billion dollars and run, and can terminate the agreement at any time on a simple allegation of non-compliance. There is no stability in this deal, even though we have gone from seven years to 23 months, now to 18 months, where the United States can make a formal announcement. The U.S. also has an opt-out clause at any time. All the Americans have to do is allege non-compliance. We have no recourse to dispute settlement. We have no appeal.

There is a series of questions I would love to ask the member. She made the statement that we eliminate the duties. Is she aware the duties would be higher as of October 1 under this deal than they are currently with the illegal punitive tariffs? Is she aware of that?

She mentioned the fact that the coalition would be taking on Canada if indeed this softwood sellout was not put into effect. We know darn well that the coalition is dry. It has no funds for further legal action, but this softwood sellout gives it half a billion dollars to take on our industry anytime it chooses. It alleges non-compliance and it can come right back at us, so the kick-me kids, the Conservative caucus that just could not get this right, is giving half a billion dollars away to a coalition that would not have been able to launch legal action against us otherwise.

The next question is around the export tax. The way the Conservatives botched this legal bill, the bill itself imposes the export tax on top of the current anti-dumping and countervailing duty imposition. What we have is a double tax. Is the member aware of that?

Finally, is the member aware that the United States kicked the kick-me kids, the Conservative caucus, last week and decided it is going to appeal the Byrd amendment ruling that Canada won last spring? In other words, the Americans take all of their cake away from the softwood sellout and they are coming back for other industries now, basically kicking the Conservatives for their naivety and their poor negotiations. Is the member aware of that?

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Mr. Speaker, obviously I do not have a clue as to where the member is coming from with some of his ridiculous allegations and some of the rhetoric that he is coming up with.

Let us talk a little about the termination clause. He likes to act as though the agreement is only 18 months. Nothing could be further from the truth. The deal is seven to nine years very clearly.

Let us point out that he does not like this agreement. We know that because he is always telling us this, but he was always asking for a longer termination clause to get out of something that he did not even like, so none of that conversation ever made sense.

I also find it a little rich for him to always be saying that we should be supporting chapter 19, when he clearly heard that chapter 19 was never to apply to softwood lumber. Standing up and defending chapter 19 of NAFTA was a bit rich to hear coming from the NDP. Am I to assume that if any other free trade agreements come forward, we have his unconditional support on free trade now? I would like to have an answer to that question.

For many years this dispute has been going on, 24 years in total. The last lawsuit was five years ago. The hon. member is trying to mislead industry into thinking that if we just win this one last lawsuit, it will be all over, that we are going to have a great working relationship with the United States all of a sudden. That is not going to happen because the U.S. lumber coalition has told us no way, that if we do not have this deal, they will continue litigation for year after year. This is it. This is the last kick at the can. Because of our Prime Minister and our Minister of International Trade, we were able to secure a deal. Like the Prime Minister has always said, we can disagree with the Americans, but we do not always have to be disagreeable with them.

We have reached a deal that is in the best interests of Canadian industry. Over 90% of the industry is supporting this deal. All industry across the country will get 81% of the duties returned. All industry, 100% of the industry, will benefit from this agreement. Even the small percentage that did not sign on will reap the rewards of this agreement.

I ask the member to apply this to the union analogy. When 80% or 90% of union members vote in favour of what is in front of them, that other 10% is still going to get the benefits of that agreement. Maybe the hon. member needs to take a look at it from his own approach.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, the proposed softwood lumber deal will affect my riding of Thunder Bay—Rainy River and the entire region of northwestern Ontario in many adverse ways. The constant shifting position of the Prime Minister has caused much confusion about just what it is we are voting for or against.

When the minority government announced an agreement in late April, the severe flaws were to have been addressed. When the minority government re-announced the deal in July, it claimed the deficiencies had been addressed. When the Prime Minister announced in late August that the agreement was concluded and all deficiencies corrected, many of us in northwestern Ontario felt then that we could possibly support the deal. When the largest forest products company in northwestern Ontario, Buchanan, announced that it would reluctantly sign on, many of us questioned that reluctance, but we were prepared to do what we had to do for our region. Then at the international trade hearing, it became painfully apparent that few of the very major concerns for Thunder Bay—Rainy River would ever be satisfied.

Softwood companies all across the country are on their knees financially and need the cash flow. They could have been supported by the previous government, with a $1.4 billion forestry package, which many of us in northwestern Ontario as MPs worked so hard to achieve. That would have given our companies the loan guarantees to keep them going as we won each of the key dispute panels. However, no, the NDP joined with the Conservatives to destroy the forestry package. Northwestern Ontario rightfully blames the NDP and knows that it is largely its fault that it does not exist now. Then after the election the minority government would not give that $1.4 billion to help the forest industry carry through this fight to a clear victory. The money was there to help. We should remember that those $5 billion in tariffs were illegal. Yet only 80% of that may be returned. It is not what people in Canada think is a fair deal.

Point after point has been made outlining the many flaws and deficiencies. Somehow they combine to be an outright sellout. Still, I have been prepared to hold my nose and support the deal for our workers, for their families, for our communities, for the industrial suppliers and for the companies large and small.

As my constituents are frustrated, so am I at the government's changing of these rules and negotiating positions. Now that the actual motion has been presented and we see what it actually says, on principle, I must now vote against the deal. The motion spends more words punishing Canadian companies than it does trying to achieve a positive agreement.

The Bloc's votes will ensure that the government deal will pass. After it does, I will not do anything to hold up the flow of funds to those companies that need them to stay solvent, even if the deal passes without our positive amendment. However, it is clear that the unprecedented and atrocious bullying of Canadian companies by a 19% surcharge, one that would force many into bankruptcy, is just a shameful move by the Prime Minister in collaboration with President Bush.

Why would a minority government try to bankrupt Canadian forest companies? It is unbelievable in a democratic nation. Enough is enough, and I know many share that this is not what they thought they could support.

Then there is a bizarre double whammy that will occur if there is a downturn in the American housing economy. We will lose market share and then be further penalized by additional tariffs. This current deal is not even half as good as the deal the previous government was close to concluding.

As members can see, I have been doing my best to support what is best for the people of my riding. In the hearings at international trade committee, I watched the partisan giddiness of the government members, who blindly assumed that this was some kind of fantastic win for Canadians. We all know now that it is far from that delusion. It is especially flawed by the two year window that leaves northwestern Ontario very vulnerable to American lumber lobbyists. I am fearful that the damage will get even worse in the next two years. What then of those workers, their families, industrial suppliers, the communities in which they live? I will continue to work to ensure those companies will still be around.

If there are so many doubts, and there always have been in these long years of negotiations, then even those who want me to support the government will realize that we are only hurting ourselves. There is still, believe it or not, no package to help companies. Take it or leave it, the Prime Minister says. I could have supported a deal if there were at least some commitment by the government to help. Instead the coercion is beyond measure and will not help obviously.

The people of Thunder Bay—Rainy River certainly support their industries. When the industry says that they will take 80%, but will not delay further any payouts even though there is no dispute mechanism if a Canadian company does not get all it feels it should. They have no recourse. Canadian forest companies can get further illegally hit by millions of dollars without recourse. There are no appeals for those disputes.

As people understand these things, they still want federal support for forestry, not a misguided submission to President Bush. The previous $1.4 billion would have saved hundreds of jobs in Thunder Bay—Rainy River. It will forever be the marked shame of the NDP for abandoning Canadian forest companies as will the current minority government for not utilizing that $1.4 billion available to help our softwood and forest industries.

I stand firm in my commitment to standing with our workers, our families and our communities. Indeed, there is a way we could all support the bill should the amendment pass. Then the House could make it unanimous. It is similar to when people want to buy a car and fully intend to buy it, but when they get to the car lot to buy the car, the tires are flat. Because they said they would buy a car, would they buy it because they said they would, even though the conditions have changed?

I asked government members if now that they know the tires are flat on this deal, would they sign it? There are so many flaws, not only with the car, but with everything about it, that there is ample room for them to consider. The amendment would at least help the government get out of this.

Regarding the second part on punitive measures, of which there are far too many for a democratic nation, we always have to ask ourselves, why would we do this and hurt Canadian companies so badly?

In my region and riding, as we go from company to company, we realize that it is not only the softwood companies that are affected. The pulp companies, the paper companies, those companies that deal in forest products are interdependent and they need each other. They are affected as well. That is why the forest package of November was meant to be across forest products assistance. The amendment would ensure that we would not condone further illegal conduct, that we would get the remaining billion dollars back and have open access for Canadian producers.

The government should be supporting and showing concern for our Canadian forest products. By eliminating the punishment and the big stick, it would show that it wants to help Canadian forest products and the softwood lumber industry. With the amendment, we can get all that done and achieve what we intend to do, and that is to support free trade and a lumber agreement that will work in the best interests of Canadians, sustain jobs, remove barriers and ensure fair access to the American market.

It does not take much education for people to understand that there are many factors involved simply besides this deal such as the value of our dollar and the cost of energy. When we in northwestern Ontario talk about the cost of energy, we have worked with the province of Ontario for a fair energy policy, or regional pricing some may call it. With the anti-circumvention clause in the agreement, support for our industry in northwestern Ontario would be lost or could be essentially appealed and overruled by the American interests.

I use that illustration for the members of Parliament here to understand how badly flawed this agreement is and some of those things that will affect us directly still have not been addressed.

It is not the best deal possible. It is far less than what we had before. We know now that if we go forward without these amendments, within the next two-year period we will be back in the same place and we will have financed with a half a billion dollars. That will pay lot of lawyers firms for a lot of years to work against Canadian interests.

I am appealing to the government to stop and slow down, take this amendment under consideration and realize that we can have a positive bill, that we can do this well and that we can come away with an agreement that allows Canadians to hold their heads up high.

[Helena Guergis, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, maybe the hon. member can let us know why former Canadian ambassador to the U.S. Frank McKenna refused to come before the trade committee to talk about the Liberal non-deal. If the Liberal non-deal was so much better than what we have achieved now, why did he refuse to come forward and discuss this proposed agreement, which never came to fruition?

My understanding is that the previous Liberal government was ready to agree to something with substantially less than what we have achieved right now. I suggest that perhaps we are just better. Our Minister of International Trade used to be the Liberals, but now he is ours. He had the leadership of our Prime Minister to be able to secure this deal and to build upon what they had started. This deal is exceptional.

The hon. member needs to accept the fact that Mr. McKenna would not come before committee because, I believe, he just could not fess up to the fact that the Liberals had something less on the table. Perhaps he would like to comment on that.

I would also want him to take a look at this from a personal perspective. People have a lawsuit, or a disagreement, with their business partners, which has gone on for 24 years. A lot of their money has been sent over there. They are about to get a ruling on their lawsuit, but all of a sudden, they sit down and reach an agreement where they will get 81% of their money back and there will be an end to litigation. Millions of dollars has been spent on the litigation, in total, in the past 24 years because over and over again there have been new lawsuits. Now there is a chance to get that money back and a commitment to work together to build a committee where people from one side and the other side, Canada, U.S., come to sit together at a binational council, to work beyond the seven to nine years, which the agreement gives, and to build a stronger North American market together. Are they going to give them the thumb and say, “No, we don't want 81% of our money back” and then take their chances in the lawsuit where they may or may not get their money? One this is definite. They will not have a working relationship to build their industry because they have been told that if they cannot work these thing out now, more lawsuits will be filed against them and their industry will continue to falter.

Would the hon. member comment on that?

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, members of Parliament well know that when we are engaged in negotiations we cannot simply throw in the towel just to end them and say that we have a deal and it is over. When we know we are entitled to 100% of the duties and they are collected illegally, then we should get them all back. That is the direction in which we are heading. We should certainly get interest and a fair exchange on the dollar. We know those have fluctuated over the past five years.

Rather than simply surrendering and saying that we have a deal, people know that the big loss is 20% of operating costs over the past five years. If they are entitled to receive it back, why should they not get it back? Why should they have to live in fear that they are now financing all the litigants, all the people who represented the American lumber lobbyists, such as the lawyers? We have established a fund for them of half a billion dollars for the next number of years so whenever they choose to dishonour this agreement or cause some kind of disruption they can do it and be so well financed that Canadian companies would never be able to compete again. We have given them half a billion dollars to hit us whenever they want to.

When we talk about logic in terms of the deal, those of us not only in northwestern Ontario but all over the country now understand that the flaws are so magnified that they are of concern. The double whammy, the anti-circumvention and the problems that will happen with regional energy pricing, all of those still have not been addressed satisfactorily. With all of those things adding up they will cause unbelievable problems, not only for the industry but the downturn in the American housing market and the penalties assigned by ourselves will be beyond comprehension. That is the fear that I am representing for the companies, the workers and the communities in northwestern Ontario that want to keep going.

We still have had no satisfactory answer with respect to what happened to the $1.4 billion that would have essentially, through loan guarantees, modernization and environmental assistance, kept those companies going. Several of them would still be operating had that fund been utilized by the current government.

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

Mr. Speaker, I was glad to hear the member for Thunder Bay—Rainy River say very clearly that he was opposing this sellout. That was not clear from his comments earlier when he said that he might support it and then abstained from the vote on the ways and means motion. I am glad he is becoming clear.

There is no doubt that this sellout will have a horrible impact on northern Ontario particularly. As testimony this summer revealed, we are looking at job losses and mill closures of about 20% in northern Ontario. This is just one example of how deplorable this sellout is. It is a sellout of the interests of softwood communities across the country, not just in northern Ontario but in British Columbia, in Saskatchewan, in Manitoba and in Alberta. The Alberta industry was not even consulted as this sellout was being put together.

I am glad the member will now be voting against it. I certainly hope he will convince his other colleagues from the Liberal caucus who abstained on the ways and means motion to vote against it. There is no doubt that this is a very poor alternative to what should be happening, which is finalizing the litigation, those two final hurdles. As Ambassador Wilson said, there are no appeals on those two final pieces of litigation, which is that the illegal tariffs are taken off and the money is returned. Very clearly, we should go through those last hurdles.

What took the member so long to understand how negative this will be on his region as it will be on regions across the country? From the testimony we heard this summer, there is no doubt that this will have an exceedingly negative impact on the Canadian softwood lumber industry which means that other industrial sectors could be targeted. We know the government's strategy has been to bludgeon and bully the industry into submission but it still does not have the required 95% to make this agreement legally valid. Despite all the bullying, the government manifestly failed.

What took my colleague all this time to make the right decision, which is to vote against this softwood sellout?

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, I would like to answer that directly because I really tried to believe that the government would be honest and forthright in addressing the flaws and deficiencies. I could never have expected it to be so punitive to Canadian companies that it would actually put in a 19% surcharge that would put many of them into bankruptcy.

I really wanted to believe, in supporting our companies and trying to keep the jobs going in northwestern Ontario, that if our companies were on their knees and just had to accept this because they had no other choice, that somehow those flaws, deficiencies and shortcomings would truly be addressed.

As I studied the agreement, after it finally came to us a week ago in terms of the ways and means motion, as to what it actually said, I was still trying to help the companies, the people who work for them and those communities. I could not believe that the government would deceive us so blatantly. I really wanted to give it the benefit of the doubt that it would be doing something good for northwestern Ontario.

Point after point has been made, not only in today's debate but over the past few days, and I know that for the future, should we accept his very substandard agreement, it will end up hurting northwestern Ontario more than the previous deal that would have been negotiated.

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

Mr. Speaker, I am pleased to stand today as the member of Parliament representing the largest softwood producing riding in all of Canada, the great riding of Cariboo—Prince George which includes Vanderhoof, Prince George, Quesnel, Williams Lake, Likely and Horsefly.

The area is good, strong, traditional softwood lumber country that quite possibly could supply, if permitted, the majority of the softwood lumber sales to the United States, our biggest customer, and it has a huge interest in the outcome of this legislation. I am pleased to say that a vast majority of the lumber producers in British Columbia, including virtually all of them in my riding of Cariboo—Prince George, the communities in my riding, the province and all those others who have a vested interest in a good, secure future with certainty and predictability in the softwood lumber industry support this deal.

I am pleased to stand in support of my riding and the producers. I should mention that I will be sharing my time with the great member of Parliament for Mégantic—L'Érable who is the Parliamentary Secretary to the Minister of Natural Resources. He will be able to share some reasons from the other part of the country, namely Quebec, eastern Ontario, the Maritimes and Atlantic Canada, as to why this deal should be supported by Liberal members from that area and also NDP members. In defiance of the spin doctors, they should support it because it is a good deal.

I am pleased to support Bill C-24 because this softwood lumber agreement is good for Canada. It is good for my riding and for ridings in northern Ontario, as evidenced by the member of Parliament for Thunder Bay—Superior North who had the courage to stand up and represent the mills and forest workers in his riding while his counterpart up there fromThunder Bay—Rainy River apparently does not have the courage to represent the mills and forest workers and does not have the courage to support certainty in the softwood lumber industry.

As the Minister of International Trade indicated, the softwood lumber deal is good for industry, good for lumber communities and good for Canada. I am proud and pleased to be able to concur with that. It does eliminate U.S. duties. It ends costly litigation and it takes our lumber producers out of the courts, out of the large legal fees and provides stability and certainty for the industry. It returns more than $5 billion to our producers.

It is a practical and flexible agreement that ends the dispute on terms that are highly favourable to Canada and will put Canada and the U.S. back on track for making North America more competitive for the future. I am pleased to note that the agreement has won a wide base of support from both the industry and the provinces.

There are a number of good reasons for the support. Perhaps one of the most significant reasons is that the agreement respects the diversity of Canada's softwood lumber industry. The lumber industry across Canada is varied and different regions have unique challenges and opportunities.

Today I would like to highlight some of regional benefits of the agreement and explain how the agreement responds to a wide variety of needs across the country. Let us talk first about the provincial flexibility and benefits.

First of all, this agreement gives provinces flexibility in choosing the border measure that best suits their particular economic needs.

Exporters will pay an import charge when lumber prices are at or below $355 U.S. per thousand board feet. When prices reach this threshold, Canadian regions, as defined in the agreement--the B.C. coast, the B.C. interior, Alberta, Saskatchewan, Manitoba, Ontario and Quebec--can select one of the following two export charge regimes.

Option A, as was spoken about previously by my colleagues, is an export charge with the charge varying with price. Option B is an export charge plus volume restraint where both the rate and volume restraint vary with the price. This is an innovative mechanism that allows provinces to choose the export charge that is right for their individual economic and commercial situation. It provides flexibility to the provinces.

I should point out that the funds collected under either option will stay right here in Canada. As was pointed out, although the NDP and Liberals failed to grasp it, if we carry on with this uncertainty of litigation, those fees are going south of the border and we will have more and more difficulty trying to repatriate those moneys back into our industry.

Provinces and industry also asked for flexibility in export quota rules to be able to meet their U.S. customers' requirements. In response, our government negotiated provisions allowing companies to carry forward or carry back up to 12% of their monthly quota export volume from the previous or next month. This is a significant improvement over the current environment.

Under the current system, the duties imposed by the U.S. are reassessed annually. The industry never knows from year to year what duty rate will apply, but under this agreement it will know. This is certainty. Companies can plan and prepare for it and take full advantage of a stable, predictable business environment. This is what the industry needs. This is what the investors want.

The agreement also contains a provision allowing provinces to seek an exit from the border measures based on a process to be developed by Canada and the U.S., in full consultation with the provinces, within 18 months of this agreement coming into force.

It provides for reduced export charges when other lumber producing countries significantly increase their exports to the U.S. at our expense.

It protects provincial jurisdiction in undertaking forest management reforms, including updates and modifications to their systems, actions or programs for environmental protection, and providing compensation to first nations to address claims.

It includes an innovative mechanism to ensure that the $4.4 billion U.S. in returned duties will be back in the hands of our exporters within weeks of the agreement's entry into force.

I know my time is running out. I could spend all afternoon talking about the great benefits of this softwood lumber deal and the courage that our government has had to stand up and put this forward to bring some stability and certainty back to our industry, to provide some job security for our forest workers and their families, to provide some economic comfort to the investors in the forest industry, and to provide the ability for our lumber producers to make long term business plans in order to plan the journey of their economic investments.

These elements of this agreement respond directly to the concerns raised by the industry, the provinces and the workers. This is a good deal for the industry, it is a good deal for the provinces, and it is a great deal for Canada. I think it is time to put aside the rhetoric from the NDP down at that end of the chamber. It is time for the Liberals to be honest with themselves about the merits of this deal, to support it and to quit playing politics.

The province of Quebec and the industry in Quebec do support this, and we want to encourage the Bloc to continue to support their industries with the province's acceptance of the bill and of course support the bill when it comes up for a vote.

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

Mr. Speaker, I find the comments made by the hon. member for Cariboo—Prince George amusing. He called this a good agreement, and said that only the Liberals and NDP do not understand it. However, the Bloc Québécois does not understand it, either. The Bloc does not feel this is a good agreement. Although voting in favour, the Bloc Québécois is maintaining its position that this is a very bad agreement.

At one time, the Conservative Party asked for help from the Liberal minister who was negotiating this agreement and who could do nothing. After having crossed the floor of this House, he was unable to do any better.

This may be a good agreement for forestry in British Columbia, because it allows them to sell off their bad lumber. This is fortunate for them, but I would remind the House that, if not for British Columbia, this tax would not have been imposed.

The hon. member for Simcoe—Grey rose earlier to say that this is a good agreement. She may be pretty when she blushes, but she was blushing from shame.

Are the hon. members who just spoke not in a more favourable position, thanks to west coast ports that allow them to sell off their softwood lumber to Japan and other Pacific Rim countries, unlike the eastern provinces that have only one customer, the Americans?

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

Mr. Speaker, I fail to understand where the member is coming from and where some of the Bloc members are coming from with their comments. The fact is that in the province of Quebec, the industry, the workers and the province all support the deal.

I would assume that the Bloc Québécois members of Parliament want to represent the feelings of the industry, the province and the forest workers in their ridings. I assume they are going to be supporting the bill. That is what we are all sent here to do: to represent our ridings. The economy of the forest industry in the province of Quebec is going to be stable and have certainty for the next nine years, notwithstanding the rhetoric that comes from the NDP.

I am sure the Bloc members can see through that rhetoric and understand that the reason the province, the industry and the workers in Quebec are supporting this deal is that it is a good deal. It guarantees job security. It guarantees that there is a future in the softwood industry in the province of Quebec as well as the rest of Canada.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member says he has a problem with rhetoric, but what about the facts? He said during a speech that the bill will eliminate the duties. That is not the case. He says it is highly favourable terms for Canada. That is not the case. That is what I call empty rhetoric.

In fact, when the Minister of International Trade got to this place, the first thing he said is that the industry has to accept the deal. If those companies do not accept it, they are on their own; we abandon them, we are just going to leave them and they will be stuck. That is the reality. At the time, the industry was opposed to the deal. Now it is not.

As for my question for the member, if the industry was opposed to the deal and now is somehow supportive of the deal, does the member think that has anything to do with the fact that those companies would now be faced with threats against loan guarantees, with immeasurable court challenges, and with the fact that we have abandoned the dispute resolution mechanism for all time, and now, without accepting the deal, they will not have a chance to defend themselves?

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

Mr. Speaker, one thing for sure that the industry would be facing if we did not sign this deal is challenges in courts the likes of which we have never seen, particularly in a down market like we have. The Americans would have an easier time trying to prove harm is caused to their industry when there is a down market. That would spell disaster for our softwood producers. In this country, there would be millions of dollars in litigation and uncertainty. That is not a good way to go--

[The Acting Speaker, Conservative, Royal Galipeau]

Resuming debate. The hon. Parliamentary Secretary to the Minister of Natural Resources.

[Christian Paradis, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, like my colleague, the member for Cariboo—Prince George, I am pleased that we can share our time.

I am happy, here today, to be able to speak on behalf of my riding as the member for Mégantic—L'Érable, and as Parliamentary Secretary to the Minister of Natural Resources.

Last Tuesday, September 12, the Minister of International Trade signed, along with his American counterpart, U.S. Trade Representative, Susan Schwab, the long-awaited softwood lumber agreement.

This signing represented a major turning point for both our countries. Settlement of this complex, longstanding dispute until now seemed like an unachievable objective. In spite of all the efforts, previous governments never managed to settle it. The Canadian softwood lumber industry was thus faced with an extremely unstable trade environment resulting in lengthy and costly legal proceedings against the United States.

Thanks to the new spirit of cooperation between our two countries, the Canadian government has been able to accomplish what no other government had managed to do, that is, conclude an agreement that ends this dispute, on conditions that are very favourable to Canada and that respond directly to the concerns raised by the industry and the provinces.

This concrete and flexible agreement ensures foreseeable access to the American market, provides for the refund of over $5 billion Canadian—or $4.4 billion U.S.—of duties held on deposit and ends years of costly litigation. Furthermore, it enables the softwood lumber producers to break the vicious circle of legal proceedings and provides them with the stable trading environment they need to make their companies grow and to invest in them.

This agreement is in the best interest of the Quebec forest industry, which employs 107,000 workers and accounts for 18% of Canadian softwood lumber exports to the United States. For example, the agreement exempts from the export measures sawmills located near the Quebec border—and I am proud to have many of them in my riding of Mégantic—L'Érable—a key position supported by the government and industry in this province. For companies that are not exempted, Quebec can choose the border option that best suits its economic and trading situation.

The province and the industry in Quebec were greatly concerned about their inability to respond to the needs of their American customers because of the rigidity of the regulations related to export quotas. As a result, the government negotiated provisions allowing companies to carry forward or carry back up to 12% of their quota export volume from the previous or next month.

The agreement has the strong support of the three main producer provinces, including Quebec, the Quebec Forest Industry Council, the president of the Fédération des travailleurs du Québec, Mr. Henri Massé, as well as the vast majority of Canadian softwood lumber producers.

The ball is now in the court of Canadian parliamentarians. It is our turn to review the bill and adopt it so that Canada can meet its commitments under the agreement.

In reaching a decision, honourable members should give special consideration to the situation that would prevail if the bill is not adopted, including the high costs that would result if the bill is not passed.

Indeed, one need not go far back in time to recognize what would happen in the absence of this agreement. Our softwood lumber producers have spent the better part of the past two decades in waging numerous unending legal battles against the United States. They have been able to see the great influence of American protectionists and they know too well the harmful consequences of this dispute, both on the human level and in financial terms.

I invite my fellow members to ask the people who live in the communities that depend on softwood lumber if they would prefer a continuation of the dispute, with all that implies in terms of effort and dollars, or the concrete and immediate settlement that this hard-won agreement provides.

After a careful examination of the facts, I am convinced that hon. members will come to the same conclusion as the provinces and the industry: that this agreement represents the best solution for the future of the Canadian softwood lumber industry, for the 300 communities and the 300,000 workers and their families who depend on softwood lumber.

This agreement is in the best interest of Quebec and of Canada.

[The Acting Speaker, Conservative, Royal Galipeau]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for West Nova, Canada Post; the hon. member for Mississauga South, Foreign Affairs.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I want to put a question to the parliamentary secretary. He kept repeating that this was the best possible deal for Canada. There are two points that I want to raise with him.

How can this possibly be the best possible deal when it contains a provision that we have to fund the very coalition that has been wreaking havoc on our softwood lumber industry, that has put so many workers out of jobs in Canada, that has threatened so many communities, and that has hurt so many of our companies?

We are funding that coalition by $500 million to continue that kind of work and pursue new opportunities to ruin Canadian industry. How can that be the best possible deal for Canada which would fund the U.S. coalition for fair lumber imports to the tune of half a billion dollars?

Furthermore, how can it be the best possible deal for Canada when it does not close the loopholes that allow for the export of raw logs?

That is a huge outpouring of Canadian resources into other countries where they are going to be processed. They are going to be processed south of the border instead of here in Canada, putting Canadian workers out of work. That is a retreat to the old expression that Canadians were hewers of wood and drawers of water, the old expression that highlighted the exploitation of our natural resources in Canada and the exploitation of Canadian workers. Here again, this agreement, by not addressing the question of the loophole around raw log exports, is forcing us back into that position.

How does the parliamentary secretary respond to those two particular issues?