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.