Mr. Speaker, I am pleased to take part in the debate on the softwood lumber deal.
I feel for those members who have sawmills in their ridings and the companies tell them it is a rotten deal, but they have on to sign it. The reality is the industry has been coerced and pressured into supporting this deal. They have been coerced because the Conservative government has said that it would cut off support to the lumber industry. What kind of a deal is that? What kind of support is that for the lumber industry?
There are two issues here. First, why would we cut a deal? Second, if we have cut a deal, is this a good deal? I will deal with the first question.
When the Conservative Party was in opposition, how many times did we hear it ask why we would cut a deal when we had been winning all the objective panels under the NAFTA. Now the Conservatives are saying that we have to cut a deal because it is in our best interests.
First, it is contrary to the NAFTA. NAFTA is meant to provide free and fair trade. Does it do that? Of course it does not. Also, the most important thing is that it perpetuates a lie. This point was made very clearly and very well by the Free Trade Lumber Council. The lie is that we subsidize softwood lumber in Canada. That has been shown time and time again by lumber one, two, three and four. Every objective panel, panels which have Americans sitting on them, have said that we are not subsidizing lumber in Canada.
Also, we have prevailed in every NAFTA panel, an objective review, and these panels have concluded consistently that we do not subsidize our lumber in Canada. Canada has followed the dispute settlement mechanisms that are laid out between Canada, the United States and Mexico.
The other thing that is terrible about this deal is that it sets a horrible precedent. That is where we as parliamentarians, notwithstanding what the industry or communities might say, are charged to deal with the national interests of Canada. If the U.S. can win this dispute, where we have consistently shown there is no subsidy, what does that mean for other products, for other sectors? The Americans will look upon this and say that if they can cut a deal on softwood lumber, they can cut a deal on plastics or on steel because with lumber the Canadians were well ahead. They have proved the case time and time again.
This is a horrible precedent. This is a sad day for Canada. It is another way in which the Conservative government has capitulated to the U.S. interests and to their love affair with the Republicans south of the border.
If we cut a deal, which it looks like the government has and it is the wrong approach to take, how good is it or how bad is it? First, how often did we hear the Conservative Party, when in opposition, ask us why would we not fight for $5.3 billion in the tariffs to be recovered by the Canadian producers. Conservatives would argue that we should not leave anything on the table. Now they are leaving $1 billion on the table.
I do not know how the Conservative members can now argue that the industry minister at the time knew the deal and conclude that this is a better deal. The minister then would have been sworn to cabinet confidentiality, so I am not sure they would know the details of the deal. Even if it is a slightly better deal, who knows, it is still a bad deal because there was no deal concluded by our Liberal government. There were discussions, but the Conservative government is proceeding with this.
The deal is of short duration. Within two years, the deal can be abrogated by the U.S. producers and by the U.S. government. They can say that they do not like it and that it is not working very well. In the meantime Canadian producers will have backed away from their lawsuits. How do we get that back? We cannot restart those lawsuits. It works very well for the U.S. producers and the U.S. government.
Another point is that the export tax increases as lumber prices decline. Does that really work to the best interests of Canadian producers? I do not think so. It might work for the best interests of the U.S. producers, but the prices have tanked already, from about $450 U.S. per thousand board feet to around $270 U.S. per thousand board feet today and the export taxes are going up. We have the compounded problem of low lumber prices and increased export taxes. Is this in the best interests of Canadian producers? I hardly see that. When lumber prices are low that is when Canadian producers need all the help they can get.
The member for Skeena—Bulkley Valley alluded to another reason why this is a bad deal and that is the anti-circumvention article. In a nutshell, this clause robs Canadians, within their federal government and their provinces, of sovereignty when it comes to forest policy. The U.S. is basically saying that if Canada does not do things the way it does things, then clearly Canada is subsidizing. I know for a fact that the auctioning of timber in the United States is not exactly a perfect market. Companies have bid on federal forestry timber and have been let off the hook later when pricing did not quite work to their advantage.
I have worked in the forest products industry. If a forest company wants to set up a lumber mill, an OSB bill, an MDF mill, or a pulp mill in Tennessee or Mississippi, the American government will put all sorts of incentives into its hands, whether they be sales tax abatements, property tax abatements, subsidized cogeneration energy, tax holidays of various descriptions, a whole range of things. Under our process, we cannot look at U.S. subsidies. We can only respond to the process in place, and that is fair enough because we agreed to that. However, the Americans should at least respect the process that is in place.
Is it too much to concede or believe that Canada might have a comparative advantage in softwood lumber? Our U.S. friends and neighbours to the south cannot seem to get a grip on this. I am prepared to say to the United States that perhaps it has a comparative advantage in IT or in other industries. However, Canada has a comparative advantage in softwood lumber.
A study done a few years ago showed that, in terms of total factor productivity, Canada's forest industry was 40% more productive than the U.S. forest industry. The problem the United States has is with the little sawmill in Portland or in Montana. What does it do with the workers if they are getting over blown by a very competitive industry in Canada. That is a U.S. problem and it has to deal with that.
There are other examples such as in Pittsburgh, Pennsylvania, which was a big commodity steel player. Steel companies could not compete with commodity steel because of the Asian producers. They became niche players and higher value-added players. Then Pittsburgh became a huge IT economy.
This is not our problem and it should not be laid at our feet. There are sawmills in the United States which cannot compete with our highly efficient mills. I have been to many mills in Canada and many mills in the United States. We should pride ourselves on the fact that we have some of the best sawmills in the world. The United States is now telling us that we are going to pay for this because of the softwood lumber deal.
We should never have cut a deal. This is a bad deal, and we should reject it on behalf of all Canadians.