moved that Bill C-411, An Act to amend the Special Import Measures Act (domestic prices), be read the second time and referred to a committee.
Mr. Speaker, Bill C-411, which I am introducing today at second reading, sets out criteria that we hope will make it easier to detect dumping and will provide better protection for Canadian businesses.
Competition in the business environment has changed enormously in recent years, and the manufacturing sector has been hard hit. The rise in value of the dollar is an aggravating factor that has dealt a serious blow to Quebec's economy. However, we believe that increasing competition from Asia is the main factor in the distress of many of our companies.
Between 2001 and 2006, Chinese imports to Canada nearly tripled, going from $12 billion to $32 billion. What is more, Canada now has a $26 billion trade deficit with China. In Quebec, traditional industries are suffering the most from Asian competition right now. Chinese textile and clothing imports have risen eightfold, furniture imports have increased sixfold and bicycle imports have grown fivefold. Needless to say, our traditional industries are suffering and job losses are multiplying.
The government is doing nothing to help these companies, and the manufacturing sector is being devastated. Between 2003 and 2006, 100,000 manufacturing jobs disappeared in Quebec. In 2006 alone, the first year this government was in power, 35,000 jobs were lost in Quebec's manufacturing sector. And 2007 is shaping up to be even worse. Quebec had 29,000 fewer manufacturing jobs at the end of February than it had at the beginning of January this year.
The more traditional sectors were the hardest hit, including the clothing industry, which has lost almost half of its workers since 2000. The textile industry has lost a quarter of its employees since 2000. The furniture industry has also had a 22% drop in its workforce, and the forest industry has lost 10,000 jobs since April 2005 alone.
Currently, the industry is being left to fend for itself. This is the policy of this Conservative government, at a time when the industry is experiencing terrible difficulties.
Programs for the textile and clothing industries were cut from the budget in 2006. The main federal support program for research and development called Technology Partnerships Canada came to an end on December 31. The Conservatives claimed it was because of administrative problems, even though analyses confirmed that all these programs were very effective.
As for trade laws, the Conservatives decided not to implement the laws that would temporarily protect our companies and give them time to adapt to the new environment and to modernize.
As the members of the Standing Committee on Industry unanimously agreed in February 2007, trade laws must genuinely protect businesses from unfair competition, which is called dumping.
The Bloc Québécois has decided to propose a series of measures for Quebec industries that are facing the biggest challenges: the furniture, textile, clothing, forest and aerospace industries, the marine industry and high-tech industries in general.
I will backtrack a little in order to explain what dumping means.
Dumping is an unfair and illegal trade practice by which a company exports a product at a price that is lower than the normal production cost or lower than the price at which it is sold within the exporting country. When a business adopts practices of this nature, it must expect some countries to impose anti-dumping duties in order to counter such unfair practices.
How do we measure dumping? Generally, to determine if a foreign company is practising dumping, we must look at the price at which the product is sold within its own market. If the product's selling price is lower here, this constitutes dumping. We must be careful: this practice is only valuable if the fair price can really be identified. We can also ask the company to turn over its books and total all its costs in order to determine of the sale price reflects the production cost. Once again, this way of proceeding is only valuable if the production costs are accurate. They can be altered by government intervention in production costs. For example, an intervention might involve the government paying for the electricity needed to manufacture the product.
When the bank is government owned and gives a loan at a prime rate, or if the currency is artificially devalued—we need only think of the Chinese yuan, which is 40% lower than its real, normal value, specifically to help Chinese companies export their products—or when the books do not account for all the normal costs because of inadequate accounting practices, in these instances it is pointless to look at their accounting books.
Also, when various government practices play a role in altering the data, we will not necessarily be able to calculate the fair price. These practices could involve devaluing the dollar, indirect assistance or assistance to the business' subcontractors. We must look further. This is what bill C-411 proposes.
The United States and the European Union do more than just look to see whether the Chinese government is directly involved in setting prices on products, which is what the Government of Canada does. The U.S. and the EU have issued a series of criteria to assess whether the practices of the Chinese government falsify the costs and the prices. In particular, they look at the value of the currency. As I was saying earlier, it is widely known that the yuan is deliberately devalued to artificially lower the prices of Chinese exports. The regulations in China are also considered, but they know full well that these are not always on par with universally recognized regulations. This practice allows the Chinese to hide data. The U.S. and the EU go much further and do more investigating. The production cost and the input cost to manufacture a product can be artificially lowered if the supplier of the raw materials or parts is a government corporation. Thus, the EU and the U.S. evaluate the suppliers. While Canada imposes anti-dumping tax on only 17 Chinese products, the United States taxes 53. While the European Union taxes 49 products, Canada carries on with its 17 little Chinese products only and these products enter freely here in Canada.
Bill C-411 is based on legislation in effect in the United States and in Europe and lays out criteria to be taken into account to assess whether there is dumping, which we hope will better protect Quebec and Canada's businesses from the illegal practice of dumping.
