Mr. Speaker, I am pleased to participate in the debate on Bill C-411, An Act to amend the Special Import Measures Act (domestic prices), which is commonly referred to as SIMA.
The mover of the bill raised some very important questions with which parliamentarians must deal with from time to time. To give some indication of that, the implications to Quebec have been very serious in some areas, particularly, as she mentioned, textiles, garments, furniture, bicycles and forestry and the tens of thousands of jobs being lost as a consequence of activity with regard to the importation of goods and the competition.
She talked very well about the whole concept of dumping, which is an illegal activity where a country will actually export goods to Canada at a price that is less than its own production costs, which obviously puts our own producers at a significant disadvantage.
Clearly that kind of activity could be extremely damaging to Canada if we did not have rules, regulations and legislation to guide us in determining whether that kind of activity exists. We do in fact have it and the Special Import Measures Act is the instrument.
The particular section which the member wants to deal with, and I think it is important simply for the information of members and those who are watching, is section 20(1) in the Special Import Measures Act.
Let me just review a couple of things and members will see how this is a very complicated area. It states:
Where goods sold to an importer in Canada are shipped directly to Canada
(a) from a prescribed country where, in the opinion of the President--
--and “the President” refers to the president of the Canada Border Services Agency--:
--domestic prices are substantially determined by the government of that country and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market, or
Therefore, as a principle, are we having dumping at a price lower than production would be an example.
Also, it covers coming:
(b) from any other country where, in the opinion of the President,
(i) the government of that country has a monopoly or substantial monopoly in its export trade, and
(ii) domestic prices are substantially determined by the government of that country and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market,
Those are the principles that must guide the president of CBSA.
I asked for some information about the specifics.
I should elaborate on the Special Import Measures Act. SIMA provides for the rules and the procedures for anti-dumping and countervailing duty actions under Canadian domestic law. The act is designed to provide protection to Canadian producers who are being harmed or injured by dumping or subsidizing goods imported into Canada. The member has raised a number of examples affecting Quebec industries.
I should also mention that I had the same situation in my own riding where back in 2004 there was an investigation with regard to the importation of bicycles from China which were hurting the bicycle industry. We have a thriving bicycle industry in my area.
The SIMA is administered by the Canada Border Services Agency and the Canadian International Trade Tribunal. The Canada Border Services Agency conducts investigations into dumping and subsidies and implements duties on dumped or some subsidized goods. That is its job.
The CITT, the Canadian International Trade Tribunal, conducts inquiries on the harm to Canadian businesses and industries from dumping and subsidies on imported goods.
The investigations are initiated after a formal complaint by a Canadian producer or group of producers. Inquiries are initiated after a formal complaint by a Canadian producer or group of producers and the recommendation comes from the president of the Canada Border Services Agency.
The determination of dumping or subsidies is based on a baseline price for similar goods. The baseline is called “normal value” and that is defined in some detail in the Special Import Measures Act. It is used by both the CBSA and the CITT during their investigations and inquiries. SIMA contains extensive rules for determining normal value, which are found in sections 15 to 23.1 and sections 29 to 30 of the act.
Bill C-411, introduced by the member to amend the Special Import Measures Act, changes the rules for determining normal value where an export monopoly exists in the exporting country for the good. Specifically, the bill deems foreign countries to have an export monopoly if certain criteria are not met. This bill changes the criteria and is proposing certain conditions that in fact change the definition of normal value.
The bill states in clause 2 that the lack of any of the factors listed will result in the country being deemed to be an export monopoly. This amendment would prevent these countries from being used as a reference for determining normal value and would allow the CBSA or the CITT to utilize the formula in paragraph 20(1)(c) for determining normal value.
I could probably put on the record some of the other details, but suffice it to say that this is not a simple matter, as members can see. We are not talking about a linear industry. We are not talking about just one sector of the economy. We are talking about the vast trade relationship that we have with countries around the world. Canada is a very active trader.
Let me simply summarize by saying that the bill seeks to codify conditions used to determine if an export monopoly exists in a given country. It does this by outlining five conditions which if they were not met would automatically result in a country being deemed to be an export monopoly.
This bill in fact is not necessary. I know the member has heard this before. The bill the member has put forward is redundant because it seeks to tell the president of the Canada Border Services Agency how to do his job. The president of the CBSA is the one who currently makes these determinations under the existing legislation called SIMA.
The categories are broad and could conceivably result in almost any country being designated as having an export monopoly. This includes the United States and the European Union, which the CBSA already relies on to determine normal value and normal market prices. This again impairs the ability of the CBSA and the Canadian International Trade Tribunal to do their jobs.
The legislation clearly lays out their authorities to protect the interests of businesses, but it is up to the businesses and groups of producers to make their case to have the prescribed investigation and inquiries made to determine under the legislation whether or not there is a matter of dumping to be addressed.
The concerns that the bill purports to address can already be addressed through a variety of mechanisms, including existing trade agreements and in trade tribunals. These issues are better addressed during trade negotiations.
Therefore, the Liberal Party is not going to be able to support this bill. We have always advocated that trade agreements are the way to seek a fair balance. We understand the importance of real free trade, which is why we are advocating that the government ensure that the proposed South Korea free trade deal effectively eliminate non-tariff and regulatory barriers that keep Canadian manufacturers, specifically in the automotive sector, from having open market access.
Although we will not be supporting the bill, I want to congratulate the member for bringing forward to the House yet another important matter in regard to which it is the responsibility of parliamentarians to inform themselves about and to assure their constituents and their businesses that there are rules in place and that we will respond where there is an investigation or inquiry that identifies areas where there is anti-dumping activity that hurts Canadian business.