Debates of March 1st, 2007

Opposition Motion—Aerospace Industry

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, if that is a socialist position, it is also the position taken by the Americans, who massively subsidize their aerospace industry. It is the position taken by the Europeans, who massively subsidize theirs. The Brazilians do the same thing and this is why Canada must do it, otherwise its industry will die.

Perhaps I am not an expert in manufacturing an aircraft. I do not have that expertise. However, my job is to make sure that Quebec is not swindled by decisions such as those made by the Conservative government, and it should also be the job of all the members of this House, be they members of the Bloc, of the Conservative Party or of the Liberal Party. Consequently, I hope that the House will today render justice to Quebec's aerospace industry by allowing it to obtain the investments it deserves.

When one awards $9 billion worth of contracts without call for tenders, one is entitled to impose conditions ensuring the economic development of Quebec and Canada, and I will never be ashamed of the stance I am taking.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, first I want to congratulate my colleague the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup for his very timely speech. The Conservatives were saying “Vote for us”. In some Quebec ridings, they were saying “Vote for us and we will give you a minister”. But the ministers they have given us in Quebec have quickly adopted Elvis Gratton's philosophy and think “There's no way like the American way”. This is more or less what they are telling us. However, these people have been elected, just like us, to defend all Canadians, but first of all the Quebec people, particularly when there are such important interests at stake.

What are we doing? We are shirking our responsibilities, leaving them to the Americans. We are telling them “We are going to give you all the space you need to tell us how much we will get and how you will invest it”. This is unacceptable. Quebec ministers should be ashamed to act this way and to defend such a position in this House. I would like my colleague to tell me if it is too late to turn things around as far as this contract is concerned.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, there are among other things the contracts for the Chinooks and other contracts which have not been signed yet. In these contracts, the Conservative government could do something and put in different conditions. It could reverse the present trend, which significantly penalizes Quebec.

It is one of the reasons why we are raising this question today. We will continue fighting until Quebec gets its share.

Obviously, if Quebec was fully in charge of this policy and had total jurisdiction over this sector, it would not have taken the kind of decision which the Conservative Party took in this case. In a sovereign Quebec, no matter the party in power, such a decision would not have been made. The decision would have protected Quebec and would have allowed Quebec to develop its aerospace industry.

The attitude of the Conservative ministers from Quebec is a crying shame. I find it rather embarrassing to see this kind of attitude in a debate such as this one. Quebeckers expected something else from the Conservative members and ministers.

I hope that today, or when the vote will take place, on March 20, the result will show that members were shaken by the position we have taken. I hope that they will change their attitude, that they will want to reinvest massively in the aerospace industry and that they will put an end to the laisser-faire that lets a company decide how $9 billion will be invested.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Mr. Speaker, I would like to congratulate my colleague for his dedication to the industry and to the defence of Quebec's interests.

What strikes me in this decision is the lack of logic. I do not understand the logic of this decision, when 18,500 jobs will be lost in Quebec, when Quebec is supposed to receive 55% to 60% of the economic benefits, and when military procurement is not subject to any trade agreement. The only logical thing I see in this decision is that we are dealing with a dogmatic government that is against Quebec and that is driving wedges between the regions of Canada. I find this very serious. This is also a government that refuses to meet with aerospace industry officials in Quebec. I just do not understand that.

How does my colleague explain the lack of logic in this decision?

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, that is the question Ms. Dabrowski, general manager of the Quebec Aerospace Association asked. She said:

The federal government has a responsibility. Its decisions have an impact on the economy. Those spinoffs are something we see once every 30 years. This is big. We must seize the opportunity to protect the industry in Quebec, exactly as the government did to protect the auto industry in Ontario. We are not asking for too much. It is public money and it must be used wisely.

That is a logic that we can understand and that should be applied so that Quebec get its fair share. Why did the Conservative government decided not to recognize that fact? I think that that can be explained by its ideology where market forces rule without constraints and where governments no longer assume any responsibility.

I think that Quebeckers, like other Canadians, do not want such a government. They want a government that shoulders its responsibilities and does not let private companies reorient or change a complex and important industry like the aerospace industry.

For these reasons, we absolutely must put the brakes on. It is in that spirit that the Bloc Québécois wanted to raise the issue in the House and hold a vote that will reveal the final position of each party.

[Maxime Bernier, Conservative, Minister of Industry]

Mr. Speaker, my hon. colleague from the Bloc Québécois talks about the expertise and competitiveness of the aerospace industry in Quebec and Canada. I wish to tell him that we are quite aware of this.

The aerospace industry is a high-tech industry that has successfully positioned itself among the best in the world. I saw this for myself last spring when I went to Farnborough, to London, to meet with the people from the aerospace industry in Canada and Quebec, and their colleagues from other countries. I met many stakeholders during that stay. Even here, in Canada, I have had the opportunity to meet people from the industry and to observe their ingeniousness and expertise. That is why we granted this contract to Boeing, since it was the supplier that met and meets all the conditions stipulated by the armed forces so that we could provide the equipment the armed forces have to have to do their job.

Canadian suppliers will benefit from the economic benefits arising from the purchase of military equipment. We think it is important for them to occupy a long-term position in Boeing’s supply chain. As you know, Boeing is a company that does both military and civil work. With their new plane, the Boeing 787, there are many business opportunities for companies. We want these companies to take advantage of the business opportunities that arise, instead of telling Boeing what contracts to give out. Economic logic being what it is, if we force Boeing to do business with a non-competitive player, Canadian taxpayers will all end up paying for these decisions and this political interference. We believe that Canadians and the Canadian armed forces should have the best equipment possible at the best possible price, while ensuring there are economic benefits for Canada. This is why we asked Boeing for these economic benefits to be high-level ones in nine technological sectors. We think that the Quebec aerospace industry will position itself well with regard to these contracts and will be able to position itself favourably in the Boeing supply chain for all these contracts on the world scene.

I am delighted with, and proud of, the investments that we have made in Canada in the aerospace sector, and of the investments to come. As I said in committee, these military purchases will generate over $12.6 billion in economic benefits. This will help all Canada’s regions. The aerospace industry sees very clearly that, under a Conservative government, it is treated well since it will benefit from these economic spinoffs.

Today I heard a most interesting story from my colleague about aerospace companies and the wonderful success of these companies in Canada. As I said, the industry is doing very well. Canada ranks fifth in the world with regard to production of aircraft and civil aircraft. The Canadian aerospace industry is an international leader, notably—and this is important—in leading sectors such as regional planes, small gas turbines, flight simulators, visual simulators, civil helicopters, landing gear for heavy planes, air-conditioning systems for aircraft and in-flight visual simulation. These are the areas of expertise to be found in the Canadian aerospace industry and we can be proud of them.

The four large Canadian aerospace companies are Bombardier, Pratt & Whitney Canada, CAE and Bell Helicopter. All of those companies have major facilities in Quebec. About half of the employees in the aerospace industry in Canada are in Quebec, that is a fact. More than half of all sales in the aerospace sector come from the province of Quebec. Quebec is a real pillar of the aerospace industry in Canada. Bombardier, as we know, has just announced the launch of its CRJ 1000 series, its new 100-seat regional jet. CAE is investing $630 million in research and development over the next six years. Innovation is essential in the aerospace industry. CAE is also continuing its successful expansion in the Middle East and Asia.

Also in Asia, it is establishing the global academy that bears its name.

Bell Helicopter celebrated the 20th anniversary of the opening of its Mirabel plant. The company is developing new, modular and affordable product line technologies that have already received more than 220 orders, unprecedented in the industry. These few examples clearly demonstrate that the Canadian and Quebec aerospace industry is a dynamic presence on the international scene.

The new government of Canada has done a lot to find markets for the Canadian aerospace and defence industry, both in Quebec and elsewhere in the country. This government is committed to building Canada's place in the international community, and that commitment includes honouring our obligations to our international partners, such as NATO, which means making wise purchases of military equipment.

Unfortunately, under the Liberals, military equipment was never replaced. The Liberals endangered the lives of our soldiers by their inaction. Our government has got things back on track. We did this by announcing military equipment procurement programs. Our government affirms its unwavering commitment to our brave soldiers who protect Canada, its people and its interests.

Our soldiers who are deployed abroad are defending our values, the values we hold dear, our Canadian values of integrity, free enterprise, individual liberty. Yes, we will never turn our backs on our soldiers, either here in Canada or abroad. First and foremost, we want to be sure that our military has adequate military transport equipment for their military deployments.

Whether here in Canada, on rescue missions and in disaster relief, or elsewhere in the world, we also want our military to have the equipment it needs, right here in Canada, for those kinds of rescue missions or for those operations abroad. That is why we have purchased the Boeing aircraft and have scheduled the purchase of other aircraft.

Under the former Liberal government, our soldiers had to rely on the goodwill of our neighbours and allies to arrange their deployments abroad. The era of turning our backs has ended. We are making sure, now, that our Canadian Armed Forces have the equipment they need to perform their duties.

In addition to that, Canada's new government is also determined to build a prosperous and competitive economy that will benefit all Canadians.

Our government has taken the right approach to create a supportive environment and to encourage and reward hard work, stimulate innovation and foster the development of Canadian industry and more especially, the aircraft industry.

We are energizing the Canadian economy by giving our industries an opportunity to help develop future technologies and by developing new, quality markets for this industry. Our way of handling the Canadian industrial benefit policy is based on our commitment to strengthening the aerospace and defence sector and stimulating the Canadian economy.

Unofficial measures to ensure that Canadian industry benefited from military procurement and spin-off effects go back to the 1970s. The federal government turned this into an official policy barely 20 years ago under Brian Mulroney. The purpose is to ensure that Canadian industry benefits from the purchases that are made, regardless of the company chosen to provide the equipment needed by our troops.

That is what is called industrial participation or economic benefits or offset purchases, and this practice has been adopted by many governments, including this one. This policy will produce lasting economic benefits for Canada.

Every time the federal government undertakes major defence procurement programs—and I would like to say this for the benefit of my hon. colleagues—three departments are involved.

The first, of course, is the Department of National Defence, which determines the equipment specifications. The second is Public Works, which handles the procurement process and the awarding of contracts. My department, Industry Canada, develops the industrial benefits plan to ensure that Canadian industry derives real, specific, strategic benefits from military procurement.

On February 2, 2007, the government announced the purchase of four C-17 Globemaster III aircraft for a total of $1.8 billion.

This sum includes the additional infrastructure required at National Defence, training and the administration of the program by the Government of Canada.

The modernized infrastructure, training and administration by the Government of Canada constitute direct investments in our economy right here in Canada. The industrial benefits policy does not apply to them, therefore, because these investments are made here in Canada.

Despite all that, the equipment that we are going to purchase for our armed forces will result in more than $1 billion in economic benefits, as I explained earlier.

When the planes are purchased, the government will also have to award maintenance and service support contracts for them. A service support agreement worth $1.6 billion was signed with the US forces. It has two parts. The first, worth about $900 million, will be subcontracted to Boeing. Boeing is covered by the requirements of the industrial benefits policy so that we will see an equivalent amount return to us here in Canada. This means basically that $900 million will flow back to Canada in economic spinoffs.

As for the second component, the services provided by the U.S. armed forces are not covered by the industrial benefits policy, since governments and foreign governments are not subjected to the requirements imposed on foreign companies. Therefore, our policy does not apply to a foreign government.

These benefits are similar to those that will be generated by the procurement project for aircraft, that we announced. These economic spinoffs for Canada will be spread over a period of more than 20 years.

Suppliers who will get contracts with Boeing can announce them as they win them, over the weeks and months to come.

In the past, it would take over two or three years to design similar procurement programs. However, in this case, with Boeing, I am pleased to point out that we were able to develop the transport aircraft procurement plan over a period of just a few months.

Our government succeeded in obtaining for Canada economic spinoffs totalling about $869 million so far—this represents the acquisition cost of the aircraft—and even more in terms of procurement and service. As I said, this additional $900 million in economic spinoffs is related to service and support for these aircraft.

Hon. members are aware that we also announced the acquisition of helicopters, ships, trucks and tactical airlift. I should point out that each procurement program will also trigger major spinoffs for the Canadian industry.

Under our industrial benefits policy, for every contract dollar awarded under our defence procurement process, contractors must commit a corresponding dollar in economic activity in Canada. This is a 100% return on investment for the duration of the contract. It means an investment of one dollar for each dollar, and that requirement is not negotiable.

We will ensure that this policy is complied with and that all its criteria are well understood by Boeing or by the other companies that will be suppliers for the Government of Canada. We will also ensure that all the businesses working in the aerospace and defence industry are aware of these business opportunities, as we have done in the past.

Moreover, we require companies that win these contracts to not only invest in Canada, but to do so in a significant fashion, over the long term, in leading-edge technology. The objective is to help Canadian companies become part of the global supply chain and continue to be. This means that the Canadian industry benefits from the government's procurement programs, regardless of where the successful bidder's head office is located.

Industrial benefits transactions have to meet three criteria to be considered by my department. The first criterion is that the work has to result from a procurement program. In the case of Boeing, it is a military procurement and we have made sure there are economic spinoffs for Canada.

The second criterion stipulates that the work has to be done over the period set out in the contract. It has to be new work for Canadian businesses.

The third criterion states that the work has to respect the principle of growth, by which companies can use existing business relationships, but only the new work counts for the purposes of respecting the economic spinoffs requirement. Quebec or Canadian companies can use their business relationships to get economic spinoffs, but only the new work counts for the purposes of respecting the economic spinoffs requirement, in other words, the new work done here in Canada.

Furthermore, for the C-17 procurement program, we specified that the aerospace and defence sector had to benefit from 50% of the industrial spinoffs and that at least 30% of these spinoffs have to target key technologies. The nine key technologies are the following—these are technologies we discussed with the Quebec and Canadian aerospace industry. We chose these technologies because they are technologies of the future for the Canadian aerospace industry and we want this industry to position itself favourably for future contracts. These nine technologies are the following: advanced manufacturing and emerging materials; avionics and missions systems; communications and control; propulsion and power management; security and protection; sensors; simulation, training and synthetic environment; space; and unmanned vehicle systems.

We are also requiring that small businesses benefit from 15% of Boeing's contracts that are subject to economic spinoffs. These businesses are critical for ensuring the growth and viability of the aerospace and defence sector. Generally speaking, they are the main drivers of our economy.

At the end of the day, the purpose of the industrial benefits policy is to allow companies in the Canadian aerospace and defence sector to demonstrate their capabilities and establish lasting business relationships with major corporations from other countries. Our government has obtained real strategic benefits for the Canadian industry.

For the first time ever, the Aerospace Industries Association of Canada and the Canadian Association of Defence and Security Industries have worked with the government, with my department, to develop the list of nine key technologies that I was talking about earlier. These are technologies that, in the eyes of the industry, are critical to the future of the aerospace industry in Canada.

We have also made it very clear to prospective bidders that we expect them to work with companies across Canada.

For instance, Boeing held four regional sessions for the industry, one in each region of Canada. In the Atlantic region, on September 7 and 8, 2006, during an air show in Halifax, Boeing met with Canadian stakeholders to ensure that they properly understand the business opportunities available to them. Similar sessions were also held in the western region, in Calgary on October 3 and 4, 2006; in the Quebec region, in Montreal on October 24 and 25, 2006; and in the Ontario region, in Toronto on November 7 and 8, 2006.

Thus, Boeing was able to meet with hundreds of Canadian businesses during these sessions and take stock of the strengths and capabilities of businesses from across the country. The procurement of strategic airlift is the first procurement strategy in a series of five, as I mentioned earlier.

For each of these projects, we will insist that Canadian businesses undertake quality activities and be able to reap the economic benefits.

Canadian benefits are a serious contractual obligation. My department requires annual audit reports and performance guarantees.

I would like to remind the House that I am very pleased with what we have done for the aerospace industry. Every year, businesses that are awarded contracts with the Canadian government must be accountable with respect to the Canadian industrial benefits policy. If those businesses do not meet their contractual obligations, there will be serious financial consequences.

I would like to emphasize that I will be very vigilant in ensuring that businesses respect their contractual obligations. The industrial benefits policy must be followed to the letter. Our approach to industrial benefits is based on the overall approach of this government. This is the approach taken by an honest, transparent government, a government that cares about its industries and cares about its aerospace industry.

I would like to remind the hon. member of the Bloc Québécois that his party is very familiar with the Quebec aerospace industry, as am I. I am certain that this industry will be able to position itself well in future contracts with Boeing and with other bidders for the other military procurement contracts that this government is planning in the months to come.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I listened intently to my colleague's speech, and I have three short questions for him.

First, will he accept the invitation of Quebec Aerospace Association, which has been trying for months to meet with him?

Second, will he announce a new program to replace Technology Partnerships Canada in order to ensure that our aerospace industry is supported by an effective government program? He had said there would be one. This program has been under evaluation for quite some time, and we are waiting for an answer.

Third, can he ensure that, with all the contracts and the spin-offs—we all want our soldiers to get the best equipment possible, let us not play politics with this—Quebec will get its fair share, that is 60% of the economic benefits? This is very important for Quebec.

If these three short questions were to be answered in the affirmative, it would have a definite impact on the development of Quebec's aerospace industry in the coming years.

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, I would like to reassure my honourable colleague with regard to meeting with stakeholders in the Quebec aerospace industry.

I met with them in Edinburgh and London at a well-known annual air show where the world aerospace industry was present. I was able to speak with all players and representatives of the various industries, the Quebec association representatives and Quebec aerospace businesspeople. I met them again in Montreal at the Winter Aviation Ball held a few weeks ago. I am well aware of their expertise and their requests.

If I am asked to meet with them, I would be pleased to do so once again. I would like to say that, in my role as Minister of Industry, meeting with stakeholders in various industries is a priority for me.

As for my colleague, the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, I am somewhat surprised by his position on military equipment and the purchase of said equipment because, on October 26, 2004, he voted against the Conservative motion to guarantee that the Canadian forces would be adequately equipped for war missions and peacekeeping. That was a motion moved by my colleagues and not supported by the Bloc Québécois, including the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup. It is somewhat paradoxical because the Bloc Québécois opposes investing in the Canadian Forces and making military purchases, but it is in favour of economic benefits for Quebec.

I want to say that, on this side of the House, we support giving our Canadian Forces the best possible equipment so that they can do their job properly and we can meet Canada's international commitments. Furthermore, this is to be done with full respect for our industrial development policy, our policy on industrial economic benefits in Canada. That is a priority for us.

I am confident that all businesses in Canada working in the aerospace and defence sectors will benefit from these economic spinoffs.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Mr. Speaker, I too am surprised to hear the minister's response. I remember a certain election campaign when the minister promised to defend Quebec's interests and said that he could do something for Quebec, that he would make sure Quebec got spin-offs, and that he would be the main spokesperson for Quebec, whereas the Bloc Québécois was not doing its job, in his opinion. Yet the Bloc members were held up as examples across Quebec and Canada for their calm manner during debates, their practical proposals and the social and economic gains they made for Quebec in nearly every field.

Today, the minister is saying that he refuses to fight. He is the minister for Quebec, yet he refuses to fight so that Quebec can get justice, not a privilege. If the automotive industry was involved, he would fight for Ontario, because that is where the industry is concentrated. However, 60% of the aerospace industry is in Quebec. It would make sense to direct this contract to the part of Canada where all the research and all the aerospace production capacity will go.

The minister also promised to consult the House regularly. When the Conservatives were in opposition, they complained that the Liberals did not consult enough on procurement, regardless of the field. Where are the consultations he held before making these military purchases? There were none.

A week before the House adjourned in June 2006, the Standing Committee on National Defence was asked to make a complete study of the army's needs. We supported that study, because we wanted the Canadian Forces to be well equipped. But we did not support the minister's decision to choose an American company he had worked for as a lobbyist for five years. That is what shocks us, that is what is not right, and that is why he has no credibility in Quebec. He is in third place in the polls, and he is going to stay there for a long time. The minister made a promise, but he has not kept his word.

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, I would like to make it clear to my colleagues that meetings took place with the industry. I met several times with Mrs. Sue Dabrowski. I will specify the dates. I had the opportunity to meet with her twice, as well as with several members of the aerospace industry last January 27 and August 14, in Montreal. Therefore, that settles it for meetings with the aerospace industry. If Mrs. Dabrowski wants to meet with me a third time, or even more, I will always be available, as I have been in the past.

As for the Bloc Québécois, we see that it is changing its position once again. After criticizing our government for buying military equipment for our troops, the Bloc Québécois is now asking us to get involved politically. I repeat that we have confidence in Quebec's aerospace industry. Indeed, my colleague from the Bloc Québécois said that Quebec's aerospace industry is competent, innovative and competitive on the Canadian and world stage. I am sure that this industry will be in a position to get contracts from Boeing as well as others.

Telling us that it will not be able to get contracts unless there is political interference is an insult to the aerospace industry. We believe that this industry is competent, good and competitive in Quebec as well as in Ontario and Manitoba. It is able to position itself so as to get these contracts.

My role as the Minister of Industry is to ensure that the policy is respected, that there are dollar for dollar returns, that every dollar of military procurement brings economic spinoffs of a dollar, that this is done in high technology and that there are real economic spinoffs. When the Liberals were in office, hotel rooms were considered economic spinoffs. I am talking about real economic spinoffs that will be appreciated by the industry and will enable it to take its position in Boeing's world chain and that of other suppliers. That is the important thing. Economic spinoffs must be quality ones and we are ensuring that they are. I can assure the House that they will be.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I would like to follow up on a question I asked the minister and never got an answer for. Will he announce the implementation of a new program, similar to Technology Partnerships Canada, to help the aerospace industry?

The only message we are sending to the rest of the world today is that assistance programs do not exist anymore. Since investments are long term deals, this kind of message is certainly a very negative one for the aerospace industry in Quebec and in Canada. We were promised a new program.

Will this new program that should help the industry with research and development be announced soon?

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, I thank the member for his question. As he well knows, the budget will be tabled in the House on March 19 and the government will make a decision concerning this program in the next few weeks.

I have already told the aerospace industry that we are examining this program and that all the options are on the table. Once this review is done, in due course—in the next few weeks, I hope—we will advise the House and the Canadian industry on the future of this program.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I will be splitting my time with the hon. member for Bourassa.

I will focus my comments today on the industrial benefit side of this.

Canada has the fourth largest aerospace industry in the world. Our industry employs 107,000 people across Canada. The sector grosses $21.7 billion per year, providing a direct contribution of 1.85% to Canada's GDP. This sector contributes $1.1 billion every year to invest in research and development and it creates thousands of Canadian jobs.

It is important to recognize the importance of that research and development. The research and development jobs are the ones that generate the most economic benefit, that create the most sustainable aerospace industry and that contribute to Canada's competitiveness the greatest.

I agree that the government needs to provide fair regional distribution of economic spin-offs across Canada. I also agree that it is important for the government to fight to get the best possible industrial benefit from defence and aerospace and government procurement in general.

Canada has a vibrant aerospace and defence industrial complex and it is one that is dispersed across Canada. There is an extremely strong industry in Quebec. We have in Nova Scotia, for instance, a significant infrastructure of small and medium size firms with expertise in military, aviation, defence systems, electronic assemblies, firms like IMP Aerospace , xwave, as well as Pratt & Whitney Canada which is located in Nova Scotia, employing over 3,500 people with over $300 million in annual revenues.

In places like Newfoundland, to give an example, Peter Kiewit Sons Co. Ltd., PKS, in Marystown, Newfoundland, is a perfect example of a firm with the skills and expertise and is participating in a $2.1 billion procurement bid through the Department of National Defence.

I know something about defence procurement because when I was minister of public works we were directly involved in defence procurement, working with defence, working with the then minister of industry and now the Minister of International Trade, and we fought for strong industrial benefits for the Canadian industry.

I have to say that the present government has failed Canadians in not finding the best possible combination of industrial benefits for Canada when it negotiated this deal.

It was the Liberal government in the 2005 budget that made the single largest investment in the Canadian armed forces of almost $13 billion. It was the single largest investment in 20 years, spanning both the Liberal government and the previous Progressive Conservative government. It was during my time in public works that we were actually involved in implementing some of those investments.

During that time, we recognized the importance of in-service support. In-service support is the area that our aerospace industry and our defence industry have probably contributed most to the industrial sector and it is the area in which we probably do best across Canada. It is the area in which the government has failed Canadians the greatest in terms of the industry.

I want to talk a bit about why it is important. To provide the long term industrial benefit and in-service support, the government needed to negotiate up front with the original equipment manufacturer, Boeing in this case, to attain the intellectual property to allow our Canadian industry to participate in the service of these airplanes over their life. The government failed to do that. That was a significant departure from our tradition and the traditions of successive governments in demanding and purchasing that intellectual property, such that Canadian industry could participate in the long term support of the aircraft.

It was that vigilance of previous governments in purchasing the intellectual property that enabled a Canadian industry and in-service support to develop and flourish.

In a February 2007 article in FrontLine defence magazine, written by Ken Rowe, the chairman and CEO of IMP Aerospace, one of the largest providers of in-service support in Canada, made the following comments about the government's decisions on defence procurement and industrial benefit. He stated:

Canadian companies will be denied the ability to directly and independently support DND on these programs.

Further on in the article he states:

The years invested in building this component of the Canadian industrial base are being jeopardized by the current ISS procurement strategy by placing Canada's world class Aerospace ISS industry under the control of foreign American companies.

Overall, this new process is not only a threat to thousands of Canadian jobs but also increases the sovereignty and security risks to Canada by reducing our independent capability to maintain our own military assets.

The fact is that we expect our defence decisions and industrial strategy to be made in Ottawa, not in Washington and not at the Pentagon. The government has eroded Canada's economic sovereignty by not providing the kind of vigilance at the negotiation stage to ensure we achieved the intellectual property that Canadian companies would benefit from for the next 20 years in providing the kind of support that has built a Canadian industry that is recognized internationally.

The government talks about standing up for Canada. It has failed to stand up for Canada. It has stood up for the U.S. aerospace industry. It is important to recognize that there was a stop production order issued by Boeing earlier this year for the C-17. According to the Boeing press release, this stop production order was “due to the lack of U.S. government orders for the C-17”. We are buying the technology that the U.S. no longer wants and, in the process, we are helping support the U.S. industrial base.

The press release further states:

This action will ultimately affect the 5,500 Boeing jobs...directly tied to the C-17, and the program's nationwide supplier workforce that totals more than 25,000 people.

The government is talking about ISS support, in-service support creating 25,000 American jobs, when it could have negotiated more professionally to defend Canadian jobs and ensure, as the Liberal government and previous governments had, that we have intellectual property here in Canada and those in-service support jobs would be here in Canada.

The government dropped the ball because of its laissez-faire approach. It believes there is no role for a government in creating an industrial strategy for the country. It does not believe that defence procurement or government procurement can be used to create growth and opportunity for Canadians. It is actually failing to create the kinds of opportunities for Canadians that previous governments had the foresight and wisdom to do.

Furthermore, this deal is not ITAR compliant, which means that Canadian citizens with dual citizenship in the 25 countries that are currently ITAR listed in the U.S. will not be able to work on these contracts. Some of the members of Parliament in the House who were elected by Canadians would not be allowed to work on these contracts because of the government's failure to stand up for Canada. The families of these members of Parliament would not be able to work on these contracts because the government did not have the guts to stand up and defend Canadian sovereignty in a contract negotiation as massive as this one.

As I mentioned earlier, the member for Bourassa will be speaking in a moment and covering further points on this.

The notion of national defence is to preserve and strengthen Canada's role in the world and to defend its sovereignty. The idea that we have a Conservative government and a Prime Minister that would actually diminish Canada's economic sovereignty as part of its approach to defence procurement is shocking.

We must recognize the importance of preserving and strengthening Canada's industrial base. Manufacturing jobs across Canada are being lost, whether it is in the auto sector or the food sector: 500 jobs lost at Hershey in Smiths Falls; the closure of the Maple Leaf plant; 300 jobs lost when Canard closed; and 2,000 Chrysler jobs lost under the government. It is because of its laissez-faire approach and the fact that it does not believe government has a role in helping create long term economic opportunities. The government is wrong and Canadians realize it is wrong and this deal was wrong.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I want to pick up on a point and ask the hon. member a question.

It is like the Conservatives made a deal and they are trying to negotiate afterward. Does the hon. member not agree that we are not just losing jobs, but we are losing skills, technology and Canada's future? Once we lose the brains of Canada, how do we get them back?

Does the hon. member not draw a parallel to this agreement with respect to the extension of the mission in Afghanistan and the so-called caveats where the Conservatives committed first and are now trying to negotiate afterward, which is a little bit too late? Is it not normal to negotiate first and then commit? For example, should we not negotiate a good deal on military procurement before we give out the contracts? Could he elaborate on that?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, the hon. member is quite right. The principle of negotiation is that one does not try to negotiate after the deal is signed.

When I look across I see the Minister of International Trade who I worked with closely when he was minister of industry in the previous government which recognized the importance of defence procurement as part of a long term industrial strategy. At that time we were fighting to ensure that direct industrial benefits, not just indirect industrial benefits, would play a larger role in our defence procurement, and furthermore, that the research and development and intellectual property side of it would be more prominent than it is in this deal.

The fact is that these C-17 aircraft will be serviced exclusively by the original equipment manufacturer, Boeing. In the past, we always fought to ensure that Canadian companies and contractors would supply the in-service support. That decision and that approach helped build an internationally recognized global expertise sector here in Canada.

The present government has reversed that decision and has taken a laissez-faire approach that is hurting Canada's aerospace industry.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, is it not surprising for my colleague to see that a government gives $9 billion in contracts, including a $3.4 billion contract to Boeing, while letting the company decide on its own where to invest the money from the contract, as long as there are spinoffs for Canada? Is the government not surrendering its responsibility? Should it not commit to respecting the current distribution of aerospace industries in Canada?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, when our government was in power we had chosen a very different approach because it is very important to make sure that the benefits are distributed throughout the country.

This government chose a laisser-faire approach. I find it strange that a government that is supposedly defending Canada and our sovereignty could act this way.

It is a complete departure from past governments. I would think that past Progressive Conservative and Liberal governments did work with regional agencies. We worked with regional industrial agencies in ACOA, the agency in Quebec and the agency in western Canada as we worked with Industry Canada to ensure regional benefits. That was part of the approach of successive governments, both Progressive Conservative and Liberal governments. They worked with a similar approach, using regional development agencies, to ensure regional benefits were distributed fairly.

The present government has thrown that away because it does not believe that government has a role in ensuring strong regional industrial benefits. I believe that departure will cost Canadians dearly in the future.

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, I thank my colleagues from the Bloc for choosing to discuss this matter on this opposition day.

I hear the member heckling, well the member can leave like the others. Nobody is here.

Today, we should talk about the branch plant policy of this government. What I find funny and pathetic at the same time is that barely a year ago, the Minister of Industry said at the Farnborough International Airshow that Quebec has 50% and that it is normal for Quebec to get its share. There is alternately the international air and space show at the Le Bourget airport, near Paris, and the Farnborough International Airshow. That was the first thing.

Today, we have “Boeing's employee of the month”. The Minister of Industry is now “Boeing's employee of the month“ for me. I would like to wish him a quick recovery because, after negotiating like he did, his knees must hurt quite a bit. Because of his size, I know that his knees must hurt right now. He spent so much time on his knees when he negotiated that they are now killing him. Therefore, I hope he will get well soon.

Today, we could be talking about several issues. There are many things we could be discussing. My colleague talked about ITAR, the International Traffic in Arms Regulations, that include all the safety regulations of the American government. Our government is but a franchisee, and the employee of the month did his job very well. He did such a fine job that even before the contract was signed, he travelled to Washington. I am not sure if he flew on a Challenger, but I know the Prime Minister likes to use it to go see a hockey game. People from Boeing and Lockheed Martin did not need bother coming here. He travelled to Washington. What did he negotiate? We do not know. But it seems things worked out just fine because both Boeing and Lockheed Martin will get contracts without any call for tenders.

I am ready to fight for the regions. I want to make sure Quebec gets its share, and the Maritimes and Western Canada should get theirs too. But the problem is we are fighting over a pittance, because they used a diversion tactic. If we want to make sure our aerospace industry gets its share, there has to be something to share to start with. I am talking here about intellectual property. I am talking about services and support. I am talking about maintenance.

This is the first time we are buying military equipment we will not own. We are buying, but we will not be the owners. What does that mean? For this equipment, there are three levels of maintenance. The third includes the integration of computerized systems, for example. The second includes motor maintenance. What we will get is the first level of maintenance, and that means we will top up the windshield fluid, change the oil and put gas in the tank. This is what Canadians got.

Not only did this government sell out Canadian sovereignty but, as a franchise, it is saying that it trusts us. ITAR is serious business. We do not own that aircraft, but we have a big heart. Let us suppose there is a disaster in Cuba and we need that aircraft to take food there but, unfortunately, it does not start. We turn the ignition key, but it will not start. We will phone Boeing and ask that they send us the necessary part. Do members know what Boeing will tell us?

[An hon. member]

Please, you have to say please.

[Denis Coderre, Liberal, Bourassa, QC]

You have to say please, but what is worse is that Boeing will not be able to go to Cuba. Why? Because the U.S. government has a foreign policy for Cuba. It will tell us that it is not appropriate to go to Cuba and we will not get the part. That is the number one problem and that is serious.

Earlier, we talked about ITAR and dual citizenship. I am disappointed, because the member for Abbotsford mentioned something earlier, referring to one of our colleagues who said he has dual citizenship and could be a member of Parliament, but could not work, and I would like to know what it means, because I am learning English.

He said that he does not belong here. That is what he said. So I want to know what that means later.

We are talking about dual citizenship. Currently, there is a problem at Bell Helicopter. Venezuela and Haiti are on the list of 25. The Haitian diaspora is present in my riding. Haitian engineers are not allowed to work on these projects. We would like to work with China, but those who have dual citizenship that includes the Chinese citizenship cannot work on such projects. It is not just engineers. The janitor who works in the building, close to the aircraft, is not allowed. This is serious. This affects not only engineers and those who hold important positions, but even manual workers who work close to the aircraft. Things are just fine. Does he believe in multiculturalism?

There is an even more serious problem. It means that, ultimately, we have not only surrendered because we now have second-class citizens, but we have also sold out our sovereignty and our industry. Whether in Quebec or elsewhere, regardless of percentages, if we want the industry to thrive, if we want things to work, we must have intellectual property.

What are the next generations of engines being built on? What did Kenroad, what did IMP grow on? It was maintenance. I am all in favour of starting up windshield washer businesses, but maybe we could be developing synthetic oils. But we will not have a real aeronautics industry in Canada with this government that gives us peanuts or with a Minister of Industry whose knees hurt and who goes to negotiate in Washington. We want to be sure that our government is doing its job. This minister said that he could not intervene because this would be political interference and favouritism. What is this Minister of Industry good for if he cannot work for the interests not only of his province but of the industry? The situation is quite worrying.

We could also talk about intellectual property. I am happy today because, with the official opposition, we passed a motion unanimously. I have just come from the Standing Committee on National Defence. Let those who are listening take note. We just unanimously passed a resolution in which it was recommended that the Auditor General look at all the contracts. I am prepared to fight for the industry, but I am not interested in crumbs from $3.4 billion and a blank cheque for $1.3 billion when maintenance is going to take place in the United States. When money is given, it has to be given entirely to Canadians so that they can benefit from it. I want a competitive process that enables us to get our money’s worth. Let them come up with their scenarios ensuring that every region will get what it deserves. But that is not what happens. I am very happy that the recommendation was made that the Auditor General look at the C-17 contracts. We might as well have simply leased these C-17s, given that we will not have the intellectual property, will not have the parts and will be unable to help our industry.

There was an alternative; Boeing could have leased them to us. We would have had the money to invest elsewhere. We could have invested in defence infrastructure. We could have invested in parts for which we know that we already have the intellectual property. Not only did the government abdicate its responsibility but, since we bought only four planes and we do not have the infrastructure, we are going to let the Americans have the jobs, too. They are going to get us excited with $577 million out of a contract worth $3.4 billion. That is what they established. Am I going to fight for 15% of 60% in Quebec? I want to make sure first that we are not falling into this government’s snare, that it will prove to us that we will get our money’s worth and that Canadians and Quebeckers, people in the Maritimes and people in the West, will get their due, that is, that we will really get this percentage. Right now we are fighting for peanuts.

I believe in a fair share. I believe in this country and I believe in true sovereignty because we need to equip our forces. As a matter of fact, the marketing strategy was easy. The government just brought back its blue paint and just changed the label because we already announced at that time $13 billion.

Nevertheless, I would say that the motion is appropriate. The government has to come clean and if it is not doing that then we still have question period. We have several questions, but I am pretty pleased that the Auditor General will now take a look at all those contracts because it smells.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I want to congratulate my colleague on his speech and on the motion that was passed by the Standing Committee on National Defence. In my opinion, this can really help us shed light on this matter.

With the contract granting system that we have, where the company can choose the location and the practical details, will we end up with less important contracts?

The Canadian or Quebec industry will not benefit from the greatest technological challenges in the end. On the contrary, we will get only the crumbs when Boeing decides to do business elsewhere with its own subcontractors or subsidiaries.

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, I thank my colleague for this very relevant question. This is another issue that we have to tackle. This is what I mean by franchising. We will not have jobs, but only consolation prizes, because we do not get the intellectual property. They are going to tell us that other contracts are coming and that we have to look at it as a whole. I totally disagree. We have to look at it one piece of equipment at a time: Deal or no deal.

It is just like the television show Deal or no deal. As far as I am concerned, it should have been “No deal”. We only get some consolation prizes. This is the first time I have seen us being forced to accept a consolation prize. It might not be your experience, but it is the first time that I see us settling for the consolation prize.

The government has given up its power and told foreign companies, “You take care of it and we will thank you for giving us peanuts”. That is so nice. It is so worthwhile.

The industry will work well once we have the intellectual property. I do not want any consolation prizes. I want to make sure that we can have regeneration models that will give us the tools we need to achieve our full potential across the country.

The reason we have an aerospace industry is that a government, which was our government back then, made some decisions. Remember what happened in Jean Chrétien's day, in 1974. The Challenger went to Canadair. It was normal, it was fine. Political decisions were made because a minister of Industry took a stand and said that from then on the aerospace industry would be important for us.

I look at what the Conservatives are doing now and I remember the Avro Arrow project under Mr. Diefenbaker, when we abandoned the technology.

We gave it all back and now we will once more be at the mercy of others. What a great foreign policy!

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, first of all, I would address an allegation made by the hon. member, which is really unworthy of him. He suggested that I made a comment that the member for Kings—Hants did not belong here and suggested that was referring to his dual citizenship.

Mr. Speaker, you were here. You did not hear that. I suspect the member for Kings—Hants did not hear it and I do not know where that kind of a smear could come from, from a member with so much experience.

Getting to the merits of the issue though, it is interesting. Our government was elected to ensure politics was taken out of the contracting process. We want to get away from the old days of Liberal pork barreling, Liberal interference in the contracting process, and that is exactly what this government is doing.

It is really interesting that when those members were on this side of the House, they would make statements that were entirely inconsistent with what they are saying now. I want to quote the member for Kings—Hants who spoke just a few minutes ago. This is what he said in the Ottawa Citizen on May 17, 2003:

I believe we need to replace failed regional economic development programs and corporate welfare with dramatic corporate-tax reductions, because the market can pick winners and losers better than bureaucrats.

Now he is singing a different tune. I would like to ask the member for Bourassa, how does he square those kinds of comments with the comments he has just made in this House suggesting there should be further interference with the contracting process?

[Denis Coderre, Liberal, Bourassa, QC]

Mr.Speaker, when I heard that remark by the member for Abbotsford, it was not about him. When we spoke about certain colleagues here with dual citizenship, he joked back—but it was not funny—“He shouldn't belong here”. That is what I heard. If he says that is not what he said, I believe him, but I heard properly. I am pretty far along in my English classes and am starting to understand properly. But let us move on.

I can say that we have indeed fulfilled our role properly. We have invested in the regions. We have worked to make sure that Canada is not just Montreal, Toronto and Vancouver, but also the rural and semi-urban areas. People, no matter where they live, are entitled to the assurance that the government is shouldering its responsibilities. That is what we have done in industry, in the automotive sector, and in R&D in a number of scientific fields. This is the right approach, and not interference.

I would, moreover, encourage the hon. member to listen in question period when they are trying to accuse us of interference and politicking. There is a saying in French that if you spit into the wind, it only ends up back on your own face. He ought to be careful when he makes comments like that, very careful.

I like this job a lot and I keep finding out more and more things I could talk about. The Minister of National Defence is a seasoned lobbyist who had 28 separate contracts. He knew plenty about procurement. He even used to approach Defence directly with the suggestion about looking after Stewart & Stevenson trucks. This very same minister is now responsible for the specs for truck purchases. We will be talking about that. There are plenty of things we will be able to talk about.

I think, however, that he is confused about what a Minister of Industry does: he needs to do his job, not go off to Washington to negotiate on bended knee. He needs to do his job, working for all Canadians. If the member for Abbotsford thinks—and I believe he does—that regional development is important, and that the people in his region are also important, then he must agree that an industry minister has a duty to intervene. This is not interfering, it is just doing his job.

[The Deputy Speaker, NDP, Bill Blaikie]

Resuming debate, the hon. member for New Westminster—Coquitlam.