Mr. Speaker, you have read the motion. It surprises me that we should have to come to Parliament to ask the government to ensure the fair distribution throughout the aerospace industry of contracts paid for with taxpayer dollars.
I would like to reread the motion:
That the House denounce the laisser-faire attitude of the government that prevailed in its negotiations with Boeing, regret the fact that Quebec did not get its fair share of the economic spin-offs of this contract given the significance of its aeronautics industry, nearly 60%, and call on the government to provide fair regional distribution of economic spin-offs for all future contracts.
Given these investments in the aerospace sector, the Conservative government's laissez-faire attitude will result in Quebec losing 18,500 jobs per year. We all know that with the way the government is now doing things, the best Quebec can hope for is about 30% of the economic spin-offs from these contracts even though Quebec represents nearly 60% of the aerospace industry. If they had simply said that they would take into account the geographic distribution of the aerospace industry in Canada relative to territory, Quebec would be receiving between 55% and 60% of the economic spin-offs.
The Conservative government deliberately chose not to impose those kinds of conditions. Yet the government did decide, for example, to require companies to direct 50% of the spin-offs to the aerospace sector and 50% to other sectors. With respect to the 50% for aerospace, the government even identified nine such sectors in advance.
There was nothing stopping the government from imposing these kinds of conditions, especially since it has the upper hand and can practically hand out contracts without a call for tenders and decide which company gets the contract. It was in an excellent position to ensure that Quebec would get its share. The Conservative ministers from Quebec failed dismally in this respect. That is why we have brought this issue before the House today. We hope that the members of this House will support this motion so that we can achieve satisfactory results. The government must change its position so that Quebec can get its fair share of aerospace investment.
Quebec is not looking for charity. Quebec's aerospace industry accounts for between 55% and 60% of the Canadian aerospace industry. It is only natural that Quebec should get its fair share, and that is what we are asking for. We want this House to tell the Conservative government that it did not do its homework and that it should have required that Boeing invest specific percentages in the regions, according to the existing distribution. That would have been truly fair.
When the Minister of Industry tells us that this is a private contract and he cannot intervene, he is clearly mistaken. In fact, he himself did intervene. He set conditions about spin-offs, but he did not have the courage of his convictions, or else his proposal was simply refused. Publicly, the Prime Minister told Canadians that there would be no geographic distribution. Even though the Minister of Public Works and Government Services claimed that he was trying to get as much as possible for Quebec, the Minister of Industry took exactly the same position as the Prime Minister. In that sense, he is particularly responsible for the mess that is going to result.
It is not just the Bloc Québécois that is frustrated and angry about this situation. This morning, in an article in Le Devoir entitled “The aerospace industry is angry”, Sue Dabrowski, general manager of the Quebec Aerospace Association, said:
The federal government has a responsibility. It cannot just wash its hands and say, “Sort this out yourselves”. If it keeps on like this, it will have a fight on its hands.
Because she has been trying to meet with the Minister of Industry for months, in fact, since the election last year, she added this:
I am very disappointed. I still hope to meet with him and tell him that there are problems with the process. We have to work as a team.
This laissez-faire approach of the Conservatives is distorting the process.
The government claims to want to give everyone an equal chance, but that is not what it is doing. The company that will get the Boeing contract already owns businesses in Ontario, Manitoba and the west. Naturally, the company will turn to its subsidiaries and its usual subcontractors. This means that the Conservative government has knowingly, deliberately decided to move the aerospace industry in Canada. Because of the government's actions, the percentage of investment in Quebec will be lower than was hoped and expected and lower than Quebec deserved in all fairness.
The result of this situation is that this hurts the aerospace industry which is very uneasy about this decision by the government. We absolutely have to express our disagreement with that position in this House.
The government could have imposed all the conditions it wanted. Military purchases are exempt from trade agreements. There is therefore no problem in terms of the WTO or other international organizations. Governments may make their military purchases where they want and impose the conditions they want. In this case, however, the government provided that the spinoffs in Canada would be equivalent to the amount of the contract, but did not provide spinoffs for Quebec. They knowingly made the choice to sacrifice the Quebec aerospace industry for the benefit of other parts of Canada.
Unfortunately, we know that the automobile industry is concentrated in Ontario. The practice is the same in Canada for aeronautics because expertise and skills have been developed, not only in the big corporations but also in the SMEs in that sector. They are all going to suffer from this decision. The greater Montreal area is not the only one that will suffer. We have obtained the number of companies that have aerospace contracts all over Quebec and they are in every region of Quebec. Today, it is those companies that are being penalized by the position taken by the Conservative government. Ottawa has undercut the only real aerospace centre in Canada. In the aerospace industry, we have a few big companies that manufacture airplanes or engines, but there are also a large number of suppliers that work on contract and the only centre of aerospace industry is the one in Quebec. The government's present position is therefore very unfortunate.
Quebec is the loser, because, since the Quebec industry is a centre in itself, it is less integrated into the American industry than the Canadian plants, which are already within the American orbit. We know that much of the expansion of the aerospace industry in Canada was due to the industry paying attention to the needs of the private sector. A part of it is associated with the army, with the air force, but that is much less a factor.
Moreover, on December 31, 2006, the Conservatives ended the Technology Partnerships Canada program. You can go and look on the department's website; there is no longer a Technology Partnerships Canada program. The minister had told us for months and months that the program was being analyzed and that a new program was going to be announced. We have not seen that new program. Now, the message that is being sent to the entire planet is that in Canada, if you want to invest in aerospace, you will not have government support as you have in Brazil, the United States or elsewhere. This means that for investments that are decided several years in advance, there is now a glaring absence in the Conservative government's attitude. This reflects the same spirit as saying that they do not want to intervene in the economy in any way.
Under the three contracts, they will be paying out about $10 billion, and it is a private company that will make the choices for the entire industry, and we know full well that there is no natural inclination at Boeing to invest in Bombardier. It is a competitor. There is therefore no natural inclination to do that. The government had a responsibility to rationalize the market in that respect and it decided not to take that opportunity. That is what we are criticizing it for today.
The spinoffs in Canada should amount to about $9.2 billion. As a result of the choice it has made, the government will be responsible for the loss of 18,500 jobs. This is undercutting the Quebec aerospace industry and the government is striking at the jewel in the crown of our economy. That is why no one should be surprised at the anger being expressed by all representatives of the aerospace industry in Quebec.
Not only is it happy to weaken the industry now, but the government is also casting a shadow over its future. There is a rule in the aerospace industry that the earlier a company gets involved in the development of a new product, the more it gets to work on technologically interesting things. Conversely, suppliers who come along later work on less important parts involving less technological research. That is what will happen in this case. We will get the crumbs rather than the main body of the research, the new products and the development. This too is a very negative effect of the Conservatives’ decision not to intervene. It makes us wonder whether the Conservatives are pathologically opposed to Quebec’s aerospace industry.
We used to see the vehement tirades of the Reform Party. We sure remember them. That is the spirit we see returning today, as if everything done in Quebec were bad and the fact that the government was helping the aerospace industry constituted an undue advantage for Quebec. Everywhere in the world, this industry is helped, assisted and supported by government.
In Canada, though, we are going backwards and in the other direction. That really is bad.
The Bloc Québécois has long been proposing a genuine aerospace policy. Unfortunately, what the Conservatives are doing is completely at odds with this. We need a major adjustment. The policy we want is the following. First, there should be a clear, predictable program to support research and development so that we can say to the world that if they invest in our aerospace industry, they will get assistance in the form of a research and development program.
We also need a solid and predictable commitment from the banks for financing, especially for export sales. There are already programs like this, but the government needs to do more.
Finally, we need a policy to support SMEs in the aerospace sector. In order for us to derive as many economic benefits as possible, small businesses, which are less able to penetrate international markets, must have the support they need to join forces and win contracts. Finally, we need a policy on military procurement that helps the industry develop. What we see before us now, though, is the very opposite.
I thought it was appalling to hear the Minister of Public Works state at a press conference that he was unable to say what percentage of the benefits would go to the various regions of Canada and especially Quebec. It was appalling to hear the minister say that the region would be Canada. Certain parts of Canada have worked very hard to develop this industry. Quebec is the heart of it. The Conservatives’ attitude is totally frustrating and unsatisfactory for all Quebeckers.
On Friday, February 2, 2007, the government purchased four C-17 cargo planes. In exchange for this high added value manufacturing, the federal government required the suppliers of the three projects to guarantee as many economic benefits as possible. But there was no way it wanted to say that Quebec’s share of these benefits would have to be assured. So these projects do not include the important things that we would have liked to see.
The aerospace industry is mainly concentrated in the Montreal area, and it includes many small and medium sized businesses. Quebec is a leader in this industry, with 250 companies, 240 of which are small or medium sized businesses. Their production has a value of more than $11 billion, and 89% of it is exported. This represents exactly what we have been told we should do for 10, 15 or 20 years, develop specialized sectors to be able to export. Quebec has developed expertise in this industry, it has developed products, and it has carved out its niche. Overnight, as a result of a decision made by this Conservative government, this stronghold will be shaken because an American company will be allowed to decide how the aerospace industry in Canada is to develop.
Jobs in the aerospace industry are high quality jobs which carry an average salary of more than $58,000 a year. In this industry, Quebec has become a world leader ranking sixth, behind the United States, France, the United Kingdom, Germany and Japan. The Montreal area, where 95% of this industry’s activities are concentrated, ranks fifth in the world in terms of jobs in the aerospace industry. The federal government gets $2.1 billion in tax revenues from this sector which is crucial for Quebec and Canada.
It is very hard to find the reasons why the Conservative government decided to ignore the existing distribution of the operations of this industry, but maybe it is just a way to destabilize the aerospace industry in Quebec. We need much more help for this industry. A specific gesture was needed from the federal government. It should have told Boeing clearly that it would get the contracts and that it could invest in Canada, but that it had to comply with the existing distribution of operations in Canada and grant to Quebec companies roughly 60% of its subcontracts, a proportion that reflects its present share of investments in this industry. That way, we could forge ahead, and Quebec and Canada could be an important development centre.
Now Boeing has the possibility of deciding to spread its investments around according to its objectives. As a private company, it cannot be faulted for taking that approach dictated by its shareholders. I do, however, find it unacceptable that the federal government has abdicated what was, and still is, its responsibility by handing it over to a private company. Unfortunately, it will have to answer for the outcome.
But I am aware that every time the Bloc Québécois has raised this matter here in the House or in a press conference, it has resulted in frantic efforts to place contracts in Quebec in order to make the Conservative government look good.
That is exactly what I want to see happen, for Quebec to get the best possible return on its investments. But the Conservative government's current attitude has held Quebec back and made it adopt an attitude that is not in keeping with its market position.
It is important for the House to make it clear to the Conservative government that we do not want to see its present approach continued, and that it ought to change its ways and move forward with investments respecting Quebec for what it is.
The Bloc Québécois maintains that the federal government needs to provide the aerospace industry with stable, predictable and substantial R&D support. The industry needs to be able to count on a federal government contribution in the 20% to 30% range for all R&D projects. The government must strike a program that is specifically tailored for the aerospace industry, and immediately inject the necessary funds.
We are nowhere near this at the moment. They favour that practice saying that this is a private market that needs to be allowed to play out, and that Quebec will,in the end, go after its share. This attitude, in my opinion, does not reflect market reality. Unfortunately, if the Conservative government does not change its attitude, within a few years we will be seeing aerospace jobs moving. There will be fewer in Quebec and more elsewhere in Canada, not necessarily because of the vigour of the industries in the other provinces, but rather because of the federal government's decision to give free rein to a company for the target areas of its investments. This approach must be rejected.
It is important, therefore, that this motion gain the support of the House. It is obvious that the future of some of the largest businesses in Quebec depends on it. In addition to such leading lights as Bombardier, there is also the small and medium business sector, which has also made its contribution and created considerable employment.
For all these reasons, we feel that the motion we have tabled today, for the House to denounce the laisser-faire attitude of the government that prevailed in its negotiations with Boeing, is important. It is equally important to us that the House support it because, given the present situation which we are defending, there is an absolute need to turn the situation around.
We have not been used to this sort of behaviour in the past from the governments here. The change we are seeing now represents a harsh blow which will result in a destabilized Quebec aerospace industry.
For all these reasons, I encourage the House to vote in favour of the Bloc Québécois motion.
