House of Commons Hansard #68 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was finance.


The House resumed from February 4 consideration of the motion.

Forestry Industry SupportPrivate Members' Business

11:05 a.m.


Daniel Petit Conservative Charlesbourg—Haute-Saint-Charles, QC

Mr. Speaker, I am pleased to take part in the debate on Motion M-414, which proposes measures to address the challenges facing Canada's forestry sector.

I would like to preface my comments by saying that I do not wish to downplay the challenges facing the forestry sector. Members on both sides of the House and from all regions of the country understand that these are serious, major challenges, but in many cases, they are a lot like the challenges affecting other sectors of the economy.

Forestry companies and related industries are not the only ones having problems. The slowdown in the American economy resulting from the sub-prime mortgage crisis south of the border is now having a negative impact on a number of sectors here that export goods and services to the American market.

Also, the loonie's recent rise to dizzying heights compared to the American dollar is having an impact on many sectors of the economy where costs are calculated in Canadian dollars and revenue in U.S. dollars.

Competition is also a factor in other sectors too. Many sectors are beginning to deal with increased competition from low-cost producers, as well as conventional producers seeking to increase their market share.

The combination of a strong Canadian dollar, a weak American economy and increasing foreign competition is having a tremendous impact on the bottom line for many Canadian companies, particularly in the manufacturing sector.

The forestry and manufacturing sectors both need access to appropriate basic economic tools so that our companies can turn their attention and their efforts to facing these challenges. Clearly, Canadian manufacturers are determined to remain competitive within a global economy. International competition is a catalyst for innovation.

Competitiveness opens up new opportunities, and the reality of today's world market has made it easier than ever to coordinate activities along the supply chain. Cheap telecommunications and fast, easy transportation have made global networks a reality, and international trade, product research, innovation and development, financing and other services are being set up where it makes the most business sense.

When economic fundamentals are solid, businesses have a better chance of making their mark and succeeding. Canada's economic fundamentals are solid.

While other economies are facing uncertainty, Canada is the only G-7 country with budget surpluses and a falling debt burden. Our unemployment rate is the lowest it has been in 33 years. In 2007, employment in Canada rose by approximately 360,000 jobs, all of them good, high-paying jobs.

This government wants to make sure that Canadians are benefiting from our economic success, and this certainly includes the manufacturing and forestry sectors.

We want them to make investments that will help them compete in the long term. We want them to benefit from a well-informed workforce. And so, the government has announced a plan to build a strong economy by creating the conditions that will allow Canadians and Canadian businesses to prosper.

Advantage Canada has established a strategic, long-term economic plan to improve Canada's economic prosperity, both today and in the future—prosperity that will benefit manufacturers. The plan creates five key advantages that will help our country to remain internationally competitive while ensuring that we live in a stronger, safer and better Canada.

The tax advantage will establish the lowest tax rate on new business investment in the G-7. The fiscal advantage will eliminate Canada's total government net debt in less than a generation. The entrepreneurial advantage will reduce unnecessary regulation and red tape. The knowledge advantage will create the best educated, most skilled and most flexible workforce in the world.

And the infrastructure advantage will help move people, goods and services across our country and our borders.

We then followed up on these concrete measures. We introduced a substantial tax break for manufacturers on the capital cost allowance for eligible machinery and equipment, which means a $1.3 billion boost to the manufacturing industry. Our manufacturers can now invest to increase productivity, so that they can remain competitive, regardless of the value of the Canadian dollar.

In the 2008 budget, we extended the provisions of the accelerated capital cost allowance program from two years to five. This will mean $1 billion in assistance for manufacturers, and is just one of many measures introduced since our government was elected in 2006. These measures include eliminating the capital tax and the corporate surtax and reducing corporate and small business tax rates. Overall, these measures represent $9 billion in tax relief for manufacturers and producers in Canada.

We are eliminating administrative formalities and reducing red tape. We are supporting marketing and R and D. We are making the largest infrastructure investment in the past 50 years. Like other sectors, the forestry industry will certainly benefit from these measures. And the forestry industry has benefited from one of the first measures the government took after being elected just two years ago: the successful negotiation of the softwood lumber agreement between Canada and the United States.

We must not underestimate the importance of this achievement. For Canada, resolving this dispute was the best way to improve basic economic conditions in the forestry industry. This action by our government put an end to years of expensive litigation that produced no tangible results and only prolonged the uncertainty for the market and for Canadian producers.

This measure gave stable access to the United States, the largest economy in the world, our closest neighbour and our largest market and trading partner. It also put $5 billion back into the hands of Canadian softwood lumber producers. That was a huge injection of capital for producers who, in many cases, likely doubted they would ever see that money again.

Earlier, I mentioned the low unemployment rates and how employment in Canada had grown by 360,000 jobs in the past year alone. On our side of the House, we understand that this overall growth is not divided equally among all communities across the country. We know that some manufacturing jobs are threatened and that this is an important issue in the forestry industry as well. We know that we cannot be complacent, especially if we want to be competitive in the global economy.

Like much of the manufacturing industry, the forestry industry must restructure and adapt to the new economic realities that are affecting many single-industry communities. Consequently, on January 10, 2008, the Prime Minister announced a $1 billion national community development trust to help vulnerable communities that are dependent on a single employer or industry.

We expect the provinces and territories to use this funding for a wide range of initiatives ranging from job training and development to community transition plans and infrastructure initiatives to promote local economic diversification.

It is not the government's policy to choose winners—nor should any government have such a policy. Our role is simple. Our role is to lay the economic foundations necessary to ensure that the economy can function properly. This can be difficult to achieve, however. If we are successful, businesses will be in a better position to develop and prosper.

This government wanted to provide businesses and manufacturers with the conditions that would allow them to compete with the rest of the world and this is working. Manufacturers are adapting and innovating. They are confident and the government will be here to back them up. We will continue to work with them by creating a climate in which businesses can succeed and there will be jobs for Canadians.

Forestry Industry SupportPrivate Members' Business

11:10 a.m.


Ken Boshcoff Liberal Thunder Bay—Rainy River, ON

Mr. Speaker, this debate comes at a very interesting time, because as our Standing Committee on Natural Resources conducts its hearings, we have been hearing officially and with a great deal of reference and confirmation that many of the issues raised since the forestry competitiveness plan of November 2005 have resurfaced. In fact, they have boiled over into problems that no one really expected would become so aggravated and problematic.

When the standing committee decided to hold these hearings, it was not without a measure of coincidence that a so-called $1 billion plan, a competitive trust, was announced for the forest industry. It sounded like it would be quite salvageable and would do something for the industry. Then we found out, first of all, that the plan was supposed to come out in July. Thanks to pressure from the standing committee, that money became available, and I think that today is the first day it should be flowing to the provinces and territories.

But then, upon closer examination, we found out that, first, the $1 billion will be spread over three years, so it is not $1 billion a year. Second, it is not just for the forest industry. It is for any industry that the provinces and territories choose.

As well, the formula of distribution means that provinces which may not need it as much as Ontario does will find themselves with a plan that has no federal component whatsoever, with the money simply being transferred to the provinces and territories. The provinces and territories may like that, but for us federally, it represents a lost opportunity for us to be able to spend that money to ensure that the forestry industry would be stabilized and workers, who may not have to lose their jobs, could still be working.

Indeed, if the $1.5 billion plan that had been proposed under the government of member for LaSalle—Émard had been adopted in November or December of 2005, thousands of jobs would have been saved and many plants, mills and operations would still be in business.

When we look at the lack of conditions in regard to this so-called $1 billion, we realize that the provinces and territories can do whatever they want, so there are no terms and conditions. Indeed, the Standing Committee on Natural Resources was quite shocked when the deputy minister for natural resources appeared before us and we found out that there was no knowledge of the mechanics of the distribution of this money. There was only the general outline.

So clearly we have exposed another scam. That is a problem for the forest industry. It means that the work done by organizations across the country in their recommendations in terms of addressing transportation issues with railways and the competitive cost advantages such as capital cost allowances, which they say should be longer, is being ignored. The Minister of Finance ignores that. We will discover throughout our hearings the kind of evidence that will make this pragmatic and hopefully acceptable in order for the government to come to its senses on this.

We know there has been a two year gap. In fact, often the money for the pine beetle is trotted out as something that is being done. Of course, we have found out that not one beetle has been stopped and not one tree has been saved by all this money. We have to wonder what kind of pork-barrelling is going on with that kind of money instead of hard research that would lead to scientific results and some solutions.

We also found, to a disturbing amount, that no communities, no aboriginal communities, no municipalities were consulted at all with regard to this so-called billion dollar fund, nor were the provinces in terms of their own departments of natural resources or those departments of industry which are charged with helping the forest industry. Therefore, it is quite remarkable that such a thing could go on.

In hearing from the mayors of towns such as Kenora, Thunder Bay and Dryden, they have let us know exactly how hard the impacts of these were and the fact that not one item of information has been received by any municipality individually, regionally or provincially such as the Association of Municipalities of Ontario or the Federation of Canadian Municipalities in terms of the distribution of this.

Even far more shocking, believe it or not, not one member of any labour organization from coast to coast to coast was asked how their membership could apply or could benefit from any of this funding. It is startling that something could be dreamt up in the Prime Minister's Office and no one else knew about it.

Now it is out there and it is being written as we speak. Therefore, in distributing a trust fund to a province or a territory it means that anything that we could have had in terms of a positive impact to make sense of this money, to distribute it to communities that have been hard hit and needing it, has been lost. That in itself is very disturbing.

We even find that many of the issues that the federal government could have used with this funding in terms of a federal stake, if we were going to allocate those kinds of dollars, and we know for certain that companies have been asking for various things in terms of retooling, environmental questions that had been proposed and the solutions in place in November 2005, are conspicuously absent.

Indeed, organizations such as the Forest Products Association of Canada, which has been working with the minister's office and with various sections, sees the research and the determination that it has had. I am not saying it has been ignored, but basically it is an organization that is proposing solutions.

It has now become incumbent upon the Standing Committee on Natural Resources to address these questions and bring them forward to Parliament in a report, but there is not anything that has not been said by various organizations, whether it is transportation, labour, forest communities, single industry towns, or forest associations that we have not known in terms of a solution.

Many of those were included in the forest competitive plan of Prime Minister Martin. We know that in pushing for those types of things in a very calm and logical way, and identifying solutions as opposed to trying to blame someone else, that we really had a handle on it.

It would have eliminated an enormous amount of grief not only for our communities but suppliers, labour people themselves, the families involved and regions such as mine and the region of the hon. member from Kenora where there is a regional level impact of a territory larger than the country of Germany or France. The impact has been phenomenal.

In conclusion, in supporting this motion before us, I believe in the strongest terms that we have been trying to get forestry as a front burner agenda. I give credit to the hon. member for Kenora for forming a forestry caucus and taking leadership in the past number of years.

Indeed, it is within the Liberal Party of Canada that many of these solutions have come forward. I am glad to see them being adopted. Members can look forward in the next few weeks to a report that should propose federal solutions, federal involvement, and a federal front of mind for the forestry industry in Canada.

Forestry Industry SupportPrivate Members' Business

11:20 a.m.


Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, I am pleased to have the opportunity to speak to Motion M-414, presented by the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord, to address the crisis in the manufacturing and forestry sectors. I have a hard time understanding how the government member could have said earlier that Canadian industry was doing well. He definitely did not visit the right regions, or else he is turning a blind eye to what is really going on.

We need only take a look at the situation in northeastern New Brunswick, for example. The UPM plant in Miramichi closed its doors resulting in the loss of 600 jobs. The Weyerhaeuser mill, also in Miramichi, closed putting 140 people out of work. And again in Miramichi, 400 people working at the kraft paper mill lost their jobs. In 2005-06, 100 workers at the Nelson plant in Miramichi lost their jobs. In 2005, 270 workers at the Smurfit-Stone plant in Bathurst were laid off. Furthermore, AbitibiBowater, a company established in the 1930's, has just closed its doors putting about 360 people out of work. As for New Richmond,I am not sure how many jobs were lost, but I believe it was at least 300 to 350.

We could also look at the situation in northern Ontario. I have brothers who left Quebec 45 years ago to work in northern Ontario. They worked all their lives for Domtar and Abitibi Paper and they would never have believed that these plants would close their doors as they did last year.

A whole industry is shutting down and the government says that it is doing just fine. Yes, it is doing fine: service jobs that pay minimum wage are being created. It is not that these types of jobs are not needed. However, these regions are hurting from the loss of jobs such as those at the Smurfit-Stone, AbitibiBowater and UPM plants. We have to ask why this happened. How did we lose these jobs? We are told that the American dollar has something to do with it. If the American dollar is a factor in these plant closures, then why are the companies saying that they are closing them forever and that they will only sell to companies that are not their competitors?

The truth is that with NAFTA and free trade, foreign companies have stepped in and been allowed to buy our Canadian companies. These foreign companies end up deciding that their production is big enough and that they no longer need the plants in Canada. Once these companies have secured the market they close the plants. That is what is happening.

Smurfit-Stone bought the companies in Bathurst and New Richmond, but after a number of years it told the workers they were no longer needed. It said goodbye and left. After acquiring the markets, it closed the plants to eliminate the competition.

The government invested money at the time, but there should have been agreements to ensure that these foreign countries could not close the plants in the heartless way they did. From one day to the next, they decided to close the doors, say goodbye and leave.

The Finnish company, UPM, kept sending wood to Finland, when people at home had lost their jobs. That is what happened. The same thing has happened to the paper plants throughout northern Ontario. Companies come here thinking that they can do what they want under free trade. They take our forest supply, have secondary and tertiary processing done abroad, send the wood to the United States and have absolutely no regard for jobs in Canada.

The government has turned a deaf ear to all this.

Now it is bragging about investing $1 billion for the forestry industry, in order to try to fix this disaster. Even that money did not come easily, because the government wanted it to be included in the budget. That was blackmail. The government wanted the money to be dependent on the passage of the budget. If it had not passed, there would have been no money.

Last fall, when the government wanted to give a tax cut to large corporations, it did not say it would wait to see whether or not the budget was passed. The majority government, with the Liberals, made a mini-budget. They did this with the help of the Liberals. We do not have a minority government now; we have a majority Conservative and Liberal government. No one ever thought they would live to see such a coalition in Canada. The Liberals always said that they were the official opposition and that they would never vote with the government. Now, that is what they do. They remain seated, they do not vote; they leave, they do not vote. I think they should get a pay cut when they do not bother to vote. The unions call this a walkout. If an employee leaves their job, they are not paid. The Liberals are leaving the House, they are not voting, they are not working, but they still get paid for their work day.

The forestry crisis did not start yesterday. Rather, it started under the Liberals, who stalled, stalled and stalled some more. This continued with the Conservatives, who now boast about receiving $5 billion, which is what the member said earlier. In fact, the American government owed us $5 billion dollars, and a $4 billion agreement was signed. The industry was robbed of $1 billion. Even worse than the theft of $1 billion, softwood lumber plants could not operate for five or more years. This left our companies in a very weak position. Today people have lost their jobs. This is nothing to boast about.

Industries, such as the forestry industry, began in 1930. Industries that are almost 100 years old are closing their doors. This hurts communities, towns and cities. This hurts an entire community. These industries were the heart of the economy in northwestern New Brunswick, for part of the Gaspésie and northern Ontario. There is also a large concentration of forestry work in British Columbia.

What are they going to do with a billion dollars? That sure sounds like a lot of money. The government has invested a billion dollars. It was forced to do so during the budget vote. I think that the government was ashamed of how it went about doing things. It wanted to tie that to passage of the budget, yet it gave $14 billion to big companies last year. So what has that billion dollars done so far? Absolutely nothing.

Our people have no choice but to leave their homes to go work out west. I hear the Conservatives telling people in the Atlantic provinces to go work out west, to go work out there because there are so many jobs that they have to bring in people from other countries. Working out west hurts our families and our people. These people are forced to go out west, but government regulations offer nothing in the way of support, such as employment insurance. If a person goes out west for three months and then has to come back home, that person cannot take advantage of a temporary layoff to go see family. These workers live in camps. Then when they come home, hoping to collect employment insurance for a brief period of time, they are not entitled.

Last week, when we were back in our ridings, I met a man who went to work out west. I plan to take this matter up with the authorities. He worked either 660 or 630 hours out there. He returned to New Brunswick, and when he called the employer to ask for his total number of hours, the employer said that he had worked 10 and a half hours. The employee brought me all of his employer-issued pay stubs, which showed that he had worked 630 hours. He contacted Revenue Canada, and was told that he needed his T-4 to complete his tax return. He then called the company, and was told that he had worked only 10 and a half hours. He told them that no, he had worked 630 hours, and that he had all the pay stubs to prove that he had worked for them.

The company representatives responded by saying that they had heard enough from him, and just like that, they hung up on him, telling him to sort out his problems himself. And there was another worker who left for the same reasons.

In addition, regarding the forestry crisis, it is important to solve the problems at home, in our ridings. We must help our fellow citizens survive. They need more than $1 billion. We must help improve their quality of life—

Forestry Industry SupportPrivate Members' Business

11:30 a.m.


The Acting Speaker Conservative Royal Galipeau

I am sorry to have to interrupt the hon. member.

We will now hear from the hon. member for Manicouagan.

Forestry Industry SupportPrivate Members' Business

11:30 a.m.


Gérard Asselin Bloc Manicouagan, QC

Mr. Speaker, I am pleased to speak here today, during this second hour of debate. For the benefit of those watching at home, and since we are at this stage of the debate, I would like to read Motion M-414 presented by the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord:

That, in the opinion of the House, the government should introduce a series of measures to assist businesses, communities and workers hard hit by the forestry crisis, including: (a) an economic diversification program aimed specifically at communities that depend heavily on the forest industry; (b) tax measures that encourage the development of processing activities in the region; (c) a government loan and loan guarantee program for business modernization; (d) a refundable tax credit for the research and development of new products; (e) the establishment of absolute reduction targets for greenhouse gas emissions, allowing businesses to sell emission credits on an exchange; (f) a program to support the production of energy and ethanol from forest waste; (g) improvements to the employment insurance plan; and (h) an income support program for older workers.

In my speech, I will cover each of these points. With regard to the employment insurance plan, I will talk about a specific case that occurred in Charlevoix last year and serves as an excellent example. I will also show that a worker of 57 or 58 who has been laid off and is receiving employment insurance does not necessarily have an easy time finding a new job.

The forestry crisis is hitting Quebec especially hard, because of the loss of 88,000 jobs in sawmills and pulp and paper plants. More than 230 cities, towns and villages depend primarily on the forestry industry. I will also come back to each of these points. A further 160 cities, towns and villages depend exclusively on the forestry industry. Nearly half of the forest communities in Canada depend on the forestry industry, which has been a key factor in settlement patterns in Quebec.

A region such as the North Shore—the large riding of Manicouagan, which extends from Rivière Betsiamites to Blanc-Sablon, including Anticosti Island, Fermont and Schefferville—owes its development largely to the forestry industry. Forestry is a Quebec industry, because we have the forest resources. Unfortunately, as the saying goes, the more forestry workers that have jobs in the forestry industry, the more the forest recedes. What the forestry industry needs is a comprehensive plan. But one gets the impression that the Conservative government cannot see the forest for the trees; it cannot see all the problems in the forestry industry.

The crisis in the manufacturing and forestry industries in Quebec is very serious. Since the Conservatives came to power, the manufacturing industry has lost 78,000 jobs, the majority of all jobs lost in Canada. Since 2005, the forestry industry—including related services such as transportation and forestry equipment—has lost 21,000 jobs, half of all the jobs lost in Canada.

When we talk about the forestry and manufacturing industries, but mainly the forestry industry, we think about the people who work in the sawmills. But beyond the sawmills there is a whole system: people work in the forest; transportation companies take timber from the forest to the sawmill for secondary or tertiary processing. Today, with modernization, paper mills use chippers to turn wood residues into pulp.

Since the Conservatives came to power, more than 25% of forestry jobs in Quebec have disappeared. Between 2004 and 2007, the forestry industry in some regions of Quebec has experienced devastation and catastrophe.

It is important to highlight these revealing figures, which date from the summer of 2007. The situation has deteriorated since then because, within the forestry industry, many sawmills have closed or cut their hours of operation.

In the Upper Laurentians region, for example, 58% of forestry jobs have been lost. In Abitibi-Témiscamingue, 38% have disappeared. In Saguenay-Lac-Saint-Jean, in the riding of my Conservative colleague for Roberval—Lac-Saint-Jean, 34% of forestry workers have lost their jobs. On the North Shore, where forestry gave rise to and fostered the development of the regions, 32% of jobs have been lost. In Mauricie, 29% have disappeared. These figures are from the summer of 2007. We are now coming up to the summer of 2008 and the problem has grown.

In addition, 160 cities, towns and villages—but mainly villages—rely exclusively on the forestry industry. Take for example the municipality of Rivière-Saint-Jean in my riding. The only industry we had in Rivière-Saint-Jean—I said “we had” because it is no longer in operation—was a softwood lumber mill. People from Minganie, Longue-Pointe-de-Mingan, Rivière-Saint-Jean, Rivière-au-Tonnerre and Sheldrake worked at the only industry in the region. Due to the softwood lumber dispute, the company was not making a profit and had to close its doors. From one day to the next, many workers—more than 100—found themselves on unemployment insurance. Today, the majority of these workers who went on employment insurance are now welfare recipients because EI benefits run out after 35 to 38 weeks, or 40 in some cases.

There was no end in sight to the problems in the forestry industry, no light at the end of the tunnel and, unfortunately, the private owner of the Rivière-Saint-Jean sawmill announced that he was not resuming operations and that his equipment was for sale. This is a hard blow for workers and their families because it demolishes their plans. These people have to pay their mortgages, their monthly power bills, their phone bills, their municipal property taxes and school board taxes. They also have to buy groceries at least once a week to feed their family.

That is the situation in Rivière-Saint-Jean and also in Rivière-Pentecôte. What I described for Rivière-Saint-Jean also applies to Rivière-Pentecôte. The sawmill that was located in Rivière-Pentecôte was the lifeblood of that community. There was a time when people who came to that municipality to settle there and work in the forestry, in the sawmill, really put down roots there. Gradually, from generation to generation, these people built homes and settled in Rivière-Pentecôte. The owner of the sawmill in Rivière-Saint-Jean also owned the sawmill in Rivière-Pentecôte. He tried his best to keep the industry going in Rivière-Pentecôte, but he had to close both sawmills.

Mr. Speaker, am I already out of time?

I wanted to talk about the Saint-Hilarion sawmill and Joseph Bergeron in Saint-Hilarion who is currently unemployed, which makes him very nervous. He is experiencing stress-related problems. He cannot sit around and play computer games. He is unemployed. He is nervous; he has received a number of fines and he has even had a small accident. At Easter he forgot to buy flowers for his girlfriend. Then there is Simon, a young man who has lost his job. His situation is similar to the example given by the hon. member who spoke earlier.

Simon lost his job and he is being told he is not entitled to employment insurance benefits. There has been a lot of back and forth in this case. Nonetheless, I took care of it and the young man managed to get his—

Forestry Industry SupportPrivate Members' Business

11:40 a.m.


The Acting Speaker Conservative Royal Galipeau

I am sorry to interrupt the hon. member, but his time is up.

The hon. member for Avalon.

Forestry Industry SupportPrivate Members' Business

11:45 a.m.


Fabian Manning Conservative Avalon, NL

Mr. Speaker, the hon. member has tabled a motion calling on the government to introduce eight separate measures to assist businesses, communities and workers who have been hard hit by the forestry crisis.

I would like to focus on the part of Motion No. 414 that asks the government to implement an economic diversification program aimed specifically at communities that depend heavily on the forestry industry.

That is exactly what this government has done.

On January 10, the Prime Minister announced a major new national initiative, the $1 billion community development trust, under which our government will support provincial and territorial efforts to build a stronger, more prosperous future for communities and workers hurt by current economic volatility.

In last fall's Speech from the Throne, we highlighted our commitment to help vulnerable communities and workers in Canada's key traditional industries, forestry, fisheries, manufacturing and tourism, which face significant challenges in the current global economy.

With the announcement of the community development trust, this government has made good on its commitment.

The reasons for establishing the trust are clear and compelling. Canada's economic fundamentals are strong. Overall, the national economy is well positioned for long term growth and prosperity. However, the global economy is facing increasing economic uncertainty and there will be challenging times in the years ahead.

This uncertainty means that some of our communities have become and will become vulnerable because of their dependence upon a single employer, or a particular sector might find itself under pressure because of exchange rate fluctuations or declining demand, notably in the United States.

As one of Canada's largest employers, with close to 900,000 direct and indirect jobs across the country, the forest industry provides employment in over 300 small and rural communities from coast to coast to coast.

We all know that these are difficult times for the forestry industry, workers and communities right across Canada. The industry has faced significant pressure from a higher Canadian dollar, declining housing starts south of the border and increased competition from low cost producers in Asia and South America.

Regions hit by layoffs, communities plagued by chronic high unemployment and one industry towns facing downturns are precisely the difficult circumstances that the trust has been designed to address.

As the Prime Minister noted, the trust will support job training and skills development to create new opportunities for workers who wish to move to a sector that is currently facing labour shortages.

In terms of economic diversification, the trust could be used to fund community transition plans that encourage economic development and job creation. It might include infrastructure initiatives that stimulate economic diversification.

Other economic development and diversification initiatives that the community development trust could cover include: public utility projects, industrial park development, science and technology development, access to broadband technology, and community and transportation services.

Under the terms of the three year, $1 billion trust, the federal government will provide a base amount of $10 million to each province and $3 million to each territory, with the balance of the funding allocated on a per capita basis.

The funding will be administered by the provinces and territories, as they are uniquely placed to identify the projects that best respond to community needs. The trust provides provinces and territories with the flexibility to invest in those projects that best help vulnerable communities and individuals.

At the same time, the provinces and territories must ensure that projects under consideration respect Canada's obligations under the North American Free Trade Agreement, the World Trade Organization and the Canada-U.S. Softwood Lumber Agreement.

As we all know, New Brunswick was the first province to sign onto the trust. Premier Graham noted that the recent downturn in the forest sector had hit the province hard. He welcomed the $30 million that the community development trust will provide to New Brunswick as the province looks for ways to diversify the economy and move away from the concept of one industry towns.

The government of New Brunswick has identified several measures to help move the province toward its diversification goal. It plans on supporting economic adjustment in hard-pressed communities such as Dalhousie, Bathurst and Miramichi. It will fund research and development related to the innovative uses of engineered wood, biofuels and energy efficiency. In addition, the province will be examining opportunities for supplying natural gas to northern communities in order to lower energy costs. Finally, New Brunswick has indicated it will be looking at accelerating opportunities in the mining industry.

On January 17, Saskatchewan became the second province to partner in the trust. Premier Wall noted that although the province's economy is strong, there are sectors and regions that can benefit from strategic investment from the federal government. Funding priorities under the trust identified by Saskatchewan include: biofuels and sustainable energy development; infrastructure; and support for communities impacted by layoffs in the forestry sector.

On March 11, British Columbia became the third province to sign on to the trust. Its share, $129 million, will support forestry related provincial initiatives to provide skills training and upgrading for laid-off workers. The funding will also be used to provide transition assistance to older workers and create new job opportunities in forestry dependent communities.

Just last week, on March 27, Ontario became the latest province to sign on. The community development trust will provide Ontario with $358 million to support programs that improve productivity and competitiveness, technology development, and training for workers and communities facing challenges in industries such as forestry, agriculture and manufacturing.

Today, just a few hours ago, the Minister of Fisheries and Oceans and the premier of Newfoundland and Labrador announced that they have signed an agreement to further this community development trust for Newfoundland and Labrador.

We welcome the participation of all provinces and territories in the community development trust; for it is by working together that the federal, provincial and territorial governments can best help turn the economic challenges we face today into economic opportunities tomorrow. We look forward to other provinces signing agreements too.

The trust builds on a number of measures that this government has undertaken for the forestry sector since it was elected just over two years ago.

Less than nine months into our mandate we resolved the costly and prolonged softwood lumber dispute. The agreement that we negotiated ended years of costly litigation and repaid over $5 billion Canadian in duty deposits, a significant infusion of capital for the industry that benefits communities and workers.

In addition, as part of budget 2006, we introduced a $400 million forestry assistance package to assist worker adjustment, to address the pine beetle infestation in western Canada, and to encourage the long term competitiveness of the forestry industry.

We delivered on these commitments too. The targeted initiative for older workers was originally a $70 million program. In budget 2008 we provided an additional $90 million for this program, for a total of $160 million and extended it to 2012. Cost shared with provinces and territories, this program is designed to address the needs of older workers who have lost their jobs in communities where the local economy faces ongoing unemployment or where industries such as forestry, and in the case of Newfoundland and Labrador, the fishery and agriculture are affected by downsizing and closures.

At roughly the same time we announced funding of $1.275 million to address long term competitiveness in the forestry industry. The initiatives, promoting innovation and investment, expanding market opportunities, developing a national forest pest strategy and forming a human resource forest sector council, help create the environment necessary for our forestry industry to compete internationally.

Through budget 2008 we have provided $10 million over two years so that Natural Resources Canada can promote Canada's forestry sector in international markets as a model of environmental innovation and sustainability.

In conclusion, this government has supported and will continue to support the Canadian forestry industry. The actions we have taken and are continuing to take make this abundantly clear. It is clear to Canadians from coast to coast. It is clear to people working in the forestry industry from coast to coast. I believe it should be clear to the members opposite.

Forestry Industry SupportPrivate Members' Business

11:50 a.m.


The Acting Speaker Conservative Royal Galipeau

Resuming debate, the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup has 10 minutes. If the sponsor of Motion No. 414 appears, he will have five minutes to respond.

Forestry Industry SupportPrivate Members' Business

11:55 a.m.


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

Mr. Speaker, today I rise to speak to the motion from the member for Montmorency—Charlevoix—Haute-Côte-Nord. This motion is very relevant. There is currently a major forestry crisis in Quebec and Canada.

Today, March 31, is a rather symbolic date. Unfortunately, today is the day that the current budget ends. And so far, the Conservative government will have spent $10 billion to pay down the debt, while it knowingly decided to let the forestry industry sort out its own problems.

At midnight tonight, $10 billion will be put towards the debt. The government could have paid $3 billion, and used the other $7 billion to stimulate the economy, as recommended by economic stakeholders from Canada and from international organizations such as the International Monetary Fund.

For a year, the forestry sector has been experiencing a terrible crisis. We should remember that a year ago we were starting to see companies experience difficulties and go under because of the value of the dollar, and jobs were being lost. The other companies, the ones that were stronger and had good management, held on. This year, we are seeing the second, or even third, wave of closures.

In my riding, Maibec had to close its doors for three months, even though it was a very stable, well managed company. Thus, it is not a question of the quality of management or staff. There was an opportunity to help that company diversify its economy.

The same thing happened at Bois Daaquam, in Saint-Just-de-Bretenières. The employees agreed to adjust their salary based on lumber prices. That is a considerable sacrifice. Significant action was taken by workers, manufacturers, employers and communities. The federal government, however, decided to allocate $10 billion to the debt, turning a blind eye to the reality facing our forestry industries. It is therefore important—very important—to put the necessary measures on the table. That is what is proposed by the motion presented by the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord.

It is not a matter of giving people a handout, but rather, creating a real assistance policy for the forestry industry. We have the means to do so. We had the means and we still have them today.

Before this day ends, we could decide to allocate considerable funding to boost the forestry and manufacturing industries. I would remind the House that, a few weeks ago, we voted on the creation of a trust for regional economic diversification in the amount of $1 billion. That took only five minutes.

The Conservatives decided to adopt a laissez-faire policy, leaving entire communities in Quebec, Ontario, British Columbia and across Canada to fend for themselves. We must be clear: the federal government's action is deliberate.

It decided not to help those communities and not to help the forestry industry. It is going to put that $10 billion surplus toward the debt at midnight tonight. In the meantime, it is telling the entire forestry industry to cope on its own with plant closures and job losses. Instead of being there to help people in the industry, the government acts like a private company, pocketing the surplus and paying off the debt as soon as possible.

They have forgotten that they were elected to Parliament to represent the people. The Conservatives are behaving just as though they were multinational company shareholders, trying to get the best return on their investment regardless of how that will affect people.

The fact that we are having this debate today is very significant. It would have been very doable to take part of the $10 billion surplus that they are going to put toward the debt and create an economic diversification program aimed specifically at communities that depend heavily on the forest industry. The billion dollars allocated to the manufacturing and forestry industries is not nearly enough. The Government of Quebec, the Government of Ontario and many other stakeholders have all said it is not good enough. The government should allocate much more money and implement tax measures to encourage the development of processing activities in the region. Instead, the government has decided to reduce funding for the Economic Development Agency of Canada for the Regions of Quebec next year. The agency will have less money, not more, but not to worry, because that is how the Conservatives do things around here.

They will try to invest as little as possible in the economy and let the market work everything out. Even though regions and businesses have to close their doors, nobody will be able to help them because the Conservatives made a conscious choice to abandon those regions. That did not happen by accident. I am sure that voters in those regions will not forget that choice. When the time comes for people to vote in the next election, I will tell them to remember how the Conservative government had to choose either to allocate part of the year's $10 billion surplus to helping the forest industry or to pay down the debt. It decided to spend all of the money on the debt. As a result, regions that rely on forestry were left to their own devices.

The Conservative members, particularly those from Quebec, who voted in favour of the last budget and who said nothing about this issue, were elected to represent Ottawa in the regions rather than the opposite. Had they decided to represent their regions, they would have said that part of the $10 billion surplus should have been used to stimulate the forestry industry. Instead, this money will be used to pay down the debt while entire communities are suffering from the forestry crisis. There would have been money, for example, for a refundable tax credit for the research and development of new products, a program to support the production of energy and ethanol from forest waste, and improvements to the employment insurance plan. This plan generated a $54 billion surplus that was used to cover Canada's deficit and is now going to be used to pay down the debt. These workers contributed for 10 to 15 years. Today, the government has made no effort to help these people even though we have a $10 billion surplus. This is the customary approach of the rich who close their eyes to avoid helping members of society in need. That always ends up biting us in the backside. That will happen to the Conservative government if it does not change its strategy, its attitude.

I am very surprised that members from regions in Quebec and Canada where forestry is an important part of the economy did not all stand up in this House and demand that we reinvest part of the surplus and use it to help the forestry industry rather than paying down the debt.

The government could have created an income support program for older workers. The members from the regions in this House, who visited plants during the election campaign, saw people aged 45, 48, 50, 52, 55, 56 and 58 who had worked very hard for 20 to 30 years in the plants. Today, we are seeing catastrophic plant closures and job losses. A host of people aged 56, 57, 58 and 60 are without jobs. All the current government is telling them is to try to find a job out west, to try to find a job in the computer field. You have spent your whole life measuring wood and suddenly you have to take a course to become a computer technician. When some of the members here lose their jobs, they will see how easy it is for someone between 55 and 60 to find another job. If Canada still had a deficit, the government could say that choices have to be made. But the federal government has had a surplus for several years.

I will conclude on that point. As of March 31, 2008, Canada has a $10 billion surplus that, at midnight tonight, will be used to pay down the government's debt. Meanwhile, there are families that cannot make ends meet and communities that cannot get their economy going again, all because of the Conservative government.

Every member of this House who voted for the budget and does not want to increase the funding in the trust for regional economic diversification is supporting the Conservatives' decision to abandon our forest communities. This is unacceptable, and that is why we encourage them to look to the example of the motion introduced by the member, who clearly showed that a concrete action plan could have been put in place and that the money was available. Instead, we are faced with the Conservatives' indifference and inaction. That is what this motion criticizes.

Forestry Industry SupportPrivate Members' Business



The Acting Speaker Conservative Royal Galipeau

It being 12:05 p.m., the time provided for debate has expired. Accordingly, the question is on the motion.

Is it the pleasure of the House to adopt the motion?

Forestry Industry SupportPrivate Members' Business

12:05 p.m.

Some hon. members



Forestry Industry SupportPrivate Members' Business

12:05 p.m.


The Acting Speaker Conservative Royal Galipeau

All those in favour of the motion will please say yea.

Forestry Industry SupportPrivate Members' Business

12:05 p.m.

Some hon. members


Forestry Industry SupportPrivate Members' Business

12:05 p.m.


The Acting Speaker Conservative Royal Galipeau

All those opposed will please say nay.

Forestry Industry SupportPrivate Members' Business

12:05 p.m.

Some hon. members


Forestry Industry SupportPrivate Members' Business

12:05 p.m.


The Acting Speaker Conservative Royal Galipeau

In my opinion, the yeas have it.

Forestry Industry SupportPrivate Members' Business

12:05 p.m.

An hon. member

On division.

Forestry Industry SupportPrivate Members' Business

12:05 p.m.


The Acting Speaker Conservative Royal Galipeau

I declare the motion carried.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

12:05 p.m.


John McCallum Liberal Markham—Unionville, ON


That this House has confidence in the economic vitality of the province of Ontario and calls upon the Government of Canada to work cooperatively with the governments of all provinces and territories to assure that the prosperity and well-being of Canadians is maintained and enhanced.

Mr. Speaker, I rise today to speak to a motion that I never thought would have to be tabled in the House. It reaffirms that the House of Commons has confidence in the economic vitality of the province of Ontario and that the Government of Canada should work cooperatively with its provincial counterparts so as to build a stronger and more prosperous Canadian economy.

The reason we need such a motion is that the finance minister has recently taken it upon himself to try to convince the world that Ontario is not the place where business should invest its money.

I am a proud Ontarian and more than that, a proud Canadian. I was personally deeply offended when thefinance minister took it upon himself some weeks ago in Halifax to tell the world that anyone thinking of making a new business investment should avoid the province of Ontario.

The fact that he has continued his assault, to the point of even holding a press conference to lay out his budget demands just 24 hours before the Ontario government delivered its 2008 budget, shows that the finance minister has no respect for the vital role that Ontario has played in Confederation, nor any understanding of what powers of persuasion his words can have on investors. His actions have left many people scratching their heads.

The words used by most pundits since that time and throughout the finance minister's ensuing attacks on Ontario have been either unprecedented or stupid. For example, let me read from one editorial in the Saskatoon Star Phoenix:

It's stupid economic policy for the country's finance minister to so publicly bad-mouth its largest manufacturing seems ugly partisanship has taken such firm hold among the federal Conservatives that they now are unable to see the damage it's doing to Canada and their own cause, or they no longer much care.

That was not the Toronto Star talking; it was the Saskatoon Star Phoenix.

Danny Williams, the Premier of Newfoundland and Labrador, was equally taken aback by these unprecedented attacks on Canada's manufacturing heartland. He had this to say just a few days ago:

If there was ever a time that Canada should step up and support Ontario—and Ontario has been the heart of Canada for a long time from an economic perspective—it's now. But they seem to be doing just the opposite.

I could go on with many more examples of Canadians from outside Ontario who are simply flabbergasted by the finance minister's recent attack. However, the thing that is most shocking about this ordeal is the rank hypocrisy of which it shows our finance minister is capable.

Jeffrey Simpson of the Globe and Mail pointed this out on March 24 when he wrote:

This inexcusable policy recklessness, combined with his own doleful legacy as provincial finance minister, disqualifies [the finance minister] from being taken seriously in lecturing Ontario.

Let us just take a quick peek at his record as the finance minister of Ontario in 2001. Interestingly, he did not bring in any massive corporate tax cuts when he had the chance. To be fair, in the one budget he did table at Queen's Park, he created a timeline for the corporate tax cuts that his predecessor had announced in the previous budget. More important, what the minister did do was cut social programs in order to find the money that would allow for those corporate tax cuts to go forward.

Where exactly did he find the money? He found it in the form of post-secondary education cuts to the tune of $309 million. He found it in the form of reduced hospital care for Ontarians by reducing that budget by over $600 million. He cut housing and social assistance by over $700 million.

As the finance minister is fond of pointing out in the House, I am also a fan of corporate tax cuts. They lower the cost of capital for profitable firms and lead to increased investment. However, I am also firmly of the view that corporate tax cuts need to be balanced with other priorities, including social spending, investments in infrastructure and education and training and running balanced budgets.

Unfortunately the government of Dalton McGuinty did not have the luxury of coming to power to find a $13 billion surplus like the federal finance minister did. When Mr. McGuinty came to power, he was faced with a $5.6 billion deficit left to him by the previous Conservative government of which Canada's finance minister had been an important member. Canada's environment minister was also an important member. On top of that, Mr. McGuinty was facing a dangerous underfunding of social programs due to cuts by the previous Tory administration.

Many of these funding cuts have been cited as contributing factors to tragic events like the Walkerton water crisis. Had that Conservative government, in which the finance minister was a central player, not cut 40% of the environment budget and laid off 900 of that ministry's 2,400 workers, perhaps something like Walkerton could have been avoided. This is the type of balance that legislators need to bear in mind when they consider the merits of corporate tax cuts and social spending. When they fail to make the right decision, ordinary Canadians pay the price.

It is definitely true that Jeffrey Simpson was correct. The finance minister's own doleful legacy as provincial finance minister should disqualify him from being taken seriously when he lectures Ontario. However, what makes the finance minister's attack even more hypocritical is how he behaved during the year after his tenure as Ontario's finance minister when Janet Ecker tabled budget 2002-03.

What did Ms. Ecker do with her first budget? According to the National Post, “She delayed personal and corporate income tax cuts. She postponed an increase in private school tuition tax credits. She turned her back on the legacy of Mike Harris, her one-time boss and some say, embarrassed her predecessor in the job”.

What sort of furious outburst did we hear from the finance minister when his corporate tax cuts were put off? There was not a peep. He went mute. Corporate income tax cuts suddenly were not so important any more. When he had his chance to get the corporate taxes down, he said nothing. Yet now he sits here in Ottawa casting stones from his glass house, telling Ontario to lower its corporate tax rates.

Speaking of which, just what has the finance minister done in terms of taxes since he arrived here just over two years ago? It is not as though he has won over many economists in terms of his tax cutting performance. Let us look at his much vaunted GST cuts.

Despite the fact that nearly everyone on the planet, or at least every economist on the planet, was telling him that income tax cuts were a better means of increasing productivity than a cut to the GST, the minister went ahead and cut the wrong tax. What he also did was raise income tax in his first budget from 15% to 15.5%.

Who exactly were these people telling him to cut income taxes instead? Just to name a few, the late Milton Friedman, a Nobel prize winning economist, told the National Post, “ If the choice were GST cut or income tax cut, the income tax cut would be better”.

The finance minister also received similar advice from his own department as well as from the Fraser Institute, the International Monetary Fund and the World Bank.

The only people who appear to have been in favour of the GST cut over income tax cuts were the Minister of Finance and the Prime Minister. This of course came not only with a catch, but a strong suggestion from both these men that the provinces should use the vacated tax room to levy their own taxes to meet their spending requirements.

The Prime Minister referred to it as an “open tax room” for the provinces to fill and the Minister of Finance went so far as to say in June 2006, “Provinces have the option to look at that vacated tax room and decide if they want to fill it”.

Less than two years ago the finance minister was encouraging provinces like Ontario to raise their taxes and fill the void left by the reduced GST in order to help them meet their spending priorities. Now he is telling them that their taxes are way to high.

However, the hypocrisy does not stop there. The finance minister has accused the government of Ontario of having a spending problem. If he is going to make such accusations, he should at least look in the mirror before criticizing others.

Through three budgets, the finance minister has managed to boost spending by an astounding $33 billion. John Williamson, the head of the Canadian Taxpayers Federation, had this to say about the minister's most recent budget:

Under [the finance minister], the size of the federal government has grown by an astounding 14.8 per cent. How is this fiscally conservative or even 'responsible'?

The quote that is my personal favourite comes from Andrew Coyne, hardly a Liberal, formerly of the National Post. After last year's budget, he had this to say about the finance minister:

With this budget, [he] officially becomes the biggest-spending finance minister in the history of Canada.

However, 2008 was going to be different. The finance minister spent the three months leading up to the budget convincing Canadians that this year, because of the slowing economy, he was going to be fiscally prudent and not table another big-spending budget.

What did Andrew Coyne--again, my favourite person to cite--now the national editor for Maclean's, have to say about this year's budget? This is what he said:

With growth forecasts cut in half, revenues actually in decline, and concerns about the U.S. economy overshadowing all, the Conservative pre-budget message was all about the need for restraint. Why, [the finance minister] even had himself photographed having his shoes re-soled, rather than pick up the traditional new pair.

Andrew Coyne stated further:

So you can imagine my shock, on opening the budget, to find that the new-look, skinflint minister plans to spend every bit as much as he forecast in last year's bacchanalia, plus a little more. Last year, he was “the biggest-spending finance minister in Canadian history.” This year, he still is.

To summarize, today we have a finance minister who has gone to the unprecedented step of trashing the business climate of Canada's largest province and telling a provincial premier what he should have in his own budget. This is the same minister who cut social programs deeply during his tenure as Ontario's provincial finance minister in order to fund corporate tax cuts, but when those tax cuts were delayed by his Conservative successor, he did not make a peep.

Now that he has arrived in Ottawa, he has spent $12 billion a year on what everyone else agrees is a less productive two point cut to the GST and, while he was at it, became the biggest-spending finance minister in the history of Canada by increasing spending by $33 billion. This is why I mentioned at the beginning of my speech that I would never have imagined that this speech would have to be given in the House of Commons.

I think all of my colleagues here should join with me in support of the motion and affirm that, despite the finance minister's insistence that Ontario is not a good place to invest, the rest of the House of Commons believes that Ontario is a great place to invest.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

12:20 p.m.


Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, the hon. member pointed out the fact that our finance minister discussed what he would like to see in the Ontario budget. That is true. We did have a wish list for the Ontario budget.

However, what the hon. member did not talk about are some things that people did not see, things that the Liberal government never allowed them to see in an Ontario provincial budget when the Liberals were the federal government. The Liberals presided over a time when the fiscal imbalance grew to some $22 billion and they never provided things like per capita transfers to the province of Ontario. Despite Ontario being 38% of the population and 41% of the GDP, it received only about 22% of the infrastructure dollars under the previous Liberal government.

However, the hon. member is different and I know he is different. He has gone on the record on many occasions with past comments which indicate that he firmly supports the Ontario Liberal government receiving equal per capita transfers, transfers that are fair from coast to coast.

I would like to ask the member if he does support equal per capita transfers for the province of Ontario and, for that matter, for all provinces.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

12:20 p.m.


John McCallum Liberal Markham—Unionville, ON

Indeed I do, Mr. Speaker. I support a strong equalization system so as to help the less advantaged provinces, but at the same time I support equal per capita major transfers to all provinces. As the member points out, I am on the record as having said that.

My only question to him is this: where is the cost-benefit study and careful analysis underlying the Peterborough-Toronto train, which appeared in the budget at the last moment?

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

12:20 p.m.


John Baird Conservative Ottawa West—Nepean, ON

Here's what Bob Rae said about Paul Martin. I have it right here.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

12:20 p.m.


John McKay Liberal Scarborough—Guildwood, ON

Are you reading from Frank magazine again, John?

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

12:20 p.m.


The Acting Speaker Conservative Royal Galipeau

I would like to advise hon. members that the Speaker is standing right now and is about to give the right to question to the hon. member for Sackville--Eastern Shore.