Mr. Speaker, I am pleased to speak to this bill and to say that the Bloc Québécois supports the free trade agreement with EFTA, the European Free Trade Association. This association refers to Europe but EFTA does not represent the Europe we know. It represents four small countries—Switzerland, Norway, Liechtenstein and Iceland—with a total population of just over 12 million and a small percentage, about 1%, of Europe's GDP.
However, we support this agreement because it has significant benefits for Quebec. The free trade agreement will liberalize trade between Canada and these four European countries. I am referring to trade in non-agricultural goods. In fact, this agreement covers only goods and not investments or services.
Why do we support it? Why are we saying that it benefits Quebec? For example, Switzerland is known for its pharmaceutical industry which is very active in the area of brand name drugs. Drugs represent 40% of Canadian exports to Switzerland and 50% of imports. That is a great deal of trade. To penetrate the American market, Swiss pharmaceutical companies might be tempted to manufacture drugs here. Quebec is the home of the brand name drug industry because of its pool of skilled researchers and its tax breaks. Given that a free trade agreement facilitates trade between a company and its subsidiaries, it is likely to mean new investments in the pharmaceutical industry in Quebec. That is fortuitous.
As for Norway, nickel accounts for over 80% of our exports to that country.The largest mine in Canada and the third largest in the world is owned by the Swiss company Xstrata and is located in Ungava.
Aluminum is our main export to Iceland. Aluminum production is also concentrated in Quebec.
Thus, we have a de facto agreement with respect to production in Switzerland and in Quebec.
One of the extremely important factors, in the Bloc Québécois's opinion, is that this agreement does not include the same condition as previous agreements, which we did not approve of. I am referring to the agreements with Costa Rica, Chile and Colombia. I am talking about the infamous chapter on investments that gave companies the right to directly sue any government that adopted measures that caused a reduction in their profits.
We fought against those provisions, which are contained in several bilateral agreements between Canada and the countries I named. There are no such provisions in the agreement with the EFTA, no doubt because this is not a situation where Canada can impose such provisions, which it can do when dealing with underdeveloped countries. We will come back to that at another point.
As I have said, the agreement does not deal with goods or services. Accordingly, there is nothing to open public services to competition, whether or not they are provided by the state, because they are not covered. In the same way, banks and financial services will not be exposed to competition from Switzerland, or from the very solid and very discreet banking system in Liechtenstein, a veritable paradise—we will say it a whisper—for the financial world, because of its tax regime and its banking secrecy.
It is a similar situation for government purchasing. The government retains complete freedom to promote buying at home, subject to the World Trade Organization's agreement on government procurement. Obviously, it would make no sense for the government to negotiate some room to manoeuvre and later to decide not to make use of that option. Let us fervently hope that the federal government, the largest buyer of goods and services in Canada, will favour domestic suppliers and consider the spinoffs from its purchases.
I am sure that many people are concerned about the provisions on agriculture. What is important for us and for Quebec producers is that supply management is not affected. Bill C-55 allows for the implementation of bilateral agricultural agreements, which would be added on to the free trade agreement with the EFTA. There are bilateral agreements that in no way threaten supply management and will not have a great impact on Quebec agriculture. I should mention that milk protein, for example, is excluded from the agreement.
The agricultural agreements will primarily benefit the west, since they liberalize trade in some grains. But even there, the impact will not be huge. Where there are problems, however, and it must be said—I heard my NDP colleague speak about this as well because he is familiar with the problems facing shipyard workers in Canada—is in the area of shipyards.
We will try to fix these problems by calling for a shipyard support and development policy, and I am sure many members in this House will join us in doing so. We also have some concerns about the future of our shipyards.
Imported vessels are currently subject to a 25% tariff. Under the agreement, these tariffs will gradually decrease over three years, and will be completely eliminated in 15 years. Our shipyards are far less modern than Norwegian shipyards and in worse condition. Norway has invested heavily in modernizing its shipyards, while the federal government completely abandoned ours long ago.
If the borders all had to be wide open tomorrow morning, our shipyards could end up whisked away like straw in the wind, or swept away with the tide, I should say. But, for economic, strategic and environmental reasons, we cannot give up our shipyards.
Imagine the risks to Quebec if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, the largest waterway in the world? It is unthinkable, and we will not give up on our belief—this is more than just a flighty idea—that we need shipyards that are equipped with the latest technology, robust and able to stand up to competition. A little later we will see that there are several conditions that need to be met for shipyards to truly be able to develop.
For years, the Bloc Québécois has been calling for a real policy.
For years, the government has been dragging its feet. Now that the agreement has been signed, time is of the essence.
Moreover, this is the only recommendation in the report of the Standing Committee on International Trade on the free trade agreement between Canada and the European Free Trade Association. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic and deputy critic:
—the Canadian government must without delay implement an aggressive Maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada’s commitments at the WTO.
This is the only recommendation in the report. The Conservative policy of leaving companies to fend for themselves is deadly for shipyards. We expect the government to give up its bad policy, and we ask that, by the end of the year, it table a real policy to support and develop the shipbuilding industry. Given the urgency, we will not be content with fine talk. We need a real policy that covers all aspects of the industry. I will come back to this at the end of my speech.
I want to say that when it comes to free trade, the real issue is the European Union. A free trade agreement with Switzerland, Norway, Iceland and Liechtenstein is nice, but we have to realize—and everyone does—that it is limited. As I mentioned, it represents just over 12 million people and roughly 1% of Canadian exports.
The real issue is the European Union, with its 495 million inhabitants who generate 31% of global gross domestic product. The European Union is the world's leading economic power.
Canada is far too dependent on the United States, where we send over 85% of our exports. The American economic slowdown, coupled with the surge in value of Canada's petrodollar against the U.S. dollar, reminds us that that dependence undermines our economy. Quebec has lost more than 150,000 manufacturing jobs in the past five years, including more than 80,000 since the Conservatives came to power, with their laissez-faire doctrine.
To diversify as we must do, we should not look to China or India, countries from which we import, respectively, eight and six times more than what we export to them. The European Union is an essential trading partner if we want to diversify our markets and reduce our dependence on the United States.
The fact that Canada has not concluded a free trade agreement with the European Union considerably diminishes how competitive our companies are on the European market. With the rising value of the petrodollar, European companies tend to skip over Canada and open subsidiaries directly in the United States. The Canadian share in direct European investments in the United States went from 3% in 1992 to 1% in 2004.
Add to that a free trade agreement between the European Union and Mexico since 2000. The Europeans are saying that they can negotiate a real tariff reduction with Mexico, while that is not really possible with Canada. They are saying that there needs to be a reduction in non-tariff barriers with Canada.
When Pierre Pettigrew was Minister of International Trade, Pascal Lamy, European Commissioner for External Trade, said he would negotiate another type of agreement.
No such negotiation is known to be taking place. I think it will not happen because it is too difficult. Just consider the fact that Europe requires GMOs in products to be identified, while in Canada, as we know, the government just recently refused to accept this measure.
The European Union has a free trade agreement with Mexico. That is an advantage for Mexico, an advantage that is prompting companies in Quebec to invest more in their own operations in Mexico since this gives them access to the European market as well as the U.S. market.
Again, Quebec would benefit from a free trade agreement with Europe. In fact, it would probably be the primary beneficiary. For example, 77% of the people who work for French companies in Canada are from Quebec, as are 37% of those who work for U.K. companies here and 35% of those who work for German companies here. In contrast, just 20% of people working for U.S. companies in Canada are Quebeckers, hence the great interest for Quebec of having a free trade agreement with Europe.
The Government of Quebec has been working with companies since the Quiet Revolution, and that is a major advantage when it comes time to seek out European investment. We have everything we need to become the bridgehead for European investment in North America.
I will use my last few minutes to appeal for a real marine transportation policy. It would include several factors, because otherwise, it will be impossible to revive this complex industry. I would remind the House that the federal government has been ignoring it since 1988. The industry needs funding, assurances and loan guarantees linked to sales contracts. In this case, access to credit at a reasonable rate is an important determining factor for the buyer. It needs loans and loan guarantees intended for shipbuilders who must invest or deposit a financial guarantee to bid for new contracts. It needs better fiscal regulations for leasing and a refundable tax credit for shipowners. Those are some measures that would help the industry.
We also need measures specifically for marine transportation in Canada. For example, we must eliminate the fees charged to marine transportation companies that practice cabotage. Truckers' employers do not pay for the damage caused to highways—and Lord knows it is extensive—although those who practice cabotage pay ice breaking fees, among others. It makes no sense.
Second, the government must implement a plan for major investments in port infrastructure. It must also bring up to standard all the ports that have been left to crumble and it must strengthen the Coastal Trading Act. It must also do something to fight against flags of convenience and poison ships. It is the federal government's responsibility to do something. It must negotiate an agreement like the Auto Pact and, lastly, eliminate all subsidies to shipyards. This House owes it to shipyard workers to pass real legislation that will allow shipyards to prosper once again.