Mr. Speaker, it is with keen interest that I join the debate today on Bill C-55, which would implement the free trade agreement between Canada and the European Free Trade Association. The association is made up of four countries: Norway, Iceland, Liechtenstein and Switzerland.
To begin, I want to reiterate that after responsible analysis the Bloc Québécois will support this bill, which we believe, in general, offers promising economic trade opportunities for Quebec that are worth pointing out. However, there are also some concerns that my colleagues have mentioned and that we share.
We all know that Quebec is a trading nation. Many of our companies, especially those operating in leading-edge sectors, rely on exports to ensure their growth. That is important. International exports represent almost one-third of Quebec’s GDP. If we include trade with Canada's provinces, Quebec’s exports represented about 50% of its GDP in 2006.
In trading terms, Quebec is far too dependent on American markets. Indeed, nearly 85% of our current exports go to the United States. Given the slowdown in the American economy that we are now witnessing, the rise in the Canadian dollar and the aggressive tactics of emerging countries such as China and India, we are finding it increasingly difficult to maintain our market share with our neighbours to the south. The results have been significant for Quebec. More than 150,000 manufacturing jobs have been lost in the past five years, including more than 80,000 since the advent of the Conservative government and its laissez-faire doctrine.
The riding that I represent, Berthier—Maskinongé, has been severely affected by the loss of jobs in the furniture and textile industries. If our trading opportunities were more diversified and we were less dependent on the United States, our manufacturing sector would not be so threatened. This is why this free trade agreement with the European association deserves to be explored and, indeed, to be supported.
For example, as is the case in Quebec, the brand name pharmaceutical industry is very strong in Switzerland. Quebec is the Canadian leader in the field of brand name drugs because of its pool of skilled researchers and its favourable tax system. One can easily imagine, and we even hope, that Swiss pharmaceutical companies could be tempted to produce their drugs in Quebec as a way of gaining easier access to the American market. We will strongly encourage that idea, which would result in new investments in Quebec. That is one of the main reasons why we support this bill.
If we look at the case of Norway, nickel accounts for more than 80% of Canadian exports to that country. The largest mine in Canada, and the third biggest in the world, is located in the Ungava region of Quebec and is owned by a Swiss company. This agreement can provide significant benefits for Quebec.
That is another reason why we support this agreement.
As I already said, we will support this agreement because it gives Quebec some good opportunities and the Bloc Québécois is here primarily to defend the interests of Quebec.
This agreement also has the advantage of not containing the same kinds of shortcomings as some other accords. For example, in contrast to NAFTA, the agreements with Costa Rica and Chile have a bad chapter on investment, as we know very well, which gives companies the right to sue a government that adopts measures that could reduce their profits. There are no such provisions in the agreement with the European Free Trade Association. The Bloc Québécois is very happy about that. These countries have a basic respect for human rights and the rights of working people and that is another reason why we support this agreement.
In addition, the agreement with the European Free Trade Association covers only goods and not services. Nothing would force us, therefore, to open public services to competition, whether provided by the government or not, because they are not included in the agreement.
Similarly, financial services and banks will not be exposed to competition from Switzerland, which has a very strong banking system.
It is the same with government procurement. The government remains perfectly free to purchase in Canada, subject to the WTO agreement on government procurement. This is an indispensable aspect of any kind of trade agreement.
I would also like to mention agriculture. Our colleagues in the NDP seem to have some concerns in this regard. I want to speak more especially about supply management, which is very important to Quebec and the riding of Berthier—Maskinongé that I have the honour of representing.
We all remember it was the Bloc Québécois that got a motion passed in 2005 requiring the full maintenance of supply management. We have been assured by agriculture officials in Quebec that this agreement does not derogate from supply management and does not contradict it or call it into question.
We are very proud of this motion and will continue to defend it because we think that farmers and consumers are best served by this system. We are satisfied with the bilateral agreements on agriculture because products subject to supply management remain protected.
The in-quota tariff is eliminated of course under the agricultural agreement with Switzerland, but it applies only to the part of the market already covered by imports, or 5%. The elimination of this tariff will therefore have only a marginal effect on our dairy farmers because the tariff rate quotas and the over-quota tariffs remain the same. It is important for this to remain as is, especially since milk proteins are excluded from the agreement. This is another essential provision for keeping our agriculture strong.
The fact that the 7% tariff is eliminated under this agreement makes it all the more necessary, however, for the federal government to remain adamant at the WTO that supply management is simply not negotiable. The Bloc Québécois will continue to demand a full defence of supply management at the WTO.
This being said, we have some concerns about what the agreement means to the future of our shipyards. Imported ships are currently subject to a 25% tariff. Under this agreement, the tariffs will gradually start dropping in three years and will be eliminated in 15. I heard the international trade minister boasting about the fact that his government had managed to negotiate this 15-year adjustment period.
I think the minister must be aware that the adjustment period provided for in the agreement will be useful only if it is accompanied by vigorous adjustment and modernization programs for shipyards.
Otherwise, it will just slow the decline of our industry. Norway has grasped this quite well, by the way.
In Canada, the federal government, be it Liberal or Conservative, has done nothing to support our shipbuilding industry. It has not supported shipbuilding since 1988. This is really a shame, given all the subsidies that are currently being handed out to the oil industry, which makes exorbitant profits.
As well, not only are the few aid measures still available very poorly adapted to the shipbuilding industry, but the federal government has even penalized the provinces that have instituted innovative measures, such as the refundable tax credit in Quebec, which for some years was considered by Ottawa to be taxable income under the Income Tax Act. That allowed it to claw back 20% to 25% of the assistance that Quebec paid to the shipbuilding industry. Unbelievable but true.
So today, some of our shipyards are having trouble and are not really very competitive. This kind of policy has to be shelved. We have to provide more support for our shipbuilding industry.
Because it receives support from its government, the industry in Norway is productive and competitive today. And now the Norwegian government is working to open up new foreign markets for it.
The Conservatives’ policy, which amounts to leaving companies to their own devices, could be very harmful to our shipbuilding industry. We have 10 to 15 years to get back on track and implement programs to support our industry.
In the case of the manufacturing sector, we can see how Conservative inaction has led to the loss of thousands of jobs. We should learn that lesson when it comes to the shipbuilding industry. So we are calling on the federal government to abandon its laissez-faire policy and put forward a policy to support and develop the shipbuilding industry quickly. The Bloc Québécois has been calling for this for several years now.
In fact, this is the motion that I introduced at the Standing Committee on International Trade, on behalf of the Bloc Québécois, and that received support there:
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.
The motion was supported by all members of the committee, but only after some discussion and some hesitation. I think it is important in this context.
We have to support our industry. We have 10 to 15 years, depending on the type of ship, to support the industry. It is therefore time for action.
In this motion we are telling this government that it has to act and put forward a comprehensive strategy to support the shipbuilding industry, because the Conservatives’ bad industrial policy must not be allowed to result in a bad trade policy.
Laissez-faire has produced no results for several years, and it is time for action. This government has the resources. The strategy should facilitate access to capital for the industry, stimulate investment, give preference to local suppliers in public procurement and of course encourage shipowners to buy their ships here at home.
When shipyard representatives appeared before the committee, they reiterated that they wanted a program to facilitate accelerated amortization that buyers of Canadian ships could use, and a structured financing mechanism.
On the question of support for struggling industries, the Conservative government is practising a hands-off, laissez-faire policy, as I said earlier, a free enterprise policy: free trade will solve everything, all by itself. That is not true.
In the case of shipyards, as in the case of manufacturing, where we have lost many jobs, we believe this policy is quite simply irresponsible.
We know how the Americans and the Europeans support their industries. We need to do the same so that we can become more competitive. That is why the Bloc Québécois will press the government to quickly introduce a series of measures to promote the development of our shipbuilding industry. I ask the opposition parties here to support us.
In closing, even though we support this agreement, we need to be aware that its impact will still be limited. The four members of the association represent nearly 12 million people and account for roughly 1% of Canadian exports. The real trade 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. We believe that Canada should be pursuing a free trade agreement with the European Union.
As we know, Canada's petrodollar has risen substantially in value against the American dollar, which has led to a major crisis in the manufacturing industry. What people may not know is that the dollar has gone up in value much less against the Euro. As I said earlier, if our trade were more diverse and our exports less focused on the United States, our manufacturing sector would be much stronger and more robust. The European Union is an essential trading partner.
Moreover, a free trade agreement with the European Union would have benefits in terms of investment. Together with NAFTA, the agreement would make it attractive for European companies to use Quebec and Canada as their gateway to the North American market and consequently to move some of their production there. We will support such a free trade agreement. As nearly 40% of European investments in Canada are in Quebec, it would certainly be a desirable location for European companies that want to invest in North America.
We hope that the federal government will quickly reach an agreement with the European Union, because it would be the best way to diversify our economy and reduce our heavy dependence on the American market.
I am willing to answer any questions hon. members might have.