Debates of Oct. 19th, 2009

The House resumed from June 1, 2009 consideration of the motion that Bill C-306, An Act respecting the use of government contracts to promote economic development, be read the second time and referred to a committee.

Canadian Products Promotion Act

[The Speaker, Liberal, Peter Milliken]

When the matter was last before the House, the hon. member for Prince Edward—Hastings had the floor. There are seven minutes remaining in the time allotted for his remarks.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Mr. Speaker, last week, when discussing this issue, I talked quite a bit about the perils of protectionism and the advantages of trade. Today I will elaborate further on those components.

Trade also gives consumers more choice. We can think of all of the things that would disappear if our imports were taken away from us: food, clothing and other products that used to be, at some times, considered exotic. This is not just a question of consumers buying foreign-finished products. Imports are used as materials, components and equipment for local production. If trade allows us to import more, it also allows others to then buy more of our exports. That means that trade increases our incomes.

The advantages of trade spread to every part of our economy and touch every Canadian, from the farmer growing wheat to the engineer designing tractors, from the factory worker producing aircraft to the supplier providing aircraft parts. Trade's bottom line is our people and the jobs that it provides them with. One in five jobs in Canada is linked to international trade. We export more than half of our manufactured goods.

Let us look for a moment at our trade with the United States as an example. Canada and the U.S. are each other's most important partner in economic growth. Since the Canada-U.S. Free Trade Agreement was signed in 1988 and then NAFTA in 1992, there is no doubt that our bilateral trade has been one of the major components of economic growth.

During these two decades, Canada-U.S. trade has tripled. Investment flows have also increased substantially. Two-way trade crosses the Canada-U.S. border at the rate of $1.7 billion a day. I would just ask members to think about that scale. That is well over $1 million per minute of trade. It is estimated that over three million jobs in Canada depend on our trade with the U.S.

Given this scale of success, it is clear that protectionism is our mutual adversary. Protectionism, quite frankly, is the greatest ideological threat in this global recession. Restrictions on trade reduce real growth prospects in both the developed and the developing world. Restricting imports might look like an effective way of supporting an economic sector, but doing so biases the economy against other sectors that should not be penalized.

We are committed to respecting and upholding our trade commitments with our partners. We expect our partners to do the same.

To come out of this global recession, we need to continue to trade with as few barriers as possible. The Great Depression taught us that the downward spiral of protectionism will only lead to more dire situations. That is why our economic action plan protects Canadians during the global recession, not by restricting trade but by promoting it.

Our Budget Implementation Act revoked additional tariffs in order to increase international trade. Our plan works to create new, good jobs for the future and to equip our country for successes in the years ahead. It is designed to stimulate economic growth, to restore confidence and to support Canadians and their families during the global recession.

It takes action to build infrastructure, stimulate housing construction, and support businesses and communities. It also helps reduce taxes, freezes EI rates, and assists Canadians through the Canada skills and transition strategy. It also improves access to financing and strengthens Canada's financial system.

Members do not have to take my word for it or your word, Mr. Speaker, or even the word of other members in the House here. This initiative has in fact been praised by the International Monetary Fund, a respected international body. In a recent report, they called it “large, timely and well targeted”.

They said our immediate focus should be on implementing the budget to mobilize spending.

We are acting through the most appropriate means to protect our economy and Canadians affected by this downturn. That includes the tax system. It includes the employment insurance program. It includes direct spending by federal and provincial governments. It also includes lending by crown corporations, and it includes partnerships with the private sector.

What it does not include is a return to the perilous ideology of protectionism.

Canadians know that in this global economy we cannot simply build a fortress and lock ourselves inside. That would be destructive.

I believe the evidence before us can lead to only one conclusion. Therefore I call upon my colleagues in the House to emphatically oppose the bill which quite frankly would be dangerous to the health and welfare of every Canadian.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to speak to Bill C-306, put forward by the member for Rivière-du-Nord of the Bloc.

First of all, members will know that this member is a very long-standing member of this place. I think she has been here for over 20 years.

My experience in working with this member on a number of occasions is that when she brings things up, they are usually fairly well thought out and provocative in terms of promoting debate. If I look at the member's speech, she is asking the House to give her an opportunity to debate the bill in committee.

We have had this on so many occasions, particularly for employment insurance bills where there have been many attempts to try to bring to the attention of Canadians the need for reform in terms of EI. We know that there needs to be a royal recommendation. We know that at the end of the day, there will never be a final vote but the debate is very important.

It is important so that Canadians understand the implications, so that within this place we look at the areas that we have difficulty with, to get the answers to certain specific questions because members usually do not have the personal expertise or the access within a short timeframe to the expertise that will give us the answers to those questions. Those questions include such things as what latitude we have within the WTO to give some preferential treatment to buy Canadian for government procurement.

It is a pretty good question. I know that our experience in this place has been that dealing with matters to do with the WTO creates a lot of acrimony. It could be the softwood lumber deal. We know that the dispute resolution mechanisms have been very problematic. We have had many debates in this place about why Canada is always on the short end of the stick when it comes to disputes. Why do we get dragged through the courts for years and years?

It is because the WTO and NAFTA do not provide the precision that we need to understand how much latitude we have to put the best interests of Canadians first, and that is what the member is asking for. Therefore I congratulate the member on bringing the bill forward.

In her speech the member also talked about the context that we have to put this conversation into. It has to do with the economic challenges we are facing now. It has to do with the fact that we have a government that said it was going to balance the budget. It had a $13 billion surplus. We now find out that as the last fiscal year ended, it turned out there was a $5 billion deficit.

Therefore the starting point was wrong. It squandered a $13 billion annual surplus and turned it into a $5 billion deficit. Then what happened? We had a budget come forward saying that we were going to have four years of surplus. We now know that at last report there was a $30 billion deficit. Now it is up to a $50 billion deficit and we have job losses that were over 9%. I think it dropped slightly, which I think is an aberration. All the experts seem to think we are going to have unemployment in the 10% range in Canada.

That means there are half a million families out there who are now forced to live on EI, and there are many families out there whose EI benefits have run out.

Therefore the member raises in her bill, Bill C-306 that the “purpose of this enactment is to promote economic development in Canada by ensuring that, in the procurement of its goods and services, the Government of Canada gives preference to Canadian products while complying with its international obligations”.

It is not saying that we should break the law but that we should do what we can within the rules of the game that we have, and that way we should be able to stimulate the Canadian economy and we should be able to stimulate job growth. That as a premise makes a lot of sense.

It also specifies that the buy Canadian approach would not exceed, I think, 7.5% in terms of giving preference to Canadian products.

I have a problem with 7.5%. I would like to debate that. However, the 7.5% is not the issue in this debate. The issue is whether we need another stimulus effort within Canada to assist Canadian business and industry to deal with the economic situation that we are faced with, to deal with the unemployment situation that we have.

The bill may not see the light of day, in terms of a final disposition. I do not know. It is hard to say these days. However, the debate is a relevant debate. We are not going to resolve it here by having a half-dozen speakers when there are probably 50 people in this place who would like to talk about it. We can only talk about it within the context of what we know now.

However, things are happening very quickly today. In the United States, President Obama has the issue of American protectionism facing him, and the U.S. is going through the process. Our provinces have been talking about opening up to the Americans provincial procurement and bidding on contracts, on an equal basis. They are trying to make it work. However, we have to remember our history in these things. Canada always seems to get the short end of the stick when it comes down to trade issues.

I can fully understand the United States saying that Americans should support American business. There is nothing wrong with that.

As well, there is nothing wrong with Canada, the Canadian government and Canadian members of Parliament encouraging Canadians to look at the labels and buy Canadian, because when we buy Canadian, we help Canadian business and Canadian jobs.

Today we are also going to be debating the issue of forestry, which is a beautiful example of where we have opportunities, but we need to take some action, and I am pretty sure that is going to get the support of the House.

I look at private members' business as a proxy for debate, and that debate cannot fully happen here at second reading. The bill needs to go to committee. It needs to have winesses and people with expertise so that we can ask questions and get answers. We have hon. members on these committees who work on this stuff time and time again. The knowledge, the approach, and the quality of the debate of the kinds of issues that will come up at committee are certainly more substantive than they are in this place right now. That is not to say that members are not capable of doing this. However, they do not have the time and they cannot ask questions or make comments. I could not ask questions of the member and nobody can ask questions of me.

Second reading is to ask whether we have an issue here that is worthy of more debate. In my humble opinion, I believe there is. I believe that the bill merits support to go to committee to have relevant debate, and I will be supporting this particular bill.

The other thing I wanted to talk about is whether or not matters like a home renovation tax credit or the stimulus program that we have, through which we are encouraging infrastructure, though not exclusively--as we know, there is a lot of stimulus money going to things that are not infrastructure--are promoting Canadians jobs, promoting Canadian business, promoting some assistance in the difficult circumstances we find in this economic climate. Those actions are not inconsistent, and this bill is not inconsistent with those actions with regard to the intent.

The intent here is to address our financial situation, the job situation and, to some extent, WTO, NAFTA and other trade agreement provisions that we have, as well as what the rules of the game are, what latitude we have and how we can have all Canadian businesses do better in this economic climate.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I was very happy to hear what the Liberal member had to say.

In the history of Parliament, the Liberals have never supported a domestic procurement policy. In fact, the Liberals have always criticized the NDP's promotion of policies that would use taxpayer money to buy Canadian products and to create jobs in Canada. The Liberals have made an about-face here, but I think that is a good thing. If the Liberals have finally realized that the NDP is always right, we are very happy, and we are very happy to hear that they will be supporting a policy that has long been endorsed by the NDP.

This bill is a positive step by the Bloc Québécois to support these procurement policies. This goes along with what the NDP has been saying for years, that we must use taxpayer money to support our Canadian industries. We support this Bloc bill, and we will be very happy if it receives the support of all the opposition parties.

Of course, this will be debated in committee, and that is very important. We know that the arguments others have repeatedly made against the NDP's practice of buying Canadian are unfounded. For a long time, we have heard the Conservatives—and up until today, the Liberals—claim that these policies are illegal, because of the regulations of the World Trade Organization and NAFTA. But we know that that is not the case. Other countries have passed similar legislation. Think of the United States, for example, and their Jones act and their shipbuilding policy. The American Congress just passed buy American legislation. These policies would be illegal. But they are not. It is very clear that they are legal.

The United States, Japan, China, Mexico and the European community all have buy local and buy domestic policies. These are our trade partners, and 98% of our international deals are with countries that have domestic procurement policies. So, it is very clear that this is not illegal from the point of view of the WTO or NAFTA.

For a long time now, other parties have been using patently false arguments to attack the NDP for supporting buy Canadian policies. The CAW even asked for a legal opinion from a leading expert in international trade law, Steven Shrybman of Sack Goldblatt Mitchell LLP. His legal opinion was very clear: a thorough review of Canada's obligations under WTO agreements, NAFTA and the AIT demonstrates that buy Canadian policies adopted by municipal, provincial or federal governments would not violate either international or domestic agreements. Basically, Canadian governments have more freedom to adopt such policies than most people think.

It is clear that the Conservatives' claim is false. According to Mr. Shrybman, municipal and provincial governments may specify levels of Canadian content when purchasing goods and services and, under certain circumstances, may even limit tenders to products manufactured entirely in Canada.

The member for Rivière-du-Nord's bill clearly defines the scope of these purchases. I want to emphasize that governments can buy products made entirely in Canada. It is legal and it is good for our economy.

This proposed comprehensive buy Canadian policy would apply not only to the very visible public transportation sector, but also to all other purchases from garbage trucks to office furniture, from uniforms to construction materials, and more. Provincial governments will also be able to attach buy Canadian conditions to transfers to municipal governments, agencies and crown corporations. The legality of such policies is indisputable and comprehensive.

Moreover, and most importantly, international trade law specifically addresses federal transfers to the provinces and international procurement regulations, thus enabling the federal government to attach comprehensive buy Canadian conditions to all funding transferred to other levels of government.

This legal opinion is very clear. It is also very clear that many countries around the world have implemented sound domestic procurement policies. The conditions are right for a bill like the one introduced by the member for Rivière-du-Nord. We can implement domestic procurement policies. We can use Canadian taxpayers' dollars to stimulate our economy just like every other country in the world.

It is somewhat ironic that the Bloc Québécois should be the ones to raise this issue in the House. Of course the NDP have also drafted similar bills, but the Bloc's bill goes a little further than the NDP's bills. The Bloc is introducing a bill that will help all Canadians, while, so far, the Conservatives and the Liberals have always rejected the possibility of using federal, provincial and municipal government funds to stimulate our economy.

This is an important issue, given that, over the past 20 years, the vast majority of Canadian families have seen their family income decrease, which is surprising. It is not an issue that is widely reported in the media, but that is the reality. According to Statistics Canada, since the first Canada-United States free trade agreement was signed and implemented, two-thirds of Canadian families have seen their family income decrease.

It is very clear that our economic and procurement policies are making the vast majority of Canadians poorer now than they were 20 years ago. The Conservatives and the Liberals are washing their hands of the issue and saying that it is no big deal. They maintain that we simply have to keep signing free trade agreements, and everything will be fine. However, the economy is much more complicated. We must do more than simply sign a few free trade agreements and give lots of money to Canadian banks to ensure prosperity for everyone. That is not how it works.

The fact is, we are talking about a complete and massive failure on the part of successive Liberal and Conservative governments. They have the same economic policies and the same laissez-faire attitude, which are leaving most Canadians poorer than they were 20 years ago.

The Conservatives and the Liberals have no reason to be proud. The vast majority of Canadian families are poorer than they were.

We have real concerns about the direction that the government has taken. We have real concerns that it seems to always be willing to negotiate with concessions first. We have seen via rumours surrounding buy America that it is willing to give away health care protection and procurement policies for universities and rapid transit. That is a failure.

We cannot bargain with concessions. We have to put sound economic policy in place. Domestic procurement is a very sound part of a sound economic strategy. That is why we are supporting it.

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

Mr. Speaker, I am pleased to speak today to Bill C-306, An Act respecting the use of government contracts to promote economic development, which was introduced by my colleague from Rivière-du-Nord.

Economic development is something we need more and more. The rapid deterioration of employment in Canada and Quebec is truly disturbing. There are 1.6 million unemployed workers in Canada. The OECD predicts that Canada's unemployment rate will reach 10.8% by the end of 2010. That means 2 million unemployed. We must support employment. We must support investment.

We are hearing more and more frequently about layoffs, plant closures and major reductions in productive investments. Forestry is vital to the regions of Quebec, and the situation in the forestry industry is a huge problem in Mauricie and in my riding of Trois-Rivières. In fact, 88,000 Quebeckers work in forestry, sawmills and pulp and paper plants, accounting for roughly a third of Canadian forestry jobs.

How has this government responded? It gave the automotive industry $5 billion, but it gave the forestry industry a mere $170 million. Companies told us they needed loans and loan guarantees. A few years ago, I visited the Kruger company in Trois-Rivières. People there asked us for loans and loan guarantees to conduct research and development in order to help this industry. The government said no, and so plants are closing.

What does that have to with this bill? We must support all our industries: aerospace, industrial research and fishing. One way to support industry is to give preference to Canadian companies when awarding government contracts. Bill C-306 is a response to this problem and seeks to ensure that government contracting complies with international agreements. The government has to use its procurement as an economic lever. This is something we need more and more. This bill would allow Canada to buy up to $600 million worth of Canadian products annually, which represents 21,000 jobs a year. That is significant, and it is a positive response to a problem Canada is experiencing.

This bill focuses specifically on purchases not subject to NAFTA. It complies with the rules and the spirit of NAFTA. It is important to understand that. It is narrower in scope because it would affect Government of Canada direct goods and services procurement only. The Buy American Act affects all of the government's indirect procurement, not just direct procurement. This bill could be implemented in accordance with NAFTA. In order to comply with international treaties, this Bloc Québécois bill targets small federal government expenditures under $25,000 U.S. for goods, $64,786 for services other than construction and $8.4 million for construction services.

What amounts are we talking about? In 2008, the federal government spent $20.1 billion on goods and services or 9.3% of its total expenditures. The Government of Canada is the largest purchaser of goods and services in Canada. Why not use the leverage we are proposing in Bill C-306 to truly produce spinoffs for our economy and for our businesses?

Passing this buy Canadian bill would halt the flow of some $600 million to other countries annually. It is estimated that more than 21,000 jobs could have been created annually if this bill had already been passed. There is an urgent need to pass this bill, an urgent need to take action.

This bill would provide a way around NAFTA by tying all federal transfer payments to the provinces—equalization, transportation funding or transfers for post-secondary education and health—to investments being made in Canada only.

This would allow our companies producing steel, lumber, cement and all manufacturing companies in Quebec to become, provided the price differential is not significant, sole source suppliers for all provincial and municipal governments. As we know, numerous manufacturing companies have closed down. That is really worrisome. They did not get any support, and that has literally destroyed Quebec's economic fabric.

This Bloc Québécois bill does, however, allow for the sound management of public resources. Under the national preference rule for products and services contained in the bill, when choosing between a Canadian product and a similar non-Canadian product, the government is required to buy the Canadian product if its price does not exceed that of the non-Canadian one by more than 7.5%, ensuring sound management but at the same time giving preference to products with greater Canadian content. This 7.5% cap was set to prevent negative financial impacts on the government.

As for direct benefits to Quebec besides the ones already mentioned with respect to our businesses, through a clause requiring that the government treat the provinces fairly when making acquisitions, the bill proposes that the acquisition of goods and services be distributed equitably among the provinces. At present, the government obtains nearly two-thirds of its goods and services from Ontario. To remedy this situation, the bill includes a provision precluding the government from obtaining more than 50% of its products from another province.

In conclusion, if passed, this bill will promote job creation, Canadian procurement and the equitable distribution of acquisitions among the provinces while complying with agreements already entered into by Canada.

I therefore encourage our colleagues to vote for this bill. To refer this bill to committee is to say yes to Canadian procurement, yes to Canadian jobs, yes to renewed economic growth.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I want to speak briefly to the concept of assisting Canadian businesses and provide a different dimension on some of the other ways we can deal with this conundrum.

Obviously, Canada is a trading nation, and more so than most nations in the world. If we are not effective in the trading environment or if trade is not amicable to our needs, we will suffer more than other countries. Therefore, we need to be experts in this and have an international regime that will help us.

Of course, as trade increases, prosperity for our citizens increases if they can buy products at lower prices. However, make no mistake, we have confidence that Canadians can compete in a trading environment and our products and services can stand up to any in the world on a fair trading field.

There are a number of ways we can help businesses without abrogating trade laws or going against agreements because, by and large, the agreements we have with other countries are in Canada's favour and help our prosperity to a great extent. Canadians would be amazed to realize how much of their salaries they would lose if the loss of trade were spread over everyone. It is a significant part of our economy, much more than our trading partners.

Because it is so important, our government has a larger role than most countries in exporting products. There are a number of ways we can assist with that, whether it is financing or marketing our products that would not abrogate trade agreements. We of course need to be very careful that we do not go against the very agreements that work in our favour and facilitate trade.

Another way is the promotion of Canadian products. We have done that over the years through internal trade fairs in Canada to promote domestically and international trade fairs to help Canadian businesses participate in worldwide or specialty trade fairs that deal with particular products and open up markets around the world.

Another way to promote trade is through trade missions. However, with a number of embassies having been closed, some services overseas have been reduced, which is a bit disconcerting as that is a window on the world for our businesses by which we can help them facilitate trade without going against any treaties or agreements.

Another way is the work we have done in the past, which has diminished somewhat recently, related to research. As products are changing faster than they ever have in history, it is very important to keep our businesses in tune with the world in order to support the research they require and make it worth their investment so they can compete on an even basis with businesses around the world that also have access to excellent science.

Another issue that we constantly hear about from Canadian business, and one only needs to make a quick phone call to the Canadian Federation of Independent Business, is the red tape burden on small and large businesses. The information we collect is important to assist us in doing all the other things to help businesses and run Canada but we need to make it more efficient so there is a coordination of federal departments. We need to make some of the surveys coming from Statistics Canada more realistic and to show businesses the benefits of this type of research. We need try to make the research so that it is not overburdened with red tape while collecting the information that we need to monitor and assist businesses.

An additional way to promote trade in a rapidly and dynamically changing world is business intelligence. There is a function for the government as part of its productivity initiatives to collect intelligence and keep businesses up to date.

Approximately 95% of the research in the world is not done by Canadians but Canadian businesses should have quick access to that. Not all small businesses in Canada can afford to research around the world to find out the status of the biggest invention in their product is that day. The Canadian government could play a role in ensuring companies know the relevant advances in the industry so they can be right on the mark and be competitive with the research on that business intelligence around the world, which they cannot necessarily do themselves. Their research would not be duplicating something that has already been found and they could strike into new frontiers with their research and use the other 95% of the world's research to advance their own products or add to their product lines, service lines or the competitiveness of their existing products.

Finally, the government could also help businesses work together in promoting and developing strong associations, associations that understand their members and can make the cases for that particular sector to survive.

I support the spirit of the motion in helping Canadian business but not to abrogate existing agreements we have. To ensure we have a free and liberalized trade regime around the world is where we do our lobbying when Canadian businesses are attacked. When something goes against us grievously, whether it is something related to the United States and softwood lumber or some other country, it does not do a lot of good to change by doing our lobbying and making a big row inside Canada because that is not where the problem is. The problem is in the other country and there are interests in that other country that benefit by free Canadian trade and by not having Canadian trade abused.

My concept is that we need to extend our efforts more into those countries, to attack those who are attacking us on their home ground and to make a case for the benefits. We need to get the groups on side that benefit by free Canadian trade, such as housing contractors and people buying houses, especially low income people in the United States who need our reasonably priced Canadian lumber. We need to expand the frontiers and the intelligence of our lobbying. In all these ways I have mentioned, we could help Canadian businesses when they are not being treated fairly by trade actions of other countries.

[The Deputy Speaker, Conservative, Andrew Scheer]

I recognize the hon. member for Rivière-du-Nord for her five minute right of reply.

[Monique Guay, Bloc, Rivière-du-Nord, QC]

Mr. Speaker, I have five minutes to conclude this debate. Thank you very much.

This is a most important bill for us and for all Canadians and Quebeckers. In the midst of this economic crisis, we have to give ourselves the tools we need to create jobs. We are talking here about 21,000 jobs and $600 million worth of purchases made annually by the federal government. Imagine how that could help us get through this situation where it is said the unemployment rate could soon reach 10.8%. Instead of that, we could reduce the unemployment rate and help our businesses.

We have really done our homework with regard to the bill before us today. We asked legal experts to check the bill. We consulted the unions. I talked to various union representatives to seek their support and I succeeded in obtaining that support because they are in favour of making purchases here, in Canada and in Quebec. I am very proud of their letters of support. I think there is a consensus around my bill.

We must also consider the fact that we have concluded important international agreements and we certainly do not want to risk being sued for millions or billions of dollars because of calls for tenders or purchases that would go against NAFTA or other international agreements that have been signed.

We were careful in ensuring that international agreements would not be affected by this legislation. The bill would allow the federal government to buy Canadian goods and services without violating any international agreements. These contracts would not be covered under those agreements, but they sure would help many of our businesses get through these difficult times, because a lot of them are barely able to stay afloat at this point.

That is very clear in our bill. We are not leaving ourselves open to judicial proceedings. On the contrary, the government would be allowed to spend up to $600 million. That is no small amount. It is big money that could create 21,000 jobs. And such a number of jobs would help lower unemployment figures across the country. That is particularly important in the current economic context. People are losing their jobs. They had very well-paying jobs and they now find themselves out of work, precisely because businesses are reducing their staff. So, these people are left with nothing. Rather than buying abroad, let us try promoting local procurement.

Hon. members may also have noticed that, in our bill, we are asking to respect a certain percentage for the provinces. This means that the Government of Canada should not buy everything in the same province. It must act fairly towards all the provinces, so that everyone can benefit from this initiative.

This is a very comprehensive bill. Even at the municipal level—and I am referring to my riding—the people, mayors and councillors are promoting local procurement. I know that this is already being done through awareness. However, at the federal level, we could have true legislation that would not only allow us to buy at home, but would in fact compel to do so.

I realize that this raises questions, and I know that we cannot ask questions amongst ourselves, because this is a fairly dry issue. However, I sincerely hope that the bill will be referred to a committee. That would answer Liberal members' concerns about the 7.5% and it would allow us to take an in-depth look at this issue. We could then have witnesses come and tell us that they agree with this measure, or that they want something to be changed. Let us make this a viable bill that can truly help all Canadians and Quebeckers to create jobs and to encourage our domestic industries, instead of buying products from abroad.

That is a priority right now. This bill comes at the right time. It is very well drafted, and it was thoroughly reviewed not only by the law clerks of the House, but also by several other legal officers. We must give it a chance and refer it to a committee, so that we can really look at it and deal with the concerns of each political party. It is my hope that, for once—although I doubt it—the Conservatives will try to be part of this group that is the House of Commons and will take a real look at the situation.

[The Deputy Speaker, Conservative, Andrew Scheer]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Conservative, Andrew Scheer]

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

[Some hon. members]

Yea.

[The Deputy Speaker, Conservative, Andrew Scheer]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, Conservative, Andrew Scheer]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to Standing Order 93, the division stands deferred until Wednesday, October 21, 2009, immediately before the time provided for private members' business.

Suspension of sitting

[The Deputy Speaker, Conservative, Andrew Scheer]

Since it is ten minutes to noon, the House will now suspend until 12 noon.

(The sitting of the House was suspended at 11:51 a.m.)

(The House resumed at 12:01 p.m.)

Opposition Motion—Forestry Industry

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

moved:

That, in the opinion of the House, the government should act urgently to provide the forestry industry, which has been hit hard by the economic crisis, with assistance which is similar to that given to the automotive industry concentrated in Ontario, and primarily through tax credits, loans and loan guarantees so that companies have immediate access to cash, and tax measures for private woodlot owners.

Mr. Speaker, I will be sharing my time with my colleague from Chicoutimi—Le Fjord.

I am very honoured to speak to this issue which, thanks to the Bloc Québécois, will be debated in this House today. We often hear the other political parties talk about the forestry crisis. They do acknowledge that there is a crisis but none of them has really done anything to help this sector of such vital importance to Quebec's economy.

Today, the Bloc Québécois will use the opposition day to put forward, once again, concrete ideas to quickly counter a catastrophe that has destroyed the forestry sector and consequently the lives of thousands of families in Quebec. I would also like to point out that the Bloc Québécois was the first federal political party to have appointed a private woodlot critic. I am extremely proud and honoured to have been selected for this task. This just shows how in touch our party is with the concerns and the realities of Quebeckers. This initiative was taken when private woodlot owners were being completely ignored by the mediocre measures proposed by the federal government in response to the forestry crisis.

Thus, the Bloc Québécois has taken up the mandate of being the voice of Quebec's private woodlot owners in the debate on the future of forestry. In the motion being debated today, we clearly state that the government must act urgently to provide the forestry industry with assistance similar to that given to the automotive industry concentrated in Ontario. We believe that it is completely absurd for the federal government to offer the forestry industry a paltry $70 million when it is giving the automotive industry almost $9.7 billion.

In Quebec, forestry is responsible for 88,000 direct jobs, but the forestry crisis as a whole affects close to 825,000 Quebec workers. In other words, this industry is vital to the economy of Quebec and above all to the economy of the regions, such as the Lower St. Lawrence region, where my riding is. So it is not right for a government to stand idly by in the face of a crisis that is threatening so many jobs and so many rural communities. This is, once again, glaring evidence of incompetence or perhaps simply contempt on the part of this government.

It is for this reason, among others, that the Conservative government does not deserve the confidence of Quebeckers. It is our clear belief that the Conservative government is making an ideological choice that benefits the West to the detriment of Quebec. The fact is that the government has still done nothing worthy of mention for the forestry sector. In creating a joint Canada-Quebec committee on forestry issues, the Conservative government has created the appearance of taking an interest in this crisis. In fact, there has been nothing concrete to alleviate the worries of forestry workers. Their frustration is all the more justified when we know that Quebec alone accounts for 32.8% of the forestry jobs in Canada and close to 40% of the communities affected by this crisis and that, in the end, according to the government’s calculations, Quebec receives only 21.7% of the funding allocated.

In addition to doing nothing to solve the problem, the government is barely concerned at all with the more specific case of the private woodlot owners. Yet private woodlots are responsible for 29,000 direct jobs in Quebec. I myself own a private woodlot, and I know how necessary and urgent it is for concrete action to be taken as soon as possible to avoid catastrophe.

I will take this opportunity to let all parliamentarians know about a few of the Bloc Québécois' proposals to assist owners of private woodlots.

First of all, in fiscal terms, it is absolutely necessary that the federal government recognize management plans as reasonable evidence of profit, so that management expenses incurred can be deductible under section 31 of the Income Tax Act. Under the current tax system, forest management expenses are not deductible from the income of the farm as a whole, and this encourages mismanagement of the forest. The taxation system applicable to private forests thus puts producers at a disadvantage and does not encourage sustainable use of the resource.

At the present time, the Income Tax Act grants no specific status to woodlot owners, and according to Revenue Canada, most owners are considered part-time farmers or hobby farmers. That being the case, their operating losses are not easily eligible. First they have to prove a reasonable expectation of profit. This is very difficult given the current requirements of the tax authorities. It is absolutely necessary to change this situation so as to take account of the specific nature of forestry work and of private woodlot owners.

Second, the federal government must set up a registered sylvicultural savings plan. At present, all the income made by lumber producers is taxable in the year when they sell their wood, even if that income represents up to 10 years of work—and that year may be followed by 10 more years without income.

Producers are asking to be able to put a portion of their income into a registered silvicultural savings plan. Though not having the same purpose, the mechanism of such a plan would be comparable to the registered retirement savings plan. The registered silvicultural savings plan would allow producers to shelter a portion of their income, setting it aside for future woodlot development.

Third, the federal government must look into the possibility of setting up an interest tax holiday and capital tax holiday program, so that forestry producers can preserve their assets in a time of crisis while improving the management, productivity and diversification of their property.

In my region, the Lower St. Lawrence, activities associated with private forest management and wood marketing create some 2,000 forest and factory jobs. In addition, the economic spinoffs from private woodlots are vital to our rural communities—my riding consists mostly of rural communities. It is crucial that the situation of private woodlot owners improve, because the survival of these communities depends on it.

Faced with the government's inaction, private woodlot owners are not just standing idle; they are doing everything they can to develop the full potential of their forest heritage. This means that, in addition to being undeniably important to rural communities, private forests can play an important environmental role when managed sustainably. They can help preserve wildlife habitat and ecological diversity, protect air and water quality, store carbon and reduce soil and shoreline erosion. In fact, thanks to the management of private forests, they are more productive today than public forests.

Private forest management in Quebec and Canada is the best solution for sustainable development and I urge the government and the other parties in this House to adopt my motion today in order to support the 130,000 private woodlot owners in Quebec and the 450,000 in Canada.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, my colleague talked quite extensively about woodlot owners. It is an important issue and he brought up some very valid points.

Recently, the Government of Quebec provided some assistance to the forestry industry in the form of loan guarantees. From what I can gather, that is the only substantial investment from the provincial government across the country at this point.

I was wondering if my hon. colleague could comment on the situation in Quebec and on how these loan guarantees would be beneficial at this time. In my particular situation, there was a mill closure, an AbitibiBowater mill. One of the reasons was that the machinery was not very modern. Perhaps loan guarantees and the like would help out the pulp and paper industry by providing incentives for mills as well as the woodlot owners.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I thank my colleague for his question and his comments.

It is true that the Government of Quebec is the only government that has taken recent action to help the forestry industry. Since last fall, and even before that, the Bloc Québécois has been calling on the federal government to take action. Since the federal government did not take concrete action, the Government of Quebec had to do something.

The Bloc Québécois is calling for loans and loan guarantees, so that the companies have the money they need to stay open, and so that they have the financial means to reinvest, conduct research, and so on. We want them to be able to keep their heads above water.

What is new today is that the Bloc Québécois is asking for the same thing for private woodlot owners. There are more and more private woodlot owners that have forestry businesses, and the Bloc feels that they could and should benefit from loans and loan guarantees to help keep their companies running and to continue, during these difficult times, to improve their businesses and to operate in their woodlots.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Speaker, opposition days are very important. They are an opportunity to get the government to act on things that are very important to the opposition.

Naturally, this is a very important part of what I do as the NDP forestry critic, and I thank the hon. member for bringing this motion forward. I would also like to tell the member that I support the motion.

However, if this is an opportunity to get the government to act, it seems to me that the opposition motion should be more substantial. In other words, it should talk about such things as employment insurance, protection for older workers to bridge the gap between the time of being laid off until retirement, if they are only a year or two away from retirement, loan guarantees which have already been talked about, pension guarantees and reform.

Why does the member's motion not have more meat to it?

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I thank the NDP member for his question.

When it comes to talking about EI mechanisms, I urge the NDP members, who support the Conservatives' Bill C-50, to come to the Bloc's side and demand even more sustainable assistance. The assistance could be applied to the private forestry sector, because these workers, primarily seasonal workers, would benefit from these changes to EI.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Speaker, the Bloc Québécois chose to introduce this motion about the forestry crisis because the situation is still just as urgent for thousands of forestry workers in Quebec and for my region.

It is not reasonable for us to be here today again, calling on the Conservative government to help the forestry industry, in spite of everything that has been said by the forestry industry for several years and particularly in the last few months.

For several months, I have observed the failure of two ministers in the Conservative government to take any action in my region, Saguenay—Lac-Saint-Jean. But even worse is the fact that they have never come right out and clearly told the public that they had no intention of helping them.

Recently, the Minister of State for the Economic Development Agency of Canada for the Regions of Quebec tried to buy time by creating the second committee in less than six months to examine the issue.

The situation we are experiencing in Saguenay—Lac-Saint-Jean is the same as in the ridings of many members of this House. In our respective regions, when the sawmill shuts down, the entire local economy is affected.

In my riding alone, 4,000 direct jobs have been lost. And the member for Roberval—Lac-Saint-Jean says that is to be expected, because there is a market crisis.

For several months, the Minister of State for the Economic Development Agency of Canada for the Regions of Quebec has been announcing far and wide that the forestry crisis is a market crisis, and that Export Development Canada has provided $16 billion in all sorts of financial services to the forestry industry. But what has to be pointed out is that this is not government spending. These services have been paid for by the companies themselves. Yet the oil companies and mining companies have received over $27 billion under the same program.

What the industry is calling for is simple. It is calling for loans and loan guarantees and for tax measures for private woodlot owners. That is what the industry has been seeking for months. And yet when we look at the Conservative government’s Economic Action Plan, it is spelled out in black and white that the lumber industry has received only $70 million in 2009, and will receive only a meagre $100 million in 2010.

That is nowhere near the $10 billion granted to the auto industry in Ontario, which is experiencing a market crisis just as the forestry industry is.

In actual fact, what the Conservative government’s behaviour demonstrates is that it made an ideological choice a long time ago to support the auto and oil industries at the expense of the forestry industry.

The forestry crisis is just as bad, and even worse, than the automotive crisis. It affects 825,000 workers, while in the auto industry 500,000 workers are affected. The government, therefore, has to make some effort to be consistent and show some common sense in order to find solutions.

That is why the Bloc Québécois has chosen to devote an opposition day to the forestry crisis and the solutions that have to be considered. Unfortunately, the government has completely given up and is no longer supporting a sector that is in great need of support.

Last spring, Robert Dionne, President of the Association des propriétaires de machineries forestières du Québec which represents 250 forestry entrepreneurs, said that the situation was so serious that “our members are worried. They are moving heaven and earth to stay alive.” Over 50 entrepreneurs in Quebec shut down in 2008, and the situation is not much better in 2009.

At that same time, the owner of Entreprises Alain Michaud Inc. in Saint-Ludger-de-Milot in the riding of Roberval—Lac-Saint-Jean said that “we have to return to the time when there were tax credits for equipment purchases.”

No new measure has been announced since the spring to address the chronic crisis afflicting the forestry industry.

As members of Parliament, it is our duty to come up with solutions to help thousands of families.

Our fellow citizens have asked us to represent them in Ottawa to defend their interests.

In our motion we are proposing some practical ideas to resolve the forestry crisis.

The motion calls on the government to put a real plan in place as quickly as possible to help the forestry industry, through loans, loan guarantees, refundable tax credits for research and development, the establishment of a policy promoting the use of wood in the renovation and construction of federal public buildings and the implementation of measures to support the use of forest waste to produce energy and ethanol.

I am going to speak more specifically about establishing a policy to promote the use of wood in the construction and renovation of federal government buildings. It would be an example for work on private, non-residential buildings.

In June, the Bloc introduced a bill in this regard. A policy of this sort is intended to increase the demand for wood in the domestic markets of Quebec and Canada and could make us less dependent on exports of this resource to the United States.

In my riding, for example, the Department of National Defence will be building a hangar: hangar number 2. I have suggested to the Minister of National Defence that this construction project be an example for the federal government and be built using wood.

We know what happens when the Americans decide to cut back on housing construction. I would count on the MP for Jonquière—Alma to defend such a project. Instead of saying nothing, he would be helping to increase domestic demand, and other projects could follow. These are solutions that could be proposed, which would provide breathing room to the forestry industry.

It is easy to talk about problems, but solutions have to be put forward. One both useful and symbolic solution would be to have the government promote the use of wood in construction projects, such as hangar number 2 in Bagotville, as I just mentioned.

However, the Minister of State for the Economic Development Agency of Canada for the Regions of Quebec and member for Roberval—Lac-Saint-Jean is saying nothing. Even my colleague from Jonquière—Alma is saying nothing. This policy would provide breathing room. Does he agree with his colleagues who said that there was some concern about promoting such projects where wood is used in building construction?

I would like to know what they find of such concern in this measure. The lack of comment by two Conservative members from the Saguenay—Lac-Saint-Jean area leave me perplexed about their positions in this matter.

Why reject a policy to use wood, a policy that costs the federal government nothing? Why?

It must be noted that the federal government owns 13,782 buildings. In 2008 alone, it built and renovated 198 buildings.

Accordingly, the federal government spends a significant amount on the construction and maintenance of its buildings. In 2007-08, the figure was $827 million. That is not peanuts. This is money that could be invested in specific projects that cost the government nothing.

At the moment, a number of governments have realized that using wood in their buildings is not only a practical way to reduce greenhouse gas emissions but also a way for them to provide direct assistance to the forestry industry.

I will close on this point. I would like the government to understand that implementing Bill C-429 is a solution. It is a practical solution. It costs nothing to use wood in the construction of buildings.

[Jean-Pierre Blackburn, Conservative, Minister of National Revenue and Minister of State (Agriculture)]

Mr. Speaker, I listened to the speech made by my colleague, the hon. member for Chicoutimi—Le Fjord. There are a few things I would like to tell him because I do not think he is telling people the real story.

He said nothing was done to deal with the crisis in the forest industry. The hon. member was there, though, along with my colleague, the Minister of State responsible for the Economic Development Agency of Canada for the Regions of Quebec and me, when an economic summit was held recently in our region. We heard what the stakeholders had to say. They asked us to do something specific for the forest industry.

So we have done four things.

First, Quebec and Ottawa jointly invested some $200 million in silviculture. In response to the requests of the forest producers, whom I have met personally, a way was found to help them.

Then they asked for loan guarantees. Thanks to the last budget, Export Development Canada can now provide loan guarantees.

For the hon. member’s information, between last January 1 and June 15—in less than six months therefore—the EDC provided $10 billion in loans to the Canadian forest industry, including $7 billion to 220 forest companies in Quebec. That is quite a few companies. This amount was $800 million more than what was provided to the automobile industry.

The Business Development Bank of Canada now also provides working capital and other kinds of capital.

We took a whole series of steps, but the hon. member does not want to talk about them or see them.