moved that Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland), the Agreement on Agriculture between Canada and the Republic of Iceland, the Agreement on Agriculture between Canada and the Kingdom of Norway and the Agreement on Agriculture between Canada and the Swiss Confederation, be read the third time and passed.
Mr. Speaker, I would like to thank my colleagues for taking an interest in the bill before us today.
I realize that free trade agreements can cause some conflict. Our world has been hit hard by the global economic crisis, and the crisis will have an impact here at home. We can take comfort in the fact that Canada has the most stable banking system in the world.
However, we must also recognize that our industries, our workers and our exporters are all under pressure.
That is why it is important for the government to do everything in its power to make things better by developing policies and programs that will lighten the burden on our industries and companies.
We know we are in a time of fiscal crisis and we know there are pressures all around. It is in times like these, more than any other, from the government's point of view and, I think, most Canadians that we should be looking at opportunities to open up the doors for, not just Canadian companies, but Canadian workers also. We should not be looking at ways in which to build walls but in fact to tear down walls and to open up possibilities.
History is very clear, as we have indicated before, that when we build a trade wall up we bring our economy down. We do not want to see that happen, which is why we are taking a number of initiatives to pursue possibilities for Canadian workers and businesses to make their products and services more available world-wide.
As our economic history shows, we are as prosperous as we are in Canada because of the fact that we believe in trading freely. Because of our great capabilities, not just on the technology side but because we are innovative and productive, we can actually produce more products than we can all, as individual Canadians, consume.
Therefore, if we are going to truly move in the area of increased prosperity, we need to look for ways to sell our goods and services abroad into other countries. That is why pursuing free trade agreements, or more comprehensive economic agreements, as some countries prefer to refer to them, is part of our plan.
Free trade agreements are very significant. They will help Canadian producers and our workers. However, we also need to look at, as we do, areas like funding research and innovation, research and development and science and technology agreements. We pursue air agreements and open sky agreements with other countries to advance the air industry and make travel and the shipment of cargo even more productive and more competitive. We do a number of things, on several fronts, to ensure Canadians are positioned among the best in the world so their products and services can be manufactured and sold abroad.
This particular agreement, which is represented by Bill C-2, involves what will be the first ever free trade agreement with European countries. Iceland, Norway, Switzerland and Liechtenstein agree with us that there will be mutual benefits if we can tear down tariff walls, tear down the barriers that make trade more difficult back and forth and open the doors of opportunities on both sides.
If we look at last year's figures, we have about a $4.2 billion relationship when it comes to merchandise exporting and trade and, even more important, we have over $18 billion of direct investment. That means jobs for Canadians and the expansion of Canadian activity. We have a fairly stable and productive trading relationship with these countries, which are pulled together in this bill known as the EFTA, and we want to see this continue and enhanced.
As important as this bill is and as important as trade is with the individual countries that are named in this bill, it also serves, and we are not hiding this fact, as a lever into the larger EU community. Colleagues will know that we have made great progress on the EU front with 27 other countries eventually encompassed in the EU agreement. We have now gone through what is called the scoping exercise or the first phase of discussions and are very close to getting into official and formal negotiations with the broader EU community. That is something we are hoping to see develop over the next few months.
However, right now we want to focus on the countries named in this particular bill. These are friendly countries and long-standing friends and allies, and we want to see our capabilities back and forth to continue.
A number of issues have been raised, some in committee and others over a long period of time, in terms of consultation. I thank all the members of the committee for recognizing that a lot of work has gone on and a lot of consultation has taken place and we believe all of the substantive issues have been addressed.
These are not always easy discussions at the committee level, especially if there are ideological differences, but my sense is that most of us in the chamber and most of the people on the committee recognize that the opening of doors and the expansion of opportunities is something that is key to us at any time, regardless of the economic environment but especially now in a tough time of economic pressure.
It is important to note that political and democratic pressures come to bear in the negotiations of free trade agreements. Inevitably, certain industries will feel that if they do not have the protection of a tariff wall and they do not have the ability to tax goods coming into the country even before they get here, thereby forcing up the prices so that the goods coming into the country are less attractive to Canadian consumers, the Canadian product is more attractive because an incoming good has a tariff slapped on to it. Some industries, invariably, will be affected by any trade agreement. These are called sensitivities, which is why we work with those industries to try, as far as possible, to soften the impact of a free trade agreement.
I will use one example in this particular agreement that is represented in Bill C-2 and that has to do with the shipbuilding industry. We have had consultations with the shipbuilding industry that go back as far as the 1990s because there have been very high tariffs in that particular industry, some as high as 25% or more. That would mean that a product coming into Canada that is under the shipbuilding umbrella could be facing a tariff as high as 25% or more, which means that the price of the product coming in is artificially raised because a tariff has been slapped on it and that gives a competitive advantage.
We are very careful to protect our industry. When we negotiate a free trade agreement with any country we need to ensure its shipbuilding industry is not being subsidized. We must have a level playing field. I believe, time and again, that Canadians have shown that they can compete with the best anywhere in the world as long as we are on a level playing field. As a government, that is where we need to be vigilant and vigorous when it comes to dealing with other countries. If we are looking at a free trade agreement abroad or an economic comprehensive agreement, we need to be aggressively pushing those other countries to ensure those tariffs are gone and that subsidies to those particular industries are removed so they do not have an unfair advantage competing against Canadians.
On the shipbuilding industry, we have put in place a 15-year phase-out of our tariff. That is the longest phase-out ever in Canadian history in a free trade agreement. We want to make this incremental and we want to give that industry as much time as possible to adapt.
We also have estimated, going over the next three decades, some $43 billion in procurement in the shipbuilding industry. We are showing our shipbuilders that the opportunities are huge moving into the future. We have also put in place a finance structuring facility of up to $50 million that assists our industry in terms of dealing with interest costs when it comes to purchases related to shipbuilding. We have carefully done this in a way that is compliant with our free trade agreements. It will not put us offside or at the risk or threat of any World Trade Organization dispute or any contest.
We have also indicated to our shipbuilding industry that just on the acquisition of Coast Guard vessels alone over the next few years, there are $175 million of acquisition geared specifically to the Canadian industry. Since shipbuilding has been mentioned, I am using it as an example of how we can deal with a particular sector within a free trade agreement.
As elected people, we need to keep in mind that we must be constantly looking at what will be good overall for our producers, manufacturers and the economy of Canada. When we are approached individually by a sector that would be opposed to a particular agreement, we need to consider a couple of things. We first must consider what can we do within the agreement to soften the impact of a free trade agreement and to help that particular industry adjust and stay competitive over time when eventually those tariffs are completely removed.
The other thing we have to consider is this. There will always be in any free trade agreement one or more industries that come forward and say that it will make them less competitive and that they do not want the deal to go ahead. At that time, we not only have to look at it seriously, but we also have to consider that if the deal does not go ahead, other industries will be affected and will stay uncompetitive because we do not have a free trade agreement.
When we look at the agreement in Bill C-2, and we look at, for instance, the fishing industry, which has a huge impact in Atlantic Canada, if we do not move ahead because we have another industry that feels it could not be competitive, an advantage will be lost for our entire marine and fishing industries.
There could be an entire sector of agriculture products that if we did not move ahead with a free trade agreement, we would be still stuck with high tariff walls. If we try to be sensitive to one area, like shipbuilding, our entire agriculture sector will be affected.
Look at the shipment and the export of our paper products. Can we legitimately look at this entire industry, the Canadian companies that manufacture paper products, and say we cannot help with free trade because another sector will be upset, especially in a time when the forestry and paper industry is probably getting hit harder than at any other time in its history?
This is where the democratic process puts us in a bit of a dilemma. We will always have one group of constituents who will be, quite rightly, concerned about a free trade agreement. If we are only being sensitive to that group, we could in fact be denying many other groups the opportunity to more freely and ably market their goods abroad.
We can use the agreement and this arrangement, under Bill C-2, as an example. We can show how we identify an industry, in this case it would be the shipbuilding sector. We have worked with it. We have made the provisions to assist it through this 15 year phase-out period. We have clearly shown the economic advantages and the purchasing opportunities in the years ahead. We have taken great steps to not only sensitize it to a free trade agreement, but also to signal to many other industries that they will benefit from this agreement as well. Provisions are being made and overall, as an economy, we will see things improve.
As we consider Bill C-2 at third reading, I ask our colleagues to give fair thought to this. I ask them to show the world, which is watching us in a time of economic downturn, that Canada does believe that opening the doors of opportunity is the way to go.
This is the worst time for countries to give in to what would be an impulse that is understandable. It is natural that industries, companies and business would step forward and say, in a time of global contraction, that they need protection. The last thing we want to do is start building walls and making it more difficult to market our goods abroad.
We can be a leader and we can be an example. I believe we are doing that. Soon in this assembly we will see free trade agreements related to Peru and Colombia. In the not too distant future we hope to see the materialization of agreements that we are pursuing in Asia and the Americas.
When I was in India last month, I met with the prime minister and the minister of trade. I have an agreement to begin discussion on a more comprehensive trade agreement with India. I will be in China next month where we will open six new trade offices there. We are sending the indicators very clearly, not just in the pursuit of things like science and technology agreement but on a broader array of sectors, that we want an even more vigorous and more robust relationship with China.
At every opportunity we can, we want to allow the world to see and to be aware that Canadian producers, innovators, exporters and merchandisers are the best in the world. We can compete with anybody in the world at any time as long as the playing field is level. This is our intention with our free trade agreements.
I thank members for their involvement in this and hopefully for their support as we continue the third reading discussion on Bill C-2.