Mr. Speaker, I will be splitting my time today with the member for Peace River—Westlock.
I am pleased to speak in support of this motion and in support of the Canadian forestry industry. Across Canada, forestry plays a key role in the growth and economic prosperity of provincial economies, and of small communities in particular. In fact, over 650 communities throughout Canada rely on forestry, and roughly 160 of those communities are solely reliant on forestry. In 2016, Canada exported $34.6 billion in forestry products, a 5.2% increase from 2015. It represents a key component of Canada's export portfolio.
In my home province of Alberta, there are more than 27 million hectares of forest area. Forestry employs more than 20,000 people and pays out close to $1 billion a year in salaries and wages. The forestry sector contributes $5.5 billion to the Alberta economy, and the workforce in the prairie provinces in forestry could double by 2020. It is clear that forestry is vital to the Canadian economy, and the federal government must do its part to support forestry workers and processors.
The official opposition's motion today calls on the government to support the forestry sector and its workers by securing a softwood lumber trade agreement. The motion also asks the government to denounce efforts by foreign-funded non-governmental organizations that actually seek to disrupt Canada's lawful and sustainable forestry practices, and other natural resources development, such as crucial energy projects, that benefit communities and raise the standard of living of all Canadians.
For example, ForestEthics has called pipelines that would safely transport oil to export markets “dirty energy projects”. Greenpeace recently celebrated the cancellation of the energy east pipeline by calling it a “victory”. These groups do not represent the vast majority of Canadians, who support responsible natural resources development. In fact, they actively campaign against the good-paying jobs and benefits the natural resources sector creates in Canada on which the livelihoods of hundreds of thousands of Canadians depend.
The most recent softwood lumber agreement expired over two years ago. There is no agreement to protect Canadian forestry workers. The negative impacts of this Liberal failure are huge. The last softwood lumber dispute cost the Canadian forestry sector $5.3 million. The previous Conservative government negotiated a new agreement within three months of coming into office in 2006. Conservatives took action again in 2012 and negotiated a two-year extension, which protected the Canadian forestry sector and workers until October 2016. It provided the forestry sector with certainty and stability, unlike this Liberal inaction, which has put the sector and workers' livelihoods at risk.
On March 12, the then minister of international trade heralded a real breakthrough on softwood lumber negotiations and said that there would be the structure of a deal within 100 days. The deadline came and went. “No softwood lumber deal, as 'challenging but productive' talks drag on”, was the headline after that deadline passed.
The tariffs currently being imposed on Canadian producers are as high as 24%, which will undoubtedly lead to job losses for Canadians and will make it increasingly difficult for Canadian forestry producers to thrive. Forestry is an important part of Alberta's economy. I provides over 20,000 Alberta jobs, and the forest products industry is Alberta's third largest manufacturing industry and second largest manufacturing export industry. However, because of Liberal inaction, these jobs and the economic contributions from the forestry sector are at risk.
With the countervailing and anti-dumping duties combined, Alberta's forestry producers are faced with trade barriers as high as 30%, with no clear remedy in sight. This, in addition to the mountain pine beetle infestation, is causing real damage. For example, in Alberta alone, nearly $500 million has been spent to fight the mountain pine beetle, but it continues to spread. In fact, six million hectares of land are currently at risk.
Albertans know the impact of hard times in the forestry sector. In Lakeland, Millar Western had to shut down its sawmill in Boyle. In a town of 950 people, 10% of the population lost their jobs, which eliminated roughly a quarter-million dollars in property taxes and other revenues for the village. It is devastating.
However, there are many success stories. Alberta-Pacific Forest Industries Inc. is a pulp and paper company, also in Lakeland. Alberta-Pacific is one of the top 100 employers in Canada and one of the top 100 employers of young Canadians. It is recognized as being one of the top environmental companies in the world. In addition to pulp products like paper and tissue, it produces renewable energy from forest biomass to power its mill site. This is a great Alberta story.
As a key contributor to Alberta's economy, it is crucial that the Liberals secure a new softwood lumber agreement.
Paul Whittaker, president and CEO of the Alberta Forest Products Association, said, “If you look at the significant challenges facing Alberta’s forest sector, if Item 1 is the mountain pine beetle, Item 2 is the future of the softwood lumber agreement.” He went on to say, “it provides a stable and predictable platform for trade with the most significant, to Alberta, external market that we have.” In 2014, 24% of Alberta lumber processed by member companies of the Alberta Forest Products Association went to the United States, but with still no deal, it is clear that the Liberals need to change their approach to negotiating.
Naomi Christensen, a softwood lumber expert with the Canada West Foundation, says that Canada needs to show the U.S. government how increased tariffs on Canadian lumber will negatively impact American consumers. Increasing tariffs on Canadian lumber products will actually cause higher housing prices for Americans, lost jobs, and lost wages. She also said:
There is only one real reason behind the U.S. Lumber Coalition’s move to petition the Commerce Department to place duties on Canadian softwood lumber—to raise the price of lumber. Yet, while the U.S. domestic industry benefits from higher profits, U.S. consumers lose out. This is clear by looking at the effects of the duties prescribed by the recently expired Softwood Lumber Agreement. Ranging from 0 per cent to 15 per cent, depending on the price of lumber, U.S. producers earned more than $4-billion because of the duties, according to the Montreal Economic Institute; meanwhile, U.S. consumers paid an extra $6-billion.
Prior to the U.S. government imposing duties on Canadian lumber, it was estimated by the U.S. National Association of Home Builders that imposing a 25% tariff on Canadian softwood lumber imports would result in nearly 8,000 American jobs lost and $450 million in lost wages. Ms. Christensen points out that Canada can motivate the U.S. to remove these tariffs. She said:
The housing market plays a major role in U.S. economic health. After the Great Recession of 2008, the U.S. economy only began to recover when the housing market did, and Canadian lumber aided this recovery.... Imposing duties high enough to significantly restrict the export of Canadian lumber to the United States will raise prices, decrease consumption and slow growth. A cooling housing market will make it difficult to boost growth in the [American] economy as a whole.
In other words, the Liberals need to make it abundantly clear to the United States how imposing high tariffs on Canadian lumber imports could, in fact, have significant negative impacts on Americans. Unfortunately, it appears that the Liberals have not convinced the U.S. and are not concerned with securing a new agreement to protect Canadian forestry workers, despite all the Liberal rhetoric. This continued uncertainty is bad for workers, bad for Canada's world-class forestry industry, and bad for the Canadian economy.