Debates of Dec. 1st, 2021

Softwood Lumber Dispute with the United States

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I want to talk about that further. There was $1 billion: $500 million went to the lumber producers and $500 million went to the Bush administration. The B.C. business council described it as a raw deal. I think it is therefore erroneous to suggest that it set us up for some type of utopian experience with softwood lumber. In fact, article 1905 was harshly criticized because it limited our responses after that.

I think it is important to recognize that this deal left $1 billion of Canadian money at the table. I do not think the member should paint it as the glorious result that is being suggested in this debate.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I rise on a point of order. The interpreter just indicated that the sound quality is very poor. That needs to be corrected to allow the interpreters to do their job properly.

[The Speaker, Anthony Rota]

Okay.

I will ask the hon. member for Windsor West to ask his question again. We had trouble with interpretation and we want to make sure that everyone gets a chance to hear what is said in the chamber.

The hon. member for Windsor West.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I will be brief. I do not know what happened there.

At any rate, the point I was making is that the previous agreement that was referred to left $1 billion of collected duties: $500 million went to the Bush administration and another $500 million went to U.S. producers. Also, article 1905 restricted our responses in future agreements.

Lastly, I think it is erroneous to suggest that this is the utopian position that Canada wants to get at the end of the day, because it had so many problems. Even businesses in British Columbia described it as a raw deal. Even though the provinces accepted it, they accepted a raw deal.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I think the member is rewriting history. I was there, as he was, but I was on the government side. I have reviewed that agreement very carefully, and I was responsible for renegotiating or extending it for two years when it expired.

First, the lumber industry across Canada embraced this agreement. It saw it as the best outcome it could hope for given U.S. intransigence. Second, on the $1 billion, again, the member does not recall this quite correctly. Half of the money went to the American industry and the other half went into a shared fund that was used jointly by Canada and the United States to promote the lumber industry. It was $500 million for that jointly administered fund, and then another $4.5 billion for Canadian producers. I see that as a good-news story.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, we are participating in a take-note debate tonight, which is designed to allow members to give their opinion on policy development on a matter of urgency. Today, the government has taken a delegation to Washington, D.C. ostensibly to talk about the softwood lumber dispute. I want to briefly, in the time I have, outline what the problem is and two ways to fix it.

We have to start by laying out the fact. The fact is that the American government has become more protectionist, particularly in its policies with Canada, under the tenure of the current government. My colleague from Timmins—James Bay outlined some of the issues, but it is everything from some of the policies around dairy; the EV tax credits that my colleague from Markham—Thornhill raised in the House during question period today; and the failure of the Americans to really respond to pleas on the Line 5 issue, and I know that the government was silent on KXL but certainly provincial governments were active on that. I could name many issues, but the doubling of the softwood tariffs suggests that something is very wrong with Canada's relationship with the United States. The question is, why? That is a question everybody in this place should ask, in a very sober tone.

The world has changed and it benefits all of us to have a strong relationship with the Americans, some continental economic unity and some continental integrated defence and immigration policies. It makes sense because the world has changed. When we look at supply chains and at trade, we need to be working with partners that are like-minded. Therefore, the question is this: Why has this relationship deteriorated?

I think it is Occam’s razor in this situation. I actually think that the relationship is just left fallow and the Americans do not care. I am sure they do care. I know there is one American who certainly cares about me. He might even be watching right now, and my condolences to him. However, I will say this: The American trade balance of Canada is such a small portion, about 2% of their export value, compared to ours that without the relationships that existed in the past and that do not exist right now, I just do not think the Americans are listening.

It has been very disappointing to watch the government allow infrastructure that was set up around the negotiation of CUSMA, like city-to-city relationships, the first ministers to state-level meetings, the business leader relationships and all that infrastructure that was developed, kind of be dismantled by the current government. I do not know whether that was through malfeasance or just atrophy, but without those relationships the government is not going to care. The first rule of foreign policy is they need to be able to pick up the phone to somebody that they have broken bread with and say, “I understand where there are commonalities and differences; let us work together on this.” I just do not think that has happened. Again, we are a rounding error to the Americans in a lot of ways. We have to make them care. That would be my suggestion for the government, humbly: Rebuild those relationships.

The last thing I will say is this. Knowing one American fairly well, I know that if he does not care about something I can either build the relationship with him or I can make him pay attention. Sometimes we have to make a trading partner pay attention and that, unfortunately, does come through retaliatory measures.

We do have measures to litigate, under CUSMA, that we have raised in the House this week. The government should be expressing plans for that to Canadian industry and should be putting its American partners on notice, but I would like to think that we can actually build that relationship again. There has been a lot of atrophy, but the government cannot say Donald Trump is in office anymore, so there has to be a purposeful building up of a relationship under Global Affairs, which has seen several ministers in a very short period of time.

There needs to be political leadership, a clear direction and an imperative from the government to make that relationship work at every level, not just at the ministerial level but state to province, municipality to municipality and industry leader to industry leader. If we are not talking to each other, really it is other actors around the world that benefit from the fact that we have not integrated our supply chains, that we are not working together and that we are fighting these silly trade wars with each other instead of uniting as a continent on certain values while retaining our sovereignty and our sovereign right to our economy.

That is what I humbly submit, out of respect, in this take-note debate tonight: Build the relationship and make them pay attention.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I would be interested in the member's thoughts in regard to American consumers. I have heard the Canadian supply of softwood lumber, in terms of the American market, could be as high as 30%. Please do not quote me on that. I believe it is somewhere around that. That is a lot of softwood lumber. American consumers will have to pay more for their lumber.

Would the member not agree that that would garner a great deal of attention through public awareness? It is an important point that does need to be emphasized that Americans also are disadvantaged by the recent actions of this trade bill.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, exactly. The point I am trying to make in my intervention tonight is that it benefits both Canadians and Americans for us to have strong relationships so that we are not going through escalating trade wars, but that is the job of the government.

We have had five foreign ministers in six years, I think, and four international trade ministers. How can there be a continuity of relationship even at the department level if department officials are not getting political will or a mandate that this is a priority? A lot of the infrastructure for those relationships to happen was dismantled after CUSMA.

Yes, of course we benefit. Both countries benefit from having strong trade that happens under a respectful rule of law. That is not happening right now and the onus is on the government to fix it.

[Mario Simard, Bloc, Jonquière, QC]

Mr. Speaker, I thank my colleague for her speech. I look forward to working with her on the Standing Committee on Natural Resources.

My colleague spoke a lot about the relationship with the United States. This relationship is a big part of the issue we are discussing tonight. However, we cannot ignore one of the major issues for the forestry industry, which is that there is no support for secondary and tertiary processing.

The forestry industry is a great industry to combat climate change, but the federal government's programs are pathetic. This industry accounts for $20 billion in exports for Quebec, but it receives just 0.2% in financial support from the federal government. Furthermore, 75% of that support comes in the form of loans. That is beyond pathetic; it is dreadful.

Does my colleague agree that the federal government's support for the forestry sector is extremely lacking?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, I very much look forward to working with my colleague on natural resources because I understand how important that sector is to his riding. I think we actually have a lot of commonality on what we can work on together.

I very much agree with him that the federal government should be doing more to support value-added processing of forestry products. At the same time, it has to make sure that our relationships with major export markets are secure. It should be able to do both. What we have seen through the government is an atrophy on both fronts.

I certainly hope that we can work together on the natural resources committee to hold the government to account, in the best interests of all Canadians.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, the one thing we know about the Americans is that they fight for their workers.

Joe Biden went to COP26. He talked about a trillion-dollar investment in a clean energy economy that was going to be tied to good union jobs. I have never heard our Prime Minister say that. Our Prime Minister went to COP26 and he announced an emissions cap. The people I know in the sector understand an emissions cap is coming. The world is expecting it but we got no details, no plan, no talk about a financial investment for the 140,000 energy workers who are getting ready for a transformation that is coming. Why is it that we have never heard our Prime Minister stand up and say that the plan for creating a clean energy economy will be tied to major investments, major opportunities and the good union jobs that Joe Biden is promising?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, it seems like unanimity is breaking out in the opposition ranks. I also look forward to working with my colleague from Timmins—James Bay on this matter because he is right. We should be ensuring that we are not offshoring jobs in natural resources and we are not being priced out of competitiveness because of our failed relationship with the Americans that has happened under the government.

This is exactly what the Liberals need to be held to account on. It is exactly why the natural resources committee needs to be reconvened immediately. I look forward to working with him and my colleague from the Bloc Québécois as well on the fact that we have lost jobs, we have lost opportunity and we have lost that ability to transition to a clean energy economy.

Very briefly, I would also like to wish a very happy birthday to the member for Central Okanagan—Similkameen—Nicola.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, since I just returned yesterday from an observation mission in Colombia, this is my first speech in the House since the last election—not counting the small point of order that I made earlier, of course.

I would like to take this opportunity to warmly thank the electors of Saint-Hyacinthe—Bagot for their renewed trust. I will do everything in my power to live up to this second term that I had the honour of being entrusted with.

Rather than engage in petty games by passing the buck and throwing accusations at either the Liberals or the Conservatives, I will try to bring the debate to another level, even if I do think that both are to blame. Focusing the debate on something else will only elevate the discussion.

First, let us quickly review the facts. Last week the U.S. administration announced that, starting in 2022, countervailing duties on Canadian softwood lumber will double from 9% to 18%, on average. Of all the companies affected, the primary victim is Quebec’s Resolute Forest Products, which will be slapped with a combined tax of 29.66%. That is why the Bloc Québécois wanted to have this take-note debate tonight, in which I am participating as my party’s international trade critic.

The trade war over softwood lumber is an old and never-ending issue. It has been said before, and it needs to be said again: There have been countless missed opportunities to resolve this problem.

The forestry industry accounts for 11% of Quebec’s exports. Our forests are a source of economic development, jobs, and tax revenue, and they have great ecological value. That must also be said. The forestry industry presents immense carbon sequestration and storage capacity, and it inspires many innovative Quebec SMEs to produce bioenergy and bioproducts. Some issues require international co-operation. The environment, the fight against climate change, and green trade are among them, and our wood can play a key role.

The new tariff war will hurt almost everyone. It will certainly hurt us because it could result in a large increase in the price of lumber and serious consequences for our businesses and the 25,000 direct Canadian jobs tied to the sale of softwood lumber to the United States. Things will not necessarily be any better in the United States either. The cost of housing will increase, which will further restrict Americans' access to housing, even though the Biden administration is claiming that access to housing is one of its priorities. Who will win in the end? The U.S. lumber lobby and a few politicians who see that the mid-term elections are quickly approaching.

Let us review the facts of this matter. Year after year, the United States accuses the Canadian forestry industry of benefiting from public subsidies that hurt the American sector. The American decision is based on what could be called a structural dynamic. This happens a lot. This is not the first softwood lumber crisis. There have been four rounds of trade conflicts: in 1982-83, in 1986, from 1991 to 1996 and from 2001 to 2006. We are now at the start of a fifth conflict.

It makes no sense. Canada has turned to the World Trade Organization and North American Free Trade Agreement dispute resolution bodies for help several times.

Canada has won all of its cases. In May 2020, the WTO even said that Washington had not been objective or fair and that its tariffs were unlawful.

Free trade agreements generally set time limits on disputes to prevent them from dragging on. The Americans knew that they would lose their case, though, so they did what they always do. They used every trick in the book to stall the arbitration tribunal, for example, by filing petitions to take up the tribunal's time or by blocking the appointment of arbitrators. The longer this goes on, the worse things get for our forestry industry.

The Americans’ strategy is therefore clear: Set tariffs that they know will be found to be wrong and take advantage of the years they are in effect to bankrupt, or at least undermine, the Canadian industry. This will allow the United States to further develop their industry in the meantime, modernize it, improve its competitiveness, and therefore get a head start.

That is what is behind the push for a trade war. Is this not precisely what can easily be described as unfair competition? It seems to me that it is. Still, there have been many missed opportunities to address this.

The Canada-United States-Mexico agreement, or CUSMA, passed in the House in March 2020, represents a very large missed opportunity in this regard. CUSMA needs to be amended. The government could have taken the opportunity to close these loopholes when renegotiating North American free trade over the past few years to ensure that the litigation process is much better regulated so that we could avoid overly long delays when time is not on our side.

There is also another item that needs to be amended in CUSMA. It should provide for a permanent softwood lumber advisory board. I tried to introduce a similar amendment in the House in March 2020, but unfortunately it was rejected by the Chair.

This brings me to another urgent matter, that of getting the Quebec system recognized.

Since 2013, Quebec's forestry regime has been fully compliant with the free trade framework and requirements, which should save it from vagaries like the ones we are experiencing right now. The regime is simple to explain. One quarter of the timber from the public forest is sold at auction, where anyone can bid. The price obtained is then applied to all the timber from public forests. This system is very similar to the one used in the United States. The price of timber is set by the market, not by the government. It is not subsidized, which passes the free trade test 100%. It was actually designed specifically for that purpose.

In contrast, that is not how B.C.'s stumpage system works. In that case, it is set by the government. Recognizing the specificity of the Quebec system would save us a lot of trouble.

I will make an aside to talk about one of the reasons I am in politics. When people ask me why I am a sovereignist, I tell them that it is so we can have the power to sign our own agreements and treaties, which sounds a bit abstract and seems quite theoretical. However, here we have the perfect example, and it is a fairly typical case: we want to be able to negotiate on our own behalf, in our own interests, instead of letting a government that does not see us as a priority do it for us.

Of course, in the short term, the government urgently needs to support the industry with a loan and loan guarantee program, to match the amounts being withheld by Washington. It is the only way to get through the crisis.

Ottawa could also argue for an exemption for timber from private forests. Although the vast majority, or 90%, of the timber harvest in Quebec comes from public forests, certain private forests are quite large and have real value in some regions, and therefore deserve our attention. The point to be made is quite simple. The Americans wag their finger at public forests, saying they do not respect the free market system and they benefit from hidden subsidies. Why, then, is timber from private forests, which I would point out is not subject to the Quebec regime, also subject to these new tariffs? This should be a very simple argument for our friends in government. It seems to me that it should be pretty easy to argue that.

Since the new duties do not apply to processed products, as my colleague from Jonquière mentioned earlier, this is a great opportunity to develop a value chain to promote the processing of forestry products. I think this presents a great opportunity for secondary and tertiary processing.

What does the government do? It tells us it is working very hard for all Canadians and that softwood lumber is a priority that it is, and I quote, “vigorously” defending.

Two weeks ago, the Prime Minister took part in the first three amigos trilateral summit in many, many years. Barely one week later, new softwood lumber tariffs were announced. Make of that what you will, but there is still a problem here. Tomorrow, the Minister of International Trade will be in Washington. Let us hope for better results.

Will the government take a firmer tone? Will it retaliate with measures on U.S. goods?

We will have to wait and see. We have yet to hear any real announcements. Empty buzzwords like “priority” and “vigour” have run their course. Now, a major industry—

[The Chair, Conservative, Chris d'Entremont]

Order. The hon. member for Central Okanagan—Similkameen—Nicola.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, I would like to congratulate the member for his speech.

When the Liberal government was elected in 2015, there were a lot of problems with the mandate letters that the government released.

In fact, I remember asking the government to prioritize softwood lumber in the mandate letters in 2015. It was the first thing I said when this chamber came back after the election.

Would the member agree that the government needs to prioritize this issue at a much higher level so his workers know their government is actively working on this? As I said earlier, the government only talks about softwood lumber when we talk about it in an emergency.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Chair, we are hearing a lot of empty words like “priority” and “vigour” while workers and industries are struggling.

We have had enough of these empty words. They are like buzzwords. They need to be tweaked to say that it is important to the rest of us. Enough buzzwords. People are waiting.

This should indeed be a key priority. However, I am curious, and I have to wonder. President Biden holds the first three amigos summit in several years, bringing together the three North American heads of state, and a week later, new tariffs are announced. If that is not a diplomatic triumph, I do not know what is. I hope my colleagues caught my sarcasm.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Chair, I am interested in my colleague's thoughts on expanding export markets beyond the United States.

We can talk about the diversification of the industry into secondary markets such as furniture or whatever else might be a wood product, but one of the biggest things the government can do is look at ways in which industry can increase the number of markets for the products we have, whether it is in Quebec, B.C. or my home province of Manitoba.

Could the member provide his thoughts on whether there are countries the Bloc believes we should be pursuing to expand those markets? I would like to hear what he has to say on that issue.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Chair, first I would like to know what to think. I have not heard any intentions. What I mean is that I have heard the intention, but I have not seen anything of substance.

I would really like to be the first to say that I have seen the proposed policy and that it makes sense, or that this or that element should be improved. However, right now, there is nothing. There is absolutely nothing, just wind. Once again, there are just empty words.

My colleague asked me if I support processing and market diversification. I have spoken about that. Now, when are they going to put their money where their mouth is?

We are not in government. It is up to the Liberals to answer that question.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Chair, the softwood lumber dispute is having huge repercussions for forest communities in northern Ontario. However, it has also led to the transformation of the industry, especially in terms of efficiency and the use of natural resources in the north.

My question is as follows. Where is the federal government's plan to work with the forestry industry and the northern regions? How does it plan on developing new markets to harness the transformation of the industry and create new opportunities for it in Canada?

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Chair, I thank my colleague for his question, but I have no answer for him.

My colleague asked where the plan is. Had I seen it, I could have definitely answered him. Unfortunately, I am very saddened to come to the conclusion that it does not exist.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, first I would like to congratulate my brilliant colleague from Saint-Hyacinthe—Bagot on his speech.

The forestry industry is a major player in our region. It accounts for nearly 20% of the Lower St. Lawrence economy and nearly 40% of the region’s manufacturing jobs.

History tends to repeat itself. My colleague put it very well. We have already seen this bad movie before. In 2006, the industries had to leave on the table nearly $1 billion of the $5 billion that was imposed as countervailing tariffs.

I would ask my colleague what is the solution that will prevent Quebec from suffering the repercussions of the tariffs being imposed on softwood lumber by the Americans.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Chair, my heart goes out to the workers in my colleague’s region who have been affected by these various shocks and who may still be affected in 2022, if this continues.

My colleague mentioned the 2006 agreement. When it expired in 2015, there was some lofty rhetoric, but there was no new agreement afterwards. Nothing concrete was announced. To answer his question about how to prevent this from happening, I would say that Ottawa needs to acknowledge that Quebec has a genuine system. The real solution is obviously for Quebec to negotiate its own agreements directly as a free and independent republic.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Mr. Chair, the hon. member and I sat on the trade committee earlier this year. The minister attended a committee meeting back in June, and we were asking questions on the notification of the duties that were coming. What were the member's thoughts on that meeting and was the minister reassuring in her comments?

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Chair, I commend my colleague and former peer from the Standing Committee on International Trade. We had a lot of fun working together. We had a very good rapport.

Usually a visit from the Minister of Trade is spent with her eating up the time for questions. When we ask a solid question that calls for a short and solid answer, we get a response that begins with a long preamble involving thank yous, kowtowing and that sort of thing just to eat up time. Then we are told that they are working hard for Canadians, that this is a priority, that they are working vigorously on this and so on, yet we never get an answer from the minister. In fact, we have never gotten one from most of the ministers in this government.

I do not feel reassured. Even if I did, I would be wrong to feel that way. It would be naive of me. We got the answer a week ago.

[Eric Melillo, Conservative, Kenora, ON]

Mr. Chair, I appreciate that the member mentioned the environmental benefits of forestry, especially Canadian forestry. We have one of the greenest, most environmentally friendly industry in the world. I wonder if he would comment further on the benefit of supporting Canadian forestry from the perspective of fighting climate change.