Debates of April 8th, 2024

Witness Responses at Standing Committee on Government Operations and Estimates

[Larry Brock, Conservative, Brantford—Brant, ON]

Madam Speaker, I could not agree more, and I thank the member from the Bloc for her question.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Seeing no other speakers, pursuant to an order made earlier today, the motion on the question of privilege standing in the name of the member for Leeds—Grenville—Thousand Islands and Rideau Lakes and the amendment standing in the name of the member for Kingston and the Islands are deemed withdrawn.

The hon. parliamentary secretary to the government House leader.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I suspect if you were to canvass the House you would find unanimous consent at this time to call it 6:30 so we can begin the take-note debate.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Is it agreed?

[Some hon. members]

Agreed.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Pursuant to order made on Thursday, March 21, 2024, the House will now resolve itself into a committee of the whole to consider Government Business No. 38.

I do now leave the chair for the House to go into committee of the whole.

(House in committee of the whole on Government Business No. 38, Mrs. Carol Hughes in the chair)

Softwood Lumber

[The Deputy Chair, NDP, Carol Hughes]

Before we begin this evening's debate, I would like to remind hon. members how the proceedings will unfold.

Each member speaking will be allotted 10 minutes for debate, followed by 10 minutes for questions and comments. Pursuant to order made on Thursday, March 21, members may divide their time with another member.

The time provided for the debate may be extended beyond four hours, as needed, to include a minimum of 12 periods of 20 minutes each. The Chair will receive no quorum calls, dilatory motions or requests for unanimous consent.

We will now begin tonight's take-note debate accordingly.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

moved:

That this committee take note of softwood lumber.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Madam Chair, I would like to thank you for the opportunity to participate in this important take-note debate and to speak about the significant actions the government has been taking to support Canada's interests in the ongoing softwood lumber dispute with the United States.

First of all, I can assure members that we are in constant dialogue with the U.S. government at all levels to convey the importance of reaching a satisfactory resolution to this long-running dispute. We have made it abundantly clear that Canada believes a negotiated settlement with the U.S. is in the best interests of both our countries. However, we will only accept an agreement that is in the best interests of our softwood lumber industry, our workers and our communities. Such an agreement has to make sense for both sides.

Reaching an agreement that protects Canadian jobs is a priority, because the forestry industry plays a vital role in the Canadian economy. Domestically, it helps create jobs for hundreds of thousands of Canadians and generates significant revenues for rural and indigenous communities across the country. What is more, it provides essential commodities that are used in a multitude of industries, from construction to paper to lumber products.

In Quebec specifically, the forestry industry is a major economic pillar that supports tens of thousands of direct and indirect jobs in various regions such as Saguenay—Lac‑Saint‑Jean, the north shore and the Gaspé. It also contributes to the vitality of regional communities by providing economic opportunities and promoting regional development. In short, the forestry industry is much more than an economic sector. It is a key aspect of the identity and prosperity of Canada and Quebec.

Historically, the United States has always relied on imports of Canadian lumber to fill the gap between its domestic production capacity and domestic demand for lumber. Canada has always been a stable and reliable supplier of high-quality products for American consumers. For example, imports from Canada have historically met about one-third of U.S. demand for softwood lumber. In 2022, 90% of Canada's softwood lumber exports went to the United States, at a value of $12 billion. Now more than ever, Canadian softwood lumber products are essential for addressing insufficient production and the affordable housing shortage in the United States.

It is clearly counterproductive to impose unwarranted duties on such a large portion of U.S. consumption when the U.S. is trying to combat rising inflation and housing costs, which is also an issue in the United States.

The U.S. National Association of Home Builders has indicated that duties on Canadian softwood lumber exacerbate already high lumber prices and directly increase costs to consumers. American legislators on both sides of the political spectrum have even written to their government to say that a softwood lumber agreement is key to predictability in the housing market. Maintaining unfair duties on Canadian softwood lumber directly contradicts the United States' goal of making housing more affordable.

What is more, these unfair duties benefit third parties to the detriment of our supply chains and our very resilient and integrated economies. Since imposing these duties for the first time in the current round of this dispute, rather than protecting jobs and companies at home, the United States has seen a surge in overseas imports from suppliers in Asia and Europe to fill the gap between supply and demand in the U.S.

It is therefore easy to see that a negotiated settlement, which would bring stability and predictability to the softwood lumber industry, is the best outcome for everyone involved. That is what the current government has consistently advocated for, and that is what we will continue to do.

Therefore, it is truly unfortunate that certain businesses in the U.S. lumber industry encourage some American decision-makers to impose duties on Canada's lumber exports and to refrain from meaningfully engaging in negotiations, preferring the continued disruption to lumber supply caused by these duties, to the detriment of U.S. consumers. The domestic U.S. lumber industry, as a pretext, contends that Canada is responsible for injury to its producers. Time and time again, neutral and impartial international tribunals have found that Canadian softwood lumber producers respect our international obligations.

Nevertheless, our government continues to encourage the United States to return to the negotiating table to find a mutually acceptable agreement. Both the Prime Minister and the Minister of Export Promotion, International Trade and Economic Development have repeatedly stated that Canada is ready to hold constructive discussions on realistic solutions that would be acceptable to both parties. Minister Ng regularly discusses the softwood lumber dispute with her U.S. counterpart, Trade Representative Katherine Tai. Just recently, the minister stressed the importance of expeditious and impartial dispute settlement procedures under CUSMA as a means of resolving the situation. Unfortunately, we have yet to see any willingness on the part of the U.S. to commit to a lasting resolution of this long-running dispute.

Furthermore, the Minister of Foreign Affairs raised this issue with U.S. Secretary of State Antony Blinken, while senior Canadian officials, including our ambassador to the United States, Kirsten Hillman, remain in constant contact with their U.S. counterparts. As we repeatedly continue to urge the United States to negotiate mutually acceptable terms, we are not just standing idly by. Canada is defending our industry, our communities and our workers and is actively using every other means available to resolve their disputes, including the remedies provided under international trade agreements, while supporting Canada's softwood lumber producers and the communities that depend on this sector. Our efforts have yielded results in the past and we are getting there again.

Throughout the entire process, we have worked and will continue to work closely with provinces, territories, indigenous partners and industry stakeholders to ensure a united pan-Canadian approach to the dispute.

As recently announced by the Prime Minister, the government has renewed its commitment to a team Canada approach and is engaging with the United States to ensure the continued prosperity and well-being of Canadians.

Our strategy for ending the dispute centres on legal victories, strong partnerships and relationship building. With our allies in Canada and abroad, we are confident that we can reach a solution with the United States that benefits producers, workers and communities on both sides of the border.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Madam Chair, it was wonderful to hear PMO speech number two.

It is interesting that we are debating softwood lumber, which is something that has been going on for eight years. It has cost tens of thousands of Canadian jobs, and the United States is holding 10 billion dollars' worth of duties, which is crippling our softwood lumber industry. The Minister of International Trade does not participate in the debate; that shows how important the issue actually is for the corrupt Liberal government.

The trade committee produced a report that said that the only way the softwood lumber dispute would be resolved is through direct head of government negotiations. Therefore, after eight years, the failure for there to be a resolution is because of the failure of the Prime Minister on this file, just like on every other file. Does the member agree with the trade committee that the reason the dispute is not resolved is the failure of head-to-head government negotiation, and that this lies at the feet of the Prime Minister?

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Madam Chair, this has been an ongoing problem since the 1980s. I believe we are on the fifth round of negotiations around softwood lumber. It is an important issue in the province of Quebec, and it is certainly one I am following closely. Indeed, we have seen the Prime Minister and our ministers engage very closely with their counterparts on this issue.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Chair, I think this is such an important issue, especially where I live in Port Alberni and the Alberni Valley, and on Vancouver Island. It is an issue where we actually need all sides to work together. This should not be a partisan issue. This should be all of us hammering Washington.

Over the last four decades plus, we have seen both Liberal and Conservative approaches in terms of their failed resolution to the softwood lumber dispute. The Liberal approach can be described as winning in court, but still losing as the U.S. has continued to levy tariffs against Canadian softwood lumber. The Conservative approach can be best described and characterized as appeasement through agreements, where Canada would not only impose an export tax on softwood lumber, but in return, the U.S. would remove its duties.

What new approach is the government going to bring? The sense of urgency is real. We have the first new mill in 15 years on Vancouver Island in my community, and it is struggling right now. The tariffs are crippling, and the sense of urgency is real.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Madam Chair, I have been following this dispute since I came into this House as a member of Parliament. The thing that struck me was, at the core of the long-standing dispute, the differences in how our two governments handle forest lands and the product thereof. In Canada, they are public lands and there is a stumpage fee that is charged to companies. In the United States, they are privately held interest.

I think that basic decision, which must have been made at some point many years ago, shows the difference. Here in Canada, this is a natural resource that belongs to the country, whereas the United States chose to go a different way. As it turns out, it is hurting its own citizens and consumers by not availing itself of Canadian lumber.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Chair, that is still not good enough. We are looking for a strategy. The whole reason we are staying here late tonight is a sense of urgency. I am still not hearing anything new from the government.

As I cited earlier, there is a company in my community that employs literally hundreds of workers. There is already a fibre supply issue being dealt with in my community. We know the mills in my riding still need more money to retool and new markets. The government is moving at the pace of molasses, despite the fact that this is having such a huge financial impact on my community. The multiplier effect is massive.

Catalyst Port Alberni Mill, one of the mills in my riding, contributes 15% of the tax base to Port Alberni, just the mill itself. It is critical that we get a sense of urgency.

What new ideas are the Liberals going to talk about tonight?

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Madam Chair, the team Canada approach that was critical in our government being able to arrive at NAFTA 2.0 was one that was widely hailed as being extremely innovative.

When I think of U.S. consumers and producers using Canadian softwood lumber, many of them are not aware and many of their state representatives are not aware of how important those industries are to them. The win-win solution for both sides is to understand that there is a mutual win when we work together, our two countries, in making the best use of this industry.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Madam Chair, the NDP members, particularly from B.C., should talk to their provincial government about getting more access to fibre. That is entirely a provincial problem and one of the NDP's own making in British Columbia. On the one hand, we have NDP governments limiting access to fibre, and on the other hand we have a Liberal government that is limiting our ability to market the softwood lumber around the world, particularly to the United States.

I do recall something that was called a “bromance” between the Prime Minister and Barack Obama when he was the prime minister. It was a complete failure by the current Prime Minister to get a softwood lumber agreement when Obama was in power.

What does the member have to say about that?

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Madam Chair, I believe the hon. member is talking about the former president, Barack Obama, and not a prime minister. I get it that he is speaking to the strong relationship that the two leaders had at that time, and indeed it continues as a friendship, as with the current president.

As we know, it is not just friendship alone that is instrumental in international trade agreements. There are many interests at stake. I think that is where the team Canada approach is a very important one, where we work federally, provincially and territorially, and also with industry partners, again, reaching out to counterparts in the United States who may not realize that there are certain private interests that are trying to capitalize on this trade dispute to their own detriment.

[Mario Simard, Bloc, Jonquière, QC]

Madam Chair, my colleague talked about a team Canada approach. The problem with that is that the federal government does not listen to the province that is paying the most in terms of U.S. softwood lumber tariffs.

Quebec accounts for 20% of Canada's softwood lumber exports to the United States, but it pays 48% of the tariffs. The federal government never wanted to lead the softwood lumber fight. Its main strategy in the dispute with the Americans was to protect the automotive industry to ensure that Canada can sell electric vehicles to the United States and benefit from the same tax credits. The federal government has never wanted to lead the fight. That is symptomatic of the problem that we have. We do not have enough leverage. Not one Liberal member is capable of defending Quebec's forestry industry.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Madam Chair, I really appreciate my colleague's question, but I think he has it wrong.

This government has put a lot of effort into defending the forestry industry in co-operation with the Government of Quebec. At the same time, we are supporting the industry with many investments both in the industry and in communities.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Madam Chair, I am going to be sharing my time with the member for Prince Albert.

What we have here with the softwood lumber dispute is—

[The Deputy Chair, NDP, Carol Hughes]

Does the hon. member have unanimous consent to share his time?

[Some hon. members]

Agreed.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Madam Chair, what we do is look at the softwood lumber dispute, but not in the vacuum of the dispute itself, because this is now an eight-year dispute. Within 79 days of Prime Minister Harper being elected in 2006, the softwood lumber dispute was resolved, and we had lumber peace for nine years. That agreement expired, and then the current incompetent government took over. We are now eight years down the road, and $10 billion in duties have been collected and tens of thousands of jobs have been lost. If we actually look at the bankruptcies in the forestry sector, since 2016, 183 companies have gone bankrupt in the forestry sector as a result of countervailing and anti-dumping duties and as a result of the complete failure of the Liberal government and the Prime Minister to resolve this.

The consequences just continue. In 2024, at the Terrace Bay pulp mill, 400 jobs were lost. At West Fraser, in February 2024, 175 jobs were lost. In 2023, at the Canfor Prince George pulp and paper mill, 300 jobs were lost. These jobs are continuously being lost because of the absolute mismanagement of this issue. If members do not believe me that this issue has been mismanaged, all they have to do is look at the trade committee's report on this and the recommendation in that report, with which five Liberal members agreed. Five Liberal members actually agreed with the statement that “an agreement with the United States regarding...softwood lumber...ultimately will occur only through direct head-of-government negotiation.” That is the recommendation from the committee, which included five Liberals.

The fact that there has not been a resolution is because there has been a complete failure at the head-of-state level. This falls squarely at the feet of the Prime Minister. It is his job and his duty to resolve the dispute. He has failed miserably, and the Liberals keep coming back with these old bromides, like the “team Canada approach”. It has been eight years. Their so-called “team Canada approach” has produced absolutely no results.

In fact, it is getting worse, because the government has so badly mismanaged the trading relationship with the United States that we are just not as relevant as we once were. We are now the United States' third-largest trading partner, as a result of the incompetence of the Liberal government, and that has consequences, because we are not as important a trading partner of the United States as we once were.

The Liberals keep saying that trade is up. Trade is not up with the United States. Trade is up by price because of inflation, but the volume of trade with the United States is down. Again, the only people responsible for this are the Prime Minister and the trade minister, who is not even here for the debate on softwood lumber—

[The Deputy Chair, NDP, Carol Hughes]

I am sorry. The hon. member knows full well he is not to indicate who is in the House and who is not in the House.