Mr. Speaker, it gives me great pleasure today to speak to Bill C-21. As we heard from the minister who just spoke, the bill is an act to extend the two areas of tariffs for another 10 years: the general preferential tariff and the least developed country tariff.
Before I go into the details of some of the bill and some of the concerns that we have, as well as some of the things we support, I want to clarify one thing which I think the minister has misunderstood.
Everyone in the House wants to support the strategy of the government that would extend these tariffs to least developed countries. Obviously it is a good thing for Canada in its strategy to help many of these developing countries. It would give the opportunity for many of these countries to actually develop their own industries, to hopefully become stronger, more developed economies.
I know the bill does not address the area of remissions because that is a separate area that is set by the Department of Finance through orders in council. Clearly, one of the things we have to be cognizant about if we are moving forward to extend these tariffs for another 10 years is we have to see what sort of measures have been kept in place in order to help Canadian industry.
In some of our strategies internationally, whether they are free trade agreements or various reciprocal agreements under various existing organizations like the WTO or the Free Trade Area of the Americas, there are certain things we have to take into consideration to ensure that Canadian industries are not put at a disadvantage. If anything, we want them to be on an equal footing or to be able to take advantage of these trade relationships that we develop with various developing countries.
In extending these tariffs what the minister failed to address was that area which I addressed in my question to him, the expiration of the remission orders that are extended specifically to textile industries. The concern is that if those particular remissions are not addressed, whether the tariffs would be reduced for inputs or whether those remission orders would be extended, we would have a serious problem in this country where some of our textile industries would be put at a huge disadvantage. As I said, their inputs would skyrocket at the end of this year, which would then threaten potential Canadian jobs as well as our relationships with trying to produce these products here at home.
I am happy the minister talked a bit about some of the products that are not available here in Canada, some of those inputs. He will try to address that and make sure that we try to address the tariffs or duties on those particular products. It would be nice to see, with the support that I believe he has in this House for the passage of this bill, the Department of Finance actually come up with some concrete steps as to how it will address those potential problems that arise after the expiration of the remission order.
I would like to address some of the good things under Bill C-21, the extension of these various tariffs in the two particular areas for the next 10 years. Obviously we on this side of the House see the benefit of that and support it.
I will give a little background and then I will address our party's position on the bill. Also, even though we agree with this particular direction of the government, I will address how we would do things a little differently, especially when it comes to pursuing more free trade agreements with various of these countries and trying to address some of the concerns that obviously are arising with various industries.
As was mentioned, Bill C-21 would extend the general preferential tariffs and the least developed country tariffs to June 30, 2014. These two tariff categories reduce the tariffs that would otherwise apply on goods imported from developing countries.
The rate of tariff on goods entering Canada varies depending upon what the good is and from which country it originates. In the absence of any specific concessions, the 35% general tariff applies. There are only a few countries that still fall under that general tariff of 35%. Most countries would have actually either negotiated a reduced tariff or they would fall under those two categories.
According to Department of Finance lists, the countries that still fall under that 35% rate are Albania, North Korea, Libya and Oman. For all other nations, unless there is a specific other trade agreement such as NAFTA, the most favoured nation tariff applies.
The rates are usually much lower than those set out in the general tariff, as I mentioned. Those are often much lower than what the Department of Finance officials said, that the average falls, I think, between 10% and 12% and often many are zero.
The rates are usually much lower, as I mentioned, and they apply to members of the World Trade Organization and to some non-members as well. Canada, along with other developed countries, has two other categories that allow goods from developing countries at even lower rates of tariff. The goal is to aid their economic development, as the minister said, and I think most Canadians tend to agree. It is a good strategy in trying to help many of the developing countries develop their economies and become self-sufficient in a positive way which is a benefit to their industry but also to Canadian industry.
The first category is the general preferential tariff which, as we know, was established in 1974 for a 10 year period until 1984. It was then extended to 1994 and then to 2004. It provides tariff reductions beyond the most favoured nation rate to approximately 180 countries. That is what we are discussing today in Bill C-21 which would extend that general tariff rate for another 10 years.
The second category, as was mentioned by the minister, is the least developed country tariff. This provides 48 of the world's poorest nations with duty free entry into Canada for goods other than certain agricultural products. It was introduced in 1983.
Some people have asked which countries fall into that category. The information is available on the government's website, but I thought it would be useful for the debate so that people have a context as to which countries fall under those tariffs. I will not read all 48 countries, but at least this will give people an idea.
The least developed country tariff applies to Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Laos, and the list goes on and on.
On a cold wintry day like today, it is kind of nice to read about these countries. It warms my heart to think that there are people enjoying nicer weather than we are here. Nonetheless the list continues on and there are a number of African countries to which the least developed country tariff applies. I will not bore the House with the rest of the list, but it gives an idea of some of the countries that are on it.
Just to give the House an idea of how this works, there is an example that I will use. Table cutlery from North Korea faces a 35% tariff under the general tariff; an 11% tariff if imported from Italy under the most favoured nation tariff; an 8% tariff if imported from Poland under the general preferential tariff; but zero tariff if imported from Angola under the least developed country tariff. As we can see that gives the incentive for Canadian importers to deal with those particular countries that fall under the least developed country tariff regime. Obviously they benefit from importing those particular products, in that they do not pay those high duties.
The general preferential tariff and the least developed country tariff categories will cease to exist after June 30, 2004 unless legislation is passed to extend them. That is what we are dealing with today in the House.
The result is that importers from the beneficiary countries would instead face higher tariffs at the most favoured nation rate. That would obviously cause a problem with the developing countries.
The incentive to encourage development in many of the developing countries is a good one. I think Canadians have always been in support of various strategies that help. Whether it is foreign aid or the evolution of many of these economies, Canadians tend to support it.
There is a great benefit if, not only alongside some of our foreign aid strategies, we focus some of our strategies on developing industry which is also reciprocally beneficial to Canadian industries. That is something we have a real interest in on this side of the House, especially in the Conservative Party.
We in this party have always believed in trying to pursue significant trade agreements, freer trade agreements. We have always encouraged governments to pursue the work under various international organizations such as the WTO. We have engaged in trying to support the process under the Free Trade Area of the Americas so we can try to address some of the other areas of industry that maybe fall through the cracks or that we can actually benefit in trying to pursue freer trade agreements.
Some people have asked about one concern: How does this particular extension of these general tariffs affect our relationships in many of our trading agreements? I believe that all the extensions of these tariffs to these least developed countries, as well as general preferred countries, are regulated under the WTO. There has been much discussion and debate. We are not really doing anything different from what many other countries do in approaching the way we deal with tariffs in these countries.
There is one thing that I know has been mentioned and this is what would happen if this legislation does not pass. What will happen if we do not extend these particular preferential tariffs in these particular categories? If they expire without that extension, then we could have some real instability in our import market, clearly because of the fact that tariffs will start applying and will throw off many of the relationships we have. As I said, it would put many of our Canadian industries at a bit of a disadvantage, especially in regard to the vast number of countries we trade with.
Ultimately what we would like to see in Canada is a two-pronged strategy. We would still extend these two areas of tariff reductions. We agree with the extension of the general preferential tariff and the least developed country tariff.
However, one thing Canada should further pursue is free trade agreements, which will lower the tariffs in a controlled manner. This would allow Canadian exporters to access many overseas markets while opening up our own markets for cheaper imports. This is something we should continue to do. I know that Canada has a number of trade agreements with a number of countries. Whether or not they are free trade agreements, we do have bilateral trade agreements with a number of these countries. They address certain areas. Often they are not blanket trade agreements. Canadians obviously need certain products and those countries are mass producers of those products, so it is a positive relationship.
Again, this is something that we should continue to do, and not just in certain areas. On this side of the House we believe that freer trade agreements should be addressed on all levels, obviously to try to encourage further growth in developing countries but also to extend abilities for Canada where products are not available, or for exporters or business opportunities in many of these developing countries as well. We would definitely urge the government to continue to review those agreements that are in place and continue to pursue freer trade agreements.
We also would urge the government to try to encourage a less complicated system when it comes to various tariffs and various agreements being created with these countries. If Canadians decided to take a look at some of these agreements we have in place because of these two particular categories, they would see that it is a very confusing system. Also, it is very ad hoc depending on how the Department of Finance decides to deal with the particular countries.
When Department of Finance officials were at the committee, many of them said that is the way they actually deal with cases. They try not to bring in issues of human rights or other problems that they may have directly related with some of these countries. That is one way they can respond in case a conflict arises with a particular country and we do not agree with a certain direction that country is following.
Through orders in council, those various tariffs can be changed, not those under the general preferential tariff or the least developed country tariff, but in other cases that may arise when we look at sanctions or other issues. This is a tool the government has with orders in council to respond to various countries. Obviously on this side of the House we are a bit concerned about the government having that kind of power to just set tariffs ad hoc without any real process in how they would be established.
There is one area I wanted to address, which probably a few of my colleagues from the NDP and a few government members have addressed with the minister. It is the issue of remission orders. It sounds a bit complicated, but let me give an explanation. Even though it does not fall under this bill in particular, it is so closely related that we must address it.
I am happy to say that in committee, as was mentioned by one of my colleagues, the members of the committee heard from this particular group of the textile industry. We were concerned enough that we were able to pass a motion unanimously to address this issue with a couple of recommendations for the Minister of Finance, so that in the passage of this bill consideration hopefully will be given to the textile industry and the extension of those remission orders.
Remission orders have been around for quite some time, as I have identified, especially in industries that have been affected negatively. I will explain. There are remission orders for various textiles. Specifically, there was a new shirt remission order that provided shirtmakers with transitional assistance to help them remain in the shirt business in Canada. Similar remissions are also being considered for manufacturers of outerwear apparel and women's blouses and shirts. Shirting fabric and outerwear fabric are subsectors that are currently receiving assistance under existing remissions.
This means that the duties on those particular areas of fabric will be reduced. Duty remissions will enable Canadian manufacturers to complement the products they manufacture in Canada, so that would help to continue to encourage our industry to grow and flourish here in Canada. It will also help textile and apparel manufacturers in these import-sensitive sectors to adjust to the same kind of increased competition faced by shirtmakers.
As I mentioned in my question to the minister, the remissions will be terminated no later than December 31, 2004, to give Canadian manufacturers enough time to adjust to a more open freer trading regime and will not be renewed.
That was the attempt by the government to say that it wanted to put a limit on these remission orders, because if we look at the various agreements that exist within the textile industry area we see that many of them are very outdated. Ultimately there was this extension of remissions to reduce the duties in that particular area so that we would not put our own industries at a disadvantage.
But I think we have to go a bit further and modernize some of the rules under which the Department of Finance deals with this industry, because clearly they are outdated. To continue to extend remission orders is not really the answer if we can negotiate these tariff issues ahead of time, if that is allowed to happen. I believe that the former finance minister, the Prime Minister, said he was not going to extend those particular remissions. We could have a huge problem with the benefits these particular companies receive when it comes to the various inputs they rely on in producing their products.
One of the things we have agreed to, if the Department of Finance will address this issue, is to extend those particular remission orders for another seven years. We are not sure yet what the government plans to do. The minister said he is taking that into consideration, but clearly if it is not addressed before the end of the year, as I have already mentioned, we are going to put our industry at a huge disadvantage. We hope to see some indication from the Department of Finance that this issue will be addressed.
As I have said, extending this would specifically help Canadian companies with their inputs. Some of these products are not available in Canada, so clearly that is something about which we should be cognizant. If we are not producing these products at home, we should lower those tariffs because it would give the opportunity for Canadian companies to access those products. An example is lycra or other polysynthetics that are not produced here. Importing these products is very expensive.
There is another area that was not addressed by the minister. We hope the finance department and the minister will address it. There still exists a gender bias on products. I will give an example of what that means. We need to eliminate the tariffs that create this gender bias on fabric. For instance, if importers import silk to produce ties for menswear, the tariffs are not high; they fall under the preferential tariff. However, if they import silk products to produce women's blouses, they are subject to higher duties and tariffs. It is unusual that this sort of gender bias exists in this day and age. Unfortunately, the particular tariffs that apply to these textile industries have not been modernized. That is a scenario I hope to address as the committee deals with this bill. I hope to put forward some amendments or recommendations and I hope the Department of Finance will consider them.
To conclude, I will reiterate that our side of the House, the Conservative Party, will support this bill to extend these various tariffs. We think it is important given the way that our tariff system works, especially in our trading agreements around the world, but we also encourage the government to address some of the failures, especially as applied to the textile industry, but also under the FTAA and other agreements we have. We encourage the government to continue to pursue free trade agreements that will help to keep our companies in Canada on an equal footing with those in other countries as well, even alongside our developing strategies, whether they be commerce or aid related strategies.
