Lost his last election, in 2008, with 29% of the vote.
Supply May 3rd, 1999
Mr. Speaker, yes, I had discussions with members across our country on shipbuilding. My comments there were the same comments as here.
There is a need to understand all aspects of the shipbuilding industry. Before we know it, when people talk about the various items, it becomes a subsidy. The important thing is that if there is to be an initiative we must back the initiative down. Is it a subsidy in the end or is it not?
Supply May 3rd, 1999
Mr. Speaker, I thank the member for his question and I also thank him for his tour last year of my area to review shipbuilding and to understand the shipbuilding industry in Ontario, which is not only in southern Ontario but in the Ottawa area as well.
I should remind him that we do not want to get into a subsidy shipping war because of other countries. We have heard over and over “not a subsidy”. However, when we get down to reviewing proposals it becomes a subsidy.
I am interested in proposals, as long as they do not involve a subsidy campaign. I am willing to meet with the member, as I have before. However, let us understand that the Export Development Corporation, in conjunction with the member for Fredericton and a representative of the shipbuilding industry in New Brunswick, met to discuss the EDC's financing and over time it changed from eight to twelve years. They are still meeting on an ongoing basis to discuss various other alternatives. That is the way it should be done, sector by sector.
The member from Lévis mentioned the premier of New Brunswick, to whom I have written in objection to his comments that there is no shipbuilding industry in Ontario and that if there were, maybe there would be interest. I immediately wrote to him so that he could understand the shipbuilding industry across Canada. I do not believe he understood that the shipbuilding industry exists from coast to coast to coast. I am interested in how he would proceed from there.
Supply May 3rd, 1999
Mr. Speaker, the hon. member for Saint John is right to point out that shipbuilding is a long and honourable tradition in Canada. It is an important part of Canada's marine industry.
In 1997 the shipbuilding industry employed 5,400 Canadians and had total revenues of around $625 million. Canada's current strength is in building high quality, relatively small vessels, such as ferries, icebreakers, tug boats, fishing vessels, excursion craft and so on. We are also internationally competitive in commercial ship overhauls and mining platforms.
Many regions of Canada have shipbuilding companies. Activity on the east coast has recently centred on the construction of two container ships, two offshore vessels and tugs, the refit of one oil rig, the manufacture of oil rig components and various commercial repair work. The industry in Quebec has been involved in upgrading one oil rig, constructing tugs and doing ship overhauls and commercial repairs. The Ontario industry is currently active in the reconstruction of three bulk carriers, the conversion of two ships into one self-unloading ship and commercial repairs. The primary construction activity in B.C. has been the three high speed ferries, but the industry is also active in the construction of smaller ferries and in commercial and government ship repairs.
The health of the shipbuilding industry concerns four regions and seven of Canada's ten provinces. The Government of Canada recognizes the importance of the industry. It has a shipbuilding policy that benefits the industry and acknowledges that taxpayers want to stop business subsidies. This policy includes an accelerated capital cost allowance of 33.3% for Canadian shipbuilding. Many other industries would not mind having that type of capital cost allowance write-off. The policy includes a 25% duty on most non-NAFTA ship imports, domestic procurement on a competitive basis for all government shipbuilding and ship repairs, a favourable research and development tax credit system, including the technology partnerships Canada program, as well as Export Development Corporation financing for commercially viable transactions.
Last year, after consulting with the industry, we extended the pay back period for this financing from eight years to twelve years. In fact discussions with the Export Development Corporation continue in that area.
I would also add that one of the major contributions the government makes to the competitiveness of our shipbuilding industry is through the facilities of the National Research Council. In Saint John, NRC's Institute for Marine Dynamics offers R and D programs in ship design and advanced navigation systems, ice structure and wave structure interaction, and innovative concepts in such areas as underwater vehicles and recreational craft.
The federal government is not alone in supporting the shipbuilding industry in this country. Two provinces have come forward with programs to foster shipbuilding in their jurisdictions. Nova Scotia has a shipbuilding loan guarantee program similar to Title XI in the United States. The program consists of loan guarantees up to 87.5% of the buyer loan, with a maximum $80 million to be guaranteed at any time.
Last March Nova Scotia announced that it will provide $47.5 million in loan guarantees to Secunda Marine of Dartmouth for the construction of two supply vessels for the Terra Nova offshore oil project.
The Government of Quebec has also stepped forward with a program for the shipbuilding industry. Quebec will provide a 50% subsidy on the direct labour costs of the first ship built in a series or converted into series. The subsidy may be as high as 20% of the ship costs, with the subsidy decreasing to zero over the first four ships. Quebec has also provided income tax exemptions on the foreign income of Quebec mariners and has reduced the capital tax for owners of new ships operating internationally.
Hon. members opposite have been calling for similar subsidies to be provided by the federal government. I would ask them if they would be prepared to offer similar subsidies to every other industry in Canada that must meet the test of tough international competition. Some say that shipbuilding is an exceptional case because other countries subsidize their industry so heavily. The Bloc in particular wants Canada to match the kind of subsidies provided by European countries and the United States. What it neglects to say is that even if we tried to match these subsidies dollar for dollar there is no guarantee nor even a likelihood that foreign buyers would turn to Canadian ships instead of ships from their own country or region.
The international market for ships is much more complicated than that. It is not just a case of who offers the best price or who puts more of a burden on their taxpayers so they can offer a good price. In the case of the United States, for example, the Jones Act of 1920 prohibits non-U.S. boats from taking part in domestic U.S. commerce.
The Canadian government is participating in the OECD and WTO negotiations to eliminate subsidies and remove the barriers that impede the ability of our shipbuilding companies to compete internationally. We offer generous tax and export support. We are continuing to meet with industry representatives to fine tune the programs now in place and ensure that the industry takes advantage of them. That is a more realistic response to the challenges faced by the Canadian shipbuilding industry than the spend thrift proposals we have heard from the opposition parties to date.
Supply May 3rd, 1999
Mr. Speaker, I listened intently to the member for Burin—St. George's. He indicated that the industry minister refused to meet with the association and the shipbuilding industry. The minister reported to the House once before that he met with the shipbuilding association and the industry executives from New Brunswick, Quebec, Ontario and British Columbia.
Rather than trying to mislead the Canadian public, the member should indicate the minister reported to the House that he had met with them. The member's statement is totally incorrect. As an hon. member he should withdraw it and insert that the minister met with the association and executives from New Brunswick, Quebec, Ontario and British Columbia last March.
Supply May 3rd, 1999
Mr. Speaker, I heard the member opposite speak about shipbuilding and some of the things the previous government did. I did not hear anything about the Jones act in the United States when her party decided to throw in the cards from Canada and did nothing about changing the Jones act. Maybe the member could address why the member opposite did not do anything about changing the Jones act and allowed the protectionism in the U.S. to continue.
Questions On The Order Paper April 23rd, 1999
Madam Speaker, I ask that the remaining questions be allowed to stand.
Questions On The Order Paper April 23rd, 1999
The following questions will be answered today: Nos. 166, 167 and 216. .[Text]
Question No. 166—
Government Response To Petitions April 23rd, 1999
Madam Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to seven petitions.
Fatima Basic April 23rd, 1999
Mr. Speaker, it is my pleasure to honour a citizen of St. Catharines who has truly made a difference, an individual who has dedicated her life to helping others and specifically, to helping children around the world.
This tireless volunteer and dedicated Canadian is Fatima Basic. Fatima is presently the president of the Bosnian Children Relief.
Created in 1992, Bosnian Children Relief is a Canadian humanitarian organization dedicated to relieving the suffering of children and their families in war-torn Bosnia-Hercegovina.
Most recently, Fatima Basic has issued an urgent appeal for food, medicine, blankets, hygienic products and financial donations for the refugees fleeing Kosovo.
Fatima Basic recently received the International Helen Prize for her work to promote harmony and understanding around the world. This award is a well deserved honour that recognizes her many years of tireless dedication to the children and people of former Yugoslavia.
Today it is my honour and pleasure to share the work of Fatima Basic with my colleagues in the House and to congratulate her on her award. I thank her for her dedication, her spirit and the many lives she has aided over the years.
Issue Of Ceremonial Statements Of Service Act April 22nd, 1999
Madam Speaker, I am pleased that the hon. member from Lévis has given me the opportunity once again to speak to the subject of shipbuilding.
The federal government acknowledges the important contribution the marine industry makes to our national economy. The hon. member is well aware of the generous package of measures the federal government provides, which in conjunction with provincial policies and sound industrial practices benefits shipbuilders.
This package includes an accelerated capital cost allowance which many industries would like to have, a duty on ship imports, a domestic procurement for all government shipbuilding and ship repair needs, Export Development Corporation financing, and a very favourable research and development tax credit system.
Despite this support the industry continues to face considerable challenges in international markets. For instance, at the December 1997 OECD workshop on shipbuilding policies it was reported that a substantial overcapacity exists. In fact the estimate for 2005 is 40%.
The Canadian shipbuilding sector went through a voluntary industry led rationalization process in which the government participated by contributing nearly $200 million. Through the reorganization and streamlining of its operations over the past decade, the Canadian industry has been able to improve its productivity levels.
Concerning shipbuilding in Quebec, the federal government invested almost $1.6 billion in Davey Industries during the period of 1983 to 1996 in the form of contracts, contributions and loan guarantees. Moreover, commercial arrangements by the Export Development Corporation are currently moving forward to provide additional support to this company through a loan guarantee on the Spirit of Columbus .
In summary, substantial support has been provided to the shipbuilding industry in the past and we continue to support it through a variety of initiatives. If provinces wish to supplement our initiatives, as has been done by Quebec and Nova Scotia, they are free to do so.