Mr. Speaker, I am pleased to have this opportunity to respond to the question asked by the member for Trois-Rivières concerning the forest industry and what the government is doing to help that industry.
As stated in the recent Speech from the Throne, the government will stand up for Canada's traditional industries, including forestry, which are currently being challenged. Our government has taken action to support workers as these industries adjust to global conditions and will continue to do so.
Mr. Speaker, I will be sharing my time with the member for Roberval—Lac-Saint-Jean.
The hon. member for Trois-Rivières is right to point out that the forest industry is facing numerous problems. That is a reality. Indeed, these problems include high fibre costs, falling U.S. demand, the rise in the value of the Canadian dollar, and increased energy and production costs.
I would like to remind my colleagues that in the 2006 budget the Government of Canada announced an investment of $400 million over two years to strengthen the long term competitiveness of the forestry sector, a key sector, and to promote worker adjustment among other things; hardly laissez-faire.
I would also like to take this opportunity to once again remind my colleagues of the wide ranging benefits of the 2006 softwood lumber agreement to the Quebec forestry sector, an agreement which was supported and continues to be supported by the provinces and by industry.
Thanks to the efforts of our government an agreement was concluded with the United States, an agreement that received the support of Quebec and of the other major softwood producing provinces in Canada. In addition, this agreement also enjoyed the support of a clear majority of the industry players.
During the negotiations with the United States we worked very hard and we worked cooperatively with the province of Quebec, as well as the other provinces and the forest industry to take their interests into account. It is in the spirit of this agreement that the agreement stands as a clear reflection of those collaborative efforts.
Second, it is important to note that the agreement returned duties collected by the United States and ended all litigation. On that point, it should be noted that Quebec has received over $1 billion of the $5 billion returned to the Canadian industry.
The return of these funds marks a significant infusion of capital into the industry and was a benefit to workers and communities across Canada. It has helped industry weather these difficult times marked in particular by a sagging U.S. housing market.
In addition to the fact that the agreement allows Quebec to safeguard the management of its forests, it provides at least seven years of stability to the softwood lumber industry. In addition, as provided for in the agreement, border measures will not apply to softwood lumber exports from 32 countries which include all of the Quebec border mills.
The agreement also prohibits the United States from taking trade remedy action for the life of the agreement, thereby protecting our exporters from the unpredictable and crippling U.S. trade action which in the past saw duties rise to as high as 27%.
The government is not operating alone on this issue. The government has continued to consult very closely with industry and provincial officials. Federal officials continue to hold one on one and industry group meetings with forestry companies to understand their needs and their concerns. In addition, federal and provincial government officials meet regularly to discuss matters related to the implementation of the agreement and to the state of the industry.
The result of this close stakeholder collaboration on the softwood lumber agreement was and is the single best way forward for this industry and the hundreds of thousands of Canadians in communities that rely on it every day.
I can also reassure my colleague from Trois-Rivières that the Government of Canada has continued to work rigorously on this file, well beyond last year's coming into force of the agreement. The softwood lumber agreement establishes a formal institutional framework for the governments of Canada and the United States to manage the softwood lumber file and to address issues that arise over the life of the agreement.
The agreement provides for the establishment of a softwood lumber committee to supervise the implementation of the agreement, oversee its further elaboration, supervise the working groups established under the agreement and consider other matters that might affect its operation.
In exercising its functions, the committee is encouraged to establish and delegate responsibilities to working groups or expert groups, and to seek expert advice as is necessary. Indeed, at its 2007 inaugural meetings, the softwood lumber committee established five working groups to address both technical subjects, such as data and reconciliation, permits and customs issues and scope issues, and also longer term policy issues identified in the softwood lumber agreement such as regional policy exits and lumber made from logs harvested from private lands and log export restraints.
The committee has now met twice, most recently a couple of weeks ago in Ottawa, helping to ensure that implementation and administration of the agreement proceeds effectively, efficiently and smoothly, thereby providing benefits to industry.
Moreover, as the hon. member for Trois-Rivières is undoubtedly aware, the softwood lumber agreement also established mechanisms to assist the lumber industry reap the benefits of the highly integrated nature of the North American economy. An example of such mechanisms is the Binational Softwood Lumber Council, which is comprised of 12 industry representatives from both sides of the border and whose primary focus is increasing cooperation between the United States and the Canadian softwood lumber industry.
One of the key objectives of the Binational Softwood Lumber Council is to strengthen and expand the market for softwood lumber products in an effort to make North America's lumber industry more competitive over the longer term.
An equally important objective of the council is to build stronger cross-border partnerships and to create a climate of trust at all levels of the industry. We are not so much competing against one another as we are building things together in these two countries. These are essential elements for any industry striving to operate successfully in today's highly integrated global economy.
We understand that the forestry sector is undergoing difficult times. The reality is that North America has a highly interdependent lumber market. Its current weak condition has been caused by a decline in the U.S. housing market, around 30% year over year, which has reduced demand for wood products.
As I mentioned at the start, we are also, as we know, facing a rising Canadian dollar and stiffer competition from emerging markets that have lower fibre production costs. These factors have resulted in a far worse impact on the lumber industry and would have resulted in a far worse impact on the lumber industry in the absence of a softwood lumber agreement. The return of $5 billion has helped companies weather the current difficulties.
The government continues to listen to the concerns of our forestry communities. We are working together to develop solutions to the problems that they are facing.
As we have always maintained, both Canada and the United States have an interest in ensuring that the agreement operates smoothly and will continue to work closely with forestry stakeholders to achieve this goal. We should never forget that we are one another's most important commercial partners. The $1.7 billion worth of trade that flows across our border each and every day attests to that fact. In fact, that nearly all of this trade is able to move with very few disputes is an accomplishment in itself.
Through the assistance of the Trade Commissioner Service and our embassies abroad, the government is working with the Canadian forestry industry to find new trade opportunities in foreign markets. Every day our trade commissioners overseas find new buyers and communicate new trade deals to the Canadian forestry and wood products industry.
In addition, the Department of Foreign Affairs and International Trade has provided funding support to the sector in its efforts to undertake various international business development initiatives through the program for export market development for trade associations.
As I just highlighted, mechanisms established by the agreement to assist the lumber industry exist through the work of the Binational Softwood Lumber Council. It is important that industry stakeholders on both sides of the border work together to look at new and innovative ways to confront the challenges that the industry is currently facing. The agreement and the work of the Binational Softwood Lumber Council is facilitating this dialogue, which can help create an environment within which the softwood lumber industry can prosper; an industry that is important for so many workers, communities and families across this great country.
The softwood lumber agreement is a good reminder of how Canada and the U.S. can work through our own domestic challenges, turn our focus to creating a more competitive North American lumber industry, and work together to find new outlets for North American lumber in world markets. The SLA has been, and continues to be, a positive factor for the Quebec forest industry and the communities that derive their livelihoods from it.
While recognizing the current challenges faced by the forestry sector, there is no doubt that this agreement has benefited the provinces and their forestry stakeholders by providing lumber producers with a return of duties, putting an end to longstanding litigation, and providing predictability and stability that has eluded the sector for far too long.
I will conclude by saying that this government will continue to keep an open dialogue with the forest industry and with provinces to ensure a prosperous and long-lasting agreement that is to the benefit of Quebeckers and all Canadians involved in the forestry sector.