Charlie Penson

[Canada-Israel Free Trade Agreement Implementation Act, October 10th, 1996]

Mr. Speaker, I have a question for my colleague from Vegreville.

During his presentation there were comments from the Liberal side asking what his speech on internal trade barriers had to do with the Canada-Israeli free trade agreement. I suggest that it has everything to do with free trade agreements, bilateral and multilateral.

Our Standing Committee on Foreign Affairs and International Trade has done a study on why small and medium size businesses are not exporting. As a point of reference, about 100 companies in Canada are responsible for 80 per cent of our exports. It is a sad commentary that we are not allowing opportunities for small and medium size businesses to explore this very important growth area. One of the biggest reasons which those businesses give for not getting involved is they say they cannot build economies of scale in Canada because of the restrictive trade barriers within Canada. That is hurting their ability to get big enough to launch into the international trade area.

I would like to ask my colleague from Vegreville if he sees this as an important restriction on the ability of Canadian companies to get into the export market.

[Canada-Israel Free Trade Agreement Implementation Act, October 10th, 1996]

Mr. Speaker, I enjoyed the comments of the parliamentary secretary for health and his recognition that indeed the Liberal Party has finally decided that free trade is an attribute and one that has been very successful in transforming the Canadian economy into one of growth.

As my colleague from Calgary centre has just stated, the domestic economy has not recovered. There still is not the confidence there with consumers but on the trade side, on the export side we have been very aggressive. We have done a good job and there has been tremendous growth.

I know the Liberal Party has done a major conversion here and now they think that free trade is good. Canada generally has been a leader in trying to put together the trade deals that are necessary. As I said earlier, we can compete with anybody on a level playing field but we cannot compete with subsidies from other countries and high tariffs.

At the last round of the GATT talks which the Liberals took over at the very end, they favoured supply management, article XI, which would preserve border closures and stop any product from coming into the country in terms of supply managed farm products. Canada became isolated at those trade talks. We were the only country that finally took that view and continued to take that view although it was not one that was conducive to free trade and it still is not.

We have moved to tariffs now, 350 per cent tariff on butter. Surely for a country that espouses free trade, trade liberalization, and has since after the second world war, are we not in a real contradiction here that we want free trade in other countries, we want access to their markets, but we will not provide it for the supply managed farm industry here at home?

I would like the parliamentary secretary to comment on that question.

[Canada-Israel Free Trade Agreement Implementation Act, October 10th, 1996]

Mr. Speaker, this seems to be a busy week for bills dealing with trade issues, unlike the normal situation where about one bill in trade comes forward per year. We happen to have had two this very week.

We are now debating Bill C-61 which implements Canada's free trade agreement with Israel. I have to admit to being a little surprised at seeing this bill because there certainly was not much fanfare heralding its arrival. The Minister for International Trade signed the free trade agreement with Israel in the dead of summer, on July 31, when most people are about as far removed from what is happening federally as they can get.

Other than a brief announcement, I do not recall any signs that the free trade agreement was in the works. I do not recall any news releases, any articles in the press or any calls for consultations with industry groups that might have wanted some input in the process.

Let me be clear that we are not opposed to this bill. We believe that each step made in the direction of trade liberalization is a good one. I am only surprised at the low key, behind closed doors way in which the deal was struck. There should have been more opportunity for input from industry groups.

We are in favour of trade liberalization. I understand the Liberals are now in favour of free trade as well. I compare them to a born again crusade; all of a sudden they have discovered the virtues of free trade and have embraced it with vigour. I do welcome that.

I recall in 1988 they were very much against free trade and campaigned against free trade in the 1993 election, but here we have the Liberals doing their famous flip-flop. They are becoming free traders with all the will and might they can muster. I do think we are going in the right direction and I am glad the Liberals finally saw the light.

One out of three jobs in Canada is created as a result of our exports. Thirty-seven per cent of our GDP is derived from trade. Growth in the economy has virtually only occurred in the area of exports in the last three years. The domestic side of our economy has been very flat and we do have to credit the growth in our exports as being one way we have been able to grow out of the recession we were in in the early 1990s. I think we are on the right track and I would like to see that continue.

As a matter of fact, I would like to see the next round of the World Trade Organization talks concentrate on further trade liberalization because Canada is in a good position to take advantage of that. We can compete with the best in the world but we have to have the trade rules that back us up and give us the clout in case we have trade harassment.

We have heard a lot about the proposal for the free trade agreement with Chile. There has been a lot of discussion about that agreement being closely patterned after the NAFTA agreement and the potential for that country to eventually enter NAFTA. I welcome that. There has also been talk about the eventual enlargement of NAFTA to join the Mercosur countries of the southern hemisphere to form a free trade area of the Americas. However, with Israel of course we did not hear a word until it happened.

Officials of the Department of Foreign Affairs and International Trade were kind enough to give us a briefing last Tuesday regarding the free trade deal. They explained that this trade agreement is fairly simple. There is really no point in building an elaborate structure for dealing with a relatively small amount of trade.

Our trade with Israel is really a drop in the bucket when compared to our trade flows with other countries; nonetheless it is important. Exports to Israel totalled $216 million last year, while imports from Israel amounted to $240 million.

Although we are enjoying a big trade surplus now, essentially it is only with one country, the United States, which is of course our largest trading partner. It disturbs me that we continue to run trade deficits with almost all of our other trading partners. The amount we are talking about is almost the same amount as our trade with Cuba.

It is my understanding that the benefits in this agreement will also be extended to the Palestinians. Under normal circumstances trade flows freely between the West Bank, Gaza and Israel. Even with the present closure between Israel and the occupied territories, one would hope this trade agreement would be extended to the people living in the occupied territories as soon as possible.

I find this agreement interesting because it eliminates all tariffs on almost all industrial goods immediately upon implementation on January 1, 1997. Our free trade agreement with the United

States called for a fairly lengthy phase out period, 10 years on some goods. Fortunately we were going to be there by 1998. But with this agreement we are going to zero tariffs overnight, which is absolutely great.

There are only a couple of exceptions and I am not exactly sure why. Ladies swimsuits at the request of a Canadian swimsuit manufacturer and certain cotton fabrics at the request of Israeli manufacturers will have tariffs for another two and a half years. This will allow the affected companies to adjust to the competition over that period of time.

It is interesting to note that non-tariff barriers for the most part will not be allowed. This is following the lead that has been established at the World Trade Organization.

The agriculture sector, because of sensitivities from both sides, has been somewhat excluded from tariff elimination, although Canada has gained an increase in market access for certain commodities. These include grains, grain products, oilseeds, pulse crops, beef and various processed fish products. I have not had a chance to analyse what this might mean for farmers like myself who grow canola, but I think that any opportunity for access into these countries is a good one for us.

It disturbs me a little that Canada continues to protect our supply management industries with tariffs that are as high as 350 per cent. These tariffs are known around the world as Canada's dirty tariffs. We simply must get into the 21st century and realize that it is not in our best interest to continue to support these. A reasonable phase out time to allow for that to happen is acceptable. We have to start that process. I would like to see it done at the next round of the World Trade Organization talks.

Further trade liberalization is good for Canada. We have been one of the main proponents of trade liberalization. Yet right here at home we continue to restrict access to part of our economy. On the other side of the coin, the United States is using similar tactics to restrict access to Canadian supply management producers that compete head-on with the United States.

I understand that the impetus for concluding a trade agreement with Israel at this time is that our largest competitors in that country, the United States and Europe, have had free trade agreements in place for some time. This will put us on a level playing field.

The dispute settlement process in the agreement is fairly straightforward and it is binding. One of my colleagues who will speak later is quite interested in the whole dispute settlement process and will be examining that in some detail. He is concerned that dispute settlement procedures for international agreements are much better than the procedure we have for disputes between the provinces and Canada. It is very interesting that the Liberal government, once it realized the benefits of free trade, aggressively worked toward signing international agreements on trade.

Where the government has fallen down is that it has not been able to put the same processes in place for trade between our provinces. That continues to cost Canadians somewhere in the area of $8 billion a year. The fact that we are not able to trade freely within our own country is a real contradiction. We have better trade agreements with our international partners than we have at home. My colleague from Vegreville will be speaking on this subject later today.

Another colleague who is a well respected economist in his own right will talk about bilateral agreements versus multilateral agreements. I know there is a bit of controversy among trade economists whether countries should enter into bilateral agreements. The argument has to do with efficiency and production. The concern is that the most efficient producer, given a situation in which all tariffs are equal, loses business when his competitor in another country moves to a zero tariff with a buyer. Trade is then diverted from the most efficient producer who, unfortunately, still has to add a tariff to his price. When he sells the product to a foreign country he becomes a less efficient producer.

The industrialized world is moving toward free trade with the World Trade Organization. The next round of trade talks will be held in 1998-99. The process is fairly slow, but we are getting there.

The last Uruguay round of the GATT declared there would be an average 36 per cent drop in tariffs over a six-year period. We are now halfway through that period. That is nothing compared to the 100 per cent drop in tariffs which has been achieved through the signing of the Canada-Israel free trade agreement.

Even though these bilateral deals may divert trade from efficient companies to less efficient ones, they also create new trade which did not exist previously.

I believe that bilateral deals are useful in trying out different rules and in testing different approaches. I suggest that the next bilateral agreement which Canada signs should try to up the ante beyond what we have been able to achieve at the World Trade Organization. We should try to get a proper definition for subsidies, countervail and some other things which were not achieved at the last round of World Trade Organization talks.

We in the Reform Party welcome the bill. We believe that trade liberalization is good for Canada. We are a trading country. We have a relatively small population. Only about 10 per cent of the GDP in the United States is derived from exports. In Canada, 37 per cent of our GDP is derived from exports. We need trade very badly. We need further trade liberalization in order for us to compete.

Canada should be a bit more proactive in the bilateral agreements and at the next round of the World Trade Organization talks. We could have used the opportunity with Israel to get an agreement on subsidies. That is what we should be looking at in our next move. Overall I support the bill. I am pleased that in just two

months manufactured goods will travel between our countries on a daily basis duty free.

[The Foreign Extraterritorial Measures Act, October 9th, 1996]

Mr. Speaker, today we are addressing Bill C-54, which is an act to amend the Foreign Extraterritorial Measures Act, commonly known as the blocking legislation for the Helms-Burton bill in the United States.

I am pleased to be able to speak at this the third and final reading of Bill C-54. During a previous debate on the bill I was interested to note that members of the other opposition parties felt the way the Reform Party does, that this bill should be supported but that it does not go far enough. I will outline the reasons.

This is only a stop gap measure, a half measure if you like, that needs to be advanced a lot further. I have stated repeatedly that this bill should go further. Canada must act in other ways to get this situation resolved quickly.

It is fine to have legislation on the books to be used if we need to do so. It is there on the shelf, but as the Minister for International Trade stated himself, we hope we never have to use it.

While every well stocked medicine cabinet contains an antidote for accidental poisoning and snake bites, it is hoped they never have to be used but it is pretty nice to have them there if they are needed. It is far better though to eliminate the problem from one's territory and remove the deadly poisons from one's household.

What I am getting at is that the United States must be told that not only is the Helms-Burton bill unwise, it is illegal. Titles III and IV of the Helms-Burton legislation are in clear violation of the NAFTA agreement which the United States has signed. Title III further violates international law and the sovereignty of all countries that invest and trade with Cuba.

Even though it is nice to have an antidote, let us get rid of this poison and this problem once and for all. Canada has been in the position for some time to call a dispute settlement panel under NAFTA. I submit that had we done this when this problem first arose in June, it could have been settled by now. We could have been finished with it and eliminated some of the potential for problems.

We know the President of the United States has given Canada a six months reprieve and may do so again. However, it is election time in the United States and we can never be sure if that is going to happen. In fact, President Clinton, or perhaps it will be President Dole at that stage, may be in a position to extend the six months further or he may not. On the other hand, a new crisis may occur which will force the president to allow lawsuits to go ahead. We do not want our companies to be in that position.

Furthermore, the metre on the claims continue to tick. We are still being exposed to these claims and the liabilities are continuing to accumulate. This bill does nothing to protect certain Canadian executives and their families who may be turned away when trying to enter the United States. That issue continues to be unresolved. We need to have the Helms-Burton bill overturned. We can only do that by challenging the legislation at a NAFTA panel.

There is another reason for getting Helms-Burton overturned. Canadian companies operating in Cuba have to decide whether or not to do business with Cuba. They can follow the U.S. rules. If they do that, they are hit with a fine of $1.5 million Canadian, or they can decide not to follow the U.S. rules and get hit with a fine of $1 million U.S. That is a little like a choice of being hit by either a brick or a baseball bat. Really, it is not much choice at all. The only real solution to this problem is to resolve it once and for all with a decision by a NAFTA panel.

It disturbs me that time and time again this government has allowed itself to be pushed around by the Americans. A persistent pattern has developed in this area. It certainly has.

We can go back to 1994 with soft wheat, the pasta wheats. Canada caved in on a dispute with the United States and accepted export caps. What happened was that the free trade agreement stated that Canada had the right, if we have any economic advantage, to export into the United States just as they had the right to export into our country. The subsidies are equal. That is not what we settled on. We settled on export caps on wheat deliveries to the United States. That deal has now expired and we hear rumblings that they may want to start it again.

We have caved in on the softwood lumber issue. Instead of taking it to a softwood lumber panel under NAFTA or the World Trade Organization, again we have accepted caps on exports. In that case it is even worse because we have to administer this bureaucratic nightmare ourselves.

The lumber industry has been waiting six months to have a process put in place it can comply with. Now it has learned it is going to take at least another month before provincial quota allocations will be decided, never mind the whole problem that we are going to get into with allocating to the different companies once that happens.

I will say again that a persistent pattern has developed and that Canada has been afraid to take on the Americans under these dispute settlement processes that we have worked so hard to put in place.

I would submit that we cannot allow ourselves to be pushed around. Furthermore, there is absolutely no need for it. Our trade agreements give the protection we require here. We have worked very hard to put these processes in place but when it is time to test them we always seem to be afraid and back away.

I also submit that it is very important for us to test these agreements when we feel we can win. How credible can Canada be in further reforms that we want to take place at the World Trade Organization and further dispute settlement mechanisms that we want to put in place when we have not even used the processes that we have negotiated in the last round?

I would like to talk a bit about the country that is being affected in addition to Canada over the Helms-Burton legislation. That little country of course is Cuba. We should take every opportunity to remind the Americans that their dispute is with Cuba and not with Canada. Although we share America's desire to see a more democratic, market driven country in Cuba, we think there are other means to achieve this. We know that the United States has used an isolationist policy and I do not believe that has worked. We have 40 years in which that has taken place and we still have a communist government in Cuba.

I believe that Canada shares some responsibility for the problems there too. We continue to trade and I think we should, but we have other tools that we can use.

We heard the Secretary of State for Latin America a little while ago speaking about the gains that have been made in terms of human rights and economic reforms and what Canada is doing to help. I think that is laudable that we have been helping out where we can, but we have not heard of too many gains that have taken place in trying to make that a more open, democratic country or any result in multi-party open elections, freedom of voting, freedom of expression. Those are all very restricted.

For 40 years we have had a policy of trading with Cuba and what is the result in terms of the other side of this, the engagement part? Very little, it seems, and I think we have to work a lot harder to accomplish an open, democratic country in Cuba. We have to work with the OAS to achieve this. We in the Reform Party believe that engaging Cuba is the right approach. We think there are other methods and I will outline those.

I think trade in this case is our carrot and we can use other methods such as the carrot and stick approach if we like, but we do have to trade with Cuba and use the opportunities to discuss the serious issues where we are not making gains.

We can make aid conditional upon improvements in certain areas like human rights and democratic reform. We can insist that Cuba get no special deals in terms of bilateral aid from Canada, no Canadian partnerships in CIDA for example that go bilaterally, which came to about $500,000 in 1994-95, and that there be no technical support from IDRC, the International Development Research Centre.

We have to see some movement, some improvement in those conditions in the United States before we should offer these kinds of technical supports. We should certainly not have any more dipping into the Canada fund to support activities in Cuba until we see some progress made in the areas I have just identified.

We should continue trading in the private sector but do what we can in terms of engagement to encourage change and restrict Canadian aid programs until some improvement is made.

In conclusion, Reform supports this bill but we do not think it goes nearly far enough. There needs to be a resolution at NAFTA, but it is a stop gap measure and to that extent I think it is probably necessary.

In addition, we must take a more hard nosed attitude when we deal with the United States in these types of disputes. Canada must clearly challenge the United States, which is way out of bounds on this issue. I believe the United States does not respect countries that cave in, and that seems to be our history in the last while. We should challenge the United States when we feel we are clearly in the right, and this is one of those times when we should challenge the United States.

[Foreign Extraterritorial Measures Act, October 8th, 1996]

Mr. Speaker, the Reform Party will be supporting these five amendments which are of a technical nature to bolster Bill C-54, commonly known as the blocking legislation for Helms-Burton.

It is clear that the United States has a dispute with Cuba that needs to be resolved. However, it is a dispute that should not be taken outside of the United States.

The question here is whether the United States has the ability or the right to apply its law outside of its country. I submit it clearly does not. It is in contravention of NAFTA and Canada should have moved this dispute to a NAFTA panel long ago.

My colleague from the Bloc has said that Canada has been sitting on this problem since July, and I support that view. We have fought long and hard to have a dispute mechanism set up to settle these kinds of problems both at NAFTA and at GATT. We now have the World Trade Organization, and Canada seems to be afraid to take these matters to final resolution at these international bodies.

What is the use of having negotiated agreements through a long period of time to settle problems of this nature if we never use them?

The parliamentary secretary pointed out that this was an election year in the United States and sometimes during an election year things get a little strange down there in terms of foreign of policy. I support that view, but I do submit that the democratic president of the United States did sign the Helms-Burton bill. This is not a bill that just came out of the Republicans. The president did give a bit of an exemption to Canada for a period of time, but the meter is still ticking.

The Canadian companies involved still have liabilities accruing and I believe that C-54 does not address a couple of issues. It does not address the issue of liabilities that are continuing to accrue. It does not address the issue of blocking Canadian executives and their families of companies that are affected from entering the United States. Therefore I see Bill C-54 as a half measure, one that needs to be taken, but we should have taken this to a dispute panel at NAFTA long ago.

I believe there is a disturbing trend coming out of this Liberal government. We saw it back in 1994 when we had a dispute with the United States over durum wheat where Canada accepted export caps. Is that in the spirit of free trade? I submit it is not.

Clearly Canada and the United States agreed under the Canada-U.S. Free Trade Agreement that there should be no restriction on trade between the two countries, there should be a phase down of tariffs and that the whole idea was to try to establish a market economy based on the ability of producers to have some regional advantage possibly.

However, what we have is a government that seems to be willing to cave in to the United States every time we have a dispute. This is just one more example of it. We saw it in the Canada-U.S. wheat dispute in 1994. We saw it again in the softwood lumber dispute where Canada has decided to impose restrictive quotas on ourselves which is very cumbersome to put in place and to administer. In fact, the whole process has been delayed another month because they cannot agree on how provincial allocations should be set out and we have not even arrived at the allocations that go to individual companies yet.

Now we have a dispute over a situation in which the United States is trying to apply its law outside of its own country which is clearly in contravention of a NAFTA deal that we have signed, and this government continues to use a process of stalling. If we had taken this issue to a NAFTA panel it probably would have been resolved by now. I believe the panel would have found in favour of Canada.

We support the amendments which strengthen Bill C-54. They are of a technical nature. The bill will be of some help to Canadian companies but clearly this dispute should be resolved on the basis of the international agreement between Canada, the United States and Mexico.

We will be supporting this bill, but this government must start to show some backbone in responding to the United States. With regard to trade policy the United States tends to act like a bit of a bully. If we do not respond with corresponding strength I do not think the Americans will respect us. We must show them we have some strength and are willing to stand up to them in this type of dispute.

Therefore we will be supporting these amendments at report stage, but we must move far beyond this, show some strength and challenge countries like the United States when they try to apply their laws outside their own countries.

[The Criminal Code, October 3rd, 1996]

Dispense.

[The Criminal Code, October 3rd, 1996]

Who said it? It must be in Hansard .

[Divorce Act, October 3rd, 1996]

Madam Speaker, I listened to the minister with interest, especially in her response to the comments to the member for Calgary Centre.

What I heard the minister say was that the non-custodial parent had a duty to make payments but that the payments were not put in the hands of the custodial parent but in the hands of the children. That simply is not true. The custodial parent administers the payments that are made to those children.

The minister also said earlier in her speech that the non-custodial parent has a duty to make sure there was an enforcement of child support payments. I agree with that, but I would like to ask if she thinks there is also a duty, on behalf of the custodial parent, to spend that money on the children. We all know of cases where the money is not necessarily spent on those children. Is there not a duty for the custodial parent as well?

[Foreign Extraterritorial Measures Act, September 20th, 1996]

Mr. Speaker, before we were interrupted for question period I was speaking about the aspects of Bill C-54 which do not guarantee the rights of Canadians and therefore the need to have a NAFTA dispute panel settle this issue once and for all.

One important aspect was that Bill C-54 does not have any provisions against the Helms-Burton bill for barring entry of senior officials of selected companies doing business in the United States.

Bill C-54 does not cover a number of questions and these are questions that need to be settled at a NAFTA panel. Does the United States have the right to seize assets of Canadian companies in the United States? Clearly not. Article 1110 states that no party may expropriate an investment of an investor of another party in its territory or take a measure tantamount to the expropriation of such an investment.

Here is another NAFTA article to take to the dispute panel. Article 1105 states that each party shall accord to investments of investors of other parties treatment in accordance with international law, including fair and equitable treatment and full protection and security. No one can tell me that Helms-Burton is not in contravention of that provision of the NAFTA.

I know that the officials of the Department of Foreign Affairs and International Trade have been looking at whether the Cuban legislation, the Helms-Burton legislation, is in violation of U.S. international trade obligations as they relate to the World Trade Organization. A senior American State Department official said last year that the bill essentially meant that the United States was asserting its jurisdiction over transfer between two non-U.S. parties of land or assets situated outside the United States. The official argued that went well beyond the accepted international practice and would be difficult to defend under U.S. law. I make the point that it would be more difficult to defend under the World Trade Organization.

I am sure foreign affairs lawyers have advised the minister as to which dispute resolution forum is best. Let us go with it. Let us stop pussyfooting around on this issue and putting tit for tat legislation in place. Nowadays when a bully bullies us we do not have to put our tail between our legs and run. We do not have to get bloodied in the fight either. We can take that bully to international court. Let us take the Americans to court to see if we can get the Helms-Burton bill overturned.

The United States is a very important trading partner of Canada. It is not only our trading partner, it is our friend. We have about $1 billion in two-way trade per day crossing the 49th parallel. However, that does not mean the Americans can take their dispute with Cuba beyond their international borders. I make the point that the United States has every right to challenge Cuba and to put trade sanctions of a binational nature in place. However, it is simply not within the international parameters of good citizenship or international trade to take that outside its borders and apply it to countries such as Canada.

I would like to talk a bit about our trade and investment relations with Cuba. Canada maintained full relations with CUBA after the 1959 revolution which brought Castro to power. Even though the country has largely a state owned economy and cutting through paperwork is tiresome and frustrating we continue to do business there. Last year Canadian exports to Cuba amounted to $108 million. This was mostly food products, chemicals, industrial machinery and transport equipment. Our exports were up more than 130 per cent last year. Imports from Cuba amounted to $194 million. This is largely made up of sugar, raw nickel products and fertilizer.

In all, 37 Canadian companies have offices in Cuba and Canadian businessmen are involved in as many as 30 joint venture projects with Cuban partners in areas ranging from minerals, petroleum, processed food and others.

Canadian companies have arranged to build over 4,000 hotel rooms at 11 different sites in the next ten years. These are valued at over $500 million and will feature golf courses, riding stables and yacht berths. Of course, Cuba is a very important and favoured winter vacation location for about 120,000 Canadians who travel there each winter.

There are continued prospects for Canadian companies to hunt for gold, drill for fertilizer and mine for nickel. A particularly interesting development is that Canadian firms are involved in biotechnology ventures with Cuban institutes.

At the same time we are trading with Cuba, I believe it is incumbent on the Liberal government to work to help that country bring about democratic reform. It is interesting to note that although we have been trading with Cuba for over 30 years the Minister of Foreign Affairs said today that we need to encourage democratic reform. Where has been that effort in the past?

The Minister for International Trade said that we should not have an isolationist policy like the United States does with Cuba; that we need to engage it. I concur completely.

It seems strange that it takes a bill like the U.S. Helms-Burton bill to cause interest in Canada helping to bring about democratic reform in Cuba. We should be making every effort to work with Cubans very closely through our trade relationships to encourage them to work toward a more democratic country.

Trading with Cuba is good business for Canada and good business for Cuba. I also believe that keeping trade alive is the best way to promote democracy and human rights in Cuba. The trade policy we are following with Cuba is the same one the United States is pursuing with China. Keep trade channels flowing and eventually the political situation will open as well. I believe we should be doing more to encourage that. In any event, we insist on our right to make our own decisions regarding trade and investments with Cuba and any other country. The United States has every right to take action against Cuba but its fight must be maintained with Cuba and not with us.

The Reform party supports Bill C-54 as a first step to repelling the Helms-Burton legislation but it is only a stop-gap measure. Let us take this to a dispute resolution under NAFTA. If we do not insist on our rights we will only encourage the Americans to keep pushing us around. It is time for Canada to test the United States' resolve. Will it be part of these international trade agreements and the rules that govern them or not?

I also believe it is time to test this Liberal government's resolve. The U.S. is testing Canada at the World Trade Organization on our policy on split run magazines. It has tested us at NAFTA. What is this government afraid of? It is time to test this government's resolve. Does it believe in the trade agreements it has signed, NAFTA and the World Trade Organization? Is it prepared to see them through? It seems to me we have worked very hard. Canada has been a leader is setting international trade agreements in place and rules to settle these disputes. It is ridiculous that we do not use them to settle matters of this nature.

[Foreign Extraterritorial Measures Act, September 20th, 1996]

Mr. Speaker, I would like to begin my speech on Bill C-54 by stating that the Reform Party will support this legislation, although I believe it is only a half measure to resolve this dispute.

My advice when this matter first arose was to take this to a dispute resolution panel under NAFTA and get the Helms-Burton act overturned. Had we moved on this quickly we would be well on our way to settling this dispute once and for all. A dispute settlement mechanism was negotiated in NAFTA. It is in place and we should not be afraid to use it.

It is clear that Helms-Burton is in contravention of the NAFTA agreement with United States. Helms-Burton is also an affront to Canada's right to set its own foreign policy and to continue trading and investing in Cuba. We cannot allow this American act to go unchallenged. Passing Bill C-54 is one more defensive action that we can take, but a much more effective one would have been to take the Helms-Burton bill to a dispute resolution settlement under NAFTA. I repeat that this should be done immediately, not after the American election in November.

The Minister of Foreign Affairs said that under the Helms-Burton bill liabilities continue to accrue. This is a stopgap measure, we support it to that extent, but we believe that it should be settled once and for all.

We must take a firm stand. We cannot allow the United States to push us around as it has on softwood lumber, as it has on wheat. Now it is telling us where to invest and do business. If we keep letting the Americans get away with these bullying tactics we will only encourage them to keep threatening us.

Just two days ago there was another report in the press that the acting American trade representative and the agriculture secretary had issued a joint statement that they were going to use U.S. trade laws to keep our wheat exports from growing. Canada capitulated to the Americans in 1994 and agreed to caps on wheat exports, at 1.5 million tonnes. Things have been quiet this past year because U.S. wheat supplies grew and Canadian prices were no longer competitive. Clearly that action is contrary to the free trade concept that Canada wants to establish throughout the world, a market economy.

We have been one of the forerunners, and rightly so, in negotiating free trade deals and I believe that we have to ensure that countries play by the rules. This year we have a bumper crop and the Americans are afraid that our wheat will once again become attractive. Various American interest groups have seen us buckle time and time again. That is a very bad precedent and encourages only further strong arm tactics. I believe we have to use whatever avenues we can to fight Helms-Burton and other attempts to fetter free trade.

Bill C-54 makes certain amendments to the Foreign Extraterritorial Measures Act which allow the Canadian government to stymie some of the more aggressive aspects of the Helms-Burton act. They are good as far as they go.

I would like to get into the specifics of the Helms-Burton act and how the proposed amendments to FEMA will help defang that legislation. The Helms-Burton act allows U.S. nationals who have claims on expropriated property in Cuba to sue Canadian companies and people who traffic in that property. Trafficking is defined quite broadly in the act to include things like holding an interest in confiscated property, engaging in commercial activities using confiscated property or participating in profits through another person who is trafficking in that confiscated property.

Under Helms-Burton a U.S. national who has a certified claim to expropriated property can start an action in a U.S. court under title III. U.S. officials have said that almost 6,000 claims of expropriation have been recognized by Washington as being legitimate. Of those, about 800 were above the threshold of $50,000 in commercial value in 1959 when Fidel Castro took power. Many of these are not subject to claims by U.S. nationals any longer.

It is true that President Clinton has waived until January certain provisions allowing suits against foreign firms. We cannot take for granted that he will do so again. The legislation is there and it is there to protect ourselves. Further, we should start an immediate action under NAFTA to resolve this issue once and for all. As we heard earlier liabilities continue to accrue.

Under Helms-Burton, once court proceedings begin and a U.S. court is presented with a certified claim it can award up to three times the damages claimed by the U.S. national. If the Canadian company refuses to pay the damages that are awarded the Helms-Burton act allows the U.S. national to ask Canadian courts to enforce this judgment.

Here is where the amendments to FEMA kick in for the first time. The new and improved FEMA will allow the attorney general to declare such an order cannot be recognized or enforced in Canada. That is a step in the right direction.

If the Canadian company has assets in the United States, Helms-Burton allows the U.S. court to seize and sell those assets and pay the awarded damage to the U.S. national. Here again the strength in FEMA will step in. It will allow the Canadian company to recover in Canadian courts any amounts that have been awarded in the United States.

However, a glitch in all of this is that the U.S. national would have to have assets in Canada to be counter seized. I do not know of many U.S. nationals who can sue under Helms-Burton that would have assets in Canada, certainly not a whole lot. Therefore we are going to be questioning this and making some recommendations in committee on how this may be improved.

Helms-Burton is meant to intimidate foreign individuals and companies from investing in Cuba and carrying on any business activities there. Here again an amendment to FEMA shows the Americans that the Canadians have backbone. We are going to raise these penalties from $10,000 to $1.5 million on Canadian companies that refuse to trade with Cuba for fear of U.S. sanctions.

For instance, if a company was planning a business venture prior to the passage of Helms-Burton but got cold feet later, it could be fined for allowing the American legislation to influence its decision. I have read that the RCMP has conducted about two dozen investigations of complaints that subsidiary companies in Canada were violating earlier provisions of FEMA not to let American head offices influence their trade with Cuba. I understand that there have been no prosecutions to date.

It is easy for a subsidiary to say that it walked away from a sale to Cuba for valid commercial reasons that have nothing to do with Helms-Burton. That is why I believe that making these amendments to FEMA, although good, are only a stop gap measure. We must try to get Helms-Burton overturned.

The aspects of Helms-Burton that Bill C-54 does not address is that provisions for barring entry into the United States of senior officials of selected Canadian companies. Clearly these are in contravention of NAFTA. Article 1603 of the NAFTA trade agreement specifically states that each party shall grant temporary entry to business persons who are otherwise qualified for entry under applicable measures relating to public health and safety and national security. What is happening here is that the senior officials of these Canadian companies would not be in contravention of NAFTA and we should make that case very clearly.

Does the United States have the right in the wake of NAFTA to stop healthy law-abiding Canadian business people from entering that country? I do not think so. Not after we signed NAFTA. It is clear that it does not.