moved:
That the Standing Committee on Industry review policies currently in place that affect the Canadian shipbuilding industry in order to assess their ability to provide a competitive and equitable environment for growth of the industry in Canada.
Madam Speaker, it is a pleasure to have the opportunity to rise in this place to discuss a very important issue which I believe is critical to the economic well-being of the country and in particular Atlantic Canada.
I rise today as a member of parliament for the riding of Fundy—Royal which borders the city of Saint John. I am one of many members of parliament who have spoken in this place over the last number of years to put forth the need for us to modernize our current shipbuilding policy.
Members from all sides of the House have spoken on behalf of this initiative. It has a wide breadth of support from a number of political parties, for example the New Democrats, and a hot and cold relationship with the Liberals. The member from Lévis, Quebec, has been a strong advocate of the need to revitalize our shipbuilding policy.
No member in the House of Commons has fought more tirelessly than the member for Saint John to ensure that the people of Saint John, New Brunswick, are able to earn their living at the shipyard located there and that Saint John Shipbuilding Limited will work again. The member for Saint John has spoken in the House on countless occasions, whether it be during debate or in question period. I rise today on behalf of all individuals who are trying to advance this debate.
Motion No. 71 calls on the Standing Committee on Industry to complete an indepth review and analysis of current shipbuilding policies and how they affect the growth or lack thereof of the shipbuilding industry.
The motion does not compel the government to make any changes. It only requests that the industry committee assess the current system for its ability to promote growth in the Canadian shipbuilding industry. Put simply, it proposes that the committee complete an indepth review of the file.
I will talk about what we need to do to revitalize our shipbuilding as has been advocated by an unprecedented number of individuals. Only last March the motion put forward by the member for Saint John on behalf of the Progressive Conservative Party of Canada called on the House to develop a national shipbuilding policy. At the same time the member for Saint John utilized the exact same language the Liberal Party of Canada used on two separate occasions to put forward a resolution by its members at its national convention concerning the need for us to develop a national shipbuilding policy. At that time in the House the Liberal government chose to reject that initiative. I find this a bit shocking.
I have a document with me which I hesitate to use as a prop by any means. It is entitled “Atlantic Canada: Catching Tomorrow's Wave”. I do not know if members have had a chance to review this document, but on page 104 it notes that one of the critical initiatives needed to develop a modern economy in Atlantic Canada is a new shipbuilding policy. Maybe the Liberals are actually listening to the member for Saint John, to me and to all other individuals who have put forth this point.
Page 106 goes on to say that Canada is the only country which does not provide any direct construction grants, loan guarantees, preferential rate export financing, research and development grants, preferential tax treatment or customs duties on imported ship materials.
That document was produced by Liberal Party members from Atlantic Canada, what few it might actually have. A number of them were able to coalesce to put together a document on September 30, 1999, less than six months after they turned their nose down on trying to advance the debate we had put forward back in March.
I am advocating something that is almost unprecedented. These individuals are calling for us to modernize the shipbuilding industry. They represented all 10 premiers of this great country of Canada not just once but on two separate occasions: in St. Andrews in 1997 and again in Quebec City in 1998. All 10 provinces have actually put their shoulder to the wheel and said that we need to ensure we have the financial instruments to develop a shipbuilding policy.
In addition to all 10 premiers, the ship owners, the shipbuilders and labour have coalesced around the same principles and are advocating the exact same things that we need to modernize our shipbuilding industry.
Before I go into the actual issues in terms of what I am advocating the Department of Industry and the Minister of Industry bring forward, I want to make it very clear to everybody in this place today or watching at home on CPAC that we are not looking for subsidies in any way, shape or form for the shipbuilding industry. We are looking for the government to do two principal things. One is to give it sound, viable access to its market and the other is to provide a proper tax regime for it to be able to compete.
Sound and viable access to its market for most commodities might be roads, rails and other direct infrastructure like ports and airports, for that matter. We have those challenges near my home in the riding of Saint John. That is normally the kind of infrastructure we speak about.
Another role in terms of what we are looking at in terms of a sound, viable access to its market is an international trade regime so that it actually has a marketplace in which to establish. I will come back to that in a few moments as I progress through the course of the debate.
We also need to develop an international tax regime whereby we can be competitive in Canada. The corporate taxes in Canada are completely uncompetitive in other regimes. In fact, Canada has the second highest corporate taxes in the industrialized world, second only to Japan. It is difficult for any industry to compete and make a profit in Canada, in particular the shipbuilding industry.
The four points I will advocate would be the cornerstone for developing a modern shipbuilding policy supported by all 10 premiers, labour, ship owners and shipbuilders. I know the member for Saint John can attest to them as well as every family, every man and woman who actually has earned a paycheque in shipyards whether it be in Saint John, New Brunswick; Marystown, Newfoundland; Port Weller, Ontario; Lévis, Quebec; or elsewhere throughout the country. These are the initiatives we are looking at doing.
First and foremost, we understand categorically that any time a large capital good is purchased in Canada or anywhere in the world the available financial package is a cornerstone of whether or not the bid is competitive. That means access to capital at the most aggressive financing rates possible. That is why we are advocating that a loan guarantee program be adopted similar to the one in the American title XI program which guarantees under very prudent criteria the loan of a potential ship buyer.
The title XI program has been in place place since 1936. Do members know how many loan defaults it has had since then? The member for Saint John knows the answer. The answer is zip, zero, not one loan default. If a student in university copied something and got in trouble it was called plagiarism. In the real world, if it works it is called being resourceful. I am advocating that Canada develop a loan guarantee program similar to the one in title XI and adopt it in the Canadian context.
We have a natural vehicle to deliver that in the departments of industry and international trade, the Export Development Corporation. It will guarantee a loan for a foreign buyer of a ship. We also need to adapt it to guarantee a loan for a domestic buyer of a ship, especially given the fact that we have a aging fleet on the Great Lakes, one of our principal markets in terms of where we can build ships on a competitive basis in Canada.
The second point I am advocating is that our punitive tax regime in Canada needs to provide accelerated depreciation combined with revising Revenue Canada leasing regulations. Lease financing has become a very natural vehicle for purchases of large capital goods. We need to ensure that our tax regime is competitive with that of the United States. I am not looking at subsidies. I am looking at a loan guarantee program. I am looking at changing the Canadian tax regime.
The third point I am advocating is that we need to ensure that we find sound, viable access to our markets. I spoke about the need for a trade regime. The result of the free trade agreement, NAFTA, in general has been very positive for Canada. Prior to 1988 we traded essentially $80 billion each year with the Americans. Today we trade around $240 billion to $260 billion each year with the Americans.
However, the Jones Act which has been in place in the United States since 1936 has blocked our penetration into the American market. That is fine to some degree. We can compete if we have a proper tax regime and a proper loan guarantee program with the markets in the EU. We can build ships in our own waters and on the Great Lakes.
It is incumbent on the government, the Minister for International Trade and the Minister of Industry, to step forward and talk with the Americans about opening up some kind of bilateral accord on building certain types of ships. The example of offshore drilling rigs comes to mind. The member for Saint John and I have spoken about it on countless occasions. There is an actual demand for more capacity to build drilling rigs for development off the banks of Newfoundland in the Terra Nova, Hibernia, Ben Nevis and White Rose oilfields, in terms of the development that has taken place along the Carolinas and what we have seen in the Gulf of Mexico.
We could develop shipshape drilling rigs, which are in demand with the States, and we could open up a bilateral accord in that way. Maybe we should look at ocean-going tugs, which are manufactured in P.E.I. In Georgetown, P.E.I., in the solicitor general's riding, they manufacture a very cost-competitive ship. Maybe we could develop a bilateral accord in that area.
What we are looking at is a loan guarantee program similar to what the Americans have under Title XI, revising our leasing regulations so we have a competitive tax regime and opening up some form of bilateral accord.
I heard, sadly, in the House on a number of occasions the government say “You, the Progressive Conservative Party of Canada, negotiated the free trade agreement and at that time you missed out on an opportunity to ensure that shipbuilding was exempt from any kind of protectionist regime under the free trade agreement”. I would like to remind every one of those members, categorically, that free trade has been a win for Canada. In 1988 our trade with the Americans amounted to $80 billion. Today it is around $240 billion.
The government has been in office for almost seven years and it has not knocked on the door of one congressman or one senator in the United States of America to say that maybe it is time we actually tried to do something in that regard.
The problem with this issue is that there is no leadership in advancing the file. This is where I am at a loss. The Minister of Finance says that it is not his file. The Minister for International Trade says that the EDC is under his jurisdiction but it is not really his file, that it comes under the industry file. The Minister of Industry says that the instruments we are looking for belong in other jurisdictions.
If we do not have a quarterback in place who is willing to advance the shipbuilding industry in this country, then it is time we change the quarterback. We should change the Minister of Industry so that we can ensure we get people back to work in Atlantic Canada, in Quebec, in Vancouver and in Ontario.
