moved that Bill S-25, an act to amend the Defence Production Act, be read the second time and referred to a committee.
Mr. Speaker, I would like to begin by thanking members of all parties for their co-operation with respect to this very important bill.
It is very important for two reasons. First, it will facilitate a solution with the United States with respect to ITAR, but more importantly still, it will ensure the implementation in Canada of an effective control system that will support our interests and those of the Americans in matters of security.
The environment is changing. New threats to security, such as intranational conflicts, the proliferation of weapons of mass destruction, and international terrorism, have appeared.
These new challenges are causing western countries, including Canada, to look at their defence needs in new ways. In the U.S. the changed perception of this threat, especially in congress, has led to an increased focus on domestic security issues. As a global response to this increased risk of diversion, the U.S. tightened up its export control over sensitive goods and technology.
Canada was sideswiped by these broad concerns of new perceived security threats when the U.S. department of state amended the Canadian exemption provisions under ITAR. Many of the preferential elements that had previously been available to Canadian firms were removed and the definition of who could take advantage of Canadian exemptions was also narrowed considerably.
This had major repercussions for Canada's industrial sector, in particular, defence, aerospace and satellite industries. The result of this action did, however, provide Canada and the U.S. with a convenient and timely opportunity to pursue extensive discussions on export controls of sensitive goods.
Among other things, the amendments have eliminated the earlier preferential status of Canadian companies and imposed new permit requirements for a vast range of goods and technologies. The amendments have also tightened up the definition of who can enjoy a Canadian exemption.
For our industry, the amendments add administrative formalities, costs and significant delays that mean lost business opportunities.
This is why we need this bill. Canada must establish appropriate safeguards to assure both ourselves and our U.S. defence partners that certain controlled goods and technology, as set out in Canada's exports control list, are available to only authorized individuals and companies. We need such assurances not only to protect certain controlled goods and associated technology of the North American defence, aerospace and satellite infrastructure, but also to encourage trade and improve Canada's national economic stability.
Putting these safeguards in place will be an important step toward reinstating the ITAR exemption for Canadian firms, allowing again for licence free cross-border transfer of most U.S. origin controlled goods and technology.
A big part of this new system of safeguards is the proposed controlled goods registration program. This Canadian made registration system will be housed within my department and will ensure effective control of access to and the transfer within Canada of controlled goods and technology.
Very briefly, the registration system will work as follows. Companies or individuals that wish to be registered or companies that wish to have a temporary worker or visitor exempt from registration must apply directly to the minister. Registration will authorize the registered company's directors, officers and employees to access controlled goods provided they are screened by the company. If the application is approved it will be up to the company to ensure ongoing compliance with the new regulations and to establish a compliance system that can be inspected.
Companies will also be required to submit reports to the Department of Public Works and Government Services and to submit to periodic inspection by my department. As minister, I will have the power to deny, suspend, amend or revoke registration and exemptions on the basis of a security assessment. I will also have the authority to request necessary information from applicants for registration or exemption.
The bottom line is that when the bill becomes law, the transfer of controlled goods in Canada may occur only between registered persons and certain individuals or classes of individuals who may be exempt from registration. U.S. visitors who are already registered with the U.S. government are an example of the type of individual that could be exempted.
As I have just mentioned, the bill will create a new part 3 in the Defence Production Act, providing for appropriate sanctions, including imprisonment, for people and companies contravening the act.
In conclusion, I thank all colleagues for helping to give this important bill speedy passage. It will protect the security of our North American defence system and in the meantime will allow the defence sector to continue to do business with its defence partners in the U.S.