Bryon Wilfert

[Children, May 7th, 1999]

Mr. Speaker, if we listen to the members of the Bloc it is obvious their concerns are about jurisdiction and money. Our priority is children. Can the parliamentary secretary to the minister of HRD inform the House what outcomes we can expect from the Saskatoon meetings?

[World War Ii, May 4th, 1999]

Mr. Speaker, on May 7, 1945, Germany surrendered unconditionally to the allied forces at Reims, France, meaning victory in Europe.

In the six years of conflict Canada had enlisted more than one million men and women in our armed forces. More than 45,000 gave their lives in the cause of peace and freedom.

For a population of 11 million, our contribution was remarkable, from the battle of Britain, the battle of the Atlantic, Dieppe, Sicily, Italy, Normandy, the Netherlands and the Rhineland. We must remember the contribution of our soldiers, sailors, merchant marines and air crews.

Canada matured through the ordeal of war and emerged ready to assume new responsibilities in the world community.

On May 3, 1915, Lt. Col. John McRae composed his poem In Flanders Fields in 20 minutes while overlooking the grave of a fellow officer at Ypres.

Some 54 years later we must remember those who served for Canada and honour the words written by him:

Take up our quarrel with the foe: To you from failing hands we throw The torch; be yours to hold it high. If ye break faith with us who die We shall not sleep, though poppies grow In Flanders fields.

[Supply, May 3rd, 1999]

Mr. Speaker, I would point out to the member that we have a motion before us which the Liberal Party of Canada voted on at its convention. I am sure motions often get put forward at Conservative Party conventions.

The purpose of this debate is to inform both the opposition and the country as a whole what the government has been doing. I have been pointing out a number of things which the government has been doing in response to that resolution, whether it is the accelerated capital cost allowance of 33.3% on Canadian built ships or the 25% tariff on most non-NAFTA ship imports. The Export Development Corporation plays a major role. I am sure my hon. colleague was listening when I said that it cannot help a Canadian buyer receiving offers from foreign yards to buy their vessels on terms supported by their national export credit agency.

Let us look at the record. We have a very favourable research and development tax credit system and domestic procurement by the federal government for all government shipbuilding and ship repair needs. The EDC is currently assessing an unprecedented number of shipbuilding proposals which I mentioned in my comments earlier. Obviously, if provinces in this country want to pursue these initiatives they are free to do so.

I pointed out to my colleague earlier the fact that we are building on a policy which has been working well. We did not say it was perfect, but we did say that we are doing something. I want you to keep that in mind.

[Supply, May 3rd, 1999]

Mr. Speaker, one of the difficulties is that unfortunately, and I pointed it out in my comments, it is not a level playing field. We know subsidies are being provided by other countries. That explains in part to my colleague across the way why some of the things he pointed out exist. I concur with him.

We saw that, as he mentioned, in Kao-hsiung, Taiwan, where China shipyards clearly have that advantage from the government. We are working as a government with our partners around the world, particularly in the next round, to push for liberalization in the market and to make sure about these types of subsidies.

In December 1997 the OECD reported internationally that there was a substantial overcapacity in terms of shipbuilding, which is estimated will be about 40% by the year 2005. We have to work together. We have to stop the kind of things that put us at a disadvantage.

In this country the EDC is working very hard with our shipbuilding industry to make sure we are very competitive where we can be for contracts in the international field.

[Supply, May 3rd, 1999]

Mr. Speaker, I am afraid I do not have a time at this point.

[Supply, May 3rd, 1999]

Mr. Speaker, I certainly respect my colleague's comments. It is my understanding that in the next round this issue will be dealt with. It is obviously of concern to us and is something that will be dealt with in the next round.

[Supply, May 3rd, 1999]

Mr. Speaker, I would like to begin by indicating again that the government has a shipbuilding policy. In fact the policy being pursued by the government traces its origins to the days when the Progressive Conservative Party formed the Government of Canada. I remind my colleagues across the way of that.

Since then we have done a lot of good for the shipbuilding industry in this country. Some of the good work lies in the support provided by the Export Development Corporation. It is in that area that I would like to address my remarks.

Let me begin by stating that the Export Development Corporation, Canada's official export credit agency, provides Canadian exporters in all sectors a wide range of innovative trade finance services. Canadian exporters and investors look to the EDC to provide creative and responsive financial solutions as they do business in over 200 countries, including high risk and emerging markets.

Founded in 1944 as a crown corporation, the EDC operates as a commercial financial institution on a self-sustaining basis. As the EDC carries out its mandate to be self-sustaining it applies sound commercial principles to all of its transactions. Premiums and fees are charged for insurance and all loans are fully repayable with interest. The EDC reinvests to support future growth in Canadian exports. As the EDC operates along commercial lines, it does not provide subsidies.

As Canada's official export credit agency, with the government of Canada as its stakeholder, the EDC is bound by certain international trade obligations. This includes the OECD's arrangement on guidelines for officially supported export credits. This arrangement, also know as the consensus, has provided disciplines for the orderly use of officially supported export credits since 1979. The arrangement provides participants clear limitations on key terms and conditions when official support is provided, such as maximum repayment terms, minimum interest rates and disciplines on trade related aid.

In certain key areas, such as aircraft and shipbuilding, the consensus agreement has sector understandings in place to provide disciplines that satisfy the special demands of these important industrial sectors.

At present there is a sector understanding on shipbuilding which dates from 1981. The OECD, recognizing the strategic importance of the shipbuilding sector, concluded negotiations in 1994 on a new agreement respecting normal competitive conditions in the commercial shipbuilding and repair industry. As part of this new agreement the sector understanding on export credits for ships was revised to bring it more in line with current market realities.

The revised 1994 sector understanding calls for maximum repayment terms of 12 years for loans and interest rates which reflect market conditions, the commercial interest reference rate of the OECD, and a 20% down payment.

Canada has stated that it will not sign the shipbuilding agreement until such time as it is ratified by all signatories. It will then be clear what final exemptions the U.S. and other signatories will build into the agreement to protect their individual national shipbuilding industries.

The existing OECD guidelines allow us to match foreign financing terms when these are extended to more favourable terms and conditions.

The Government of Canada fully supports efforts by the OECD to move closer to an internationally accepted set of rules that will eliminate unfair financing practices. The EDC will continue to be guided by revised 1994 sector understandings when offering support to Canadian yards for their foreign business transactions.

Moving on to the specifics of EDC support in the shipbuilding sector, I am very pleased to state that the EDC has been providing a tremendous amount of support to the Canadian shipbuilding industry. The EDC tells me that since 1996 it has supported more than $110 million in Canadian trade vessels and in ship repair services provided by Canadian yards. At this time the EDC is developing another $733 million in potential international business on behalf of Canadian yards.

The House should not take my word for it. In the April 26, 1999 edition of the Canadian Sailings magazine the president of the Shipbuilding Association of Canada, Peter Cairns, said in reference to the EDC that it was “a significant step in the right direction in an area where Canada has a lot of expertise”.

There are other enthusiastic supporters of the initiative of the EDC who have raised their comments in support, including Alan Thoms, president of Canadian Shipbuilding & Engineering Ltd. and John T. B. Chard, executive vice-president and chief operating officer of Shipyards in North Vancouver for the Washington Marine Group. These are people in the industry who support the very important role which the EDC plays.

The EDC is organized along sectoral lines so that business teams can provide Canadian exporters with financial services to meet their specific and unique needs. Shipbuilding and repair transactions are handled by the ground transportation and shipping team. This team contains financial service professionals who can structure financial support to meet the complex demands of today's shipbuilding industry.

The EDC can support Canadian shipbuilders with a wide range of financing, guarantees, insurance and bonding products. The EDC actively considers support for Canadian shipbuilding using direct loans, guarantees for debt participants in shipbuilding transactions who are taking a risk with the EDC, bid and performance bonding, specific transaction insurance and leading and participating in structured financial transactions.

There is a market in financing where the EDC has not been able to help Canadian yards. This is the case of a Canadian buyer receiving offers from foreign yards to buy their vessels on terms supported by their national export credit agencies. This has happened on occasion in the past. Unfortunately, since these would be domestic transactions, Canadian yards have not been able to go to the EDC for competitive financing.

An outstanding example of the EDC sectoral approach to supporting Canadian business is its ship repair financing framework. The framework is ideally designed for ship repair transactions which require swift credit decisions for amounts up to $1.5 million U.S. and credit terms of up to 120 days. The EDC purchases the promissory notes issued for the cost of the ship repairs, allowing shipowners to receive financing for up to 80% of the cost of ship repairs, with a fixed interest rate for up to four months, with a straightforward documentation and administration process.

The benefit to the Canadian shipyard is a cash sale upon receipt of the promissory notes by the EDC.

In order to be eligible for this financing, the proposed transactions must involve a shipyard or shipyards operating in Canada, benefits to Canada and the vessels involved must operate on international routes. EDC is also very willing to discuss financial solutions for complete ship overhauls and new construction in Canada.

Before I conclude I would like to make a few comments on U.S. programs that are of great interest to Canadian shipyards. The new OECD shipbuilding agreement which was discussed earlier has still not been ratified by the United States, which continues to offer special longer repayment terms to buyers of U.S. vessels. As an example, under the U.S. MarAd program title XI financing of the U.S. sourced equipment and products, buyers can receive financing support of up to 87.5% of the contract value and repayment terms up to 25 years.

Furthermore, we have discussed in the House today a number of maritime laws known collectively as the Jones act which also impose a variety of limits on foreign participation in the U.S. domestic maritime industry.

Under these laws the carriage of cargo or passengers between points in the United States is restricted to U.S built and U.S. documented vessels owned and operated by U.S. citizens. Similar restrictions apply to dredging, salvage and other commercial marine activities in U.S. waters.

In international shipping there are limitations on foreign ownership of vessels eligible for documentation in the U.S. In addition several subsidies and other support measures are available to operators of U.S. vessels. Cargo preference laws restrict the carriage of military cargo and limit the carriage of government non-military cargo, aid cargo and certain agricultural commodities to U.S. vessels. These and other restrictions coupled with defence related prohibitions of the Byrnes-Tollefson amendment limit Canadian participation in U.S. shipping activities.

The Jones act does not entirely bar foreign shipyards from participating in the U.S. shipbuilding market. For instance, certain types of ships such as research vessels and other offshore platforms may be procured from non-U.S. yards. Foreign yards are allowed to do some repair and overhaul work.

As a result of a commitment made in NAFTA negotiations, virtually its only undertaking in the maritime sector, the U.S. has clarified that work involving the replacement of less than 7.5% of the hull and superstructure of a vessel can be done without forfeiting its Jones act status. Work involved in the replacement of more than 7.5% but less than 10% of the structure of a vessel can be done without forfeiting the U.S. Jones act status, but approval for such work must be obtained in advance. Having fulfilled its NAFTA commitment to clarify the rebuilding determination, there is no expectation at this time that this allowance for repair and overhaul work will be liberalized.

Although Canada and other trading partners have sought to enhance access to the American market in this sector through trade negotiations, the United States has refused to negotiate improvements. At this time there is no viable recourse available to Canada against the Jones act. Legally the United States has safeguarded the Jones act both in NAFTA and the WTO under the present terms and conditions of these agreements. Therefore future trade negotiations may provide an opportunity for change, but even this will be difficult in light of the strong support the Jones act continues to enjoy in the United States.

In the NAFTA and the WTO Canada protected its ability to utilize similar measures with respect to imports from the United States. An initial assessment of the imports of a Jones act type restriction in Canada indicates that such action is likely to impose significant costs on the Canadian economy while at the same time being unlikely to achieve any success in reducing the Jones act restrictions.

Overall I am convinced that EDC financing support has been competitive.

We have studied the issue and where international transactions have been lost other issues have been found to be at play. I am very impressed with the progress that has been made in productivity and modernization improvements in Canada's yards.

However, when other countries choose to subsidize their cost of production, we cannot fault our suppliers for failing to submit a competitive bid. We cannot expect EDC financing to compensate in these situations since we do not have deep enough pockets to fight on those terms.

I conclude my remarks by once again noting the high level of EDC support to the shipbuilding industry. The good news is that the EDC is currently developing $733 million in potential international business on behalf of Canadian shipyards. Members will understand that I cannot go into specifics because of the commercially confidential nature. However, since our industry has made enormous strides in recent years and is competitive internationally, I expect that much of this business pipeline will become firm contracts.

While the EDC is committed to abiding by our international trade obligations, it will continue to aggressively monitor and pursue deviations by other export credit agencies under OECD guidelines. EDC will continue to be an important partner for the Canadian shipbuilding industry in a highly competitive international market.

[Air Cadets, April 27th, 1999]

Mr. Speaker, this year marks the 30th anniversary of the 778 Banshee Royal Canadian Air Cadet Squadron in Richmond Hill.

From its early beginnings in 1969, the 778 Banshee Squadron has been an active force in the community, whether it has been in helping out with many community activities or in supporting local charities. Its tireless efforts were rewarded in 1998 by the town of Richmond Hill by being awarded the best volunteer organization in the community.

From an initial membership of 30 in 1969 to a strength of 110 today, the cadets are continually learning that hard work and team effort produce positive results. Their motto: To learn, to serve, to advance.

The rewards of joining the air cadets are many. The vision and attributes it builds in our youth are outstanding.

Commanding Officer Javed Khan, his officers and civilian instructor team and all the cadets have much to be proud of. I take this opportunity to congratulate them. I wish them every success in the future.

[Public Sector Pension Investment Board Act, April 26th, 1999]

Mr. Speaker, as far as the pension account is concerned, all those affected will get their pension money regardless. In fact they will get their promised benefits for the law requires the government to make sure that there is always enough money in those accounts.

If we look at the editorial in the Toronto Star today entitled “Whose Pension Surplus”, the government has always, even in times of deficit, covered this particular plan.

The fearmongering we hear on the other side has absolutely no basis in fact. The government has done exactly what it has done in the past, that is keeping up with its responsibility of assuming all of the financial risk of the public service pension plan. We will do that again if and when the need arises.

Members on the opposite side would prefer that deficits be allowed simply to lie where the accounts, unattended, increase to no end and to no purpose. We are asking for a purpose.

Reform Party members in the past supported the government position. Talk about changing positions. They flip flop as if they are acrobatics on the other side. Canadian taxpayers feel secure in knowing that it is covered. We are clearly showing prudence and doing the right thing. Every member will in fact be protected by the actions of the government.

[Interparliamentary Delegations, April 21st, 1999]

Mr. Speaker, I have the pleasure to table in the House in both official languages the report of the Canada-Taiwan Friendship Group delegation of January 1999. We had the opportunity to meet with government officials and business leaders to promote trade and culture.