Mr. Speaker, in the past month I have done a great deal of reading and listening with regard to the government's softwood lumber agreement and I have come to only one conclusion, which is that this softwood lumber deal is a sellout and it is bad for Canada. There are many reasons why and I would like to take some time this afternoon to list a few of those reasons.
First, it is based on the falsehood that Canadian softwood lumber industries are subsidized. This falsehood was exposed and rejected in every NAFTA and U.S. commercial court ruling, all of which have clearly sided with the Canadian industry.
Second, it gives away $500 million in funds owned by the Canadian softwood industry to subsidize the U.S. Coalition for Fair Lumber Imports.
Third, it provides $450 million in funds to the Bush administration that the President of the United States can use at his discretion, without congressional approval and without any accountability. One can only wonder at what George Bush will do with these ill-gotten Canadian funds.
If we put those two together, it is nearly $1 billion. This is $500 million so the U.S. Coalition for Fair Lumber Imports can come at us again and $450 million in the hands of the President of the United States. I do not know about other members but it gives me chills just thinking about that.
In addition, this deal can be cancelled unilaterally at any time and does not provide stability and predictability to the Canadian softwood industry. It constrains trade unreasonably by applying punitive tariffs and quotas that hinder the flexibility of the Canadian softwood industry. It also infringes on provincial constitutional prerogatives by not just Ottawa but by Washington. It is bad enough that Ottawa can interfere in provincial jurisdiction but to have Washington calling the shots is just unconscionable.
The softwood deal also kills the credibility of the NAFTA dispute settlement mechanism which would have ensured a full refund to the Canadian softwood industry of the entire $5.3 billion of illegally collected duties. Was it not just recently that both the Liberals and the Conservatives were delivering the siren call of the NAFTA deal and how important that was? To see it being scuttled and totally abandoned now is quite remarkable.
This deal sets a bad precedent not only for softwood lumber but for any other industrial sector in Canada. That should send shivers through this country, not just the softwood industry but every other industrial sector. It opens the door to U.S. attacks on all Canadian industries. They can target any industry and go after it because they were very successful with softwood. They will find a group and then follow the same plan as before.
The deal does nothing for the thousands of workers who lost their livelihoods over the past five years. There is nothing in the softwood lumber agreement to deal with the major disruption that the U.S. abuse of trade rules has caused to the working families in the communities of Canada. There is absolutely no compensation for people who have lost their jobs or for the communities that have suffered as a result of those job losses.
This deal will also potentially trigger significant job losses through further consolidation caused by the quotas and export taxes and by discouraging Canadian value-added production and stimulating raw log exports. Value-added industries are the key to our economic future. If we are to be hewers of water and those who can only use our resources to export, we will not progress at all in this modern economy.
The deal also forces a further downsizing of the Canadian softwood industry, with the accompanying huge impacts on softwood communities throughout Canada.
The deal discriminates against Canadian companies that refuse to sign the softwood lumber agreement by resorting to bullying and fiscal arm-twisting. This is an abuse of power.
This deal will not deter American litigation in the near future, as evidenced by the recent move of the Bush government to overturn the United States Court of International Trade, CIT, decision of April 7 and July 14 which ruled that the Byrd amendment could not apply to Canadian merchandise.
I believe I have given a significant number of reasons. In fact, I have just outlined 14 reasons why Bill C-24 is fiscally flawed. The payout is based on Canadian softwood exporters who are owed the equivalent of 95% of the total $5.3 billion in illegal duties paid to the U.S. We know that the Prime Minister has not reached the 95% target, which means additional costs to the Canadian softwood industry and to taxpayers. Taxpayers should be watching this bill very closely because they will be the worst for its passing.
The 15th reason is that the participation process was flawed. While U.S. customs has put in punitive taxes on about 1,500 Canadian softwood companies, the minister responsible initially conducted secret meetings with a core group of about 25 large softwood companies. The consultation process must be far broader than that.
The Standing Committee on International Trade passed an NDP motion in support of further hearings on the softwood issue in northern Ontario, Quebec and B.C. More hearings are needed, not fewer. More hearings are needed by the committee to ensure the recommendations that need to be in place are indeed in place.
The deal does not account for the seasonal nature of the market. Companies are not allowed the flexibility to sufficiently carry forward export quotas to other months, which would lead them to consistently undershoot their export ceilings.
Also, at current or potential market benchmark prices, the Canadian softwood industry would pay more in punitive tariffs under the softwood lumber agreement of 2006 than the current illegal American tariffs. Can anyone imagine making a deal in which we pay more? It is like asking someone to hit us over the head with a mallet. If we pay more and have more charges, we will be less competitive. It is like being asked to be hit again.
The quotas will not replace the export tax until 2007. As of October 1. everyone, east and west, will pay a 15% export tax for three months. This is a considerable sum of money. Also, Canadian softwood companies that seek a refund through the EDC could be losing interest on their money. They could forfeit about 20% of their return and pay an additional tax of 19%. So much for Conservatives the tax fighters. This is astounding.
Bill C-24 contains no contingency provision pertaining to entry into forest and softwood lumber agreement 2006. Consequently, when the tax of 15% goes into effect on October 1, a Canadian softwood company may still be paying an additional 10.8% to the U.S. on that day.
The 22nd reason, and we are logging up quite a few here if you will pardon the pun, Mr. Speaker, is that the Provinces of B.C., Ontario and Quebec are behind this deal for the wrong reasons. The reality is that the three provinces are overexcited about getting the money and have given little consideration to the longer term, broader implications of this deal.
I have many more reasons and I wish I had time to go through all of them but the current Prime Minister was clear on how the softwood lumber agreement should be negotiated. In Hansard on October 24, 2005, he said:
Most recently, the NAFTA extraordinary challenges panel ruled that there was no basis for these duties, but the United States has so far refused to accept the outcome and has asked Canada to negotiate a further settlement.
I will repeat what I have said before and I will be as clear as I can. This is not the time for negotiation or for compliance and that was before the final legal victories. I speak from the heart and for my constituents in the forest city of London when I say that this is a sellout. We cannot accept this deal. We must negotiate something that works for Canada and Canadians.
