James Rajotte

[Gasoline Prices, February 11th, 2005]

Mr. Speaker, I want to ask my colleague a couple of questions to clarify some matters.

He seemed to question the validity of the figures that are available to us. As he correctly pointed out, it was in 1995 through program review that the current Prime Minister, then the finance minister, eliminated a lot of the functions within the Department of Natural Resources to examine gasoline prices. However, there are public companies, such as MJ Ervin & Associates, that publish the prices every day on the Internet. I was on the committee when we studied this issue. In fact none of the witnesses who appeared before us, even those who alleged collusion, questioned the validity of the figures put out by MJ Ervin & Associates.

I would like to get the member's comments. Does he accept the figures that are put out by MJ Ervin & Associates? Are those figures correct in his view, or are they wrong? Is that one reason he is proposing this motion?

Also, the Competition Bureau can already investigate these matters if it gets letters of complaint from six citizens. This seems to me to be a fairly low threshold. If he thinks that is not sufficient, and obviously he does, why then does he see that as insufficient?

[Telecommunications, February 11th, 2005]

Mr. Speaker, what the industry has been calling for is less regulatory burden on the industry. This is what even members of the Liberal Party called for over two years ago, but the government has failed to act on it.

The fact is that the CRTC and the regulatory framework governing this industry are cumbersome, slow and outdated. Foreign ownership restrictions need to be relaxed. The government has failed to appoint a vice-chair for the telecommunications industry. The VoIP decision has been delayed.

The fact is, one of our best industries is left to dither while this government is dithering over a decision. When is this government finally going to relax the burden on the telecommunications industry in Canada?

[Telecommunications, February 11th, 2005]

Mr. Speaker, a broad consensus is emerging in calling for a telecommunications policy review. The Canadian Chamber of Commerce, Bell Canada, Motorola, Mitel and the Montreal Economic Institute have all called for the government to review their telecommunications framework.

What is the delay? Why is the Minister of Industry dragging his heels with regard to a review of telecommunications policy in Canada?

[Manufacturing Industry, February 11th, 2005]

Mr. Speaker, I stand today to applaud Canadian Manufacturers and Exporters on the release of its excellent plan, “20/20: Building Our Vision for The Future”. This plan is very timely in light of the wage stagnation in Canada, the growing productivity gap between Canada and the United States, and increasing challenges from and opportunities in emerging markets like China, India and Brazil.

The CME calls on the government to rebuild and enhance our relationship with our major trading partner, the United States, to ensure that our goods have access to the world's richest market. To do this we must address its legitimate security concerns and invest in key upgrade projects at the border.

The report also highlights the need to reduce the tax and regulatory burden on Canadian businesses. We must harmonize our regulations both within Canada and with our major trading partners to reduce the costs for business. Business taxes should be reduced and existing tax credits and capital cost allowances should be improved to better assist manufacturers. The Canadian government must also begin to look at an overall energy framework and realize the importance of a reliable cost effective energy supply to the Canadian economy.

We must above all recognize and appreciate the importance of the manufacturing sector in Canada.

[Patent Act, February 9th, 2005]

Mr. Speaker, I too want to commend my colleague from Windsor West for bringing this issue forward. I know it is an issue very near and dear to him.

I am pleased to speak to Bill C-274, an act to amend the Patent Act. This bill would seek to repeal the notice of compliance regulations and reduce the extent of patent protection. It was actually a former Conservative government that introduced these regulations in the first place that this bill seeks to amend. The Conservative Party today continues to believe that the intent of a pharmaceutical policy should be to achieve a balance that encourages the development of new drugs and treatments for Canadians, and at the same time provide those drugs to Canadians at an affordable price.

What this means is that the Conservative Party supports regulations that respect property rights and encourages research and development into new drugs by brand name companies. At the same time we support regulations that allow generic manufacturers to offer similar medicines at a lower price after a reasonable period of time. We also support the existing system now where the Patented Medicine Prices Review Board regulates the prices of brand name drugs here in Canada, which actually does not happen with the generics, and that is an important point we should make here.

I want to identify two types of pharmaceutical manufacturers. It is important, especially for viewers watching this, to be aware of this.

The first is what is called the brand name or the research-based pharmaceutical company like Pfizer, GlaxoSmithKline, AstraZeneca, Merck Frosst, et cetera. These companies do the basic research and create drugs from scratch. These drugs are certainly expensive to research and develop, and they are one side of the pharmaceutical industry.

The second type of manufacturer is the generic manufacturer. In Canada, basically the two largest are Apotex and Novopharm. The generic companies copy a brand name drug after its patent expires, although as the question I asked the member earlier indicates, through the early working provisions they actually research that so that they are able to go to market as soon as the 20 year patent expires. It is important to note though that they copy certain drugs. The generic industry copies the drugs which are generally the most lucrative, and that obviously makes economic sense to them, but they do not copy all the drugs, especially the ones that do not in fact raise a lot of revenues.

As written, Bill C-274 in our view would seriously harm the brand name pharmaceutical industry in Canada by removing all the protection regulations currently provided to the brand name companies. The stated objective of the bill is to exclude drugs from the scope of the regulation-making power provided for in subsection 55.2(4) of the Patent Act, while making other amendments to reduce the extent of patent protection for medicines. The bill would achieve its objective in part through appeals in the notice of compliance regulations.

In our view, the bill would ignore our obligation under the TRIPS agreement, under these multilateral agreements, to provide 20-year patent protection for brand name pharmaceutical companies. The fact is that no other country treats pharmaceutical patent issues the same way it treats patents for cars, telescopes or other industries. For example, and I know the member in his speech mentioned this, the pharmaceutical industry does have patent rules that are particular for that industry, but that is the same as in other countries.

The fact is that if a generic manufacturer ignored a patent and put its product on the market before the patent had expired, it would take years for a brand name pharmaceutical company to go through the regular court system and a full infringement action. If the brand name won, it would likely never gain back the market it lost to the generic company because that is how quickly people would switch because of difference in price. It would take more time to recoup damage costs.

Our concern is that if this bill were passed companies like Merck Frosst and GlaxoSmithKline would likely remove themselves as much as possible from Canada. I know some people do not see this as a concern. Speaking personally as a member from Edmonton, I know that these companies invest a lot into R and D of infectious diseases, for instance, Dr. Lorne Tyrrell, the former dean of medicine at the U of A, is researching into hepatitis B and hepatitis C at the U of A.

These are the companies that are investing the money into trying to research and create new drugs to lengthen or to certainly improve human life. Canada's brand name industry spends roughly $1 billion on R and D. It hires extremely well educated Canadians, most obviously with post-secondary degrees, and it produces some truly amazing drugs such as the asthma drug Singulair in Montreal.

I acknowledge that there are problems with litigation on certain drugs which have multiple patents. I support efforts to reduce the litigation, at which I know the government is currently looking. I support the member for Windsor West in making an effort to bring those regulatory changes open, whether it is before a committee or before the House.

However, we want to seek to preserve that balance. It is important on the patent issue to make this known. In the hearings we have had, both Health Canada and Industry Canada pointed out that most drugs had either one or two patents. It is the big, blockbuster drugs like Paxil or Losec that have eight patents, which is the big cause of most of the litigation between the generic and the brand names in Canada. That is an important point to make. In our view the bill shifts the balance away from that precious balance to entirely in favour of the generic manufacturers.

In our view the generation and development of new scientific knowledge is pivotal to the growth and the prosperity of the Canadian economy. The Conservative Party would like to see the brand name manufacturers invest more money in R and D. We have asked them to do that and we will push them to do that, and to hire even more well-educated Canadians.

If the bill were passed, it would have quite the opposite effect on the industry, and it would have a negative effect on the Canadian economy.

I understand fully that the pharmaceutical industry is litigious, but even as former industry ministers from the government side have pointed out, will this ever stop? I think the changes in the regulations that the government is looking at now will certainly reduce that. The fact is with the amount of money around the industry, it is likely to be litigious long into the future.

I would like to explain some of the issues relating to patents and how the automatic injunction and early working provisions work. Normally a patent is exclusive. A patent cannot be broken before it expires. However, the notice of compliance regulations allows generics to copy and conduct clinical trials of drugs still under patent as part of a system called “early working”.

To use plain English and to use a specific example, before its 20 year patent expires, the generics can create a copy of the asthma drug, Singulair, for mass production. They can conduct their human trials on the copy and they can get Health Canada to review and approve their copy before the original patent on Singulair, which is owned by Merck Frosst, has expired.

The problem is that once this copy has been approved, the generics do not want to wait until the patent expires, especially if it is a blockbuster drug like the ones I mentioned, the anti-depressant Paxil or the ulcer drug Losec. Generics, according to the testimony from Health Canada, challenge patents to get on the market earlier. They will take the brand name companies to court and argue that the patent does not apply to their specific copy of the drug.

As members before me mentioned, the Standing Committee on Industry in June 2003 conducted hearings on this matter. We asked Industry Canada if it was common for generics to attempt to break brand name patents before the patent has expired.

To quote the question my colleague from Yellowhead asked at the time of Industry officials, “Have the generics challenged the 20 years? Have they tried to put a product on [the market] before the 20 year period [has expired]?” The resounding answer from officials was yes. To quote them, “Yes, I'm not aware of a drug where they haven't”.

Make no mistake, early working provides the generic companies with a distinct competitive advantage over the patent holders and over other countries where early working does not exist, such as the United States. Thus, there is a counterbalancing measure in the notice of compliance regulations which is called an automatic injunction. It is also known as linkage regulations by the brands.

When a generic wants to copy a brand name drug, it must inform the brand. The brand has 45 days to advise the generic company as to whether or not the brand believes the generic is infringing on its patent rights. If the patent holder agrees that patent has expired, then the generic is given permission to go to market. This happens repeatedly once the patent is not contested.

However, if the brand believes their patent would be infringed by the introduction of a generic product, the brand is granted an automatic injunction. The brand goes to the federal court and is granted 24 months for the case to proceed.

The generics call this practice evergreening. Their argument is that the brand gets its 20 years plus the 24 months, so at least 22 years. However, what this fails to disclose is the fact that the generics can actually introduce in year 17, 18 or 19 and the 24 month period can actually be within the 20 year patent. If the generic tries to get on the market in the 20th year of the patent and the brand is granted an automatic injunction, in that case it extends the life of the patent.

We, in this party do not support the bill because we believe it upsets the balance between the research companies and the generic companies.

[Patent Act, February 9th, 2005]

Mr. Speaker, I note that my colleague is recommending that we eliminate the NOC regulations, but he is not recommending that we eliminate the early working provisions. According to the Industry Canada officials who presented at committee, early working provisions and the NOC regulations are flip sides of the same coin. My colleague obviously disagrees with that.

Could the member explain to Canadians what are the early working provisions? Why does he not see them as flip slides of the same coin? Why is he recommending eliminating the NOC regulations but leaving in the early working provisions which certainly favour the generic industry in Canada?

[Supply, February 8th, 2005]

Mr. Speaker, we are supporting today's motion.

In terms of the specifics of the motion, the Conservative Party supports programs that look at human resources development. The motion itself is not overly specific on what type of program so I cannot respond for my party on that point. When the Conservative government signed the free trade agreement, measures were in place at that time for workers in displaced industries.

That is certainly a reasonable request.

[Supply, February 8th, 2005]

Mr. Speaker, my hon. colleague is absolutely right. Not only with this industry but with other industries, the fact is the government waits until there is a crisis and then it tries to implement a stopgap ad hoc measure.

Members of the Bloc have been asking these questions for years and years. In the last session they were asking these questions. Before Christmas we were all asking questions on this issue. The finance minister stood up day after day and said that the Liberal members were raising the issue with him constantly. He gave that answer about 20 times instead of actually doing something.

I believe that up to six mills closed in Huntingdon. The day after, the government called a press conference and announced an interim package. It announced a big figure and then it said it would be over five years. There is no long term vision or response to serious questions.

The softwood lumber industry was in the exact same position. For years members in this caucus, in particular from British Columbia, were raising the issue of softwood lumber and that the agreement was going to expire. The government had no concern about it. The agreement expired and now we are in protracted negotiations and legal fights with the United States over the issue. Thousands of workers have been displaced as a result of complete inaction on the government's part.

The hon. member is absolutely correct. The Bloc is right to hold the government's feet to the fire on this issue. What is truly sad though is that workers, whether they are in textiles or softwood lumber, have been completely displaced by the government's inaction and indifference. That is completely unacceptable.

[Supply, February 8th, 2005]

Mr. Speaker, it is my pleasure today to rise to address the motion before us. I will be splitting my time with the loquacious member for Edmonton—St. Albert. The motion reads:

That the House acknowledge the inadequacy of the assistance plan for the clothing and textile industries which was announced by the federal government following the closure of six plants in Huntingdon, and that it ask the government to further elaborate with regard to the following elements: the use of safeguards provided for in trade agreements, the implementation of measures to encourage the use of Quebec--and Canadian--made textiles and the creation of a program to assist older workers.

The Conservative Party has long been a supporter of free and fair trade and long advocated that if we as a nation of a small population with a large land mass with unparalleled natural resources have fair trading rules and a level playing field, Canadians will do well, have done well in the past and will succeed into the future.

The problem is how governments in the past, particularly this government, have represented Canadian industries and citizens in international trade agreements, and it has not been up to par. In general, the Conservative Party will support the motion, although not perfect, for certain reasons.

The first reason is we believe that more care and diligence must be put into trade agreements and negotiations. In our view some of the biggest economic problems facing Canadians today are due to a lack of attention by the government to huge trade issues, like in textiles, the beef industry, softwood lumber and elsewhere.

The second reason we will support it is the Liberal government has implemented a program, which I think the motion is referring to as well, through the least developed country initiative which is unfair and has caused serious harm to the industry. Under former Prime Minister Jean Chrétien, the government made a decision to provide duty free and quota free entry for textiles and clothing from 48 least developed countries. That decision has had a profoundly negative impact on the textile industry, and I will explain why later in my speech.

The third specific reason to support the motion is we support any examination of programs delivered by the human resources department to assist workers, not only older workers but workers who have been displaced in areas such as textiles or any other affected trade areas. This was something that was part of the original free trade agreement which the government at that time recognized. The Conservative government recognized the impact of the trade agreement on certain industries and tried to address that.

I want to point out some of the facts of the textile industry for the information of people. It is a vibrant modern manufacturing industry. It has a long and proud history in Canada, particularly in the province of Quebec. It is easy to understand why the industry is very important, particularly to Quebec and the Bloc Québécois. Roughly 47,000 Canadians are employed in textiles across Canada and a further 97,000 Canadians are employed in the apparel industry.

Textile and apparel jobs are an important source of employment for new Canadians. Approximately 40% of apparel workers are first generation Canadians. The textile industry comprises two subsectors: textile mills which includes fibre, yarn and thread mills, fabric mills, textile and fabric finishing and the fabric coating; and textile product mills which produce textile home furnishings such as carpets and rugs, curtains and lining as well as other textile mill products, excluding clothing which include tire cord fabrics, rope, textile bags and canvas. In addition, a significant number of textile workers produce textiles for motor vehicle seating. Obviously, it is another important industry in Canada.

Despite the fact that the R and D expenditures seem quite moderate, the textiles industry is touted as one of the most innovative in Canada, based on an innovation index designed by Statistics Canada. Critical to the successful adoption of these advanced technologies is a continuous upgrading of the industry's workforce knowledge and skills.

On trade, global integration is constantly reshaping and transforming our own economy. One of the most important issues facing Canadian industries is a safe and free movement of goods across borders in a timely manner.

Trade remains key to the future prosperity of all industries in Canada. Trade barriers limit Canadian firms in their capacities to grow and participate in foreign markets. Trade barriers cause investors to bypass Canadian businesses and hinder the mobility of goods and services in Canada. The Liberal government has not worked as effectively as it could with international organizations and individual nations to reduce the protection of policies of other countries to secure free trade agreements and to reduce the level of subsidies that have happened in other industries in other countries. The goal of governments in negotiations should be to secure agreements that benefit Canadian manufacturers by allowing them to compete and succeed through competition.

I want to address the LDC initiative and explain my perspective on it. This initiative, in combination with the appreciating Canadian dollar, has caused many in the Canadian textile industry to start importing rather than producing domestically. As of January 1, all the quotas Canada had on imported clothes from foreign countries were removed with some minor exceptions that came at the last minute.

The government greatly underestimated the impact on textile products of its decision to produce duty free and quota free entry for imports of textiles and clothing from 48 least developed countries. The LDCs are the world's poorest countries as designated by the United Nations on the basis of specific economic and social criteria.

We support this initiative and the industry supports the concept of the initiative. The problem is the textile and apparel manufacturing powerhouses, like China, India and Pakistan, will also through this initiative be given greater access to the Canadian market. That goes against the goal of the program, in and of itself. It is supposed to help the LDCs. It is not supposed to help emerging and developing economic powerhouses like China and India, which will obviously be some of our main competitors in this century.

The impact of the federal government's decision to provide duty free and quota free entry for imports of textiles and clothing from these 48 least developed countries has been devastating to Canada's textile industry.

The program has recently been changed. The industry has brought this to our attention on this side and I know it has made it very well known as an issue to the other side of the House. It has been very frustrated by the fact that the issue simply has not been addressed to its satisfaction.

The government has focused at the very last minute on the duty remission orders, and on doing a package. As the Bloc has already pointed out, after the mills had closed down at Huntingdon, it did the package, I believe, a day after, which was obviously a late response. This initiative is doing much more harm, and it is something to which the government should respond.

The specific reason for this is that under the rules of origin of this program, up to 75% of the ex-factory price of garments made in an LDC country can be of non-LDC materials from general preferential tariff countries, such as China, Korea, India, et cetera, countries with huge and sophisticated textile and clothing industries that hardly need Canada's help to export textiles and clothing.

The result is that these rules of origin deprive the least developed nations of any incentive for foreign investors to establish textile manufacturing facilities in their countries, investment that would lead to long term employment and advancement opportunities for the people who need it most. The purpose of the program was to encourage investment in these least developed nations as a way of lifting them out of their current economic condition. It is not doing that. In fact, it is allowing nations, which are turning into economic powerhouses, to access this program for their benefit.

The rules under the LDC also relegate the LDCs to clothing assembly, and only as long as they remain the cheapest source of labour in the world by paying the lowest wages in the world. As a result of the program, textile manufacturers across this country are being forced to close their facilities on an almost daily basis.

In terms of solutions, it should be possible to amend the LDCs' rules of origins to require that products made in the LDC countries are eligible for benefits under the program only if they are made from these least developed countries or from Canadian inputs. In addition, it would be appropriate and effective if an LDC-specific safeguard mechanism were to be instituted to deal with import surges.

The long term solution in the industry rests with tariff reductions. Our challenge to the government is in line with the motion. Why does it take the government so long to act on issues such as textiles? Why does it take so long to negotiate a fair tariff reduction agreement?

The previous speaker, the Parliamentary Secretary to the Minister of Health, mentioned something about China's agreement with other WTO nations. It is our understanding that President Bush, when he was in China last, got an agreement from the Chinese to limit their manufacturing and exports into to the United States, particularly as it affected the textile and apparel industry. Our understanding is our Prime Minister did not even ask for this, to which the government should respond.

In conclusion, we in the Conservative Party will be supporting the motion by the Bloc Québécois. We feel the final solution to the industry's challenge obviously involves the Canadian government allowing our manufacturing sectors more access to foreign markets but also ensuring that there is as much a level playing field as possible. If that happens the fact is our industries and companies will succeed very well.

[Telecommunications Act, February 7th, 2005]

As the member from Kelowna says, it made sense. It was a good model. The government should have used it.

The other issue is really the administration and maintenance of a registry in Canada in general, because as so many MPs and Canadians across this country know, the government has been rather lacking in the whole establishment and maintenance of registries, the firearms registry being of course the most obvious example of what not to do in setting up a registry.

There are certain questions that I believe we as legislators should ask at this point. How will this list be maintained? How will the list be accessed? Who will maintain the list? If it is not the CRTC, which organization will do it? What will be required of telemarketers? How often must they check the list? Will there be a maintenance fee for telemarketers? Who will pay for the list? Who will pay for updating, monitoring and enforcing the list?

These are all questions that are not answered in the legislation and they must be before Parliament passes it.

Why is there no requirement for an annual report to Parliament on the cost of the administration of the list? The fact is that we in Parliament must have more details on how the CRTC plans to set up, administer and regulate this do not call registry.

In addition to the private member's bill I mentioned, there are two excellent examples of do not call registries, one in the United Kingdom and one in the United States. I want to touch briefly on the American list because I believe it offers Canada some guidance.

The American act is called the telephone consumer protection act. It is extremely detailed. It restricts the use of phones and fax machines to deliver unsolicited advertisements and it limits the hours during which telemarketers can call, something that was referenced by the previous speaker; we get the same complaints when telemarketers call on Sunday mornings or late at night. These are reasonable restrictions that we can put on telemarketers.

However, my point is that this is all laid out in the American legislation. The Americans did the proper thing. They laid it out in detail instead of just introducing a bill with no details and hoping that the committee could fix it.

On June 26, 2003, the Federal Communications Commission revised its rules implementing the telephone consumer protection act. The FCC established, in coordination with the Federal Trade Commission, a national do not call registry. The registry is nationwide in scope and includes virtually all telemarketers, with the exception of political organizations, charities and telephone surveys, three of the exemptions that I mentioned.

A telemarketer or a seller may call a consumer with whom it has an established business relationship for up to 18 months after the consumer's last purchase, delivery or payment even if the consumer's number is on the national do not call registry. Consumers registered on the national registry will be able to provide prior express permission in writing to companies from which they wish to continue to receive telemarketing calls.

The initial legislation tabled in Congress looked a lot like Bill C-37. The major difference was the oversight embedded in the bill by Congress. The FCC and FTC had to report to the House of Representatives within 45 days of the bill becoming law with an analysis of the telemarketing rules, any inconsistencies between the rules and the effect of such inconsistencies on consumers and persons paying for access to the registry, and proposals to remedy any such inconsistencies.

In addition, the American legislation required an annual report and includes some details required of the report, such as the number of people using the list, the fees collected for access to the registry and an analysis of the progress and the operation and enforcement of the registry.

This is a piece of legislation that the Conservative Party believes we can model our legislation on. We can certainly model our legislation on the private member's bill of the member for Burlington from the last session. It would be interesting to find out why the government in fact did not model Bill C-37 on either of those previous pieces of legislation.

In conclusion, I want to state very clearly that the Conservative Party will support the establishment of a national registry as long as it is detailed in the legislation, as long as the parameters are set by Parliament, as long as we know exactly who is going to administer the list and the details are set out, and as long as there are some reasonable exemptions provided for charities, for political organizations and for companies that wish to contact their current customers.

I think those are all reasonable requests that our party is making. We certainly hope that we can fix this bill at committee and that this type of legislation or this concept of a registry will become law in Canada in a very short time.