John Duncan

[Softwood Lumber, October 25th, 2005]

Mr. Chair, it is very interesting to watch the member for Thunder Bay—Superior North and the member for Kenora—Rainy River freelancing on the issue of EDC loan guarantees or backing of receivables, and some applause from the Minister of Trade for that action. Maybe we can expect some action from the government after three and a half years or so of dithering and bumbling over what to do to support our industry in the face of an onslaught by the U.S. lumber lobby and the U.S. coalition.

I would like to recognize the fact that the member for Kenora—Rainy River did talk about the American consumers, the friends in the U.S. who need to be mobilized on this issue. I will recognize the fact that we have the American Consumers for Affordable Homes. The executive director and others from that organization are in Ottawa as we speak. I know they are taking in this debate tonight, and they are not very far away.

The disappointments of the Conservative Party and of my constituents and many people involved in the forestry industry across the country in the lack of leadership on this most serious trade dispute is profound. Once again, one thing that tonight has proven is that the rhetoric that emanates from the NDP members is not very helpful. Nor is the way they misrepresent for political purposes other people's constructive input.

For example, we have had a pretty clear enunciation of what it means to nominate envoys to carry on communications at the highest levels between the Prime Minister's representative and the President's representative. It is a long way from negotiation, but a very essential step.

NDP members are very much in tune with us from the standpoint that we are both extremely disappointed that it took more than two months after the August 10 extraordinary challenge decision, the final decision at NAFTA, before we had an awakening by the Prime Minister. He finally was willing to talk to the President on this dispute. By that time, much of the advantage of our long, hard fought win, which was several years in the making, culminating on August 10 and predictably in our favour, was lost.

My history on the file goes back quite a long way. I have a fairly strong memory of how the government has failed us. I would like to review that a little just to remind people, because there are some inventive imaginations and shameless storytelling that goes on.

As long ago as January 2000, I met with the Free Trade Lumber Council and the American Consumers for Affordable Homes, both in Canada and in Washington, to prepare my party for the upcoming expiry of the softwood lumber agreement, which was the quota arrangement that ran from 1996 to March 31, 2001. We had a well-enunciated position. I shopped it around for the other parties. Right up until March 31, 2001, we had no idea where the government would take us.

There was a strong suggestion that the government was going to roll over the old agreement. It was quite a victory to find out that the Liberals were not going to take that distorting quota arrangement and just roll it into another agreement.

However, there was no signal on that. As a matter of fact, every signal was that the Liberals were going to take no leadership. Their leadership position was that they were going to take no leadership. It was like the anti-leadership positioning of the Liberal Party of Canada, the Government of Canada. I can talk privately about some conversations as to how that was enunciated, but I would just as soon not embarrass those individuals right now.

After that non-rollover of the agreement, we had free trade until May 2002 when the tariffs were put on. This was very obviously going to be a long and hard fought battle. All of the rules were stacked in favour of the U.S., in some respects because of the Byrd amendment, which redistributes tariff money back to the complainant companies in the U.S. That came into effect in 2000. This was also the first time we had a lumber war under the full provisions of NAFTA.

There was some strong and serious legal thought put to where Canada would be placed over time. It was that thought which led to the 2002 proposal on loan guarantees, backed by EDC. Really what this was is EDC guaranteeing our cash deposits to tariffs as a receivable, so that creditworthy companies can retain their creditworthiness and can continue to use that receivable as an instrument for borrowing power if they should need it.

That was put forward and that is what has never actually gone anywhere with this government. It was rejected by the trade minister of the day. It was resubmitted to the current trade minister in 2004, with the response that there would be no response. It was like the no leadership leadership; there would be no response because NAFTA was still going on. At that time, we knew we were in a waiting game again. Industry knew that.

We now have a circumstance where, on September 14 of this year, after the August 10 NAFTA decision, that proposal was resubmitted to the trade minister. The signs so far are that it will not be acceptable to the government because it might ruffle some U.S. feathers. We have this indeterminate process where the government is basically saying, “We are going to come up with a package. We have no idea what the package is”. The government has had three years. I guess that is not enough time.

Why are they dismissing the EDC proposal? There is no technical reason and the Liberals do it for other sectors. They have certainly done this for Bombardier and others. We are not sure what the impediment is.

In the meantime, they have done some ad-hockery. It is the normal non-leadership leadership of the Liberals coming up with some ad hoc positioning of $50 million for an assistance package for the forest sector in the province of Quebec. Other jurisdictions have yet to see anything.

We have major challenges in the forest sector across the country. This is what people need to understand. In coastal British Columbia where I am from, there is major grief and financial hardship. There are companies that are hanging on by their fingernails.

What is going to happen, unless the government displays leadership, is that there are going to be regions pitted against regions or partial regions pitted against each other. This needs to come to an end. We are not seeing the kind of leadership we need.

[Softwood Lumber, October 25th, 2005]

Mr. Chair, a lot has been said on this issue and a lot has been very repetitive.

Based on the member's answer to the question from the Bloc member, he is once again talking about the issue of loan guarantees as if it is a brand new issue. The first time this was presented to the government was in 2002. The government has yet to respond that there is a technical problem with this. It has yet to respond in any way in the negative. It just never has responded in the positive.

At this point, one can only ask this. After three and a half years of strangulation of our industry, when is enough, enough and when will the government say yes?

[Export and Import of Rough Diamonds Act, October 25th, 2005]

Mr. Speaker, rather than go directly to the question I will talk to the preamble a bit. Natural Resources Canada has been a very professional department. It suffered under two years of rudderless leadership and then for a period of time went without a deputy minister. It now has a deputy minister. The former minister continues to be paid not to be minister, and the department now has half a minister who is not being paid to be minister. This is a crazy set-up. This department deserves much, much better. That is my response to the preamble.

In terms of the diamond industry, I am aware of interest in the northern parts of the provinces. I am not aware of anything specific in British Columbia. Perhaps some of that mapping money would help and we could pin that down a little better.

[Export and Import of Rough Diamonds Act, October 25th, 2005]

Mr. Speaker, I am pleased to speak to Bill S-36. It is a fairly straightforward bill, but there is a lot behind it in terms of how we got to where we are today. It is part of the Kimberley Process certification scheme of which Canada is an active member. Actually, Canada chaired the scheme in 2004 and is an ongoing chair of the statistics working group and the participation committee.

One would assume that we would be a leader in this process and here we are dealing with some fairly minor legislation. We are one of only a handful of 48 member nations that are part of this scheme that are not yet in compliance.

This goes to the heart of what has been happening in governance issues emanating not just from the government of the day but from a general malaise at the sponsoring department, Natural Resources Canada, where we certainly had a leadership problem for some time. This is very symptomatic of once again Canada struggling to match its words with its actions. This should have been dealt with in a very straightforward way much sooner.

The truth of the matter is this action has been supported by industry. It is supported by all of the participating territories, provinces and no one is suggesting that this not something we should do and yet it is slow to happen. I asked the parliamentary secretary about Bill C-259, which is a bill I sponsored and has passed the House of Commons, which removes the 1919 tax on jewellery on value added. I understand that bill is now languishing in the Senate. There is some concern that the government is not supportive of the bill despite the fact that the majority of non-cabinet members of the Liberal caucus and basically all of the opposition members voted for that bill.

This is a major concern for the industry because it affects the mining sector and the value added sector. Any of the value added sector which is dealing with producing a product in Canada is actually going to produce for domestic purposes a product that is more expensive than the identical product imported into Canada. That is no way to grow a domestic industry, especially one with the economies of scale that can become a player in the export market.

We have all of the ingredients for a very successful industry in Canada. We produce precious metals. We produce precious stones including diamonds. We have tremendous design and artistry skills. We have jewellery manufacturers, many of which have had to downsize because of increasing global competition.

However much of that is related to either the financial penalty imposed by this excise tax, the hidden tax, or by external investors who have chosen not to invest in the Canadian jewellery sector because they do not like the implications of that tax, how it is imposed and its complexities. It is sort of a double whammy.

The time has long since passed when it was needed. It was to pay for the war effort in the great war, World War I, and yet we do not hear a commitment from the very department, Natural Resources Canada, that should be fighting in cabinet for the speedy passage of that bill. I am quite concerned about that. We have an opportunity here to do something that is very right and I am concerned that instead the government is headed toward doing something that is very wrong.

If we have the right kind of leadership in Canada, we will have, not the world's third largest diamond industry, which has been stated here by Liberal colleagues, but the second largest industry by 2012 if we can give the right kind of assurances that the diamond sector will not be somehow penalized. This is one way to do that.

Another way to do that is to demonstrate, through the budgeting process, that there is a commitment to the mining sector, a commitment to the future and future development of new mines.

The last budget passed by the government was a major disappointment on this front because the mining industry and the prospectors had been assured of significant funding for geoscience. A joint federal, provincial and territorial cooperative geological mapping survey was well developed and there was a strong feeling that the government had bought in, but when it came time for delivery it was not there. This would have cost the federal government a commitment of $25 million annually for 10 years and basically would have mapped great parts of the north, which are not currently mapped, to a level that would have allowed it to be useful.

This is a major infringement on our ability to find and develop new diamond mines and other kinds of mines. We need better leadership on that kind of issue from the government than what we are getting.

Another major disappointment was that the super flow-through, which also applied to the mining sector, was not renewed in the budget. What we now have is some of the provinces actually finding themselves doing more than the federal government, but of course that does not help us in the north where we are into the territories rather than on the provincial scene.

Much needs to be done. We have reached where we are in the Kimberley process because of this whole issue of blood diamonds. It is most appropriate that Canada takes a very significant, strong, positive role in doing everything we can to avoid the issue of blood diamonds.

I have very dear friends who are constituents in my riding who were long time residents of Sierra Leone. I have talked with them about the issue of blood diamonds and it brought it home in a very real way to me. One of the things that was happening is that these diamonds are not mined. These are alluvial diamonds that are basically found on the surface and Sierra Leone is very wealthy in these things. Presumably, if one were to look long enough one could find these things in an exposed fashion without even the need to dig for them.

The areas where these diamonds were found were being controlled by rebels who were largely from Liberia. This was being used to create violence and to control territories in a way that was very ugly. One of the ugly parts was that children were being conscripted by the rebels and then forced to commit atrocities against their own people. The children were often drug addicted by the rebels or placed in compromising positions to spare their own lives or amputation, which is a common terrorist approach used to force their will upon the oppressed youth.

For example, Sierra Leone has the highest rate of amputations in the world and part of the problem is that thumb prints have been used as identification in elections when dealing with people who are illiterate. The rebels used this draconian method to ensure that a portion of the population could not cast their ballots.

When we talk about the Kimberley process and when we talk about how all these measures stack up, we have to be thinking in terms of what it does to address the core issue which is the blood diamonds and ensuring we are not doing anything to compromise the international ability to stomp out these illegitimate diamonds.

I think the Kimberley process has actually accomplished a fair amount on that front but it is certainly not perfect. One thing Canada wants to be sure of is that our production does not get tainted with any suggestion that our system does not have complete integrity because that would affect the marketplace.

We have a country where blood diamonds completely changed its social dynamics. Sierra Leone was once the hub of West Africa, featuring the first university in the region. It was a leader in many cultural and social trends. It also has the third deepest and largest natural harbour in the world. We saw this natural harbour being used in any number of conflicts in the 20th century and most recently by the British during the Falklands War. This has been changed quite dramatically all because of these illegitimate diamonds.

The governance of a country actually becomes compromised in that type of situation and the national treasury, once it is deprived of hard currency, whether it is U.S. dollars, Euros or other forms of currency, is placed in a very impossible position in terms of purchasing commodities on the world market and so on. This is what happened to Sierra Leone. This is what made it so very difficult. We even had situations where we had United Nations peacekeepers in Sierra Leone who became part of the problem rather than part of the solution. I am certainly not suggesting that was the case with any of the Canadian peacekeepers who were there but there was certainly compelling evidence showing that did occur with peacekeepers from other nations who threw their lot in with the rebels in terms of controlling some of the territories.

In terms of what we can do in Canada, another crucial issue is the fact that the Canadian government has been reluctant to enter into any kind of good faith, long term renewable resource sharing with our territorial governments. This discussion, debate, dialogue, discourse has been going on too long and it has made it more difficult to achieve the kind of forward progress that would lead to natural resource development on all kinds of fronts. In my view this is contributing to the ongoing impediments that are now in the way in terms of the development of the Mackenzie Valley pipeline proposal and any number of other projects. It is often difficult to pin down lost opportunity but we have had lost opportunity and that lost opportunity often does not knock again or we may not see it again for generations.

This is an area where we need leadership and an area where the federal government could do a lot but has chosen not to. As a matter of fact, I think the agenda is to slow that entire process down rather than to accelerate it. This is just a different vision of federal-provincial relations from the one shared by the official opposition. I think, once again, we could see some major new developments if the government would change its behaviour.

This summer, I had the opportunity to travel to Yellowknife and then to fly in to one of the two operating diamond mines in Canada in the Northwest Territories, which is about 300 kilometres by air from Yellowknife. I travelled to the Diavik operation which is very impressive. There is a $1.3 billion investment in a place where we have hundreds of highly paid, highly skilled, well trained and mostly northerner employees who are building dikes, pumping out lake water in an environmentally sound and very sustainable way and then removing rock and overburden and then getting into the kimberlite pipes and processing the diamonds which are all used for cosmetic purposes.

This is a huge industry with huge employment benefits and it is all based on this presumption that people will buy these diamonds for cosmetic purposes. That is why the integrity of the system is so important.

[Export and Import of Rough Diamonds Act, October 25th, 2005]

Mr. Speaker, this initiative has the support of the diamond mining industry and the value added sector, so did the private member's bill, which I sponsored in the House of Commons, Bill C-259 on removal of the excise tax on jewellery. That bill is now sitting in the Senate. I was wondering if the Parliamentary Secretary to the Minister of Natural Resources would indicate whether the department will be pursuing support of and quick passage of that bill in the Senate to ensure that we get that very positive bill through to royal assent this fall.

[Softwood Lumber, October 25th, 2005]

Mr. Chair, I have a very brief question. I too was on that interparliamentary trip. We met with our U.S. equivalents in New Brunswick. I thought that we had made great progress. I thought a lot of that progress was dissipated by government actions in the ensuing time since we have been back here. Would the hon. member concur with that assessment?

[Airline Security, October 21st, 2005]

Mr. Speaker, my constituent, John Howard, tried to fly from Vancouver to Toronto and was denied a boarding pass because he has the same name as a Canadian on their do not fly list.

Air Canada has been instructed not to tell Canadians under any circumstances that they are on such a list and to refer all inquiries to the U.S. Department of Homeland Security.

Why has the government sold out Canadian sovereignty so that American authorities now authorize air travel within Canada?

[Trade Compensation Act, October 19th, 2005]

Mr. Speaker, the bill is an act to provide compensation to Canadian industry associations and the Canadian exporters who incur financial losses as a result of unjustified restrictive trade actions by foreign governments.

In the instance most of us are talking about, we prefer to talk about softwood lumber because that is a current example. However, my friend from the Bloc from Joliette is quite correct, this applies to a lot of potential disputes, not just within our NAFTA arrangement but within other arrangements.

I have a fairly long involvement with the portion of the bill that deals with what is being called loan guarantees. I prefer to call it government backing of a receivable because that is what it is.

The government chose, with a Friday afternoon announcement, to back, through EDC, very poor risk receivables with some of the airlines that were purchasing Bombardier products. We now have three companies, which are insured for $3.7 billion by EDC, in chapter 11 bankruptcy in the U.S. The maximum we are asking for here, on a go forward basis, because we cannot make this bill apply going backwards on the softwood dispute, is about $2.4 billion. That would be virtually a guaranteed receivable because we are not talking about money that is sitting with a poor risk. These are cash deposits sitting with the U.S. government. This is a whole different equation. We are looking at a two year window. It deals with the court enforcement of a final NAFTA decision.

The reason I have had quite a bit of background on this is that in 2002 the Free Trade Lumber Council made a proposal to the trade minister of the day and the trade minister of the day turned it down on the basis that there were too many things going on in NAFTA and it wanted to see how this would play out.

Last year the lumber council once again approached the current trade minister and was told that the government wanted to wait until it saw the final decision from the NAFTA panel on threat of injury before it did anything.

August 10 was the big day, the day of the long awaited decision on threat of injury, the long predicted big win for Canada and, guess what? In September the six trade associations from British Columbia to Alberta and Ontario to Quebec jointly made this request of the current trade minister and basically were told no. Have they been told no based on any rationale? No, they have not. Have they been given any indication of why the government is saying no? Only to the standpoint that this might be rather irksome to the U.S. Well, guess what? The reason the Canadian industry saw the need for this kind of program is that it knew the U.S. Department of Commerce would be unreasonable in the tariffs it arranged.

The U.S. has now passed an amendment called the Byrd amendment which distributes these moneys, ultimately to the U.S. complainants, the industry that launched these very complaints against the Canadian industry, in other words, its competitors in the U.S.

Canada's answer to the Byrd amendment, which is the only way it could fight the amendment, is contained in the bill. It is contained in the proposal accepted by my caucus in 2002, along with the Bloc and the NDP. We held a joint press conference announcing our support for such an endeavour. We are still there but the government has never been there and is still not there.

What is the government doing to send a message to the U.S. that we are serious about winning when we have actually won legally? We want our money back. I do not know a stronger way to deliver that message than to carry out this kind of measure. The result of this measure would be that the government would say to companies that they have a receivable and that they have suffered three and a half years worth of requirements to pay a total now of almost $5 billion into these accounts but they cannot call those receivables.

The cumulative weight of all of that is now bringing companies to their knees, which is exactly what the U.S. lumber coalition wants. However we cannot go for another two years because it will not serve our national interests. It is time for the government to step forward and to back our forest industry in the same way it has been prepared to back our aerospace and other industries. This would actually be a lot cheaper. This is the way to go.

However for the government to now argue that this is somehow an ill-considered proposal is contrary to all of the thought that has gone into this over the last three and a half or three and three-quarter years. The government has never actually given a technical reason why this should not proceed and, for every technical reason and for the national interest, it should proceed.

[Points of Order, October 19th, 2005]

Mr. Speaker, it is unfortunate that the government does these kinds of interventions at the last moment when a member of Parliament has obviously invested a considerable amount of time and energy into this exercise.

However, I would first like to point out, on the merits of what has been stated, that what the parliamentary secretary has been calling a loan directly from the government coffers is not a loan. That is the terminology that is used, but it is actually the government backing a cash deposit receivable. This is not taking money from the general revenue account of government. This is simply stating that this receivable will indeed be a receivable. This is done all the time.

There is no reason why trade harassment cannot be one more category. This would not even require a statutory change beyond the impetus of this in order to effect that change. The minister could do it simply by deciding to do it. The same argument largely applies to the other point on the legal costs, which is that the government is already making these kinds of decisions. It has already allocated $20 million in this area.

This creates a scenario where it would be triggered as opposed to leaving it up to the vagaries of the politics of the day for the government. It is very demonstrative of a disingenuous argument to suggest that this would require a royal recommendation.

[Softwood Lumber, October 3rd, 2005]

Mr. Speaker, it is 53 days and $200 million in tariffs since the Prime Minister promised Premier Campbell he would call the U.S. president about the softwood lumber dispute. The Prime Minister needs to be involved, and we need direction from the highest levels of both governments to try and resolve this dispute.

When will the Prime Minister stop his phony domestic posturing and pick up the phone?