Mr. Speaker, I rise to speak in favour of the motion brought forward by the hon. member for Fundy—Royal.
As my colleague, the member for Halifax West, stated yesterday in the House, we in this party believe that Canada is in desperate need of a national shipbuilding policy.
Shipbuilding has a vital place in the economy of this nation, in its heritage and, more importantly, in the lives of numerous coastal communities. To let it wither on the vine would be a wanton act of industrial sabotage that would haunt the present government for generations to come.
Canada was once a key player in the global shipbuilding industry. As a major coastal nation and a central partner in the Allied military effort during the second world war, Canada entered the post-war years with a robust and healthy shipbuilding sector.
Today, after decades of short-sighted Liberal and Conservative stewardship, the industry is on its knees. The industry which once was a vital part of our industrial base is now barely afloat. We have reached the stage where we can barely meet our own modest shipbuilding needs, let alone aspire to become a major provider to the global market.
More sadly, the tragic lack of foresight and innovation exhibited by successive Liberal and Conservative governments have condemned thousands of highly skilled workers to unemployment or idleness. Since the beginning of this decade alone, the workforce in this sector has fallen from 12,000 to less than 5,000 hourly and salaried workers in 1996.
This is a shameful performance. It is especially so when we reflect on the fact that these same workers have made tremendous strides in improving their value added and productivity per worker, increasing it by almost one-quarter between 1986 and 1993. Alas, no such vision or dynamism has been apparent in the approach taken by the government to the future of this strategic sector. Apathy, resignation and ineptitude have been the hallmarks of its approach.
The government approach has had devastating consequences. Total sales of the Canadian shipbuilding sector have declined by about one-half since 1991, from $1.5 billion to less than $800 million in 1996. The decline in the value added of of the shipbuilding industry to the Canadian GDP has been even more dramatic, falling from $450 million in 1990 to less than $200 million today. While other countries continue to make the necessary investment in upgrading their shipbuilding yards and technology, with some exceptions Canada has continued to rely on outdated capital equipment.
Most forecasts suggest that the demand for new ships and marine technology will grow rapidly in the coming years. The need to modernize our Great Lakes fleet, the requirement for high speed ferry and commuter services, developments in the offshore oil and gas sector all point to a renewed demand for ships. However, every indication at present is that Canada is in no position to meet this renewed domestic demand.
If we are ill-equipped to meet domestic demand, our preparedness to meet global demand is even weaker still. As world trade grows, demand for new, economically efficient ships to replace an aging world fleet will be strong. Close to one-third of the world fleet is more than 20 years old. In sectors such as oil tankers this figure is much higher. There is also demand for new cruise ships from the expanding leisure industry. Opportunities for economic growth in jobs in the coastal shipbuilding yards abound, yet the minister sticks to his banal and naive view that he will not be dragged into a subsidies bidding war.
I can assure the minister that while he clings to these doctrinal absurdities, other nations are busily preparing themselves to meet the renewed demand. The U.S. with its Jones Act ensures that cargo carried between U.S. ports is carried aboard U.S. ships that are U.S. built, U.S. registered, U.S. owned, U.S. crewed and repaired and serviced by U.S. firms.
European nations use innovative tax credits, competitive bank financing, share purchases and tax shelter programs to encourage investment in shipbuilding. In Germany, for instance, individuals or corporations who invest in ship shares receive total deductions equal to 100% of the total investment.
The do nothing approach taken by this government to date is no longer acceptable. Canada must show some audacity and seek to develop new markets for our industry in niche areas such as ferries, icebreakers or specialized cargo ships. Canada must get out of the business of subsidizing foreign shipbuilders, many of whom utilize cheap labour and fail to comply with fair social and environmental standards.
Since the completion of the frigate building process and the refurbishment of Tribal class destroyers, Canada's shipbuilding industry has been waiting in vain for direction from Ottawa. Hard pressed coastal regions are looking to Ottawa to abandon its dismal hands off policy which has been so fatal to the industry. As it is increasingly obvious that neither the minister nor his senior officials have any idea how they might begin to re-invigorate the industry, let me suggest some basic life support measures which would benefit the industry over the medium to longer term.
First, let us rid ourselves of the short-sighted and damaging notion that private market forces alone should determine the future development of this important industry. While we do not endorse an escalating subsidy war, it is time to recognize that governments have a role to play in managing a fair allocation of shipbuilding production between competing countries. A managed trade approach, akin to the auto pact, would ensure that the Canadian shipbuilding industry would receive an overall volume of new orders consistent with our own shipbuilding requirements. This would amount to the extension of the U.S. Jones Act principle to international shipping and would ensure that each major seagoing nation would achieve a certain target level of shipbuilding activity.
Second, the government should lobby for the inclusion in any future international agreement regulating shipbuilding of a social clause. The problem in the past was that the term subsidy had been defined too narrowly. In many countries anti-union laws, low wages and non-existent health and safety laws amount to a subsidy to private shipbuilders. In these cases a subsidy is paid by the workers through lower wages or less safe working conditions rather than explicitly by the government.
We recommend that future international agreements in relation to subsidies take a broader view and include a social clause requiring participating countries to respect basic social, democratic and labour norms.
Third, we must recognize and co-ordinate the close links that exist between the regulation of the shipping industry and government efforts to support the shipbuilding industry.
In the past, shippers have been given too much discretion to select companies on the basis of price alone. The result has been that considerations relating to Canadian content, basic health and safety and environmental concerns have been neglected. In many cases the trade in Canada has become dominated by foreign flag vessels, flying flags of convenience from low tax jurisdictions such as Panama.
In fact, it is alleged by observers of the industry that Canada Steamship Lines, a company owned by the finance minister, has made use of these tax evading measures in the past. We believe that to be simply scandalous. It is time for Canada to implement a Jones like act that would require minimum levels of Canadian content in shipping activities. Furthermore, it is time that we insisted that ships traversing Canada's inland waterways be Canadian built and Canadian flagged.
Fourth, Canada has long been relying on its production and export of natural resources. We now recognize that greater value must be added to these raw, unprocessed resources here in Canada. It follows that Canada should be more involved in constructing, maintaining and operating the vessels that carry our natural resources to their destination markets. Canada is a great trading nation and it makes obvious sense that we have shipping and shipbuilding industries that reflect our stature as one of the top ten exporting nations.
Finally, it is time the government paid greater attention to maintaining appropriate levels of investment in our coastal infrastructure. Liberal cutbacks to lighthouses, coast guard search and rescue services, port upkeep and other maritime services have been highly detrimental to the safety, security and efficiency of our maritime communities. New public investment is needed by the coast guard and would generate additional work for Canadian shipyards.
In conclusion, I would like to state that we reject the view that the key decisions affecting the shipbuilding industries should be left to private shipbuilders and the private shipping companies. It is time for the government to embrace the public interest in promoting a vibrant, domestic shipbuilding sector. Shipbuilding workers, coastal communities and Canada's status as a major maritime nation are too important to be left to the vagaries of the marketplace.
To my colleague for Fundy—Royal, I too endorse your request that this important motion be a votable one. I will do what I can to support the motion. I beg your indulgence, Mr. Speaker, to look into that aspect.
