Madam Chair, I am pleased to take part in this debate, especially since I believe we all agree in this House that it is unacceptable that the softwood lumber dispute has not been resolved after 41 months. I find it somewhat unfortunate, especially from the opposition parties, that we are engaging in partisan politics over a dispute that not only is making our softwood lumber industry weaker, but is threatening the survival of many communities.
That is how people seem to see it in Ottawa. I remember that when the dispute began in 2002, I moved a motion on behalf of the Bloc Québécois in support of the government taking initiatives to go back to free trade. I received a phone call from the Minister of International Trade, who has since become the Minister of Foreign Affairs. He asked me what was behind this motion, what it was hiding. It was not hiding anything whatsoever. It quite simply reflected the Bloc Québécois' desire to find a solution as quickly as possible to this dispute that was harming Quebec and all of Canada.
Unfortunately, we obviously did not achieve our goals. A great deal of the responsibility truly lies with the Liberal government.
We all recall that on May 22, U.S. authorities found that there had been subsidies for the wood, there had been dumping and risks of hardship to the U.S. softwood lumber industry. Accordingly, they imposed 27.22% duties.
As I was saying, the motion I had presented received unanimous consent from the House. The Canadian government, with support from the Bloc Québécois and the entire House, went before NAFTA and WTO tribunals to dispute these countervailing duties, which we felt were unjustified.
According to NAFTA rules, 10 months would have sufficed to resolve the dispute. We are now at 41 months, or four times as long under NAFTA rules. This is totally unacceptable. I am sure that all of us in this House realize that we have been victims of stonewalling by this protectionist U.S. softwood lumber industry and of decisions made by U.S. authorities for their own reasons.
We are currently awaiting the outcome of a dispute that was technically over on August 10, 2005. I would remind hon. members that the extraordinary challenge committee brought down a ruling finding that there was no violation of the dispute settlement procedures in any of the NAFTA rulings by the various tribunals. The Americans were therefore not entitled to keep the $5 million currently being held in trust.
What is more, on October 6, again under NAFTA, a ruling was brought down concerning subsidies to the Canadian softwood lumber and forestry industries. This was a first, we must make that clear. Throughout the numerous decades of the softwood lumber dispute, we have rarely won decisions all the way to the end of the legal process.
The NAFTA panel confirmed that there was no industrial subsidy. That was the icing on the cake. The ECC ruling was sufficient in itself to solve the problem because it confirmed that no prejudice was caused to the U.S. softwood lumber industry.
We ought not therefore to be having to discuss this dispute here. It ought to be settled, but the problem is that the U.S. authorities along with the protectionists in the softwood lumber industry, have decided to use delaying tactics and not to act on the NAFTA special panel rulings.
This leads us to a matter that goes beyond this specific issue and heavily involves the government and the Minister of International Trade. The whole spirit of NAFTA is at stake. We are constantly being reminded that softwood lumber exports—in the case of Quebec, 3%—are not the only thing Canada exports to the U.S. We agree, but for the first time in nearly 20 years, the spirit of NAFTA and its regulations have been broken and the chapter 19 dispute settlement mechanisms challenged.
Through its Subcommittee on International Trade, Trade Disputes and Investment, the Standing Committee on Foreign Affairs and International Trade has conducted a very comprehensive study of the issues related to the chapter 19 dispute settlement mechanism.
The American attitude is calling into question the efficiency of this chapter 19 concerning dispute settlement. It is also calling into question the confidence that everyone, whether in Canada, of course, Quebec, Mexico or in the international community, may have in this agreement. The American attitude concerning the Byrd amendment, which was declared illegal by the World Trade Organization, combined with the fact that Congress has not taken any action as of yet, have exacerbated this distrust on the part of Canada, Quebec and the international community as a whole. Therefore, for the first time since the free trade agreement was signed, we have been forced to go before American courts, as we used to.
The whole purpose for NAFTA was to spare the Canadian, American or Mexican industry from having to depend on the traditional judicial mechanisms. Now, the entire free trade agreement is being called into question. This is why I believe that we have to be extremely diligent in following up on this issue.
At stake is not only softwood lumber, but also the continued existence of the free trade agreement, as evidenced by the suit launched by the American softwood lumber industry—again, its protectionist component—concerning the constitutionality of chapter 19 of the free trade agreement.
We will recall that negotiator Gordon Ritchie had told the press that, had it not been for chapter 19, Canada would probably never have signed NAFTA.
This effect the dispute is having on NAFTA makes it crucial where the future of trade relations and just plain relations between Canada and the United States are concerned. But there is also its effect on industry.
We will recall that, a few days ago, on October 19, Carl Grenier gave a presentation to the Economic Club of Toronto, reminding his audience that the $5 billion in countervailing duties held at the border represent more than three times the combined net income of the 12 major Canadian forest companies over the past three years. These figures may sound low, but for the forest industry, this is significant in terms of capital expenditures and investments that cannot be made. It also means jobs that are not being created, or which are lost either temporarily or permanently.
All this is at a time when the softwood lumber crisis is not the only thing hurting the forestry industry. The Canadian dollar is very strong and therefore not working in the industry's favour. There are also problems with forestry management. For example, the Coulombe report was tabled in Quebec, and we know that there will be a 20% reduction in stumpage over the next few years.
We really need an assistance plan. I know that the government has presented an assistance plan intended as an a response to these challenges, at least for Quebec. However, $50 million is not really enough to respond to the current challenges.
Everyone is in agreement. The Prime Minister has said it again and again, even if it was not always clear, as did the Minister of International Trade, and the Leader of the Opposition just said so too: negotiations are out of the question. The way the Americans see it, negotiations will give us less than what the tribunals do.
It must be recognized that the Government of Canada made a strategic error. Perhaps the opposition was not vigilant enough. The then Minister of International Trade and current Minister of Foreign Affairs told us that the issue would be dealt with on two fronts, namely through negotiations and the legal process. Americans always felt that it mattered little if they lost the legal battle, because they could fall back on the negotiation process. That is what President Bush told us.
I am in favour of a lasting solution for the softwood lumber dispute, but we must not let the industry fend for itself at this very critical time. The federal government must assume the legal costs, which now exceed $350 million. Considering what lies ahead for the next two years, loan guarantees are also needed. An additional $2 billion will be added to the $5 billion. We are headed for something like $7 billion in duties. The industry will not make it. Some companies will go bankrupt if the government does not get involved.
Everyone agrees on the need for these loan guarantees, except the government. Some changes should be made to the employment insurance program. Policies are needed to help secondary and tertiary processing. In my opinion, the issue of the content of the North American Free Trade Agreement should be raised again at the political level.
President Vicente Fox acknowledged the problems relating to NAFTA. The Canadian government must do the same and make Americans realize that the situation is extremely serious.
We all want to maintain strong and friendly trade relations with our neighbours, but the ball is now in their court. The federal government has a duty to help the industry, the workers and the communities affected by this dispute.
