Serge Cardin

[Canada-EFTA Free Trade Agreement Implementation Act, March 23rd, 2009]

The members of this House know the Bloc Québécois' position on this Free Trade Agreement between Canada and the States of the European Free Trade Association. In our opinion, the agreement would benefit Quebec. And knowing that the Bloc Québécois defends Quebec's interests, members understand that we will support this agreement.

Today, I would like to come back to the shipbuilding industry in particular. Some things have happened in the history of shipbuilding, and some things have not been done.

For 25 years, the Conservatives and the Liberals have shared power more or less equally. However, I would like to refer to an article that appeared in the Canadian Press on November 11, 2008 about comments made by Denise Verreault. I quote:

The president of Groupe maritime Verreault, Denise Verreault, did not mince words yesterday as she condemned what she called politicians' “lack of vision” on the marine industry.

Speaking at the Institut maritime de Rimouski..., Ms. Verreault said that “politicians could not see further than the end of their own noses or...the next election” when it came to shipping.

For more than 25 years, the CEO of this company based in Les Méchins has criticized the fact that Canada has no marine policy, even though shipping will double by 2020.

“Quite simply, there is no political will or vision. The shipping lobby is not as strong as the trucking lobby. The marine industry needs a single association that is very strong, instead of a number of groups. Our politicians think that ships are a vanishing breed and that as a mode of transportation, shipping is too slow. The hidden costs alone of just-in-time trucking are phenomenal, not to mention the environmental impacts,” said Ms. Verreault, honorary chair of the 27th funding campaign for the Institut maritime du Québec.

We can see that Ms. Verreault was talking about a 25-year period, and we can say that she was referring as much to the Conservative government as to the Liberal government of the time.

There was another very interesting article this morning in the newspapers, about comments made by the member for Bourassa. In a Canadian Press report, we can read:

But to win Quebeckers' hearts, the Liberals will have to rely on more than just their leader's relative popularity. [The member for Bourassa] therefore announced the appointment of two new campaign co-chairs: Gaspé businesswoman Denise Verreault and [other people, of course].

Should anything be inferred from what Ms. Verreault said in November 2008 and her current involvement with the Liberal Party? It is clear from her comments that she condemns the Conservative government for its lack of action with respect to the shipbuilding industry. We also know that she condemned the Liberal government of the day for its lack of action with respect to the shipbuilding industry.

At present, the fundamental problem facing the shipbuilding industry is not necessarily an international trade one, but rather a problem with the industry per se. The fact is that our industry has been neglected for many years, while other countries were heavily subsidizing theirs.

The suggested time frame in the accord is 18 years, that is an initial three year waiting period, followed by a progressive phase-out over 15 years to ensure that the trade can really be considered as free trade, with no extra costs.

What matters is to know what the Conservative government will do and, particularly, given Ms. Verreault's involvement, what the Liberals will do in the next election campaign. I want to know whether Ms. Verreault's efforts will have been all for naught, in the sense that, come an election, she will realize that the platforms include no shipbuilding policy, even though, as we know, such a policy is needed.

What I would like to hear today from Conservative members, and of course from the Liberals and even the NDP, is what they suggest as policy for the shipbuilding industry. It was primarily the shipbuilding industry that caused negotiations to last more than 10 years and people to fail to agree. What could these parties advocate or do to come up with innovative options for the shipbuilding industry? These are main points that must become clear through today's debate. We have to know what the government is going to do and what a party that, as we saw clearly on the weekend, was all energized to potentially form the next government, will commit to doing for the shipbuilding industry. Of course, we must not forget that Ms. Verreault is there, probably to provide strong suggestions.

I would still like to raise a number of points. I do not know whether I will have the time to list them all, but the Bloc has proposed a lot of things specifically to enable the shipbuilding industry to improve.

We must not forget that the shipbuilding industry has some very special features, features unique to it, which must be taken into account in working to ensure its development.

The government must realize that, because of the high cost of its products, the industry needs special financial arrangements for sales contracts. Because its products' value often constitutes the lion's share of the buyer's assets, the industry needs special financial regulations.

Because of the significant investments involved in producing the first of a line of ships, the industry must share the risks it faces in research and development and requires special credit access facilities.

There is also the matter of instability. Shipyards regularly do not operate for a number of months between contracts. Because of its instability and the high fixed costs of its considerable capitalization, the industry must have access to a substantial line of credit.

As it is also excluded from most trade agreements, the industry's international environment involves governmental subsidies, protectionism and buy-domestic policies.

Measures offering protection and support are needed to permit fair competition. Because contracts from DND and the Coast Guard are important to the industry, it needs a government purchasing policy that contributes to its development.

Since Canadian shipowners make up its main clientele, the industry needs a policy that promotes the development of domestic marine transportation, in other words, cabotage. Since the law of the sea is inadequate and does nothing to force companies to replace those dangerous, polluting scrap heaps, those poison ships, the industry therefore needs initiatives to modernize international shipping.

In order to bring in a real marine policy, the Bloc Québécois is proposing measures to ensure the development of this industry, which is of strategic importance to Quebec. It is also essential to ensure the protection and safety of the environment. Many of these measures could help the industry. I would remind the House that the federal government has not supported shipbuilding since 1988. Not only are the few aid measures still available very poorly adapted to the shipbuilding industry, but the federal government has even penalized the provinces that have instituted innovative measures, such as the refundable tax credit in Quebec, which for some years was considered by Ottawa to be taxable income under the Income Tax Act. That allowed it to claw back 20% to 25% of the assistance paid by Quebec to the industry.

In any discussion of financing, insurance or loan guarantees involved in sales contracts, it is important to note that purchasing a ship or an oil rig is a multi-million-dollar investment. Access to credit at favourable interest rates is a critical factor for the buyer. Through EDC, the federal government should set up a sales contract financing program to finance the purchase, repair and conversion of ships in Canadian shipyards. The program should provide funds for a significant portion of the value of the contract—perhaps 87.5%—at private market interest rates to low-risk companies that are in good shape. The program should be offered to both domestic and foreign buyers.

One issue is loans and loan guarantees for shipyards that have to invest or provide a financial guarantee in order to bid on new contracts. The tax rules for financial lease agreements have to be improved. We must bear in mind that under these lease agreements, the ship buyer does not take immediate possession. The buyer rents the vessel for several years and does not take possession until some time later. Because the buyer does not own the ship, tax rules allowing him or her to write off depreciation against taxable income do not apply. The government should improve the tax rules that apply to lease agreements for buyers of ships built or refurbished in Canada.

There should also be refundable tax credits for ship owners. The government should provide a tax credit to ship owners who sign shipbuilding or rebuilding contracts with Canadian shipyards. Because operating a ship is typically not profitable during the early years—all income ends up financing the initial investment—the credit should be refundable.

I want to point out that, in 1999, Antoine Dubé, who was the Bloc Québécois member for Lévis, introduced Bill C-213, which contained measures similar to those I just discussed. In 2000, after the bill was introduced, KPMG conducted a study for the Shipbuilding Association of Canada. It showed that, with respect to the 16 shipbuilding contracts between Canadian ship owners and foreign builders in 1999, these measures alone—none of them subsidies—would have, in a worst-case scenario, kept four to six contracts here in Canada, resulting in an additional $100 million to $150 million in annual sales. Their best-case scenario showed that some contracts for foreign ship owners—for the construction of drilling platforms worth from $300 million to over $1 billion—could have ended up in Canada.

The government must systematically favour Canadian companies for purchases to meet military requirements or those of the Coast Guard, and for offshore investments, drilling rigs and, eventually, wind turbines. A few announcements have been made, but more needs to be done.

In establishing its purchasing criteria, the government has to put a stop to discriminatory rules that offload transportation costs onto the shipyards, penalizing those in Quebec more than those in the maritime provinces.

It must also take measures focusing on water transport within Canada. While international seaborne shipping is growing at an exponential rate, domestic shipping, or cabotage, is growing at a slower rate. But Canadian shipping companies make much better customers for our shipyards than foreign companies. Environmentally as well as from an energy standpoint, shipping is the most logical choice and should rapidly become increasingly popular, given growing concerns about climate change and depletion of fossil fuels. In a nutshell, far from being a thing of the past, shipping is a forward-looking transportation mode.

Why do several government practices limit the development of cabotage for the transport of freight? Dredging and icebreaking expenses incurred by the government along the St. Lawrence River are entirely offloaded onto shipping companies. Conversely, the cost of maintaining roads is shared among all taxpayers, instead of being paid by truckers. Such an injustice hinders the competitive capacity of water transportation in comparison to land transportation.

The government should also eliminate the fees charged marine transportation companies that practice cabotage. It should also put in place a major investment program for port infrastructure focusing on the infrastructure needed to develop intermodal transport. In addition, the government should bring up to standard all the ports it left to crumble given that it is responsible for ensuring the best possible use of its own infrastructure. The government should also strengthen the Coastal Trading Act to support Canadian shipping and to ensure that foreign carriers that practice cabotage are subject to Canadian laws, especially those governing working conditions.

As for measures pertaining to international marine transport, we should oppose flags of convenience. Canada must ratify the UN convention on ship registration and lobby internationally for its implementation. We must fight poison ships by strengthening international marine law and creating an agency such as ICAO for marine transport.

This is not an exhaustive list, but it does show both the Conservative and Liberal members that it is possible to put in place measures to foster the development and competitiveness of the shipbuilding industry and the marine industry in general. Today, I would like to know what is the position of the Conservative, Liberal and NDP members, and the measures they are proposing to entrepreneurs and employees in the marine industry. I would like to know and I am certain that Ms. Denise Verreault would also be interested.

[Canada-EFTA Free Trade Agreement Implementation Act, March 23rd, 2009]

Mr. Speaker, I think they are trying to influence me.

[Canada-EFTA Free Trade Agreement Implementation Act, March 11th, 2009]

Mr. Speaker, my colleague is probably referring to a letter of support from a different union.

In Quebec, there are two main shipyards: the Davie Yards and the Groupe Maritime Verreault. I have to admit that we have not spoken directly with the management of these two firms, or with the union.

Furthermore, we have never received a clear indication of their position. However, as the previous member stated, there is still time. Therefore, I will ensure that I obtain the required information and study the impact this could have on the Canada-EFTA Free Trade Agreement.

[Canada-EFTA Free Trade Agreement Implementation Act, March 11th, 2009]

Mr. Speaker, as soon as I can get away—I will not say from my NDP colleague's incessant questions, but as soon as I can go to my office—I will get in touch with the union. The previous NDP member informed us of the support of the union of shipyard workers in Lauzon. The time on the document indicates that we received it during question period. I spoke earlier about responsibilities, and my primary responsibility is to verify the union's position and expectations and see how we can reach an agreement.

I was an accountant in a former life, and I have worked for unions. When they gave me mandates, I always made sure they could keep their jobs, and that is my goal now.

[Canada-EFTA Free Trade Agreement Implementation Act, March 11th, 2009]

Mr. Speaker, once again I rise in connection with Bill C-2 , but this time at the report stage. I hardly need mention that we in the Bloc are here first and foremost to defend the interests of Quebec. We also count on the people of Quebec to keep us informed, and at times that makes us almost a substitute for the government. To date the government has never really given us any impact studies to provide an overview of the repercussions of a free trade agreement on the economy of Canada or Quebec as a whole.

But some careful analysis is required. Overall, in Quebec, we see that we will stand to benefit from the free trade agreement with the European free trade association. As hon. members know, pharmaceuticals are hugely important to Quebec. We export and import with one of the countries, Switzerland. As well, nickel is an important mineral and some 80% of trade in nickel is with Norway. Then there is aluminum with Iceland. Those three factors mean that Quebec would stand to gain from this free trade agreement, and would have huge potential opportunities in future.

As we can see from a closer analysis, the shipbuilding industry is an important component of this free trade agreement. The agreement has been in negotiations since 1998. Preparations to sign it have taken 10 years. We know there have been slowdowns, and even interruptions in the negotiations, in large part due to the shipbuilding component. This industry is an important part of the negotiations. Today we see that, whether or not there is a free trade agreement that would do away with duties applicable to ships after 15 years, after an initial 3 year period—so 18 years in all—that is not the only thing that threatens shipbuilding. What does threaten it is the lack of a policy for this industry, particularly on the part of the federal government.

The federal government, for all intents and purposes, has not given any type of subsidy to the shipbuilding industry since 1988. Norway has heavily subsidized this industry, allowing it to modernize, progress and become more productive, while Canada and Quebec were dealing with gaps in the federal government's shipbuilding policy. For one thing, measures to assist the shipbuilding industry were ill-suited. As well, the Quebec government had a refundable tax credit which for some years was considered by Ottawa to be taxable income under the Income Tax Act. That allowed it to claw back 20% to 25% of the assistance that Quebec paid to the shipbuilding industry. Not only did the federal government cut assistance to the industry but it raked in 20% to 25% of the funding and refundable tax credits that Quebec gave the industry.

So, with or without an agreement, if we want to preserve the shipbuilding industry, it is imperative that the government invest heavily in it.

The government appeared before the committee today to testify. It said that the help it is giving to the industry is sufficient, be it structured facility financing or accelerated capital cost allowance. That is far from sufficient.

My NDP colleague stated earlier that his party recently received the support of the union at the Davie shipyard in Lauzon. The union is supporting the NDP attempt to have the shipbuilding industry excluded from this free trade agreement. However, this agreement has been under negotiation for 10 years with countries in the European Free Trade Association. Since the shipbuilding industry is the problem, if it is excluded from this agreement, another agreement will have to be negotiated.

The Bloc Québécois is here to work in the interests of Quebec. Those interests are well served by this agreement in various ways, even in terms of the shipbuilding industry. As we can see, the agreement covers a period of over 18 years. The federal government will definitely change during that time, and a new government would see the need to invest heavily in the shipbuilding industry. If it were to receive nothing from the government one way or another, free trade agreement or not, the shipbuilding industry would probably not survive. We must give it a fighting chance of surviving through direct assistance, which could take many forms.

We often hear about loans and loan guarantees these days. This is important. The government can also provide assistance for lease agreements for boats, which would have the same effect as accelerated capital cost allowance and have an impact on the working capital of the various businesses. We could also talk about funding for the purchase of boats. A responsible government could bring all of these elements together in such a way as to establish a real policy for the shipbuilding industry. The term “responsible”, however, applies less and less to the current government . It is hard to say if it was any more applicable to the previous government. People often learn from their mistakes. Perhaps one day this country will have a truly responsible government to the great benefit of these industries, which make such an important contribution to Canada and Quebec.

In any case, 18 years is a long time. That is enough time for Quebeckers to give themselves their own country, one that will take charge of its shipbuilding industry and its own trade agreements with the rest of the countries on the planet. We would then have the best of all possible worlds.

[Forestry Industry, March 10th, 2009]

Mr. Speaker, the three law firms representing Canada before the London Court of International Arbitration are unanimous that loan guarantees to the forestry industry are perfectly legal under the softwood lumber agreement.

Will the government finally abandon its ideological approach and provide loan guarantees to the forestry industry?

[Business of Supply, March 9th, 2009]

Mr. Speaker, it is important to note that the universities received funding for a certain period of time enabling them to carry out research in the humanities. What will they do when the majority of funding is channelled towards business? How will they be able to continue research at current rates and on several levels?

Just now, my NDP colleague said that “they like to do a lot of talking”. She was using part of the expression—namely, they have to walk the talk—often used by a unionist in my riding and that lends itself well to the Conservatives. When they go on talking and talking, they say all manner of things. But they have to follow through by taking action.

In this case, we are told that huge amounts of money are being channelled to research and development. That may be true. However, when expressed as a percentage of GDP, we fall behind other countries. According to the OECD, we are far behind other countries.

Substantial amounts should be invested directly into the sectors most affected by this economic crisis, such as the manufacturing and forestry sectors. We should ensure that our businesses can flourish thanks to innovation, research and development.

[Business of Supply, March 9th, 2009]

Mr. Speaker, at this point in time, students and university administrators are concerned about what will happen to research subsidies that were supposed to be granted to humanities, and perhaps even those that were meant for health sciences. A lot of research has been done and is still going on in areas other than business. What will the criteria be for the new program? This is a very serious issue. The budget only mentions business, but engineering is important too.

As I said earlier, private enterprise is responsible for most of the research and development going on in Quebec. If the government subsidizes universities directly, it will be harder to ensure that technology transfer benefits our companies. Innovation is important to businesses, whether they are in manufacturing or forestry, as we have already pointed out many times, and research and development are just as important. We have repeatedly told the government that it should invest more in these areas in order to protect them. There is also the aerospace sector, which we discussed earlier. Quebec should also be getting its fair share of defence spending. The pharmaceutical industry is also big in Quebec. That is why research and development are so important.

Then there is biotechnology. Many of Quebec's universities are working hard in that industry, and the government should keep investing in it, and not just in sectors with immediate payback. All of these areas are important. Things are happening now, and the government should keep investing in what is most important. Above all, it should not invest in ways that hurt Quebec, as it is now shamelessly doing. It is obvious that Quebec is not getting its fair share of all the money allocated to R and D.

[Business of Supply, March 9th, 2009]

Mr. Speaker, I would first like to congratulate my hon. colleague who gave a good description of the overall picture. The Liberal Party motion is very relevant in today's economic climate of globalization, where competition is extremely fierce and comes from around the world. As we know, in order to compete, we must focus on the basics such as innovation, research and development. Nearly everything must start with those basic elements, if we really want to succeed economically. However, the reality is that most elements that can be affected by, and that should be the focus of innovation, research and development, are not getting enough attention. As my hon. colleague indicated, this affects many areas, from aerospace and defence to pharmaceuticals and biotechnology.

The Prime Minister, along with the well-known member for Beauce—although not well-known for his parliamentary work—presented the policy statement on science and technology. We must revisit that in order to better understand what is going on behind all of this. The statement was disappointing, to say the least. The government announced new priorities, but no new measures. Those priorities were definitely more in line with Canada's needs than those of Quebec. Ottawa wanted to be more directly involved in our universities, by redirecting more student research to graduate programs.

As my colleague said, the document does not respond to the Standing Committee on Industry, Science and Technology report on the manufacturing industry, which recommended substantially increasing federal funding for industrial research and making tax credits for R and D refundable. By the way, what was happening in the textile industry at the time is still happening in the softwood lumber industry. Innovation and research and development were needed in these sectors at the time, just as they are needed today. These priorities therefore meet Canada's needs much better than Quebec's.

Regarding federal research, we know that the government puts a great deal of emphasis on technology transfers to companies and plans to focus its own research on the needs of industry. This federal priority meets Ontario's needs more than Quebec's. Quebec is the only place in North America where commercial companies do most of the research themselves. This means that they are less dependent on technology transfers from federal research activities.

In Ontario, the federal government accounts for 83% of government research funding, while the Ontario government provides 16.9%. In Quebec, the Quebec government provides 31.8% of research funding, nearly a third. Quebec therefore gets less federal support. Quebec receives only 19.4% of the funding for research done directly by the federal government, while Ontario gets 58.3%. Technology transfers will likely follow the same pattern.

To help Quebec, Ottawa would have had to distribute its own research activities better and provide more support for companies that fund research themselves. That is not what it did. It has also interfered more directly in universities. The government is critical of the fact that university research has little practical application in industry. It therefore plans to get more involved in directing university research in technical fields such as engineering, so that discoveries can then be transferred to industry. Without increasing funding, it will focus its support more on these areas.

As we know, after years of encroachment into education, the federal government is today investing more than the Government of Quebec into Quebec university research. It plans to use these funds to more closely direct the areas of research by our post-graduate students.

The government plan is in fact a ploy to disguise new oil subsidies. It is announcing that it will refocus research activities in the national interest from the social and economic points of view. It has set four priorities: environmental sciences and technologies; natural resources and energy; health sciences and technologies and related life sciences; information and communications technologies.

In Quebec, the two main R and D industries are aerospace and defence, along with pharmaceuticals and biotechnology. Ottawa, on the other hand, does not consider them priorities. There is a concern that its support for environmental technologies and energy will only use taxpayer dollars for research activities that will lessen oil and gas company pollution.

Many points have been touched on, so I would like to revisit the university situation. A graduate student has sent me an email in which he questions the government's intentions, after reading on page 107 of the 2009 budget that “Scholarships granted by the Social Sciences and Humanities Research Council will be focused on business-related degrees”. He is not the only one to question this.

Having checked the figures, the student in question writes that there is an announcement in the budget of an increase of 20% in SSHRC funding. He wonders about this new condition, and whether this measure will apply solely to business-related degrees. He also wonders whether this new condition will hamper the awarding of past funding, and whether this is a separate increase with a new condition attached, or whether the government is changing the entire Social Sciences and Humanities Research Council, and making its funding subject to this new condition.

He also wonders why these funds are meant for business-related degrees, adding that the Conservatives are behind the problems we are now facing, that is, the economic crisis. He goes on to say that it is not fair to other fields that used to be funded, such as law and sociology in particular, and that plurality and diversity of areas of study should be maintained.

He also mentioned that the Conservatives provided $50 million to the Institute of Quantum Computing, located on the campus of the University of Waterloo. This is, he says, the institute that developed the Blackberry. The owner of that company already funds the university rather generously. It does sound like what the federal government is seeking is a return on investment.

The newspaper today reports that the Conference of Rectors and Principals of Quebec Universities denounced such tied funding, which they perceive to be a denial of the usefulness of research in social sciences and humanities during these times of economic crisis. It denounces and condemns the Conservatives' interference in determining the direction research should take.

In these times of economic crisis, grants are obviously important for innovation, research and development. To follow the logic in the email I received from that student about who discussed business-related degrees, I would say that perhaps substantial grants should be given in science and economics so that our economists can finally change some rules or adjust certain basic rules to ensure that our economy will get better and better.

In the current context of globalization where competition is fierce, there things are important in both the manufacturing and forestry industries, and these are innovation, research and development.

[Forestry Industry, March 9th, 2009]

Mr. Speaker, the minister does not understand that the forestry industry has a much greater need for loan guarantees and a minister that supports it, than for a minister who signs the op-ed pieces published by his colleagues in the local newspapers.

If the minister really believes that loan guarantees are illegal under the softwood lumber agreement, will he identify the specific section that prohibits such guarantees? Otherwise, we will have to conclude that such a section does not exist, and that the minister does not want to help the forestry industry.