44th Parl. 1st Sess.
April 8, 2024 11:00AM
- Apr/8/24 6:57:46 p.m.
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Madam Chair, I thank my colleague, a fellow member of the Standing Committee on International Trade in the last Parliament. I think we were both on the committee together in this Parliament, and I believe he was there when I moved the softwood lumber motion he just quoted. We have even been on one or two missions to Washington together. We advocate for this issue there a lot.
Financial support for oil is in the billions of dollars; for forestry, it is in the millions of dollars, and most of that is in the form of loans. Does my colleague agree that there is a bit of an imbalance here?
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- Apr/8/24 7:00:57 p.m.
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Madam Chair, on this eclipse day, I rise to take part in a take-note debate, not about the eclipse—we are probably the only place not talking about it—but about the ongoing softwood lumber crisis that has been going on for some 40 years. I have the impression, however, and I say this candidly, that I am wasting my time. I will explain why.
On February 1, 2024, the U.S. Department of Commerce announced plans to substantially increase the countervailing and anti-dumping duties it levies on Canadian and Quebec softwood lumber. In the days that followed, shortly thereafter, I requested an emergency debate in the House. We all know the procedure. A written request must be submitted and then it must be verbally requested. The Speaker, of course, refused, saying that other avenues had to be explored first, that a take-note debate should happen first. I thought, okay, I will try for a take-note debate. I went to see my House leader. The Bloc Québécois said it wanted such a debate, and negotiations began. Like the messiah we were waiting for, we finally got it this evening, on April 8, more than two months later.
That is how much interest the government has in this issue. When the Minister of International Trade attended the World Trade Organization's ministerial conference in Abu Dhabi on March 2, did she take advantage of the opportunity to raise this issue? It was not on the agenda. Is that the great team Canada approach that the government is always going on about? I think that I will stick with team Quebec. I will be better off. It is more reliable.
This crisis has been going on for 30 years. The ups and downs continue. On November 24, 2021, the U.S. administration announced that the tariffs on Canadian softwood lumber would double in 2022, going from an average of 9% to 18%. A week or two later, we held a take-note debate here in the House. Admittedly, two weeks is better than two months. The problem is that the forestry industry is not the oil industry or the automotive industry, in other words, it is not a strategic industry for the rest of Canada. While the federal government provides billions of dollars in support for the Canadian oil industry, it provides only millions for the forestry industry, mainly in the form of loans. Lumber will never be one of Ottawa's top priorities, despite the lumbering rhetoric we hear from key officials in successive governments in Ottawa. In fact, that may be the only time lumber is given any attention. The trade war over softwood lumber is an old and never-ending issue. There have been countless missed opportunities to resolve this problem, even though Quebec has done what it takes to meet the international trade requirements. This issue has been ongoing for 40 years.
Let us come back to the last episode of December 16, 2021. We know that a month earlier, the U.S. government announced an increase in countervailing duties. Taking advantage of the fact that the House of Commons had just adjourned for the holidays, the government disclosed the contents of the ministerial mandate letters. The House being adjourned, the opposition cannot react, cannot ask questions, and that is when we saw the mandate letters. As we know, this is an exercise where the Prime Minister puts in writing the priorities he wants to see his ministers work on. When these letters came out, I naturally acquainted myself with the one dealing with my file, the letter for the Minister of International Trade. I saw that there was an entire paragraph devoted to the challenges of U.S. protectionism. I thought that was great. Then I looked for the words “softwood lumber”. I never did find them. I reread the letter four times. They were not there. I did not misread the letter. The words were not there. Ottawa is not even pretending any more that the problem exists.
In 2021 and 2022, when the U.S. Congress was debating the possibility of offering a tax credit for the sale of electric vehicles, but only those assembled in the U.S., which would have had serious consequences, the international trade minister organized a visit to Washington. We supported the government in that. She wrote a letter to the U.S. Senate threatening countermeasures if Congress decided to go ahead. In the case of softwood lumber, however, there was no visit to Washington, no letter, no announcement of retaliation, no assistance programs for the industry; nothing, nyet, a big fat “O” as in Ottawa.
The forestry industry accounts for 11% of Quebec's exports. Our forests are a source of economic development, jobs and government revenue in the form of taxes. The two members seated behind me are actually from forestry regions. They could talk at length about how important forests are to their regions. The tariff war hurts virtually all of the parties. It could increase the price of wood in Quebec and Canada significantly. It could threaten our businesses and the thousands of jobs directly related to the sale of wood to the United States.
Things will be no better in the United States. The National Association of Home Builders in the United States understands that. I have met with association members in Washington, and they understand that very well. They are against these anti-dumping duties because housing prices will go up, denying more Americans access to home ownership despite the Biden administration's claim that access to housing is one of its priorities. Who comes out ahead? The American lumber lobby and a few American politicians attempting to make political hay.
In the aftermath of tariff wars, Canada has repeatedly filed complaints with WTO and North American Free Trade Agreement tribunals and has always won its case. I hear representatives of the governing party tell us today that Canada is going to win again. It is true that we will win again. Spoiler alert—we are going to win again. We might not know the exact moment, much like with the eclipse earlier, but we know that we are going to win. I am announcing it. It is scientific too.
In May 2020, the WTO stated that Washington had not acted objectively or fairly and that its tariffs were unlawful. Free trade agreements impose time limits to prevent disputes from dragging on for an excessive amount of time. The problem is that delay tactics are common. Knowing that they are going to lose their case, the Americans are using every trick in the book to slow the arbitration tribunals' work. For example, they file petitions to waste time or drag their feet when appointing arbitrators. As time goes by, the situation facing our forestry industry keeps deteriorating. We are losing jobs. We are losing money. We cannot modernize. It is as simple as that.
It makes no difference that Ottawa claims to want to challenge the decisions in court; the problem is not going to go away. That said, there have been missed opportunities everywhere. When NAFTA was renegotiated a few years ago, Ottawa could have seized that opportunity to plug the gaps in the litigation process, to strengthen the framework, to avoid excessively long delays when time is our enemy. CUSMA was passed by Parliament in March 2020, yet this issue was not settled.
That was not the only missed opportunity. As I proposed in the House, CUSMA could have included a permanent advisory council on softwood lumber. That would have ensured ongoing monitoring. Not only does the Quebec plan fully pass the free-trade test, it was even designed specifically for that purpose in 2013. This is a good example of what it costs us to not be at the negotiating table defending our own reality. Meanwhile, Ottawa tells us that softwood lumber is a priority and that it is vigorously defending it. This is an eclipse, an eclipse even more obvious than the one we saw today.
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- Apr/8/24 7:10:15 p.m.
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Madam Chair, this agreement has been very problematic. It has divided the sector and the regions, and has objectively cost the sector. I recognize that progress has been made. For example, the Conservatives have not said that the softwood lumber crisis started because of the carbon tax. I will give them that. At this point, it is fair game to say that things were going better when they were in power, except that the softwood lumber crisis has been going on for 40 years. In some cases, they tried to plug the holes, but they got it wrong. This has been going on for 40 years, and that is the crux of the problem.
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- Apr/8/24 7:11:31 p.m.
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Madam Chair, Quebec is obviously tired of these punitive tariffs, these countervailing duties that keep coming back. As my colleague knows, when we talk to American elected officials, they too would like this to end, but often these decisions are made by the administrations. Many will say that they look forward to the court's decision and that will be good, except for some states where this topic is more political.
I remember one meeting with the U.S. trade representative, they assumed and admitted that this was a political issue. People from his office said that a number of forestry producers are fiercely in favour of countervailing duties, but the opponents of these countervailing duties are home builders. This raises a major electoral issue.
Nevertheless, we have the burden of proof: We need to show the Americans that this penalizes them as well. This certainly penalizes Quebeckers and Canadians, but it also penalizes Americans. It is up to us to do the work now.
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- Apr/8/24 7:13:35 p.m.
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Madam Chair, my colleague made a play on words when he said “tax the axe” instead of the Conservative's usual “axe the tax” line. I was listening to the French interpretation, which was probably not as punchy as the original English. I will have a chat with my colleague about this later.
Having said that, no, I do not support the Conservative approach at all. We do not. We have said it before, and we have no problem saying it again: This agreement was problematic during the Harper era. It was bad for people, for the industry and for everyone. It ended up just deferring the problem. That is not the approach we want at all.
We are after a long-term solution. Some things can be done in the short term. For example, Ottawa can invest in secondary and tertiary processing to reduce our dependence on exports to the United States.
However, I do think I provided a good summary of the many missed diplomatic opportunities in negotiations and meetings with the United States. Canada could have threatened retaliation against the United States, but never did. The Canada-United States-Mexico trade agreement is supposed to be renegotiated in 2025, if I am not mistaken. Those negotiations may end up presenting an opportunity worth seizing.
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- Apr/8/24 7:15:29 p.m.
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Madam Chair, it is simple, quite simple in fact.
First of all, forestry accounts for 11% of Quebec's exports. That alone makes it an important industry and an economic driver in the regions. Such is the case for my colleague's region, which was ravaged by forest fires almost a year ago. How time flies. It stands as a reminder of how important forestry is in her riding. I recall that she was often away from the House because she had to be there, on the ground. It cannot have been easy, and I want to assure her again that she has my support; I congratulate her on the work she has done in this regard.
That said, the forestry industry is extremely important to the regions and to workers. Yes, cases have been won, and the next case will be won as well. However, and I must stress this point, in the time leading up to the tribunal's ruling, all kinds of abuses are being committed to constantly push back or delay the date of the tribunal's ruling, and this is where the harm is being done. This delay is creating a situation where our industry fails to modernize, becomes less competitive, keeps losing money and workers, and is heading for bankruptcy. This is how this situation leads to absolutely devastating consequences.
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- Apr/8/24 7:17:51 p.m.
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Madam Chair, I want to begin by saying that my colleague is probably right about that.
On various missions to the U.S., including missions I went on with colleagues from other parties in the House, missions with the Canada-U.S. Interparliamentary Group and in the meetings we held, whether with senators or U.S. representatives, I was pretty much the only one who raised this issue, which says a lot. It is worth mentioning.
Allow me to repeat some of the examples I gave earlier. Softwood lumber was not on the agenda at the WTO in Abu Dhabi last month. In 2021, when the increase in countervailing duties was announced, the government was busy panicking over the electric vehicle issue and did nothing at all about softwood lumber. The House adjourned, and the words “softwood lumber” were nowhere to be seen in the paragraph devoted to American protectionism. A few weeks after the announcement of new countervailing duties, and the words “softwood lumber” do not even appear in the paragraph about American protectionism in the mandate letters. I do not know what happened there.
Obviously, there is work to be done to raise awareness among the American citizens. The National Association of Home Builders in the United States is doing a remarkable job, but we need to pull out all the stops.
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- Apr/8/24 7:57:08 p.m.
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Mr. Chair, I would like to ask my colleague what he thinks of the fact that softwood lumber was not mentioned in either the minister's mandate letter, or the agenda for the WTO ministerial in Abu Dhabi. In both cases, it was a month after the announcement of new countervailing duties. The Liberals agreed to holding this take-note debate more than two months after we started talking about it.
Are we witnessing a rather clear display of this government's complete disinterest in this issue?
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- Apr/8/24 9:25:42 p.m.
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Mr. Chair, I know my colleague comes from a region where softwood lumber is an important issue.
Does he agree with me that the renegotiation of NAFTA, which became CUSMA, represents a major missed opportunity and that, when it comes time to renegotiate in 2025, we must not miss out on such an important opportunity?
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