44th Parl. 1st Sess.
April 8, 2024 11:00AM
- Apr/8/24 6:21:03 p.m.
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Madam Chair, I would like to thank you for the opportunity to participate in this important take-note debate and to speak about the significant actions the government has been taking to support Canada's interests in the ongoing softwood lumber dispute with the United States.
First of all, I can assure members that we are in constant dialogue with the U.S. government at all levels to convey the importance of reaching a satisfactory resolution to this long-running dispute. We have made it abundantly clear that Canada believes a negotiated settlement with the U.S. is in the best interests of both our countries. However, we will only accept an agreement that is in the best interests of our softwood lumber industry, our workers and our communities. Such an agreement has to make sense for both sides.
Reaching an agreement that protects Canadian jobs is a priority, because the forestry industry plays a vital role in the Canadian economy. Domestically, it helps create jobs for hundreds of thousands of Canadians and generates significant revenues for rural and indigenous communities across the country. What is more, it provides essential commodities that are used in a multitude of industries, from construction to paper to lumber products.
In Quebec specifically, the forestry industry is a major economic pillar that supports tens of thousands of direct and indirect jobs in various regions such as Saguenay—Lac‑Saint‑Jean, the north shore and the Gaspé. It also contributes to the vitality of regional communities by providing economic opportunities and promoting regional development. In short, the forestry industry is much more than an economic sector. It is a key aspect of the identity and prosperity of Canada and Quebec.
Historically, the United States has always relied on imports of Canadian lumber to fill the gap between its domestic production capacity and domestic demand for lumber. Canada has always been a stable and reliable supplier of high-quality products for American consumers. For example, imports from Canada have historically met about one-third of U.S. demand for softwood lumber. In 2022, 90% of Canada's softwood lumber exports went to the United States, at a value of $12 billion. Now more than ever, Canadian softwood lumber products are essential for addressing insufficient production and the affordable housing shortage in the United States.
It is clearly counterproductive to impose unwarranted duties on such a large portion of U.S. consumption when the U.S. is trying to combat rising inflation and housing costs, which is also an issue in the United States.
The U.S. National Association of Home Builders has indicated that duties on Canadian softwood lumber exacerbate already high lumber prices and directly increase costs to consumers. American legislators on both sides of the political spectrum have even written to their government to say that a softwood lumber agreement is key to predictability in the housing market. Maintaining unfair duties on Canadian softwood lumber directly contradicts the United States' goal of making housing more affordable.
What is more, these unfair duties benefit third parties to the detriment of our supply chains and our very resilient and integrated economies. Since imposing these duties for the first time in the current round of this dispute, rather than protecting jobs and companies at home, the United States has seen a surge in overseas imports from suppliers in Asia and Europe to fill the gap between supply and demand in the U.S.
It is therefore easy to see that a negotiated settlement, which would bring stability and predictability to the softwood lumber industry, is the best outcome for everyone involved. That is what the current government has consistently advocated for, and that is what we will continue to do.
Therefore, it is truly unfortunate that certain businesses in the U.S. lumber industry encourage some American decision-makers to impose duties on Canada's lumber exports and to refrain from meaningfully engaging in negotiations, preferring the continued disruption to lumber supply caused by these duties, to the detriment of U.S. consumers. The domestic U.S. lumber industry, as a pretext, contends that Canada is responsible for injury to its producers. Time and time again, neutral and impartial international tribunals have found that Canadian softwood lumber producers respect our international obligations.
Nevertheless, our government continues to encourage the United States to return to the negotiating table to find a mutually acceptable agreement. Both the Prime Minister and the Minister of Export Promotion, International Trade and Economic Development have repeatedly stated that Canada is ready to hold constructive discussions on realistic solutions that would be acceptable to both parties. Minister Ng regularly discusses the softwood lumber dispute with her U.S. counterpart, Trade Representative Katherine Tai. Just recently, the minister stressed the importance of expeditious and impartial dispute settlement procedures under CUSMA as a means of resolving the situation. Unfortunately, we have yet to see any willingness on the part of the U.S. to commit to a lasting resolution of this long-running dispute.
Furthermore, the Minister of Foreign Affairs raised this issue with U.S. Secretary of State Antony Blinken, while senior Canadian officials, including our ambassador to the United States, Kirsten Hillman, remain in constant contact with their U.S. counterparts. As we repeatedly continue to urge the United States to negotiate mutually acceptable terms, we are not just standing idly by. Canada is defending our industry, our communities and our workers and is actively using every other means available to resolve their disputes, including the remedies provided under international trade agreements, while supporting Canada's softwood lumber producers and the communities that depend on this sector. Our efforts have yielded results in the past and we are getting there again.
Throughout the entire process, we have worked and will continue to work closely with provinces, territories, indigenous partners and industry stakeholders to ensure a united pan-Canadian approach to the dispute.
As recently announced by the Prime Minister, the government has renewed its commitment to a team Canada approach and is engaging with the United States to ensure the continued prosperity and well-being of Canadians.
Our strategy for ending the dispute centres on legal victories, strong partnerships and relationship building. With our allies in Canada and abroad, we are confident that we can reach a solution with the United States that benefits producers, workers and communities on both sides of the border.
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- Apr/8/24 6:38:57 p.m.
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Madam Chair, my colleague talked about a team Canada approach. The problem with that is that the federal government does not listen to the province that is paying the most in terms of U.S. softwood lumber tariffs.
Quebec accounts for 20% of Canada's softwood lumber exports to the United States, but it pays 48% of the tariffs. The federal government never wanted to lead the softwood lumber fight. Its main strategy in the dispute with the Americans was to protect the automotive industry to ensure that Canada can sell electric vehicles to the United States and benefit from the same tax credits. The federal government has never wanted to lead the fight. That is symptomatic of the problem that we have. We do not have enough leverage. Not one Liberal member is capable of defending Quebec's forestry industry.
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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 7:31:42 p.m.
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Madam Chair, for my colleague from Courtenay—Alberni, I have another question from Vancouver Island. I thank the member for the last round, as I was just going to ask where my hon. colleague thinks we should stand on the issue of raw log exports.
Obviously Canadians need a team Canada effort. Tonight's take-note debate lets us focus on the quite unfair and unexpected increase in duties from the U.S. Department of Commerce, but let us look at the reality: Why do we let a single raw log get exported out of B.C. when we could be putting it through a mill? I will connect this back to the issue of productivity. The more we export only products that are value-added, the more it improves Canada's productivity. A productivity crisis is enhanced when we export any resource product without value added, which is a crime against the environment and our workers.
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- Apr/8/24 7:34:58 p.m.
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Madam Chair, I know the Bloc worked with the NDP when it came to the bill that was brought forward by my good friend and colleague from South Okanagan—West Kootenay, who lives in Penticton, on mass timber used by the federal government, in order to do exactly that. However, the federal government has not done it. When it comes even to things that pass in the House, it is moving so slowly on getting direction from the House. Despite the fact that there is a housing crisis and that it is buying materials to build buildings, the government is ignoring the House. We passed legislation directing the federal government on what it has to do.
On the retooling of our mills and making sure we add value to every single board foot that goes through, I think of San Group, which is using small logs and processing them. It is not using big logs, but is processing small logs and creating more value. We need to create more value.
We need to make sure we purchase and support wood and timber through federal procurement, and we need to stop raw log exports, especially at a time like this, when we are seeing the impacts of climate and we know we are going to have fibre supply issues down the road. We need to do this immediately. It is critical to job security, to our communities and to the longevity of our forest sector. It is actually smart. I cannot think of another first world country, if we want to call it that, or a developed nation, that is mismanaging its forest like this. It is absolutely unbelievable that we are shipping raw logs when our mills are starved for fibre. It absolutely does not make sense.
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- Apr/8/24 7:37:37 p.m.
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Madam Chair, 42 years at the negotiating table is a long time. If I were the government, I would not be patting myself on the back or blaming another political party. Certainly, we know the Conservatives' approach did not work. Like I said earlier, it is taxing the axe, because their motto was tax from both sides of the border, which they agreed to. It was a billion-dollar hit to the B.C. lumber industry and producers in British Columbia, and half a billion of that went to lobbyists. That is what Stephen Harper negotiated.
The Liberals dragged this out. There has not been a full-court press on the issue. Clearly they have not negotiated well, and we need a different approach. We need to keep as much of our fibre as we can in Canada. We need to supply our mills. We need to end raw log exports. We need to add value to our fibre. We need to retool our mills. We need to invest heavily into ensuring that we keep up with the international market and are supplying the needs of countries that do not have access to fibre, as well as with emerging markets, where there is huge opportunity. There is mass timber, which we talked about.
We have seen some great models in British Columbia of small players that cannot access fibre. This is ridiculous. The federal government allows international trade and export of our fibre, and our local mills cannot get access. This is just absolutely bonkers. I cannot think of any country in the first world that is managing its forest sector like this. It is unbelievable.
The opportunity is here. It is right now. I hope next week, in the budget, that the federal government is going to take a different approach and is going to look at mass timber, value-added product, retooling and putting more money on the table. Catalyst mill in my riding received the most federal money ever in the history of the riding to retool the mill so we can make food-grade paper and replace plastic paper. When one goes to Costco and gets a hot dog, the packaging is from my riding. Eight times the value per tonne is what we are getting now because of that retooling. Let us do more of that.
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- Apr/8/24 8:05:30 p.m.
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Mr. Chair, we all know that the mechanism to fight these unfair duties is through legal means, through NAFTA chapter 11 or CUSMA chapter 10. We have fought those, but we can only have a favourable outcome and settlement if the other party is willing. Unfortunately, despite continuous legal victories on Canada's behalf, we need a willing trading partner who agrees to abide by those. We have seen that the Americans have been inconsistent in that regard, and it takes a long time to pressure them into doing that.
I am very confident that our government and our minister of trade will continue to do those talks, and we will get to a resolution so that our softwood exports will be traded at a fair and an appropriate value, free of any trade barriers.
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- Apr/8/24 8:57:04 p.m.
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Mr. Chair, as the parliamentary secretary to the Minister of Export Promotion, International Trade and Economic Development, I am proud to participate in this vital take-note debate and to highlight our government's steadfast support of Canada's softwood lumber industry.
We are here tonight because the softwood lumber dispute between Canada and the United States is a long-standing trade irritant in an otherwise fruitful bilateral trading relationship. Unfortunately, this latest round is hardly the first time that the U.S. lumber industry has sought undue protections from fair competition with Canada's leading-edge softwood lumber products. Even worse is the fact that some of our American allies continue to succumb to protectionist pressures by imposing unjustified duties on Canadian softwood lumber products.
The current round of the dispute is the fifth of its kind in the last 40 years. While we will always stand shoulder to shoulder with the companies, workers, innovators and exporters who make Canada's lumber industry second to none, the fact that we have to yet again revisit this dispute speaks to the need for our continued engagement and advocacy on this file.
As members know, the unwarranted duties imposed by the United States on Canada's softwood lumber exports have caused harm to our industry and to the communities and workers that rely on it. The softwood lumber industry is a key component of our highly integrated forestry sector. It contributes to over 200,000 well-paying jobs for hard-working Canadians. The federal government recognizes the importance of the softwood lumber industry to communities across the country and to the Canadian economy more broadly.
That is why resolving the softwood lumber dispute has been a top priority of our government and will continue to be a priority until we see a resolution. The federal government has been relentless in its pursuit of legal challenges against U.S. duties. Canada has contested every U.S. decision imposing or maintaining unfair U.S. duties on Canadian softwood lumber.
The most recent example dates from just a few months ago, when the Minister of Export Promotion, International Trade and Economic Development announced a legal challenge to a U.S. decision to maintain the duties on Canadian softwood lumber instead of revoking them. This decision implied that it would be harmful to the U.S. lumber industry if duties were removed from Canadian products. That is just plainly inaccurate and unfounded.
The truth is that the United States cannot produce enough lumber to meet its domestic demand, so it needs lumber imports. Fair competition from Canada should be treated fairly. To be clear, impartial international arbitrators have consistently found Canada to be a fair and reliable trading partner in previous rounds of the softwood lumber dispute. In the current round, we have already seen favourable decisions for Canada, which recognizes what we have said since the beginning, that the Canadian softwood lumber industry is not unfairly subsidized and does not dump its products in the U.S. market.
I will mention just two examples. In August 2020, a WTO panel ruled on Canada's challenge to U.S. countervailing duties. That panel ruled overwhelmingly in Canada's favour. In particular, it stated clearly that U.S. countervailing duties on Canadian softwood lumber are inconsistent with the United States' international obligations. More recently, in October 2023, a binational NAFTA chapter 19 panel reviewed the lawfulness of U.S. anti-dumping duties and issued a decision that was, overall, in Canada's favour.
Canada has 13 ongoing legal challenges against U.S. duties, and we firmly believe that, as these challenges proceed, we will see more and more of these legal rulings confirming our position that U.S. duties are not in compliance with WTO obligations or with U.S. law.
We expect additional developments in our legal cases this year and look forward to welcoming further recognition of Canada's fair trading practices. That said, our government recognizes that while these U.S. duties remain in place, they are having a negative impact on Canadians. That is why our government swiftly reacted to the imposition of U.S. trade measures in 2017 with the announcement of a comprehensive support package, the softwood lumber action plan. This package was designed to help mitigate the wide-ranging effects of the unjustified U.S. measures on our workers and communities in a manner consistent with Canada's international obligations.
In addition to our legal challenges to the U.S. duties, Canada is pressing the United States at every opportunity to find a mutually acceptable outcome to this dispute. The Prime Minister has stressed the importance of finding common ground to President Biden, including during President Biden's recent visit to Canada in March of last year.
Moreover, the minister of international trade routinely raises concerns over the continued imposition of U.S. duties on softwood lumber products with her U.S. counterpart, Ambassador Katherine Tai, the U.S. trade representative. In those conversations the government has consistently reiterated to Ambassador Tai that Canada is, as always, ready and willing to work constructively toward a durable outcome that provides stability and predictability to the sector. Sadly, the United States has yet to demonstrate that same willingness.
However, we are confident that a positive outcome for all parties can be reached. It is in the United States' own interest to engage collaboratively on this issue. Its own domestic lumber industry remains unable to satisfy growing U.S. demand, and that is where Canadian industry steps in with high-quality products. Many Americans recognize how beneficial it is to have such a reliable source of lumber to build new homes and complete renovation projects. U.S. home builders and certain U.S. lawmakers have called for prompt U.S. action and the removal of U.S. duties, because they are rightfully concerned over housing affordability.
At a time when affordability is a significant issue for many, it is very disappointing that the United States recently signalled its intention to increase these unfair duties later this year, but this only strengthens our resolve. Canada will continue to push back and defend the interests of our softwood lumber industry through all available avenues.
I would be remiss if I did not highlight our close collaboration with the provinces and territories as well as industry stakeholders, indigenous partners and other key players in our effort to defend Canada's interests. For example, our government works closely with stakeholders and partners to mount the best legal defence possible. We provide information and support to companies about navigating the complex U.S. trade remedy proceedings, and we regularly consult with stakeholders on their specific interests within the broader context of this dispute.
As the parliamentary secretary, I have the honour of working closely with the Minister of Export Promotion, International Trade and Economic Development to deliver upon her ambitious mandate and stand up for Canadian businesses, exporters and hard-working Canadians.
Recently I have had the honour of visiting Kelowna, British Columbia, to visit with local businesses. I have travelled to Washington D.C., to help advocate for Canadian exporters, and to Nairobi, Kenya, to help enhance our trade ties with Africa. In all of these instances, as well as in my role on the Standing Committee on International Trade, I have been acutely aware of both how important the softwood lumber industry is to Canada's economy and how and why Canada must continue to be tireless in our advocacy for a fair, rules-based approach to international trade disputes.
I am convinced that the same approach is one we can and should take here tonight as part of this important debate. I know that everyone in the House stands united in their support of our softwood lumber industry. I am convinced that a true team Canada approach is the cornerstone to achieving a positive outcome for Canada in this dispute, and that is why we will continue to work closely with key stakeholders and partners, including members of the House from all parties, in all aspects of this unfortunate dispute.
The federal government's approach to this round of the softwood lumber dispute is comprehensive. We are taking concrete action through both legal avenues and through bilateral engagements to have these unfair U.S. duties revoked. Separately, we have also acted swiftly to mitigate the impacts of the U.S. trade measures on workers and communities.
While we continue to pursue a durable negotiated outcome, let there be no doubt that the Canadian softwood lumber industry and the communities and workers who rely on it know that we have their backs, and we will continue to have their backs.
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