44th Parl. 1st Sess.
April 8, 2024 11:00AM
- Apr/8/24 6:56:42 p.m.
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Madam Chair, I give the member credit for being here tonight. I appreciate her being here and showing interest in the industry, even though it is not in her riding.
Twice in the current Liberal government's history, it came close to negotiating a deal. Both times, it required the Prime Minister to step up and get it across the finish line. He had a chance in 2021, and he did not do it. He had a chance in 2017, when it was down to disputes over the amount of wood over quota and lack of supply in the U.S. that Canada could fulfill. Ambassador MacNaughton almost got it done. If the Prime Minister had paid attention, it probably would have been done. That is the problem. When it was done in 2006, President Bush, Jr., and Prime Minister Harper sat in a room, negotiated and got it done, president to prime minister, prime minister to president.
In reality, it does not matter what one does for the team Canada approach with regard to this file; it comes back to those two people having the political will to do it. The Prime Minister has not shown that political will.
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- 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 6:58:26 p.m.
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Madam Chair, I appreciate the fact that the member took the initiative to show up in Washington and to work on behalf of all Canadians, including those from Quebec.
In fact, the forestry workers in Quebec should be the most upset with regard to this file. They made the changes to their system to meet the requirements that the U.S. set, yet the government has not been able to take the sacrifices and the changes they made in Quebec and to sell it across the line. What happened? They still pay a tariff. It still comes back to president to prime minister and prime minister to president.
If the Prime Minister does not know what he is talking about, if he does not have the political will or does not have the initiative to support Quebec forestry workers, I will guarantee one thing: prime minister Poilievre would.
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- Apr/8/24 6:59:08 p.m.
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The hon. member knows he is not to name individuals.
The hon. member for Courtenay—Alberni.
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- Apr/8/24 6:59:19 p.m.
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Madam Chair, the Conservatives keep going back to when they were in power. They gave away a billion dollars U.S. of collected funds, which legitimately belonged to Canadian softwood lumber producers, and about half of that amount went to the U.S. lobby group that started the whole thing. In the agreement, they sent half a billion dollars to those lobbyists. Does my colleague think that was a good deal? Is that what Conservatives want to bring back?
Conservatives taxed our producers with that deal, and I have not heard them come forward with a proposal that is not going to revert back to their failed deal when it was Prime Minister Harper or Prime Minister Mulroney. That is 42 years of failure. They cannot absolve themselves of it.
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- Apr/8/24 7:00:17 p.m.
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Madam Chair, the reality is we had 10 years of bankability in the forestry sector under the Harper government. Right now, there is $8 billion tied up with the U.S. government. A lot of that belongs to first nations. That money could have been used in first nations.
The Prime Minister has not shown up. Does he care? He does not care. I am trying to get that point across to people here in Canada. If we had a Prime Minister who actually cared, this deal could have been done in 2016 or 2017. He does not care. The reality is that Canadians pay for it. The Prime Minister is not worth the cost.
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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 7:09:44 p.m.
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Madam Chair, I want to thank my colleague for such an interesting speech.
I do have some questions. We heard the Conservatives say that their party negotiated an agreement when Mr. Harper was in power. I would like to hear my colleague's thoughts on that agreement.
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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 7:10:46 p.m.
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Madam Chair, I remember when this first came up. Quebec had done the right thing. It changed its process. It changed the process it used to collect fees from logging within the province to comply with U.S. requirements. It relied on the federal government to negotiate on its behalf, whereas the Irvings, out of New Brunswick, said they were not going to trust the government and would do their own negotiation. The result was that the people who had relied on the federal government paid a tariff of around 21% or 23%, or somewhere within that range, and for the Irvings it was around 3% to 5%.
Would the member like to explain how he feels and how Quebec forestry producers must feel knowing the government let them down so badly? The proof is in the difference in the tariffs between what the Irvings paid and what other producers had to pay.
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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 7:12:45 p.m.
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Madam Chair, my colleague is trying to work on some solutions to move forward.
Back in 2006, the Bloc supported the Harper softwood agreement, which saddled Canadian softwood lumber producers with both an American import quota and a Canadian export tax, while paying the U.S. lumber lobby half a billion dollars. Does my colleague support reverting back to that approach, which creates more taxes?
The member is right, in that the Conservatives have not blamed this on the carbon tax yet, but we are still early in the debate, and I imagine that is coming. However, does he support the approach where, I think, the Conservatives would tax the axe if the Conservatives were to get their way?
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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 7:15:10 p.m.
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Madam Chair, I thank my colleague for his very interesting speech.
We know full well that the softwood lumber dispute is causing considerable harm. I would like my colleague to say more about this harm and about the impact that the U.S. administration's findings and decisions since February 1, 2024 are having on the softwood lumber industry.
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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 7:16:59 p.m.
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Madam Chair, here we are again, and it is back to the same old blaming and pointing of fingers.
For 42 years, Conservative and Liberal governments have been failing the forestry sector miserably and eroding our market share in the United States. This is causing inflation for American citizens. Most Americans are not even aware that the lobbyists who are blocking this are actually causing more harm to their own people.
Does my colleague agree that Canada needs to do a better job of educating American citizens about the impact of this dispute? As well, does my colleague agree that there has not really been a team Canada approach? We have not been flooding the United States and those states that are impacted with information. Does he believe that we need to have a full-court press on this issue?
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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 7:19:30 p.m.
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Madam Chair, it is an honour and privilege tonight to join this debate. This is a debate that is long overdue.
We need new ideas around the softwood lumber dispute and we need a different approach. Canada and the United States have been fighting over this softwood lumber issue for over 42 years, and it is time to stop the partisan politics. We need to work collectively in this place, come up with new ideas and take a team Canada approach, a united approach.
I live in a community that has been hit hard by this dispute, and believe me when I say that many of the people, the mills and the businesses in our community will not be here for another 42 years if this dispute carries on.
It is time to change our approach. Forty-two years might be a long career for someone working in our mills or in the forests, for people who are working hard, but I can tell members that they cannot wait another 42 years, and our communities will not make it.
Mill workers, timber workers, lumber workers and forestry workers and those who are out felling in our forests are the backbone of the community where I live. We know that the fallers get up before dawn. They are ready to face some of Canada's most rugged and dangerous terrain. April 28 is a day of mourning, a day when we recognize those who are lost at work, and many of those people are foresters and mill workers. They do some of the most dangerous jobs in our country, and their work is crucial for Port Alberni, for the Alberni valley, for Vancouver Island and for the Canadian economy from coast to coast.
It is time to spend way more time ensuring that we tie this issue into the need for people to have a place to live. We have an opportunity to use softwood lumber to build homes. I think about some of the mills in my riding, like San Group, where they mill western red cedar, yellow cedar, Douglas fir, hemlock and spruce. We use softwood lumber for the roof over our heads, and we need to capitalize on that, given that we have a housing crisis.
Timing is also critical, because we have wildfires and a changing climate, which obviously threaten those mills and our lumber industry, and loggers and mill workers need economic security now more than ever before.
I will cite that the United States, in moving forward, is looking at raising duties and causing even more harm. The bigger problem is that it is not only harming Canadians but is actually harming its own citizens and people around the world. It is driving up inflation. We have an inflation crisis, which we know is global because of global supply chains, but this is an absolutely unnecessary cost and impediment to people in the United States south of the border. We need to do a better job of educating Americans about the impact that those lobbyists are having on their own people.
Again, after 42 years, 13 Liberal and Conservative governments, eight prime ministers, three temporary agreements, two prime ministers with a last name that starts with T, which I am not allowed to say here, we are still dealing with the same trade dispute. For decades, the Liberals and Conservatives have bickered back and forth about who has achieved the best deal, but we know it is who has achieved the best of a bad deal, which is really what it has come down to.
I appreciate that the Liberals have been in court fighting the harmful duties set up by the United States, but it is important to uphold the rules that form the foundation of our international agreements. This needs to be fixed. This cannot keep going.
Every time Canada wins in court, we see that we have proved that the actions of the United States are not only harmful but in fact illegal. The American government just shrugs it off, despite the fact that this is illegal. Then there are more tariffs, more jobs lost in communities and cities like Port Alberni and on the west coast and across Canada. They are gone for good, and they are hard to get back. The San Group opened the first mill in 15 years on the coast of British Columbia just in the last few years. Now it is being hit with this.
We know that conservatives would like to cost our lumber industry more than it can afford by bringing in these tariffs. They call it “certainty”, but it costs our lumber industry and those producers more, and they are at an unfair playing advantage.
I was sitting with Ken McRae, four-time mayor, just the other day. He was the negotiator for the Canadian Paperworkers Union for over a decade and also ran the labour council in Port Alberni for five years. He told me that back in 1995, he wrote a letter to Jean Chrétien, who was prime minister at the time, asking him to make this a top priority. I have not seen that priority as part of the Canada-U.S. agreement.
As my friend from the Bloc said, he has gone on these trips across the border and I have gone to PNWER repeatedly to talk about the impact of the softwood lumber agreement on our relationship, but we have not seen the Canadian government get organized and create a strategy of going across the border. I hope that comes out of tonight's debate.
In 1986 and 2006, the agreements the Conservatives established created export taxes on our softwood lumber in an attempt to appease the United States. Following the 2006 agreement, our lumber exports ended up being taxed by both Canada and the United States. We could say that the Conservatives taxed the axe. That is language they will understand.
For mill workers in Port Alberni, the Liberal court battle does not mean much. Mills are being overcharged for wood; some are closing their doors for good, and many mill workers will not see a dime of the money that the Liberals win in court. Another Conservative tax, though, would make sure those businesses would never recover. Either way, most mill workers cannot afford to wait another 42 years for real change.
It is time to fix it. It is time for the government to look at new possibilities instead of just trying the same thing over and over. It is time that we support our lumber industry in supporting itself. We have already taken a step in the right direction. Catalyst Paper, for example, in my riding, retooled its mill so it could make food-grade paper. When people go to Costco and buy a hot dog, that is where the paper is made. It is adding eight times the value per tonne of fibre.
We brought forward a biomass expansion to the clean technology investment tax credit, working with the Minister of Natural Resources, and my riding led the charge, working with Catalyst Paper in my community. It is projected to save mills in British Columbia up to $10 million per year. This was in the last economic statement in the fall. We are hoping legislation comes forward quickly to enact that tax credit, because this money would go back into communities, giving workers in the industry some breathing room and a little more security, but it is just a start.
After 42 years, we need to take another look at our dependence on raw softwood lumber. For 42 years, we have been propping up the same failing issue in how we manage with loans and programs, which only lead to more tariffs. Now we need to support our lumber industry in a transition toward more lucrative, environmentally friendly and future-forward enterprises. Port Alberni has seen prospective investors hoping to bring money into the community to create mass timber plants. Through targeted federal funding, we can support them and other lumber towns that rely on softwood lumber, creating new jobs in a growth industry that uses all the same resources that those communities already have.
Mass timber can benefit Canada in more than just the health of the lumber industry. My NDP colleague from South Okanagan—West Kootenay brought that forward. It could provide a new material that is more carbon-friendly than metal or cement, and we could use it to build infrastructure, skyscrapers and the housing that our nation desperately needs, a point that I raised earlier.
We also need to further support the growth in our domestic market by encouraging Canadian companies to use wood in place of less sustainable materials in manufacturing. New developments in wood alternatives to plastic could open up new industries to our supply of softwood lumber. We could reduce waste by helping the environment and generating Canadian wealth, as I talked about earlier with that tax credit. After 42 years, we could finally try to do something different. We can strengthen mass timber and other Canadian wood product manufacturing and we can improve domestic demand and ensure that softwood moves away from logging companies to Canadian mills and manufacturers. Funding for mass timber and wood manufacturing would create new jobs in regions where logging and mills have historically been a major industry.
Families in Port Alberni that have worked in lumber for generations can remain in their communities and harvest timber or create new, higher-value products, which then can be exported to the United States or other trading partners. We need to look at those other trading partners.
Those manufactured wood products, by the way, would be unaffected by the raw log tariffs. It is time that we stop repeating the failures of the last 42 years and start looking at what we can do to strengthen the timber industry for the next 42 years.
I know it is past my time, but it is certainly time to start something new.
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- Apr/8/24 7:29:37 p.m.
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Madam Chair, the forestry industry is significant, especially in Kootenay—Columbia. There are a lot of family-owned saw mills, some owned for five generations.
Another problem in British Columbia is access to fibre. I am wondering whether my colleague could give some examples or ways he could see for our mills to get the wood, regardless of the fires. There is wood there, but we cannot seem to get access. Could the member explain what kind of ideas he has?
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- Apr/8/24 7:30:16 p.m.
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Madam Chair, that is a great question. I hope this debate leads to all of us working collectively. I appreciate the demeanour and tone my colleague brings.
This is something that has come up. Mosaic, which owns private lands on Vancouver Island, actually asked the Minister of Export Promotion, International Trade and Economic Development for relief during COVID, for 18 months to three years, whereby it could bypass B.C. timber sales, basically the raw log export board federally. If it had been granted that permission, it would have creamed everything. San Group and mills would have been closed. We would have lost hundreds of workers, and they would have never come back. We fought tooth and nail, and we got the minister to back down on that request. Thank God, because the price of timber went through the roof. It would have demolished that area.
We have an opportunity right now to change the structure of how logs are sold internationally. We should not have raw log export. At a time like this when we have issues when it comes to fibre, we should be focused on all of that fibre being manufactured here in our country. We also need provinces to demand changes in how the federal government works on international trade. They need to work together on this issue. The model is not working. It is not working for the environment. It is not working for workers. It is certainly not working for the future of British Columbians and Canada.
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