June 7, 1993

NDP

Joy Langan (Deputy Whip of the N.D.P.)

New Democratic Party

Ms. Langan:

Mr. Speaker, the hon. member for North Island-Powell River makes a very important point, and that is the length of delay in achieving justice for workers in the public sector. Under the Canada Labour Code the system is enormous, ponderous and slow. It is true that people like Joe Davey end up spending inordinate amounts of time without any income and certainly without any resolution to the case.

I would undertake with the hon. member for North Island-Powell River to pursue this particular case and address the issues so that we can try to ensure that there are not other Joe Daveys throughout the country who have to get justice in the collective bargaining process and legislative process for federal government workers and workers under the Canada Labour Code.

I will pursue this with the hon. member, the Minister of Labour and the President of the Treasury Board.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA LABOUR CODE
Sub-subtopic:   MEASURE TO AMEND
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PC

Charles Deblois (Assistant Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. DeBlois):

Is the House ready for the question?

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA LABOUR CODE
Sub-subtopic:   MEASURE TO AMEND
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?

Some hon. members:

Question.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA LABOUR CODE
Sub-subtopic:   MEASURE TO AMEND
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PC

Charles Deblois (Assistant Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. DeBlois):

Is it the pleasure of the House to adopt the motion?

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA LABOUR CODE
Sub-subtopic:   MEASURE TO AMEND
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?

Some hon. members:

Agreed.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA LABOUR CODE
Sub-subtopic:   MEASURE TO AMEND
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Motion agreed to, bill read the third time and passed.


CUSTOMS TARIFF


The House proceeded to the consideration of Bill C-122, an act to amend the Customs Tariff (textile tariff reduction), as reported (without amendment) from a legislative committee.


PC

Marcel Danis (Minister of Labour)

Progressive Conservative

Hon. Marcel Danis (for Minister of Finance) moved

that the bill be concurred in.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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Motion agreed to.


PC

Marcel Danis (Minister of Labour)

Progressive Conservative

Mr. Danis (for the Minister of Finance) moved

that the bill be read the third time and passed.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Minister of State (Finance and Privatization))

Progressive Conservative

Hon. John McDermid (Minister of State (Finance and Privatization)):

Mr. Speaker, I am pleased to rise to speak on third reading of Bill C-122. I shall be brief.

Bill C-122 is important legislation that contains the long awaited textile tariff reductions. The bill will have the effect of amending the Customs Tariff so as to implement, as of January 1, 1993, the textile tariff reductions announced in the government's December 2 economic and fiscal statement.

This is not a new initiative. In 1988 the government announced that it would be reducing Canadian textile tariffs to levels comparable with those of Canada's industrialized trading partners, particularly the United States.

For years Canadian textile tariffs have been significantly higher than those of other industrialized countries. For example, United States textile tariffs are on average one-third lower than Canadian textile tariffs.

These high Canadian textile tariff rates have imposed additional costs on all downstream users of textiles, particularly the apparel and furniture industries. This has affected both the international and domestic competitiveness of our textile-using industries and increased costs to Canadian consumers.

In February 1989 the government asked the Canadian International Hade Tribunal to provide advice on how Canada's textile tariffs could best be brought into line with those of other industrialized nations in order to

June 7, 1993

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maintain the competitiveness of the Canadian apparel industry and other downstream users of textile products.

The Canadian International Trade Tribunal held extensive public hearings on this matter. In 1990 it recommended that Canada's textile tariffs be reduced by moving to a simpler tariff structure involving maximum rates of 5 per cent for fibres, 10 per cent for yarns and 16 per cent for fabrics.

This would reduce Canadian rates from an average of 8 per cent, 13 per cent and 18 per cent to 25 per cent respectively. The tribunal also recommended that tariff rates on certain specially constructed textiles be reduced by one-third.

The tribunal proposed that the textile tariff reduction be phased in over nine years once the results of the Uruguay round of multilateral trade negotiations were known, but not later than 1991.

The recommendations of the Canadian International Trade Tribunal would reduce Canadian textile tariffs by just over one-quarter. This would leave most products with slightly more tariff protection than their United States counterparts and significantly more than those in the European Economic Community or Japan.

The tribunal concluded that its recommendations would generate over-all benefits for the Canadian economy by reducing costs to textile-using industries and consumers. In turn the tribunal concluded that its proposal would have a relatively minor impact on the textile industry and that the industry would successfully adjust to the reductions.

Over the past 20 years the primary textile industry has invested very heavily in its modernization and rationalization. As a result, the industry has recorded impressive productivity gains.

Following receipt of the Canadian International Trade Tribunal's report on textile tariffs the government carefully studied it in detail and concluded that the interests of all parties had been fully considered.

In July 1990 the government expressed its support for the general direction of these proposals. It announced that it would act on the tribunal's recommendations within the framework of decisions to be taken by the Uruguay round of multilateral trade negotiations. Accordingly, with this in mind the textile and apparel industries began to make appropriate adjustments.

It is a little later than 1991 but Bill C-122 contains legislative amendments to implement the tribunal's recommendations effective January 1, 1993. Of course the Uruguay negotiations are still ongoing. It is hoped they will arrive at a conclusion this year, however we had hoped that for the last couple of years and it has not happened. That has nothing to do with the negotiations on textiles but everything to do with the negotiations on agricultural matters.

Bill C-122 is going to implement the tribunal's recommendations with the following modifications. First, to compensate for the delay in its implementation the tariff reductions are being phased out at a rate of 1.5 percentage points annually rather than the 1 percentage point per year that was recommended by the tribunal.

Second, to further simplify the tariff structure all textile fibres, yams and fabrics are being treated in the same manner. All, excluding speciality fabrics, are being reduced to maximum rates of 5 per cent, 10 per cent and 16 per cent respectively.

Finally, in keeping with our international obligations, margins of tariff preference are being maintained for Australia and New Zealand for six tariff items in which there is significant trade from these countries.

In concluding my remarks I would like to re-emphasize the importance of Bill C-122.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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?

An hon. member:

Cheaper suits.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Minister of State (Finance and Privatization))

Progressive Conservative

Mr. McDermid:

I have my Canadian suit on. It was made in Hamilton by Cambridge. I will give it a little plug today. Wait until you see the tie of my colleague across the way from Eglinton-Lawrence, Mr. Speaker.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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?

An hon. member:

Cheaper ties.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Minister of State (Finance and Privatization))

Progressive Conservative

Mr. McDermid:

It is pretty outstanding too. I am sure it is Canadian made as well.

Reducing textile tariffs is the best way to ensure that Canadian companies such as Cambridge which use substantial qualities of textiles can compete on an equal footing with other companies in the North American market and overseas. It will also ensure that companies are able to market their products at more attractive prices to their customers.

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It cannot be forgotten that the health of our textile industry depends to a certain extent upon the strength of its customers. The Canadian apparel industry, its major customer, uses about 35 per cent to 40 per cent of the Canadian textile industry's production.

Nor should we lose sight of the fact that the textile tariff reductions in Bill C-122 will directly benefit many textile producers by reducing their input costs. Bill C-122 represents a fair and reasonable approach to the issue of reducing Canada's textile tariffs.

Delays in introducing the long awaited reduction have created uncertainties for both the textile industry and its customers. It is time to remove any lingering doubts. I respectfully ask that hon. members support speedy passage of this bill through third reading.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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LIB

Giuseppe (Joseph) Volpe

Liberal

Mr. Joseph Volpe (Eglinton-Lawrence):

Mr. Speaker, I appreciate the plug given to me by my colleague from Brampton. I hope that the lights and cameras can handle the brightness.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Minister of State (Finance and Privatization))

Progressive Conservative

Mr. McDermid:

It looks like a test pattern.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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LIB

Giuseppe (Joseph) Volpe

Liberal

Mr. Volpe:

It is. It is a new product by Canadian manufacturers in the apparel industry and it is a plug for them. They are obviously interested in any kind of legislation and any representation that gives them a competitive edge in a very aggressive business.

The bill is supposed to address the competitiveness of the Canadian apparel industry and its ability to source material so it can provide a product that is attractive from a style point of view and competitive in price.

The committee went through the legislation. It is pro forma legislation. We are talking about reducing tariffs on a list of items. For those of us who want to examine each and every item on an individual basis, there are some five pages of coded documents and coded numbers in three columns per page. For the average citizen to see what exactly is exempt is a bit difficult.

However, we ought to keep a couple of things very much in mind. Some of the suggestions made by the minister opposite we would accept and expect for all Canadians in a competitive environment, in a world environment. The textile industry or the apparel industry in Canada has suffered enormous buffeting over the course of the last several years, in large measure because

of increased competitiveness from manufacturers and suppliers overseas, offshore and down south.

The problem has not necessarily been with the tariffs. I recall they were initially put in place to protect nascent and thriving Canadian industries and to give them the added competitive edge required to produce a quality product that would be attractive in its own right. Such attraction would provide Canadians not only with an industry but with an opportunity for employment as well.

Over the course of the last several years the problem the Canadian industry and Canadian manufacturers have experienced has in some measure been due to tariffs. However it has been caused in larger measure by the exchange rate. Today we are addressing legislation that says we are to reduce tariffs at the rate of 1.5 per cent per annum over the course of the next six years, to the point where we will reduce them to zero.

When the minister points to increased productivity on the part of our industry and the increased competitiveness of some of our manufacturers, we are talking about a rather recent situation given that the Canadian dollar has achieved a much more competitive rate overseas.

As a point of criticism, this legislation will encourage Canadian apparel manufacturers to source more and more of their products overseas. In committee we deliberated on this matter to a very thorough extent. The problem we will be facing in Canada is not so much whether we will be talking about whether our tariffs will cause greater strain on some of our producers, whether this is better from a competitive point of view for the consumer, but whether we are addressing an enormous need, a crying need in this country for an industrial strategy that promotes the development of a manufacturing sector.

As I indicated a moment or two ago, this sector has been buffeted and virtually destroyed. The legislation will not do anything to help our textile manufacturers. Granted, it may assist those in the apparel industry inasmuch as the materials they will be using will be available at moderately more attractive rates.

I wanted to give an indication that the Official Opposition is in favour of the reduction of tariffs. Having made extensive efforts to consult with the textile and the apparel industries on this matter, we would have very little objection. Our objection to legislation such as this is that it does not address the large picture.

June 7, 1993

We would agree that some of the objectives the government outlines in promoting the legislation are laudable and worthy of support. We are sorely lacking in those areas that address a longer term and broader strategic manufacturing strategy. We have not addressed it at all. We are missing another great opportunity to do something for Canadians everywhere. We are missing another opportunity to enhance the manufacturing sector. We are missing a golden opportunity to provide an environment whereby we can create a greater number of jobs.

M[r. Jack Whittaker (Okanagan-Similkameen-Merritt): Mr. Speaker, I want to put a few remarks on the record. It will not take long.

The bill has to be looked at in the over-all context of what it is doing or what it will continue to do to the textile industry. When we look at the bill, we have to separate the two sections of it dealing with the clothing industry and the textile industry. I believe this particular case is a continuation of what started with the free trade agreement and the dissolution or the erosion of the foundation of the textile industry.

Clothing manufacturers have said that they feel by moving more rapidly than set out in the bill with the breakdown of the tariffs they would be more competitive in the over-all market. Yet on the other hand the textile industry is saying that while it does not necessarily disagree with the tariffs being dropped, it should be phased and loaded in on the other end as opposed to the front end loading of the tariff reduction.

It is interesting to note the employment figures since the free trade agreement was instituted in 1989. Total employment in the Canadian garment industry back in 1988 was 95,800. In 1992 employment had fallen to 62,300. Those are Statistics Canada figures. They are of some concern to our party with respect to the employment aspect.

The minister knows well what has occurred. Often we are hurrying a process. Instead of trying to find a cure for the ills, we are saying let us amputate and see whether we grow back the appendages we have amputated.

Government Orders

Let us look at the over-all manufacturing sector and what has happened to that sector with the realignment through the free trade agreement. We have looked at that amputation as opposed to looking at how we move our industries into a point of international competition so there is the least amount of damage done to the employment base and to families throughout Canada.

I do not think we have looked at that. It is another example of where we have moved the textile industry out. Once again it is often at the expense of women with low end wages, people who have worked hard and do work hard in trying to keep their families together. They are looking at how they are going to get their next dollar. From those Statistics Canada figures we have seen a fairly major drop in employment within the textile industry. That in itself causes a problem within the legislation and causes a problem for the employment base of the textile industry.

We also have to look at the over-all bill itself and exactly what it does. It phases in tariff reductions at the rate of 1.5 per cent per year rather than the recommended 1 per cent in the Canadian International Hade Tribunal recommendations, speeding it up as opposed to back end loading it as requested by the textile industry.

Also, under this bill it would treat specialty textiles and certain lightweight wool fabrics in the same manner as other fibres, yams and fabrics. That is the tariffs would be reduced a maximum 5 per cent, 10 per cent and 16 per cent respectively. Currently these tariffs are on average 8 per cent, 13 per cent, 18 per cent and 25 per cent respectively. This legislation would maintain the margin of tariff preference for trade with Australia, New Zealand and six tariff items in which there is significant trade.

Clause 1 would implement proposed tariff cuts through an amendment to the Customs Thriff which strikes out a series of existing textile tariffs itemed in schedule I and replaces these with a new set of reduced textile tariffs for goods entitled the most favoured nation and British preferential tariff.

We have to look more broadly at the bill in analysing it and asking where it is leading us and what it is doing. It seems to me that this once again is simply tied in with the

June 7, 1993

Government Orders

free trade agreement and the North American free trade agreement in pushing to the end where there is the breakdown at the borders between ourselves and the United States.

It gives the advantage, I would suggest, to the United States manufacturers. It is going to cause a problem to some of our clothing manufacturers in bringing out yams and fabrics that are made offshore and are presently being used. That is because it is going to force them to purchase more North American made fabrics, often made in Mexico or the United States. It is going to put them at a disadvantage in that respect.

From my point of view and from the point of view of my party there are major problems with this in that it does not do what it should do. If there are to be tariffs brought in it seems that they should be back end loaded to ensure the smooth transition for the textile industry.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Minister of State (Finance and Privatization))

Progressive Conservative

Mr. McDermid:

Mr. Speaker, the hon. member rightfully pointed out that there has been a reduction in employment in the industry.

As I mentioned in my remarks and as the industry itself has acknowledged, rationalization has had to go on. Modem equipment and far more productive operations have come into play. We have seen some very positive results. We have gone through a recession, there is no question about that. We have lost employment to that and we have lost some employment to rationalization.

One of the things I think we should point out to the Canadian public just to make a balanced presentation to them is that exports of apparels are up some 60 per cent since the free trade agreement came in. The Canadian producers of apparel found markets in the United States during the free trade agreement and have done very well with sales. With these changes and reductions in tariffs, it will make them even more competitive. I just wanted to get that on record.

I understand the hon. member's concern about manufacturing jobs and so on and he is right. There has been a reduction, but there has also been an increased productivity, very impressive by the way, in the industry. At the same time, there have been greater exports to the

United States which during a recessionary period have been very significant.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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June 7, 1993