October 6, 2005

CPC

Kevin Sorenson

Conservative

Mr. Kevin Sorenson (Crowfoot, CPC)

Mr. Speaker, I listened with some interest to my colleague and I commend him on his speech which was well delivered. He basically lives this portfolio and has done so for many years. He has dealt a lot with aboriginal concerns throughout our country.

My colleague mentioned that the Crown reserves the right to expropriate certain lands under certain circumstances. I am wondering if he could enlarge on that a little and give me an idea of what types of circumstances would be deemed as cause for expropriation.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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CPC

Jim Prentice

Conservative

Mr. Jim Prentice

Mr. Speaker, the member for Crowfoot is one of the hardest working members in the House. I applaud his interest in this legislation.

It is difficult to say where and when the power of expropriation might be necessary. What the legislation does do is it preserves the right of the Government of Canada, essentially this Parliament, in the best interests of the citizens of Canada to proceed to expropriate first nation lands or other assets. The point one can take from that is that aboriginal communities under this legislation are in really the same position as all other Canadians, in the sense that they are subject to the overall best interests of Canada. If Canada needs to proceed for whatever reason with taking a forced entry, as it is called in law, the government has the power to do that.

The reason I raise this as important is that one of the very difficult questions we have in the Mackenzie Valley, which has emerged in the context of the negotiations over the Mackenzie Valley pipeline, is whether or not through sheer negligence the Liberal government neglected to protect that very right. There are those who argue that if we examine the treaty negotiations that have taken place and the treaties that have been put in place up the Mackenzie Valley, the Government of Canada has, through a constitutional agreement, given up its right to expropriate, for example, a pipeline easement or a pipeline right of way. Some would make the argument that because it is not in the treaty, it is not in the legislation, this House in fact no longer has the authority within the sovereign jurisdiction of Canada to actually make those kinds of decisions, that because of the negligence of the Liberal government in putting that legislation in place, it overlooked that fact. That is, I am told, a significant issue in the negotiations in relation to some of the pipeline questions.

I might conclude by saying that is not the case with this legislation. We have been vigilant to make sure that those authorities, the authorities of this Parliament, are protected and maintained. It is one of the reasons we support the bill.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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LIB

Ethel Blondin-Andrew

Liberal

Hon. Ethel Blondin-Andrew (Minister of State (Northern Development), Lib.)

Mr. Speaker, I am pleased to rise in the House today to speak to this legislation.

Serving the public here in the House of Commons is a wild and wonderful experience. I have just come from the Commonwealth Room where I met with the Métis of Alberta. If there ever was a group that was impacted by resources in their region it is that group. They felt such empowerment from the legislation they put together in terms of the Métis settlement. It will enable them to create wealth and opportunities for employment for themselves. This speaks loudly in support of Bill C-54. This legislation is necessary, empowering and definitive.

The Métis were here today to announce the opening of an office in Ottawa. This will further empower them to achieve and enact the provisions of their settlement.

Bill C-54, the first nations oil and gas and moneys management act, will equip first nations that choose to participate with vital tools to create good jobs, stimulate economic activity and improve the quality of life in their communities.

I would also like to share some of the successes of my first nations constituents in oil and gas development north of 60. It is not doom and gloom. People have different interpretations on how expropriation works. The reality is that every democratic government does not have expropriation as the first step. It is something that is done after having exhausted every other possibility.

I like to be positive about these things. I think this is a wonderful piece of legislation. I am really into empowering our people to create their own wealth and to be self-sustaining. Bill C-54 does that. It makes the rules quite clear, which is a good thing.

First and foremost, this legislation was designed to respond to the specific needs of the three sponsoring first nations, the White Bear First Nation, the Blood Tribe and the Siksika First Nation, which were directly involved with the first nations oil and gas pilot project launched in 1994. Not every pilot project ends in legislation. Obviously a lot of success was gleaned from that pilot project.

I would like to take this opportunity to recognize the efforts of the sponsoring first nations and the great success that has already been achieved over the past decade. Their commitment to working in partnership with Canada to develop this legislation is honoured as we help them to reach their goals.

Bill C-54 builds on the excellent progress the government has made through several recent initiatives, including the Canada-aboriginal peoples round table, the policy retreat, and the upcoming historic first ministers meeting. It builds on the commitments made in recent Speeches from the Throne, budgets, land claims and self-government agreements. We have achieved some major milestones with our partners in the aboriginal community across the country.

This legislation provides two related but distinct authorities for first nations. First, it provides communities that opt in with the authority to gain complete control and management over their oil and gas resources, creating jobs in the expanding oil and gas sector. Second, it provides these communities with the authority to gain complete control over the management of their moneys held by Canada on their behalf, allowing them to respond to emerging economic opportunities. Therein lies the challenge. First nations are not always in a situation to do that, but in this case we are heading in the right direction. I believe this will be very helpful.

A first nation that chooses to opt for the legislation can opt in to either the oil and gas provisions or the money provisions or both.

Economic development on reserve and strengthening communities continue to be priorities of the government. I am pleased to note that first nations communities both north and south of 60 will be able to take advantage of the opportunities afforded under the moneys management provisions of the legislation.

However, the oil and gas provisions do not apply in the north because oil and gas development is presently governed by a distinct legislative and regulatory framework. South of 60, FNOGMMA as Bill C-54 is known, would remove several levels of federal oversight and offer to first nations the same benefits that many northern communities are already enjoying in managing their own resources. In fact equity participation is a huge part of that. That is something I just gleaned from a recent trip to St. Petersburg, Russia to attend an oil and gas symposium. All circumpolar indigenous peoples have the aspiration to be involved in managing the resources that are in their region, and any of the resource development activity that takes place.

Extensive efforts have been made and continue to be made in the north to negotiate land claim and self-government agreements to respond to first nations' and Inuit people's desire to manage their political and social affairs and to advance economic development and self-sufficiency. That is the goal of every government at all levels.

Regarding oil and gas development and management, the land claim and self-government agreements enable resource development in the north. They clarify land and resource ownership rights, which are of vital importance to investors. These agreements have created conditions for sustainable economic and social development, providing a land base, opportunities for economic development and modern institutions of government to secure a higher standard of living and quality of life for all northern and first nations people.

Consider for instance the Inuvialuit whose land claim was finalized more than two decades ago. Since then the Inuvialuit have secured valuable partnerships with several companies and have launched dozens of businesses. These partnerships and businesses generate revenues that help pay for physical and social infrastructure in Inuvialuit communities and create jobs and training opportunities. They create hope and a vision of prosperity for the people in that region, or at least participating in the wealth that is being created in that area.

By facilitating the success of resource projects, land claim and self-government agreements also have a significant impact on Canada's economy. The economic benefits of large scale resource development projects are felt across the country. Never let it be said that people are not trying to achieve important milestones in going ahead with these projects. Anyone who says to the contrary is wrong.

Land claim settlements and self-government agreements are just one way to ensure first nations and Inuit peoples have the tools needed to assist in fostering business partnerships between industry and aboriginal groups. FNOGMMA provides first nations with similar tools and will also be of tremendous benefit, as we have seen from the northern experience.

Although Bill C-54 describes a somewhat different path than the land claims settlement or self-government approach, it is designed to enable first nations to achieve many of the same goals, such as fostering prosperity and strengthening communities. With the passage of this legislation, first nations that vote to come under its provisions will have more tools available to them as they seek to be more self-sufficient and better able to take charge of their economies. What more could we want for people of any part of this country?

The management authority that this legislation provides will help create jobs in the oil and gas sector, as well as in the many spinoff businesses and all of the value added that result, helping first nations improve their members' quality of life and standard of living. This is a goal shared by all members of this House, I am sure, and all Canadians.

Every community has the right to decide for itself whether it wants to take advantage of this legislation. It simply provides the three sponsoring first nations, and any other first nations in similar situations that choose to opt in, with the authority to assume control of their oil and gas and related revenues, and to assume control of moneys held on their behalf by the Crown.

In effect, Bill C-54 will enable first nations communities to participate in the oil and gas sector and to access moneys held in trust. With these powers, first nations will become more engaged in the economy and better able to implement projects that will improve social and economic infrastructure in their communities, as we have witnessed in land claim settlements and self-government agreements.

If we consider the example of the Inuvialuit or, more recently, the Tlicho, the Labrador Inuit, the Westbank First Nation and even the Kwanlin Dün self-government agreement signed in February of this year, we can see where Bill C-54 might lead. We can see improvements in the transportation networks and in health care and educational facilities. We can see post-secondary scholarships, youth centres and assisted living residences for seniors. For the first time in generations, we can see young people looking forward to bright futures.

In the end, this is what Bill C-54 is all about: enabling first nations to assume greater control of their social and economic destinies. It is about ensuring that first nations have the access to the tools they need to improve the quality of life in their communities.

It is through these types of arrangements, whether they are land claim settlements, self-government agreements or initiatives such as FNOGMMA that ways are found to forge a lasting partnership between first nations and Canada which will set us on a new path toward prosperity.

In my area, we are proposing to build a pipeline that is 1,200 miles long, all along the Mackenzie route. We have achieved significant milestones to move that along. These are not easy things. It is this type of legislation south of 60 that will enable our friends, relatives, people in the south and neighbours to be part of what is happening in their backyard. That is so important. For too long, aboriginal people have been sitting back and waiting for arrangements to evolve. That is not going to happen.

This bill will help that. This is the work of first nations people. They did the pilot project that actually enabled them to come up with this legislation. They are responsible for this. This is a very good piece of legislation. We should support it.

We believe the empowerment of our people is a singular objective of every first nation in Canada. I want to appeal to the members of the House to support this wholeheartedly.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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BQ

Mario Laframboise

Bloc Québécois

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ)

Mr. Speaker, obviously, the Bloc Québécois will support Bill-54. This leads me to put a question to the hon. member.

Since Quebec has been a pioneer in the signing of agreements with first nations—such as the peace of the braves agreement, for instance—could the hon. member explain how Quebec served as an example to the federal government, with the result that it is now proposing Bill C-54? This measure will give first nations the opportunity to manage and regulate oil and gas exploration and exploitation. What was Quebec's contribution and what example did it set in this area?

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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LIB

Ethel Blondin-Andrew

Liberal

Hon. Ethel Blondin-Andrew

Mr. Speaker, I would never claim to be an expert on Quebec, but I do appreciate that Quebec has forged a unique relationship with first nations. Agreements have been struck that relate to resource development revenues and that help to empower the Cree of James Bay and work with all first nations in Quebec.

Quebec has its strengths. It is known for the work that it does on the social agenda, for all of its social programs: child care, housing, and looking at the needs of the civil society in terms of how community development happens, how people live within a community and what their needs are.

The first nations are very indicative of those needs. Quebec has been very skilled at being able to integrate the first nations into this. Not only that, but Quebec has been very skilled at developing a very good relationship with the first nations leadership like Matthew Coon Come, Bill Namagoose, Albert “Billy” Diamond and many of the other leaders, all those people who are from the Quebec aboriginal leadership community. A good leadership relationship was forged. That is the unique part of it. Also, the work plan set together to achieve those milestones is pretty significant.

I think Quebec does set a good example, but every province has its own story to tell, not just one province. All the different communities have that story to tell as well. It is not one partisan issue. Successive governments replace one another and basically do a good job with the first nations. We have to look at those examples.

For me it is not a partisan issue; it is what each different government does well, what are the best practices and what we learn from them. I understand that. To be fair, we have to look at what different provinces and municipalities have achieved. Some people will say that a province is weak in one area but strong in another. Forging that relationship with the leadership and setting an agenda with the first nations has been pretty significant. That is hard to deny.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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CPC

Ed Komarnicki

Conservative

Mr. Ed Komarnicki (Souris—Moose Mountain, CPC)

Mr. Speaker, with respect to Bill C-54, first of all I would like to acknowledge the critical role that Chief Brian Standingready and the White Bear First Nation have played and continue to play in the self-government of White Bear in particular and the first nations in general.

White Bear First Nation, the Blood Tribe and the Siksika First Nation were all part of a pilot project with respect to the co-management of oil and gas on their reserve land as early as 1994. I am proud to say that White Bear is within my constituency. They were the forerunners in the establishment and passage of an act to provide for real property taxation powers which involved a series of different structural organizations and changes that they put together.

The driving force behind that piece of legislation, as in this one, was the economic development of reserves and the improvement of the quality of life. It provided the ability to raise capital and generate revenue. It was an initial step in self-government, in being in charge of one's destiny and being responsible for one's own economic development.

At that time, I said that it was a good step but that there was a much larger journey that must be taken for the first nations to truly arrive at self-government. As Bruce Standingready of the White Bear First Nation put it, “You can only eat an elephant one bite at a time”. Chief Brian Standingready of the White Bear First Nation put it quite correctly when he stated, “If you don't have the jurisdiction, you don't have the ability to make decisions”. With respect to this legislation, he indicated, “This new enabling legislation is recognizing our inherent rights to make our own laws in regard to managing and controlling our oil and gas revenue derived from these sources”.

The bottom line is that not only should first nations have the legislative means to address issues facing first nations on the reserves, but they should also have the financial means to do so. The White Bear First Nation is willing and eager to take charge of its own destiny and to participate in the development and use of its natural resources to better the life of its people

On the reserve there are many basic issues that need to be addressed: housing, infrastructure, water, sewer and electricity. It is important, however, that a good foundation be laid by the legislation to ensure the future success of first nations initiatives.

I support this legislation, as does my party. There are some important features and principles in place that will help in success. They relate to the transfer of moneys held on behalf of first nations and the transfer of the management and regulation of oil and gas exploration and a host of activities related to it.

Let me speak of some of the important features. There is an oil and gas code that provides for accountability of the council to first nations for the management and regulation of exploration and exploitation and the establishment of a procedure for disclosing and addressing conflicts of interest of members of council.

The legislation provides for a financial code, specifying the mode of holding oil and gas moneys, either by deposit in a financial institution or payment to a trust of which the first nation is settlor and sole beneficiary. It prescribes the conditions governing subsequent changes from one mode to another.

The legislation also provides for the manner of expending moneys. It provides for accountability. It addresses procedures for disclosing, as I said, and for addressing conflicts of interests. It also requires that books of account be maintained and annual financial statements be prepared in accordance with generally accepted accounting principles. I think these are all good and proper safeguards.

I am somewhat disappointed that the proposed legislation fails to specifically and in advance set out some generic, boilerplate, basic prerequisites that one would expect to find in a trust agreement, not only in terms of the fiduciary duty of the trustees but the specific objects of the trust and the method of spending approval.

However, the legislation does provide for a vote where a majority of those present, not less than 25%, would approve any of the procedures or codes outlined. That in itself provides some safeguards.

Having said that, I see great potential for the first nations, White Bear in particular, in the transfer of moneys and oil and gas rights by giving them an opportunity to chart their own destiny. It seems to me that education, skills training in jobs in various sectors, and management of various forms of business will be a way of ensuring economic prosperity and an acceptable level of quality of life.

There is much to be gained from oil and gas management. As the preamble of the bill states, first nations are able to assume control of their oil and gas industry.

What does that mean in practical terms? It means that first nations can enter into petroleum and natural gas leases, surface leases, easements, rights of way and rights of entry. They can participate in the extraction of oil and gas, in exploration, in production and storage, in distribution and even in processing or refining. There are many associated activities, such as surveying, mapping, test drilling, pipelining and all other related activities that will provide an opportunity for employment.

The White Bear First Nation has experienced some of this in its involvement with Tri Link Resources. It gives it an opportunity to receive a royalty on production and even to participate in oil production. Moneys raised can be placed back into production or used to help the community. It is a great opportunity to create employment, to encourage education and to be trained and employed in the oil industry.

A good example of that was articulated in an article dated May 29, 2000, prepared by Wayne Dunn & Associates, titled, “Experiences and Thoughts on Indigenous Business and Economic Development”. The article, although somewhat dated, provides a little bit of history that the White Bear First Nation has experienced. The article states:

Since White Bear began working with Tri Link, a number of First Nation members have been trained and employed in the oil industry. Tri Link hired two university graduates from White Bear to work in their Calgary office as a petroleum land administration assistant. A summer student was hired to work out of their Kipling office to gain environmental and production experience.

Two White Bear members work out of [White Bear's] office and two members work as Petroleum Land Administrators with the White Bear Pilot Project. These individuals all attended the Southern Alberta Institute of Technology for training sponsored by the White Bear First Nation and received certificates as Petroleum Land Administrators.

Many White Bear First Nation members have gained training and experience in the oil industry thanks to WBOG. So far approximately 38 members have been trained and employed by drilling rigs that are working for Tri Link and four have been trained and are working as contract battery operators. Recently four White Bear members were trained and certified as heavy equipment operators in a program jointly sponsored between Tri Link and the First Nation-run Kakakaway Learning Centre. In the past, the Kakakaway Learning Centre and Tri Link have teamed up to offer training to 30 individuals in the areas of chainsaw certification, chainsaw instructors certification and entry level training such as first aid, CPR and H2S Alive.

As well, the agreement provides White Bear companies and private contractors with the opportunity to bid for services required by Tri Link such as surface lease construction, pipeline construction, seismic line clearing, well site reclamation, trucking, well site maintenance and drilling and service contracting. As a result, seven new businesses have developed on the White Bear First Nation creating new employment opportunities and on-the-job work experience for many First Nation members. These activities have provided over 90 First Nation people with short or long-term employment”.

Part of that in the bill allows this to continue and to be expanded as they take control and management of their own resources. The bottom line in all of this was best stated by Chief Brian Standingready when he said that he “believes it is important that the first nation focuses on helping their people, rather than making profits”. “The oil”, he said, “won't be here forever, our people are our priority. We have to respect the land, our heritage sites, the environment. We always consider the future generations and ask what this is doing for them”.

White Bear in particular has been developing its governance structure in a number of ways. It operates White Bear Lake Resort, the Bear Claw Casino and works in an integrated and cooperative manner with the community of Carlyle, Saskatchewan. With the passing of this legislation, I see the role only increasing into the future. I think it is a good step and is going in the right direction.

I am looking forward to the White Bear First Nation continuing to lead by example, in its industrial expansion and in its involvement in various activities on the reserve, in upgrading the skills of the various participants, in taking part in business, in bringing back some prosperity and putting itself in a position and a place where it can look after some of the very basic needs that it finds facing its community.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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LIB

Mario Silva

Liberal

Mr. Mario Silva (Davenport, Lib.)

Mr. Speaker, it gives me great pleasure to speak to the bill at second reading.

One of the countless good reasons to support Bill C-54, the first nations oil and gas and moneys management act, is the fact that three first nations, which are directly involved, the White Bear First Nation from Saskatchewan, the Blood Tribe and Siksika Nation from Alberta, have taken the necessary steps to prepare their communities for the new responsibilities participation in this legislation would bring.

As a result of 10 years of hard work and dedication building capacity in their communities, these three first nations are now ready to assume control over the management of oil and gas resources on their land.

Working closely with federal officials and Indian and Northern Affairs Canada, the White Bear, Blood Tribe and Siksika Nation entered into a pilot project back in 1994. It would see them move to full first nations control of oil and gas resources and related revenues on their lands and the management of first nations' moneys as envisioned in the sectoral self-government legislation before us today.

To appreciate this progress we need to know a little history behind it. This work began through a pilot project initiated by the Indian Resource Council. The council is a stand alone, first nation-owned and operated agency representing over 130 first nations with oil and gas interests. It provides a mechanism for first nations to become involved in the planning, policy development and strategic direction of Indian and Oil Gas Canada, a special operating agency of Indian and Northern Affairs Canada.

The three first nations, White Bear, Blood Tribe and Siksika, entered into the pilot project so they could one day assume responsibility for the management of oil and gas resources on their lands.

In phase 1 of the project, they entered into a co-management agreement with Indian Oil and Gas Canada. Co-management involved specific oil and gas training as well as capacity building exercises. After three years of co-management capacity building, the three first nations were ready to move on to phase 2 in 2000. This phase involved continuing the joint administrative and management processes begun in the earlier phase. It also equipped the first nations with the necessary knowledge to jointly approve all administrative and management decisions with Indian Oil and Gas Canada.

However it went further: developing a process to transfer control of oil and gas resources to the participating first nations. This stage also required building capacity through enhanced training. Equally critical, it entailed developing individual communication processes incorporating first nations values and beliefs to inform community members as well as industry and government.

This latter point is extremely important as we recognize that any initiatives undertaken to support first nations development must conform to the values of the first nations people affected.

In mid-2001 the three first nations entered into discussions on a framework proposal that served as the launching point for work leading to the current legislation. At this time, the first nations, which initially began this capacity building exercise, are ready to move on to the final phase of this process.

As part of this legislation, first nations choose to control the moneys derived from oil and gas activity when they choose to manage their oil and gas, or moneys in the consolidated revenue fund held by the Crown on their behalf. Opting into one or both parts of this legislation can ensure first nation governments have the tools needed to better manage their community affairs.

Bill C-54 encompasses all of these objectives for the first nations that want to opt into its provisions. There is no obligation for any first nation to take advantage of the bill.

A first nation would be able to choose whether it wishes to assume control of oil and gas resources on reserve and related revenues, assume control of moneys held in the consolidated revenue fund or both. It would be up to community members to decide.

The bill before us is a tribute to the first nations that have shown determination and the desire to acquire the skills needed to manage their own resources and moneys.

This past weekend I was pleased to participate in a first nations event in my riding of Davenport. Consistent with the aims of the bill, I witnessed the desire of first nations to manage their own future and to honour the long, rich and vibrant first nations legacy in this country.

After 10 years of hard work and dedication, the White Bear First Nation, Blood Tribe and the Siksika Nation are now ready to fully assume the roles and responsibilities for which they have been preparing for more than a decade. Should their communities decide to participate in the legislation, the sectoral self-government legislation would enable the White Bear First Nation, Blood Tribe and the Siksika Nation to assume full authority for decision making in relation to oil and gas activities and the revenues generated as a result.

It is now our responsibility to transfer the necessary authorities. I urge all hon. members of the House to support the legislation and to ensure this progress is fully realized.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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LIB

Shawn Murphy

Liberal

Hon. Shawn Murphy (Parliamentary Secretary to the Minister of Fisheries and Oceans, Lib.)

Mr. Speaker, I have been following the legislation as best I could this afternoon and there is one issue I want clarified. I would ask the member to perhaps explain or clarify the necessity for this particular legislation for the first nations to manage their own oil and gas resources. In other words, what new legislative capacities would this legislation give them that they cannot already do now?

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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LIB

Mario Silva

Liberal

Mr. Mario Silva

Mr. Speaker, presently there are gaps and constraints in the legislation that do not permit first nations to engage in the type of activity we want them to, which, in many ways, lead them to self-government. In particular, the oil and gas sector is an extremely important one for them because we are talking about economic controls that should be in the hands of the people who are most affected.

The present legislation has some of these gaps and constraints and this legislation would allow them to take on these steps. It is a move forward for the first nations in this country and is the reason that I would hope all members in the House will support the legislation.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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?

The Acting Speaker (Mr. Marcel Proulx)

Is the House ready for the question?

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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?

Some hon. members

Question.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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?

The Acting Speaker (Mr. Marcel Proulx)

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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?

Some hon. members

Agreed.

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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?

The Acting Speaker (Mr. Marcel Proulx)

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Aboriginal Affairs and Northern Development.

(Motion agreed to, bill read the second time and referred to a committee)

Topic:   Government Orders
Subtopic:   First Nations Oil and Gas and Moneys Management Act
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LIB

Andy Mitchell

Liberal

Hon. Andy Mitchell (Minister of Agriculture and Agri-Food, Lib.)

moved that Bill S-38, An Act respecting the implementation of international trade commitments by Canada regarding spirit drinks of foreign countries, be read the second time and referred to a committee.

Topic:   Government Orders
Subtopic:   Spirit Drinks Trade Act
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LIB

Wayne Easter

Liberal

Hon. Wayne Easter (Parliamentary Secretary to the Minister of Agriculture and Agri-Food (Rural Development), Lib.)

Mr. Speaker, I am pleased to rise in support of Bill S-38 because it is important to our agriculture and agrifood sector and indeed to all of Canada and all Canadians. The bill would open up possibilities not only for the Canadian spirits drink industries, but for our wine industry and for our growing agri-tourist sector as well.

The bill is about jobs and about the diversification of regional economies. It is about growing Canada's $26 billion a year agriculture and agrifood exports in a manner which is most beneficial to our economy and our jobs.

One might ask how Bill S-38 would do all that. The bill would accomplish that by helping our agrifood sector add more value to our agriculture products, our grains and our grapes here at home so we can keep the dollars and economic prosperity within Canada.

Bill S-38 is also known as the spirit drinks trade act. Basically the bill would bring into full force a bilateral wine and spirits agreement that was signed by Canada and the European Union two years ago. It is this agreement which will benefit Canadian producers in both our domestic and foreign markets in the ways that I have just outlined.

The agreement, signed in September 2003, covers a wide range of wine and spirit trade issues between Canada and the EU. These include updates to an existing bilateral agreement which has been in place for some 15 years.

I will speak first to the technical provisions in the bill regarding spirit drinks which upholds Canada's end of the Canada-EU agreement.

In a nutshell, these provisions protect the identity of certain European drink names such as ouzo from Greece, grappa from Italy, pacharan from Spain and others.

Under Bill S-38, only spirit drinks from those specific countries and nowhere else could carry those names. In other words, a distiller in Niagara could not produce a spirit drink and sell it as a grappa or an ouzo. To be clear, no Canadian producers are doing this now.

Certain wines and spirits which are named after the geographic regions where they come from such as Rheingau and Baden in Germany already are protected in Canada under the Trademarks Act. So are Canadian geographic indicators such as the Okanagan Valley, or the Niagara Peninsula or Canadian rye whisky. Products like grappa and ouzo do not fall into that geographical indication category so they needed the specific protection provided under Bill S-38.

New legislation is needed to house the protections required by the Canada-EU bilateral agreement on wines and spirits. This is because these provisions could not simply fall under the Trademarks Act. It does not cover generic names for goods. Furthermore, it only protects private rights while the agreement calls for state enforced protection of these names.

As well as protecting European spirit drink names, Bill S-38 also would protect a number of North American spirit drink names, including Bourbon whisky from the United States and tequila from Mexico. These provisions fall under Annex 313 of the NAFTA.

Bill S-38 would also incorporate Canada's long-standing protection for the names Scotch whisky, Irish whiskey, cognac and Armagnac. Finally, the bill would provide protection for Caribbean rum under the Caribbean and Canada trade agreement. These existing commitments are currently implemented through provisions in the food and drug regulations, however Justice has advised us that it is not the appropriate home for them or the appropriate legislation for them to be within

I would also note that following consultations with Industry and International Trade Canada, a number of minor amendments were made in the committee in the other place. These amendments were designed to more clearly differentiate between the types of protection that Canada undertook to provide for each spirit drink name.

These are the nuts and bolts of Bill S-38. As I said earlier, while the bill may be viewed as a minor technical matter, Canada's wine and spirits industries regard it as much more than that. For them, Bill S-38 is nothing less than a wide open doorway to new growth and exports and new market development opportunities.

We are talking about is helping an industry that is already a strong contributor to Canada's economy and jobs, particularly in rural Canada where many of our wineries and distilleries are located. Rural Canada, as I have said on a number of occasions, is an important part of our country and the government takes that part very seriously. For urban Canada to be strong, rural Canada must be strong as well. They are not separate entities and they are not separate ideas, and we must support both. Rural Canada is home to one-third of Canadians. It provides one-quarter of all jobs. It contributes 22% to Canada's GDP and 40% of our total exports. Certainly the wines and spirits industry is an important contributor to that output.

We should never lose sight of the fact that our rural communities, our rural resource base and our rural people are the fabric and backbone of what makes our country strong. Canadians know that rural communities are key to both our social and our economic competitiveness. They are the front lines in building a better quality of life for the entire country. There is no question that wineries and distilleries are good for the rural economy. They generate crop sales for primary producers.

On the winery side, we are seeing a tremendous boom in the whole agri-tourism sector. More and more tourists are flocking from all corners of the globe to take wine tours in the Niagara Peninsula, the Okanagan Valley, Prince Edward County and elsewhere, even the Annapolis Valley as my colleague next to me has indicated, much as they do in the Napa Valley in California or the Loire Valley in France. That influx of tourism brings important economic benefits right throughout the rural economy: the hospitality sector, the restaurant sector, the travel sector and much more.

The Canadian wine and spirits industries are agrifood success stories, to be sure. Our wine sector continues to grow at a steady pace in many parts of Canada, including, if I may add a commercial message, in my own province of Prince Edward Island. Today about 170 wineries across Canada annually sell some $400 million in wines and purchase $75 million in grapes from producers. As for the spirits industry, Canada has 21 distilleries that produce over $1 billion worth of spirit drink products each year. Of that, some $500 million worth is exported.

As we heard in committee in the other place, both the wine and the spirits industries, including the Canadian Vintners Association and Spirits Canada, are in full support of Bill S-38. Why? Because, as I mentioned earlier, it secures the benefits achieved under the 2003 Canada-E.U. agreement. This agreement provides the industry and the Canadian economy with trade rules in the domestic marketplace, with greater access to the E.U. marketplace, and with a framework to manage any potential grievances in a cooperative and collaborative manner. Best of all, this is a balanced agreement that would benefit both sides without causing any disruption in the Canadian marketplace whatsoever.

With this proposed legislation bringing the 2003 Canada-EU agreement into full force, Canadian wines and spirits producers can look forward to improved access to the European market with which the recently expanded membership is now home to almost half a billion potential consumers. That is a considerable marketplace which is now open to more products thanks to this proposed legislation, products of which Canadian producers and the rural economy can take advantage of.

With Bill S-38 in force, wine and spirit producers in both Canada and the EU will have an agreement that would give them access to more trade opportunities and more stable trade rules. As well, consumers in Canada and the EU have access to a greater variety of wines and spirits than they have had in the past.

The Canadian industry is confident that the agreement will help free up some of the market restrictions that they have encountered in the EU market over the years and in doing so, secure greater recognition in the international reputation of the Canadian wines and whiskey.

As members will know, the Canadian wine industry has made great strides in quality over the past decade, due in large part to the development of the VQA , or the Vintners Quality Alliance, application. Today Canadian VQA wines are known and respected in international wine circles. It is interesting, even if we go to the stores around here, we will see people looking for that VQA symbol because that is the wine they like to buy and that is quality.

The next important step will be to make our quality Canadian wines household names right across Europe, to get them into basement wine cellars from Paris to Prague. The bill marks an important step in that direction. In fact, the wine industry believes that on the strength of this agreement, it will be able to grow wine exports from about $1.5 million annually to some $5 million over the next 10 years.

To give a few more specifics of the Canada-EU agreement, it will recognize for the first time Canadian wine-making practices in labelling rules for VQA wines in the EU market. It will provide for simpler certification for VQA exports, giving wine exporters greater certainty of market exports and allowing them to invest in market development. While protecting EU spirit names, it will protect our geographic indicators in the EU, notably Canadian whiskey and rye whiskey.

I must add that Canadian whiskey is an incredibly positive ambassador for Canada in many markets around the world. A full 80% of our production of Canadian whiskey is exported. Formal recognition by the EU of Canadian whiskey and rye whiskey provides the Canadian spirit industry the opportunity to invest and grow their brands, secure in the knowledge that they will not be undermined by cheap imitation knock-off products in the markets that they serve.

Just as important, here at home the Canada-EU agreement permits provincial liquor boards in Ontario and British Columbia to continue to allow producers in those provinces to make direct sales to consumers. Quebec also will be able to maintain its requirement that wine sold in grocery stores be bottled in the province of Quebec.

To sum up, Bill S-38 is about jobs. It is about regional diversification in rural Canada. It is about growing Canada's exports and adding value to those exports to keep more prosperity and more economic benefits here at home and to continue to build rural Canada. Bill S-38 is about Canada living up to our international trade obligations. We take these commitments very seriously and we expect no less from our trading partners. Canada is a trading nation and a rules-based trading system is fundamental to the global economic competitiveness of Canadian industries.

It is for these reasons that I would urge my hon. colleagues on all sides of the House to lend this important bill their full support. I would note that Canada agreed to provide protection for these names by June 2006, so it is important that we move forward with this bill rather quickly.

We must pass this legislation because it gives Canada a legal mechanism enabling it to meet the trade obligations we have so carefully negotiated. In the context of the discussions which led to the renewed agreement on spirit drinks and wines, Canada has succeeded in obtaining many benefits from the EU which Canadian producers and consumers can enjoy. However, to retain those benefits, we must ensure we are in a position to honour our obligations to our trading partners.

The provinces, the members of the wine and spirits industries in Canada and the federal government have worked hard together in negotiating the Canada-EU agreement on wines and spirits. The bill we have before us is the end result.

I would also like to recognize the contribution, hard work and collaboration of a number of federal departments including Agriculture and Agri-Food Canada, International Trade, Justice, Industry, and others. This is a significant accord that ensures Canadian wine and spirit drinks producers will have increased access to markets in the European Union in the years to come.

Again, I urge members to support the timely passage of this legislation.

Topic:   Government Orders
Subtopic:   Spirit Drinks Trade Act
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CPC

Loyola Hearn

Conservative

Mr. Loyola Hearn (St. John's South—Mount Pearl, CPC)

Mr. Speaker, I listened intently to the presentation by the parliamentary secretary. As usual, he did a very good job in talking about a product that is important to the agriculture field, a field in which he is very interested. I also know the gentleman, as a former chair of the Standing Committee on Fisheries and Oceans, is also interested in fish.

My question actually has two parts. I cannot ask too many questions on wine, being someone who has never had a drink in his life, and I do not know why. Anyway, I am no expert in wine. I totally agree with him by the way, but if we can put this kind of an effort into protecting and promoting our products, how many more Canadian products can we do much better with on the national stage, and the international stage in particular? I would refer to him a product that goes to the EU. Should we try to put the same effort into protecting and promoting Canadian shrimp? As he well knows, a 20% tariff has been placed on shrimp and it is destroying the industry in Atlantic Canada in particular, including affecting people in his own province.

He initiated an effort on that some time ago and nothing is happening. Why is it we pick certain things to really make an effort on, and other things perhaps of greater magnitude are ignored?

Topic:   Government Orders
Subtopic:   Spirit Drinks Trade Act
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LIB

Wayne Easter

Liberal

Hon. Wayne Easter

Mr. Speaker, I know how seriously the hon. member takes the issue relative to trade in shrimp with Denmark and some of the other European countries.

Yes, in my past capacity as a member of the Standing Committee on Fisheries and Oceans, we did a tour in the Newfoundland and Labrador area. I talked to lots of producers about that very serious issue. I think we made a very good report which went to the Government of Canada.

I can very clearly say that the government, through its international trade department and others, has continued to try to deal with that controversial issue. It is still ongoing.

I gather as well that last week the Standing Committee on Fisheries and Oceans was again in the province of Newfoundland and Labrador looking at some of those fisheries issues. I expect the committee will again be putting pressure on the government as a whole on the serious concerns within that province over those 20% tariffs.

This agreement shows what is indeed possible when negotiations go well. We are having difficulty on the other side and admit that. I can say that it is not for lack of effort by the Department of International Trade and the negotiators on many fronts. This agreement will certainly be helpful to rural Canada by opening up markets for our producers, for our wineries. It will give us the kind of protection that we need for those products in an international trading environment.

Topic:   Government Orders
Subtopic:   Spirit Drinks Trade Act
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NDP

Peter Julian

New Democratic Party

Mr. Peter Julian (Burnaby—New Westminster, NDP)

Mr. Speaker, we are, of course, very supportive of Bill S-38 because it shows what can be done when we have good, effective trade policy that is win-win.

Basically the European Union wanted access to our markets in the same way that Canada wanted access to its, but at the same time we wanted to protect the appellations that exist in Europe and in Canada for the creation of a market for good Canadian quality products. Bill S-38 is an example of very effective trade policy.

As the parliamentary secretary knows, we have another issue, that of softwood lumber, where the government has clearly been completely ineffective and in fact negligent. We have an industry that is bleeding $4 million a day. Our partner in the United States has ripped up those aspects of NAFTA that the Bush administration does not like and the government has done nothing, absolutely nothing, to defend the interests of the softwood lumber industry, the 20,000 workers who have lost their jobs, and the communities across British Columbia, across northern Ontario, across Canada indeed, that are suffering from this long-standing dispute.

I would like to ask the parliamentary secretary what has worked in this case. Canada very clearly has negotiated equally with the European Union in order to bring forth a bit of trade policy that works for both partners. Why has the government manifestly failed on softwood lumber?

Topic:   Government Orders
Subtopic:   Spirit Drinks Trade Act
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LIB

Wayne Easter

Liberal

Hon. Wayne Easter

Mr. Speaker, the member made allegations in terms of the Government of Canada's efforts on the softwood lumber issue and he has it all wrong. The fact of the matter is that members of the government right up to the Prime Minister have worked hard on this issue for quite a number of years. We have been supportive of the forestry industry and we recognize that it is extremely important to the Canadian economy.

Although the tariffs and the anti-dumping percentages are there, we have continued to export more product to the United States at higher values. In fact, this morning we met with the maritime lumber industry. Yes, that industry wants the issue resolved, but it was certainly not critical. We are getting some criticism from some of the political parties, but we are really not getting criticism from the industry itself, which knows that we are working cooperatively with it to try to win this argument with the Americans.

In fact, on the weekend a number of Canadian parliamentarians, including a member of the New Democratic Party, were in St. Andrews, New Brunswick speaking with U.S. legislators, again laying out to them the Canadian position on where we are on the softwood lumber issue.

The Government of Canada is indeed working hard. We are aware of the ruling in Canada's favour relative to NAFTA. That shows the kind of background, research and work that was put into that issue by the Government of Canada, its negotiators, its members and others.

Specifically on Bill S-38, the spirit drinks trade act, the member is absolutely right. It is a win-win situation. It shows what can be done when people sit down, negotiate and accept that those negotiations are a win for both parties.

On the other issue, the U.S. does not seem to want to abide by the ruling on a trade agreement that the U.S. in fact signed on to.

Topic:   Government Orders
Subtopic:   Spirit Drinks Trade Act
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October 6, 2005