James Francis KELLEHER

KELLEHER, The Hon. James Francis, P.C., Q.C., B.A., LL.B.

Personal Data

Sault Ste. Marie (Ontario)
Birth Date
October 2, 1930
Deceased Date
June 2, 2013

Parliamentary Career

September 4, 1984 - October 1, 1988
  Sault Ste. Marie (Ontario)
  • Minister for International Trade (September 17, 1984 - June 29, 1986)
  • Solicitor General of Canada (June 30, 1986 - December 7, 1988)
February 2, 2004 - October 1, 1988
  Sault Ste. Marie (Ontario)
  • Solicitor General of Canada (June 30, 1986 - December 7, 1988)

Most Recent Speeches (Page 1 of 125)

August 29, 1988

Mr. Kelleher:

Madam Speaker, I certainly agree with the Hon. Member and, if I did not, he would certainly tell me about it. However, in this particular case he is absolutely correct. How a province which exports 90 per cent of its exports to one country could possibly be opposed to a trade agreement with that country, when this agreement is going to enhance trade and secure jobs for that province, is beyond me.

The Province of Ontario, more than any other province, knows the benefits of free trade because some 20 years ago we negotiated the Auto Pact which, in effect, is a free trade agreement. No other province in this country benefits more from the Auto Pact than the Province of Ontario and, I may say, the riding of the Leader of the NDP. General Motors has invested $2 billion in that riding because of the Auto Pact which has created thousands of jobs there. I have not yet heard the Hon. Member for Oshawa (Mr. Broadbent) stand up in this House and condemn that agreement.

I cannot understand why the Province of Ontario or the opposition Parties are against an agreement which is going to provide more secure jobs for the people of not only Ontario but the whole country. That is beyond me.

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August 29, 1988

Mr. Kelleher:

Madam Speaker, I can certainly advise the Hon. Member that if one looks at the trade statistics over the years, one will see that 10 or 15 years ago, we exported as much as 20 per cent of our product into the European Community. Today, following the creation of the European Economic Community, we export only 7 per cent or 8 per cent.

I know what happened to Canada when Norway and Sweden came in as associated members. We were denied access to some of our trade in the pulp and paper industry. I know what happened to Canadian trade when Portugal and Spain became members of the European Economic Community. Again, our trade suffered as a result.

It is absolutely vital for us to protect our market in the United States where approximately 75 per cent of our exports go. One of the things the critics have overlooked in condemning our Bill and in telling us that they will tear it up is the very important, careful, methodical studies that have been done by recognized experts on what will happen if we do not have this trade agreement. There is no such thing as the status quo. We cannot stand still. We either go ahead with this agreement or we will be subjected to continued protectionist pressures from the United States. We saw all kinds of that before we negotiated and concluded this agreement, and there is no reason to suspect that if we do not sign this agreement, those pressures will not continue. One only need look at the continuing trade

August 29, 1988

Canada-U.S. Free Trade Agreement

deficit in the United States to realize that those pressures will become unbearable on an administration and will reflect themselves on protectionist measures against Canada. The moment that happens, Canada will lose jobs. We cannot allow that to happen. We care about jobs. The other two Parties obviously do not care about jobs. That is why we are the Government and they are not.

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August 29, 1988

Hon. James Kelleher (Solicitor General of Canada):

Madam Speaker, it gives me great pleasure to be able to speak today on one of the most important achievements of this

August 29, 1988

Government, the negotiation of a trade agreement that will secure and enhance Canada's trade with our largest trading partner.

As Canada's former Minister for International Trade, and as the Member representing the northern Ontario riding of Sault Ste. Marie, I am particularly pleased that Bill C-130 has now reached third reading stage in the House of Commons.

Today I would like to focus on why Canada must develop a more predictable trading relationship with our friends to the south, and why the trade agreement is a good deal for Canadians, particularly Canadians living in northern Ontario.

The need and the rationale for a new trade agreement with the United States quickly became clear to me in September, 1984, when I assumed my responsibilities as Minister for International Trade.

When our Government took office in the fall of 1984, Canadian exports in several key sectors were under fire in the United States. Our forestry, mining, fishing, and manufacturing exports to the United States were being targeted regularly by American trade actions. Yet there was no mechanism in place to allow us to protect our interests effectively. Our Prime Minister (Mr. Mulroney) demonstrated both leadership and a national vision when he put on our political agenda the negotiation of a free trade agreement.

In today's world the status quo would not provide the jobs required for Canadians in the 1990s. Our Prime Minister had campaigned in the 1984 election on the theme of "jobs, jobs, jobs". In northern Ontario we understood that clearly those new jobs could not be created without such a comprehensive trade agreement. Simply stated, the status quo was not working, and thousands of Canadian jobs were at stake.

Take for example an industry that is critically important to the well-being of Canada's manufacturing industry, and to my riding of Sault Ste. Marie, the steel industry. In 1984, the U.S. International Trade Commission recommended that protectionist quotas and/or tariffs be allowed and applied to certain products of steel. In the end, voluntary restraint agreements were proposed for all of the steel products exported from countries considered to be trading unfairly through dumping or subsidization. At the time there were strong voices in Congress arguing that Canadian steel exports should also be blocked.

The stakes in this game were high for the residents of Sault Ste. Marie. Algoma Steel is the primary employer in my riding, and Algoma exports approximately one-quarter of its production to the United States. Well over 2,000 jobs directly depend upon steel exports south of the border. Ultimately, we have succeeded in excluding the Canadian steel industry from being side-swiped by these protectionist measures that were aimed primarily at countries like Brazil and Japan. However, our steel producers continued to be targets of various rearguard actions.

Canada-U.S. Free Trade Agreement

I quickly realized that, although Canada and the United States had an institutional mechanism to deal with the administration of the bridge that links our two countries in the Sault, there was no dispute resolution mechanism available to deal with our day-to-day trading relationship. Trade disputes were being dealt with on an ad hoc basis, with varying results.

It would have been irresponsible to continue to try to manage the largest two-way trading relationship in the world on an ad hoc hit-or-miss basis. This is one of the primary reasons that led to our decision to explore the opportunity of securing and enhancing our trade with the United States.

We carefully examined the facts and consulted with Canadians before embarking on negotiations with the Americans. Three of the most noteworthy facts are as follows: First, Canada has an internal market of 25 million people. This market is spread over 4,000 miles and is subject to various interprovincial barriers.

Our domestic market is relatively small when compared to the United States domestic market of over 240 million, or Japan's market of 130 million. Let us not forget that producers in the European Economic Community have access to a single market of 320 million consumers.

Second, given our relatively small domestic market, Canada must trade with other countries if we are to prosper as a nation. About a third of Canada's Gross National Product depends on access to foreign markets.

Among industrialized countries, only West Germany comes close to Canada's degree of dependence on access to foreign markets. However, West Germany has privileged access to a market of over 300 million consumers, whereas Canada's domestic market is less than one-tenth in size.

The importance of trade to Canada can perhaps best be understood in terms of jobs. Three million Canadians depend on trade for their jobs.

Third, the United States is by far Canada's largest trading partner. Over three-quarters of Canadian exports are sold to the United States, and approximately 2 million Canadian jobs depend on this trade. Last year Canada's two-way merchandise trade with the United States totalled approximately $175 billion.

The United States is Canada's most important trading partner for many reasons that relate to geography, history, and economics. Although the Trudeau Government's third policy option attempted to increase Canada's trade with Europe and decrease our trade with the United States during the 1970s, the relative importance of the U.S. market has continued to grow.

Given the fact that Canada must effectively manage its trading relationship with the United States if we are to prosper as a sovereign nation, our Government began a consultation

August 29, 1988

Canada-U.S. Free Trade Agreement

process with Canadians to determine the best option available to us.

Yes, Madam Speaker, there has been extensive consultations with Canadians. Although there are some who pretend that Canadians have not been consulted on this trade agreement, the facts indicate that the consultation process has been moving forward for almost four years. As a front row player, I am proud to have been part of this Government's extensive consultation process with the Canadian people. Never in the history of Canadian trade negotiations were so many people involved in examining Canada's trade options.

In November, 1984, my colleague, the Minister of Finance (Mr. Wilson) released our agenda for economic renewal. At that time, we clearly stated that:

The Government will examine, as a matter of priority, and in close consultation with the provinces and the private sector, all avenues to secure and enhance market access. This will include a careful analysis of options for bilateral trade liberalization with the United States in the light of various private sector proposals, as well as preparations for and opportunities provided by multilateral trade negotiations.

In January, 1985, I released a discussion paper that was widely circulated throughout the country. The discussion paper set out four main options to deal with our trading relationship with the United States: one, maintain the status quo; two, negotiate sectoral or functional arrangements; three, negotiate a framework agreement; four, negotiate a comprehensive arrangement similar in scope to the agreement we are considering today.

Following the release of our discussion paper, I set out across the country and met with the provinces and many groups and individuals from the private sector, unions, the universities, and elsewhere.

However, we were not content in limiting the consultation process to my travels across the country. In 1985, Cabinet approved my proposal to set up both the International Trade Advisory Committee chaired by Walter Light, as well as 15 sectoral advisory committees. These committees were made up of men and women from virtually all major industries and regions in Canada. Many meetings were held to ensure that this trade agreement was based on the most complete information available, and to ensure that Canadians could provide ongoing input during the negotiating process.

I would like to take this opportunity to thank again all individuals who so generously volunteered their time and their energies to this successful grass roots consultation process.

I am very pleased that this consultation mechanism has not been dismantled following the successful conclusion of our negotiations with the Americans. These committees were recently restructured to ensure that there is also meaningful consultation for the second track of this Government's trade policy-the Uruguay Round of multilateral GATT negotiations.

The Prime Minister has stated on many occasions that "gone are the old days of confrontation"; that our Government will listen and consult before acting. These consultations on Canada-U.S. trade were consistent with our Prime Minister's new approach to consultation rather than confrontation.

Rather than continue discussing the many ways in which Canadians have been consulted over the past four years, I will now turn to the second main point that I wish to discuss tonight-why this trade agreement is a good deal for Canadians, and particularly Canadians living in northern Ontario.

I mentioned earlier that Canada as a whole ships about 75 per cent of its exports to the United States. The importance of secure access to the American market is particularly well understood by Ontario residents, because 90 per cent of Ontario's exports are shipped to the United States.

For example, the forestry, mining, and steel industries are three of the most important employers in northern Ontario. All three of these key industries require secure access to the United States and, therefore, will be among the big winners as a result of the dispute resolution provisions in the agreement.

The forestry industry employs about 150,000 people in Ontario, most of whom work in northern Ontario. Over 20 communities in northern Ontario rely on the forestry industry.

In the Algoma area alone, there are seven major sawmill and forest product plants that employ about 1,500 people. These plants export around 90 per cent of their product to the United States. In addition, St. Mary's Paper in the Sault employs 500 people and exports 95 per cent of its paper products to the U.S.

The primary producers in the forestry industry will benefit from the creation of a dispute settlement mechanism that gives Canadians rights where before they had none. The fact that Canadian firms can now appeal adverse determinations by American trade tribunals to an impartial binational body will greatly assist our producers of lumber, pulp, paper, and newsprint.

Likewise, the producers of high value-added forestry products such as some papers, particle board, and plywood, will benefit from the elimination of existing tariffs because their products will become more competitive in their primary market.

Producers of converted products such as windows, doors, and kitchen cabinets also stand to benefit from free trade access to the United States. Most of Ontario's $5 billion mining industry is located in northern Ontario. Over 20,000 people in over a dozen communities work in the mining industry in the North. Since 75 per cent of its production is exported to the United States, it is easy to understand why the mining industry has responded favourably to the trade agreement.

August 29, 1988

In addition to the benefits flowing from the dispute resolution mechanism, tariff reductions will provide major benefits to the mining industry. Since American tariffs on metals and minerals now escalate when value is added to the raw resource, the removal of these tariffs will stimulate exports at the higher value-added sectors in the mining industry such as smelting and refining.

I would like to conclude with a brief discussion of the steel industry. With the recent share acquisition by Dofasco, Algoma Steel is part of the largest Canadian steel producer and is also one of the top five steel producers in North America. The trade agreement enjoys broad support in the steel industry, and rightly so. Algoma exports 25 per cent of its production to the United States and will greatly benefit from the dispute resolution provisions.

It is interesting to note that although both opposition Parties have vowed to tear up this agreement, no one has offered a viable alternative to our Government's two-track trade strategy. It is ironic that both the opposition Parties have indicated that after tearing up the trade agreement, they will attempt to negotiate a series of more limited agreements that are confined to specific sectors, although the eligible sectors have not been fully identified! Unfortunately, the so-called sectoral approach was attempted earlier this decade by the Liberals and failed. Furthermore, three years ago, the Macdonald Royal Commission on economic union and development prospects carefully considered the sectoral approach and concluded that it was open to "several serious objections."

Likewise, although the sectoral approach was one of the options considered in our 1985 discussion paper, my cross Canada consultations quickly led me to conclude that the sectoral approach was unworkable. I therefore find it highly ironic that both opposition Parties are now attempting to offer the sectoral negotiating approach as a viable alternative to this trade agreement. The sectoral approach was tried less than five years ago and it got nowhere. There is absolutely nothing to indicate that this discredited approach would fare any better today.

The comprehensive trade agreement we have negotiated with the United States is the product of extensive consultations with Canadians from every walk of life. As a result of this grass roots consultation process, this trade agreement will provide major benefits to all regions of the Canadian economy. In particular, northern Ontario will be the big winner because its forestry, mining and steel industries stand to gain significantly. I therefore look forward to voting for Bill C-130 later this week.

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August 25, 1988

Hon. James Kelleher (Solicitor General of Canada) moved

for leave to introduce Bill C-155, intituled An Act to amend the Criminal Records Act.

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August 25, 1988

Hon. James Kelleher (Solicitor General of Canada) moved

for leave to introduce Bill C-154, an Act to establish the office of Correctional Investigator.

Subtopic:   PETITIONS
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