Mr. Andy Savoy (Tobique—Mactaquac, Lib.)
Mr. Chair, I am pleased to have this opportunity to speak on the Government of Canada's strategies and maritime perspective on the challenges faced by maritime lumber producers.
I come to this debate from a fairly strong background in softwood lumber and the forestry sector in general having owned a woodlot. I still own a woodlot and I worked in softwood lumber. It is something that is certainly very important to the economy in my constituency. I have many friends and neighbours who work in the industry, so the sector that is critical to not only my friends and neighbours but the economy employs about one in six people in my riding.
The Government of Canada places the highest priority on resolving the softwood lumber dispute, and so it should. Our government, as I do, recognizes the vital economic importance of the forest products sector to Canada with sales of $59 billion a year and a total of 1,200 communities across Canada entirely or heavily dependent on this sector. Forestry contributes more to our nation's surplus than the automotive, metals and fisheries industries combined.
In Atlantic Canada alone there are over 785 lumber producers and 72,000 woodlot owners. I am proud to say that I am one. They owe their livelihoods to the lumber business. In my native province of New Brunswick, it is a $670 million a year business that provides 28,000 jobs or one in eight New Brunswickers with employment. It accounts for more than half of New Brunswick's exports making our province more dependent on softwood shipments than any other province in Canada.
Underpinning the success of this industry are free, open and competitive markets for Atlantic Canada's forest products, especially in the United States, where 90% of our New Brunswick products are sold. Although Atlantic Canada was spared the one-two punch of countervailing and anti-dumping duties in the last round of U.S. trade tariffs, the anti-dumping penalty alone has had very serious consequences for our region's forestry industry and our economy.
Until this shortsighted protectionist trade action, Atlantic Canada had enjoyed free and unrestricted commerce in logs and lumber with the U.S. These duties were clearly based on politics, not proof. The U.S. has always regarded our region as a free and fair trader, acknowledging that 75% of the timber cut in the Maritimes is cut on private land. Yet, even though the region had never been accused of being unfairly subsidized by stumpage fees, our producers were still slapped with an anti-dumping penalty. The consequences have been devastating.
Everyone loses in a trade war and in my riding we have lost big. On Monday two Fraser owned company mills shut down in my riding forcing 400 people out of work. That was the same lumber mill where I started my engineering career. While working there in 1988 and 1989 in the refurbishment of that sad lumber mill, it increased production on an eight-hour shift from about 80,000 board feet to about 260,000 board feet and subsequently it has gone up to 360,000 board feet. It employs a couple of hundred people, people who I grew up with, people I worked with and people I call friends.
This has had a very devastating impact and the softwood lumber dispute was one of the reasons cited for the layoffs. These shutdowns have occurred in communities not just in New Brunswick, not just in Atlantic Canada but all across Canada. We know that. They have also occurred in Plaster Rock, New Brunswick, where the softwood dispute really dealt a blow. We need action by the U.S. and we need it now.
As the MP for Tobique—Mactaquac, where one in six jobs depends on the forestry industry, I fully support the government in its efforts to find a long term, durable solution to the problem. I must stress durable solution to the problem in order to protect our nation's lumber interests. These efforts that the government is taking are focusing on litigation, political intervention and advocacy.
On October 14, the Prime Minister raised the softwood lumber dispute with President Bush, stressing its importance to Canadians. The Prime Minister spoke out forcefully about the importance of all of the NAFTA partners living up to their obligations. This was amplified, as we all know, by his speech at the Economic Club of New York on October 6, and he will continue to do so as long as the U.S. imposed duties remain.
The Minister of International Trade has spoken with his U.S. counterpart, U.S. Trade Representative Rob Portman, on several occasions to express Canada's strong concern over U.S. intransigence on the lumber file and the need for the U.S. to comply with its NAFTA obligations. Canada will continue to raise the softwood lumber issue at the highest level of the U.S. administration.
In regard to Canada's advocacy efforts, our main goal is to foster American support for Canada's position and to remind key U.S. decision-makers that this dispute has negative implications for U.S. as well as Canadian interests.
I had the pleasure and honour of travelling to Washington on four occasions now. On each occasion I met with those interest groups to explain to them the damage that this was having not only to Canadians, to my constituents, to Atlantic Canadians, but to people in the United States as well. I explained the big impact it was having to people in the home construction industry, for example, people who are working in Home Depots across the United States and people who are being severely taxed by this dispute. By some estimates there is a $1,000 increase in the average price of a home. We have played a strong advocacy role on that front.
We are taking advantage of every opportunity to put our message and our position before American decision-makers and those who will influence the lumber file. Ambassador McKenna has been sending Canada's message loud and clear to key groups and individuals in the United States. He is saying that U.S.-imposed duty on Canadian softwood imports hurts American businesses and consumers. Countervailing and anti-dumping duties on Canadian lumber negatively affect many other American industries and workers whose businesses use lumber. These advocacy efforts inform Americans that they are paying the price in order to benefit very narrow protectionist interests.
On March 2 the Minister of International Trade headed a delegation of federal, provincial and industry officials to Washington to promote Canadian-U.S. trade and to raise awareness of this issue. As I said, Ambassador McKenna and other officials have and will continue to meet with members of Congress to press Canada's position in Washington.
Canada has been working with U.S. organizations that share our view that these duties are detrimental to Americans. We are working with the major U.S. corporations, consumer advocates including Home Depot, American Consumers for Affordable Housing, the National Association of Home Builders to name just a few. I had the pleasure of meeting with some and they truly understand Canada's position and the impact this is having in the United States.
We will continue to seek new allies as well to make Canada's view known to influential U.S. policy-makers. We are getting the message out to key American audiences who must be made aware that jobs in America's lumber-consuming industries outnumber jobs in the U.S. lumber-producing industries by 25 to 1. The restrictions on Canadian lumber imports put American value added jobs at risk.
Key American audiences must be made aware that the U.S. industry cannot, on its own, meet U.S. demand for quality structural lumber. The U.S. duties on Canadian lumber disrupt a stable supply of high quality lumber. The American public must be made aware of that $1,000 increase to the price of a new home. The government's enhanced advocacy efforts ensure we get Canada's message across to our southern neighbours that the import tax on Canadian softwood hurts Americans.
The softwood lumber dispute also threatens to undermine North America's reputation as being one of the most predictable and transparent places in the world in which to conduct business. U.S. actions damage the large and integrated North American market by compromising the rules-based framework that governs it, NAFTA.
The NAFTA dispute settlement rules must work the way they were intended. Our advocacy efforts will raise the importance of NAFTA to the United States. Ambassador McKenna will make it known to audiences that the U.S. position threatens to undermine NAFTA.
The government's advocacy efforts also include a wide range of activities that many people in this House deserve credit for, including the Canada-U.S. interparliamentary group. This group hosted in St. Andrews, New Brunswick other members of Congress to discuss softwood lumber and other issues, and they should be commended for that.
We need an agreement that respects NAFTA and then further negotiations that respect Atlantic Canada's historical exemption to U.S. trade penalties. We need a durable solution. The sooner that agreement is reached the better for companies and consumers on both sides of the border.
Topic: Government Orders
Subtopic: Softwood Lumber