BUDGET 2009: Masse Speaks on Trade AGreements, Workers, and Sectoral Strategies

Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, it is important to make that correlation because we have a spiralling effect that really brings down other elements of the economy, everything from the person who operates a small business and provides food services, also those who want to invest in the area and look toward clustering around a major manufacturing facility. It also hurts the social infrastructure be it the United Way or other charitable groups because, for example, we have the CAW and other types of philanthropy taking place because of that economic activity.
This really hurts on a psychological level in the sense that what the government has said to the workers of Chatham and Kent area is that we want to have our trucks for our military built in Texas, but hey are not good enough in Chatham and area for the $800,000 retooling. That is all that is necessary. A small pittance and it is all the jobs too that would be done by the people of our own country, many of them laid off right now.
The government has said to those people they are not going to be the ones who build the trucks for our men and women who are serving this nation and that really hurts them. I have talked to them and that is how they feel. It is sad because it could be different.
Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, I appreciate the opportunity to rise again and to speak on this very important issue, and that is regard to Bill C-2, An Act to implement the Free Trade Agreement between Canada and the States of the European Free Trade Association, in particular, Iceland, Liechtenstein, Norway, Switzerland.
It is important to recognize that our trade relations are very key to how we develop our sector economies, how they affect Canadian employment and how they affect even issues of national defence and strategies related to growth industries in terms of technology and so forth.
We believe in fair trade, and one of the principal components of fair trade is to ensure that when a country that we are trading with has had a strategic advantage or has a system in place that is providing a benefit, we actually deal with that and have a plan in place for our workers and our people over here in Canada.
In particular, there is problem with this trade agreement as it currently stands which we find very difficult. There are some issues with regard to agriculture, but in particular the hardest one is the issue of shipbuilding.
Norway has had several years, in fact over a decade, to provide a strategy that it has developed and implemented to build its shipbuilding industry. What will happen in this agreement is that over a series of years, we will see the phase-out of a 25% tariff that partially helped protect the shipbuilding industry, which is still struggling over here in some respects. We would like to see this as an opportunity, in terms of what is happening right now and laws of trade that are out there, to actually rebuild our shipping industry.
It is something that should be noted. It is done in other countries. It would not create an offensive front. It would not be seen as protectionism because quite frankly, the United States, for example, under the Jones Act has a protection of its procurements. As well, under its defence policies, it actually has local and domestic procurement that it controls.
We do not begrudge the United States for that. We can certainly understand the fact that it would want to maintain some of its base industrial elements that protect its national interests and national defence. It is something that is important for the United States in terms of its sovereignty and how Americans view themselves in the world, but also in terms of the workers who have good skill sets.
Value added work is very important with regard to notation of shipbuilding. It is not a case of simply sending natural resources out of the country. It is something that actually has value added components. It is also something that is actually changing right now, with new technology, so we get those advancements in technological development clustered around the shipbuilding industry. That also includes the elements that it connects to passive shipbuilding industry as well.
I am familiar with this as well in terms of the auto sector. They have that strategy and it is a strategy at which we have not gotten up and raised our fists in anger. At the same time, on the Canadian side we have done the very least of things to protect our industries and provide the same things.
It is interesting to note because this is a big difference, especially right now with the heightened discussion of what is happening in the United States with its buy American clause, what Canada can do and cannot do, and what the United States can and cannot do. We do not even do the base minimum that the United States would respect.
One of the most egregious situations that has now come to the public discussion forum is the fact that the government has chosen to procure a quarter billion dollars worth of trucks from Texas. That is unacceptable because our trade agreement right now allows us to have defence procurement and to purchase from our own country.
Ironically, we have a facility in Chatham, Ontario that was actually going to close a few years ago and there was government support. The then Liberals said that they could not do it, that it was against NAFTA and against everything else, and there was no way they could save this plant. We hit the streets and we worked really hard. We saved the plant and it has actually been very successful until recently, well worth the investment it got from the government which it paid back to the coffers, not just from the company but also more particularly from workers who have paid taxes and have been able to raise their families with some dignity and integrity and also chase the Canadian dream of having a prosperous life in this country.
Sadly, what has happened now though is that the plant is in jeopardy. Ironically, the government has decided to abandon it. There is a quarter billion dollars of work going to Texas when retooling is estimated to cost $800,000 at the Navistar truck plant in Chatham.
However it is a modest step forward and it is something that we certainly support. At the same time it also provides some of the elements that are necessary for the actual procurement of additional capacity that could be important for our shipbuilding industry. We should not just be simply relying or hopeful that we actually have our yards filled right now. We would like to see expansion.
When we have this economic downturn right now it is easy to be able to use elements like this as a way to have procurement, especially when we look at some of the defence contracting that needs to be done.
The budget notes that there is going to be $175 million allocated for a number of different craft. Small craft are going to be built and we hope that they will be done in our own shipyards with the proper policy to do that.
That is what worries me and why the Navistar example with regard to the trucks being built in Texas instead of Chatham, Ontario is disturbing. We could see that $175 million contract awarded in several different ways to procurement in South Korea, procurement in Norway or procurement in the United States, all of those things.
I would like to thank the House for the opportunity to speak again on this and also to reinforce that as we go through trade agreements like this we have to be very careful of the details.
One of the elements that I would like to touch upon finally is the past Liberal government thought it had it right when it brought in the free trade agreement and new trade agreements after signing the Auto Pact. The Auto Pact made us one of the strongest auto manufacturers in the world but when we brought in the other trade agreements it killed the Auto Pact despite the government of the day arguing that we would stand up and be able to have it. Since that time our auto industry has crumbled around us as others have decided to move forward.
I hope that is a lesson we keep in mind, vote this down and vote for Canadian action instead.
Mr. Brian Masse: The hon. member for Nickel Belt is absolutely correct. It is important to note that Terry Phew, Executive Director of the National Farmers Union has identified the concerns, that if we actually had to bring the agriculture component forward in the bill that potentially under the WTO we could get a challenge with regard to supply management.
Even though agriculture and auto do not often meet up together they are actually a good example when I was referring to what happened with regard to the Auto Pact and I think the concerns are there. It was the WTO on a challenge from Japan that eventually killed our Auto Pact.
We were fourth in the world in assembly and now we have gone down to ninth and we are falling even further back. Despite the challenges that we are facing it is important to recognize that other things are developing in the industry.
General Motors, for example, is opening up the first plug-in electric vehicle in Detroit, Michigan. It has just bought South Korean technology to bring its battery system on line for that vehicle. That is because the U.S. has set aside a $25 billion investment strategy of low interest loans.
Therefore despite the challenges for the auto sector, and we have seen plans go down here in Canada, in the United States it is actually increasing plant production and certain measures. That is really a good example of the environment being connected.
The reason that it is really important is at that time trade minister Pierre Pettigrew downplayed the WTO decision originally with regard to the Auto Pact. That is traditionally what governments of the day do. They will downplay decisions as they work themselves through the court system and at the same time they will undermine our actual ability to control our own destiny.
Therefore it is a warning sign. It is something that is very important and it is also one that sets a good example for the concerns expressed in the agriculture sector about the bill.
Mr. Brian Masse: Mr. Speaker, I have had the opportunity to tour the Halifax shipyards and talk to both workers and management there. There is a strong confidence element involved there. Those people feel that they could be part of something bigger. They feel that they could be a part of the future of procurement for Canada, whether it be the military or the coast guard. That is what they would like to do. It is not only about having a job. It is about having pride in a country that can produce the goods necessary for us to be able to defend ourselves and also serve our citizens. There is a natural connection there that needs to be recognized. It really instills a nation's sentiments.
It is sad that we do not have that policy in Canada. It is sad that we do not have the necessary overall sectoral strategies.
Other countries are doing it. One of the reasons there is an interest to get into Canada is because other countries know that we could be vulnerable to competition because they have had so much support in the past. I am speaking of Norway as an example.
Norway implemented a plan and developed significant shipbuilding facilities and capacity. That is the important thing. Norway had a head start. It is difficult for someone in the 100 yard dash to catch up with their competitor who is 50 yards ahead of them. That is what we are talking about here. We want to see a race in many respects.
It is really important for Canada to recognize that there are other stimuli packages out there. We are not talking about adding other layers of protectionism. We are talking about using the tools that we have available in this country. European countries, the United States and Japan use the models of their economy within their trade agreements to expand their services and capabilities.
It is an exciting time right now with the greening of many of the different types of technologies. Even though we face deep challenges, our opportunities are great. We can see a lot cleaner, a lot leaner, and more important, a stronger connection between the lifestyles that we lead and the environmental footprint that we leave behind.
This is a great opportunity to build on sectoral strategies. That is why I would like to see the government take this opportunity to heart and move forward. Sadly, we are still moving backward. We cannot be just a nation that supplies raw resources to the rest of the world.
Let us weigh this out. For $800,00 of retooling, done by Canadian workers and a with lot of Canadian content, it would facilitate the improvements that are necessary on the truck that would make it meet the obligations of the Canadian military. It would also allow for new innovation in the plant, which is a very good plant that has been known for its quality. Prior to much of its production being sent down to Mexico from Navistar, we used to get some of the Mexican produced vehicles into Canada to fix them. The men and women are very good, adept at their skills and solid workers. We know that the quality would be of the highest calibre and I am sure that the workers in Chatham would take a lot of pride in building vehicles for our military. They would get behind this 100% and produce the best vehicles possible.
Instead of putting that $800,00 into the retooling that would have had workers paying taxes again and going forward into the future, they have decided to ship it all down to Texas. When one compares the $800,000 with the $250 million of the defence procurement contract one has to wonder where the strategy in this government is. Why does it not believe that Canadian workers are just as capable of building vehicles for our soldiers, men and women and military infrastructure?
It would also guarantee, and this is a key element in the trade agreement that worries me, a key element of our industrial complex that is still necessary for the world that we live in. We need to have a manufacturing capacity that is going to protect our national interests. The trucks would be used for a whole series of operations. We know that if we have control over that, we could actually continue to be able to produce those vehicles for future contracts. If other countries have an interest in the vehicle they could come to us. Perhaps we could have a continued expansion of the facility or a continuation of the work, which would go on for nearly a couple of years.
It is really disappointing when we pull away from that opportunity, especially at a time when down in my region, unemployment in the Windsor-Essex County area is at 10%. Chatham is up there as well. That those individuals would not be the men and women who would be assembling the vehicles for our country is very frustrating. We lack the visionary elements from this government to see that forward. It comes forward with plans in this budget to help Canadians put sod on their lawns, but it will not help Canadians maintain the industrial complexes that are necessary for our national security and are going to benefit the overall economy. On top of that, it is going to be the cutting edge of the new development of the actual manufactured vehicles. They will be the newest and latest in the field.
This is a problem with regard to our concerns on the shipbuilding aspect. There is going to be a loss of opportunity there. It is not just us who are calling for this. I want to read a quote that shows that the New Democrats are not alone on this. A number of different shipping associations have commented on this and made objections. President of the Shipyard General Workers' Federation of British Columbia George MacPherson states:

The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.
He gets it right, because he understands that it is not just about the current capacity we have and need to protect right now. It is about making sure that we are going to continue to be able to reap the rewards of the investment that we have done before.
When I was part of the industry committee we had over 20 recommendations studying the manufacturing sector. One of the things that has been moderately positive with regards to the budget is that we came forward with a policy on the issue of capital cost reduction allowance for machinery and tools. It was supposed to be a five-year policy. First, the government had a position of doing it for a two-year period. Now, they are proposing to do it for a three-year period, so they do have the accumulation of the five years. Unfortunately, not having it done properly through a one five-year period undermines the planning necessary for the capital cost reductions on some of the more expensive and thought-out equipment changes that will be necessary in the future.