Masse on Bill C-2: International Trade Agreements, Procurement Policies and the Impact on Workers and Industry in Canada

Hansard – Free Trade
March 23, 2009
Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, it is important that one looks at the context of trade. One can look to the current deals out there that have been signed, and as part of due diligence, one can review what is happening here. It is important to look at Bill C-2.
The hon. member for Burnaby—New Westminster has requested to carve out aspects of shipbuilding. That is actually a normal process of trade arrangements. In fact, in the history of trade arrangements they have had these elements in a series of different ways. For example, just look at the United States. It has the Jones Act and also procurement policies within a number of different defence contracts.
The United States also has these elements in manufacturing, for example with the bus industry, where there are provisions that require content assembly in parts manufacturing in the United States. In fact, Canadian companies had to go into the United States and open up assembly plants so they could bid and win contracts for those.
As well, the United States has a buy American clause, which is part of its overall procurement policy and always has been. It reached some feverish discussion in recent months, but the reality is it has been in American law for a number of years. The clause has in fact been part of the United States' ordinary procurement policy and has also been part of American state and municipal procurement policies.
The request that has been made here is part of negotiation tactics. Unfortunately, Canadians have a history of bad negotiations when one looks at the past Liberal government and the Conservative government. The fact is the deal here was arranged by David Emerson, who was a Liberal minister for the Martin administration. When he crossed the floor after an election, he continued with his policies. One of the policies was with regard to European trade, but also another one with Colombia. Also, another deal that has not seen the light of day, thankfully, is with Korea.
If one looks at those policies, the government offered up quite significantly a number of different iconic Canadian industries as bait to bring in trade negotiations, and then the government caved and gave them away later on.
One of the reasons I have been opposed to the South Korea trade deal is that, as some bureaucrats will admit, they had to offer something up. In this agreement the government has offered up the automotive industry. It is a terrible position to start with, because one knows right away where one's negotiation strength is. Unfortunately, the government comes back with deals that really sell out certain segments of Canada's industrialized capacity.
It is important to note, for example, the United States has its own defence procurement policy and Canada does not begrudge it that. Canada knows the United States has certain aspects it wants to continue to have in its country as part of its overall strategic way to deal with civil society as well as international affairs. That is why it has the capacity to make sure it can respond to certain things.
Sadly, Canada has done the exact opposite. Canada has basically abandoned any type of sectorial strategy approach, and only through a budgetary process year by year scrambles around to try to find some programs or aids that come and go for the aerospace, automotive, or shipbuilding industries. The government does not really create concrete plans of action.
The NDP is looking at Norway for particular reasons in this debate because it spent over a dozen years building a shipbuilding industry through heavy subsidization and national policy. It had over a generation of public policy geared to design and build ships not only for their domestic industry, but also international industry. When Canada then enters into an agreement like this with no terms and conditions to protect Canadian industry, it is at a natural disadvantage.
I have had a chance to see some of the work that has been done with shipbuilding. I have been at the Irving yards in Halifax and spoken with the workers there. Interestingly enough, the government position has always been the issue over labour mobility. The government says if workers cannot build ships because there is no work, then they need to go out to Alberta or somewhere else to find a job.
The first thing one may say to that, even I as a young parent, is one will do what one must, there is no doubt about it. When Canadians have thriving communities that are going to continue to be there, it is important for families to be held together, which is the creation of a bond the community requires to deal with everything, including social programs, crime, education, innovation.
It is not just about having workers go away for a couple of months and come back again. Canadians do those things if they have to, but the preference would be to have a job in their own community, especially communities that historically will be around for the foreseeable future. We should be looking at building that capacity. It is about those communities with a high industrialized component for shipbuilding, for example, as we are talking about today specifically, to be part of a program and plan to create stability. We are going to win from that.
Other organizations or other countries would not be complaining about Canada being protectionist because this is done in other countries and that is why it is important to have this component carved out and move forward with the rest of the trade agreement that would be more balanced. It would be progressive in the sense that shipbuilding would be removed, but it is not, which is unfortunately why we are back here today.
I am going to speak again about the Navistar truck plant in Chatham, Ontario where a $200 million defence procurement offer went out to International Truck which is located in Chatham and also Texas, which decided to put all the work into Texas. That is not acceptable because a number of years ago International Truck was having problems and there was a $35 million loan guarantee provided to it which was successful and for the last several years we have been producing trucks at that plant and doing quite well. In fact when they tried to move production to Mexico, they had to come back to Chatham to be audited and repaired because the quality was not up to what the client needed.
I do not get upset as a Canadian politician if the United States is going to buy trucks from Texas for its military. I understand Americans have a plant with people working there. If they are going to buy trucks and if they thought it would be a good idea to come to Canada to buy them here that is a good thing. We are always hopeful to gain that type of business. But I can understand that they want to have certain segments of their military protected, to be able to do procurement there because they actually get it. They also understand if they have that development capacity they also have control over who gets those at what time. They have it in their contracting, so basically the United States can cut the line whenever it wants and that would reduce our capability to have our own sovereignty addressed.
It is interesting that this plant can produce that truck for retooling at about $800,000. With the layoff of workers going to take place, we are looking at maybe $17 million to $19 million in unemployment insurance benefits. So it makes no sense whatsoever on an economic scale. If we were actually going to have that investment, the retooling is going to be done by Canadians, the equipment allotted is going to be Canadian. People doing the work are Canadian and we would have the next future base of taxation policy from those who are making money in that area contributing back to the coffers of Canada, so we would have a net win. So why we would send our truck development to Texas and basically backhand Chatham, Ontario which is struggling right now does not make any sense.
It goes to a deeper issue also which ties with the essence of shipbuilding and the history we have with the water. Canadians know we have been a maritime nation serving ourselves quite capably during the first and second world wars where we had one of the largest merchant marines and navies by the conclusion of the war. There was a real pride and sense of dignity we had with being able to procure much of our own development and capacity to do it.
People having the type of work where they actually produce something of net value they can really relate to is such a value added component to our society. It is an extra added benefit to those who are part of the actual experience. In terms of shipbuilding there is that element. Similar to that, in Chatham, Ontario it is what the Conservative government said is that they are not going to produce for our men and women serving in the military, it is going to have someone else do that.
Therefore they miss out on that relationship of having to be able to get up every single day, go to work, get a paycheque and also contribute to the Canadian development experience that is so important, that when one has a job that one has a meaningful sense of worth.
The Conservatives have told them, no, they are not good enough. They are not going to be the ones that will do this. They are going to assign that to somewhere else.
That is what is so important about the debate in terms of the economics behind the shipbuilding industry and also how it connects to ourselves as a people. When we see this outsourcing that is going on it becomes very frustrating.
What is happening is workers and others are starting to feel the anguish and I worry about the elements that will come next. Being from the auto sector I can tell the House that there is a great deal of frustration coming from workers who feel that the government is not there for them and that they are having to do things on their own.
In one of the more recent cases that we have had is the issue over Aradco. I want to take this opportunity to congratulate Gerry Farnham, president of CAW195 and his workers. Because they were not going to get the severance when an American company pulled out of Canada, and 80 families were losing their jobs and they were not even going to get a severance package, these workers took it upon themselves to occupy the plant and they made sure that they were going to get a better severance package which was negotiated by themselves and not with the help of the government. Those people are working class heroes. They are men and women who many of them are single parent families who have had to take these types of actions to protect themselves and their families livelihoods.
That should be a message to the government about what happened in that one plant at this particular time. The government has to be more responsible when it has the tools and the resources behind it to make a difference in this country.
That is why we should be carving out this element and protecting our shipbuilding industry and the workers who have the skills and the training, which is important. When we look at the Aradco workers they were some of the most productive workers and through no fault of their own they were usurped. That is the same for the shipbuilding industry. The workers are the best trained and they are people who actually have significant experience. We are going to abandon that in some type of an experiment and it does not make any sense.
That is why we have to turn this around. People are looking at us and looking at the examples that we are setting. They are asking what can we do with their taxpaying dollars that will benefit not only just in terms of the immediacy of the tax expenditure that we are doing right now but later on in terms of public policy.
That is what a national strategy for shipbuilding and an auto strategy would be and all those other things where there is value and traceable elements of where the money goes to. That is what could be done in this particular element.
Workers are going to continue to feel frustration as they have done everything right and then they do not have the government behind them.
It is disappointing that we are here by ourselves as New Democrats on this issue. I think we will be looking back later not only in terms of what we have lost but also the missed opportunity to reinforce at a time when there is that motivation which should be even bigger to restart an industry and make sure that it is going to thrive.
That is really critical because when we can look at the incredible opportunities. We can look at the Great Lakes, not only as a treasure environmentally but also trade corridor that is significant. The ships that are there right, in terms of Great Lake freighters, now need to be replaced. Those will all be built in China, Norway or somewhere else and they could be built here.
Sadly we let the shipbuilding facility at Collingwood go, but we could plan to make sure that Halifax, the Montreal area and other parts are preserved where we still actually have that capacity. For those who are not aware of it, Collingwood has now become a resort. It is a very beautiful location with a lot of positive things there. However what we did not do was plan another deep water capacity port. What we have lost now is the opportunity to actually have a thriving industry return.
Therefore we need to think about that in the context of what is happening right now and this is the perfect opportunity.
I think it is important that we revisit and look at what the message would be for Canada if we actually carved this out. It would tell the other countries that we are interested in doing this and I do not think we would have a hostile reaction. I do not think any country would challenge us.
When we look at some of the European policies for defence and other procurements, it is quite similar. When we look at the United States, it is very clear that it has decided that it is going to have this at its capacity, and we are very much integrated with the United States. Ironically, even as we have had some of these elements, the United States has gone to the extreme where under the Patriot Act and other types of legislation, many Canadian workers are not eligible to work on some contracts in the United States that are defence procurements.
The United States has even challenged the workers who are part of companies that are integrated. This is going to become a bigger issue because we have a number of different procurements that are going to take place over the next few months. We will hear about some of them, including search and rescue planes that need to be replaced. There are concerns already being expressed that the government is going to skew the bidding process basically to give an Italian company the contract. We have actually a number of different consortiums here in Canada that could actually do that type of work and that have up to 50% Canadian ownership. They should be part of that process.
We are going to continue to see this type of debate emerge. This is not a one-time issue. We are going to see the return of the discussion of the South Korean trade deal. That is another one that I mentioned, where the automotive aspect to it is being offered up as an element that basically could be seen as the carrot to bring us in, and then later on we suffer the consequences because of that.
It is not just the New Democrats here on their own who are actually bringing this issue forward. It is interesting because we have not only the labour aspect, which is traditionally a part of our party, our relations and so forth, but we also have the associations and the companies, such as the Irvings.
There are some interesting quotes that have come out of this debate that really reinforce the fact it is going to be costing us as a country a lot of jobs, such as Mary Keith, a spokesperson for Irving Shipbuilding Inc. It has actually put this in a release, so it is not something that was just said off the cuff or thrown out in a media comment. This is an actual release that it put out, so they thought very carefully about what they were going to say. She said:
The Government of Canada is continuing its 12 year history of sacrificing Canadian shipbuilding and the ship operators in the establishment of free trade agreements with other nations. International trade minister David Emerson said a free trade agreement in principle was reached with countries Iceland, Norway, Switzerland and Liechtenstein.
They were looking at it through a 12 year lens when she made that comment, and that is significant because there are a number of different operators or companies out there seeing this as systemic, and when we see something as systemic, we defeat the option of other people interested in actually investing or moving into that actual field.
The people making those comments are indicating that this is not just a one-time bad policy from the Conservative government and the Liberals before it. What they are saying is that if people want to get into this business, they better buckle up because the ones who are in it right now are completely dissatisfied with the relationship they have with the government. They feel that not only is it not neutral, it is actually against the flow.
I want to point that out because what we have happening here is a continued pattern of behaviour, the assumption that we can just reduce trade barriers or regulations, whether it is regarding food or other types of industries such as the airline industry, and we are going to see natural improvements to the consumer and to civil society. That is not the case. That has not always happened.
What we need is a carrot and a stick approach. The carrot is good public policy and the stick is to make sure that the jobs are going to be created here, especially when taxpayers' money is involved.
Mr. Brian Masse: Mr. Speaker, we know the industry will be abandoned in Canada. I would be surprised if the Bloc thought that if the industry has trouble later on, we should not worry because the Conservatives will rescue it at the end of the day. I would be surprised if the Bloc believed that would happen, because I do not sense that from the government. Traditionally, it has not been there. I would not give the Conservatives that type of credibility or that type of responsibility and think it is real.
It is important that when we have a trade agreement, it is fair and balanced. It should not be done at the expense of one particular group or segment. That is the whole point, I suppose, of a united Canada. We can be stronger and more successful.
There is nothing wrong with carving out a piece of this deal and then negotiating a better one. There is certainly a lot of benefit from other countries when they come into the markets in Canada. It will be a more balanced, a fair trade, but we cannot ignore that Norway has provided more than a decade of support for an industry that will destroy that.
I would say that the Quebec shipbuilding industry would also take a hit. It could be much more significant, but has not been because there has not been that policy in place. I believe Quebec will suffer from that lost capacity and also potentially a shipyard closure, which has been threatened in the past. That would be a setback for the country and for Quebec.
Mr. Brian Masse: Mr. Speaker, quite frankly, a couple of things play into this. First, the architect of this deal was David Emerson, a Liberal. Members have quite clearly hitched the history to him. He was the architect of the softwood lumber deal and we all know how that is working out. In fact, I was just in the United States and it was questioning Canada's deal itself. We do not even have a set stability pattern. We basically got taken to the cleaners on that deal. Ironically, we were winning in the courts and then we pulled defeat from the jaws of victory.
I live across from Detroit, Michigan which is home to the Detroit Lions, so I am very familiar with that process. That is what was done with regard to the softwood lumber deal. We see the catastrophic result of it across this country. Who can be satisfied with the current status quo in the agreement?
That is part of the problem, as well as expediency. When sign trade agreements are signed, for some reason they are seen as elements of justification or a process that shows maturation in a government. That is really worrisome in the sense that the symbolism of it is being presented as more important than the fact of what is going to happen to industries after they emerge in this new relationship.
I do not know why the Bloc is supporting this without forcing the carve out. It makes no sense for it to turn its back on the workers of Quebec, in particular those directly affected. Basically giving up control of the potential shipping industry in the future to other hands without having a public policy is rather peculiar.
Those are some of the reasons I think we are seeing some of the decisions being made and why we in the NDP are the only ones speaking on this issue. I have debated this a number of times and people say I am against trade and moving forward. That is the furthest thing from the truth. What we need is fair trade and this is part of negotiations that have taken place in other bills and other countries and they have those elements.
With that, we should move forward with this. We not only have examples we can point to but they are right next door in the United States.
Mr. Brian Masse: Mr. Speaker, I think the people who negotiate on our behalf have either a self-esteem problem or need to see Tony Robbins, or something. It is habitually case that they go in with a position to give up something quite significant and we get taken advantage of. People just cannot go in playing poker with their hands facing the opposite way and kind of hope things are going to go right. Those types of elements cannot be given up right away.
It important that we actually set the proper policy. I have seen it with the auto industry. It is affecting the entire country right now. All we can do now is hitch on to the United States because we have given up so much of the sovereignty. I would hate to see the shipbuilding industry suffer the same fate because it is important not only for our national security but also the type of work people can do and the value-added work that goes back to the coffers of this country.
Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, that is an interesting intervention, especially given the fact that the NDP did not even have enough votes to vote with the Liberals at that time. Obviously, once again the Liberals cannot even do basic counting.
This issue really is that the Canadian public was tired of Liberals' behaviour in the sponsorship scandal. That is really what is at stake here. The bluster coming from the member really shows the sensitivity that Liberals have about this issue because they know that the minister at the time, David Emerson, who flip-flopped and crossed the floor to the Conservatives, was the mastermind behind it. He sold us out with the softwood lumber deal. Is the architect trying to sell us out with the South Korea deal, which we have been able to stop as New Democrats?
The heart of the matter is this deal should be stopped right now. If Liberals want to do something productive, they could carve this element out and correct their ways. I would like the hon. member to comment on that.
Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, I know my colleague is aware of the case of Navistar. The government is procuring trucks as part of a couple-hundred-million-dollar project. Our country has decided to send this work to Texas. At the same time, we have a perfectly good facility in Chatham, Ontario that can produce those vehicles. It is going to close eventually. Ironically, it has been rescued in the past and been successful.
We understand the United States is going to purchase their trucks for their Texas plant. We accept that, but why can we not do the same thing in our country? The retooling is around $800,000, but the employment insurance for the laid off workers is estimated at $17 million to $19 million. It makes no sense whatsoever. I would like to have my colleague's comments on that.