IN THE HOUSE ~ Peter's speech in response to the Liberal Opposition Day Motion on "Buy America" issue

40th Parliament, 2nd Session

Mr. Peter Julian (Burnaby—New Westminster, NDP):
Madame la Présidente, j'ai écouté avec beaucoup d'intérêt le discours de mon collègue de Sherbrooke. Il m'a laissé un peu perplexe car là, il faut faire un choix entre le commerce équitable — prôné par le NPD — et cette théorie libre-échangiste que la coalition du Parti conservateur et du Parti libéral adopte. Cela fonctionne bien dans les livres d'écoles, mais cela fonctionne moins bien dans la pratique.

Je ne comprends pas la position du Bloc. Est-il davantage en faveur du commerce équitable, autrement dit contre les ententes qui sacrifient des emplois, comme l'entente de l'Association européenne de libre-échange européenne qui va tuer notre industrie de construction navale? Est-il contre ce genre d'ententes, comme celle qu'on a vue avec le bois-d'oeuvre? Malheureusement, le Bloc l'a appuyée, même si cela a mené à la perte de milliers d'emplois au Québec. Ou bien, prône-t-il la position du libre-échange sur ces questions, là où l'État n'a aucun rôle?

Quelle est la position du Bloc?

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Madam Speaker, this is a pretty fundamental debate that we are having today. Unfortunately the motion really does not address the issues that we as Canadian parliamentarians must address.

The motion does put in very stark relief the two ends of this House of Commons. Sitting at one end of the House and crossing over the aisle sits the Liberal-Conservative coalition, which is essentially a group of flamboyant and radical free traders.

Government members read in a textbook that free trade is good so they do not make any sort of intervention or any sort of managed trade, or any actual polices, that would lead to job development or industrial strategies in this country. That is what we have seen over the last 20 years.

Many Canadians know that has led to the collapse of our manufacturing industry, to the collapse of many of our strategic industries, and, as I will point to a bit later on, to actually a fall in real income for most Canadians.

One would think that those radical free traders would look to see if the economic theories that they have learned in a textbook actually work. They do not. There is no evaluation. There is no real consistent understanding of the impact that these policies have had, and that is unfortunate.

The Prime Minister never actually ran a business, never met a payroll, but learned his economics from textbooks, and it shows. The Conservative government has been appallingly shortsighted in putting in place industrial strategies for the automobile sector, for the steel sector, for our shipbuilding sector, for our softwood lumber sector, and for a whole range of vital and strategic industries. We have seen the loss of real jobs, and that is due in part to the fact that we have not had a trade strategy that makes any sense.

At the other end of the House, stretching across both aisles now as a result of the new members we earned in the last election, sits the New Democratic Party. We are strong fair traders. We believe that trade needs to generate additional jobs. We also believe that the government has a role to play in ensuring that industrial strategies are put into place for the preservation and enhancement of our automobile sector, our steel industry, our softwood lumber industry, and our shipbuilding industry.

We in the New Democratic Party believe that government has to work together with the public sector to ensure that there is a rise in real income for most Canadians.

Perhaps nothing draws the difference between fair traders and radical free traders more in relief than the motion that we see before us today.

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J'aimerais souligner certains éléments de l'approche du NPD sur le commerce équitable avant de poursuivre mon allocution sur des aspects spécifiques.

Le NPD croit au commerce équitable, qui prône les droits humains, tels les droits des femmes et les droits syndicaux. Nous croyons que le libre-échange international devrait se réajuster pour accroître la capacité des gens à négocier des ententes collectives, voire s'attaquer à la question des inégalités entre les hommes et les femmes et renforcer les droits humains et non pas les diminuer. On a vu dans l'approche de ce gouvernement, comme dans celle du gouvernement précédent, que leur approche, comme avec l'Entente Canada-Colombie, fait effectivement en sorte que cela brime les droits humains plutôt que de les faire avancer.

Nous croyons également au respect des institutions du commerce équitable, comme la Commission canadienne du blé et la gestion de l'offre, puisque nos agriculteurs à travers le pays, de même que les communautés, dépendent de ces institutions pour faire avancer l'économie locale. À notre avis, il faut protéger ces institutions de commerce équitable, mais les autres partis, le Parti libéral et le Parti conservateur ne croient pas en cela.

Nous croyons également à des ententes qui respectent l'environnement en passant par le développement durable, et cela différencie clairement la coalition libérale-conservatrice et le Nouveau Parti démocratique. Les ententes de libre-échange ont servi à enfreindre des règlements environnementaux. Plusieurs compagnies ont trouvé des façons de contourner toutes les réglementations environnementales, souhaitées par la très grande majorité des Canadiens.

Nous croyons que nos ententes de commerce équitable doivent servir à renforcer une politique et une approche de développement durable et respecter l'environnement. Aussi, nous croyons en des ententes équitables respectant la diversité économique et respectant, par exemple, l'existence d'un troisième secteur. On parle souvent du secteur public et du secteur privé, mais il y a aussi le secteur coopératif, un milieu où les communautés peuvent unir leurs ressources économiques afin de se développer. Je pourrais donner beaucoup d'exemples où le milieu coopératif a permis de renforcer les économies locales et régionales.

Le commerce équitable doit donc servir à renforcer cette diversité économique. Dans un sens, nous croyons à la diversité économique. Pour leur part, les conservateurs et les libéraux, qui travaillent ensemble, prônent les mêmes approches sur le commerce et ne croient qu'en une seule approche: le secteur privé et les grandes compagnies. Une réglementation stimulerait l'économie, sinon il y a monoculture. En mettant tous ses oeufs dans un seul panier, on ne renforce pas les liens communautaires et les économies locales.

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We have here the issue of this particular motion. In light of that difference between Liberals and Conservatives who are perfectly happy selling out Canadian jobs, and the NDP that believes firmly in reinforcing our economy, reinforcing our vital industries like the automotive sector, the softwood lumber sector, shipbuilding and I can go on and on, but there is a very clear difference in our approaches.

Therefore we have this motion today that has three elements and I would like to touch on each one of them. Unfortunately some of them are factually wrong. It is too bad but it is a fairly innocuous motion. We will have to decide in the next few days how we take all this together.

The first element states: That, in view of the growing protectionism in the United States, which is reminiscent of the counterproductive behaviour that led to the great depression of the 1930s,...

In this sense the Liberal motion changes history unfortunately. I think it is referring to Smoot-Hawley back in the early 1930s. The Liberals are radical free traders. These theoretical folks who just love to look at their textbooks and say, “This theory will have to work ”, without ever checking on the consequences of their action. They say that Smoot-Hawley was the cause of the great depression. That is simply not true. Smoot-Hawley came as a result of the great depression, which had already started.

Essentially the great depression in part came from a lack of regulation. Does that sound familiar? Of course it does.

I would like to cite one of our international colleagues, the Australian Labor Party, which is part of the same international entity that the NDP is part of, and the new Prime Minister Kevin Rudd who said:
The time has come off the back of the current crisis to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes.

Prime Minister Rudd is referring to the fact that a lack of regulation again has put us back in the same kind of economic circumstances that we saw in the 1930s. Smoot-Hawley was not the cause. Smoot-Hawley was a right wing Republican attempt to deal with the crisis that began with no regulations, no protections in place for the public across North America.

Curiously, this particular motion does not refer to what the antidote was for the great depression which was not only a series of regulations to put in place to protect the public but also what the NDP has always been calling for the great economic stimulus that came out of the new deal. That was missing from the Republican approach. There was no economic stimulus. There was no investment and what Franklin Delano Roosevelt did with the new deal was provide that economic stimulus that the NDP has been pushing now for months, convinced our Liberal partners to come on the majority coalition and then they sold us out and went with the Conservatives.

In any event, we will see if the Conservatives can be trusted to bring in that economic stimulus in a fair and effective way. Many of us do not believe that they can be trusted. Certainly they have broken their word before.

However the point I am making is that it was economic stimulus in the new deal that actually started to push the United States out of the great depression.

Therefore the first clause is factually wrong. It is I guess in keeping with the proud Liberal tradition but aside from that factual error perhaps pretty innocuous.

Secondly it states: ...this House calls the Government to intervene forthwith and persistently with the United States Administration, and the Congress, in order to protect Canadian jobs,...

That is something certainly that we could support. That is something that we have been pushing for. However let me preface my remarks in this regard with what is actually happening in the United States and in Canada.

Since NAFTA was implemented in 1989, we have the figures right here that what has happened is a hollowing out of Canada. Essentially for most Canadians they have lost in real income. We have seen a loss of real income that is the equivalent for the lowest 20% of the Canadian population of about a month and a half of income. In real terms they have lost a month and a half of income since NAFTA was implemented¸

For the lower middle class they have lost about two weeks of income. Each and every Canadian family in that income class, and we are talking about more than six million Canadians in those families, has lost about two weeks of income in real terms.

The middle class has lost about a week of income in real terms for each and every year since NAFTA was implemented.

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This is not solely a result of NAFTA. It is also because of the foolish economic policies or lack of economic policies that were put in by the Liberals, like the Conservatives. They do not seem to change much as they bounce across the floor, but fundamentally we can say that the bottom line is that they have failed over the past 20 years. When most Canadian families are earning less in real terms than they were 20 years ago, one would think that one member of the Conservative-Liberal Party would say, “Well gee, maybe we should change our economic approach”.

What the NDP is saying, with a growing number of Canadians, is that since Liberals and Conservatives are not changing their economic approaches, we are looking to change the government, and that is why we are seeing more and more New Democrats in this House of Commons as we go through each election. We understand that this is not sustainable. Telling the middle class to accept less every year and telling the poorest Canadians to accept much less every year is simply not a sustainable policy.

I will just conclude my remarks on the Canadian income categories by saying that the wealthiest 20%, which is what these economic policies have been intended to do, not a floor upwards, the wealthiest 20% now take most Canadian income. The Canadian income pie is less and less equal, more and more skewed to corporate lawyers and to corporate CEOs. That is why the NDP is saying that we need a much more balanced approach, a much more mature approach, in keeping with what we are seeing around the world.

We are saying in this motion that we want to intervene with the United States administration. The important thing to note is that when we are talking to President Obama and talking to Americans, we have to understand that they are going through exactly the same thing.

Two right-wing, radical free traders, Kenneth Shi and Matthew Slaughter, who has the oxymoronic title of being a former economic policy adviser to George Bush, said in a recent issue of Foreign Affairs: Income inequality in the United States is greater today than at any time since the 1920s. Less than 4% of workers were in educational groups that enjoyed increases in mean real money earnings from 2000 to 2005. Mean real money earnings rose for workers with doctorates and professional graduate degrees--corporate lawyers and CEOs--and fell for all other income categories.

That is nearly 97% of Americans who saw their real incomes go down.
These explanations around the issue of so-called protectionism miss a basic point. U.S. policy is becoming more protectionist because the American public is becoming more protectionist, and this shift in attitude is a result of stagnant and falling incomes.

It is no secret why President Obama was elected on a platform of renegotiating NAFTA, rebuilding it on a fair trade model. It is no secret why we have seen in the United States, both in the House of Representatives and I was on the phone yesterday talking to friends of mine in the U.S. Congress, that they are talking about these issues. The Senate rejected Senator McCain's ridiculous amendment, certainly not an amendment that was in keeping with the way most American senators felt. It was rejected 65 to 31. It is because Americans are increasingly concerned about the same income fall that we have seen.

If we are intervening with the United States administration, we have to start on that basis. We have to start on the basis that these free trade agreements and all the economic right-wing policies that have gone with them have not been good for American workers and they have not been good for Canadian workers. That is the fundamental problem and I would hope that at least one of our colleagues from the Conservative or Liberal Party would actually start to look at the real facts, the bottom line, not the textbook theory.

We all know the textbook theory. I can spout the textbook theory as well as anyone in this House, but the real, practical results are a fall in real income for Canadians, a fall in real income for Americans, and that is why we are having to deal with these issues where more and more workers are saying, “We have to protect jobs here at home”.

How do we communicate with the United States administration and Congress? We can do it on a win-win basis.

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I will cite the most recent figures available, November 2008, for Canadian trade with U.S. from iron and steel mills, targeted, as we know, in the House of Representatives bill and targeted, as well, in the Senate bill. They are going to go into conference, but one can assume that iron and steel is going to get through that conference and we are going to have to contend with this and deal with the administration and the American Senate and Congress in a meaningful way.

In November 2008, we exported to the U.S. $349 million worth of iron and steel. We imported from the United States $401 million worth. In other words, the U.S. has a deficit with us, a trade deficit in iron and steel. That essentially means that we buy more iron and steel from them than they buy from us. In November 2008, essentially, that is what those figures meant.

So what that means is that we have an opportunity for a win-win. We have an opportunity to go to the American administration, American senators and American members of Congress, and say we would like to exempt from a “buy Canada” clause American steel so we can use American iron and steel and we would like them to do the same with the “buy America” clause.

There is just one wrinkle, one tiny wrinkle. Over the 20 years of Liberal inaction and Conservative inaction, neither government chose at any time--we talked about the lack of industrial strategies. They did not even bother to put in place a “buy Canada” clause. That is something the NDP has been pushing and that, again, is why there are more New Democrats in this House as we go through each election. That is why we overflow from one side to the other side of this House. Canadians are asking why the Liberals did not bring this in and why the Conservatives are not bringing in a 'buy Canada' clause. They are going to say, “Well, it simply must be illegal”, or, “It's not in keeping with our textbook theory.” However, the reality is this would provide us with the leverage that we need to sit down with the American administration and have a win-win negotiation: exempt our iron and steel in the same way that we can exempt theirs.

I come to the third part of the motion, which states, “urge the United States to respect its international agreements”.

I will cite a couple of articles, first, by the Canadian director of the United Steelworkers, Ken Neumann and the International Steelworkers president, Leo Gerard, a very proud Canadian.

Ken Neumann stated: The U.S. has had laws requiring the use of domestically-produced goods for government contracts since the 1933 Buy American Act. These laws are consistent with international trade obligations.

Linda Debouse said the same thing in the Toronto Star. “Buy Canada” is legal, “buy America” is legal for provincial and municipal entities as it is for state and municipal entities and, instead, we are sending millions of taxpayer dollars to buy overseas what we could be building here at home. Many people have cited the Navistar plant, where we are spending $274 million for military contracts in Texas when we, as taxpayers, provided $65 million to the Navistar plant in Chatham, Ontario.

This approach does not make sense, a purely theoretical approach that we are not going to have “buy Canada” because it interferes with our theoretical approach on free trade. It is legal. It would create more jobs in Canada. That is why the NDP is pressing this government, and its Liberal colleagues, to put in place a “buy Canada” policy and save Canadian jobs.

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Madam Speaker, is that all he has? It is the same kind of Conservative theoretical rhetoric. Come on. I expected to have a real debate, and that is all he has got? It is going to be an utter calamity if Canada does what is legal under trade agreements?

I am sorry to have to announce this to the member, but he should have been following this. The Senate just adopted the language on iron and steel provisions and the buy American act and also reiterated that it is essentially within trade agreements. The member should know this. My goodness. He is the trade critic for the Liberal Party. He should know this stuff. This is pretty fundamental. Conservatives should know this too, but they are trade illiterates. They simply do not understand.

The buy Malaysian, the buy Korean and the buy European clauses are all legal clauses. Legal. Yet, they do not bring them in. Is it because they are illiterate? Is it because they are uninformed? Is it because they do not understand trade? Is it because they are asleep? I have no idea, but time after time after time we are told it is legal, and time after time after time Liberals and Conservatives say no. If we do that, the whole world would explode. No, it would not, but more Canadians would have jobs. More Canadians would be able to contribute to their local economy. More Canadians would be off employment insurance or welfare and be able to contribute to Canada the way they want to.

If Conservatives and Liberals understood fair trade and understood that buy Canada is legal, more Canadians would be prosperous. It is a shame they do not understand.

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Madam Speaker, I will deal with the serious question first and then the silly question afterwards.

The numbers are from the Library of Parliament's StatsCan from 1989-2005. I will bring the figures forward another way, because what I was saying was that if one lost a week's income it would have a cumulative effect. If one loses a week over 20 years, less one week for each of those 20 years, one loses more income cumulatively. I was trying to explain it in a very simple way so that Conservatives and Liberals could understand.

Another way of explaining it is that in real terms the loss of real income growth for the lowest quintile has been 14%, for the second quintile it has been 12% and for the third quintile it has been 6%. That is an average loss for all 6 million Canadians within that income category. That is horrendous.

As for the sillier question, I will come back to saying one more time for the Liberals and Conservatives in this House that buy Canada provisions are legal. Virtually every other industrialized country in the world has them, including the United States. They are going to be investing in economic stimulus through a completely legal process. The question that I have to put back to every single Liberal and Conservative in this House is: Why are you refusing to protect Canadian jobs with a strategy that is legal under NAFTA and the WTO?

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Madame la Présidente, je remercie mon collègue de sa question. Effectivement, j'essaie d'expliquer aux libéraux et aux conservateurs que M. Obama a reçu le mandat du peuple américain de conserver les emplois américains et d'augmenter le revenu réel qui a chuté de façon considérable depuis une vingtaine d'années, surtout depuis cinq ans. Même les plus fervents partisans de George W. Bush sont d'accord à ce sujet et l'admettent.

On a donc besoin de dire qu'on comprend leur préoccupation, mais qu'on en a une également, plutôt que de faire appel à des théories farfelues de libre-échange pures et dures que les conservateurs et les libéraux aiment expliquer. On a besoin d'avoir, de façon très pratique et réelle, des négociations concernant le fer et l'acier et de proposer une entente gérée entre les deux parties. Ceci ferait en sorte que l'on gagne sur le côté canadien et qu'ils gagnent aussi sur le côté américain. Il s'agit de conserver les emplois et d'améliorer le rendement de notre industrie de l'acier et du fer.

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Madam Speaker, I am quite concerned after having listened to the parliamentary secretary attentively because his comments showed the lack of understanding of the government in intervening with the Obama administration.

Yesterday the U.S. Senate defeated the amendment that was brought forward by the Republicans 65 to 31. It was a landslide. The “buy American” provisions will be in the bill going through the Senate. It is already in the bill that has gone through the House of Representatives.

The parliamentary secretary continued to refer to rules-based trading. Linda Diebel requested in the Toronto Star that the international trade minister actually read the trade pacts. She said: He might discover that the North American Free Trade Agreement allows an exemption for procurement contracts to allow only American iron and steel, a provision that was contained in the stimulus package.

My question is very simple. Does the government and the parliamentary secretary understand that “buy American” is legal under NAFTA and legal under the WTO? Speaking to the Americans as if what they are doing is illegal when it is very clearly legal means we cannot communicate our message effectively. That is why we failed.

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Madam Speaker, the member has in this Parliament showed that when the Liberal caucus takes a misinformed stand that he is able to distance himself from that misinformed stand.

We heard of course earlier today from the member for Toronto Centre that the Liberal caucus opposes any sort of managed trade settlement, such as what the United Steelworkers are proposing on iron and steel. Certainly we have heard from the member for Toronto Centre that a buy Canada act would be illegal. Therefore it appears the Liberal caucus opposes that measure as well.

Would the member be inclined to take that same kind of independent stand on these issues that he took on the budget, stand up and say the Liberal caucus is wrong in opposing a managed trade settlement with iron and steel in the buy America provisions and wrong to say that buy Canada is illegal?

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Madam Speaker, the Conservative government has admitted today that the buy American act is legal. The parliamentary secretary said that a few hours earlier. So we have made some progress in trade education with the Conservative government.

The member for Abbotsford talked about the fact that the budget may have some infrastructure funding, may because we do not actually trust the Conservatives to bring this in.

However he did not raise of course the irony that if there is infrastructure money that is spent from Canadian taxpayers that that money can go to buy overseas third world steel. In other words, Canadian taxpayers' money, because we have no buy Canada policy in place, will be used to fuel jobs in other countries. There is a real irony there.

President Obama did not say what the member purported him to say. He has actually said that the economic stimulus package and the buy American provisions in both the House of Representatives and the Senate bills are going to go through and he is going to sign off on them in two weeks. They are legal. Buy American is legal.

Why is the government not bringing in buy Canada provisions so that Canadian taxpayers' money can go to fill Canadian jobs?

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Madam Speaker, I would like to compliment the member for London West for a good maiden speech in this House. I welcome him to the House and also welcome him to the Standing Committee on International Trade. I look forward to working with him and others members of the committee on trade issues.

I will ask him a polite question, given that he had a polite speech, about the lack of a buy Canada act. I am getting some heckling, but I have tried to build a relationship here and I would hope the Conservative members would allow me to do that across the aisle.

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Madam Speaker, we have been talking about the fact that the buy America act is legal. We know that it is under NAFTA. We know that President Obama is following his own mandate. Does he not feel that a buy Canada act to build Canadian jobs would be effective here in Canada?