IN THE HOUSE ~ Response to the Minister of International Trade's statement on International Tribunal ruling on softwood lumber

Mr. Peter Julian (Burnaby—New Westminster, NDP) in response to the Minister of International Trade's statement (Minister's statement below)
with regards to the international tribunal ruling on September 29, 2009, on the latest softwood lumber dispute.

Mr. Peter Julian (Burnaby—New Westminster, NDP): Mr. Speaker, for softwood communities across this country, today is a sad day. It is just another case of a very clear, unmitigated and absolute defeat imposed by the Conservative government on softwood communities.

It is hard to underestimate the scope of the defeat that we have received because of the government's mismanagement. Nearly $70 million in punitive tariffs will now be taken out of softwood communities. The government defends itself by saying that at least under the softwood sellout, this money will somehow not go to the American lumber lobby but back to government.

However, the reality is that this money is taken out of softwood communities. This softwood sellout has contributed to the loss of tens of thousands of jobs across this country and the closures of dozens of softwood mills. In British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec, we have seen a hemorrhaging of jobs as a result of this softwood sellout.

This defeat comes as a result of the government's mismanagement of the softwood file. It mismanaged export licences. It did not know how to count them. Through backroom deals, it tried to get out of the anti-circumvention clause that it signed with Liberal support. The anti-circumvention clause is like handcuffs on our softwood industry. We are paying tens of millions of dollars now, but just next month, hundreds of millions of dollars are on the table as the Americans come under another aspect of the anti-circumvention clause to come after the industry in Ontario and Quebec. That tribunal hearing starts next month.

The shame of this is that all of it was unnecessary. On October 13, 2006, we won a clear and final victory in the Court of International Trade and it was given away by the government with Liberal support. The minister should apologize to softwood workers who have lost their jobs and he should apologize to Canadians.

Hon. Stockwell Day (Minister of International Trade and Minister for the Asia-Pacific Gateway, CPC)

Mr. Speaker, as hon. members are aware, yesterday the London Court of International Arbitration tribunal issued its final decision with respect to use of the adjustment factor in the calculation of volume of exports to the United States.

In March 2009, the tribunal had ruled that Canada had breached the adjustment factor of the softwood lumber agreement. Canada applied the adjustment factor to some provinces beginning in July 2007, but the tribunal ruled that it should have been applied since January 2007.

Then in April 2009, Canada offered the United States a payment of $46.7 million to cure the breach. This payment was rejected by the United States, so at that point Canada requested that the tribunal rule on whether the proposed payment in fact would cure the breach.

Yesterday, Canada's proposed lump sum payment was rejected by the tribunal and Canada was ordered to impose compensatory adjustments to Canada's export changes, in effect to collect that back tax. The tribunal sent a strong message that the export charge should be collected on a first-to-ship basis and should be applied to Quebec, Ontario, Manitoba and Saskatchewan until the amount of $68.26 million has been collected.

As members are no doubt aware, the United States is currently imposing an import tax of 10% at the border. In order for this tax to be removed, Canada must comply with the tribunal's ruling. The Government of Canada is disappointed the tribunal did not accept Canada's proposed solution to cure the breach. We continue to believe that our effort to pay $46.7 million was fair, however, there is no further route for appeal.

I have consulted with the provinces. I have received their support to comply with the tribunal's decision. We remain committed to the success of the softwood lumber agreement. The agreement has brought stability and has returned nearly $5 million to the industry.