IN THE NEWS ~ Tariff talks worry shipbuilders; NDP says it will ask government to guard language in international trade deals

PUBLICATION: The Chronicle-Herald
DATE: 2009.03.03
SECTION: Business
PAGE: C3
BYLINE: Tom Peters Business Reporter

Tariff talks worry shipbuilders; NDP says it will ask government to guard language in international trade deals

The federal government will be asked to eliminate any reference to ending a protective tariff on shipbuilding in future international trade deals, the NDP shipbuilding critic said Monday. Peter Stoffer said Peter Julian, the party's international trade critic, will seek amendments through committee and the House of Commons to a trade deal announced in 2007 between Canada and the European Free Trade Association.

The deal, agreed to in principle, says Canada will phase out over 15 years its 25 per cent tariff on foreign-built vessels coming into the country. The shipbuilding industry opposes elimination of the tariff.

Norway, which strengthened its shipbuilding industry through government subsidization, is one of four countries looking to compete in the Canadian market, and eliminating the tariff would benefit those countries, Mr. Stoffer said.

"We would be placed in a serious disadvantage, even through a declining scale over 15 years of removing the import tariff," he said. "We are very concerned about the future of our industry and the five major yards across the country and the smaller yards as well.

"And we are not only concerned about the EFTA deal but this sets a precedent for the Korean free trade talks, which are ongoing."

Korea is a major shipbuilding country.

Mr. Stoffer said the NDP is asking the government to follow the U.S. example in future trade deals.

"Since 1924, in every free trade deal they have ever negotiated, they (Americans) have excluded shipbuilding and marine services from these trade deals because they know it is a strategic industry for their country," he said. "We believe Canadian tax dollars should be hiring Canadian workers building Canadian ships in Canadian yards." The New Democrat said Canada has about $22 billion worth of work to be done on both vessel construction and upgrades for the coast guard, military, ferry, laker and Arctic fleets. That's work that should be done in Canada, he said.

Defence Minister Peter MacKay said Monday his department and Public Works are hoping to hold a shipbuilding forum with workers to discuss the issue.

"What we need to do is get everybody around the table, including representatives of the unions at the shipbuilding companies, in the room with all of us knowing that there are a large number of ships to be built," he said. "We need to have the facilities ready to go and we have to do away with some of the archaic process that seems to be holding us back."

The $2.9-billion program to replace both of the navy's 40-year-old supply ships was put on hold last August in a late-night announcement after bids to build the new ships came in over budget. Mr. MacKay denied persistent rumours that the supply ship program has been cancelled.

"This is one of the worst myths out there; it's not dead in the water," he said. "It's, in fact, alive and well, along with surface combatants, along with a number of vessels that we'll need in the high Arctic and including a number of coast guard vessels. We have somewhere in the range of 50 ships to build in Canada in the coming years."

Karl Risser, president of Halifax Local 1 of the Marine Workers Federation, said Mr. MacKay has been consistent in "saying the same thing over and over again, but the only problem is, he is the only one saying it. Industry was clear there is no big plan here. I would love for him to come through for us but I am becoming more skeptical all the time. It is not anything new for him to make those promises."

Mr. Risser said the shipbuilding industry wants Ottawa to stop talking about free trade deals that would "undermine our industry." He said the Halifax yard used to employ 600 to 700 workers but is now "down to 200. I think it is time to get the work on the ground. We shouldn't be talking about free trade deals. They should be talking about putting policies in place that support us so we can build the ships here in Canada. It is shameful what they are doing. They are dragging their feet when this industry is dying around us."( )