An About-face on Government Policy is Needed
Supplementary Opinion from the Bloc Québécois

The Bloc Québécois is especially proud of its contribution to this report on the gravity of the situation in the Canadian manufacturing sector. We would like to thank the many witness from a variety of backgrounds who submitted briefs to the Committee during its six months of consultations and hearings.

Consensus on the Findings

These hearings were very enlightening and enabled the Committee members to reach agreement on a number of findings:

• that the manufacturing sector has been seriously undermined, whether by increased competition from emerging countries or by the rapid rise of the Canadian dollar
• both traditional and high-tech sectors have been hit
• businesses will have to modernize, innovate and become better equipped in order to meet foreign competition
• there will have to be an abrupt about-face in federal government policies to provide the manufacturing sector in which it can develop
• that about-face must include better support for those who lose from globalization, who more often than not are the workers
• trade laws must genuinely protect businesses from unfair competition

Consensus on doing much more to support industry

Even more importantly, Committee members noted the scope of the challenges facing the manufacturing industry and were able to agree that the government cannot respond to these challenges with laissez-faire economic policy.

What should therefore be taken from this report is that the Committee is recommending that the government take must more proactive measures to support the manufacturing sector, which is facing major challenges.

The Committee recommends that the government take trade measures to provide better protection for the industries undermined by fierce and sometimes unfair competition, offer tax incentives for investment in production equipment in the manufacturing sector, and budget measures to provide more support for research and development in the industrial sector.

Consensus that the government must revise its policies

The Bloc welcomes the general agreement expressed in the report, and for that reason we have supported it. We expect that the government will take this into account and revise its industrial policy from top to bottom accordingly. The committee's recommendations are actually the opposite of what the Conservative government has done since it was elected. 

For example, while the Committee is recommending that support for technological research and development in industry be increased, the primary federal program that contributes to it, Technology Partnerships Canada, ended on December 31, 2006 without the government announcing a new program to take its place. Industry today is in a state of complete uncertainty and R&D investments cannot help but suffer as a result. 

Another example is that while the Committee is recommending that support for clean energy development be enhanced, the government is working to multiply by five the oil sands production without public debate.

And while the Committee is worried that some industrial sectors are being seriously undermined by fierce and sometimes unfair foreign competition, the government is refusing to implement the recommendations made by the Canadian International Trade Tribunal, which is urging that they be protected.

Specific assistance measures needed in some industrial sectors

The government must make a rapid about-face and propose a set of measures to provide better support for industry. Those measures will have to vary, depending on the industrial for which they are designed. The Committee clearly states that not all sectors of the manufacturing are in the same situation. 

It identifies some sectors that are particularly hard hit, such as textiles, clothing, furniture and forestry. The Bloc Québécois has had occasion in the past to propose a set of measures designed specifically for those sectors.In every case, they are measures to accelerate modernization in the industries and to create trade conditions that will allow them to carry out that accelerated modernization. To date, the government has done absolutely nothing to assist them. 

Because what the Bloc is calling for takes exactly the same approach as in the Committee's recommendations, the Bloc Québécois believes that it is better equipped to take up this cause and bring more pressure to bear on the government to help industries in these sectors that have deep roots in Quebec.

In addition, the Committee recognizes that it is important for high-tech industries to be able to compete on a level playing field. They are weakened if their foreign competitors receive support from their governments while here they are left to their own devices. For that reason, the Committee is recommending that support for R&D in industry be significantly intensified.

That is exactly what the Bloc Québécois was calling for. Let us not forget that Quebec accounts for over a third of Canadian exports of high technology goods. At the top of the list is the aeronautics industry, which has been left completely on its own since the Conservative government came to power. 

Here again, the repeated calls by the Bloc Québécois for a complete and coherent set of measures to support the aeronautics industry to be put in place are consistent with the consensus reached by the committee. Here again, the report submitted by the Industry Committee gives the Bloc Québécois more ammunition for getting the government to put an aeronautics policy of this nature in place.

Consensus on the importance of trade issues 

The Committee recognizes that foreign competition has radically changed the environment in which manufacturing businesses operate. In fact, this is the source of the greatest pressure on the manufacturing sector, along with the rise in the Canadian dollar prompted by oil exports from the West.

Obviously, it was not within the Industry Committee's terms of reference to review all of Canada's trade laws. However, the Bloc would like to echo the alarm sounded by a number of companies: we must adapt our trade laws and the application of those laws to the current context.

The government must stop turning a deaf ear when the Canadian International Trade Tribunal finds that an industrial sector is suffering serious harm because of rising imports and recommends that protective measures be taken.

And laws must be tightened to provide genuine protection for our businesses against unfair competition. The case of Chinese companies, where the government has relaxed the criteria for determining whether they are practising dumping, resulting in the abolition of antidumping duties that protected bicycle manufacturing, is an obvious case in point.

Ultimately, we will have to seriously revisit the very structure of trade agreements.  

Is it reasonable not to regard trade in a product manufactured contrary to the leading international labour rights, environmental protection or human rights agreements as unfair? Does this failure to take into account human, social or environmental considerations in trade agreements not open the door to a kind of unfair competition in which parties that honour their international commitments are penalized? And is this not an incentive for out-sourcing and exploitation in other countries?

The Industry Committee's hearings brought to light the enormous pressure that whole segments of the manufacturing industry are enduring. The Bloc Québécois plans to work even harder on this issue and ensure that the federal government plays an active role in opening this discussion at the international level.

The ones left behind

The transformations that will have to take place in the manufacturing sector over the next few years will enable many businesses to develop, as long as an effective policy is adopted. Some, however, will be unable to keep up, and their future is in jeopardy.

The Bloc Québécois believes that it is essential that we provide workers in those businesses with a decent quality of life, and this aspect of the future of the manufacturing sector must not be swept under the carpet.

For that reason, the Bloc Québécois is calling for an income support program to be created for workers 55 and over who are victims of mass layoffs and who are unable to find work, in addition to the measures now found in the TIOW.  Such a program could be funded by the federal government and the provinces in the same way as the former POWA, on a 70%-30% basis.  In addition, it would be administered by the provincial governments.

The objective of the income support program for older workers would be to enable workers who are unable to find work to have a decent income until they retire, so that they would not have to rely on social assistance and sell off everything they have acquired over their working lives.  

Employment insurance

Year in and year out, the employment insurance fund amasses surpluses of billions of dollars. When those surpluses are diverted from their true purpose they allow the government, in turn, to reap surpluses that it invests as it sees fit. The Bloc Québécois has denounced this state of affairs on many occasions and called for the creation of an independent fund so that this diversion will stop and the funds will be used solely for the purposes of the employment insurance scheme.

The Bloc Québécois believes that an appropriate premium rate and using the fund exclusively for the purposes of employment insurance would allow for the scheme to be reformed for the benefit of workers who lose their jobs, and in particular workers in the manufacturing sector.

Such a reform should include an increase in the coverage rate, from 55% to 60%, elimination of the waiting period, an increase in the maximum number of benefit weeks to 50 weeks, a reduction in the minimum qualifying period to 360 hours regardless of the regional unemployment rate, and an increase in the maximum insurable annual earnings, from $39,000 to $41,500.

An industrial policy designed to meet the needs of Quebec

In many ways, the industrial base in Quebec is different from in Canada. While medium-technology goods account for the bulk of Canadian exports outside Quebec, Quebec's manufacturing industry, on the other hand, is characterized by strong representation of high-technology businesses and more traditional industries. 

In view of these and various other differences, it would not be realistic to imagine that a federal industrial strategy will be able to provide a complete response to the needs of Quebec industry. For that to happen, the policy would have to be designed in Quebec, based on Quebec's interests alone.

That requires that Quebec itself have control over all of its levers of economic development.  

In other words: it requires sovereignty.