Evidence of meeting #4 for Subcommittee on the Automotive Industry in Canada in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chrysler.
A recording is available from Parliament.
9:20 p.m.
Conservative
The Chair Conservative Michael Chong
Thank you very much, Mr. Masse.
Thank you very much, Mr. DesRosiers.
Good questions.
Mr. Lake.
9:20 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Thank you, Mr. Chair.
I want to start by responding to a couple of things Mr. Masse was saying. He mentioned that we're not doing anything to do with moving vehicles. I found that pretty astounding, because we do have a $12 billion secured credit facility, which witness after witness has identified as the most important thing to move forward on, and he voted against it in the budget. We need to get that budget passed in the Senate so we can start flowing that money.
On the other side of things, regarding the jobs, I would remind the member that of course the reason we're going through this whole process, the reason we're even having these discussions, the whole purpose is to protect jobs. That's the whole purpose, because we can all relate to what it's like to have families and payments and things like that, and we're here to protect jobs. So I just want to clarify those things. That's what this is all about.
I'll give some context here. We talked about this the other day. We're talking about lending as much as $8 billion and possibly more. When you break down those numbers, you're looking at about just under $250 per Canadian man, woman, and child. For a family of four, it's $1,000 we're talking about.
I asked this question of one of the witnesses yesterday, but I'll ask it of Mr. DesRosiers.
I know you're in favour of our going forward and lending this money. What do you say to that family of four from whom we're asking for $1,000 of their money in terms of the loan? What do you say in terms of why they should agree to it, and will they see their money back?
9:20 p.m.
President, DesRosiers Automotive Consultants Inc.
First, only lend it if they meet the conditions that very capable people are putting in front of them. Your taxpayer needs to understand that this has gone through a very rigorous due diligence process.
What you have to tell that taxpayer or try to explain to him is that it's all this indirect stuff. Without exception, there's a car dealer, at least one, in every single community in Canada with 5,000 people or more, and every one of those car dealers employs 50 to 75 people in that community. They sponsor the soccer team, the baseball team; they're the biggest contributor to the local charities, the hospitals; and that's one of the reasons you want to support this industry: because you're helping the communities in middle-of-nowhere Canada, not just southern Ontario, through the dealer body, through the automotive aftermarket, fixing vehicles, financing vehicles. There's a lot in this value train, and it really is, without any exaggeration, one in seven jobs directly and indirectly.
9:20 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
In terms of some of the testimony we've had, we've asked the question to some of the companies not asking for loans at this point--Ford, Toyota, Honda. How long before you have to ask? If things don't get better, if we continue on the path we're on right now, how long before they have to ask? Do you have any ideas of what that would be in terms of the analysis you've done?
9:20 p.m.
President, DesRosiers Automotive Consultants Inc.
We used to talk about Toyota being a bank, the Bank of Toyota. I can't imagine a scenario in which some of the other big players, like Honda and Toyota, would come forward unless we were into a nightmare scenario three or fours years out, and I don't envision that. So the answer is never.
I do think that if we end up at the levels of demand we're heading towards, Ford could be coming in a year's time or two years' time. They're next on the docket. There are minor import name plate companies that could be in serious trouble, but they would be very difficult to support. They are some of the small tier two companies. I don't want to name any, because I don't want to get myself into trouble. What I'm saying is that it's not just a GM, Ford, and Chrysler problem. You're looking at the longer term.
9:25 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
This will be the last question I ask in the entire discussion.
You've had a chance to hear other testimony, I'm sure, from the other meetings. And this goes to anybody at the table. Is there any testimony you've heard that you thought was not giving us the full story or where there may have been more to add, from your standpoint?
9:25 p.m.
President, DesRosiers Automotive Consultants Inc.
Do you want me to be blunt?
9:25 p.m.
Conservative
9:25 p.m.
President, DesRosiers Automotive Consultants Inc.
I don't want to get into naming names, but I read about two or three hours of your meetings, and there was question after question that I.... With all due respect, none of you have 40 years of experience--Peter has 20 or 30 years' experience--so the subtleties of this industry you haven't really covered off.
But I also commend you, because I've been involved in many of these committees, and I've generally said no recently, because I find that there is too much partisanship back and forth, and that's not my world. You're asking some really good questions today and prior to today. You're getting at a lot of the nub. As a person who understands this industry cold, I would have headed into so many other areas and put them much more on the hot seat.
9:25 p.m.
Conservative
9:25 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Mr. DesRosiers, all that being said and done, I opened with our need to protect Canadian jobs, and I'd like to pursue that, because those jobs have to be protected in the short term and in the long term.
What I'm hoping you might offer us are some recommendations to ensure a viable, strong Canadian auto industry in the long term and in the short term. While I know that you said there can't be a national policy, I know there might be some framework or some initiatives we can undertake as a government to help the industry structurally. I'm wondering if you can offer some of those in terms, possibly, of these areas or others that you might have thought about: investment and innovation; infrastructure; taxes; regulations, whether it be harmonizing them with American regulations or not; human resources; or anything else you may offer.
9:25 p.m.
President, DesRosiers Automotive Consultants Inc.
This is not the kind of environment to get into this sort of detail. We don't have the time. I could get back to you with some suggestions.
But I will tell you one thing. I suppose I had my first head-to-head involvement with your Industry Canada and Department of Finance people at the federal level probably about 30 years ago. I am deeply involved with them today and have been over these 30 years at various levels. I have never worked with a more competent group of civil servants on automotive issues, federally, than today. I can't say that in Ontario. You have a dynamite team, especially in Industry Canada. You go through Dicerni, you go through Maloney, and you go through Alison Tait; these people and the team under them are an A-team. You need to have a little broader perspective on some of your team in places like Environment Canada and Natural Resources. They have some shortcomings. But they're still very good. That gives me comfort
To go into identifying specific policies in detail I leave up to your A-team. I honestly think you have it. They're doing things that just amaze me. Never in my wildest imagination did I think they would get into these areas and work on these areas and be productively coming up with good solutions. And that's apolitical. This team started under previous politicians, and it's in place today. Keep it up.
9:25 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
I have another question.
It strikes me, given the integration of our industry, American and Canadian, and the existence of the Auto Pact, that there isn't a bilateral structure somewhere--and maybe there is, so correct me if I'm wrong--that allows federal, provincial, and state governments and industry parts assemblers to come together and talk about the issues, on a daily basis, that are affecting each of our countries and the industries in each of our countries. While you said that there can't be a national auto policy, should there be some international forum that meets regularly to talk about these issues going forward so that we can harmonize more issues, such as regulations?
Can you comment on that?
9:30 p.m.
President, DesRosiers Automotive Consultants Inc.
That's a very good idea, by the way. We actually had formally written into NAFTA a study period of about a year and a half for the Canada-U.S.-Mexico group to formally look at a number of the issues related to this auto-sector-specific NAFTA task force, and it was very effective dealing with them. Once they dealt with the specific issues, it was disbanded. I would argue that you need that kind of thing. But there probably is a European one separate from a North American one, separate from an Asian one, and that's a very good idea.
9:30 p.m.
Chief Executive Officer and Scientific Director, AUTO21 Network of Centres of Excellence, Auto21 Inc.
There actually is a Canadian body that serves that function, and that's the Canadian Automotive Partnership Council, CAPC. In fact, that model has been envied around the world. I hear about it all the time when I travel. It includes the major automakers. Reid Bigland is a member of CAPC, as is the federal Minister of Industry, key parts company presidents, the president of the CAW, and the president of the University of Windsor, because that's the host institution for AUTO21. There are working groups on human resources, innovation, trade and infrastructure, fiscal policy, and sustainability. That's a very active organization that has really done some great work. The Quebec and Ontario ministers of industry or economic development are also members.
9:30 p.m.
President, DesRosiers Automotive Consultants Inc.
It's just within Canada.
9:30 p.m.
Chief Executive Officer and Scientific Director, AUTO21 Network of Centres of Excellence, Auto21 Inc.
It's just within Canada, but that is the kind of structure, I think, that you're talking about and it does exist. It's been very successful at exchanging views and bringing forward good policy recommendations.
9:30 p.m.
Conservative
The Chair Conservative Michael Chong
Thank you, Mr. Frise.
That will be all for this evening. Mr. Ostroff, Mr. DesRosiers, and Mr. Frise, thank you very much for your direct and frank testimony. It's much appreciated.
We will now take a 10-minute recess.
[Proceedings continue in camera]