Good afternoon, Mr. Chair, committee members.
My name is Pierre Boucher. I am President of the Cement Association of Canada. To save time, I will quickly introduce the cement industry, the challenges we have to face in terms of competitiveness and the main recommendations that appear in our pre-budget brief.
The Cement Association of Canada represents cement producers from coast to coast. Our members include nine cement companies operating 16 cement manufacturing plants in five provinces, with distribution terminals at over 45 locations.
The Canadian cement industry belongs almost entirely to multinationals with operations in more than 75 countries. At the same time, it is vertically integrated in the concrete industry. Our industry makes a direct contribution of $1.6 billion in revenues to the Canadian economy and generates more than 26,000 stable and well-paid direct and indirect jobs.
Canada's cement industry produces 15 million tonnes of cement a year, with 10 million tonnes consumed here in Canada and 5 million tonnes exported to the U.S. markets. As an exporting industry, an efficient and well-maintained border infrastructure, especially in the Great Lakes ports and the St. Lawrence Seaway, is vital to our operations.
Cement is a strategic commodity and a critical component of our nation's infrastructure. Cement underpins the construction industry as the key ingredient in concrete. There's little built without cement. A shortage of cement has a serious impact throughout our economy. The Canadian industry is currently well positioned to provide the necessary national supply.
Maintaining a vigorous and competitive cement industry in Canada is essential for sustained economic growth. Canada must act now to maintain and increase industry competitiveness in order to incite and attract new foreign investments.
The Canadian cement industry is facing persistent and growing threats to its competitiveness like we have never seen before. Cement is a globalized commodity subject to strong competition.
As a manufacturing sector and an exporting industry, the competitiveness of Canada's cement manufacturers is being threatened by a host of factors of the greatest significance: continually and rapidly increasing energy costs, onerous patchwork regulatory regimes, an expensive and time-consuming permitting process, new and increasing competition from emerging economies, and the rapid appreciation of the Canadian dollar.
These threats pose major challenges for Canada's cement industry and, in fact, all industrial sectors. The House of Commons Standing Committee on Industry, Science and Technology correctly pointed this out last year.
I would like to take this opportunity to commend the important action taken by this committee just last week, recommending that the government introduce the tax measures outlined in the industry committee's report on the manufacturing sector.
However, the greatest threat to the competitiveness of Canada's cement industry is still the uncertainty that continues to surround the development of the federal regulatory framework for air emissions. We estimate that global cement production will increase 40% by 2020, and decisions by global cement groups as to where new investment is made are giving rise to strong competition. The regulatory framework is a major obstacle to new and renewed investment in Canada by global cement interests.
The Government of Canada must ensure that tax policy supporting the regulatory framework's objectives is immediately put in place to preserve the competitiveness of Canada's cement industry. The government should ensure that it applies tax policies that support a competitive trade context and see that those policies take into account the investment planning cycle of the economic sectors concerned.
The Cement Association encourages the government to implement and integrate systems of tax measures that promote innovation. There are many options, but specifically the government should consider the accelerated capital cost allowance announced in Budget 2007 and increasing the capital cost allowance rates to speed the implementation of new technologies.
The Cement Association of Canada also recommends that the government accelerate the Budget Plan 2007 commitment to reduce the general corporate tax rate and the marginal effective tax rate on business investment, at least to the OECD average.
I would also like to take note of the new Building Canada plan recently announced by the Government of Canada. This plan is welcome, and it's an unprecedented level of federal investment in Canada's infrastructure. The cement industry strongly encourages the government to ensure a focus on critical border and trade infrastructure in implementing Building Canada. This, then, will require a steady, stable supply of cement, and our industry will be a necessary strategic partner to Building Canada.
In conclusion, I would like to emphasize that we are living in a world that is constantly, and quickly, changing. Although it is impossible to predict future business conditions with any certainty, it is essential, to ensure the success of Canada's industry, that we be able to react quickly and effectively to changes that occur. The Government of Canada plays a central role in the implementation of policies that, as I have said today, can ensure the desired flexibility.