Thank you, Mr. Chairman, for the opportunity to address the committee. I'm pleased to be here to provide our comments on Bill C-9.
Before I begin, please allow me to introduce our association and our industry. The Canadian Apparel Federation represents over 400 Canadian companies that are active in the apparel industry. The industry itself produces a wide range of women's, men's, and children's apparel. The industry directly employs approximately 50,000 people, with the largest concentration in the Montreal area. Other areas of concentration include Toronto, Winnipeg, and the Vancouver area. We are one of the few manufacturing sectors found in all provinces and territories.
Many Canadian firms have become market leaders and successful exporters in the past decade. They have made major inroads into the U.S. market, in particular. Despite our successes, the Canadian apparel industry faces immense pressures and challenges, including one of a domestic nature; that is, duties of up to 14% on imported raw materials.
Our association last appeared before this committee in 2004 on this issue. Duties paid on these imported raw materials represent the most significant policy issue for the industry, as companies need to have access to competitively produced raw materials to meet the needs of the Canadian consumer and our export markets. Since 2004, we have seen some progress on this issue. But currently, our industry pays approximately $65 million in import duties on raw materials on an annual basis.
The clothing industry is one of the truly global manufacturing industries. Clothing is made in virtually all countries. And in developing countries, it is seen as a key strategic industry. Our firms understand globalization, because they know that they are competing with manufacturers from around the world who are keenly interested in our domestic market and our major export market, the United States.
Canadian firms can compete based on superior design and innovation combined with superior customer service. However, if we are to remain competitive, we must have a policy framework that ensures that we are not working at a disadvantage to our competitors internationally.
As we have mentioned in previous appearances before this committee, our most important industrial policy issue has been the duties paid on imported raw materials. I am happy today to support the passage of Bill C-9, because it contains the elimination of these duties.
Last year, the Department of Finance initiated a consultation on input tariffs, including textile tariffs. The Canada Gazette notice on September 19, 2009 set out the government's intention to eliminate duties on imported raw materials. From our perspective, it is a balanced approach, as it applies to the apparel and textile sectors. Fabric mills will benefit from the removal of duties on their inputs, namely yarns and unfinished fabric. Apparel producers will benefit from the removal of duties on inputs they use to manufacture, primarily finished fabrics.
In the current economic climate, this is the most effective policy at the government's disposal to lower the costs of domestic manufacturing. It eliminates an unnecessary financial burden on domestic manufacturers, namely the 14% duty on raw materials.
Our members have made dozens of individual submissions to the Department of Finance requesting tariff relief on literally hundreds of different tariff lines.
I have provided the clerk of the committee with a summary of our association's submission. The bottom line is that we strongly support the passage of Bill C-9. We also support the red tape reduction initiatives contained in the budget.
We also believe that the government should establish a mechanism to review various proposals that came up in this process relating to other tariff relief measures, such as outward processing. These should be reviewed on a sector-specific basis.
I thank you for your time, and I'd be happy to answer any questions.