Thank you, Mr. Chairman.
My name is Ron Watkins. I'm president of the Canadian Steel Producers Association, and we welcome this opportunity to present our recommendations for budget 2013.
The CSPA represents Canada's steel producing industry. The steel producing industry employs some 25,000 Canadians, with steel mills in five provinces. We generate over $13 billion in shipments, but our impact goes much further. We are integral to the major supply chains, such as automotive, energy, construction, and mining. That is why we call for pro-manufacturing policies that will strengthen all industrial sectors.
CSPA is a founding member of the Canadian Manufacturing Coalition, which last week released a five-part manufacturing action plan for Canada. The elements are to support manufacturing investment, productivity and innovation; to strengthen Canada's labour market; to strengthen Canada-U.S. economic integration; increase value-added exports and ensure a rules-based trade; and reduce regulatory burdens.
In my opening remarks I will highlight certain fiscal proposals that are in this plan and in CSPA's own submission to this committee.
First is to extend the accelerated capital cost allowance, or ACCA. We have strongly supported this measure since it was first introduced in 2007. It is a direct incentive to product and process improvements in manufacturing that will enhance our overall industrial competitiveness. The ACCA has been successively renewed at two-year intervals and is set to expire again in 2013. To provide the planning certainty necessary for large capital expenditures, it should be extended for at least five additional years. This will help Canada win new investment against other jurisdictions, because increasingly we are competing for that investment globally.
Secondly, in the area of innovation support I'll talk about the SR and ED tax credit. The SR and ED tax credit is a broadly based incentive to industrial innovation. Budget 2012 introduced many changes to the S and ED that, while designed to improve support for SMEs, can reduce the effective support for more capital-intense projects in larger manufacturing businesses. We are thus seeking measures that will restore support for such innovative projects, including the introduction of refundability provisions. Alternatively, the government could introduce R and D programs that would be applicable to such capital-intense large performers, thus helping to address the gap that has developed with the changes that were made.
The third area is skills training. The growing skill shortages in Canadian industry are broadly based and well documented, and I sense this committee has already spent a lot of time talking about those. It is an increasingly expensive challenge for industry not only to attract new workers but to retain and upgrade the skills of the current workforce as industrial processes become more complex and sophisticated. We therefore call for a new training tax credit, to be financed from EI premiums, that would help industry invest in further skill development of its existing workforce, thus preparing it for the competitive challenges of the 21st century.
Fourth is to maintain an effective trade remedy system. The government has embarked on an ambitious round of free trade agreements and other trade initiatives.
We actually support the direction of that policy when it will benefit, on a net basis, Canadian industry, but global trade is two-way, of course, and there is a corollary requirement, and that's to ensure that market-based trade will prevail in our own markets. We must, and do, compete at home under agreed trade rules, but exporters in many other countries, notably China, seek to achieve their goals by dumping products into our market. Left unchecked, such trade practices threaten Canadian jobs and jeopardize future investment.