Evidence of meeting #219 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was products.
A video is available from Parliament.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Okay, that's important to put on the record.
Ms. Govier, you spoke about the surge analysis. Can you go into the methodology around that? How do we know that a surge is taking place, for example? How do we distinguish that from a small spike, for instance? What's the data gathering process around that? Who does it and how and issues like that?
Senior Director, Trade Rules, International Trade and Finance Branch, Department of Finance
As part of the CITT's process, I can speak to it a bit at a distance, because I'm obviously not involved in that process. Typically they would look at data over a three-year period and look for trends over that period, as well as looking at a more.... In the last finding, they did look at the first half of 2018 and compared it with the first half of 2017 to identify whether there were patterns that showed what looked like a significant increase.
I did mention previously, as well, that you can look not only at whether there's an absolute increase in imports but also at whether there's a relative increase in imports. So if the market's growing, you see something growing or similarly if the market is shrinking, maybe the imports are stable but they're taking up a larger share of the Canadian market.
The data they use is, I think, based on input they are getting from the questionnaires they issue as part of their process, so they could be relying partly on StatsCan information as well as on information supplemented by other participants in the process.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
It sounds as though there are tools in place to keep up with what is a fluid situation.
Senior Director, Trade Rules, International Trade and Finance Branch, Department of Finance
Certainly within the CITT process, they're well positioned to gather all of the information they have and, for the government's part, we have import permits for steel. We do have reasonably good data on steel, which is looked at on a regular basis.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Okay.
I also want to ask you about how our approach compares with what other democracies have done in this area, the E.U., for example, or other examples you could cite.
Senior Director, Trade Rules, International Trade and Finance Branch, Department of Finance
The E.U. does have steel safeguards in place for a number of product categories. Those have been in place as final measures since January of this year. The United States does not have a safeguard in place, but as we know, the section 232 tariffs that were imposed on steel and aluminum have a very similar effect. There are a number of other countries that have safeguard measures. Some of them are fairly targeted in terms of the products they are looking at, but I wouldn't call them the larger countries. It's not, you know, Australia or whatnot. I would say that the E.U. is the main one. The U.S. has those protections, as do certain other countries.
In the case of steel products, the global overcapacity definitely means that countries look for different ways to address some of the import challenges they're facing. There are a lot of trade remedies in that sector and we're seeing a lot of safeguards in that sector, as well, for those reasons.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
I have a final question, if I may, Mr. Chair.
Could you speak to the level of engagement or consultation with the steel sector in the development of this particular legislation, or in general terms if you don't want to...?
Director General, International Trade Policy Division, International Trade and Finance, Department of Finance
Maybe I'll answer in general terms.
Certainly since, let's say, March of last year, when the prospect of section 232 tariffs being imposed was raised in the United States, we'd been working quite closely with the steel sector. We took a number of measures during the spring of last year with respect to any concerns on transshipment of product. We made changes to marking regulations, all of which has been done in close consultation with the steel industry. When we moved to a situation where we were facing the section 232 tariffs in the United States, we added a number of measures in place to assist the sector, but we've also established a federal-provincial union and industry committees to monitor the situation and work closely on these issues.
There's been, I would say, a fairly continuous process of engagement with the industry.
Liberal
Liberal
The Chair Liberal Wayne Easter
Thank you all. Maybe just before I turn to Mr. Poilievre, I have two questions.
These measures are put in place basically to protect the steel industry, but will this bill help us in terms of our maybe being accused by the United States of transshipment of some products through Canada to the U.S.? Would it be helpful in that regard?
Second, do you see any implications for some of the smaller players in the system who may use or bring in steel from certain countries, Turkey or wherever, and basically sell most of their products domestically, whether they're making patio tables or whatever the heck it might be? Are there any implications for those kinds of operations from this bill?
Executive Director, Trade Remedies and North America Trade Division, Department of Foreign Affairs, Trade and Development
On your first question, I think the United States would be interested in seeing what Canada is doing to address offshore steel imports. They have the same concerns as ours with the global overcapacity and market distortions, so I think they would notice what we do. I think they've said there are issues with transshipment. We haven't seen evidence of that, but I think they do watch what we do in terms of our measures on steel.
Senior Director, Trade Rules, International Trade and Finance Branch, Department of Finance
On the second question, we've certainly been in touch not just with the steel producers but also with some of the smaller players you were talking about that might import steel for various purposes in using it in Canada.
Certainly, with the way that safeguards were imposed on a provisional basis last time, and in looking at how the final safeguards are structured, it does allow for a certain amount of surtax-free trade to occur, reflecting historical levels. I think that's an important component of ensuring that people can still get in supplies they require to do business.
Also, the amendments that I was talking about to the Export and Import Permits Act, whereby you can actually allocate...so that people have a more sure supply of what they're able to import, are going to further help the predictability and the ability to import where needed from these countries.
Liberal
Conservative
Pierre Poilievre Conservative Carleton, ON
Do you have a summary of the consultations the department did with companies that import steel?
Director General, International Trade Policy Division, International Trade and Finance, Department of Finance
We had consultations prior to the imposition of countermeasures in June. That was one. We also had consultations prior to the imposition of provisional safeguards, which were solely on steel. The countermeasures were broader, of course, because there were suggestions with respect to imposing countermeasures on steel, aluminum and other products from the United States.
Conservative
Pierre Poilievre Conservative Carleton, ON
What consultation has the department done on this bill with businesses that import steel?
Director General, International Trade Policy Division, International Trade and Finance, Department of Finance
With respect to this particular bill, there hasn't been a discussion with any stakeholders at this point.
Conservative
Pierre Poilievre Conservative Carleton, ON
We haven't had any conversations with the many companies across the country that use steel as an input?
Director General, International Trade Policy Division, International Trade and Finance, Department of Finance
What we're doing now in a parallel process, which is going to loop back to concerns that we've heard about this bill, although not as part of a specific consultation on this bill.... On April 26, there was an announcement by Minister Morneau of consultation on a further strengthening of the trade remedies system. We've had discussions with the steel industry and with other stakeholders as well, including downstream manufacturers and users of steel, with respect to some of these issues and the trade remedy system. As part of those conversations, some views have been expressed with respect to Bill C-101.
Director General, International Trade Policy Division, International Trade and Finance, Department of Finance
I'm sorry?
Director General, International Trade Policy Division, International Trade and Finance, Department of Finance
What are they? First of all, I think people are asking questions, and certainly we've heard some concerns with respect to the potential re-imposition of safeguards, but they are very much separate from the consultation process that we're working on with these stakeholders. These are some of the concerns that have been raised, but they are very preliminary at this point.