Thank you, Mr. Chair.
I appreciate this opportunity and thank the distinguished members for your time. My name is Chad Bunch and I'm a mechanical engineer by trade. I'm also the Vice-President, Operations, of our family-owned and operated business, Bunch Welding Ltd. We are located in Leslieville, Alberta, and have been operating since 1981.
We primarily service the energy sector by fabricating structural steel and pressure piping. We employ roughly 250 to 350 people directly, depending on the season, mostly tradespeople. Our payroll typically consists of around $20 million annually, with our third party expenses also being around $23 million annually and a growing proportion at each year to payroll, so we're spending more money on third party expenses than we would on payroll.
Every year we typically purchase around two million pounds of steel directly, and we handle double that in carbon steel piping on behalf of our clients. Year over year since 2017, we've seen steel prices increase upwards of 60% per year for some steel categories and, I would say, at least a minimum of 30% for all the other categories.
By my count, in the last year we've seen about eight competitors, running similar businesses with similar numbers, shut down due to increased expenses and lack of profitability in spite of there being sufficient work. We're hearing things like people saying it's just not worth it.
Although this increases market share for us, this has obviously been devastating for the local economy by shrinking the amount of money going into things like housing, restaurants and tertiary services like massage therapists, etc.
I heard testimony yesterday that used the words “flexibility” and “process”. I understand that flexibility is required to add and remove tariffs as required. However, in the private sector flexibility translates to volatility, and volatility leads to drastic price swings, which are terrible for planning. Currently, there are no good legal mechanisms for small businesses like our own to pass the costs of tariffs on to the end users, unless it is expressly stated in contracts, which isn't always the case.
We're also usually outmatched when it comes to legal teams that our clients have, and our contracts are structured to protect them and obviously not us.
Regardless, our clients require cost certainty to determine whether projects are viable and make sense to proceed. This is impossible to do with the volatility in steel pricing, and in my view it's a significant impediment to whether investors decide to proceed with projects that our economy so desperately needs.
As a former federal public servant who worked in a quasi-judicial organization, I deeply respect our government employees and the work they do, but I also fully realize that government process is not fast and it's not easy, and when governments say words like “flexible” and “process” it scares me.
Unfortunately, it's just not practical for small businesses like our own to participate in processes, as we are often consumed with day-to-day operations of business and don't have the time and resources to commit to things that might seemingly be simple. It's because of this that small businesses don't get a voice at the table and, in my view, share a disproportionate amount of the burden from these changes.
I appreciate the difficulty that we Canadians are experiencing in the volatile world, and I recognize how profound and difficult these decisions are that you are required to make on behalf of all Canadians. I only respectfully ask that you please keep in mind small businesses and communities and the drastic effects of this flexible decision-making when you do it.
I appreciate your time. Thank you.