Evidence of meeting #220 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was market.
A recording is available from Parliament.
National Director for Canada, National Office, United Steelworkers
Your first question was with regard to why they didn't.... I mean, it's really all about timing. There's no doubt about it.
National Director for Canada, National Office, United Steelworkers
I think it's as simple as that. The fact is that by the time the government did impose, I think it in October, it was just.... To me, that is the simplest answer with regard to why they didn't find harm on the other five. Craig could probably add to that.
I'm not sure what your second question was. You went on there for some time.
Conservative
Dean Allison Conservative Niagara West, ON
Yes, I know. That is a problem with politicians, for sure.
You talked about meaningful surges. My concern is that the U.S. can unilaterally impose tariffs if they see a meaningful surge. In your comments, you mentioned being concerned about that.
Are you concerned with the fact that the U.S. can snap tariffs back on?
National Director for Canada, National Office, United Steelworkers
I am, very much so. I think you said yourself that nobody can predict what's going to come out on Twitter tomorrow from President Trump, so of course that's a concern of ours.
I think we've witnessed it. We're still getting over the shell shock of how they could impose section 232 tariffs on the best neighbour one could ever envisage. The fact is that we've had the integrated market. To see what's happened in the meantime, a lot of damage has been done to the country. A lot of our members and communities have suffered dearly because of this situation. It's taken work by all of us—politicians, and working with the producers—to move in that particular direction to have them removed.
We're pleased in that sense, but our work is far from completed. The fact is that it's a very volatile situation. When you have 540 million tonnes of excess capacity, and they're basically shut out from the majority of the world because they've taken actions to it—Canada hasn't, even though we've tried to convince them that that's what they should do—I think we're very much at risk. That's why the monitoring committee they've put together—which many of us have members on—is an important step.
If we're going to protect the Canadian steel industry.... I maybe come from a different angle. The fact is that we no longer have a Canadian steel company. They are all foreign-owned. I fully appreciate that fact. We work every day and we work very hard to make sure we have the protection for our members and the communities in which they operate, so they won't unfairly be in a situation where countries can come in and dump the steel.
To us, it's incumbent upon the government to stand up for those industries and stand up for the workers.
The other thing is with regard to investment. You have the new Stelco, which has now come out of its bankruptcy, basically saying that it has $500 million to invest, but it's not going to invest that money when it knows it has the potential of tariffs hanging over it. You have the businessman who is prepared to create 500 jobs in Steeltown. I was recently up in Alma, which is owned by Rio Tinto. They had an expansion of over $400 million in regard to a billet plant. They've put that on hold simply because of the uncertainty.
There is a lot at stake here. To me, it's very—
Conservative
Dean Allison Conservative Niagara West, ON
Does this reduce the uncertainty in your mind or does it still leave some gaps?
National Director for Canada, National Office, United Steelworkers
I think BillC-101 sends a message that the government is prepared to stand up and basically defend. We support that.
As I've said in my submission, our view is that they should also continue with the five products that they haven't imposed. To me, this is a bigger picture. We'd better be cognizant of the fact that we have international companies that operate around the world. If we don't pretend to look after their interests to make sure that they're not being unfairly...by people who are not playing by the rules and come in and dump, that's not going to help anybody.
Therefore, it's very important that we make sure our industry is protected. That's a job the government has to do and this is a step in the right direction.
President, Canadian Steel Producers Association
I wondered if I could build on the point about the U.S. I think it's really important for all of us—all the political parties in Canada and all the stakeholders—to remember that the U.S. is watching our every move. We have to demonstrate that we have the tools and we will use them.
One of the points Ken raised was that the last time we did safeguards there were surges in products. That's the type of thing we're very nervous about and that's why we talk to the government about preparation to use. If those surges happen, we know the risks are even greater than the domestic market, but it's the domestic market and the U.S. market now. We absolutely have to be in ready mode to react to a surge situation, which we think is inevitable. We saw it last time.
Conservative
Dean Allison Conservative Niagara West, ON
I have quick question; I'm almost out of time.
Do you think we would have had 232s if we had put on safeguards ahead of time? The U.S. was asking for them years in advance.
President, Canadian Steel Producers Association
Honestly, I think that safeguards were a very helpful tool. It was a different political situation in the U.S. around their interest on section 232. As you know, they applied them globally—not just to Canada. We were caught up in that unfairly and egregiously and what have you. We were caught up in a broader move.
When the provisional safeguard measures came in place, we saw measurable improvement. They weren't perfect, but they sure as heck did a lot better job than not having any safeguards, for the record.
Liberal
The Chair Liberal Wayne Easter
I would like to weigh in on this point.
I happen to chair the Canada-United States Inter-Parliamentary Group, and it's a grouping of all parties, with co-chairs on the American side as well. We've been down to Washington and other areas quite a number of times. I think Senator Grassley was a huge help to us. He's a good friend of ours. We also met with a number of other congressional representatives. We've probably met 150 or 160 in the last year and a half.
One of the things that I'm concerned about is that I think sometimes in North America we navel-gaze in terms of our own country. We have to find a way through our supply chains in Mexico, Canada and the U.S. to realize that we're competing against the rest of the world. We have to establish our policies in such a way that we, as a region, can work together and compete against the rest of the world instead of playing these games amongst ourselves, making us less competitive while China and others expand geopolitically around the world.
I do find in dealing with the political establishment—not necessarily the White House, but Congress—that this argument works somewhat effectively. We have to get there.
We'll go to Mr. Dusseault.
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Mr. Chair.
Thank you to the witnesses for being here today.
My first question concerns the five of the seven categories of steel products that no longer benefit from safeguard measures. First, I would like to hear the witnesses' opinion on the need, as soon as this bill is passed, to reimpose safeguard measures as soon as possible.
Mr. Neumann or Ms. Cobden, what do you think?
President, Canadian Steel Producers Association
Sure.
Thank you for your question, Mr. Dusseault. I will answer you in English.
President, Canadian Steel Producers Association
Five of the seven, yes.
As Mr. Neumann stated, I really do believe that this had to do with timing: the period of investigation and the timing of the initiation of the process. Our sense is that, without safeguards, we will have surges. We have been asking fairly consistently in the provisional period, as well as post, that safeguards need to be in place for all of those products. I actually worry about additional products. We must put these in place. We need to be ready.
To go back to the main point of the discussion here today, this is why we need this legislation to pass into law as quickly as possible: so that we have it at our disposal to respond to what we believe are going to be inevitable surges into our marketplace.
National Director for Canada, National Office, United Steelworkers
I think that Catherine covers the point.
As I said earlier, the fact is that it's all about timing. When the government imposed the sanctions, it stabilized the industry. By the time the hearings were held.... Really, it's all about timing. I think that it's for that reason that somehow the CITT didn't see what was necessary at that particular point.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
You all tell us that the bill seems good. However, we know that the legislation, once it receives royal assent, will only be in force for two years. Do you think that this two-year period is sufficient? Will there not be risks that there will still be uncertainty in the markets, that we will find ourselves in the same situation in two years' time and that we will still have to adopt similar legislation?
President and Chief Executive Officer, Canadian Automobile Dealers Association
Of course, a longer-term solution must be found. I do not have any to propose to you right now, but this bill gives us some respite. By 2020-2021, the political situation in the United States could change and things may stabilize.
That being said, we see that Congress is divided. The problem is that if we don't find a longer-term solution, we could go back to the same point.
My colleagues have made it clear that this is a first step, a first measure. Once this bill has been passed, it will certainly be necessary to think of the longer term, see if there is legal flexibility and look for other possibilities.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Neumann, do you share this view? Do you have anything to add?
National Director for Canada, National Office, United Steelworkers
Look, be it two years or three years—and we probably have not talked about it—this dumping problem didn't start last year or the year before. This has been a problem for many years. Unfortunately, we haven't had the mechanism, to a large degree, in Canada, to deal with it as quickly or as efficiently as we possibly could.
If anything, this has, hopefully, opened the eyes of all politicians. The fact is that we can become very vulnerable. No one ever anticipated we'd have this section 232. Never in my wildest dreams did I think Canada would be seen as a national security threat, but it is what it is. We suffered for eleven and a half months. We're now starting to tighten and bring in some legislation to put the right things in order.
One of the biggest complaints the U.S. had, during the OECD meetings we attended in Paris, was that Canada was not protecting its industry. There's some truth to that. If you look at Mexico, the European Union and all this other stuff, that's an issue. That's one of the reasons they were a bit reluctant to get to where we're finally at.
The bigger picture is—if you look at the 540 million tonnes of overcapacity—it's not just Canada, Mexico and the United States. You have to get your global partnerships, be it the European Union.... Some of the people who play by the rules have to find a mechanism for how to deal. You can't say, “We're going to shut down trade.” Of course, trade's important in every economy. The fact is, it has to be fairer trade. Until such time as governments of all stripes take that issue in hand, and try to come up with some mechanism to get rid of the dumping.... The dumping didn't just start this last year; the dumping's been there for a while.
President, Canadian Steel Producers Association
Mr. Chair, if you don't mind, I have just one more thing to add that I think is quite crucial for all of you to hear, going forward.
What we feel is an important lesson learned from what we just lived through is that we have to look very closely at Canada's trade remedy system. We have to be willing to—the word I have in my head is “modernize”, but that's not quite the right word. We have to address today's modern circumstances, which are very uncertain, and very unpredictable.
It's been alluded to a couple of times, but I want to put a pin in it. We have established a working group on trade remedy strengthening. We absolutely have to, over the next two years—and this is my answer to your two-year question—put those recommendations put into place, not stand still and continue to do more.
I just wanted to make the point on why we are comfortable enough with the two years. It's because we expect that those additional steps will be taking place in parallel.
Liberal
The Chair Liberal Wayne Easter
We can come back to you again in another round, Pierre.
We are turning to Ms. Rudd.
Liberal
Kim Rudd Liberal Northumberland—Peterborough South, ON
Thank you very much.
Thank you for coming today, and to those of you on the phone. Catherine, it's good to see you again.
One of the things you have said, and that has been reiterated by others, is that we really are in exceptional circumstances. This is not something—to your point, Ken—that we envisioned would ever happen. As a government, one of the things that is our responsibility is ensuring that we do have the tools in the tool box, as someone said, to be able to respond to those exceptional circumstances, when they arise.
I don't think anyone thinks there's a magic bullet here, or that we're going to be able to just have something that's going to address this. We have to be nimble. The panel group brought together to look at these things is a key element of this. This is one element of a very large global trade agenda. Being proactive and at the forefront of some of these things is key to us being successful on those global markets. A number of folks have come out to support this, and the comments here, including the mayor of Sault Ste. Marie, who has been very active in his support, as well as others.
One of the things that happened over however long the tariffs were in place—a couple of years, I guess—is that the SMEs were caught in this whole process. I'm going to go to you, Mr. Bunch. You can't see me, but I hope you're still there.