Thank you.
Good afternoon, honourable members of the committee, and thank you for the opportunity to present today on behalf of the Canadian Steel Producers Association, or CSPA, as regards Bill C-44, an act to implement certain provisions of the budget tabled in Parliament on March 22, 2017.
The CSPA is the national voice of Canada's $14-billion primary steel production industry. Canadian steel producers are integral to the automotive, energy, construction, and other demanding industrial supply chains. CSPA seeks to work with governments and industry partners to advance policies that enable a globally competitive business environment for its member companies and various supply chain stakeholders.
As committee members are aware, the global steel industry is at an inflection point as the result of growing overcapacity and direct state intervention in the sector. Canadian producers are not immune to or sheltered from the truly unprecedented international challenges that currently face the sector. The steel industry has, on a worldwide basis, seen a significant increase in market distorting dumping and circumvention practices, both from China directly and from a host of other global producers whose home markets have also, in many cases, suffered because of unfair Chinese competition.
To put that in perspective, the root cause of our issue is that there is 700 million tonnes of global excess capacity in a steel market of 1.6 billion tonnes. Out of that 700 million tonnes of excess capacity, over 400 million tonnes is in China.
Simply put, that steel has to go somewhere. The price deterioration and the market instability associated with the illegal steel trade have contributed significantly to our industry's challenges and are hurting middle-class Canadian families. As a direct result, investment in Canadian facilities, capacity utilization, and employment are under threat throughout Canada's steel production and manufacturing sectors.
With that in mind, the CSPA welcomes the Government of Canada's budget 2017 commitments to improve its ability to remedy dumped and subsidized imports by implementing measures that effectively modernize the Canadian trade remedy system.
Specifically, the CSPA appreciates the amendments in budget 2017 to the Special Import Measures Act, or SEMA. These four major amendments provide for the following: first, the ability to expand a trade remedy measure to address circumvention of dumping duties; second, more transparent and predictable enforcement of trade remedy measures; third, the ability to address market distortions in the country of export when establishing dumping margins; and last, the ability for unions to now participate in trade remedy proceedings.
With these changes, taken in conjunction with the changes that were implemented in budget 2016, the Canadian government has taken meaningful, substantiative, and timely steps to modernize Canada's trade remedy system.
Almost as importantly, these trade defence mechanisms also send an important signal to our closest trading partner, the United States, that Canada remains a partner equally committed to battling and addressing unfair trade.
In this regard, in 2015 and 2016, the U.S. implemented their own trade remedy modernization via their trade enforcement act and the Leveling the Playing Field Act. Now Canada and the United States are on equal footing from a trade remedy standpoint.
However, recently the U.S. has initiated processes such as the ongoing section 232 investigation on the effect of imports of steel on U.S. national security, and a consultation concerning construction of pipelines using domestic—that is, U.S.—steel and iron.
As we work to seek exclusions from future U.S. findings or actions, it will be essential to remind the U.S. administration of both our existing joint efforts on steel enforcement and our renewed legislative commitments to combatting unfair steel trade in North America.
In closing, I would remind this committee that unfairly traded goods pose a clear and present threat to the livelihoods of over 22,000 middle-class Canadians, together with their families, employed directly in steel production and the additional 100,000 Canadians whose employment is indirectly impacted by the sector.
Steel production in Canada involves significantly advanced manufacturing processes, and Canada's steel workers are well educated, highly skilled, and trained throughout their careers.
With this in mind, I urge this committee to recommend the passage of the amendments in Bill C-44 related to strengthening Canada's response to unfair trade and to encourage the government's quick implementation of the related regulations. This will allow our industry to take advantage of these new legislative tools to defend against the well-documented and corrosive impacts of global overcapacity and unfair trade in steel.
I thank you for your time, and I'm happy to take any questions that members may have.