Thank you, Mr. Chair and members of the committee.
My name is Catherine Cobden. I'm the president of the Canadian Steel Producers Association.
I want to thank you very much for the opportunity to share the perspective of the domestic steel industry on the impacts of COVID and our recovery priorities.
Our member companies produce approximately 15 million tonnes of products annually, and we support 123,000 jobs in five provinces, from Saskatchewan to Quebec. Our industry is an important backbone of our national economy.
Furthermore, Canada's steel sector plays a strategically important role in the overall North American economy. We are advanced manufacturers of a 100% recyclable product and a critical supplier to many other key North American sectors.
Today, our industry, like so many others across the country, is facing unprecedented challenges as a result of this pandemic. We truly appreciate the priority that all parliamentarians have given to tackling the pandemic, and we are very grateful for many of the economic measures that the federal government has introduced in support of Canadian businesses and our employees. Some of these have been absolutely invaluable to our members.
As an essential industry, we continued to operate throughout the pandemic to supply our much-needed products to many critical applications. We are certainly proud of our small but important contribution in supplying steel for medical equipment and hospital-grade applications. However, the last few months have been exceedingly difficult for our members. We have seen a dramatic drop in demand from our primary markets, such as automotive, energy, construction and many others, and our members have only been able to operate at about 60% or less of their existing capacity.
On the job front, unfortunately 10% of our workforce has been affected by layoffs, but this is actually a good news story as these layoffs would have been far worse were it not for the Canada emergency wage subsidy program. Our members thank the government and all of you for working together to see this program delivered quickly and, frankly, for the decision to extend the program until the end of August. Our industry views it as a critical lifeline during this unprecedented time.
Moving forward, the steel industry faces a very difficult road to recovery. We are not expecting an immediate return of our business. It's not a “V”. We expect the next couple of quarters, frankly, to be a significant challenge. In that regard, we are urgently sharing with you ideas on how to recover the economy in a way that will support the steel sector's full participation in that recovery.
A top priority for us is to protect our domestic market from unfairly traded imports, either from dumping practices, massive importations or other practices that harm our sector. The world has been stockpiling steel throughout this pandemic, and we remain deeply concerned about the “wall of steel” that is already beginning to surge into our market. It's causing injury to Canadian steel producers and will cause more.
In addition, maintaining market access to the U.S. is crucial for Canada's steel sector. The swift implementation of the new CUSMA, including the automotive rules of origin, is a tremendous opportunity for North American steel and our collective recovery. The North American automotive sector is a valued customer of ours, representing about 25% to 30% of all Canadian steel production. As the auto sector returns to operation, we remain ready and able to support that sector in meeting all the “rules of origin” obligations.
COVID-19 has also taught us the value of a strong Canadian manufacturing base, along with the need for strong North American supply chains. We must carry this lesson forward as we emerge from the pandemic to ensure that manufacturing and these supply chains stay strong and resilient. For the steel industry, this includes considering how things like domestic procurement and infrastructure spending priorities could recognize the social, economic and environmental benefits of using North American steel.
Finally, another important aspect of our recovery is enabling investment that improves competitiveness and productivity, and supports environmental objectives. In today's context, Canada's steel industry is facing challenging conditions to attract investment. The strategic innovation fund has been a valuable tool for our sector in incenting investment. In our case, we saw $250 million of SIF funding leveraged to over $1 billion of project funding in the past. Given this demonstrated importance, we call for SIF's recapitalization as part of the government's COVID recovery response.
Thank you again, Mr. Chair and committee members, for the opportunity to be with you today. I'm happy to answer any questions.