Government Operations Committee on June 11th, 2026

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Ms. Sudds, go ahead, please.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you very much, Chair.

Thank you to all of the witnesses who have joined us today.

I'll start with either Ms. Cobden or perhaps Mr. Cuddihy, if he wants to join in on the responses.

It strikes me that in a lot of the discussions with industry over the last year, particularly with Canadian steel producers, there has been discussion as well around the environmental advantages of Canadian steel production. I'd love to hear a bit about how sourcing steel domestically—of course, in light of the buy Canadian policy and the objectives around Canadian material—supports not only the economic outcomes we're striving for but also the environmental objectives. That is for either of you.

[Catherine Cobden]

I think that's a perfect question for John.

[John L. Cuddihy, Vice President, Climate and Environment, Canadian Steel Producers Association]

Thank you very much for the question.

When we talk about Canadian steel, we're talking about steel that can be produced in different ways, and those different approaches have different.... For example, greenhouse gas emissions have pathways associated with them, but they're producing different products.

When we look at the two primary manufacturing processes—blast-furnace steel versus scrap-based electric arc furnace steel—Canada is ranked first in the world on a greenhouse gas emissions intensity basis for blast furnaces and third in the world for electric arc furnaces. We're producing some of the best steel in the world from an environmental perspective.

[Jenna Sudds, Liberal, Kanata, ON]

That is amazing to hear, and we don't trumpet that quite enough, frankly. I think it's important in the current context, as obviously we strive with the buy Canadian policy to drive support for these Canadian materials, but the environmental objectives are incredibly important in that consideration as well.

Perhaps I'll go to either one of you. At a time when we are seeing many countries pursuing industrial strategies and domestic procurement preferences, as we have done with the buy Canadian policy, how important is it for Canada to be using procurement as a strategic tool, specifically as we have done in specific industries and in building that supply chain resilience?

[Catherine Cobden]

It's extremely important, so thank you for that question.

Based on the conversation we've been having today, the point I'd like to underline to answer your question is the role of a steel plant, for example, as an anchor in the local economy, particularly for SMEs. I'm sure that MP Danko knows this very well. There are a significant number of SMEs that pop up around these massive anchor plants, such as a steel plant. The buy Canadian policy will help to ensure a domestic market for the domestic industry and thereby support the domestic supply chains, many of which are SMEs.

[John L. Cuddihy]

If I may add to that briefly, we talked about steel being melted and poured in Canada. One of the fundamental benefits of the way the federal government has approached the materials policy is that it's certainly melted and poured, which is very important for our producers, but it also speaks to fabrication in Canada, so it's that continuity throughout the supply chain.

[Jenna Sudds, Liberal, Kanata, ON]

Yes, absolutely. Thank you.

It also speaks not only to that supply chain resilience and to building that capacity, but also to that predictability as we move forward, which I think is so important.

Perhaps with that, I will pivot online, to Mr. Young.

Building on that comment around predictability, how important is predictability of domestic demand from major public procurements in helping Canadian companies predict future demand, make the necessary investments and have confidence in their own operations and their workforce?

[Stephen Young]

Thank you for the opportunity to answer that.

Janco Steel's 30% to 35%, let's say, of our business that was going to the States would be anecdotal, I think, of the entire industry, even up to 60%, let's say. Some mills, at moments in time, would have been sending that much steel into the United States. All of us made decisions for infrastructure and building our businesses strategically, thinking there would be a free border. It has come to us now that we can't count on that.

To your point and your question of how important it is—

[The Chair, Conservative, Kelly McCauley]

Mr. Young, I have to interrupt. We are past our time. Are you able to finish up quickly?

[Stephen Young]

Yes.

It is extremely important. We are in a time that is just extremely nuanced, I guess, in feeling like there's a.... I'm being mindful, Mr. McCauley—

[The Chair, Conservative, Kelly McCauley]

I have to cut you off there. If you could provide a lengthier response in writing, it would be appreciated.

[Stephen Young]

Of course.

[The Chair, Conservative, Kelly McCauley]

Thanks.

Go ahead, Madame Gaudreau, for two and a half minutes.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you, Chair.

This is unbelievable. I'm thinking out loud, wondering how our small and medium-sized enterprises can overcome the pressure exerted by lobby groups, which makes it very difficult for them to compete. Looking beyond that, how will such a measure benefit SMEs, given all the necessary filters? We need to understand which stakeholders will benefit from it.

Mr. Prévost, Ms. Auger, you may not be aware of this, but members of the Standing Committee on Access to Information, Privacy, and Ethics have been calling for a conflict‑of‑interest filter for weeks now because the Prime Minister owns approximately 2,000 shares. It's not okay, and it will never be okay.

How can SMEs deal with this if they believe this measure is designed for large corporations, lobby groups, and certain wealthy individuals?

[Michelle Auger]

The CFIB has a great deal of data, and it strives to provide as much of that data as possible to members of Parliament and federal departments. Yes, significant investments are being made, and they will eventually find their way into supply chains. However, we must ensure that the current business climate supports small and medium-sized enterprises so that future entrepreneurs will want to start businesses in Canada. That is not the case right now. The number of businesses is dwindling. We need to ensure that the foundations are in place for SMEs and that they can be truly competitive.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Mr. Prévost, let's be honest: If you don't know there's a competition, you don't submit a bid. At this point, 50% of SMEs aren't aware of competitions, so I have my doubts.

What do you think about lobbying and all the factors in decision-making that are beyond our control?

[The Chair, Conservative, Kelly McCauley]

I'm afraid there's no time for a response, Mr. Prévost. As previously mentioned, maybe you can put your thoughts down in writing and send them to the clerk to be distributed and included in our report.

Mrs. Jansen, please go ahead.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

I cannot help but notice that whenever the Liberal government creates a program, it seems to help the biggest companies while ignoring the small businesses that actually drive Canada's economy.

For example, the steel industry, with us today, contributes about $4 billion to Canada's GDP. Small and medium-sized businesses contribute hundreds of billions, something like 300 times more. SMEs make up 99% of all businesses in Canada. They employ nearly two-thirds of private sector workers and generate roughly half of our economic output.

If the goal is to strengthen the Canadian economy, create jobs and increase productivity, where would we get the biggest return? Is it by creating another targeted program for a handful of large companies or by making it easier for millions of entrepreneurs and small business owners to grow, hire and invest?

What makes this even more frustrating is that often these large businesses, for example, the steel industry, are largely foreign-owned, well over 50%, whereas SMEs are truly Canadian businesses. They're owned by Canadians and rooted in their communities. They reinvest their profits here at home, yet they're the last to receive attention.

The government calls this a strategy to support Canada, but when a program is designed around a relatively small segment of the economy, while businesses that generate half of our GDP are largely left out, it raises a fair question. Are we really focusing on where Canada gets the greatest economic benefit? If we want a stronger economy, the biggest opportunity isn't at the top—no shade on the steel industry—it's in the millions of small and medium-sized businesses that keep our country running every day.

My question, Michelle Auger, as we sit here today is this. Can a Canadian SME clearly identify what new opportunities this buy Canadian initiative creates for them?

[Michelle Auger]

Our data says no. There is preliminary data showing that the qualitative data that we've also received in our June survey shows that the opportunities that do exist are entirely too complex for them to apply. It's not worth the time and effort, and they don't have the extra staff or the cash to do it.

You're completely right: Canadian SMEs are the foundation of our communities across the country. They're the first to try to keep their doors open and keep their staff employed for as long as possible, even through the tough times. There really does need to be a shift in focus on Canadian SMEs, because when you look at the programs that have been announced to support SMEs, you have the regional development agencies and the RTRIs. Again, the criteria are so different from one to the other that you're picking winners and losers. We need to make sure that when programs are being created, whether procurement programs or others, the intent allows for good policy programs that make it easy for SMEs to get there.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Have you seen any evidence that procurement has become simpler for SMEs since the buy Canadian announcement?

[Michelle Auger]

There hasn't been a lot announced yet for small businesses.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

There's not even information for them.

[Michelle Auger]

You can go online, but the thresholds are so high right now on the buy Canada policy that a lot of the contracts are not reflective of SME realities.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Would you say that reducing barriers is often more valuable than creating a new subsidy program?