Evidence of meeting #46 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aluminum.
A recording is available from Parliament.
Conservative
The Chair Conservative Kelly McCauley
Thank you very much.
With that, we will suspend until we're done with our vote.
Conservative
The Chair Conservative Kelly McCauley
Thank you, everyone. We appreciate your patience. We're back in session.
Mr. Marcil, welcome. We'll open with you for five minutes, please, and then we'll start our round of questioning.
Olivier Marcil Vice-President, Public Affairs and Communications, Alstom
Thank you very much, Mr. Chair.
Mr. Chair, members of the committee, I am pleased to be here today to contribute to your work on buy Canada policies and on the role that public procurement can play in supporting our economy, creating jobs and building long-term industrial resilience in the manufacturing sector.
Canada is at a pivotal moment.
Across the country, and for several years now, governments have been investing heavily in infrastructure and public transportation systems. The question is whether we will use these investments strategically as a lever to strengthen our industrial sovereignty, rebuild our supply chains and create lasting economic value for Canadians.
As experts in rail mobility, with experience delivering tramway, light rail, subway, commuter rail and high-speed train projects across Canada, we believe the answer is yes.
Alstom is the only global passenger rail company with manufacturing facilities in Canada. We employ over 5,000 Canadians, including 1,000 engineers, and we operate major facilities in Saint-Bruno-de-Montarville, La Pocatière, Thunder Bay, Kingston and Brampton. Moreover, Saint-Bruno is home to Alstom America's headquarters, overseeing activities from Canada to Chile.
The Caisse de dépôt et placement du Québec is our largest shareholder worldwide. This leadership presence reflects Canada's importance within our global organization and demonstrates that Canada is not simply a market for Alstom; it is home.
Our trains are designed, engineered, manufactured, tested, commissioned, operated and maintained here in Canada by Canadian workers. Every day, Alstom employees deliver transportation solutions that connect people to jobs, students to schools, businesses to customers and communities to opportunities. We are proud to support major transit and rail systems in cities including Toronto, Montreal, Ottawa, Waterloo, Vancouver, Edmonton and, soon, Quebec City. Millions of Canadians rely on these systems every day.
Beyond our own workforce, we support a broad Canadian supplier network of over 900 companies—small, medium and large—representing hundreds of additional jobs and millions of dollars in GDP contributions. We have seen what is possible when governments establish clear local content requirements.
Last January, we announced a $2.3-billion Canadian contract with the Toronto Transit Commission to deliver a new fleet of 420 subway cars, before options. Thanks to the leadership of all three levels of government, this new subway train project includes a minimum of 55% Canadian content and will generate up to 945 direct, high-paying jobs in Canada and will support 1,700 indirect jobs, providing a strong, concrete return on investment for taxpayers. This is a clear example of what a buy Canadian policy can achieve.
Around the world, countries are increasingly using public procurement as an industrial policy tool.
The buy America act has enabled the United States to attract investment, build new production and innovation capacity, grow its manufacturing sector and create skilled jobs. The U.S. government has provided certainty that public investments will generate domestic economic benefits, and manufacturers have responded in order to maintain access to U.S. government contracts.
Historically, Canada, as a small open economy, has felt it necessary to rely on open markets to create wealth. That was effective—until our partners stopped offering the level of reciprocity we expected. In the face of supply chain erosion and the decline of our manufacturing sector—primarily to the benefit of the United States—a strong and clear buy Canada policy can help reverse this trend.
We recognize that increasing Canadian content will not happen overnight. Rebuilding supply chains will require time and investment.
It begins with a choice: to invest in ourselves, to select our products, to prioritize our expertise.
At Alstom, we believe public procurement remains one of the most powerful tools governments have to support this growth. We are ready to answer that call, with the support of our customers, suppliers, union partners and employees.
Thank you.
Conservative
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you very much, Chair.
Thank you to the witnesses for joining us.
I would like to start my questions with Mr. Marcil of Alstom.
In a June 8 press release, you announced that Alstom received a renewed funding agreement from Export Development Canada in order to enable your company to “expand low-carbon rail...in markets around the world”. Is that correct?
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Can you tell us which countries that would involve?
Vice-President, Public Affairs and Communications, Alstom
Alstom is working in more than 60 countries all around the world. As you know, the mandate of Export Development Canada is to support Alstom customers worldwide so we can have access to those markets and develop some of those products. Those markets are very different. They could be from eastern Europe to Latin America, for instance. It all depends on the projects and the moment. The agreement with EDC offers Alstom their full suite of financial products, which we can offer to our clients, moving forward. Our intention is to use them to develop different projects—it could be high-speed commuter rail, for instance—all around the world.
What is specific about this agreement, and highly interesting, is that we are committed to continuing to grow our local supply chain and scaling up some of our local companies so they can support Alstom in different markets, moving forward, not just the Canadian market. That's very important, because over the last few years, we've seen the rail industry supply chain move south of the border. The United States has a very strict regime of buying American. Canada was not asking for a lot in terms of economic impact in Canada.
The natural decision of an industrial player is to establish a plant in the United States to deliver in the United States market and export to Canada. With Export Development Canada, we will try to reverse this trend by starting to scale up our local supply chain here in Canada while supporting Alstom in different markets.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you very much for that.
Will you table for this committee an outline of which countries EDC is giving you funding to build in, as well as the dollar amount from EDC?
Vice-President, Public Affairs and Communications, Alstom
Do you mean, can I provide the committee with the different agreements we have? It's probably—
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Just give a list of the countries and the dollar amounts. I certainly understand commercially sensitive information.
Vice-President, Public Affairs and Communications, Alstom
That's exactly it.
Conservative
Vice-President, Public Affairs and Communications, Alstom
I will come back to the committee with the proper information related to this.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you.
The government is looking to procure projects with Canadian content. How much of a project's cost is spent complying with emissions regulations here in Canada in, for example, the procurement of metro trains?
Vice-President, Public Affairs and Communications, Alstom
I'm not sure I understand the full scope of your question. Are you talking specifically about the cost of the project in Canada? When you say “emissions”, are you talking about—
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
I mean the environmental emissions regulations here in Canada. Is there a cost for a company like yours to comply with the emissions regulations here in Canada?
Vice-President, Public Affairs and Communications, Alstom
No, there's no real impact, I would say. It's really minimal.
Vice-President, Public Affairs and Communications, Alstom
We are in the rail manufacturing sector producing rail systems. We do not produce diesel locomotives. It's all about green propulsion systems and electric systems. It's not very difficult for us to demonstrate the impact.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Beyond steel and aluminum, what other components does your company use in building trains?
Vice-President, Public Affairs and Communications, Alstom
Trains nowadays are very complex products. Back in the day, we said that they were steel cans on rails. Now they're almost computers on rails.
There are still a lot of components in the manufacturing of car bodies. From Canada, we have primary parts like aluminum and steel. That's one thing. We look at the different components. Think about the roof, car body, radio, isolation and harness. There are all sorts of components that can come from Canada. It depends on the project.
Sometimes there are very specific elements requested by our customers. It's possible that we're unable to procure those elements in Canada. That's very true.
Conservative
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Okay.
Do you pay the cost of the carbon tax on the materials, such as the steel you're using? How significant is that cost?