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.
Vice-President, Public Affairs and Communications, Alstom
I can't tell. I need to look specifically at who is paying the carbon tax on these components. Is it the producer or is it us as the buyer? I need to check. I'll come back to you on that.
Conservative
Liberal
Danielle Martin Liberal University—Rosedale, ON
Thank you, Mr. Chair.
I thank all the witnesses for their shared enthusiasm. It warms my heart to see the enthusiasm of three such different witnesses for the government's buy Canadian policy.
I'll start with you, Mr. Marcil.
I represent the riding of University—Rosedale, which is in the heart of downtown Toronto. Line 2 of the TTC runs right through the heart of my riding. It's exciting for me and for my constituents to contemplate the notion that our new subway cars will have been built here in Canada and in Ontario.
From your perspective, what does that mean for the people of my community? How can we work together with you to tell the story of what buy Canadian means for riders who are getting on a Canadian-built subway car on our line 2 subway?
Vice-President, Public Affairs and Communications, Alstom
Torontonians and transit users of the subway cars will have access to brand new last-generation subway cars with all the latest amenities. It's important for Toronto.
I think we all know that the growth of the city is exponential. Right now with the FIFA World Cup, we're seeing the number of people who are using transit in Toronto, and it's a challenge. We're also operating and maintaining the GO Transit network. We've been asked to step up to make sure we offer a flawless service to the population. That's really important. Line 2 is currently one of the busiest lines of metro cars being used in the world.
On top of that, our supply chain is very diverse. It goes across Canada. Obviously, we have some companies from Toronto, but we also have companies from B.C., Alberta, Quebec and all around Canada that are working with us. Some of these suppliers will benefit from the new subway train project, that's for sure.
Liberal
Danielle Martin Liberal University—Rosedale, ON
This links to my next question, actually, which is about the supply chain. Can you describe briefly for us how the buy Canadian policy works its way down the supply chain?
I'm also curious about Madame Laramée's perspective. We all want to see small and medium enterprises supported in Canada. This government is investing, understandably, in big, important nation-building infrastructure projects that require a volume of supplies that can make them tricky and difficult.
I'm interested in understanding how buy Canadian works its way through the supply chain, whether it's for line 2 or anything else, and how we can be inclusive of small and medium enterprises in these big nation-building projects.
Vice-President, Public Affairs and Communications, Alstom
Maybe I can go quickly, and then Charlotte can finish.
When we think about Canadian content, there are two main elements we must take into consideration. The first part is where we are producing goods. Alstom, for instance, is the only passenger rail rolling stock manufacturer that has a footprint in Canada. We have the facilities, we have the employees and we have the expertise. I wouldn't say it's easy, but we have an opportunity to use our footprint to respond to the local content requirement. That's not the whole solution. We can do this but not reach over 50% in Canadian content.
The second part of the equation is the supply chain. This is probably where most of the work in the rail sector will come from. A lot of our supply chain needs to be reshored in Canada. It moved south of the border for a lot of things. The best example is stainless steel. We used to produce stainless steel in Canada. We don't anymore. It moved south of the border. To bring it back, we need volume, predictability and stability. This will come with the large contracts that will be steadily offered with a buy Canada requirement that is strong, clear and predictable. Companies will think about making new investments in Canada and will rebuild their capability in Canada to have access to those contracts.
We cannot move forward when there's a contract with a local content requirement but another one without one, and we yo-yo like that. It needs to be consistent. This comes from the government.
Liberal
Danielle Martin Liberal University—Rosedale, ON
I want to come back to Ms. Laramée, but before we run out of time, Mr. Cloutier, on this question of the lowest bidder, can you say a bit about what it means for good union jobs in Canada to have some flexibility around the lowest-bid approach when we think about a buy Canadian strategy that is also about uplifting Canadian workers?
Quebec Director, Unifor
I'll give you a striking example. Paccar is currently trying to secure a truck contract with the City of Laval. Our understanding is that the company is going to lose the contract over less than 1% of the contract's value. Clearly, the repercussions on the manufacturing sector in Canada are not taken into account when such choices are being made.
Conservative
The Chair Conservative Kelly McCauley
That's our time, but it was a great example in the time allowed, Mr. Cloutier. Thank you.
Ms. Gaudreau, please go ahead for six minutes.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Ms. Laramée, I just want to check one thing. Have you been consulted? Essentially, since December, when someone stole a—
Chief Executive Officer, Quebec Aluminum Industrial Cluster
We were consulted.
We worked with the Public Services and Procurement Canada team to set up the HS code catalogue for aluminum.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Did they tell you that they would continue to consult you?
Chief Executive Officer, Quebec Aluminum Industrial Cluster
We haven't had a response. We're still having discussions with them on certain products, but it's more to see what we do or don't do in Canada. We're working on our aluminum flows. However, for the buy Canadian policy specifically, we haven't received a response at this stage.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
That is needed. I heard you clearly.
Mr. Cloutier, in your opening remarks, you said that the buy Canadian policy is a good start. However, what does that mean in concrete terms?
Quebec Director, Unifor
The Via Rail contract is one example we give. The $3‑billion contract for locomotives and railcars ensures a supply chain and quality jobs for years, including for maintenance of the railcars. There's also the Paccar example, which I just gave.
In many cases, what we understand and what we're sometimes told is that the administrative authority can of course tolerate a certain degree of flexibility. However, the pressure to select the lowest bidder is so strong, and the fear of being sued or being seen as a poor manager is so great, that the flexibility isn't applied. We believe it needs to come from the top, with a clear message from Treasury Board saying that this is what it wants. That is necessary both federally and provincially.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
What elements would be needed for a true Canadian industrial strategy? It needs to be improved.
Quebec Director, Unifor
In our opinion, where possible, we need to move away from commodity markets and towards the manufacturing of value-added products that can serve our own needs and that, in some cases, could eventually be exported and open up new opportunities.
In many cases, there are self-imposed limits. For example, a lot of lumber is produced, but it remains a commodity market. Right now, the question being asked is whether we should produce more biofuel. That could somewhat offset what's no longer being done in lumber. However, it remains a commodity. The idea, then, is to process our materials ourselves, at home, first to use them and then to create wealth.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
There's a lot of talk about the procurement policy, the policy on government contracts. Do we have a national industrial policy in Canada?
Quebec Director, Unifor
Not to our knowledge. We advocate for one, particularly for aerospace and forestry, as well as other sectors.
There's another great example in aerospace. Last year, or about two years ago, the government needed surveillance aircraft, and there was no call for tenders. Canadian companies, including Bombardier, said that they should at least be allowed to submit a bid. There wasn't even a call for tenders, and the contract was awarded to Boeing in the United States for a model that was outdated.
There was no consideration of whether it was the right model for the future, and our own suppliers were prohibited from bidding on the contract. Is there a policy? We doubt it.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
This is something I've been fighting for, because the situation with Boeing was unacceptable.
I still have a little time left. Let's talk about the European model. In countries like Germany, France or South Korea, it's clear that the government plays an active role in developing industrial sectors. Should we follow that model more?
Quebec Director, Unifor
Yes, we believe so. We think the government can be a conductor of sorts when it comes to these industrial policies. We're not asking the government to be the investor or to nationalize anything. We're quite comfortable with the private sector taking care of it. Nevertheless, that vision needs to be developed. If that is to exist, it needs to be centralized somewhere, and that's the role of the government.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
I'd like you to provide the committee with the elements of the model most appropriate for Canada.
My time is limited, and I'd like to ask you some questions, Mr. Marcil.
Should we buy Canadian or build Canadian? Since the beginning of the study, the topic has been public procurement and Canadian content. I'd like to make a distinction. Is the buy Canadian policy primarily a procurement policy, or should it become an industrial development policy?
Vice-President, Public Affairs and Communications, Alstom
It can be both. If a Canadian product is purchased, that means that someone made it in Canada. It's primarily a policy that can be leveraged to revitalize our manufacturing sector, which, honestly, isn't doing very well compared with the U.S.'s. Whether it becomes a policy of industrialization or reindustrialization, it can be extremely useful. The government has resources; it awards enormous contracts in our sector, the defence sector and others. It provides a lever, and we certainly can't let that pass by.
