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
We have an ethics and compliance policy, and we have supplier behavioural policies—
Vice-President, Public Affairs and Communications, Alstom
—that we apply strictly throughout our supply chain.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I'll quickly change. Is the funding you receive from EDC subject to the buy Canadian rules, yes or no?
Vice-President, Public Affairs and Communications, Alstom
No, absolutely not. It's not the same. It's not a tool for buy Canada; it's a tool for exporting. That's different.
Conservative
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
Thank you, Mr. Chair.
Ms. Laramée, you said that the $5‑million threshold was too high for enough small and medium-sized businesses to take an interest in the buy Canadian policy. I don't know whether you mentioned it, but do you have a number in mind or something to recommend with respect to the threshold?
Chief Executive Officer, Quebec Aluminum Industrial Cluster
When Public Services and Procurement Canada initially presented the buy Canadian policy to the committee we were working with, the threshold to trigger the policy was said to be $25 million. There was also talk about a $250,000 threshold for materials. The $25 million seemed too high, and SMEs felt that $5 million was more realistic. They told us that the contracts were often for renovation work. In general, there are few new contracts; they're mostly contracts related to renovation. In this case, since the thresholds will be lower, they won't trigger the $25‑million threshold. The tenders need to be smaller, and the buy Canadian provisions need to be triggered more often for large projects, showcase projects. That's the concern SMEs have.
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
Have you submitted those recommendations in writing?
Chief Executive Officer, Quebec Aluminum Industrial Cluster
No, it was an informal discussion with Public Services and Procurement Canada.
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
It would be good if you could send them to us.
Mr. Cloutier, I really appreciated your comments. It's true that what's happening in Laval is unfortunate. It affects us all. Indeed, it's a challenge for municipalities, given the international trade requirements.
I'd like to read you something and hear your opinion on it. If time permits, I'd like to hear Mr. Marcil's and Ms. Laramée's opinions as well.
It says:
...when Canada limits access to its public procurement, other countries may do the same to Canadian businesses....
Still, others argue that Canada is “clinging to the fiction that ‘free markets’ still exist while competitors build protected ecosystems” and needs to adapt to the new realities. This requires a complete retooling of the system in order to serve economic sovereignty and national security.
I know you've made some comments, but could you share your recommendations on this?
Quebec Director, Unifor
I tend to agree with what you just read. It often seems as though the government suffers from naive optimism. As can be seen, several other countries, like the U.S. and those in Europe, have much more aggressive buy domestic policies. We're constantly told that isn't possible here, because of our international agreements. Why is it possible elsewhere, but not here? I think we need to wake up and give ourselves the tools to level the playing field.
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
Thank you, Mr. Cloutier.
Mr. Marcil, what's your take on it?
Vice-President, Public Affairs and Communications, Alstom
I would be in favour of the proposal too. It's very much in line with my presentation. Basically, these tools will help us regain industrial sovereignty that we've lost over time.
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
Do you have any specific recommendations on how Canada should approach this challenge?
Vice-President, Public Affairs and Communications, Alstom
The way the buy Canadian policy is currently designed is a very good first step.
Now, the government could set out more specific targets for content. In other words, it needs to be clearer. So far, there's been a lot of talk about discounts that could be given or about promoting Canadian content in the policy. That's the first element.
There's also a second element. All levels of government need to have a similar approach on this issue. Some procurement is under the direct jurisdiction of the federal government, while some is under the direct jurisdiction of the provinces or cities. In our field, it's not uncommon to see all three levels of government contribute funding to a public transit project. It's important to ensure a meeting of the minds and policy alignment on building locally.
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
That's an excellent comment.
Ms. Laramée, I'd like to hear your point of view.
Chief Executive Officer, Quebec Aluminum Industrial Cluster
I stressed the point that our value chain is North American. That said, I believe we need to be careful. Buy local policies are very helpful and must indeed be aligned across the three levels of government. That's critical.
Conversely, there is still the concept of reciprocity. I think we have to choose the partners we want to work with. For example, I know that, in some areas, there is co-operation with the federal government and there are discussions about protecting local businesses from countries with non-market economies, such as China, Taiwan and Turkey. We're told that if we start imposing quotas or tariffs, we'll take access away from our international partners.
However, which partners do we want to work with? I think, once again, the devil's in the details. We need to choose partners with whom there's genuine reciprocity and alignment on volumes. For example, saying we'll work with Europe when it comes to aluminum processors isn't realistic. Our aluminum is more expensive in North America. Processed aluminum products won't be that easy to sell in Europe. Our value chain needs to evolve, but that's not the case for processing. When talking about reciprocity, the government needs to look at what's being discussed and what the volumes are, and ensure that it's a mutually beneficial transaction.
However, some countries are attacking and undermining our local supply chain. Right now, the aluminum sector is experiencing a perfect storm. We're losing contracts with the Americans while inputs from non-market economies are eating into our local market share. Because the procurement process favours the lowest bidder, we obviously can't compete with products that are 30% to 40% cheaper than what we're able to produce here. I don't think we'll be able to ignore the price. When we adopt a buy local policy, we also need to make sure we look at what else we're willing to do to protect our industry.
There was a question about whether it should be an industrial policy. For me, the answer is yes. It's about building buy local requirements into the policy.
Conservative
The Chair Conservative Kelly McCauley
I'm sorry. We're quite a bit past our time, but perhaps you can take it up with Madame Gaudreau.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
I have two minutes and thirty seconds left, and time is running out.
Ms. Laramée, just because we don't have much time, that doesn't mean you can't provide us with all the details and information on the issues that have emerged. Clearly, that's the purpose of the committee. If we don't have time to consult you, we'd like to have your point of view, even if it's not in the form of a dialogue.
It's the same thing for you, Mr. Cloutier. Here's a question about your recommendations: What does the buy Canadian policy absolutely have to have to be successful?
Quebec Director, Unifor
Earlier, I gave three concrete recommendations. I'd say it's quite urgent to review the rules around awarding contracts to the lowest bidder.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Ms. Laramée, what do you think about predictability?
Chief Executive Officer, Quebec Aluminum Industrial Cluster
Our companies need to be ready to invest and know where they should be heading. In defence, it's very hard to have predictability. Knowing where the opportunities will be and where the government will invest is essential, so we can structure our supply chain accordingly.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Yes, but it requires a geopolitical context. That would be good.
Mr. Marcil, what do you think?
Vice-President, Public Affairs and Communications, Alstom
I agree with what my colleagues said.
The government should also look at what is defined as Canadian as opposed to what isn't. It's especially important to prevent people from being able to just open a post office box in Canada to claim they have a foothold here and thus qualify under the buy Canadian policy. The number of investments, the real economic impact, the employees and where the product is actually designed, among other things, must also be examined. There's work to be done on that. You can look to Ontario, which has started to consider the definition of what constitutes a Canadian product as opposed to what doesn't.