Industry and Technology Committee on April 20th, 2026

[The Chair, Liberal, Ben Carr]

Good afternoon, everyone.

I hope you had a good weekend at home.

Pursuant to Standing Order 108(2), as adopted by this committee last week, we are commencing an emergency study of the economic and supply chain impacts of U.S. tariffs on Canada's metallurgical and advanced manufacturing sectors.

I want to welcome the three witnesses we have here in the room with us today. A few will be joining us in the second hour.

I also see that we have a few new members of the committee joining us today.

Mr. Lewis, welcome back to you, sir.

Just as a reminder to our witnesses in the room, if you are not using your earpiece, please place it on the sticker in front of you in order to protect the health and well-being of our interpreters. I can confirm that all audio for those joining online has been tested.

With that, colleagues, I'd like to welcome the following witnesses who are with us today. From the Canadian Association of Moldmakers, we have Nicole Vlanich, executive director. From Laval Tool & Mould Ltd., we have Jonathon Azzopardi, chief executive officer and president. From Liard Industries, we have Isabelle Liard, president. She is joining us online.

Witnesses, you will each have up to five minutes for opening remarks, at which point we will turn to our colleagues around the table for a preallocated slot of time to ask questions in order to be able to dive more deeply into this.

I want to thank members and their staff and the witnesses who are here today for a very quick turnaround. We did not have this discussion until Thursday of last week. It's very unusual to be able to make a committee meeting work as quickly as we did. Due to the coordinating efforts of the clerk, her office staff, members and of course witnesses, we were able to elevate the conversation on this very important issue in an expedited and timely manner.

With that,

Ms. Liard, you have the floor for the next five minutes.

[Isabelle Liard, President, Liard Industries]

Good afternoon, everyone.

Thank you for this opportunity.

I represent a manufacturing SME in the Joliette region. We've been in business for more than 50 years. We make specialized, custom-designed equipment using industrial steel. Over the years, we've built strong business relationships with large U.S. customers. More than 60% to 70% of our sales are in the U.S.

As you know, prior to April 8, section 232 of the Trade Expansion Act only applied to certain products, mostly structural products. For us, that represented only 5% of our sales, so most of our products were not affected. As you know, a 50% tariff was applied to non-U.S. steel content. For us, that represented about 5% to 8% of the value of a project once applied.

Since April 8, the situation has completely changed. Now, a 25% tariff is applied to the total value of the commercial bill for virtually all steel products. For our company, it's a direct increase of 25% of our export price, and we're unable to absorb that increase. We can't reduce our selling prices by 25%, so we're really losing our competitiveness in the U.S. market.

What I understood is that there may be some exceptions for certain products. There might be a 15% tariff until 2027 on certain products, but that's not very clear to me. There could also be a tariff of only 10% if 95% of our steel was American. It's almost impossible for our company to source exclusively American steel, especially for plate, which comes almost exclusively from Canada, not to mention that American steel is very expensive compared to Canadian products. That has a major impact on our business.

For the past year, we've been trying to build relationships with new customers in new markets. However, we're subcontractors for components manufacturers. We manufacture what our customers want, and that's custom-made equipment. It's a local market. It's difficult for us to export outside North America. Also, the Canadian market is still more limited than the American market. It's still hard to do without sales to the U.S.

Since tariffs were announced a year ago, we've been working hard to try to improve our productivity, but the 25% tariffs are having a major impact, mainly because they were applied quickly.

Thanks to Economic Development Canada, we've been able to invest. Through the regional tariff response initiative launched last fall, we purchased a machine to improve our productivity. We invested $1.3 million in new digital equipment. However, the equipment has yet to be set up. That'll be done in the coming months. Since the productivity gain isn't immediate either, we wonder if we'll be able to make that investment profitable in the current context.

In the short term, the most important thing for our business is really to maintain our cash flow and our workforce. Obviously, we have highly skilled employees, but it's hard to replace them. Almost 30% of our workforce is made up of temporary workers, and they're essential to our business. If we lose them, we may not be able to continue our operations.

We definitely need an employment support program to keep our workers and maintain our cash flow. Quick and accessible support for market development should also be accessible, because it's costly for our business.

Also, we have to work constantly with tariff experts to stay informed and get support, and that's an extremely high expense for our business, from $100 an hour to $200 an hour. It's important for us to have access to help to better understand the rules and adapt. Flexibility is needed in order to keep our temporary foreign workers.

That's what I wanted to say in the five minutes I was given.

[The Chair, Liberal, Ben Carr]

Thank you very much, Ms. Liard.

Mr. Azzopardi, we'll turn the floor over to you for up to five minutes, sir.

[Jonathon Azzopardi, Chief Executive Officer and President, Laval Tool & Mould Ltd.]

Good afternoon, Mr. Chair and committee members.

I want to say a special thank you for inviting me here today to speak to you about my briefing on the urgent response required for the section 232 tariffs and the impact on the Canadian mould-making and steel fabrication industry.

My name is Jonathon Azzopardi. I'm the owner and CEO of Laval International, and I'm also a board member of the Canadian Association of Moldmakers.

I feel it appropriate to give you the overview on the recent changes in the U.S. section 232 tariffs, including their expanded application to the full value of Canadian-made goods containing steel. They represent a significant escalating threat to Canada's mould-making and broader steel fabrication industry. These measures should not be viewed as an isolated, temporary trade action. They reflect a deliberate, structured policy direction that risks systematically weakening the Canadian advanced manufacturing base over time.

Unlike the initial proposed tariff increase of 50%, which would have caused immediate severe disruption, the current phased tariff structure of 10% to 15% in 2026 through 2027, increasing to 20% to 25% thereafter, presents a strong and strategic sustained challenge. This phased approach creates predictable, long-term cost pressures. It enables a gradual erosion of Canadian competitiveness and encourages incremental relocation of production and sourcing decisions to the United States. This should not be interpreted as a short-term negotiation tactic. It is a structured mechanism designed to influence long-term industrial investment decisions.

There is a clear precedent for this policy approach. The United States has previously implemented trade and industrial measures that have had the intended effect of shifting automotive production and capacity. The current application of the section 232 tariffs suggests that the attention is now shifting beyond the final assembly plants to the remaining upstream supply chain, including mould-making, tooling and steel fabrication. The implications for the Canadian industry are wide. The consequences extend well beyond mould-making to mould-makers, steel fabricators, automation and fixture builders, steel mills and broader manufacturing supply chains.

The application of this tariff to the full value of finished goods rather than just to the steel inputs disproportionately impacts high-value engineered products, penalizing Canadian labour, engineering and innovation. That's the industry we're in.

Efforts to diversify away from U.S. markets may provide some short-term mitigation, but they do not resolve the structural disadvantages created within North America. The mould-making sector employs approximately 58,000 within the MTDM sector, which contributes well over $2.5 billion directly to the GDP. What is more alarming is the broader supply chain that supports hundreds of thousands of jobs, about $16 billion in GDP, and this industry supports about 12% of the total GDP of Canada.

Ongoing trade frictions in North America create a strategic vulnerability. It weakens the integrated continental supply chain, increases the resilience of the offshore, low-cost producers, and risks enabling external competitors to gain market shares within North America. Canada, the United States and Mexico share a mutual interest in maintaining a strong and competitive manufacturing base.

Given the urgency and the scale of the risk, immediate federal action is required. We respectfully urge the Canadian government to engage with U.S. counterparts to address the application of the section 232 tariffs on the full value of the goods, advocate for an exemption for moulds and tooling, advocate for tariff applications limited strictly to the steel content, reinforce the importance of integrated North American manufacturing under the USMCA or CUSMA, recognize the cascading impact across all steel fabricators and supply chain industries, and prepare a targeted support measure should resolution timelines be extended.

Commercial decisions are being made immediately in response to this pricing pressure. Market losses are difficult to reverse once production has shifted. Supply chain impacts are widespread and compounding, and workforce displacement risks are imminent.

On April 4, overnight, our industry went from being profitable to not being profitable.

In conclusion, the current implementation of the section 232 tariffs represents a structural and strategic challenge to Canada's manufacturing base. Evidence from the automotive sector demonstrates how this sustained policy pressure can reshape the industrial geography over time. The extension of similar pressures to upstream industries now places Canada's remaining manufacturing ecosystem at risk.

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Ms. Vlanich, the floor is yours for up to five minutes.

[Nicole Vlanich, Executive Director, Canadian Association of Moldmakers]

Thank you for the opportunity to appear before you today on behalf of the Canadian Association of Moldmakers and our members.

CAMM represents Canadian mould-makers and a broader network of tooling, machining, automation and advanced manufacturing firms that support production across Canada and North America. I'm here today because the current U.S. tariff environment, particularly section 232, presents a serious and immediate concern for our sector and for Canada's manufacturing competitiveness.

Our industry may not always be visible to the public, but it is foundational to modern manufacturing. Moulds, dies, fixtures and other precision tooling are the production tools required to manufacture products in automotive, aerospace, medical devices, packaging, consumer goods, construction materials and industrial equipment. Without tooling, manufacturing programs do not launch, production lines do not run and supply chains slow down.

This is also an industry of real scale. Canadian mould-making exports approximately $7 billion annually to the United States. Approximately 75% of Canadian mould-making is in Ontario, within which Windsor-Essex is home to the largest cluster of mould-makers in North America, exporting $2.4 billion annually.

This sector is also deeply tied to cross-border trade. When we discuss mould-making and related tooling, we are not discussing a niche issue. We are discussing a critical enabling industry that supports downstream manufacturing on both sides of the border. Our supply chains are deeply integrated and reliant on each other. We are manufacturing partners, and the issue before you today is not theoretical. Commercial decisions are being made now. Projects are being quoted now, and customers are deciding where future tooling programs will go now. Canadian firms are evaluating whether they need a U.S. operating footprint simply to remain competitive, and this is why urgency matters.

A central concern for our members is that current tariff treatment does not reflect the true nature of these products. The value of a mould is not simply the steel it contains. Its value comes from engineering, design, CNC machining, software, polishing, testing, project management and highly skilled tradespeople developed over decades. When tariffs are applied to the full finished product value rather than the steel content alone, they disproportionately penalize value-added manufacturing activity. That creates a structural disadvantage for Canadian firms competing in an integrated North American market.

There is also significant uncertainty in administration and compliance. Even experienced customs brokers are reporting confusion regarding classifications, documentation requirements and treatment of certain products. Many small and medium-sized companies do not have the internal resources to manage rapidly changing and highly technical border requirements. That uncertainty becomes a cost in itself.

I would also note that moulds and dies are closely related industrial tooling categories. They often serve the same customers, use similar materials, rely on the same skilled trades and are manufactured using many of the same advanced processes. Where different treatment exists between closely related tooling sectors, it would be appropriate to review whether policy is aligned with the industrial reality.

At the same time, Canada is not the source of the problem these measures were intended to address. Canada is a trusted ally, a CUSMA partner and part of an integrated manufacturing economy. Many Canadian firms purchase U.S. steel, components, coatings, software and services. Likewise, many U.S. manufacturers rely on Canadian tooling capacity for quality, speed, engineering, expertise and responsiveness. Weakening this relationship does not strengthen North America; it weakens it. It also risks driving sourcing and investment towards offshore competitors outside of our continent.

Our members are looking for continued and urgent engagement with U.S. counterparts regarding section 232 treatment of moulds, tooling and other value-added manufactured products. There is also a strong need to pursue exemptions or revised treatment where products are clearly part of the integrated North American supply chain. It is also important that closely related tooling sectors, including moulds and dies, are treated consistently where their manufacturing processes, materials and end uses substantially overlap.

Finally, if resolution timelines extend, temporary domestic support measures would help viable Canadian firms manage current uncertainty while longer-term solutions are pursued.

Members of the committee, this is about more than tariffs. It is about whether Canada retains specialized industrial capability developed over generations. If capacity leaves, if investment pauses or if skilled people exit the sector, recovery will be difficult, costly and slow. We have the opportunity to respond now, strategically and in partnership with industry.

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much, Ms. Vlanich.

Colleagues, we're going to enter into our first round of questions.

Mr. Lewis, the floor is yours for six minutes, sir.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much, Mr. Chair, and thanks so much to the committee for having this very important emergency discussion here today.

I will start with Mr. Azzopardi.

What's the immediate impact if we don't get a resolution to the tariffs on industry? I don't even want to talk regionally. I'm talking about Canadian industry. What's the immediate impact? How quickly are companies going to close? How many jobs are we going to lose? What's the fear factor on that front, sir?

[Jonathon Azzopardi]

That's a twofold question. The first impact is what we're feeling immediately. Any product that we have on our shop floor that we would have already received contracts for is not quoted nor does it have any provisions for this 10%. We're hoping that it will be 10%. It could be 15%. Because of the ambiguity, it might be 50%. There's no industry in Canada that could sustain that type of hit to the bottom line.

Most manufacturers operate at single-digit net profits, so anything greater than 5% is going to make them unprofitable. If they're in a position to look at sourcing in the United States, they'll explore that. The small to medium-sized businesses will not. They will just close. At the end of this, you will likely see that the industry will shrink or leave Canada quite quickly, because there's really no incentive at that point to stay in Canada.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Mr. Azzopardi.

You mentioned in your opening remarks potential support programs. Are those support programs for three months? Are they for six months? Are they for a year? How do we save industry today, so we don't lose it? I believe that once industry is gone, it's gone for good. It's gone forever.

Can you please expand on the comments that you had made earlier on in your initial remarks?

[Jonathon Azzopardi]

MP Lewis, you're absolutely right. When industry leaves, it doesn't come back. We've already seen that in the automotive industry. Once these plants close, they very rarely reopen.

The idea that you're going to be able to change the minds of these companies once they move is likely not going to happen because it's too expensive for us to move industry, especially with what we do, which is with very highly technical, specialized machines. I tell most people that one machine in my shop costs more than the entire plant, building and land that it sits on. That's not easy to move around, so once it leaves, it's gone.

To answer the rest of your question, I don't necessarily think that there's a good opportunity for us to try to save this business if we are looking at something longer than two or three months. You have to understand that this is an aging industry. Most of our owners are 65 years old. They're not going to stick around to try to fight this and go around again. Most of them will look at either closing their companies, moving them or trying to sell them.

The problem is that immediately, overnight, the multiples for these companies were cut in half, if not more, because they are no longer profitable. Nobody's going to buy a business now that's not profitable. It will just close or relocate.

[Chris Lewis, Conservative, Essex, ON]

Thank you.

Again, I'll go back to you, Mr. Azzopardi, and then I'll move on to Ms. Vlanich.

Mr. Azzopardi, how many employees would be at Laval?

[Jonathon Azzopardi]

Currently, we employ 132.

[Chris Lewis, Conservative, Essex, ON]

If there are 132 employees and we say that many of those employees have potentially two people in the house—probably more, potentially—that's a lot of food on Canadian tables and a lot of food on local tables that wouldn't be there otherwise. Is that correct?

[Jonathon Azzopardi]

That's correct.

[Chris Lewis, Conservative, Essex, ON]

All right. Thank you, Mr. Azzopardi.

I'll move on to Ms. Vlanich.

In your opening testimony, you spoke about Michigan. I found that very interesting. I loved it. Of the members, how many are Michigan members and how many are Canadian members? How many are U.S. members and how many are Canadian members?

[Nicole Vlanich]

It would be about 80% to 20%. Canadians make up 80% of our membership. We do have about 20% in the U.S., in Michigan.

[Chris Lewis, Conservative, Essex, ON]

Obviously, there must be a lot of integration between the 80% and the 20%. Those moulds are going back and forth. Whatever that tool is, it's going back and forth.

Ms. Vlanich, this weekend, the Prime Minister delivered an address to Canadians. Among other priorities, he spotlighted his government's deepening strategy of divorce from the U.S., Canada's largest trading partner and the world's richest economy. In that address, Mr. Carney suggested that regard for the deeply integrated nature of the North American supply chain was merely nostalgia.

The jobs of your members right now depend on this relationship. Is that just nostalgia, or is it the painfully real reality that you and your members, whether you like it or not, must contend with?

[Nicole Vlanich]

I'm not sure what Prime Minister Carney thinks or what President Trump thinks. On behalf of our members, I know that these are real businesses, real jobs and real families being impacted. They need a solution.

[Chris Lewis, Conservative, Essex, ON]

About a month ago, our leader, Pierre Poilievre, was in Windsor, calling for an auto pact, and that was turned down.

With that, sir, I'll cede the remainder of my time.

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Lewis.

Mr. Bardeesy, the floor is yours for six minutes.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

Thank you.

I'm just going to ask a few questions to better understand what's going on in the witnesses' sectors and businesses.

Ms. Liard, could you tell us using round numbers how much of your sales are in Canada, in the U.S. and abroad?

[Isabelle Liard]

Yes. We have $5 million in sales. Multiply that by 0.7, that comes to $3.5 million in sales to the U.S. The rest of our sales are in Canada.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

Nothing outside of North America?

[Isabelle Liard]

No. We're really a mechanical manufacturing subcontractor, so it's virtually impossible for us to sell outside of North America.