Industry and Technology Committee on April 23rd, 2026

[Karina Gould, Liberal, Burlington, ON]

Great. Thank you so much, Mr. Donally. I really appreciate that. I think it applies to the same kinds of companies I have in my riding as you have in Windsor. I really appreciate it.

Mr. Loomis, it's great to see you, as always.

You said a couple of things that I wanted to touch on. Obviously, the government has done a lot when it comes to supporting the steel industry and steel fabricators in Canada, and steel derivatives. You talked about two things I'd like you to expand a little bit more on. You talked about increasing the tariff on non-FTA producers. I'm hoping that you can discuss what impact that would have on domestic producers of steel and jobs in our country.

The second is encouraging the federal government or requiring the federal government to encourage provinces, territories and municipalities to use domestically produced steel. I'm hoping you can talk a bit more about what that would mean for jobs in our country. You talked about the fact that this latest 232 tariff is really drying up the order books for Canadian companies, and this will have an impact on thousands of jobs in our community and across this country.

Perhaps you could also talk about what some of the barriers are for provinces, territories and municipalities to access domestic steel, and what the federal government can do to alleviate some of those barriers.

Thank you.

[Keanin Loomis]

Thank you so much, MP Gould. It's good to see you again as well.

First of all, when it comes to derivatives, we're happy there is a broad recognition in Ottawa that there is far greater breadth and depth to the Canadian steel industry than just the primary production of steel. That's a big, important part of the economy for my hometown of Hamilton and your hometown of Burlington as well. Just in structural steel—and there are far more derivative steel fabricators and manufacturers in this country—we employ 30,000 people across Canada, so we really appreciate the extension of the protections of the Canadian steel industry, down through the value chain to the derivative industries.

What we're seeing, however, is pricing right now that is far below that, particularly coming from China. I'm not trying to be xenophobic here. This is not about that. It's just the whole situation, and the reason for the 232 tariffs in the U.S. is the over-capacity of production in China. What we're seeing and what I'm hearing is that we would need a derivative surtax of 300% to put us on an even playing [Technical difficulties—Editor] steel.

It's important to recognize that, yes, we have to protect our free trade agreement [Technical difficulties—Editor] and the 25% does a really good job of putting us on a level playing field there, but it is not the case when it comes to one country in particular. More needs to be done there.

When it comes to domestic procurement, as I said, right now it only applies to situations in which the federal government is the procurement agency. In the grand scheme of things, the federal government only purchases a small amount of steel compared to the provincial governments and the municipal governments. The federal government provides a lot of funding to projects in our provinces and our municipalities. I think it would be easy to leverage in the funding agreements the requirement to buy Canada. That shouldn't mean that municipalities and provinces are going to be paying more.

The other note is that all the—

[The Chair, Liberal, Ben Carr]

Mr. Loomis, I'm afraid I've let it go about 90 seconds over. I'm very appreciative of the insight, but I have to keep us a little bit on track. I'm sure there will be another opportunity for you to finish that thought.

Mr. Ste‑Marie, you have the floor for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Mr. Chair.

Good morning, witnesses. Thank you for being with us. I also thank you for your presentations, which have taught us a great deal.

My first questions are for Mr. Donally.

As you said, the latest executive order from President Trump, from the American administration, puts a tariff on the total value of a finished or intermediate product exported to the United States, not just on the steel and aluminum that were previously targeted.

In your opinion, does this seem to contravene the rules of the free trade agreement, the Canada—United States—Mexico Agreement? In that case, it would be illegal.

In your opinion, does that also seem to contradict the previous order applying a 50% tax, or customs duty, on steel and aluminum, whereas now the percentage is much higher?

[Ryan Donally]

I'm not a trade lawyer by any stretch, but what I can say is that the feedback from my members who deal with this on a daily basis is that they believe that this is something that has extended beyond the notion of what the 232 tariffs were. This does extend into, essentially, a tariff on the value-added, the labour, the intelligence and the person-hours that are brought into any of the products that are shipped throughout the United States.

I won't speak specifically on the illegal nature of that, but it does seem to extend beyond the notion of what the 232 tariffs should be instilled for.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

The federal government is trying to negotiate the executive order and reach an agreement with the U.S. administration, which is clearly acting in bad faith and does not seem to want to reach an agreement that is mutually beneficial on both sides of the border. As we wait for the outcome of the negotiations, do you think it would be useful for Canadian chambers of commerce to talk to American chambers of commerce, for Canadian worker groups to talk to American worker groups, for provincial governments to talk to American state governments and for Canadian elected officials to talk to American elected officials? That would help maximize pressure on the U.S. government and ensure that Americans take legal action against the U.S. government to determine whether the measures it has adopted are illegal. Do you think that's a good idea?

[Ryan Donally]

This is quite recent. These are approximately two weeks ago. Especially with the folks I was talking about, the tool and die mould-makers, these are projects that are just finishing up. These projects right now are not the projects that are putting a headlight on a 2026 Ford Fusion or 2027 Ford Edge. This is something that will be installed in 2028 or 2029, down the road.

I suspect that the pain has not yet been felt by the purchasers in the United States on these products. I firmly believe that. I think it's too soon. Once that happens, I expect those conversations to be filtered up.

I can tell you right now that I have a very strong relationship with the Detroit Regional Chamber, the Downtown Detroit Partnership and a number of other of my U.S. counterparts. These are conversations that I've had already and will continue to have.

I believe that over the next month or so, as these projects are not fulfilled.... As I alluded to on Monday, there are projects that are on the shop floors in Windsor-Essex right now that are not shipping. I know one company specifically that has four projects done; they're ready to ship over tools. They're not going to do it because they're not willing to pay the cost of the tariff. They're going to wait it out. In a month, when that doesn't come through, and the OEM is putting pressure on the supplier, that's when I think this tipping point will happen in the United States.

I'd say to make sure that we are seasoning the folks in the United States that this challenge is going to be coming for them. I do think that any type of cross-border relationships are extremely important. I think it is incumbent on Windsor chamber of commerce, other border chambers and also the Ontario and Canadian chambers of commerce to build and maintain those relationships. At the end of the day, we're not selling our house. We are always going to be neighbours with the United States, and they currently are the largest economic power in the world.

I think having those conversations early to build those relationships will serve us nothing but positively as we move forward.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

If it took time to see the impact of the order and to put in place a new agreement that would benefit domestic industries, a temporary solution would have to be found. Small and medium-sized businesses have come here to suggest that, if it lasted several months, it might be useful to reinstate a targeted and temporary wage subsidy to help businesses retain their specialized labour until it is resolved. They also suggested that a government hotline be set up to answer questions from small, medium-sized and other businesses about customs duties so that they didn't have to use consultants who charge between $200 and $300 an hour. What do you or your members think of those two suggestions?

[Ryan Donally]

Thank you again. Those are very interesting ideas. I do think right now that anything related to cash flow is important. This is not a “let's figure it out in a year” type of situation. We need, in the next three to six months, for this to be hammered out and understood. That's the reason for the request right now, and the urgency.

I thank everybody involved for listening to us last Monday, today and next Monday, because you all recognize the urgency of what this means for many of the manufacturers, the 8,000 in Windsor, the 60,000 in Ontario and the 140,000 across Canada. Anything that can allow those people to continue to employ their skilled, talented labour and continue to put food on their plates is very important right now because, regardless of how this plays out over the next year, these folks are going to be the basis for the future industry of Canada. Making sure that they don't disappear over the next three, six or nine months is vitally important.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you. That's very clear.

Mr. Chair, before my time is up, I want to remind you that the University of Calgary study cited by Ms. Gould pointed out how much the sector contributed to the Quebec economy, slightly behind the Ontario economy. It was also a significant contributor, although less so, to the Manitoba, Nova Scotia and British Columbia economies.

Thank you.

[The Chair, Liberal, Ben Carr]

I'm always happy to get behind a report that highlights the interests of Alberta, Manitoba and Quebec, Mr. Ste‑Marie. Thank you for referencing that.

Ms. Borrelli, the floor is yours for five minutes.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Thank you to all of the witnesses for coming here today to be part of this important study.

My first question is for Mr. Donally.

How critical is a long-term trade agreement to the survival of the mould-making industry?

[Ryan Donally]

I would say that it is supremely important. Approximately 85% of the products that are manufactured in our region, if not more, go to the United States, and even more go through Ontario and then eventually end up in the United States. A continued long-term relationship with the Americans is vital for my region.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

We've heard that manufacturing represents roughly one in five jobs in Windsor-Essex, which would be about 4,800 or 4,900 jobs. What would be the outcome for our regional economy if this sector is disrupted? Do you have an estimate of how many indirect jobs would be affected as well?

[Ryan Donally]

It's 48,800 jobs, which, again, is one in five jobs.

The economic multiplier, as it relates to that NAICS code 333, is generally accepted to be 3:1. That's quickly 150,000. With 240,000 or so employees in the Windsor-Essex region, basically every other person will be directly impacted. That doesn't even trickle down.

We represent 775 members across the Windsor Essex Chamber of Commerce. Approximately 40 of those are manufacturers, starting at the OEMs—Stellantis, Ford, etc.—and going all the way down to the lowest level, where it's a single employee sole proprietor. It would be impossible for that type of economic impact in our region to not impact every single one of those.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

That's a lot of people to worry about. There are a lot of children in those families, and I worry about those families putting food on the table and paying their mortgages every month if we don't come to a resolution for this.

Can you explain, please, for everyone here, how integrated the Canada-U.S. manufacturing supply chain is, particularly in tooling and mould-making, and why it's so crucial that we get a deal?

[Ryan Donally]

Yes.

Oftentimes right now, the original steel block is brought in from the United States. They have specialized steel. That has been used for decades. I'm looking forward to working more with Mr. Loomis to make sure that's Canadian steel.

That is transformed into essentially what makes things. In Windsor-Essex, we make things that make things. We are the upstream. All the way down the road, you're going to get a plastic bucket somewhere from—you name it—the home goods store. The tool that made the plastic bucket very likely came from Windsor-Essex. That product likely crossed the border multiple times before it was perhaps finally assembled or moulded in the United States. A case in point that I can use is the Chrysler Pacifica, proudly built in Windsor for upwards of seven years. There are parts that go into that vehicle that have crossed the border seven to eight times.

It's hard to unscramble that egg, to use Doug Ford's term. Windsor-Essex folks don't want to unscramble that egg. We want to make more eggs. We want to make sure that the industry can be diversified, but also that in its reliance on the United States the long-term economic relationship continues.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Have you heard from any of your mould-makers that they plan on moving their companies to the States? If they do, will we ever get them back?

[Ryan Donally]

I have heard from them directly that they are being asked or are very much considering it. To the point that the minister made on Monday, when and if an industry moves.... This is a multi-million-dollar industry. These are tools that make the things that make the things that cost millions of dollars: time, effort, energy, labour. The ability to move people is very difficult, but they are being asked and they are considering. Right now, the industry has gone from single-digit profitability to single-digit and double-digit unprofitability because of these current tariffs.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Thank you so much.

[The Chair, Liberal, Ben Carr]

Thank you very much, Ms. Borrelli.

Ms. O'Rourke, the floor is yours for five minutes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you, Mr. Chair.

Just to be clear, all Canadians, all parties, want stability. We want to review CUSMA and get back to a predictable trading relationship with our American counterparts. I think the flyer that was held up was talking about new opportunities to reduce the overreliance on the United States. In fact, we have very similar cities, Mr. Donally. Guelph is very vulnerable to American tariffs from an agricultural and also auto parts perspective. In my riding, 16,500 jobs rely on advanced manufacturing.

I want to come back to your recommendation. You said we need to protect the Canadian tooling capability. I could not agree with you more. What does the bridge look like? You also said to reinstate a temporary blanket remission framework. What does that look like specifically, for you?

[Ryan Donally]

I'll echo your sentiment that our communities are very similar. I alluded briefly to what I believe that support looks like—essentially, a bank account—and the nuances of how that is related, with the federal government, the provincial government and the company itself absorbing some of this risk and tariff cost. However, when a company is bidding on a project today and they don't know what it's going to look like six months from now, they want to be able to have stability or at least have the knowledge that should something like this come into force—maybe it's 20% by then, although it's supposed to go up to 25% in 2028, by the way—they know full well that they can still be profitable when they bid on this project.

What's also important, and most people might not know this nuance, is that in order to win these projects six months to a year ago, especially against U.S. competitors, they had to confirm that whatever the landed cost would be, it would be absorbed by the seller. In this case, in the last two weeks, that increase is 10% on the total value. When they bid on it six months ago, they didn't know that was going to happen.

It's about having an ability, or some sort of account, so they know they can continue to be profitable, or at least break even, for the foreseeable future—I say foreseeable, but that's six months, nine months, 12 months or whatever that looks like—so that they can continue to bid on jobs, so they can continue to back-flow the finished products that are going to be off the floor in the next three months, and so they can put new stuff on the floor to keep people employed.

[Dominique O'Rourke, Liberal, Guelph, ON]

Is that different from the cash-flow relief you're talking about? There's regional tariff relief. There are BDC loans. Are you talking about something different in terms of cash-flow relief?

[Ryan Donally]

Yes. I would suggest that this is slightly different. Companies are applying for the regional tariff response and the regional defence initiative. I know that some are being successful. This is something they are actively pursuing. That is a strategic decision they're making. These are strategic loans or strategic initiatives to help diversify our economy. What's happening right now is not a strategic thing. This is an immediacy thing. Companies need to be able to pay the bills. Three months or six months down the road, they may not.