Industry and Technology Committee on April 23rd, 2026

[Greg Moffatt]

We have to think about the supply chain that's linked to key areas of focus. You talk about defence, critical minerals and battery technology. Sometimes we focus on the end product without thinking about the value chain required to make that a reality.

Critical minerals is an example. There's lots of focus on lithium, but where's the focus on the enabling chemistries that are going to allow that lithium to be concentrated at the mine site and then refined into a usable product? The clean technology investment tax credit is focused on the mine, and enabling chemistries are not included within that mechanism. That's a great example of where we're focused on a very specific point, but we're not thinking about what we need to do to enable that to be built out.

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

I haven't asked you this question, and I have asked it of every witness I have talked to: How critical is a long-term agreement to the survival of the mould industry in Canada?

[Greg Moffatt]

A few of our members are very active in the moulding business and are building the moulds that allow for the conversion of plastics into usable products.

With the tariff structure that's in place now, there is obviously a cost to import the die if you can't get the material here in Canada, which, in certain instances, is the case. The folks I have talked to can't pass those costs along. It reduces the margin and the profitability of the product. It's a material question, for sure, but the government is going to have to think about how it can provide some support to industry.

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

Thank you so much.

[The Chair, Liberal, Ben Carr]

Thanks very much, Ms. Borrelli.

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

[Michael Ma, Liberal, Markham—Unionville, ON]

Welcome to all the witnesses. My first question is for Mr. Hicks.

You spoke about seeing program stoppages. Are you tracking any early indicators of firm distress, such as increased insolvency risk, deferred investment or contraction in capacity?

[Michael Hicks]

What I can say to you about programs stalling is that they get launched, but they don't get firm dates to be released to start the work. The problem is that, really, for the last two, three or four years, especially in the ICE to EV situation and with the advent of tariffs, a lot of programs have been put on hold because budgets change and there's uncertainty. Vital things come out. It's really hard to quantify or measure it. I don't have those statistics.

On Monday, our executive director Nicole was here. I am a volunteer board member with CAMM—I just wanted to mention that. I've been on the board for 42 years. I used to be a chair. We deal with all the tool and mould shops in North America, including many in Windsor.

As I said, this unstable situation sometimes does cause programs to be cancelled. You have probably read about the latest one, which was the Honda EV program, which we anticipated was happening, but every one of our shops were impacted. It really had nothing to do with the tariffs. It was just the direction of the auto industry, and that caused a little hiccup.

Most of the major companies, now that they have affirmed we are going back to ICE-powered cars and vehicles, are starting to release a lot of programs, and they want to get them out there as soon as possible, but as Ryan mentioned to you, we are building into 2027, 2028 and 2029. We're not building current products.

Hopefully that helps answer some of the question.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you, Mr. Hicks.

My next question is for Mr. Moffatt.

What system-wide supply chain disruptions are you observing across your membership, particularly in terms of cross-border integration with U.S. manufacturers, and what do you suggest strategically to address this?

[Greg Moffatt]

For the most part, the products of chemistry and plastics are rules-of-origin compliant. In the early days, the most favoured nation rate was zero. Some companies didn't do the paperwork, and they were caught, but anybody that is producing a compliant product has done the paperwork and the goods are moving freely.

What is in play is demand weakness. You've heard about the automotive industry and the construction industry, and these are the industries that the products of chemistry and plastics are sold into, so the impacts are secondary. You could talk about broader global effects around the Iran conflict and supply chain disruption. North America is actually very uniquely well positioned because we have the feedstock and we have domestic production to meet domestic demand.

I made a comment in my remarks around rail transportation and port transportation. Our Achilles heel in Canada is that we continually allow our transportation system to be impacted by labour disruption. That's not just a labour problem; that's a government, industry and labour conversation that needs to be had. We need to find a way to make sure that system is resilient and can meet the requirements of the existing U.S.-Canada trade objective. If we are going to double our non-U.S. exports by $300 billion, we need to solve our transportation problem now.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you.

My next question is for Ms. Cretney.

You spoke about structural exposure. What structural changes would you recommend for the resilience of Canadian supply chains in your sector against similar tariff shocks in the future?

[Alison Cretney]

I'll maybe build a little bit on the recommendations in my presentation. To the degree that we can be really well planned and thinking ahead around onshoring the value chain within Canada and broadening our trading partners and allies in relation to that, the big opportunity you really see in our sector is that missing middle. It's that midstream processing, which I think Greg alluded to as well. We have such competitive strength here—the skills, the resources and the chemical industry expertise—to do this.

Of course, as I mentioned in my talk, China and some other jurisdictions in the world are a lot further ahead, so we have a lot of work to do here to really lean into where we have unique strengths. Lithium brine, given the level of resource that we have in western Canada, is one example, and copper smelting is another with some really strong potential.

It's looking at the full value chain and then looking further downstream as well. We're really focused on western and northern Canada as a significant gap—in large part because it requires working across the provincial and territorial borders there—and linking that to our really impressive manufacturing capacity in Quebec and Ontario.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Ma.

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

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

Thank you, Mr. Chair.

Good afternoon to the three witnesses. Again, we're learning a lot from your remarks.

Mr. Hicks, I won't ask you any questions, since your colleagues were here earlier this week and the connection is poor right now. That said, I want to point out that the entire committee is very sensitive to the struggles your particular sector is experiencing. We'll continue to talk about it and make sure you're supported.

My first question is for Mr. Moffatt.

You pointed out something that I think is very important. Your industry is not directly affected by the tariffs because it is tariff-free, yet it is so integrated with a sector that is being hit by the tariffs that you bear the brunt.

Are the criteria for the support measures put in place by the government for industries that are struggling designed to support your industry, which is suffering indirectly as a result of the tariffs?

[Greg Moffatt]

We're very aware of the measures around anti-dumping, countervailing duties and tariff relief. I have not heard from our members that those are not meeting the measure. Again, the majority of what we produce in the chemistry and plastics industry is rules-of-origin compliant. We've been able to work very well with the departments to be able to create a line of communication with our members. You get a level of sophistication in our industry. You get multinationals, and you get small, medium-sized and family-owned enterprises.

That would be my response to that question.

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

That's very clear.

Do you think that if the repercussions of the U.S. administration's latest executive order early this month were sadly to last a long time, if the U.S. government had no intention to resolve the situation in July and if we had to wait until after the mid-term elections in the United States, could your members, including small family businesses, suffer?

[Greg Moffatt]

Again, I think we've heard—as I would have said in my testimony, and as you would have heard from others—that it takes a long time for supply chains to reorient themselves. These aren't short-term actions. I think it depends on the sector you're in and the degree of differentiation in the products. Chemistry and plastics are not cement and they're not steel. There's a whole basket of products that fit into that broad definition. There's no one size that fits all.

I would say that the biggest harm to our sector in general is the uncertainty that has been created around trade and tariffs. Ultimately, trade agreements are negotiated between governments, and that's going to take place, but companies trade. That's who trades. Companies trade. For our sector here in North America, it's highly integrated.

I've been joined this week by my colleagues from Mexico and the American Chemistry Council. We had a workshop earlier this morning, and the degree of integration is what makes manufacturing so strong. It's a North American strength, and we would hope that this continues to prevail. Hope is not a strategy, but we would hope that it would continue to prevail, and we're trying to do our part to make sure that there's awareness of how important that integration is.

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

I think everyone here agrees that this is very important. Thank you.

I'm going to direct my next questions to Ms. Cretney.

You say that to build strength, Canada needs to fully develop the integrated strategic and rare minerals industry. Do you think that if we were to do that, would the Canadian industry's demand for these minerals be sufficient to maintain the whole industry or should the industry also focus on an export strategy? If so, do you think the U.S. market could remain a reliable export market? Also, what are the prospects for doing business with Europe in terms of opportunities if the entire industry had to be redeveloped?

[Alison Cretney]

I have two points on this. One is the opportunity for a strategic industrial focus here, really looking at what those needs are within the country so that we can then prioritize some of our efforts around them as we're looking at that full value chain, such as graphite needed for defence. There was a question earlier about mould-making, as an example in parallel.

Also, we need to be integrated into the global supply chains. One of the big opportunities there—given my comment earlier that we're early on this and can therefore look at the bigger picture—is looking at diversifying to Europe, certainly, and the U.S., one would hope.

This is a turbulent time. Things can settle, but we can't put all our eggs in that basket, of course. It's been too easy for us to do so. Therefore, we should be looking at those global supply chains and where we're uniquely competitive within them. There is lots of opportunity there.

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

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you.

Mr. Gill, the floor is yours for five minutes.

[Harb Gill, Conservative, Windsor West, ON]

Thank you, Chair.

Mr. Moffatt, BASF has a plant in Windsor and one right across the river, as was mentioned earlier. They're a company present in Mexico as well.

How is the current trade uncertainty impacting their confidence in our country and their willingness to invest here, rather than just having a minimal presence here while investing in other parts of the world?

[Greg Moffatt]

That's a good question. It's best to ask BASF that question. I can't speak for them. I can speak generally about the sector.

I mentioned earlier that we were doing a CUSMA-USMCA team workshop here in Ottawa this morning, and BASF was one of the few companies that had representatives from Mexico, the U.S. and Canada at the workshop. That's more just to pop out and point out to you how important this is to them.

I spoke to the integrated nature of chemistry and plastics, and BASF would be a great example. They have over 100 facilities in North America. These facilities produce inputs that are brought together and find their way into many of the critical supply chains you hear about. It's very important. This is a highly integrated sector. I talked about $120 billion of trade for Canada to the U.S., and a lot of that is intercompany.

It just speaks to the potential impact here, to the importance of this CUSMA process as a review and to finding ways to operationalize what exists within CUSMA to make sure that we continue to generate the benefits in North America from an integrated industrial platform perspective.

[Harb Gill, Conservative, Windsor West, ON]

Based on your talks with your own industry folks, is there a willingness to invest more in our country, or is there some sort of disincentive so that people are looking at moving to the U.S. or the EU because it's more competitive over there?

[Greg Moffatt]

When you think about global chemistry, a lot of these companies are highly complex. They function in multiple countries in multiple markets, and there's a competition for capital within the companies.

As an industry, we always focus on competitiveness. It's a Canadian government issue. It's a provincial government issue. It's a municipal government issue. If we're going to maintain what we have, we need to make sure we're competitive. If we want to grow, we need to make sure we're competitive. Again, that means competitive access to capital and regulatory processes that make sense.

Dow has signalled a very strong investment in Fort Saskatchewan. That's going to be a project that's upwards of $10 billion. They did it here for a reason. You have to maintain your competitiveness. Competitiveness has to be the lens through which you look at every issue when it comes to industrial manufacturing.

[Harb Gill, Conservative, Windsor West, ON]

Is the regulatory process competitive enough to attract more investment?