Evidence of meeting #34 for Industry and Technology in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
President and Chief Executive Officer, Chemistry Industry Association of Canada
Chemical manufacturing projects are mostly exposed to provincial regulation. Again, industrial chemical manufacturing in Canada is focused in Alberta, Ontario and Quebec. Generally speaking, it's been very competitive.
Conservative
Harb Gill Conservative Windsor West, ON
Ms. Cretney, I have a quick question for you.
Are there any additional regulatory burdens or barriers in Canada compared to the U.S. or the EU that are impacting our competitiveness—
Liberal
The Chair Liberal Ben Carr
I'm sorry, Mr. Gill. The wrong microphone was highlighted. Could you start your question again? I won't take the time away.
Conservative
Harb Gill Conservative Windsor West, ON
Okay. Thank you, Chair.
Ms. Cretney, the question I had was about barriers, the regulatory burdens and barriers relative to the U.S. or the EU, and comparing them to Canada. Is that impacting our competitiveness here in terms of attracting new investment and building our reliance on ourselves as compared to other countries?
Executive Director, Energy Futures Lab
It's certainly a factor. One of the common examples shared is the length of time it typically takes in the mining sector, for example, to get permitted, like up to.... Ultimately, it's a 15-year process, not for the permitting but for moving from initiation to full operation. That's a huge factor when we're looking at this value chain, given that our natural resources are part of that.
It's encouraging to have attention on this issue, because it is certainly one of the sticky points. I don't have in front of me the comparison to other jurisdictions, but I think we recognize that there have been some sticky points in Canada.
One of the things I'll also say are really key to this in this sector is indigenous engagement, and early engagement around these projects as well. When I talk about the ecosystem approach, I think one of the big advantages is starting early on that, so it's not.... Once the project is already thought through, that's often happening way too late in the process, and that is one of the dynamics that needs some attention as well .
Conservative
Harb Gill Conservative Windsor West, ON
Yes, I don't know of too many companies that would wait for 15 years to turn a profit, but thank you for that answer.
Thank you, Chair.
Liberal
Liberal
Karim Bardeesy Liberal Taiaiako'n—Parkdale—High Park, ON
Thank you, Chair.
I'm going to try to ask questions of each of the witnesses. I appreciate their appearance here today.
Maybe I'll start with you, Mr. Hicks. You referred to your long experience in this sector and your engagement in different kinds of conversations on this over 20 years. Could you talk to us a bit about the diversification you have seen in the sector and what this moment could do to encourage even more diversification?
Director, Canadian Association of Moldmakers
Again, I'm sorry. I only caught half of that question but I know that it's about diversification of the industry.
Primarily, in the plastics industry, the biggest part of the pie is automotive. It's always going to be automotive. Our shops do try to do medical, and they try to get into other sectors, absolutely. Again, as I mentioned to you, it's mostly a bonus and a windfall that primarily auto drives our industry. If you look at a plastics chart, you'll see the biggest piece of the pie is automotive. Again, most of our projects are $1 million, $2 million, $3 million or $5 million. These are not $100-million projects.
I've been on an India delegation. We went to India to see if we could do some joint ventures and possibly do some tooling for them, and that type of thing. The Premier of Saskatchewan was there, Premier Moe. It took them about five years to get a $100-million potash contract. There were five years, but the reward was $100 million. Again, our companies just don't get into that level of sales, if you will. It's mostly that $1-million to $5-million sweet spot. That's why there are some other situations that are happening.
I apologize, again, that I'm freezing here. If it's possible, I'd like to get a couple of things in if I could, just a couple of closing remarks so that you can have some more things recorded. Again, I'm very sorry that I'm having technical issues.
Liberal
Karim Bardeesy Liberal Taiaiako'n—Parkdale—High Park, ON
Mr. Hicks, I'll suggest something. We would love if you could provide a written submission so that you won't get interrupted.
I'll move on to the other witnesses, if you don't mind.
Liberal
Karim Bardeesy Liberal Taiaiako'n—Parkdale—High Park, ON
Ms. Cretney, I wanted to ask you a couple of questions.
You mentioned the critical minerals strategy and how it needs to be linked to the value-added work. Can you talk to us a bit about what you see in the strategy now that helps do that?
Executive Director, Energy Futures Lab
That comment was really coming from the perspective of in the west and north, in particular, where the Future Materials [Technical difficulty—Editor].
I'm so sorry. I thought I had hit the button.
My comment around that was largely coming from the perspective of where the Future Materials Alliance is initially focused, which is on supporting the west and the north, because the value chain cannot exist within the border of a single province. In Quebec and Ontario, there are much more integrated aspects of the value chain.
What we're seeing is that each jurisdiction has its own critical minerals strategy, and of course there's the federal strategy as well. There's this lack of alignment across those provincial and territorial strategies. That's what we're really trying to build the alignment on in relation to the federal strategy, so we can have an integrated national approach.
Liberal
Karim Bardeesy Liberal Taiaiako'n—Parkdale—High Park, ON
Thank you very much.
Mr. Moffatt, you mentioned that your sector's a main consumer of moulds. Can you share with us some of the latest of what's happening with some of your members and what their purchase decisions are right now, whether they're delaying purchases or doing other things in this current context?
President and Chief Executive Officer, Chemistry Industry Association of Canada
Especially in the plastics sector, where they're taking plastics and converting them into end-use products, they're using that equipment. The equipment is very expensive. In that conversion sector, there are some large companies, but it is dominated by small and medium-sized enterprises of less than 100 employees, privately owned. The activity continues. It's a question of what the products are that you're producing and where you are selling.
What I would say, just generally, is that this is mostly in the plastics sector. There was a question earlier about the regulatory approach. I think that's one place where there is an opportunity here in Canada to take a little bit of a different perspective. In that particular industry, the federal government has taken a very punitive approach towards plastics in how its approached the file. I think we should be much more outcome-based focused. We should be thinking about allowing the innovation and the investment to take place, to drive the sustainable solutions that society is dependent on.
I'm sorry. That was a long answer.
Liberal
The Chair Liberal Ben Carr
Thanks, Mr. Bardeesy.
Colleagues, we're a little bit over, so I'm going to have to cut a little bit of time off.
Mr. Ste‑Marie, you have the floor for one minute.
Bloc
Gabriel Ste-Marie Bloc Joliette—Manawan, QC
Thank you, Mr. Chair.
Mr. Moffatt, my question is for you, but please answer briefly.
You reminded us of how integrated your industry is with the American industry. I would like to know how you are working with the American chemistry industry association to exert pressure to bring tariffs down to little or nothing and to have actual free trade.
President and Chief Executive Officer, Chemistry Industry Association of Canada
I did signal close collaboration with the Mexican and American chemical associations. We collaborate. My responsibility with the Chemistry Industry Association of Canada is to engage the Canadian government. The American Chemistry Council engages with the U.S. administration. They are strongly supportive of a continuation of CUSMA or USMCA—or T-MEC in the Mexican context. I have no concerns that they're not trying their best to make sure that the U.S. administration is aware of how important free trade is when it comes to the chemical manufacturing and plastics sectors in North America.
Liberal
The Chair Liberal Ben Carr
That's great.
Thank you, Mr. Ste‑Marie.
Mr. Epp, you have two minutes and 30 seconds.
Conservative
Dave Epp Conservative Chatham-Kent—Leamington, ON
Thank you, Mr. Chair.
Mr. Hicks, I picked up on your comment on boom to kaboom in your testimony. Boom was what the industry was looking forward to with trade stability as assured eight months ago. Here we are. Trade uncertainty has been the theme that we've heard from all of the witnesses here. Can you comment?
My basic question is whether the American strategy is working. Unless countered effectively relatively immediately, how big is the risk to jobs and livelihoods?
Director, Canadian Association of Moldmakers
It's immediate. It's happening as we speak. It's sort of like you're on the track at four o'clock and the train is coming at 4:30. You have about half an hour to get off the track. That's about where we're at. Again, I think we'll also see at the end of April, when our companies have shifted things to the States, if they have been able to do that, how their tariff bills with their custom brokers are going to be adjusted. I think that's going to be big. You might want to circle May 1, when the custom brokers bills come in. I think that could be a big issue, and it's very urgent.
Again, I will do a written submission, and I apologize for the nature of this connection.
Our Conservatives in Windsor have been in our shops. We need Prime Minister Carney in our shops to see what he's fighting for. The urgency of this is to get Prime Minister Carney in Windsor at our manufacturing shops and tool shops if nothing more comes from my participation today. We've had many other politicians in our shops so they can see what they're fighting for. I would just like to close with that.
Conservative
Dave Epp Conservative Chatham-Kent—Leamington, ON
Thank you.
Ms. Cretney, in your testimony, we heard that we shouldn't retreat from integration. We hear you on upstream value-adding here in Canada. The reality is that concerning our mould-makers, our steel fabricators and our aluminum extruders, it isn't practical for them to integrate upwards into the OEMs that they sell to. Can you comment on that?
I know Mr. Moffatt also talked about integration.
Executive Director, Energy Futures Lab
I can't comment on the steel and aluminum mould-maker sectors specifically, because that's not where we spend our time on the challenge of integration. I think what we have seen in studying critical materials is how to take advantage of the opportunities here. That requires both vertical integration but also horizontal integration to truly be competitive. That's really what we're working towards.