Thank you, Mr. Chair and the committee, for inviting me to present today
My name is Jason Bates. I am with the Excellence in Manufacturing Consortium. We work with manufacturers right across the country, engaging over 18,000 Canadian manufacturing companies annually, helping them grow and continually improve. I am also the chair of the London Region Manufacturing Council.
This afternoon, I will be detailing the experiences of two manufacturers in southern Ontario, where I'm located. Both companies are great examples of Canadian advanced manufacturing. Both work with steel, metal or copper as major inputs to their finished products, and they have been greatly affected by the tariffs.
The new changes to 232 tariffs present even more of a challenge. These are their words and their experiences, and they offer some suggestions and opinions on what the government will be able to do to assist them.
Example one is Great Lakes Copper in London, Ontario. Great Lakes Copper is the last copper tube mill in Canada. The mill was constructed in the late 1950s, opened in April 1958 and designed to support the Canadian copper tube market. At the high point, there were four mills in Canada. However, the reduction in our market due to the conversion to PEX plumbing pipe has resulted in the closing of all other mills.
Since the early 2000s, we have also seen an influx of cheaply priced copper tube being imported into the Canadian market. This has forced us to expand into the U.S. market. Prior to the implementation of the 232 tariffs on copper, approximately 50% of our shipments went to the U.S.
The original 232 language resulted in a 50% tariff on the copper content of our product. In many cases, the copper content represents over 80% of the selling price of our product. Therefore, we were immediately uncompetitive on this type of product. We lost one channel of our sales immediately, representing approximately 12% of our total sales.
From August through April, we maintained some higher-margin business, although sacrificing profitability. In some cases, we also make products that are difficult for U.S. mills to produce, and these customers have largely stayed with us, despite the tariffs.
The change in the language to the 232 tariffs in April 2026 now results in a 50% tariff on the total invoice price of our product. This change results in our higher-margin business no longer being profitable, and this business will move to the U.S.
Despite these challenging conditions, Great Lakes Copper are committed to manufacturing in London, Ontario, and ready to invest $65 million in improvements in their facility. These improvements would improve their manufacturing efficiency on existing product and open capability on some additional Canadian product that they are currently unable to produce.
They have met with several officials from both provincial and federal governments and have consistently asked for the following. Utilize section 53 of the Customs Act to impose tariff rates or tariff rate quotas similar to those in place for steel imports. Initiate government procurement preferences for Canadian copper tube. Provide funding to support 15% of their eligible capital expenditure to modernize their production facility and support their global competitiveness for years to come. The total project cost is $65 million.
The recent expansion of the Ontario-made manufacturing investment tax credit by the Ontario government, to include non-Canadian-controlled private corporations, is appreciated. Additional support from the federal government would also be appreciated.
Example two is Arctic Snowplows in London, Ontario. Here is some brutal reality. Arctic Snowplows sales are down 40% in the U.S. prior to the new 232 change. They will soon be down 90% with the change. The reason they have maintained 10% is parts and a very few highly loyal customers. They pay a $2,450 duty on a $10,000 plow. The only way to reduce this to $1,000 is to use U.S. steel. The problem is that U.S. steel costs more, so perhaps another $500 in costs to save them $1,000 on duty.
The big problem is segregating inventory. They buy a sheet of metal and laser cut 30 parts to build plows not only for the U.S. but for Canada. In short, it simply cannot be done economically unless we switch to all U.S. steel, and that would increase our Canadian costs and their costs in Canada.
At the same time, U.S. plow makers can sell against us in Canada with no penalty. It simply is not fair. In this case, Canada can actually do something. We need a countertariff to level the playing field.
Other ideas to help would be to make SR and ED a bit more flexible. Keep the content in Canada. Use the buying clout of the government to support Canadian companies, not at a huge premium but perhaps 3%, or give Canadian companies the last look at quotes. Municipalities have no money, so having the feds help a bit would really help.
We have to be careful of retaliation by the U.S. If we push the government to buy too much, the U.S. might retaliate. This is why I like adding some to SR and ED, since it would fly below the radar.
I always think of things that are win-win. I do not really like grants to specific businesses and not others. I do not like adding admin burden.
One simple idea that would generate capital for all businesses—banks are clamping down, so businesses need money—would be to allow delayed payment of HST and income tax. The problem with doing only income tax is that companies that are severely hurt will not be profitable, so they have no tax to pay. This is another area that the U.S. would be unlikely to retaliate in.
Thank you, Mr. Chair and committee, for allowing me to present this afternoon.
