Thank you very much, Mr. Chair and members of this committee. I appreciate the invitation to appear before you today as part of this study.
My name is Aaron Aalbers. I am president of Aalbers Tool and Mold, a tool shop based in Windsor, Ontario. The recommendations I have largely line up with the previous speaker's, so I will instead focus on the more personal story of our struggles and difficulties.
What we do is design and manufacture precision plastic injection moulds that support Canada's advanced manufacturing industries, particularly the automotive sector in the Windsor-Essex region. Our company was originally founded in 1982 and grew from a single employee to our current size of over 135 employees, managing an average of $24 million in sales within a highly competitive market.
In this industry, due to the length of planning done by our customers to arrange for full automotive parts production, as well as our coding and contract negotiations.... Many of these take place over several months to a year or more before we get approval to begin the work. Since our founding, we have never faced the types of challenges these 232 tariffs supply. The suddenly changing values, the lack of clarity on what is impacted versus what is not impacted, and the ambiguity on how to even calculate the duty costs have greatly hindered our ability to accurately quote and compete for work.
After delaying multiple projects last year, we worked closely with our U.S.-based customers to determine the nature and application of the 232 tariffs as they impact their production plans. It was understood that if moulds used U.S.-poured steel, they would be exempt from the duty imposed, and our customers would be able to get high-quality, Canadian-made moulds at an appropriate cost to begin production.
Since the start of this year, many projects have been taken off hold due to this understanding, creating a massive boom in the automotive market after a slow period last year. We invested in expanding and growing the company during this period in order to process these added workloads. Unfortunately, again, we are left having to rework the plans and commitments of multi-million-dollar projects with our customers after the latest changes to the way these tariffs are applied.
As per the April 2 proclamation by the President of the United States, every single contract we have with our U.S.-based customers is now impacted with a 10% duty, regardless of the fact that most of these projects specifically sourced U.S. steel at a higher cost to us. Our current portion of work is impacted. We already received a PO and agreed to pricing. It is over $15 million Canadian, a significant portion of our annual sales.
Our industry was protected and covered under CUSMA, with labour and products being duty-exempt. Now we must work with our customers, who are suddenly made to pay duty on the overall sale value of an item protected by CUSMA. These challenges make long-term planning and cost accounting impossible in a production environment that requires them. If we do not alter or correct these issues, I fear many of these projects will be placed on hold and freeze the growth we have already invested in. Long term, I fear many production facilities will struggle to even operate due to an inability to accurately account for costs in such a tight-margin-driven industry.
Thank you, Mr. Chair. I look forward to sharing our experience with the committee and answering any questions you may have.