Industry and Technology Committee on April 27th, 2026

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Danko.

Mr. Ste‑Marie, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Lecours, in everything you've told us so far, you raised the issue of access to fair and credible information. You said that you have approached tariff experts, accountants and lawyers with questions but even they aren't sure how the executive orders will impact your production. Other witnesses have told us the same thing. It often costs hundreds of dollars an hour to talk to experts, and still there is no certainty of receiving clear information.

Do you think it would be useful to have a dedicated line or a point of contact to get answers to your questions? That could be people from a department, an agency like Export Development Canada or the chambers of commerce network, as Mr. Caron suggested. Is that a service that could help you and companies like yours?

[Marc Lecours]

Yes, it's a great idea. We do spend thousands and thousands of dollars through wages in looking for good response times through our customs brokers. As you said, there aren't definitive answers right away.

Things are changing so quickly, and we need to stay on top of them, so it would be a great idea to have more exposure to knowing where the tariffs are going and how to play the game, basically.

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

Okay. Thank you.

Since I don't have much time left, and since it took some time to set up the interpretation system, I'll stop there, Mr. Chair. Thank you.

[The Chair, Liberal, Ben Carr]

That's very kind, Mr. Ste‑Marie, but honestly, it wasn't your fault. Do you want an additional 30 seconds?

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

No, that's fine.

[The Chair, Liberal, Ben Carr]

Okay. Thank you.

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

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

Mr. Bates, thanks for being here today.

Many of the owners and managers of the mould, tool and die shops in the Windsor area are not necessarily asking for financial relief at this point. They really want to have a plan. They think they can handle this crisis for one or two more months, but going forward, they need a plan, and they would like that plan to be zero tariffs. They want relief. They want those section 232 tariffs to go away. They want to trade with the United States without tariffs.

I really hope that can be the outcome here. However, if that doesn't happen, we're going to see companies moving to the U.S., closing down or pivoting to other types of business.

One of those changes could be getting into the procurement line for our defence industry.

What changes to procurement processes would be needed to ensure that SMEs can realistically compete for those contracts?

[Jason Bates]

One of the other two panellists touched on that. Regarding the defence sector, there are some barriers to getting into that. It is hard to get the approvals. The cybersecurity levels they need are very prohibitive. It's a lot of work, and it's expensive. The volumes in defence are not the same as in automotive or those industries where there's a lot of product being pumped out, so they would have to adjust to that.

It's an avenue, but there are definitely barriers to getting into defence specifically. Easing some of those barriers and giving them the resources to overcome some of them would be positive things. There's a huge interest in defence right now, and EMC is doing defence sector sessions across the country. We've put about 500 manufacturers through them in the past two weeks. There's great interest to learn and to explore it for sure, but there are barriers to getting into it that need to be eased.

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

Thank you.

Chair, I'm going to give the rest of my time to MP Dancho.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you, Mr. Chair.

I want to thank the witnesses, the Conservative members and others who have put a lot of effort into drawing attention to this matter.

Mr. Chair, I am concerned that we haven't heard a robust response from the Liberal government on what it plans to do about this. I think this is quite significant. These aren't the early tariffs that were uncomfortable and bit but weren't existential. Now we are hearing from witness after witness that if this does not change, this area of our economy is going to be completely wiped out, along with over 58,000 jobs, potentially impacting up to 200,000 indirect jobs and multiple billions of our economy's GDP.

I am concerned, Mr. Chair, that we haven't heard what the Prime Minister is planning to do about this. In fact, all we've really heard is our American counterparts saying that the Canadian government isn't at the negotiating table. It's been over a year. Many promises have been made that deals were going to be delivered. However, not only has there been no tariff relief deal, but the situation is getting worse. In recent weeks, we've been hearing that it is far worse, in fact, than it has been in the past, and it was already dire for many industries.

Mr. Chair, I do feel strongly, since this is the last meeting, that we're going to hold the government to account, so I'm going to move the following motion:

That, given:

The Liberal government has failed to secure a deal with the United States, resulting in thousands of Canadian jobs lost across key industrial sectors, with thousands more at risk;

Recent U.S. tariff changes under section 232 of the Trade Expansion Act of 1962 have significantly increased costs for Canadian exporters, turning an already serious situation into an existential threat for industries such as moldmaking, steel and aluminum, and the auto sector;

Moldmaking and related upstream industries are foundational to Canada’s broader manufacturing base and are essential to Canada’s economic sovereignty and industrial self-reliance; and

Despite repeated promises, the Prime Minister has failed to deliver meaningful relief or improve trade conditions, as disputes with the United States continue to escalate;

The committee call on the Prime Minister to finally deliver an agreement with the United States that ends these tariffs, restores stability, and protects Canadian jobs and the long-term competitiveness of Canada’s industrial base; and that the committee report this recommendation to the House.

Mr. Chair, we'll be circulating the fully bilingual version of this momentarily.

Thank you.

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

I am rising on a point of order, Mr. Chair. The interpreters do great work, but normally they should be given a bilingual version of the text before a motion is moved.

[The Chair, Liberal, Ben Carr]

Absolutely.

We will suspend for a few minutes.

We need the language of the motion to be provided to members in both official languages, which I don't believe has been done just yet.

Witnesses, I am going to offer you an early dismissal for today, because this is going to take us a few moments, and we were right at the end of our questioning. I very much want to thank you for making yourselves available to us, particularly on short notice.

As has been discussed throughout the last few meetings and repeated by the three of you here today, we appreciate very much the difficult nature of the impacts this is having on you personally and professionally and on members of your community. You are all here advocating as best you can for improvements to those conditions on the ground, and we're very grateful for that and for the guidance and advice you've provided us today as we consider how to report some recommendations to the government.

Thank you, witnesses, again, for making yourselves available.

Colleagues, I'm going to suspend momentarily. I might suggest that the parties take a few moments to talk this over with one another. We do have witnesses waiting to speak to us for another hour of this discussion, which I will remind the committee we all agreed to conduct on an emergency basis. I would hate for the final hour of that testimony to be interrupted, so I hope we can come to some type of a negotiated compromise here.

Meeting suspended.

[The Chair, Liberal, Ben Carr]

Colleagues, bear with me for a moment here as I explain the current state of affairs, and then we'll get going.

Madam Dancho, as you heard a few moments ago, put forward a motion. What we have done in the past when a motion has been presented by a member while there are still witnesses left to be heard from in our regularly scheduled meeting is that we have agreed, on camera, to press pause on dealing with the substance of that motion in order to allow the witnesses to be heard.

We have called a set of emergency meetings, and this is the third of three, with 60 minutes remaining and four witnesses with us to provide testimony.

The agreement that has been reached is that we are going to proceed as normal for the next roughly 45 minutes; that's five minutes for our witnesses' introductory remarks followed by the line of questioning, which will consist of six minutes for each party in the first round and then five minutes to the Conservatives, five to the Liberals and two and a half to the Bloc in the second round. We're going to cut off the final ten minutes.

As soon as that is done, to honour the spirit of what we have agreed to do to allow us to hear from our witnesses, we will go to the motion.

Does everybody understand?

[Some hon. members]

Yes.

[The Chair, Liberal, Ben Carr]

In summary, we're pressing pause so that we can hear from our witnesses, and then we'll resume.

From Aalbers Tool and Mold Inc., we have the president of the company, Aaron Aalbers, joining us virtually.

Thanks very much for making yourself available, sir.

From the Automotive Parts Manufacturers' Association, we're joined by Flavio Volpe, president.

We welcome Mathieu Lavigne, vice-president of the Fédération des chambres de commerce du Québec.

We also have Hubert Rioux, who is the economic director.

We will hear introductory remarks. I can confirm that tests have been done for everyone who's joining us.

Mr. Lavigne, you have five minutes.

[Mathieu Lavigne, Vice-President, Public and Economic Affairs, Fédération des chambres de commerce du Québec]

Good afternoon, Mr. Chair and hon. members.

My name is Mathieu Lavigne, and I am the vice-president of public and economic affairs at the Fédération des chambres de commerce du Québec. With me today is my colleague, Hubert Rioux. I will give a brief introduction and then I will give the floor to Mr. Rioux, who will get into the substance of our presentation.

To summarize, the Fédération des chambres de commerce du Québec brings together Quebec's 120 local chambers of commerce and acts as Quebec's national or provincial chamber. It has 1,000 members companies and represents a total of 40,000 businesses of all sizes and from across all sectors and regions of Quebec. Many businesses are directly affected by the subject of today's consultation.

Now that I have explained who we are, I will let my colleague present our arguments on the issue.

[Hubert Rioux, Economic Director, Fédération des chambres de commerce du Québec]

Thank you, Mr. Lavigne.

Thank you everyone for having us.

There are indeed many businesses in Quebec and elsewhere in Canada that are dealing with major commercial upheaval as a result of both the U.S. tariffs imposed under section 232 and the fundamental change in the way those tariffs are applied.

The decision to now apply ad valorem tariffs, or tariffs on the total value of the products rather than on the relative value of the steel, aluminum or copper content, is having extremely serious consequences. This is a technical change with a disproportionate economic impact. In practical terms, the more a product is processed and the higher its added value, the more it is penalized. The result is that secondary or tertiary processing companies, which are the heart of Quebec's manufacturing sector, are over-penalized. Their gross margins, which are already slim in many cases, are being almost entirely or entirely wiped out by the tariffs. In many cases, the U.S. market has become economically inaccessible because our products cannot compete as a result of these tariffs. Businesses whose products were and still are compliant with the Canada-United States-Mexico Agreement, or CUSMA, are now subject to applied tariffs of 25% on the total value of their products, which is simply unsustainable.

It is important to make that clear to the committee today. What is happening is that the application of ad valorem tariffs under section 232 has now rendered CUSMA inoperative. Businesses that comply with the rules of origin under CUSMA and that structured their supply chain based on the agreement are still subject to unpredictable, punitive tariffs with no effective short-term recourse.

All of this undermines the very credibility of the North American trade framework, discourages investment in Canada and Quebec and accelerates decisions to relocate to the United States. In most cases, this is not a strategic choice, but one that is simply necessarily to ensure the company's survival.

For us, the most critical short-term challenge is liquidity. What is more, Canada's retaliatory tariffs, combined with the administrative burden and long delays associated with the remission process, are forcing companies to front the cost of the tariffs to the detriment of their operations, investment projects and, ultimately, jobs, of course.

We have had many clear reports from our members. Acquisition and expansion projects have been put on hold, contracts have been or will be lost once they are renegotiated, particularly with American clients. As a result, some companies will be choosing to relocate their operations to the United States. In fact, some are already in the process of doing so.

The Fédération des chambres de commerce du Québec is calling for swift, targeted and structural measures to address this situation.

We have several short-term recommendations.

First, as far as possible, the government must avoid imposing new countertariffs on imports of intermediate inputs and semi-finished materials from the United States. If necessary, countertariffs should be limited to finished products that compete with equivalent products already manufactured in Canada.

Second, the government must immediately reinstate and extend horizontal remissions on the countertariffs applicable to steel and aluminum imports from the United States for all manufacturing sectors until the tariffs have been completely lifted.

Third, the government must reverse the burden of proof for the remission process for companies. In our opinion, remissions should be granted up front, and it should then be up to the Canada Border Services Agency to show, through investigations, that an equivalent Canadian capacity exists.

Fourth, the government must better promote the drawback program to manufacturers who export, with an expedited pathway for steel, aluminum and copper processors.

Fifth, the government must immediately relaunch the regional tariff response initiative, which is vital to SMEs in the current context, and it must keep that initiative in place until the current tariffs are lifted.

Finally, we believe it is essential that all revenue generated from Canadian tariffs on American or foreign goods, particularly those from China, be fully reallocated and used to support affected businesses and sectors, rather than being put into the consolidated revenue fund.

These measures are essential in the short term, but they are no substitute for what really matters, and that is quick, tangible progress in the discussions with Washington on the section 232 tariffs. Without that, CUSMA will continue to exist on paper but be violated in spirit and letter, as is currently the case.

We will be happy to answer any questions you may have.

[The Chair, Liberal, Ben Carr]

Thank you both.

Mr. Aalbers, we're now going to turn to you for up to five minutes. The floor is yours.

[Aaron Aalbers, President, Aalbers Tool and Mold Inc.]

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.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Aalbers.

Mr. Volpe, the floor is yours for up to five minutes, sir.

[Flavio Volpe, President, Automotive Parts Manufacturers' Association]

Thanks. You don't know me very well, but I'm going to try to stick to that five-minute limit.

I'm going to be candid, because I think the two presenters got very specific about the business they're in.

Let me break the North American auto sector into four buckets.

In the first bucket, there are the materials that go into vehicles and the materials that also go into the tools that make the parts that go into the vehicles. That's one issue, and it's one set of issues that we have to deal with.

In the second bucket, there's tooling. This includes, specifically, moulds and auto-specific tools. The main competition has been China. It has been for the last 15 years, for lots of reasons. That's the real competition. It has been the canary in the mine for the automotive sector in North America. What the Chinese have been able to do in terms of winning the market share and hollowing out the base in North America is something for the rest of us.

In the third bucket, there are the parts. We use the tools to make the parts, and 75% of a vehicle is made by the parts suppliers.

Finally, you have the final bucket, which is the automotive bucket. This is the only one facing the regular consumer.

The gentlemen on here, and other witnesses you had here before, talked about how the time between quoting a job and delivering a tool has put them on either side of new tariff updates. Tariffs hit after the job is priced, and customers, whether they're parts suppliers or automotive assembly plants, are expecting the mould-makers and toolmakers to absorb that cost. If we lose that capacity, that's the first domino to fall.

In the industry, we had a crisis in 2021 and 2022, when the auto sector let go of the supply of chips that it needed for complex systems. When the industry tried to get those chips back, it figured out that the rest of the world wanted them for all the new electronic consumer goods everybody was buying because they were stuck at home. That affected volumes, the cost of vehicles and the cost of parts, but it also affected leverage for Canadian entities and those centred around Detroit, of which the Canadian auto sector is a part.

The American mould sector is benefiting from this in the short term. In the long term, as this cluster reduces.... The cluster that Aalbers Tool and Mold is part of is one of the world's top five clusters of mould-making expertise and capacity. As that erodes and as customers in the Detroit cluster—of which Ontario and Quebec are a part—lose Canadian options, the Chinese option looks more and more real.

What do we need to do? We don't have the defence opportunities and aerospace opportunities that the Americans have, nor do we have the volume of automotive opportunities that the Americans have. One thing we've been doing with the CTMA, which is the tool and machine makers association in this country, and the mould-makers association is finding a way with new defence spending and new programs to support the automotive and parts sector to require those companies to buy tools locally or reward them for doing so.

If I worked at a tool shop in Windsor, I'd probably be the youngest guy there. These are usually independent businesses that are looking for a succession plan. They usually want to say “the next generation”. All of this makes the valuation of that business lower, or maybe it's unsellable, so they have to stay in longer as they fight forces they have no control over. They're the canary in the coal mine, and I'm very happy to represent, even just in this moment, some of their interests. If they go, it erodes part of the shaky pillars we have under the automotive parts sector in Canada as well.

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Volpe.

Mr. Lewis, the floor is yours for six minutes, sir.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much, Mr. Chair. I appreciate it.

Thank you so much to all the witnesses for being here today.

My first line of questioning is for Mr. Volpe.

Thanks so much for coming all the way up to Ottawa to be part of this very important study. We certainly appreciate it.

Recently, you were appointed to the advisory committee on Canada-U.S. economic relations. I give you my congratulations on that, for sure.

What is the mandate of that committee?

[Flavio Volpe]

It's to give honest advice, insight and data points to the Canadian negotiating team as it prepares for a CUSMA review and any ancillary negotiations, perhaps, on layered tariffs that have come in from the U.S.