Industry and Technology Committee on April 27th, 2026

[Flavio Volpe]

They're typically smaller companies, although, with apologies, there are some really big, globally relevant players in Ontario and Quebec. For the smaller companies that are currently frozen, especially since the April 6 updates on new derivatives, use the agencies that we have, like EDC, BDC and FedDev, to try to help through the current offerings to help short-term liquidity. If we're going to get relief through the CUSMA renegotiations, if that's this year over the next couple of quarters, let's get them there healthy, so that the immediate course of action for them will be that current customers may come back to them.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you.

Mr. Chair, do I have a minute to ask another question to the representatives of the Fédération des chambres de commerce du Québec?

[The Chair, Liberal, Ben Carr]

Yes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you.

Mr. Lavigne and Mr. Rioux, thank you for being here. I would like to ask you the same question. We know that this is an extremely urgent file. What are your recommendations for the short, medium and long term? Do you also think that we should have credible, sustainable negotiations rather than just nonsense?

[Hubert Rioux]

Thank you for the question.

In the very short term, our main recommendation is to relaunch the regional tariff response initiative because it provides non-repayable assistance. What is more, it is extremely important for SMEs to have access to this liquidity in the short term.

In the medium term, we obviously need to find a more sustainable solution to the tariff issue. We need to reach a productive and lasting agreement with the United States government to eliminate these tariffs as much as possible. That could be done as part of the CUSMA review or in conjunction with it, but it is essential that it gets done.

[Dominique O'Rourke, Liberal, Guelph, ON]

Absolutely.

[The Chair, Liberal, Ben Carr]

Thank you, Ms. O'Rourke.

Mr. Ste‑Marie, you have six minutes.

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

Thank you, Mr. Chair.

I want to extend my greetings to our four witnesses. I thank them for being here and for their help in responding to this critical situation.

Mr. Lavigne and Mr. Rioux, thank you for your presentation.

Mr. Rioux, you painted a very clear picture of the impact that the April 2 proclamation, which came into effect on April 6, is having on the entire ecosystem of businesses in Quebec's metal processing sector, particularly its small and medium-sized businesses. That is very worrisome.

My first question is for you, Mr. Lavigne. Do you have good contacts at the U.S. Chamber of Commerce? I'm sure everyone will recall that, in 2018, the U.S. Chamber of Commerce took legal action against the U.S. administration regarding the illegal steel and aluminum tariffs under section 232. That case was dropped after CUSMA was signed.

Do you think that the U.S. Chamber of Commerce might reinitiate legal action, for example, against the most recent proclamation, which, as Mr. Rioux said, seems to go completely against CUSMA?

[Mathieu Lavigne]

Thank you for the question, Mr. Ste‑Marie.

We are in regular contact with our colleagues at the U.S. Chamber of Commerce. They recognize that the tariffs are counterproductive for the U.S economy, so they are also very concerned about this.

We are pleased to see that the Premier of Quebec is in Washington today and she should be meeting with them soon, if she has not already. That is very good news and shows solidarity on both sides of the border.

Beyond that, will they want to reinitiate legal proceedings? We will leave that up to them. However, it is clear that the key to success is dialogue with our American partners. The key to success for associations like ours, for businesses and for politicians from Quebec and Canada is to talk to people on the ground, not just White House administration officials, and to find our allies. We have plenty of allies in the U.S. on this issue.

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

We are in complete agreement. You made yourself very clear. It is well noted.

It is very difficult to renegotiate an agreement when one of the two parties does not want an agreement or is not complying with the one that is already signed.

If there is still no compliance with the agreement or any willingness from the U.S. administration to reach an agreement by July, if we have to wait until the fall, or maybe even later because of the mid-term elections, and if the government does not propose any additional support programs or other measures, what will happen to your members, the SMEs and other businesses in the sector that are being affected by the most recent proclamation?

[Hubert Rioux]

Thank you for the question, sir.

Unfortunately, it stands to reason that some SMEs will be forced to close down, because 25% ad valorem tariffs completely take away their gross profit margins. It's simply impossible for them to survive in that environment.

Those who don't end up going out of business will seriously consider delocalizing part of their production to the U.S. Some are already doing business in the U.S., so if push comes to shove delocalization can happen more quickly than we realize.

Delocalizations, closures and bankruptcies; that's what we can expect if the situation around section 232 tariffs doesn't improve. That much is obvious.

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

We recognize that there's an urgent need for action.

A few meetings ago, we spoke with someone from a small family business called Liard Industries that's been around for 50 or 60 years and does 60% of its business in the U.S. Last fall, they used a federal program to purchase a new machine and increase productivity. If memory serves, the witness told us that this investment might have been for nothing if nothing else is done, because orders and contracts have dried up.

There seems to be a lot of concern over retaining expertise and keeping employees on the payroll. We know that there's a shortage of welders, machinists and operators. The government appears to be open to a new one-time wage subsidy for companies impacted by the April 2, 2026 tariffs.

Do you hear that from your other members, or is that more of an atypical case?

[Hubert Rioux]

We haven't heard that too often over the last few days. That said, our position is clear: all short-term supports to help with the businesses' need for liquidity are welcome, whether it's support for wages or direct liquidity. In other words, they need help to ensure their short-term survival, which means non-repayable contributions because, in this context, businesses cannot take on any more debt. No matter what mechanism is used, they need liquidity support.

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

I agree.

I have a technical question. The representative from the business I mentioned said that she heard from several people involved with SMEs that they learn about new orders being made through the media. Then the business owners turn to their lawyers, accountants or tariff specialists, who charge them hundreds of dollars an hour and don't always have clear answers for them.

Would it be useful for the government or Export Development Canada to set up a hotline specifically for that? The Ontario Chamber of Commerce mentioned that chambers of commerce could provide that service. Should that service be offered? If so, would your federation be willing to take care of it in Quebec?

[Mathieu Lavigne]

One of the problems that we see during crises like this one is that SMEs are disproportionately impacted because they don't have as many resources to properly assess and analyze financial and commercial issues. So yes, that service should be offered.

That said, we're always willing to discuss the means and the ways to do that with the government. As far as the means go, we're open-minded, because we're interested in results. The important thing is to support SMEs.

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

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Mr. Groleau, the floor is yours.

[Jason Groleau, Conservative, Beauce, QC]

Good afternoon, Mr. Chair.

Good afternoon, honoured guests.

Mr. Rioux, you're the economic director of the Fédération des chambres de commerce du Québec.

I'm from Beauce, a manufacturing region that hosts several big players in the steel industry, some of which are among the biggest in North America, as you know.

We've been here for a year and no progress has been made. Every time I come here, we talk about American tariffs. The Prime Minister promised victory, but tariffs have doubled instead.

At this stage, what is the impact of these tariffs on Quebec businesses from an economic and employment standpoint? What are businesses telling you?

[Hubert Rioux]

They're telling us that it's unbearable.

In a way, it was bearable under the previous tariff regime.

First, there were no tariffs on cast steel and aluminum in the U.S. That's no longer the case: now, there's a 10% tariff on that. Some processors import American steel or aluminum for the simple reason that there's no other solution in Canada for their specific products. So there's that.

Second, as I said, 25% ad valorem tariffs take away the profit margins of many processors, and that's unbearable.

We're also told that, depending on the contracts that businesses had signed with their clients in the U.S., some clients were willing to absorb the tariffs because they were relatively low since they only applied to the value of metals present in manufactured products. Now that tariffs are 25% ad valorem, businesses are getting used to the idea that their American clients won't renew their contracts in the short or medium term. In the medium term, the result is loss of contracts.

[Jason Groleau, Conservative, Beauce, QC]

Thank you.

Let me give a concrete example. For garage door manufacturer Garaga, tariffs on exports are at 50%. It's the biggest player in Canada and one of the biggest in North America. Add to that 25% countertariffs and the exchange rate. It's easy to see that it's impossible to make it in these conditions.

Moreover, the U.S. have shut their doors completely because of steel dumping. Over here, we haven't done anything.

Do you have any recommendations?

[Hubert Rioux]

As I said earlier, the horizontal remission of countertariffs on U.S. steel should be reinstated immediately until such time as the retaliatory tariffs are removed. That's fundamental in our view. The horizontal remission was abolished in January. That's our main recommendation.

Our position on countertariffs is that they should be limited as much as possible to finished products imported here when they compete with equivalent finished products made in Quebec or Canada. We want to shut out American competition, just like the U.S. is doing to us.

However, we want there to be as few countertariffs on semi-finished products and intermediate inputs as possible, because the countertariffs are hurting our processors. We're shooting ourselves in the foot by putting countertariffs on intermediate inputs.

[Jason Groleau, Conservative, Beauce, QC]

We've been here for a while. Announcements are made. My colleagues said earlier that they were talking to the ministers, but there is no action. No action has been taken on this issue. It has even gotten worse in terms of tariffs.

We all agree on developing new markets. New markets are being announced. I was born close to the American border. We agree that, unless the United States has physically moved, it's still next door. That's just the way it is.

Why aren't we focusing our energy in the right place? Why are we not negotiating with the Americans?

I'll give you an example. Last week, I was with our friend, Mr. Wiseman. He told me that Canada was deliberately making the Americans wait in the negotiations, which I find quite scandalous. Don't you think we should focus our energy on resolving the issue of U.S. tariffs?

[Mathieu Lavigne]

That is certainly the priority for Quebec businesses. The ones in your riding are probably saying the same thing as the ones we talk to across Quebec.

Yes, diversification is important. It would certainly be a good idea to have more help with diversification, but that will never replace the American market. The U.S. will always be our main partner. No matter what we say, geography will not change. It's so easy to access. It's such a huge market.

Therefore, the priority of the governments of Canada and Quebec should be to talk to the Americans, find allies and resolve this situation, absolutely.

[Jason Groleau, Conservative, Beauce, QC]

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Groleau.

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