Evidence of meeting #35 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 businesses.
A recording is available from Parliament.
Liberal
The Chair Liberal Ben Carr
Thank you, Mr. Ste‑Marie.
Ms. Dancho, the floor is yours for five minutes.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Thank you, Mr. Chair.
It's an honour to be at this committee today, talking about this very critical issue that I know is impacting tens of thousands of jobs and billions of dollars of GDP. I want to applaud the Conservative members of this committee for championing this and bringing it forward to ensure that the country is hearing about these recent tariff changes and how dire the situation is.
Thank you to the witnesses today for their expert testimonies.
Mr. Lecours, I want to make sure people really understand what we're talking about when we talk about the changes. I want to start with a really basic question. Could you describe, in very simple terms, what a mould is? To my understanding, it's something that has metal parts. You would pour polymer, plastic or metal into it to make a part. It's a critical piece of manufacturing.
Can you correct me on that or just provide a simple explanation to someone who may not know what a mould is and why it's so important to our industrial capacity?
President, Preferred CNC Inc.
A mould is very simple. Any plastic part that you see, such as a phone or a pair of glasses, requires a mould to be made for that component.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Right, so we wouldn't have cars or machinery or anything that you see, really, without moulds. Canada makes billions of dollars exporting these, mostly to the U.S. Is that correct?
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Okay.
Just so I'm clear on the tariff change, there was a tariff put on metal parts of these moulds and tools and dies and the like. It was a couple of thousand dollars, which was biting to the industry but survivable. Then, and correct me if I'm wrong, the recent tariff change put the tariff on the entire mould, which increased the tariff to tens of thousands of dollars per mould. Is that correct?
President, Preferred CNC Inc.
That's correct. There were 10% to 15% tariffs on the material. As of April 2, I think, they increased it to the full invoice. That is catastrophic for our industry.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
If these tariffs are not removed and this issue isn't solved, this is catastrophic for the industry. Is that correct?
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
From what we've understood in testimony, in Canada that's about 58,000 high-paying, high-value direct manufacturing jobs, up to 200,000 indirect jobs and up to $3 billion of economic activity in Windsor alone. We know that Quebec has a large sector of this as well.
This is really devastating. We're staring down the barrel of a gun, really, with this tariff change. Is that a correct assessment?
President, Preferred CNC Inc.
That's correct. I think we need to act quickly on it to try to intercept this problem.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Okay. Thank you.
Mr. Caron, you made some excellent comments about some possible solutions. Just so I'm clear on your position, you're saying that while government subsidies may help temporarily, the only real, long-term solution to ensuring that this industry has viability in Canada is if the tariffs are removed completely. Is that correct?
Vice-President, Policy, Ontario Chamber of Commerce
Yes, under the current circumstances, but I guess there's another answer: What if these companies had other sources of demand for what they do? It's not always straightforward. If you're in a supply chain where you service an OEM that is really on the other side of the border, obviously this isn't available to you. In some cases, retooling for procurement for other sources can be a significant undertaking that companies might not have the expertise or wherewithal to go through, but I guess there's always that.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Right. I would imagine that would be quite capital-intensive. Some companies may survive. They may have the capital to quickly pivot their machinery to manufacture a different mould and find a new buyer in a different industry or perhaps a different country. That might be another way some of these companies may survive this. Is that correct?
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
It is correct, but the best option would be to remove the tariffs, I would imagine.
Vice-President, Policy, Ontario Chamber of Commerce
Obviously, and again, that's for the U.S. businesses that we met in the U.S. as well.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Thank you for that. That's an excellent point.
We heard in other testimony about this idea of why our mould-makers just don't start selling to China or to Europe, and we heard responses that the idea is really ridiculous. There's just no way that we'll be able to sell to China. We're not competitively priced, and Europe uses different types of moulds for different types of cars, and it's not like we can snap our fingers and quickly pivot to different markets. Is that an accurate assessment?
Vice-President, Policy, Ontario Chamber of Commerce
I would say that's correct. If you have equipment that's geared to certain products, you can't just go and get a different part at Walmart, or get a different supplier. Again, it's a very involved thing.
No. The ability to pivot, especially for smaller firms, is limited.
Conservative
Liberal
The Chair Liberal Ben Carr
Thank you very much, Ms. Dancho.
Mr. Danko, the floor is yours for five minutes.
Liberal
John-Paul Danko Liberal Hamilton West—Ancaster—Dundas, ON
Thank you, Chair.
As a representative from Hamilton, I represent Hamilton West, Ancaster and Dundas. Hamilton has been the industrial centre of Canada for the past century. I have family members who have worked at Dofasco, Westinghouse and Stelco. I'm very familiar with that industrial manufacturing component and how important it is to a municipality.
In particular, Hamilton is one of the most tariff-impacted municipalities in all of Canada. There's no question that there is a direct impact on the businesses, but it's also on the families and workers, because of the amount of uncertainty there is. It's impacting their daily lives on a regular basis.
Going back to the start of this conversation, the United States government unilaterally initiated a trade war against Canada, and its goal is to destroy the Canadian economy and take businesses back to the United States. When I'm talking to business leaders in Hamilton, industry executives or union representatives, families, our local chambers of commerce, and manufacturing and industry organizations, obviously we all want a resolution to this, but we recognize that we are only one side in this conflict, and what I've heard very consistently is that Canada cannot accept a bad deal.
Mr. Caron, I think you stated it really clearly. We cannot accept a shakedown of small businesses. Again, what I've heard is that capitulation to or acceptance of bad terms for Canada is actually worse than continuing to fight and continuing to negotiate, even with a hostile U.S. administration.
Mr. Caron, I'll give you the opportunity to expand on that and on what you're hearing from your members as well.
Vice-President, Policy, Ontario Chamber of Commerce
Thank you.
I just want to say that obviously we see big concerns in fabricated metal. That's the focus of today, but we also, in your community, see a significant impact for the primary metal industry. Actually, they are connected, because these small companies want to buy Canadian steel. When their capacity is depressed, it's the customer base of Dofasco or Algoma that is impacted.
That's also why Greg Dunnett, the president and CEO of the Hamilton Chamber of Commerce, provided a quote in support of the statement we made today. I'll just reiterate that we obviously cannot accept a situation where concessions are being asked of us for us to keep our businesses, basically, to keep our economic prosperity and to keep the jobs of the people who build this country. The terms of a trade agreement are usually negotiated on a win-win basis, and there are also interrelations in the supply chain. That sort of logic—you win, you lose or vice versa—honestly doesn't apply to the way our economy is built.
This is why, when we went to Washington, every business, actually without exception, told us that they did not support tariffs and wanted a resolution. You could think of steel, you could think of autos and you could even think of aluminum. You have communities in Kingston that are really dependent on aluminum that crosses the border three or four times. Again, everything is interrelated.
That's not a logic that we support: We think negotiation has to happen on a win-win basis between the Government of Canada and the Government of the United States, and U.S. businesses support that.
Liberal
John-Paul Danko Liberal Hamilton West—Ancaster—Dundas, ON
I'm sorry. I don't want to cut you off, but I want to have enough time to ask you a follow-up question on that.
In your response to Monsieur Ste-Marie, some of your statements spoke about how the U.S. tariffs are actually extremely damaging to U.S. businesses. They're driving up American inflation. They're causing U.S. job losses.
As the last portion of this question, could you comment on the chambers of commerce, what you're hearing from business leaders in the U.S. and what pressure they're putting on Washington to have a resolution?
Vice-President, Policy, Ontario Chamber of Commerce
Those are two separate questions, but I will say that the impact on the U.S. is very clear. You just have to look at the U.S. Bureau of Labor Statistics. There have been 100,000 manufacturing jobs lost in the U.S. since Donald Trump took office, give or take. Okay, that's 100,000 jobs. That's from a government that said, “We are introducing tariffs to bring back manufacturing.” Something is wrong here.
Clearly, what's happening is that the input costs of manufacturers are going through the roof. There's also no certainty on sourcing anything other than something that's made in the United States. Given the whole range of the American economy, it is absolutely impossible for the U.S. to develop that kind of industrial capacity overnight, especially in an environment where there's no certainty whatsoever, from week to week, from month to month, about what the trade arrangements are going to look like.
No nation on earth can be an island, and that is why this economic experiment that we're seeing is clearly a failed experiment that will create a reaction from U.S. voters. That's what we think, but the problem we have is that our companies cannot wait that long, so we need to support them in the meantime to help them get through this.