Industry and Technology Committee on Oct. 20th, 2025

[Mark Stoddart, Chief Technology Officer and Executive Vice-President, Linamar Corporation]

Dominique, if I could just add one thing, in regard to the red tape, Canada does a great job in regard to the funding through AIF, SIF and SR and ED. They're great programs and large chunks of money.

The process is very onerous. It takes a lot longer than typically what we do, say, in France or Germany. Obviously the dollar values are significantly less, but the process is much easier. They've really been able to streamline that. I think looking at other countries in regard to that process of R and D awards and stuff is something that could be much improved.

[Jim Jarrell]

There are two other things. [Technical difficulty—Editor] local suppliers. I think that's another that thing other countries do. They make sure that local suppliers are getting a lot of the benefit, sourcing credits and things like that to help local companies.

On our way here today, we saw a scissor lift. The scissor lift that we produce in Canada is out of Skyjack. We saw an LGMG, which is a Chinese-built scissor lift, in this city. We wondered why the Linamar Skyjack was not there front and centre? There are other things that happen with incentives that are given to Chinese companies and things like that, and we have struggled to compete with that.

I think that local sourcing is pretty critical, and then there are regulatory approvals. We need to get regulatory approvals more quickly in regard to incentives, as Mark said, but building plants or capital to build infrastructure takes a little more time here. Getting that red tape reduced and being more efficient would be very helpful.

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

Ms. Hasenfratz, you've been really clear about the quality of Canadian labour. Can we have a frank conversation about the value of that and the value of the proposals of training trades that will be in the upcoming budget? What is the best way to attract those construction workers that Ms. Desjardins alluded to, and what would be the best practice for labour for increased productivity?

[Linda Hasenfratz]

Our workforce is a key element in driving our productivity. I mentioned in my comments that our workforce in Canada is our deepest bench with our strongest skill level, whether that be skilled trades, as you've talked about, or all the technology that comes in behind it, including technologists, scientists, R and D, and engineers. They're the lifeblood of any manufacturing organization because of the key role they play in helping to come up with new ideas and implementing them efficiently. I totally agree that attracting and retaining those folks is key.

My father came to Canada in 1957 as a Hungarian refugee. He came here with nothing except a skill. He was a tradesperson, a skilled machinist. He took that capability and turned it into a global powerhouse. I think that we should be looking at how we attract more skilled people like my father.

I like to tell the story that, when my dad arrived in Canada in 1957 with nothing in his pocket, he was given his permanent residency on the spot when he landed and five dollars, which was the custom at the time.

Last year, Linamar and its employees contributed $600 million in taxes to Canada and the provinces that we're in. That's a pretty good return on investment for five bucks.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Mr. Ste‑Marie, you have the floor for six minutes.

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

Thank you, Mr. Chair.

First, I'd like to welcome all the witnesses and thank them for being here. I'd also like to thank them for their presentations and their answers to our questions.

I'll start with Ms. Hasenfratz, from Linamar Corporation.

Ms. Hasenfratz, thank you for your overview of productivity in Canada. It's incredibly different from what we usually hear. That's a lot more encouraging than any of the assumptions we might have had.

Thank you for sharing your father's life story. It's a beautiful story, very touching.

In your opinion, how does the uncertainty caused by the U.S. government's current protectionist and tariff policies limit productivity growth in Canada?

[Linda Hasenfratz]

I think that tariffs and protectionist policies like we've seen employed in the U.S. actually dampen productivity. You don't have to be productive, because you're being protected. I fully expect to see a further decline in productivity in the U.S.

On the contrary, I think it forces all of us to work even harder to try to offset any additional costs that may be in place. Obviously, it depends on the business, what you're producing and who's paying those tariffs, but I think that any time you have an extra cost, you're working even harder to try to offset that in order to improve your productivity. I think, in the end, it can help push companies to do more and invest more.

[Jim Jarrell]

On tariffs, I think the long-term implication is reduction in volumes. To me, that's the real key thing that we're worried about.

Every single day we're watching this short-term tariff relief and the mitigation strategies. We've learned more about HS codes in this company than I would ever care to want to learn about them.

We're probably looking at this differently. We've been saying since the start that this is a business person's nightmare but an entrepreneur's dream. We have been very successful in trying to incorporate ideas to do onshoring. This hurts not only our relationship with the U.S. but also the global relationship.

Our view is that the USMCA should be the lay of the land going forward. We're a great conduit to bring in manufacturing through Canada. In fact, we have a sales program called MCMAGA—that is, “make Canada, Mexico, America great again” sales program. It is about onshoring and bringing more manufacturing jobs back here.

Certainly day-to-day tariff mitigation is creating issues, but we have not seen any market share or any reduction in our selling from this at this point in time.

My fear though, again, is the volumes long term. I think that will eventually have to come back and hit the consumer.

[Linda Hasenfratz]

I was going to add that, in fact, I think we're quoting way more business for our North American operations, and Canada is definitely included in that. This isn't just about quoting work for our U.S. plants, which we have as well; we're actively quoting and winning business for our Canadian plants, because of the onshoring.

I think that's a really good point.

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

Thank you for your answers.

Ms. Hasenfratz, I'd like you to tell me about the effect of the value of the Canadian dollar on the manufacturing sector and productivity.

Mr. Stoddart was talking about investments. Equipment is often procured from abroad. In that case, it's better to have a high-value Canadian dollar. However, there's a competitive advantage in having a lower value for your exports.

How would you define the value of the Canadian dollar that the economy would need for productivity in the manufacturing sector?

[Linda Hasenfratz]

It's definitely a good point. If we're investing in technology that is coming from outside the country and our dollar is weak, that makes it more expensive.

We've always tried to maintain a good balance, a natural hedge around our currency position. We have quite a lot of revenue in Canadian dollars. We have lots of expenses in U.S. dollars. Particularly in our mobility business, our automotive business, they're almost fully naturally hedged.

Again, it's a risk mitigation strategy that we have undertaken. We don't get a lift, but we don't get a hit. It's not exactly perfect. There's some fluctuation quarter to quarter or year to year, but largely, it takes effects out of the equation. That's how we've handled it.

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

Thank you very much.

That's very enlightening.

Do I have time for one more question, Mr. Chair?

[The Chair, Liberal, Ben Carr]

Unfortunately, you have only eight seconds left, so we'll continue with another member.

Thank you, Mr. Ste‑Marie.

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

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

Thank you, Mr. Chair.

I'm really surprised by a comment made by Ms. O'Rourke, who questioned why we are comparing ourselves to the United States. My goodness, every single day, we hear about investment going to the States. Just recently, we heard about Stellantis moving 3,000 jobs to the States. In Windsor—Tecumseh, we're worried about our battery plant, which Stellantis claims will provide work for 2,500 people. Of course we're going to compare ourselves to the States.

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

Is that a question?

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

I don't have a question for you. It's just a comment. I disagree that we shouldn't compare ourselves to the United States when it comes to our automakers and our economy.

I have a question for Ms. Desjardins. Do you believe that the Prime Minister's failure to strike any meaningful deal with the United States on trade has caused Canada valuable time and opportunity for investment? How much do you think this uncertainty around the future of CUSMA is weighing on business decisions today?

[Dawn Desjardins]

What we're seeing is that it is such an uncertain environment. Having a deal one day and not the next is certainly within the realm of reality.

In general, when we think about uncertainty and the impact it is having.... We saw it today in the Bank of Canada's survey. It asked companies if they're going to be investing, and they're sitting back because they are unsure. When we think about how we may be investing in our own economy and in infrastructure, that could be the green light that ignites some investment within Canada by Canadian companies.

The uncertainty is very hard for people to navigate. Consumer sentiment is down too, so I believe this uncertainty is making us look inward to things that we can actually control, which, over the medium term, will be a positive in terms of igniting business investment.

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

You highlighted that sector-specific tariffs imposed by the U.S. continue to weigh on Canadian manufacturing, but the average tariff rate remains comparatively low. Doesn't this overlook the fact that it's not averages that matter to businesses, but the specific targeted tariffs that distort investment and drive capital south to the United States?

[Dawn Desjardins]

Sure. Certainly, when you look at the data on employment, for example, or output.... Yes, those industries do. You're right. Averages tell a totally different story. It's always been that way.

Having said that, you see that some of these industries are very specifically being heavily penalized. Overall, as long as you are compliant with the agreement—and we have seen Canadian companies step up to make sure their goods are compliant—you aren't facing tariffs. It is a very bifurcated market in a lot of these industries.

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

In Deloitte's update, you mentioned that businesses are focusing primarily on maintenance investment this year. Is that an indication that the current government's approach has created an environment where firms are choosing survival over growth?

[Dawn Desjardins]

I think it's the uncertainty element. Our biggest trading partner is the U.S., with three-quarters of our exports going south of the border. We are constantly fighting a level of uncertainty with respect to whether or not that market will be open to us and whether or not we will have to see our goods' prices go up because of the tariffs. That is what's actually weighing on businesses' decisions at this stage.

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

From an economic perspective, it doesn't concern you that businesses are delaying or scaling back investment in anticipation of a potential renegotiation of the trade terms.

[Dawn Desjardins]

Obviously, it's very concerning. You can appreciate that until we have a sense of what that playing field is going to look like, we can operate in an environment of uncertainty. For businesses right now, though, it really is trying to get a better read on how this is going to play out.

Yes, it is concerning, but—

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

We're over the time. I'm sorry.

[The Chair, Liberal, Ben Carr]

Ms. Acan, you have five minutes.