Evidence of meeting #10 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was automotive.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chairman.
Ms. Shalhoub stated that a host of factors, including environmental ones, must be taken into consideration. On April 5, 2005, the Government of Canada signed a Memorandum of Understanding with the automotive industry respecting automobile greenhouse gas emissions. You were slated to produce your first report on November 30, 2005. Why was the report not released?
Director, Public Policy and External Affairs, DaimlerChrysler Canada; Canadian Vehicle Manufacturers Association
With respect, the report has now been produced.
I think Mark Nantais can speak further to that.
President, Canadian Vehicle Manufacturers Association
Monsieur Crête, the report was in fact produced, and it's actually in printing.
This report was not a requirement of the GHG MOU, but it was something we agreed to do beyond the memorandum of understanding. Obviously it was necessary to have it translated and printed. I believe the report, which has been in the hands of Natural Resources Canada for well over a month now, is in printing. The date for its delivery covered the period from April 5, 2005, through to April 30 of this year.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
According to paragraph 9 of the MOU:
Commencing in 2005, the Canadian Automotive Industry will report its projections for GHG emissions for the coming model year by November 30.
Therefore, as I understand it, a report should have been produced by November 30. Are you saying that Industry Canada only received it a month ago?
President, Canadian Vehicle Manufacturers Association
That is correct. As I said, the first report was really just a report on the process to date. The requirements under our agreement require us to report on the first annual emissions in 2007. That's when the first report is required, and that's what we plan on doing.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
I read you an excerpt from the MOU and it seems fairly clear that the industry must report by November 30. I hope we're talking about the same thing. The MOU also refers to “a mandate and its operational plan for approval by the parties no later than 180 days from the signing of this MOU”, which brought us to October 2005. Are we talking about two different reports? Can you give me the status of each one, to further enlighten me?
President, Canadian Vehicle Manufacturers Association
If I understand your question correctly, first, there is a series of deadlines that had to be met--180 days to establish the committee, and thereafter its mandate, and so forth.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
The MOU called for an operational plan.
President, Canadian Vehicle Manufacturers Association
That has all been done. It was all done within the timeframes; it is all part of this first report.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
I see, but it hasn't yet been made public.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
It's currently being translated. Is that right? You're telling me that Industry Canada only received the report a month ago.
President, Canadian Vehicle Manufacturers Association
Yes, Natural Resources Canada.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Yes, the report was sent to Natural Resources Canada.
President, Canadian Vehicle Manufacturers Association
My understanding is it should be released momentarily.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
I see. Will it be made public by the government, or by your organization?
President, Canadian Vehicle Manufacturers Association
The overall agreement is governed by a joint industry committee. The joint industry committee will issue the report. So it will be issued by Natural Resources Canada on behalf of the government, and we as industry intend to release it as part of our publications as well. It will be available on our websites.
It is a public report, yes.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Moving on to another topic, I was contacted by a constituent of mine who works in the metal casting industry. He manufactures automobile parts and is greatly affected by the increase in the value of our dollar. How has the rise in the dollar affected your market, particularly with respect to subcontractors? What impact is this currently having? Are foreign competitors capturing a share of the market? As subcontractors, are Quebec and Canadian suppliers holding on to their share of the market, or, because of the surging dollar or for some other reason, are they struggling? Is my question clear?
Vice-President, Government Affairs, General Motors of Canada Ltd., General Motors of Canada Ltd.
I may be able to answer the question.
General Motors sources a little under $1 billion of supply from Quebec each year. This is primarily in a variety of different areas, but there are particular strengths in the Quebec marketplace, especially in lightweight materials.
There's also extraordinary research and development capability in Quebec in lightweight materials, which is a critical component in our improving the fuel economy of our vehicles. As we've replaced certain steel products with lighter-weight aluminum and now magnesium products, those things are very important to us. We've actually been growing an awful lot of that type of work in Quebec.
The rise of the Canadian dollar does make a difference, especially to the supply market and having to compete with other sources of materials around the world. As new supply contracts come up to be bid with major automotive players, if your cost on a relative base against a competitor in the United States or another jurisdiction has increased in two years by 40%, you can imagine the stress this puts certain companies under.
So it's a reality. We try to work with our suppliers to make sure we're optimizing the innovation within the Canadian supply chains so that we can offset some of those increases.
I would add, though, that the increase in the Canadian dollar also impacts us in the assembly area, as we try to attract our large investments against our competitors in the automotive world, as well.
The same thing will apply if our cost base related to labour--which is a combination of labour costs, their benefits, and the like--and other things we source from Canada goes up 40% in two years. Then it's much more difficult to make the case for the next major investment because of that increase. So one is forced to be more productive, and that's why I think you might find that the Canadian supply chain and the Canadian automotive assembly area are amongst the highest in productivity and quality of any in the world.
Bloc
Conservative
President, Canadian Vehicle Manufacturers Association
I would just like to add more for Mr. Crête, if I may.
Conservative
