I'd like to thank the committee, Mr. Chairman, for this opportunity to speak.
Being from New Glasgow, I must be one of those old country boys who the previous two speakers were referring to as being from rural Nova Scotia, so bear with me.
To give you a little background about Maritime Steel, Maritime Steel is a manufacturing company based in Nova Scotia and Prince Edward Island. The company manufactures steel bridges and other steel structures in the Dartmouth plant. We have a modern foundry located in New Glasgow, Nova Scotia. And we build food processing and fish processing equipment and other stainless steel structures in P.E.I. In fact, we recently finished doing some work for an Alberta firm in a reactor plant.
Maritime Steel has operated for 104 years in the New Glasgow area and currently employs 150 people in New Glasgow. We have a mere 25 people in Dartmouth now, because of a slowdown in the structural business, and 35 people in Prince Edward Island. The structural division is really in a state of decline. The foundry operation is relatively busy, as is the Charlottetown facility.
In terms of the business climate, Maritime Steel and Foundries Limited has been impacted by challenging market conditions that have restricted growth in the past five years. Currently, the company's foundry division has managed its way to record sales, despite a long-term decline in the industry and recent market conditions.
In the 1960s there were approximately 1,000 foundries in Canada. In the 1980s there were 500, and there are approximately 150 today. A number of foundries in Upper Canada, if you will, in Ontario, have recently gone out of business, and it's indicative of the issues that we face.
Some of the circumstances that have had an impact and may continue to negatively have an impact on the organization are as follows. The two previous speakers alluded to much of this.
As we export most of our product to the United States, the high relative value of the Canadian dollar and the speed with which it has increased in value have had an impact on both our revenues and our margins.
Competition from countries with low-cost labour, such as China, India, and Mexico, to name a few, and others, are an ever-present threat to our continued growth and prosperity.
The cost of energy and its impact on the shipping industry, as well as the direct cost of energy, is increasingly affecting the cost competitiveness of Canadian manufacturers and our cost competitiveness. The cost of meeting regulatory initiatives, as new environmental restrictions become tighter, is making our product more expensive in the marketplace.
Skill shortages in eastern Canada, as the migration of skilled trades and technical people to the west continues, has reduced our competitiveness here.
Competition from U.S. firms that are in close proximity to our customers means slim and shrinking profit margins as we pay the shipping costs to get our product to the market.
We have some suggestions to help Canadian manufacturers compete in this existing environment.
We would suggest that community colleges be encouraged to take an initiative to enhance formal industrial training initiatives directed at production workers, as well as in cooperation with industry and unions where the unions provide skilled people. We've seen a number of precedents for this in the Atlantic provinces that have been eminently successful in allowing people on unemployment insurance and welfare to become active members of the workforce.
Another suggestion is to encourage and simplify industry and university research and development partnership programs. As previous speakers have mentioned, we have some direct experience in working with universities in trying to develop a culture where we would share our capital equipment and expertise with the universities, and vice versa, in an attempt to rejuvenate the steel industry here in Atlantic Canada, which in days of old was a primary employer of Canadians.
Third, ensure that Canadian manufacturers have access to low-cost fuel to enhance their competitive advantage. For example, and this is one that is very specific to us, a natural gas pipeline passes within a few miles of Maritime Steel's plant in New Glasgow, and we and other industries in the area do not have access to that gas. This means that we are dependent on higher-cost propane for much of our process needs. Every dollar at the margin, every incremental dollar that you pay for fuel, reflects directly on your margins and your competitiveness in the marketplace.
Fourth, we are suggesting that the government help Canadian companies with market studies and provide additional assistance in matching our manufacturing capabilities here in Atlantic Canada and elsewhere in Canada with Alberta's industrial needs. The Canadian Manufacturers' Association in fact is working on that initiative, and I applaud that activity. Hopefully it will benefit companies not only in Maritime Canada but in Quebec and Ontario and will also satisfy Alberta's insatiable need to grow.
Fifth, ensure that environmental regulation is based on sound scientific research. In many cases we find that our province here has a tendency to adopt rules and measures that are put in place in other jurisdictions, and we find that some of these rules that are affecting us directly are in fact very expensive and cost the company a great deal of money.
Again, thank you for the opportunity to speak here today. That concludes my talk.