Industry Committee on Nov. 23rd, 2006

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Thank you for being here today. We've heard some very fascinating comments.

I take up where my colleague Ms. Kadis left off with respect to ensuring that we're all singing from the same page on what ought to be done and what needs to be done, while at the same time recognizing that in this area and in many other areas, Canadians tend to want to purchase products at the lowest price, with the best quality. They are doing it day in and day out throughout a number of retail stores here in Canada.

I'm wondering if you could tell me, from the Windsor perspective—I think it's extremely important, as this is a motor city—whether or not there has been the ability to adapt to the change in the tastes, the inclinations, or the appetites of Canadian consumers as it relates to products they're purchasing. Of course, within the automotive industry I was saddened to hear, like many in Toronto, about the closing of the Essex motor plant. I have a 1993 Ford Explorer with 474,000 klicks on it. It has a damned good engine, and I can't remember another vehicle that did that well.

Nevertheless, a lot of us are wondering something. If you're supplying parts to this industry, are you supplying to the entire industry or are you working through the Magnas or other companies like that? Are we losing out because the big three in the United States have seen closures and we're now seeing the ripple effect for your industries here in Windsor?

[Mike Hicks]

Yes, absolutely. You can't police consumers, but because certain situations are allowed to exist, you have a piling-on effect. One company does it, and it's like littering: if you throw one thing out the window, there isn't a mess, but if everybody suddenly litters, you have a mess. The problem is that because nothing has been done to correct this in a big way, you have one company doing it, and then you have a second company, and then we suddenly have to compete against that. The bottom line is that if something costs $30 and it's selling for $30, we certainly can't produce it for $100. That's where the big problem is, because $30 becomes the benchmark for that product.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Hicks, on that point, a BlackBerry or the shaver you used this morning, Fusion, the new one that has come out from Gillette, the plastic may be made in China for pennies. It may be exported with all these little subsidies, but the actual technology that went into creating five microblades was actually made in Quebec. That product itself has high value-added.

There is an argument out there suggesting that where we can continue to be competitive, where we can continue to maintain our standard of living, where we can continue a viable manufacturing sector, is not just in niche marketing, but in recognizing that in areas where we do specialize, these are not technologies that China or South Korea or anyone has. We are concerned about copyright, but the argument may come back to me in some corners—not necessarily in my constituency, but across the country—that if we meet a challenge of subsidies and we meet the kinds of incentives that are being given in China, many of them probably bordering on dumping, we should do the same. Are we protecting industries that cannot make the transition in an important time and, as a result, unwittingly not preparing ourselves for the next economy? I realize it's a structural problem. I'm not playing devil's advocate, but it's an important argument that's out there.

[Mike Hicks]

Again, I don't want to throw any other industry under the bus, because all manufacturing is important. Again, though, I reiterate that I'm protecting mould-making. It's a proven fact, especially in Windsor and Canada, that Windsor is a world-leading-class mould-making producer. It is world class. We have it here. It's not like we're trying to invent it. Our industry does the innovation and does everything right by the book.

When I suggest that customers come to us with problems and so on and so forth, what do we do? We have certain formulas, but there are some things we can control and some things we can't control. Within our industry, there are going to be strong shops and there are going to be weak shops. In our economy, there are going to be weak manufacturers and there are going to be strong manufacturers. Unfortunately, someone is going to lose.

With our mould-makers, we're very strong. We can compete with anybody in the world. Again, I refer to my ITC book. You can look at the German economy. I've been to Germany, to the EuroMold show. They're even more advanced, I would say, than Canada is, but sometimes their moulds are too expensive for a world market. But when you look at Germany and you look at BMW and Mercedes-Benz, they protect their industry. They can still get high costs.

Again, our mould-makers are highly skilled. They should be paid proportionally. It's a strong industry.

[The Chair, Conservative, James Rajotte]

You have ten seconds.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Just on the European side, are you finding it less competitive now that the currency is still very competitive relative to Europe? Are you getting fewer European competitors?

[Mike Hicks]

Most of our competition is from the States.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McTeague.

We'll go to Mr. Carrie now.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair. I have a couple of questions for the panel.

One of the opportunities that I had last year was with Jeff Watson, member of Parliament for Essex. He brought the Conservative auto caucus down and we had the opportunity to actually see the border. We talked to some of the stakeholders about different solutions. I was wondering if you actually have some ideas. With the border, number one, what do you see as the biggest holdup? What are the short-term solutions and the medium- and long-term ones as far as increasing capacity is concerned? I'm just wondering if I can get each of you on the record, just to give us an idea on that.

The other one was more or less about this U.S. study about the different countries that aren't playing by the rules, or however you want to phrase that. What I'm seeing is Canadians being the good guys. We go out in the world and we play by the rules. We're doing what is ethical and what needs to be done, and these other countries are just doing what they want to do. They're renegades. I was wondering if you could comment on that as well, and just elaborate a little bit more. In your opening statement, you didn't have that opportunity.

Those are my two questions.

[The Chair, Conservative, James Rajotte]

Perhaps we can start with Mr. Storey on the border question first, and we'll finish with Mr. Hicks, who can go right into the second question.

[Bill Storey]

On the border, I believe everybody is aware that Toyota has just announced that they are opening a plant in Woodstock. They already have one in Kitchener. There has been nothing here in Windsor. Personally, I feel that one of the main causes of that is the border crossing here at Windsor–Detroit. It's well known that it's a bottleneck. It sometimes takes hours to cross. That is turning investors away, in my opinion. They work on just-in-time delivery. If they can't get their goods across the border in a timely manner, why deal here? They have much better success in Sarnia. That border is much easier. It's cheaper. Ours is more expensive. It's a bottleneck. We'll go on for years in this area about a new crossing. It's like our arena. It just won't happen.

[The Chair, Conservative, James Rajotte]

Mr. Hrastovec.

[Peter Hrastovec]

Very briefly, thank you for the opportunity to comment on this.

I agree with Mr. Storey, and if I can just take it a step further, it's not just Toyota. Look at all the developments going on in, say, the Kitchener–Waterloo area, everything east of London, and just west of Toronto. There are options there to cross, and not just at Sarnia. They can cross at Niagara and they can cross at Windsor as well. They're smack dab in the middle.

If you're looking at a regionally based economy—and you have to look at this region because of everything it has to offer—you have to make the access to Michigan, Ohio, Illinois, and the Midwest region sustainable and very quick and operational. The fact is that there are those opportunities for people who do want to take the chance to do investment here in the deep south, as we call ourselves sometimes, but by keeping that border not as fluid as it ought to be, that tells people they should go elsewhere for their economic development. If there are opportunities elsewhere, then so be it. That's what a free market is all about. But keeping that border in a manner that is not as sustainable as it ought to be does not give this community, this region, those opportunities.

[The Chair, Conservative, James Rajotte]

Mr. Kanters.

[Ed Kanters]

Just as an expansion on some of the things that have been said, the border crossing that we have here was operating at very close to capacity even before 9/11. Any hiccup that took place would create slowdowns, backups, and huge issues getting across. Then 9/11 happened, and now customs activity and Homeland Security actions can, at any point in time, create larger backup. That just points out that there is a capacity constraint, that being the crossing point that we have here.

That constraint needs to be dealt with in two ways. We need a secondary crossing so that there is greater capacity. Along with that secondary crossing, we need to work with our friends over in the U.S. to develop their customs infrastructure so that it's capable of handling the throughput. We're not going to change the fact that they're going to want to maintain their own security, but we need to work with them so that the structures they set up don't create slowdowns and barriers to the free movement of trade across the border.

[The Chair, Conservative, James Rajotte]

Mr. Hicks.

[Mike Hicks]

The only thing I would like to add is that we haven't addressed people crossing, such as customers who come to visit us. Key personnel have a heck of a time crossing that border going both ways. Even when they get to Canada, they have to get back into the States. Again, when we're exporting so much to the United States, the last things these people need are problems crossing the border. Somehow, that issue has to be addressed as well. But I agree with all three panel members. Obviously, it's a common thing within manufacturing.

[The Chair, Conservative, James Rajotte]

And on the second question that was asked—?

[Mike Hicks]

May I ask that the second question be repeated? I only got part of it.

[Colin Carrie, Conservative, Oshawa, ON]

In your opening statement, you mentioned that the U.S. has done homework for us.

[Mike Hicks]

An in-depth study, yes.

[Colin Carrie, Conservative, Oshawa, ON]

Like I was saying, it seems that in Canada, we're the good guys. We play by the rules. You inferred that there are countries out there that are just renegades. They do what they want.

[The Chair, Conservative, James Rajotte]

Just briefly, please.

[Mike Hicks]

Yes. Again, we don't want War and Peace here.

I've reiterated that statement throughout what I've said here today. Again, I just want to reiterate the briefing that I have here. That study could have been used against us. We could have been a victim. They were looking to put tariffs on us because they know that so many disproportionate amounts of moulds are going into the United States. But they again deemed us as a fair trade competitor.

On the other countries that were named, we've talked about all the improper things that are happening. You said to make it brief, but if you look at China, they're going to take a lot of that money and they're developing an army. They're going to come after the United States at some point too, and the United States has to be worried about this as well. What are they doing with this money? As I said, they have a mission.

I just want to say something about the plastics. The world of plastics in our industry is growing. It's a growing field, but it's shrinking here, so we have to protect that.