Industry Committee on May 19th, 2016

[The Chair, Liberal, Dan Ruimy]

Can you do it in five or 10 seconds?

[Jean-François Champagne]

It is important to our sector. R and D is important, obviously. The pace at which cars evolve today is accelerating, so the rate of development in the capacity to build good aftermarket parts is also increasing. In short, yes, it is.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Kitchen, you have five minutes.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Thank you very much, Mr. Chair.

Thank you, all three of you, for coming here and educating me quite a bit. I'm new to this committee for today, so I have a few questions.

I come from Saskatchewan, the southeast corner, and my riding is about 43,000 square kilometres. We do an awful lot of exporting. I export everything. I export coal, I export potash, I export canola, flax, etc. These sorts of things are what I do.

I also come from a background as a regulator. A number of you mentioned the TPP, and I'm wondering if you could expand on that to me.

Mr. Champagne, you said you don't feel that the TPP would affect your industry a great deal. In southern Saskatchewan we definitely have a lot of service industries involved in automotive sales. Can you expand on that for me?

[Jean-François Champagne]

Sure. Thank you.

Essentially, when we did our research around TPP, the 20 or more of our members who manufacture in Canada today highlighted the fact that most or some of their manufacturing is already done through partnership in Asia, non-inclusive of the countries involved with TPP but in China, and that the export portion of their product to countries outside of the U.S. or Mexico is relatively small, so the impact of the TPP is limited.

By the same token, their biggest concern, the capacity to continue to produce in Canada, was much more linked to wide variations on the exchange rate, which creates a lot of uncertainty in their capacity to continue to manufacture in Canada. There was also the advancement of technology. In any case, faced with the small variations we'd see as a result of the TPP, they felt, in conclusion, that we're in pretty much a neutral position in that regard.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Okay.

Mr. Praznik, you too mentioned a bit about the TPP. I'm wondering if you could expand on that.

[Darren Praznik]

There's a provision in the TPP that calls for its participants to align their regulations to facilitate trade. For us that was just a huge plus. It's one of the first trade agreements in the world to include that provision. From our perspective, we welcome it. We see it as a great advance in the kind of work that we believe needs to be done internationally. That is a component we support very much.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Great.

Are there any comments on your part? In Saskatchewan, we do have one or two defence industry—

[Christyn Cianfarani]

You do. You have Meggitt, I believe.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Correct. They obviously are dealing with that aspect, and building, and providing some very good work, which is good to see, and they are exporting. Do you have any comments? You mentioned that a lot of it is not necessarily protected as much.

[Christyn Cianfarani]

Well, for certain. Defence is managed in the sense that it falls outside of the trade agreements, but that's a great subtlety. If you're in Saskatchewan and you want to be doing aircraft structures, components, and effectively “aftermarket” aircraft work, let's call it, then you'd be concerned about making sure that the prime contractors are providing intellectual property in Canada so that you don't lose that capability in Saskatchewan.

Do you know what I mean? It's kind of like the dealership model. We don't want to have to go back to the OEMs to be able to service the aircraft for the Canadian Armed Forces. The same principle would occur if you didn't transfer the intellectual property into the country. We've made that mistake on some of our fleets already.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Thank you.

How much more time do I have?

[The Chair, Liberal, Dan Ruimy]

You have 50 seconds.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Okay.

I have a lot of cattle ranchers in my riding, so we've dealt with COOL. The issues we've had to deal with include country-of-origin labelling for beef products. You mentioned that a little bit as well.

[Darren Praznik]

In Canada the Competition Bureau has, for the made-in-Canada designation, the last major or significant transformation and a 51% value. I think in agriculture, for “manufactured in Canada” or “made in Canada”, it's the last transformation.

The reality for many manufacturers is that given the value of the ingredients and the exchange rates, there are times when it's hard to make the 51%, but it's clear that the product is manufactured in Canada. It's really time we revisited some of that to represent the realities of manufacturing today. You're sourcing so many of the inputs from around the world that, with exchange rates, is the 51% value really of benefit?

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We'll hop over to you, Mr. Longfield. You have five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair.

Thank you all for coming. It's such a pleasure, as a member of Parliament, to have experts like you folks come before us with the range of industries that you represent and the range of people across Canada who work in your industries.

I want to touch on the people, on the creative and entrepreneurial citizens, and what we can do in your industries to try to move things forward. I want to start with Monsieur Champagne.

I'm picturing your sector as a supply chain sector. You're in warehousing and all of the things around logistics. You mentioned in your presentation a labour market study. I'm wondering whether you're tying in to colleges and universities—I'm thinking of Ryerson University and its Magnet program—or whether there's something we can put into our report in terms of a need and a solution that you've identified and that we could bring forward.

[Jean-François Champagne]

On the labour market information front, we're definitely working with various stakeholders. A good example is the creation of some good partnerships with the Automotive Business School of Canada in Barrie. It's a great collaborative effort between the institution and industries in making sure that we're educating and bringing people into the sector. It speaks to the bigger issue of how that is evolving, as technology impacts the sector and changes the skill set required for the future. Obviously, the driver behind our presentation is to build upon the project, to build the labour market information project. We're really hoping it will expand our capacity to get a better understanding—

[Lloyd Longfield, Liberal, Guelph, ON]

Perfect. Thank you. I think you've hit on the need.

I want to ask about banning asbestos. We have a brake pad manufacturer in Guelph who is manufacturing the only Canadian-made brake pads, and they are asbestos free. We can't touch that.

I'd love to talk about J1939 automotive standard for communications and whether we could open up that standard. However, that is for another day. I wish we had more time.

On defence, Christyn, you mentioned the Jenkins report. People have mentioned the Jenkins report to me several times in the last two weeks. Back in October 2011, it was brought forward.

Is it alive? Is it dusty? Is it something that could benefit your industry, or should we be maybe resurrecting it, or is it already in process?

[Christyn Cianfarani]

I'm alive. I was an expert on it.

[Lloyd Longfield, Liberal, Guelph, ON]

I know you were.

[Christyn Cianfarani]

You're talking to a live human being who worked on it.

[Lloyd Longfield, Liberal, Guelph, ON]

I was talking to someone named Nobina, whom you might know as well.

[Christyn Cianfarani]

Parts of it are alive. There are many concepts within the Jenkins panel report, everything from better leveraging defence procurements to building the tools to do it, which we have done.