Industry Committee on Oct. 19th, 2016

[Michel St-Amand]

Thank you.

[The Chair, Liberal, Dan Ruimy]

We are going to jump right into questioning. We have five minutes.

Mr. Sheehan, you're on the list for five minutes.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

Thanks to all our presenters as well.

My first question will be for Ken.

Thank you for your work on behalf of the workers across Canada and in Sault Ste. Marie as well.

I am the representative for Sault Ste. Marie. Two weeks after I was elected, Essar Steel went into creditor protection, and we've been working quite hard with all the stakeholders to make that company stronger for the long haul.

You were talking about dumped steel from China and other countries. About seven months ago, the Liberal government introduced in the budget, on page 128, a section called “Response to Unfair Trade”, in which they introduced a couple of recommendations on modernizing trade remedies, something that has been called for by USW and the Canadian Steel Producers Association for decades.

That has been undertaken now. In your opinion, how will that improve the situation? Also, there are consultations currently under way on more recommendations to strengthen the response to unfair trade? Which of those recommendations do you feel would continue to help us combat dumped steel?

[Ken Neumann]

Thank you very much for the question. I understand the importance of the Sault, knowing that if it weren't for the steel industry, the town would really be suffering.

When it gets to the question of the modernization of the trade remedies, we've made a submission along with the Canadian Steel Producers Association. We have a very good, close working relationship, and we see eye to eye on this.

We think it's important that workers have an involvement. We see time and time again that we have lost jobs. We have plants that have been idled because we have pipe coming from India or steel being dumped from China. We've had a trade case with respect to rebar that they are bringing to the shores of British Columbia. We went hand in hand with the CSPA. The time has come for the government to allow our workers that particular right.

The fact is that it rests on the global basis. I know there were some meetings recently on the Prime Minister's tour overseas. There were some discussions.

You have to reduce the capacity in China. They have 400 million tonnes of excess capacity. In the U.S., they have a much stronger trade remedy process, because they have the ability to file complaints, which we talk about. We want to be on equal footing. When they get turned back from the U.S., you know sure as hell that they are coming back in through the back door and somehow trying to get that into Canada.

It only makes sense to me that the government have a very clear policy with regard to dumping. The fact is that it's unfair dumping. We've seen it time and time again. I was born and raised in Saskatchewan, and I worked in the steel mills as one of my first jobs. I understand the importance of those particular jobs. These are good, decent-paying jobs. The steel industry is no longer a smokestack industry. It's viable. It provides high-skilled positions, and people can raise their families on them.

We have to work hard, and hopefully, with the recommendations coming, soon they will be able to stop this flood that's coming from China and elsewhere, until such time as we have a government that's prepared to stand up.

We understand you have to have trade, and it has to be fair trade. That's what we are really focusing on, and we are going to work as hard as we possibly can, because right now it doesn't look very.... We have the people in the Sault, and we also have the people in Hamilton. This has been a long process, and it has not been a pretty process.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you.

Just supplementary to that, the three amigos were here—Obama, the Mexican President, and the Prime Minister. They signed a trilateral agreement on working together to combat dumped steel from whichever country—China, India, etc.

How important is it—because you represent workers on all sides—for people to work together to combat that?

[Ken Neumann]

I think it's very important. We do have NAFTA. The fact is you have the three amigos, as you referred to them, working together. It's important.

I can tell you our union is very active in the U.S., not just in steel. We are active in tire, rubber, and all those other sorts of things, because we get inundated from countries such as China and elsewhere. The fact is that, when you have some tire factories that are shut down because you have 50 million tires coming from China, that's not the kind of society we want to build.

I think it's crucially important that the leaders of Mexico, Canada, and the United States live up to the agreement to make sure that our workers are protected and that we enhance the ability. I've always thought that we're not going to have a successful economy if we don't have a strong steel industry and a strong manufacturing sector.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

In your written submission, I was reading—

[The Chair, Liberal, Dan Ruimy]

That's it; you're done.

We're going to move to Mr. Dreeshen.

You have five minutes.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

I'll just refer to the written submission. They're great to see. I certainly am pleased to see all the detail that is them, and it's something that we'll be looking at. I'm interested in some statements on the carbon leakage, and so on, as we're looking at steel coming in from other parts of the world, but I'll perhaps leave that to some of my colleagues.

I wanted to speak to Troy about the Canadian Meat Council and some of the issues that are involved there. The use of our animal-based natural resources is critical. That's extremely important.

You mentioned—and I think this had to do with the hog industry—that there are 83 drugs used in Europe that are not allowed in Canada. Yet we hear from various food suppliers about terrible things, such as hormone-free and no antibiotics.

When you take a look at 75 grams of beef and realize the difference between the amount of estrogen in the treated one versus the untreated one is two...yet in the bun there are about 30,000 nanograms there, it's the kind of thing we get caught up with, and, of course, the meat industry is going to take the brunt of that, and has been taking the brunt of that. So trying to get some real information out, I think, is critical.

I guess some of the other issues that we see, as you have alluded to, have to do with crossing the border from the U.S. into Canada, and then from Canada into the U.S., and the differences that exist there.

I wonder if perhaps you could comment somewhat on the safety side of it, how perhaps sometimes people get going in the wrong direction, and whether you could also look at some of the trade issues that exist.

[Troy Warren]

Okay. In my day job, I actually work for Maple Leaf Foods. On antibiotic resistance and the movement from a labelling claim standpoint, I think consumers are pushing us very aggressively to probably the right outcomes, which means that we have to responsibly use antibiotics, and I'd say, by and large, the industry does so today. The regulations that we work under within this country are some of the best. They're probably the best in the world.

Our call-out is more from a trade standpoint. This country sets our standards, and if we're going to allow imports into this country, they should still meet our standards or be produced under the same standards that we are forced to adhere to. That's the challenge. With the agreement we're pursuing with the EU, a great number of inequities exist in terms of the standards we're held to operate under—in plant, on farm, and so forth—that will actually limit our trade going into their countries, but we have been very fully accepting of all of their standards and their practices that don't meet ours, and of that meat coming into our country.

From that standpoint, what we want is just one standard. If this is the standard we need to operate under, and these are the costs we're going to have to incur or not incur, depending on the products we're all labelled to use, then the meat coming into this country should have the same requirements.

Sorry, what was your second question?

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

It was about the safety on border....

[Troy Warren]

That's really the border one. The U.S. has the same challenge. The U.S. inspects, as I say, every single load of meat that goes from this country into the U.S. Our trade, actually, is pretty balanced. The amount of meat that we ship there and the amount of meat that comes into Canada are about equal.

The difference, though, is that, randomly, because they have a testing system, they will test our product to see if it's the right species. They'll check our pork, from one of the pork plants I operate, going into the U.S., to make sure that it's pork. Is that really necessary? It's been produced under a Canadian CFIA federal inspection facility, and we have equivalency between the USDA and Canada, yet they'll run a test that takes nine days to return. If it's fresh meat, our fresh meat has a very short shelf-life. That meat has to be returned to Canada and sold off at a discount, typically, because no one wants meat that's now going for some testing and we don't know what the outcome's going to be.

If we return it to our facility, then CFIA actually wants us to put it on hold. Why would you want to put this meat on hold when you've certified it and given us export certificates that actually say it is pork and that meet all of our standards? Just because it's been tested by another country, you're concerned about what the outcome would be.

Those are the challenges of crossing borders. While our borders seem very open, they aren't as open going into the U.S. as we make them coming into Canada.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Masse.

You have five minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'm going to give my time to Mr. Duvall, but I just want to add one little quick statement. That's a good opportunity to segue with regard to the border, and there's more to it. In fact, the United States in terms of protecting its steel industry—consider this—has the Buy America Act, the Buy American Act, the Jones Act, and the ability to stop dumping or at least challenge it. As well, they have addressed issues, and politically, there's currency and other manipulation that have affected the steel industry in Canada as well. But we've done nothing on this side, whereas the United States has clearly championed the industry, leaving Canada basically as an island unto itself with regard to the workers and the quality of product, which are the last things we have control over.

I'll turn it over to Mr. Duvall, but I want to thank the steel workers for their hard work and also their maintenance of an industry in Canada.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Thank you.

I appreciate you gentlemen coming forward with your concerns. Your presentation was very interesting.

Mr. Neumann, you've made some statements especially about the steel industry, which I represent in Hamilton Mountain, and my colleague Mr. Sheehan represents up in the Soo. With regard to the problems we're having with the steel industry, whether we're talking about the dumping of steel or trade barriers, has the government been of any assistance to date in either of our two municipalities to Essar or U.S. Steel? Has it been of any assistance to date to bring back those jobs and get those companies back on their feet? If it has, what has it done, and what is it that you need from the government today to help solve the steel crisis?

[Ken Neumann]

Thank you for the question. As I said in my submission, we've had a very engaged provincial government, and Ontario is working very closely with us with respect to what's happening up in the Soo and also within Hamilton.

We had the opportunity and the pleasure to meet with the Hon. Navdeep Bains back in April, and he was very conciliatory and very open and recognized the importance of a very strong steel industry. We had a follow-up meeting with some of his staff on June 14 here in Ottawa and talked about some of the issues. We talked about dumping and some of the regulatory issues that are at hand. I sent off another letter at the end of last month, requesting another meeting, because we're now getting to that stage where we have some potential buyers in play and we are hoping to be in a position to get these two facilities out of CCAA, which they've been into for a long period of time.

That being said, we've not had any assistance from the federal government at this time, but as I say, we've had a couple of meetings. We've now requested the third, and I'm hopeful that we will have that meeting very soon. We want it to be engaged in the process. This is a crucial industry of some $14 billion with 22,000 direct jobs, and if you do the add-in factor of another five to one, this is very significant. I think the federal government acknowledged that. We need it to be engaged in the process, because there are some issues there. There are some tax issues, and there are also some environmental issues, with which I'm sure it can be of assistance in some form or fashion.

The other one we'd like it to consider is capex. The fact is some major investment is needed, and I don't want to go through what happened when the former government allowed U.S. Steel to come into this country. To me, that was not a net benefit for Canada whatsoever. It went off to the side and signed this secret deal with no involvement from the community, no involvement from the workers, and for that reason we're in this particular difficulty.

There is a serious need in one of the most modern facilities in North America, which was built in the mid-1970s, the integrated mill at Nanticoke. The blast furnaces there need some realigns, and those realigns don't come very cheap. We think that it's a capex situation in which the government could very much be of assistance.

The third thing we have to get back to is some assistance in training and adjustment. We need skills for the modern industry. It's high tech. The steel industry is high tech, and we now recognize that baby boomers are retiring and all those sorts of things, so we need some assistance on that.

I go back to the days in the steel industry when we had CSTEC, which was a sectoral council, and the good it did. It wasn't just CSTEC; we had a whole bunch of other sectoral councils.

Those are the three areas that we think the government needs to be engaged in, and again, we look forward. I'm very hopeful that in the very near future we're going to have another opportunity to meet with Minister Bains to talk about these issues that are crucial, because we've been working day and night recently in regard to having some potential buyers, and this is not an easy task. This is not an easy task, considering what has transpired in the steel industry.

In last year and a half—and you know the circumstances very well—20,000 of those retirees had their health care benefits cut out. These are people who have toiled. These are people who have helped build this great country of ours, and there they are in the greatest need, knowing full well that when they went into those industries they were looked after with respect to their benefits. So it's a serious crisis, and we have to move forth with it.

[The Chair, Liberal, Dan Ruimy]

You've run out of time. Thank you very much.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Thanks, Mr. Chairman.

[The Chair, Liberal, Dan Ruimy]

The last question goes to Mr. Longfield. You have three minutes, and then we're done.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair.

Thank you to Mr. St-Amand for joining us by video from Edmundston. I apologize, I'm asking my questions in English. I'm taking lessons, but it's a hard job.

You've been in the business for 30 years?

[Michel St-Amand]

That's right.

[Lloyd Longfield, Liberal, Guelph, ON]

Congratulations. It's Small Business Week this week, and you're a great example of a business that survived through some pretty tough years.

You mentioned investing in equipment and having some incentives. What's the opportunity for us to bring the garment industry back to Canada? It's left North America.

I'm originally from Winnipeg, which had a very strong garment industry. Montreal had a strong garment industry. It's great to hear that you're still operating in New Brunswick, but what's the potential?

[Michel St-Amand]

I'll do my best to give you a brief and satisfactory answer.

I think that everything goes through innovation. We are often barometers. We had already started losing jobs in 1995. Now, we are beginning to see the possibility of competing with Asia. We are seeing a rise in employment in the clothing industry in Mexico, and we hope that in the next few years this wave will reach the United States and Canada, to finally generate some jobs in our sector.

Innovation is key for us. I have three robots in my small SME. I do research and development. Trying to make clothing using robots is almost unique, I think. As small business owners, we are in our own little world. We lack structure and time to inform ourselves properly.

I spoke earlier about three ways to help us. I think that relationships with the universities will be important for us. It's important to remember the technical sectors. Everything goes through innovation and capital assistance, which is used to procure advanced equipment. I speak mainly for my own business. I am awash in innovation, despite the sector I'm in. Generally speaking, I think our industry is moving in that direction. That's the key.

I hope I have answered you satisfactorily.

[Lloyd Longfield, Liberal, Guelph, ON]

That's very useful.

And a sherpa system might help to give us a guide to possibly get you to innovation.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

That's about all the time we have left. I want to thank our guests for the very lively discussion.

We're going to suspend for two minutes, and then we're going to return in camera to do some committee business.

Thank you.

[Proceedings continue in camera]