Industry Committee on Feb. 24th, 2020

[Casey Chisick]

Yes, it does, and it affects creators and in a positive way. It's important to maintain the fidelity of the Canadian culture that has allowed the Canadian music industry, among others, to thrive for the last 50 years. Preserving that protection in CUSMA and in its implementation is, of course, key.

It doesn't, unfortunately, address the issue that we're here to discuss today, which is the implementation of term extension for copyright.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much for your answers.

How much time do I have left, Madam Chair?

[The Chair, Liberal, Sherry Romanado]

You have one and a half minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

My next question will be fore Honey Bee Manufacturing.

I know you have proposed certain changes. Obviously, we heard from previous witnesses that if we make many changes, we would not be able to ratify the agreement, which obviously would have severe consequences for the Canadian economy and many businesses that do business with the United States. In general it would have a huge impact in terms of job losses and everything.

Can you speak to why it's important that we do ratify this agreement regardless of the changes that need to be made? How would your company and your workers benefit from this agreement's being ratified?

[Scott D. Smith]

We're in support of the trade agreement as it's presented in its various aspects.

We manufacture all of our products from steel and aluminum, so all of the issues we have with the tariffs on them really hurt us over the last couple of years. The other issue is with exporting our agricultural output besides our own products, but in general, we've seen the value and importance of a trade agreement.

Our urgency on our aspect of it with the copyright legislation is about having to have this exemption included. If it's not, this trade agreement doesn't matter at all to us in our communities.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you.

[The Chair, Liberal, Sherry Romanado]

We will begin the next round of questions with Sébastien Lemire.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

Thank you for joining us, Mr. Boivin. My first question is for you.

You talked about a study that mentions the consequences of putting on hold projects valued at $6.2 billion. Consequently, that translates to a disaster for the Saguenay—Lac-Saint-Jean region and the North Shore. Right?

I ask that you give short answers, as I have a number of questions.

[Roger Boivin]

Of course, but we mustn't forget that the aluminum industry's production is done on the North Shore, in Saguenay—Lac-Saint-Jean, in Donnacona, in the Bécancour region, as well as in Kitimat, but the processing—in other words, the smelting—is done everywhere. There are thousands of suppliers in Ontario and in Quebec. This industry is of national importance.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

The impact on SMEs is significant. Quite a political game surrounds the signature, and one of the things discussed is compensation for the industry. Of course, the industry is satisfied in that respect.

Are you worried that the money could simply be taken and then invested in Mexico to build plants to enable Chinese dumping?

[Roger Boivin]

That is another good observation, Mr. Lemire.

Indeed, the $1.3 billion in compensation has not been paid by the primary steel producers. It was not Algoma, Stelco or Rio Tinto who paid. SMEs in the processing sector have taken on the burden and invested $1.3 billion in steel and aluminum.

It would be indecent at the very least if the $1.3 billion, if it were spent again, were to come back to the aluminum giants, which have their own problems. As a government, you must absolutely ensure that the $1.3 billion would come back to the SMEs who paid it. Otherwise, the wrong individual would be compensated. It would be an aberration.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

So it is recognized that the situation is currently creating a tremendous amount of uncertainty.

As a result, how can we develop an industry like that of aluminum in the context of that uncertainty if no changes were made and the agreement was ratified as is?

[Roger Boivin]

The industry will adopt a defensive position. We will end up with a second or third-rate industry. It will not die, but it will decline. It will become an industry that is no longer competitive. We have an industry in offensive position that has invested a lot in the development of great projects.

This door must absolutely be closed, but not for legitimate aluminum production. We can compete with another country that sells aluminum at a legitimate price, but not with those that receive subsidies for aluminum production. This door that is opening toward Mexico is the straw that is breaking the camel's back.

That is why the industry is going to get back to us in 10 years. There will no longer be any major investments over the next 10 years, aside from investments related to productivity to remain in defensive position. Canada and Quebec need this industry. It is Quebec's second largest industry. It is a very big industry. It is in offensive position, I repeat, and it is developing strategies that perform very well on a global scale.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

It is an important industry in Quebec and in Canada.

[Roger Boivin]

Yes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

It is worth mentioning.

So there will be an opportunity to review in 10 years. Are there any immediate measures to be taken to try to salvage the free trade agreement?

[Roger Boivin]

Of course. They would involve the monitoring of dumping. The Mexicans are reticent when it comes to that, and we understand them, as it is not in their interest. The authorities must monitor any aluminum dumping and the entry of illegitimate aluminum—that which is not produced in North America. Traceability is required for that. That is what the aluminum industry representatives have asked for in their seven or eight points. They emphasized that. Along with the Americans and the Mexicans, we must monitor dumping and aluminum origin very closely.

On the other hand, as they said, and as the Conservatives and Bloc Québécois members are saying, the amazing value of our aluminum is its low carbon content. Our wood also has a low carbon content. We have to put forward more and more indirect measures in what I could refer to as our “Buy Canada Act”. I don't know what else to call it, but we need something that would enable the government, in its calls for tenders, as was saying the president of the Aluminum Association of Canada, to take into account the low carbon content of our aluminum and to promote that. We are currently selling our aluminum at the same price as the aluminum whose production, for each tonne, generates 18 tonnes of greenhouse gas. That's because there is no value attributed to that advantage of our aluminum. Therefore, measures must be implemented.

However, we do have brains. Let's think of the Department of Industry representatives. We are capable of developing quality measures that benefit not only Quebec and Canada, but the entire world. This industry produces less greenhouse gas emissions than any other. That is what everyone wants. We cannot let in aluminum whose production has generated, for each tonne, 18 tonnes of greenhouse gas. We will destroy the huge efforts people everywhere are making. It is costly for us to reduce our carbon footprint.

It is hard for me to believe that we will let our industry perish like this. I know that none of you want that, but we must absolutely all work together to find solutions, so that the industry can continue to produce this aluminum at a fair cost. What we are asking for is fairness. So there are direct measures to be taken.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I have one last question for you.

The industry's reaction was quite different from that of workers in your region, Saguenay—Lac-Saint-Jean.

What interests exactly do you think the industry is trying to protect?

[Roger Boivin]

You'd have to ask the industry people, but I'll try to answer.

It may be that the situation puts the industry in an awkward position. Rio Tinto Alcan's largest shareholder is Aluminum Corporation of China, which has made two hostile takeover bids for the company in the past. The Australian government blocked the bids, but 15% of Rio Tinto still belongs to Aluminum Corporation of China. As you know, Australia is the Canada of China. It supplies raw material to China. We think we have a complicated neighbour, but so does Australia.

There is no doubt that the industry is a bit uncomfortable with the whole thing. Rio Tinto is very closely linked to Chinese aluminum.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Boivin.

My last question is for Mr. Nantais.

Mr. Nantais, you talked a lot about the importance of signing the new agreement, but do you really think it's a big improvement over NAFTA?

[Mark Nantais]

Thank you very much for your question.

The progress lies in the fact that we've been able to preserve a three-country approach in the agreement. Without that, we will not be competitive as a bloc. Our supply chains won't be competitive if we don't have that, so, as I mentioned in my remarks, it's the consequences of not doing this that one really needs to be concerned about.

For our industry we need to have this in place. We need it for our competitiveness. We need it to keep the anchor assembly plants here in Canada and across North America. Without it, there will be no supply chain as well, so whether it's aluminum, steel or many of our parts makers, the agreement is really critical. But I will say this—

[The Chair, Liberal, Sherry Romanado]

Mr. Nantais, unfortunately, that's your time. Perhaps in the next round they'll ask you that same question.

[Mark Nantais]

Okay.

[The Chair, Liberal, Sherry Romanado]

The next round of questions is for Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Mr. Nantais, you can finish, and it was no pun intended when you said the bloc?