Industry Committee on May 10th, 2022

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

In closing, I am interested in the idea of a summit. I would note however that it would have to include the provinces since labour is under their jurisdiction.

Thank you, Ms. O'Born.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Lemire.

We will move on to Mr. Masse, for six minutes.

You have the floor.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to our witnesses.

Mr. Naidu, I'm going to go to you first with regard to labour shortages at the border and your supply chain challenges and disruptions. Maybe you can highlight a bit the challenges we faced recently with the illegal border blockade and how that affected not only large industry, but also SMEs.

How important is it to have supports at the border to get into the American market? I don't think people realize that about 38% of Canada's trade goes through two kilometres in Windsor.

[Rakesh Naidu]

Thank you, MP Masse. It's great to see you here. Thanks for the question.

This supply chain is a very evolved, complex and highly integrated supply chain that we have in North America, specifically when it comes to the automotive industry. This has been built over a hundred years of work between collaborators, between companies that stretch on both sides of the border, between states and between provinces. This is not something that's been built overnight.

The importance of it was very clearly highlighted during the blockade we had. Every day, half a billion dollars' worth of goods crosses the Windsor-Essex border. For the goods crossing the bridge that was blocked, it's about $350 million. This blockade put at risk not just the companies in the Windsor-Essex region but also the companies on both sides of the border, businesses that supply to auto assembly operations not just in Canada but also in the U.S. and in many cases also outside of the North American continent.

The blockade was a major issue not just because of what it did for the current operations and the assembly operations, many of which were idled. There was also the message it was sending to our partners across the border, that if this were to continue, or if this were to happen again, it would be a time for them to look at sourcing some of the components locally and not really rely on Canadian businesses and Canadian supply chain partners. Hence, the risk was significantly more than just what the blockade resulted in, which was the immediate ceasing of operations at some of the assembly operations.

In terms of the supply chain, it is a well-known fact that a product before it's fully assembled in one of the assembly operations on either side of the border has travelled seven times between the border. That's the level of integration. There are many manufacturing companies on this side in Canada in the Windsor-Essex region and many on the other side. They collaborate and the parts get assembled. They get processed and then finally assembled in the vehicle assembly operations.

This is a very evolved supply chain. It justifies the amount of effort that goes into keeping the border open and ensuring that the Canadian economy is never put at risk. It's something that we're very proud Windsor-Essex plays an extremely important role in.

[Brian Masse, NDP, Windsor West, ON]

As well in our area, international students play a vital role, not only at our colleges and universities but also across this country. We've already heard testimony from a number of different witnesses about the challenge, and I guess the lack of progress, to get those individuals who are interested in remaining Canadian citizens into our labour market. Do you have any thoughts about that?

[Rakesh Naidu]

We have about 640,000 international students studying in Canada. Ontario attracts a significant number of them. Windsor-Essex is fortunate to have two great educational institutions that attract a huge number of international students.

While we do a great job of attracting them, we do a very poor job of retaining them. We make it very difficult for those who are here to find jobs. There are a limited number of hours that they can work. They have limited avenues to work. There are many other constraints. We also make it very difficult for them to find a path to residency. We basically force them to work for someone else, even though they may have an entrepreneurial streak in them and even though they may have the wherewithal and the means to start their business. We actually negate all of that and force them to work for someone else.

In the process, many regions like Windsor-Essex lose these students, because they tend to get jobs in larger metropolitan areas. We don't just lose them to employers and that; we lose them forever. That's the unfortunate part. A region like Windsor-Essex, which is having a huge demand for workers, doesn't end up benefiting at all, even though we attract quite a lot of students here.

[Brian Masse, NDP, Windsor West, ON]

There's been a noticeable trend with that, as even some of our traditional Canadians here are also being poached internationally. Some are working remotely, and there are other types of opportunities. It would seem that we need to have a counterstrategy to deal with that.

Do you have any thoughts on how the government can help with that or whether we should be looking at a counterstrategy? What I'm hearing from a lot of employers right now is that they're looking at other areas, more than ever before, including Canadians who could work from Canada but be employed internationally.

[Rakesh Naidu]

Yes, that's a great point.

Dana actually touched a bit upon this in terms of the digital nomad strategy, which is very important.

There's a growing number of gig workers in Canada, and I don't think we've created an environment in which they can actually be gainfully employed or that they can find an environment in which they can really carry out their business or their work in a place where they get paid fairly and have a good work experience. This is something that needs to be addressed. Plus there are a lot of employees here in Windsor-Essex who have moved to this region postpandemic because it's still a great place in terms of cost of living. They don't work in the Windsor-Essex area; they work across the border; they work in Toronto, and they work in other places, as far away as California.

We need to find a way to retain them and to attract more. The provinces and the states on the other side of the border are also doing their best to lure them.

So, yes, we need to have a strategy on how to retain them and create an environment that better suits them. We also need to find a way to bring the right kind of people and match the needs of the employers to the people who are coming in. One of the ways to do that is through the municipal nominee program that my chamber of commerce is spearheading here. That would be a very laser-focused approach to identifying the needs locally and filling the demands locally, rather than that being dealt with at the federal level where it could be hit and miss.

Those are some of the opportunities that I think we have not leveraged.

Then finally there are the temporary foreign workers. Again, we do a good job of bringing them here but the path to residency is very difficult for them. We end up not retaining a lot of them, and I think they have a lot of challenges while they're here in Canada.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Naidu and Mr. Masse.

We'll move to MP Kram for five minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair.

Thank you to all the witnesses for joining us today.

Mr. Boquist, from the Driving Change Automotive Group, you spoke about supply chain issues being a problem for your business. I can understand the supply chain issues that arose in the spring of 2020 at the beginning of the pandemic, but why are we seeing these problems lingering, and can you expand a little bit on that for us, please?

[Trevor Boquist]

Well, certainly computer chips seem to be the biggest challenge from a new vehicle stock and supply perspective. Today vehicles require many chips for all of the functions within an automobile, and those chips are in very short supply for many reasons, including where they're produced and the fact that one of the factories burnt down.

In North America we've been slow at being able to source that stuff here, and so we rely on other areas of the world for everything, and so that has dramatically slowed down the production of new vehicles. Today I received word that Ford Motor Company would be idling more plants starting on Monday.

So those things really impact us, and then the other side of that is parts. Parts are sourced, again, throughout the world and those parts roll in.

We saw a bit of a slowdown in accidents amongst vehicles when people stayed home for 90 days and didn't go anywhere, but as people have gone back to driving, those things have resumed, and so we're seeing a big impact in the auto collision sector in which we're unable to get parts to do repairs.

As you know, we're also seeing an impact on being able to get parts to repair and do servicing and things. That impacts companies. It impacts individuals when they're not able to get the vehicles repaired in a timely fashion or to put them back to work or to use them in their personal lives. So it's caused significant issues within the daily lives of Canadians and certainly within our industry.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay. Thank you very much, Mr. Boquist.

Mr. Chair, I'd like to share my time with Monsieur Généreux, so I'll hand things over to him.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

I would like to thank all the witnesses.

Mr. Ballingall, my brother Luc says hello and wishes you a happy birthday. He worked at your ski centre for seven years and my sister has a chalet there. I really understand what you are saying.

Two weeks ago, I went to Banff and Jasper and met some young people who had been there for two years. They were from Australia and elsewhere, from other countries and Canadian provinces. Younger people are of course more inclined to travel and more likely to work in situations like that or in western Canada. In contrast to what the industry said, they said it was relatively easy to get work permits with two-year temporary visas to come and work in the industry.

Would you agree that we should look at the possibility of increasing the duration beyond two years so they could stay longer?

[Michael J. Ballingall]

Hello. Thank you for your good wishes.

Hello to your brother as well. He's an outstanding service professional at our resort, to say the least. I know he's enjoying his time back in Quebec and on the farm.

I am proof of what a 10-year visa process can do for a family. I went over to Australia as an instructor on a working holiday visa, and I grew to like it so much that I increased my credentials, went back and forth for a number of years and became a permanent resident of Australia. I met my wife there and had two kids there. When the family that owned the Big White Ski Resort became Canadians, the father retired and the son took over, and he invited me to come back in 1995.

Since that time, visa workers and young people on working holidays only have two years with us. They used to have a longer period of time. With Canada being what it is, they worked in the mountains, they worked in Ontario and they worked in the sugar shacks of Quebec. They travelled around the country, because they had a visa that could take them back and forth. They fell in love and, whether they moved to their home country or stayed here, there are thousands of examples of this.

When you only have a two-year restriction, the visa holder still wants to travel. They're not going to stay in your sector or with your company—in our case—for more than one season. They're going to move on and go to our competitors and competitor companies, take that great training from Canada that the Canadian industry is known for and use it to benefit that other country.

I agree with your comment. I don't 100% agree with the people who you ran into. It was terrible to get a visa to come to work in Canada up until six weeks ago. It took anywhere between three and four months, and was sometimes as much as eight months. We simply missed the opportunity for the last two years; when people could travel, they couldn't get their visa in time to make their entry. Now it's getting better.

We understand what's going on in Afghanistan. We understand what's going on in Ukraine. We understand that the immigration department is overloaded and that it takes people to process these things. What we're saying is that you have a respected industry that is with you on this that knows the process. Give us a chance to help you process. We think, with the extension of the visas and the visa time allotments, we could help solve this crisis immediately.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Ballingall.

Unfortunately, your time is up.

Mr. Gaheer has the floor for five minutes.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Chair.

Thank you to all the witnesses for making the time today.

My first question is for Mr. Kotak. Thank you for making time for the committee. You spoke about social media and cybersecurity. I come from a family that also owns a small business. It didn't utilize social media, but it kept a lot of its information online—actually, it was all of the data, like sales and purchasing. One of my family members is computer savvy, so he was able to protect that data.

What options do small businesses have in relation to the data that they keep online, and cybersecurity in general?

[Ritesh Kotak]

That's a very interesting question, because we have to first understand what type of data is generated by these businesses.

Let's look at a business as a whole. Most of us might think of social media or we might think of online sales, but it's a lot more than that. You have employee records, you have information relating to your intellectual property, you have documents and you have finance-related information. If you're in the health care sector, you have health-related information. All of that information has to be stored somewhere, and the big issue, especially when it comes to small businesses, is whether they have adequate protections in place or whether they are aware of adequate protections to ensure that customer, employee and financial data are being protected and secured.

The best way to think about this is that it's not just a check box exercise, and this is what adds to the layers of complexity. I like to use this example. All of us have smart phones and we go into the app store, whether it's the Google Play store or the App Store on the iPhone, and you get the updates for all of these apps. You think to yourself, are these new features? No, nine times out of 10, they're security updates.

It goes to show that it's such a dynamic situation, and if you don't stay up to date, you're vulnerable. Security, cybersecurity in particular, cannot be a check box exercise. It must be continual and, in order for it to be continual, it requires investment.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you.

You mentioned a small business hub. What role could that play in cybersecurity?

[Ritesh Kotak]

Think about the red tape and the complexities that small business owners have to go through. Let's just take an independent farm. I was surprised to know that there are over 1,000 registered independent farms in the Ottawa region alone. These farms produce products. They might, for example, grow their own berries and make jam. This jam now need to be sold somewhere. It's not as simple as just taking an item and putting it online or going and selling it. There's a lot of complexity. For example, there are labelling-related issues, business registration, insurance and shipping.

I think we've all gone through this. We go to purchase something online and when we get to the checkout, it says that shipping is now $30 or $40 and so we exit the shopping cart. In comparison, when you get to a checkout at a big box organization, there will be free shipping or it's five dollars. How can small businesses actually compete?

This is where I think the small business hub becomes essential. It becomes a one-stop shop where small businesses and entrepreneurs can actually go and access experts, whether it be the Canadian Food Inspection Agency on labelling requirements, Canada Post on shipping requirements or other public-private partnership organizations that are there to help small businesses succeed, instead of what it is right now. Right now it is a reactive enforcement model, compared to a proactive support model.

I think that's where that small business hub becomes extremely important.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you.

Mr. Chair, do I have time?

[The Chair, Liberal, Joël Lightbound]

You're almost out. You have 30 seconds.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Lemire has the floor now for two and a half minutes.

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

Thank you, Mr. Chair.

My question is for Mr. Boquist and pertains to regulated markets.

Allow me to quote Daniel Breton, from Electric Mobility Canada:

If you look at the way things are unfolding around the world, the main markets for electric vehicle sales are regulated markets. Canada is unregulated, and in the third quarter of 2021, the percentage of sales of fully electric or plug-in hybrid vehicles was 5.4%. Let's look at the sales of electric vehicles in November or December in Europe and China. In China, the percentage was about 20%, in Germany it was over 30% and in Norway it was 90%.

In all countries with a regulated electric vehicle market, there has been an increase in electric vehicles. Have car dealerships looked at the ecosystem in which the market is developing, a very lucrative market? Will they pressure the government to impose additional regulations and offer more subsidies to enable you to increase your productivity among dealerships?

[Trevor Boquist]

I'm not sure I fully understand your question. I believe you're saying that Canada should regulate electric vehicle sales and that would lead to a higher adoption.

Is that what you are basically saying?