Evidence of meeting #120 for International Trade in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
Vice-President, Institutional Relations Canada, Tenaris
Yes. I'm vice-chair of the CME.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
That's what I thought you said.
Going back to Ms. Coulter's comment about being busy on a day-to-day level, how do we get more information to firms like Ms. Coulter's?
Vice-President, Institutional Relations Canada, Tenaris
It's an extremely common challenge. That's where these business associations do such a good job by sharing out briefings. There is an economist on staff. There are people who can come out to sites in order to help with these things.
In particular, there are public consultations. The association sent out the forms to the members to try to help them navigate the system. It is tough, though. I completely understand. I've heard her story from many people. It's a challenge.
Liberal
The Chair Liberal Mark Eyking
Thank you, Ms. Ludwig.
That ends the first round. We have about 12 minutes, so I think we're going to three four-minute sessions.
We're going to begin with Mr. Fonseca, for four minutes. Go ahead.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Thank you, Chair.
Let me commend our witnesses, both for your resilience in this climate we're in right now, as well as just for the jobs you create, the investments you make and the big risks you take. I heard from all of you, and my understanding was that you saw the new USMCA as a major step towards getting back to normalizing and bringing stability to the market, and now getting to work on eliminating these tariffs. I thank you for that.
You know, we have great projects ahead. We have a lot of infrastructure that needs to be built. We heard from Mr. McHattie about LNG. Just the announcement that's being made today is for a project worth $40 billion, which is tremendous for our country. There's the pipeline that we have to get built. Because of that, we need our steel and aluminum industry at their best. Also, on the USMCA and looking at trade, it was good to see that we had labour groups, contractors and big and small business, and everybody was onside for moving forward.
I would like to hear from you in terms of addressing the dumping of steel that we've heard so much about at this committee. What more can be done? What are some of the steps the government could take to address dumping? We know Canadians play by the rules. We're fair traders, and we want to ensure that everybody else is playing by those same rules and we have a level playing field.
I'll start with Mr. McHattie.
Vice-President, Institutional Relations Canada, Tenaris
I'll try to be quite short, because the Steel Producers Association has an updated brief we could share. Again, we need more transparency and more speed, and it's a continuous challenge to make sure that the normal values are reflective of what they should be. If they become stale, those who have already been found to be dumping just fill in the holes. We've proposed some measures, but it would take almost 20 minutes to go into all the details. We would be happy to share our memo with the committee.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Thank you so much.
Mr. Ghosh or Ms. Devoni, would either of you like to add to that?
President and Chief Executive Officer, Essar Steel Algoma Inc.
We are happy with what the government has done, but we need the safeguard and a resolution to section 232 as a tariff going away or having a product-wise, company-wise quota coming in immediately. That would be helpful.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Mr. Ghosh, when you were speaking about the quotas and you brought up that example where you only have so much quota and you have to get it in so fast and how that would not work for us. We have a just-in-time and the way our supply chain is set up it would not be manageable.
What would you like to add to that? What would you like to put on the table that we can take to the business community, to our stakeholders, to our minister and the ministry, who would all like to hear from you about how that is just not manageable? I'm sure the people at the table would realize this as soon as they started looking at how our business works as an integrated supply chain.
President and Chief Executive Officer, Essar Steel Algoma Inc.
I can only say that quotas that are not company-wise and product-wise can work with countries that supply commodity products, or plain vanilla products, to the U.S. like South Korea, where the quantities are very small.
In the case of Canada, we have contracts, one-year contracts with auto companies in the U.S. You cannot suddenly in the month of September say your quota is over. You need to plan for the whole year. The company needs to know. The customer needs to know. You cannot have a free-for-all system. It has to be product-wise, and it has to be company-wise.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
We'll bring that back to our manufacturers so they know that.
Liberal
The Chair Liberal Mark Eyking
Thank you, Mr. Fonseca.
We're going to go to the Conservatives now. I think Mr. Albrecht is starting off.
You have the floor, sir.
Harold Albrecht Kitchener—Conestoga, CPC
Thank you, Mr. Chair, and thanks for your welcome to the committee.
I am not a regular member of the committee, so I don't have the background of previous witnesses that my colleagues have. However, I have reached out to people in my local area, to the business community, the small and medium-sized enterprises there, and I actually had Mr. Allison come to my riding to conduct a round table.
One of the primary concerns that my SMEs have is with the lack of communication. They know about section 232, but they don't know anything about the exemptions. There's nowhere to find this information easily. Another person said there's no communication on what's going on with this big $2-billion announcement that was made to support the steel and aluminum industry. There was an announcement made in June. None of my SMEs, even after trying, were able to access this information.
If you've just said today that you've only begun to apply, it sounds to me like there's a big gap there. Mr. McHattie refers to the good communication that's gone on in dialogue and in trying to find a space, but I'm not sure that the same kind of dialogue has happened with our SMEs. I'm happy for the large employers, believe me, but I'm concerned that the SMEs, which are largely responsible for job creation in this country, are the ones that are really struggling right now. In fact, some of them are considering moving out of the jurisdiction, out of Canada, because there's less red tape and less complications in other areas.
I'm wondering if you could respond. Why, after three full months, are you only now starting to apply for this relief? If you're experiencing that time lag, how would an SME, which doesn't have the staff a large company has, be able to navigate that quagmire?
Ms. Coulter, you may want to respond to that as well from your perspective of the difficulties involved. In my area, I have not had one SME that has known anything about how to actually access the funding that's supposedly available.
President and Chief Executive Officer, Essar Steel Algoma Inc.
Of course, communication is a two-way process. It's not one way. To that extent, I cannot comment about the effectiveness of it. What I can say is that companies like us have been able to communicate well with the government.
Coming out in June and doing it in September when we did it, whether that's long or not, I cannot say. This is something on which I will not be able to comment. That being said, you're right that SMEs have not got.... I also heard the same thing, but I suppose, as the other witness was saying, that small companies may not have the wherewithal to communicate. Maybe that's the reason.
Vice-President, Institutional Relations Canada, Tenaris
I would just like to point out that we should keep this in context. The process for remission from the retaliatory duties to the United States has been very simple and very straightforward. I know many people who have applied. The result isn't there yet, but it's completely different from in other jurisdictions. This one, I think, was well thought out and well done.
In terms of business association, I know that large companies are employing the suppliers—smaller companies—so if we're healthy, they are also going to be healthy. We help each other. I would say that, in general, where the steel industry has not been able to produce a product, we've helped small customers of steel with their submissions to obtain a remission. I think this process is working very well here, better than in many places, and I hope—
Kitchener—Conestoga, CPC
I just wanted to have another opinion from Ms. Coulter.
Liberal
President, GGS Structures Inc.
I'll very quickly respond, then.
I don't really think that it's totally the government's responsibility. As has been said before, it is a two-way process. In terms of communication, CME does an excellent job. If you have manufacturers that aren't part of CME, I'll give them a good plug there and suggest that they do that.
Quite frankly, the problem is that I might get the document, but I don't have the time to thoroughly look at it, or I scan it and I don't think it applies to me, so I don't spend the time digging in because there are better uses of my limited resources. I think that's more the problem.
Liberal
The Chair Liberal Mark Eyking
Thank you.
We're going to go over to the Liberals for four minutes.
Mr. Peterson.
October 2nd, 2018 / 11:50 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I'm going to split my time with Mr. Dhaliwal.
I just have a quick question for anyone who might have an answer. If these section 232 tariffs were put on the auto industry, what effect would that have on your businesses?
President and Chief Executive Officer, Essar Steel Algoma Inc.
As I said, auto is big part of our total customer base. If the volumes of auto come down, it will affect us.
Canadian manufacturing has shrunk over the last 10 to 15 years, so that's not a question. Auto shrinking will have a really devastating effect on us. To that extent, I feel the USMCA, at least the expansion possibility that has come in, will definitely be helpful. Finally, I would say that section 232 tariffs in some form need to be solved because this can't continue too long.
Vice-President, Institutional Relations Canada, Tenaris
The side letter on 232 provides roughly a 40% growth opportunity for Canada's auto industry, so if it were able to fill that in, it would be good for the steel industry.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I think it's an opportunity. Magna International is in my riding, so I know they're excited about it too. We look forward to it.
Anyway, Mr. Dhaliwal, you have a couple of minutes.