Evidence of meeting #125 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, Ocean Steel and Construction Ltd.
I think we should have been more selective about where we put it, and on the steel that was definitely not available in Canada and not being produced in Canada at that time, we should not have been putting duties on that material.
President and Chief Executive Officer, Aluminium Association of Canada
On the other aluminum side of things, we agree with the way it's been managed. It's been set up and managed by the government.
One thing is certain. For small and medium-sized businesses, the pain happens very early, and the remedy comes in always too slowly. It's a matter of managing things so that you can really support the small and medium-sized businesses that are strapped with cash payments and stuff like that. That's the tough part of things. But it seems that up to this point, it's working.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Okay, thank you.
Mr. Simard, through your association—
Liberal
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Are you able to help out the small to medium-sized businesses directly as an association?
President and Chief Executive Officer, Aluminium Association of Canada
We represent only the three large primary producers, but each of them is working with their customers through their client relationship to ensure that within that relationship, there's no additional pain that happens to the small businesses.
Liberal
The Chair Liberal Mark Eyking
Thank you, Mr. Simard.
We're going now to the NDP.
Madam Ramsey, you have the floor.
NDP
Tracey Ramsey NDP Essex, ON
Good morning, and thank you, everyone, for your testimony.
Unfortunately, it's not unique to what we're hearing here at the trade committee. We're essentially hearing the same story being repeated from small businesses that aren't able to navigate the red tape of the government's programs.
Last week we had finance officials here. They told us there have been 74 applications for duty drawback and relief. Only 36 have been approved, and the money isn't flowing. It's a very significant issue when we know they're collecting upwards of, I would say, half a billion dollars, by this point, in tariffs and surtaxes. We need to find a way for that money to reach you on the ground to support what you're going through because it is so drastic and extreme. It's something that we've spoken about at this committee pretty consistently. We're in an emergency situation in Canada.
There is a theme that keeps emerging around the LNG case. It's a bit mind-boggling, and you mentioned this, Mr. Wilson. We have a domestic steel and aluminum industry in Canada, but our steel industry in particular is being shut out of procurement projects and things that would see growth. We are favouring foreign steel, which just sounds on the surface to be something made up or unbelievable, but it's true. Even in the LNG case, we have Chinese fabrication that we know we have a case against—a found case of dumping—that we are now rewarding with this project in our country. It really is mind-boggling.
Understandably, we can't control what's happening south of the border right now, but we can control our domestic policy. I want to ask all of you what you think we can do right now in this eye of the storm to be strengthening and really protecting our domestic industry so that we don't continue to lose jobs throughout this tariff war that we're in.
Vice-President, Ocean Steel and Construction Ltd.
As I mentioned with LNG Canada, it's unfortunate. It's a large project. There are a lot of Canadian fabricators available capacity-wise that could provide it. We have provided the module steel from Saint John, New Brunswick, all the way to Alberta for modules for the oil industry. There's enough capacity in Canada to do it. The only reason they don't want to do it would be for price, because as part of the trade action, the Chinese were subject to, I think, a 46% tariff plus a $2,300 per tonne countervailing duty because they were found to be dumping steel into Canada.
We should enforce the duties that have been put there for good reason in order to keep fabrication jobs in Canada.
Director of Administration, Bohne Spring Industries Ltd.
I just think that the countermeasure tariff surtaxes should be eliminated altogether. I think they're too punitive and too arbitrary in some respects. I don't know how they were selected, but they seem very arbitrary. As I said, it's fairly penalizing and targeting specific industries, which is hurting our entire industry. I'm just one of 30 spring manufacturers in Canada that's affected by these tariffs.
President and Chief Executive Officer, Aluminium Association of Canada
From the aluminum industry's point of view, countermeasures are working. They probably have to be improved in terms of managing the situation. We have to remember that we're in uncharted territory in our industry. This has never happened before.
Government procurement is also a way to facilitate supporting businesses. As an example, we have to open up government procurement to aluminum all over Canada, both provincially and nationally. It's very hard for a metal like this to make its way because it's off the beaten path. For SMEs, we have to maintain the support to assist them in terms of cash flow through this situation. There's a lot of unpredictability for the big ones, but it's even more burdensome for the smaller ones. Market diversification is also very important, because we have to wean ourselves off this giant client that we've been nurturing for many years and which is becoming more and more volatile.
I must say that these are all sectors in which government intervention has been put in place. I'm not saying that it's 100% efficient, but there is movement on those aspects.
NDP
Tracey Ramsey NDP Essex, ON
I'm not going to have time for the other question, but thanks to all of you.
Gagan Sikand Mississauga—Streetsville, Lib.
Thank you, Mr. Chair.
My questions are for Mr. Simard.
I represent a riding that has a pretty strong footprint in aerospace. They're very concerned. They're hurting because the aluminum they require has to be of aerospace grade. Obviously, businesses only have so much recourse, and one recourse is that they're considering moving and relocating to where it's easier for them to manufacture.
Would it be possible for Canadians to move into that space? I know that we have high-quality aluminum, but do you think we can move into the space where we will be able to produce the aerospace grade?
President and Chief Executive Officer, Aluminium Association of Canada
Thank you for your question regarding the potential for Canada to move deeper into the aerospace field in terms of aluminum products. We are already a significant supplier of aerospace grade aluminum, both to the U.S. and to Canada.
These are niche markets and value-added products that are very specific and very specialized. You're talking sometimes about proprietary alloys that can be made in only one single plant in the world, which in our case is in Quebec, for a specific client. We're already there. Could we be there more importantly and more significantly? Certainly, and that brings us to the characteristics of Canada's market.
We're a very small country in terms of population. We don't have critical mass. There are parts of industrial markets that we don't cover because we're not big enough. The markets are elsewhere. Parts of those gaps are covered in those markets domestically, such as the U.S. That's why the temptation to move somewhere else to get the right cost for the product for the supply is very tempting at this point in time.
Mississauga—Streetsville, Lib.
Thank you for that.
Correct me if I'm wrong, but I believe the aluminum industry was pretty quick to react when we were going to renegotiate, and they built in what they assumed the tariffs would be quite early into their production. No?
October 23rd, 2018 / 12:15 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
Could you elaborate a bit? I don't understand the question.
Mississauga—Streetsville, Lib.
I believe that a lot of the manufacturers in Canada built in the price of what they assumed the tariff would be early on. I was wondering how close the tariffs ended up being to what was assumed.