Thank you.
Good morning, Mr. Chairman and members of the Standing Committee on International Trade. My name is Colin Kirvan. I am the vice-president of product management at Onward Manufacturing Company. I'm joined today by our president, Terry Witzel.
Onward is a third-generation, Canadian-owned company in the Waterloo region since 1906. At our Waterloo facility and at our U.S. facilities in Indiana and Tennessee, we manufacture high-quality gas barbecues sold under the Broil King brand. Currently, we directly employ approximately 475 people in Waterloo and support significantly more jobs in Canada. These are well-paying, value-added jobs.
Although other companies manufacture barbecues in Canada and the U.S., our company's extensive vertical integration sets us apart. Other well-known Canadian and U.S. companies import a significant percentage of their finished products from China, or import major components that then are assembled into finished barbecues here. Our company operations are different. Our barbecues are manufactured in North America by our skilled North American workforce, with quality North American steel. In Waterloo, we source Canadian steel where possible and make every effort to support our Canadian suppliers.
Since 2008, our company has invested significantly in its North American footprint, leveraging NAFTA to build a truly global business. Today, we ship our Canadian-made barbecues to over 40 countries around the world. Between 2008 and 2017, Onward has more than doubled its production and sales, with significant growth in both the U.S. and Europe, yet Onward's continued growth and viability are under duress. The pressure is twofold: trade tensions and tariffs, and China's unfair trade practices.
Current Canada-U.S. tariffs are driving up prices of our inputs in North America and threatening our supply chain. The pressure heightened when the U.S. imposed a 25% tariff on steel and a 10% tariff on aluminum under section 232. Things were made worse when the EU and Canada responded with retaliatory tariffs.
Our steel costs are up nearly 18% this year alone. That is a substantial increase that our competitors, who use of Chinese steel and process finished goods or parts in China, do not contend with. In this climate, it is difficult for a vertically integrated Canadian company with substantial steel inputs to compete.
I'll turn here to my second pressure: China's ongoing trade advantage. By subsidizing its steel industry, China gains a huge trade advantage, one that has decimated North American barbecue grill production. We have seen numerous companies fold or move production to China over the past 15 years.
China's subsidized steel and manipulated currency enables the Chinese to export finished goods around the world at lower than fair market value. Canada's 8% tariff on Chinese barbecues is insufficient to address these unfair trade practices. A more robust tariff of 25% would help level the playing field and fit with Canada's policy of ensuring that social, environmental and labour rights are enshrined in our trading relationships. When China starts trading fairly, the tariffs can be eased. Unless we take action to protect Canadian steel processors, the local consumers of Canadian steel, they will eventually move to China.
Finally, I'll point briefly to how we can leverage this volatile trading arrangement. Due to the recent 25% tariff the EU has placed on U.S.-made barbecues, Canada and China are presented with an opportunity. Our preferred option is to move this production to Canada; however, the China option is far less capital intensive and more cost effective. However, with the support of the Canadian government, we could leverage the made-in-Canada brand and grow our Waterloo operations in order to supply the growing EU market and create 200-plus direct Canadian jobs.
This is a real opportunity for Canada to support companies such as ours to scale up and grow jobs and exports here at home, by keeping material costs competitive and spreading funding directed to steel producers downstream to steel processors.
In conclusion, we would urge the committee to recommend the elimination of retaliatory tariffs and to not impose further tariffs on imported steel; to recommend action to level the playing field for Canadian-made products, namely an increase of the 8% tariff on Chinese-made barbecues to 25%; and to recommend action to support small and medium-sized downstream steel processors to grow Canadian jobs and exports.
Thank you very much. We'd be happy to answer any questions you have.