Evidence of meeting #126 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 customers.
A recording is available from Parliament.
12:30 p.m.
Mississauga—Streetsville, Lib.
What I was getting at was whether we can get this aluminum everywhere. Can we find it in Canada and the States, or does this mainly come from the States for us?
12:30 p.m.
President, Beer Canada
You can absolutely get aluminum for beer cans here as well, and we do ship aluminum sheet metal into the United States. It gets hit with the tariff and then we process it into cans in the U.S. and then it comes into Canada. With the countermeasure tariff that was on, we were actually getting hit twice with the aluminum going into the States, being processed into cans and then being hit with a Canadian tariff. Now that is off, it's a big help to our industry and our competitiveness, for sure.
12:30 p.m.
Mississauga—Streetsville, Lib.
You have to excuse me, this isn't my committee, but there is an acronym, and I forget if it was ACC or AAA, but there was a summit in Montreal in June last year. Does that affect the beer industry at all? It was addressing aluminum.
12:30 p.m.
Mississauga—Streetsville, Lib.
Okay, no problem.
Moving over to Dave, I guess I still have the same question. What's the level of impact that harmonization has on your industry, having to be harmonized with the States?
12:30 p.m.
Vice-President, Ellwood Specialty Metals
Being a U.S. company, we figured we were probably kind of safe. We always touted it as that, but the fact that we've gotten into some little bit of trade wars here is huge, more so just on the Canadian side. Again, I started 15 years ago and the whole reason that Ellwood brought a distribution to Canada was to help the Canadians get a more direct pricing—take another distribution out of the middleman to be able to make us more competitive here in Canada and make our Canadian toolmakers and mould-makers here more competitive as well. Since that's happened, it's really shut things down.
12:30 p.m.
Mississauga—Streetsville, Lib.
You were mentioning that you have a lot of specialty products, some that only can be made here in Canada. If we look toward the rest of the world, what's the impact of different standards? For example, I'm thinking that if we have appliances made here and we have to think about the voltage in Europe being double, how does that different standardization affect your industry?
12:30 p.m.
Vice-President, Ellwood Specialty Metals
I struggle a bit to answer that. With the OEMs, everybody has to go through an approval process. Whether it's a Canadian, U.S. or European manufacturer, all have to go through that process. The biggest part is becoming very competitive in the small market-type segment of building those specialty alloys.
12:30 p.m.
Liberal
The Chair Liberal Mark Eyking
You're all good. Okay.
We're going to move over to the NDP. Go ahead, Ms. Trudel.
12:30 p.m.
NDP
Karine Trudel NDP Jonquière, QC
Thank you for being here.
I want to answer my colleague's question. I'm proud to say that there are five aluminum smelters in my constituency, Jonquière, in Quebec. We produce aluminum sheets, which are used to make cans, including beer and soft drink cans. The aluminum is produced in Quebec, and we take great pride in that fact.
Mr. Harford, I want to start with you. According to the press release that you provided, the industry directly employed 14,800 workers. Have there been any job losses as a result of the imposition of tariffs? There has been a great deal of discussion regarding the price of cans and beer. I want to know whether this has had a direct impact on job losses in the industry.
12:35 p.m.
President, Beer Canada
The distance between the time that the countermeasure tariffs came in and the time that there was relief.... There was a remission process put in place almost immediately, and an application process was made available to us. On October 11, the countermeasure tariffs were essentially removed for an indefinite period. I do not think that there was any negative impact as a result of the tariffs put in place from the countermeasure tariffs. I think that, over time, there could be an adjustment made if tariff relief from the U.S. is not secured. That adjustment could be a change in packaging configurations, as much that can happen.
To answer the question, it was too short a period of time. Relief was brought in quickly, and we have not seen a negative impact from a jobs perspective.
12:35 p.m.
NDP
Karine Trudel NDP Jonquière, QC
In light of what Mr. Harford just said, I also want to ask all three of you two questions.
The first concerns the impact of the tariffs. If the situation continues, are you worried about job losses in the industry? Is this a major concern that you need to address?
Second, what should the government be proposing to get the industry through this period? We know that there was a rebate program for the tariffs. However, what more could the government do, in particular to maintain jobs and support industries in Canada?
12:35 p.m.
Chief Executive Officer, St. Thomas Economic Development Corporation
In St. Thomas, it's safe to say that we haven't seen any significant job losses yet as a result of trade barriers or tariffs. In fact, we're seeing record numbers of companies hiring people, trying to find people and having challenges doing so. But we've all seen how fast that can change.
If this continues to go on and companies' profit margins continue to shrink, I think it's fairly safe to say that we will lose some of our companies, particularly the U.S.-based companies located in our region, not just in St. Thomas. I think we'll see a shift in those businesses back to the U.S. Some of them don't have to be in Canada. Some of them are shipping only to the U.S. and are in Canada for various reasons. Certainly, from an economic development standpoint and from a community standpoint, we need those businesses to stay. I think it's fairly safe to say we would see layoffs in the future if it continues the way it is today.
As far as a solution goes, unfortunately I don't have a solution or an answer. Everyone wants to see the eradication of tariffs, but I'm not sure that's up to us.
12:35 p.m.
Vice-President, Ellwood Specialty Metals
For us in Windsor, it's a tricky situation because we are seeing two things. We are seeing that programs are being lost from [Technical difficulty—Editor] and placed back into the U.S., but we are seeing a little bit of slowing in the industry itself. We've had a fairly good run in the auto industry, for probably seven years plus. I think that's probably pushing the slowdown a little bit and we are seeing some of the younger folks, who are in the early parts of their trades, being laid off.
Probably the only reason I actually see this is that we've been fighting for employees down in Windsor. There is a very low unemployment rate and we've been fighting to get employees. We're now starting to see some people knocking on our door and we're picking up some young people. But, again, if it carries on, we really worry about it affecting the auto industry and slowing it further and possibly causing layoffs.
12:35 p.m.
Liberal
The Chair Liberal Mark Eyking
Thank you. That wraps up the time. There have been good questions and good dialogue.
We have room for one more MP.
Madam Ludwig, you have the floor.
12:35 p.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Thank you. I'm splitting my time with Mr. Sheehan. I'm going to direct my questions to Mr. Harford. Actually last week in the Financial Post I read about the changes, the remission of the 10%. My questions are actually specifically about that.
Could you speak to how the consultation process worked to basically remove the 10% tariff?
As well, is there an opportunity—you must have some very happy beer drinkers in Canada right now—with the 473-millilitre tall cans through innovation through SIF? I don't know if you've had an opportunity to speak with the aluminum can producers in Canada and whether they are able to apply for funding or they are looking to apply for funding on the innovation side so they can retrofit and actually produce more of the 473-millilitre cans here. Was there an increase in your smaller can, the 355-millilitre can?
12:40 p.m.
President, Beer Canada
The consultation process was robust. Knowing that this was going to touch virtually every Canadian brewer across the country—and in particular a lot of small brewers who package only in cans—we took an approach really to get brewers to engage directly with the government through the consultation process. Then as an association, we put together the big number on what the impact was.
As for your second question, on what I have tried to do, I don't work directly with suppliers other than malt and barley growers and the bottle manufacturers, because we have a shared bottle in the country. Can manufacturing being somewhat new, I have now oriented myself around that group and I've been able to explain to them and direct them to some of the opportunities that the government has made available to make investments here in Canada that would further secure our supply going forward. I've connected people that way, but I'm not lobbying in that direction.
12:40 p.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Just on the last one, if you need any more information, we have experts here, and we can certainly follow up with you with more resources.
Thank you.
Terry.
12:40 p.m.
Sault Ste. Marie, Lib.
Thank you. I'm going to pick up on the conversation started by MP Trudel and Mr. Dyke. I'm glad to see you again. I didn't put your name forward but I'm glad to see you here. We did our EDAC certification, the economic development certification, at the University of Waterloo many years ago.
When they put forward the $2 billion in relief, there was $50 million specifically set aside for businesses to diversify their networks and to take a look at the advantages for the new trade agreements with Europe. We have our European friends in the background, and also there is the comprehensive trade agreement that was just recently passed.
How critical is that for Canada to do, with the economic developer's hat on?
12:40 p.m.
Chief Executive Officer, St. Thomas Economic Development Corporation
It's absolutely critical. We do have to diversify, to get out of dealing with just the U.S. Beyond that there is still a lot of uncertainty around the trade agreements that exist currently with Europe and with what's going on with Asia as well with some of the work that's being done there.
For us, we're working with some of our local businesses now as they look to expand their business into Europe, and they are looking to, in some ways, avoid the U.S. and are trying to deal explicitly with Europe. Obviously trade agreements that are happening there are certainly useful to those businesses, but I still think there is a lot of information missing for the general population and even for us, with regard to economic development and being able to share that story.
12:40 p.m.
Sault Ste. Marie, Lib.
That's very good.
For you, Dave, you said you were in the process of going through remissions. Where are you at with that, and how has that process been going for you so far? What advantages will come about once they are approved?
12:40 p.m.
Vice-President, Ellwood Specialty Metals
As for the remissions, we belong to various Canadian associations: the CAMM association, CTMA and others. We've been working very closely with them. The remissions have already been applied to part of our products—maybe about one-third to about one-half of our products. We're here to be able to get the rest of our products on those remissions so that we can hang on a little longer. They're made with the same processes as the ones that are already provided with remissions.
We have our remissions applications ready alongside us at our meeting here, so we hope they'll be considered. It will really help us to move forward and to be able to help our Canadian customers here, especially in southwestern Ontario. We do have people as far as Quebec who have some very large mould-makers as well.
12:45 p.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, all.
Mr. Sheehan, that's it for your time. I know you had lots of questions, but it was split time, and we're out of time.
That's it for the dialogue with the MPs. That ends this session.
Thank you, witnesses for coming. You support a lot of employees in challenging times. We'll work at it and continue on. Good luck.
We're going to break for a minute and clear the room because we have some in-house business.
[Proceedings continue in camera]