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.
11:45 a.m.
Liberal
11:45 a.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair.
Thanks to all of you for being here. I have only four minutes, so I'll be relatively quick.
Mr. Dodds, you talked about three- or four-month lead times in ordering. Are you getting a non-section 232 price and a section 232 price? There is a saying out there that this is going to be resolved after the mid-terms relatively quickly.
11:45 a.m.
Vice-President, Commercial, Central Wire Industries
No. In fact, all of our product, our raw material supplied, is freight, duty and tariff extra.
11:45 a.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
We heard from a lot of manufacturers that they can't separate the surtax amount and the section 232 amount. It's just being lumped into the price. They can't really see, when they do their claims, what is duty or what is tariff or what is the actual price of the product.
11:45 a.m.
Vice-President, Commercial, Central Wire Industries
I don't necessarily understand that statement, but I can see where it might be confusing. For example, if I'm selling a product for $1 into the U.S. and the customer is going to pay 25% on top of that, he's actually paying 25% on $1.25, not on $1. What is the exact amount he's paying? Again, that was part of the process in the U.S.
I can see why some customers are confused, but no, on the raw material that we supply or that we buy, it's all extra.
11:45 a.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Okay.
Mr. Kirvan and Mr. Dodds—my friends from Burnaby can also weigh in on this—when you heard that a trade deal was done, that the USMCA was done, were you surprised that aluminum steel was not part of that deal?
11:50 a.m.
Vice-President, Product Management, Onward Manufacturing Company Ltd.
I'll say, for us, absolutely.
11:50 a.m.
Vice-President, Commercial, Central Wire Industries
We were not involved in the aluminum market. Really, I was focused on stainless steel rod, because that's what we buy, and stainless steel wire.
11:50 a.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Okay, but were you surprised that the trade deal was signed without that being resolved?
11:50 a.m.
Vice-President, Commercial, Central Wire Industries
I was surprised that the trade deal was signed and yet section 232 is still here.
11:50 a.m.
Conservative
11:50 a.m.
President, UBS Industries
Yes, we were surprised, but we're not trade gurus, so I don't know that we were in a position to have a strong opinion. We were very focused on section 232 and, yes, disappointed.
11:50 a.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Yes, exactly; I think a lot of people were disappointed. We talked to some 200 people right across Canada this summer, and they all had the perception you guys did, that we'll do a trade deal, this will be all done, and we can move on. We had a lot of manufacturers saying, “We can hold on for a little while longer.”
Are we past that point now? We have a trade deal. Mexico's incoming president has been out there saying publicly that he will not ratify the USMCA unless steel and aluminum tariffs are dealt with. What's your advice to the government at this point in time? What should we be saying?
11:50 a.m.
Vice-President, Commercial, Central Wire Industries
Well, I wish I had a magic cue ball.
11:50 a.m.
Voices
Oh, oh!
11:50 a.m.
Vice-President, Commercial, Central Wire Industries
Certainly, “unpredictability” is the best word to describe what's happened with our southern neighbours. I really don't know what to say. It has to go; it has to. Again, for our business, it has to go away.
As I said, in terms of our market, our customers and our suppliers, I've been in this business 20 years and our product has been one market: U.S. and Canada.
11:50 a.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Mr. Dodds, then, if the Canadian surtax part of that were gone, would that make it easier?
11:50 a.m.
Vice-President, Commercial, Central Wire Industries
No. It would, probably, for other companies, but not for us because, specifically, we started the remission process. Coincidentally, in the safeguard announcement, our raw material is excluded if we bring it from the U.S. I don't even need the remission process today. I now can get my material again from the U.S.
11:50 a.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Mr. Kirvan and Mr. Witzel, your business is actually the classic example of what we've seen out of a true free-trading economy, where if we had done this deal right we would have gained more efficiencies for you to compete in Europe. Instead, it's been done wrong, so now you're looking at this situation. How is this going to affect your manufacturing facilities and the flow of goods if this is not resolved soon?
If we go on for another year, do you see manufacturing being relocated from Canada to the U.S., or some of it relocated back to Canada? How does this affect that cross-flow?
11:50 a.m.
President, Onward Manufacturing Company Ltd.
The issue is where the manufacturing is going to go. Would it be from the U.S. to Canada or from the U.S. to China? That's what we're faced with. We have to make a decision. Colin's been to China 60 times. We do a lot of work in China, but we try to produce everything in North America, as much as possible. We have a great group of people in both of our plants in the U.S., and we have a fabulous group of people here in Waterloo, Ontario, whom we work with.
The instability is a big problem, but we're really hoping that Canada votes for more Broil King barbeques being made in Canada versus our running over to China and having them made there.
11:50 a.m.
Conservative
11:50 a.m.
President, Onward Manufacturing Company Ltd.
Yes, that's the problem. We're given an opportunity.
If I can just give you one second here, Kyle, I think you're incorrect on the bit about Trump's thinking that Canadian products are a national security threat. The concern is this. We met with all kinds of people. We met with four different senators. We met in the vice-president's office. We met with a senior person with the commerce department, and I gave testimony down in the U.S. a couple of months ago. It's not about Canadian products. It's about the U.S. keeping their steel industry in case they get into a war. If they don't have a steel industry, they have a big problem. We almost should be supporting it, in a way, because the U.S. supports us militarily, in a great way, and we should be thankful for that.
Now, it's not fun, the situation that we're going through, and it's very unsettling. Hopefully, I can clear up that misconception. I don't think it's true. That's what we learned when we were down there.
