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.

On the agenda

MPs speaking

Also speaking

Andrew Mindell  President, UBS Industries
Colin Kirvan  Vice-President, Product Management, Onward Manufacturing Company Ltd.
Thomas Dodds  Vice-President, Commercial, Central Wire Industries
Terry Sheehan  Sault Ste. Marie, Lib.
Alice Wong  Richmond Centre, CPC
Jim Kerr  General Manager, UBS Industries
Terry Witzel  President, Onward Manufacturing Company Ltd.
Sean Dyke  Chief Executive Officer, St. Thomas Economic Development Corporation
Dave Heath  Vice-President, Ellwood Specialty Metals
Luke Harford  President, Beer Canada
Gagan Sikand  Mississauga—Streetsville, Lib.

11:25 a.m.

Conservative

Colin Carrie Conservative Oshawa, ON

Thank you very much, Alice.

I wanted to say to Colin that I have a Broil King as well, although it doesn't burn as many things as our chair does.

11:25 a.m.

Voices

Oh, oh!

11:25 a.m.

Conservative

Colin Carrie Conservative Oshawa, ON

You made a comment in your opening statement that I'm curious to follow up on. You said, “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.”

What kind of government support are you talking about there?

11:25 a.m.

Vice-President, Product Management, Onward Manufacturing Company Ltd.

Colin Kirvan

We're looking at a couple of different things.

First, to back up a little bit so that you understand, our facilities are in Tennessee and Indiana. We make die-cast aluminum ovens. We have seven die-cast cells in Tennessee. Those components would flow to our Canadian facility and also to our U.S. facilities. Likewise, in Waterloo we make injection-moulded components that we would then supply to our U.S. facilities. In a lot of ways, then, our NAFTA footprint is quite strong. We're able to move parts very economically and get them to the right place when you need them.

To me, that is the first piece. We have an issue at the moment where we're captured in that 10% retaliatory tariff. We have components coming that we need for production in Ontario to be able to ship in Canada and all over the world, and we're now getting hit with a tariff on them. Those would be cast aluminum ovens, shelves, you name it—whatever those components happen to be that are coming from those particular facilities. Right out of the gate we want to deal with those issues that are now impeding our ability to compete.

The second issue is around how we then capitalize on that opportunity for Europe. When we looked at it, we said there was a strong opportunity to open up that market with increased capacity in our Waterloo facility. We need about 90,000 square feet to accomplish that. We physically don't have the footprint today to be able to run that product economically through the plant, and we want to make that investment here.

At the moment, for every barbeque we're shipping through our U.S. facility, going to Europe, we're trying to hold our pricing so that our customers can maintain those retail price points and we can compete. We're dealing with the likes of Weber, who's doing a significant amount of their product offshore. They're competing with us in that market space, so we have to hold those price points. The goal is to move that production where it's targeted for European Union customers into Canada, leverage CETA and be able to supply that product from Canada to Europe.

I hope that answers it.

11:25 a.m.

Liberal

The Chair Liberal Mark Eyking

Thank you, Mr. Carrie.

We'll go to the Liberals for five minutes.

Mr. Sheehan, you have the floor.

11:25 a.m.

Sault Ste. Marie, Lib.

Terry Sheehan

Thank you very much.

I'm the member for Sault Ste. Marie, where we have two large steel producers but a lot of small and medium-sized steel producers as well. We have Algoma steel. We have Tenaris tubes. We have a number of small and medium-sized steel producers. We've become sort of a centre of excellence for steel, and in many ways they're affected by the tariffs, these punitive and unfair tariffs. Some of the steel producers are importing steel. It's just the way the integration of the steel market happened. They're affected in many of the ways you're sharing with us and past people have as well. The big ones are affected too, as you know.

I had the pleasure of being co-chair of the all-party steel caucus. At this committee we're hearing about, through those channels, the challenges that the different organizations and businesses are having. In response to these unfair tariffs, $2 billion in aid was announced to help businesses deal with these unfair tariffs and section 232.

First, to the folks from B.C., perhaps you could expand on and share with us your advice on how you were able to access this very quickly and get the ball rolling. I think that would be important to hear, so perhaps you'd like to share your story about that—about your best practices and how you did that.

11:25 a.m.

President, UBS Industries

Andrew Mindell

I would just say that we followed the advice we heard and we followed it to a T. When we were told to fill out an application, we filled it out as we were asked to fill it out. We were persistent in our following up. We just stayed on it. It was the biggest issue in our business, so we were on top of it. We didn't try to plead a case that wasn't being asked to be pleaded. We answered the questions that were asked. We followed up with people, as you would in business. I would say that we were successful in having a....

Our case was unique and we quickly realized that it was unique. The product was not available in Canada. It was only available in the United States. It was highlighted that this was one of the things the government was looking at.

That was really all we did.

11:30 a.m.

General Manager, UBS Industries

Jim Kerr

We encouraged our customers to support the cause as well.

11:30 a.m.

President, UBS Industries

Andrew Mindell

Yes. We had many customers who applied alongside us. We don't have a trade group or a trade organization. We're a small industry. However, they certainly supported us, and we welcomed the government to probe us where necessary, as opposed to going unprobed, to make a decision. We wanted to give full disclosure and answer any questions that those individuals had.

11:30 a.m.

Sault Ste. Marie, Lib.

Terry Sheehan

Thank you very much.

My next question is for Thomas Dodds.

Beyond the $2 billion in support, there was also the announcement of safeguards. Could you please share with the committee why that's important for a producer like you that produces with the stainless steel rods? I believe those were included in the safeguarding.

11:30 a.m.

Vice-President, Commercial, Central Wire Industries

Thomas Dodds

Absolutely. I might even touch a little bit back on your question to our friends in British Columbia because Central Wire produces stainless steel wire from stainless steel rods. There are no stainless steel rod producers in Canada. Our primary partners are in the U.S. Our market, our customers, our competitors and our vendors have, for my 20 years in the business, looked at it as one market.

One of the first things that we did, similar to our friends in British Columbia, was file with the remission process, and that does help us on some of our input. With regard to our friends here from Waterloo, I think their next challenge now is to get the product that they make into the U.S. to compete against some of the imports and the pricing. That's where we're at. That's where the safeguard.... We were included in the initial seven products of the safeguard announcement, so we're kind of all in different stages of the process. To this point, I have to say that we're pretty excited that it's working and that the Canadian government is listening.

We have done the remission process. We are partly involved now in the safeguard process. We looked at the funds that were available through our CFO. I spent the better part of yesterday filling out many forms and questionnaires for the safeguard.

That's really where we are in the process. Again, if section 232 went away today, that would be a win for Central Wire. If the safeguard proves out after 200 days and stays in place, that's another win, especially if the U.S. still has its duties on products coming into the U.S. Again, our fear is—and we've always seen this—that some of those products come into Canada to compete with us, as opposed to going to one of the world's biggest markets.

11:30 a.m.

Sault Ste. Marie, Lib.

Terry Sheehan

So what you're saying is—

11:30 a.m.

Liberal

The Chair Liberal Mark Eyking

Sorry, Mr. Sheehan, your time is well over there. It's good dialogue, but we're going to move on.

The NDP has the floor now.

Ms. Trudel, go ahead.

11:30 a.m.

NDP

Karine Trudel NDP Jonquière, QC

Good morning. I want you welcome you and thank you for your presentations and for being here before the committee.

I'm from Jonquière, which is in the Saguenay—Lac-Saint-Jean region of Quebec. I had the opportunity to visit STC Manufacturier, which makes steel frames and windows. The 25% steel tax has also severely affected their production. If prices increase outside the country, the company must also pay more for supplies in Canada. This is becoming an issue.

I heard your comments regarding the program implemented by the federal government. As such, I have a few questions for Mr. Mindell and Mr. Kerr, by video conference, and perhaps Mr. Dodds could answer them afterward.

With regard to the federal program, you said that you had to respond to a number of questionnaires and spend several hours providing the information requested by the Canada Revenue Agency. Of course, it's good to conduct a study and an investigation. However, I want to hear about the time frame. You needed this program, but it was a long time before you had access to it. Should the government shorten this time frame?

Could we start with the witnesses from Burnaby?

11:35 a.m.

President, UBS Industries

Andrew Mindell

I think in an ideal world, yes, it would be shorter. That would be ideal. In the situation we found ourselves in, we had customers who had slowed their ordering to the absolute bare minimum and were holding their breath hoping to get through the steel tariffs, to get through NAFTA or to have section 232 reversed. We were mostly focused on the fact that there was a process we had some input into, and that we could get a remission.

Of course, we wanted them to go faster. We'd like it to have never happened or happened in a week, but we also were respectful of the fact that, like I said, we are a small piece of the imports into Canada. This is a major issue between Canada and the United States. It was impacting our business and we didn't enjoy the impact, but we did recognize the position the government was put in. They couldn't make knee-jerk decisions. They needed to have a due process. I would say they were good in communicating to us that they expected to make decisions by certain days, and I think the last one we were hoping to have was an October 15 list of those who received the remission. We knew this in September.

Timelines are one thing, but it is something else to be able to communicate to our customers the expectations and then have those expectations met. We were impressed by that. To answer your question, it would be wonderful if the list came out July 1 and we had tariffs and by July 15 we were off it. That would be our preference. However, we certainly weren't demanding it, and we recognized the greater situation at hand.

11:35 a.m.

Vice-President, Commercial, Central Wire Industries

Thomas Dodds

Everything Andrew has said is bang on, from our experience. Obviously, faster would be better, but it worked and it was right. Our production is maybe unique. With the raw material I'm looking to acquire for our production, I'm getting lead times of three, four and five months, so I'm planning that far out anyway. Fortunately for us, a three-, four- or five-month process actually worked, but certainly faster is better.

11:35 a.m.

Liberal

The Chair Liberal Mark Eyking

We're going to go to the Liberals now.

Mr. Fonseca, you have the floor.

11:35 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Thank you, Mr. Chair.

First, let me remark on what excellent presentations all of you have brought here to the table today. It's been really encouraging for us to hear the steps you've taken personally and how you've reached out to the government. We want to ensure that we can get all the supports we possibly can to all our friends from Burnaby, Perth and Kitchener.

On Burnaby, one thing maybe we fail to do often is to advise people to reach out to their member of Parliament. That member of Parliament can help navigate the system here and get you in touch with the right people. If there are roadblocks or things are not moving at the pace you're looking for, often we're able to pick up the phone, or actually go and speak somebody in person, just to see if we can help to get the ball rolling. So congratulations to all of you.

Another thing is that we are all so proud of the work you do. We understand the investments you make in your communities, provinces and country. We also understand how much the people you employ depend on those wages for their families. Again, we thank you so much.

Perhaps you can help us go through the remissions. You were talking about the process—how long it would take, the forms you had to fill out. What advice would you give us about improvements to the process? It's a bumpy road because we're all in this for the first time, but what improvements could we make to that process for the remissions?

Mr. Dodds, would you like to answer? You're going through it right now.

11:40 a.m.

Vice-President, Commercial, Central Wire Industries

Thomas Dodds

Individually, I was not heavily involved in the process, other than supplying some data and questions for our CFO. Like you said, though, it's the first time for all us. There are always hiccups and bumps. We did have a lot of advice from our own counsel, as well as from our own MP, and even the mayor of Perth was supportive of our efforts. I think we all get better as we do something repetitive. The process was clear. It wasn't complicated. It was in depth at times, but nothing jumps to mind that I would change today. We'll all get better at it, unfortunately.

11:40 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Is there anything from our friends from out west?

11:40 a.m.

President, UBS Industries

Andrew Mindell

The only thing—and this is just us sitting here—that would be preferable goes back to the first question about the timeline, but I can understand why it wasn't possible. It felt as though we did our work and then the finance department was going to put forward their recommendation to the Minister of Finance, who was then going to go to cabinet. For us to have to wait for the rubber stamp to find out.... It would have been nice to know sooner, even though you guys have a process, because it sounded—I'm sorry for calling it a rubber stamp—like the decision was very likely, whatever the Department of Finance recommended.

It was just that much longer to not be able to communicate any certainty to our industry and our customers. As somebody who received the remission, if we had known as soon as the Department of Finance recommended it and that it was subject to...but we didn't get that. I can understand that the government has a process, but sitting in our seat, that would have been ideal.

11:40 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Okay, so more communication...?

11:40 a.m.

President, UBS Industries

Andrew Mindell

No, the communication was great. I'm not saying that. I'm saying that if the government had the ability to communicate to us to say that we got past that hurdle.... We didn't get that. They just said that some had been put forward and “we will let you know when cabinet gets back to us, but we can't tell you for certain whether or not you've been put forward because we're not allowed to tell you that”.

11:40 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

To our Broil King friends, I have a Broil King myself.

October 30th, 2018 / 11:40 a.m.

Terry Witzel President, Onward Manufacturing Company Ltd.

That's good news.