Thank you, Mr. Chair.
My name is Ben Whitney and I have the privilege of being the owner and president of two London, Ontario manufacturers: Armo Tool and Abuma.
Thank you for the opportunity to explain the impacts of steel and aluminum tariffs on Armo, Abuma, and our 225 Canadian team members.
My companies design and build things that make things. Some 80% of our business is in the automotive industry. We have risen to the challenge of going global, exporting 50% of our production, with most of our exports going to the United States and Mexico.
When tariffs were announced, my hope was that competitors in the U.S. market would be paying more for steel and that, by buying Canadian materials as well as materials from elsewhere, I would have a competitive advantage. Instead, all of my suppliers raised their prices. Armo is paying 17% to 33% more than we were a year ago for steel of all types. Most of the steel is produced in Canada or from offshore. These price increases occurred almost immediately upon the discussion of tariffs. It did not wait for the tariffs to take effect. I am paying $50,000 per month more for steel, aluminum, and metal components than I was a year ago.
If the Canadian government implements anti-dumping measures, I fear rising costs on steel plate and possible shortages. On more than a quarter of projects, I am competing with companies in China. These Chinese firms can buy steel cheaper than I can. They consistently deliver quality parts on time. They are very serious competition.
After Bush's 2002 steel tariffs, the U.S. discovered the unintended consequence of tariffs was to lose 10 times as many jobs in value-added manufacturing as were saved in steel-making. These tariffs are endangering manufacturing jobs on both sides of the border.
I don't need help to compete with the Americans. Just don't make it easy for our offshore competition.
We are a moderately sophisticated mid-size business. Many automation integrators, fabrication shops and tool-and-die companies are smaller and more localized. I have good support from a national accounting firm and experienced import brokers, but I am still not able to get duty relief on steel we are buying, even when it is used to manufacture goods for export. This is because we buy the vast majority of our material through local steel and aluminum distribution companies. Our material purchases are too inconsistent and require delivery times that are too short to go direct. Local distributors do not break out the cost of the tariffs in their invoices, and we cannot get the required import paperwork. We can't apply for duty drawback. If Armo, at a 200-person size, cannot figure this out, most companies in our industry will not be able to.
I hope and trust that these tariffs will soon be a thing of the past. I know the government intends to use tariffs collected to help companies that use steel and aluminum. Other than returning tariffs paid through duty drawback, I understand that some of the funds have been pointed towards the SIF program. The minimum project size for SIF is too large at $25 million and will only help companies that are large enough to figure out how to get duty drawback or their cost passed on to customers.
What is needed is funding of much smaller projects, like the digital technology adoption pilot program, DTAPP, from a couple of years ago, which could promote industry 4.0 investments, or the CME SMART program for supporting capital purchases.
The simplest measure might be allowing accelerated capital cost allowance on capital equipment for processing steel or aluminum. A targeted ACCA could be implemented immediately with a minimal amount of administrations.
Congratulations on finishing the USMCA agreement. I hope you get these mutually destructive steel and aluminum tariffs removed as soon as possible. Thank you for your interest and support.