First of all, thank you for giving us the opportunity to explain the situation we're in and the outcome of the retaliatory tariffs in our situation.
My name is Stephen Vezina. I'm the vice-president of sales for the company. Mailhot is a Canadian-owned company that manufactures hydraulic cylinders for industrial use. Our company was founded in 1956. The company is based in St. Jacques de Montcalm in the Lanaudière region, close to Joliette, northeast of Montreal, and it is among the biggest employers of the Lanaudière region.
We have two production facilities, one here in St. Jacques and another one in Silao, Mexico. We operate an R and D centre in Terrebonne, Quebec, as well as two service and distribution centres, one in Edmonton, Alberta, and one in New Hampshire.
As I mentioned, we build hydraulic cylinders that are used for mobile equipment. Mostly we sell to original equipment manufacturers in the waste, snow removal and construction industries. Our company employs 323 people, with close to 200 in Canada. We import on an annual basis about 2,800 tons of steel tubing from the U.S., which represents a value of over $8 million Canadian.
The steel tubing that we import from the U.S to do the cylinders is unfortunately not available in Canada. There are no suppliers in Canada. Therefore, we have no choice but to get our steel from the U.S. or other countries. We are working on getting alternative supplies from Asia, but as my predecessor mentioned, that cannot be done overnight, so we have an immediate impact on our cost of production.
The situation we're in is that our competitors are all U.S.- or foreign-based and do not have to put up with the retaliatory tariffs. Therefore, it puts us in a less competitive position versus our customers. Our major customers are from the U.S., Brazil, China, India and Europe. Those products are not subject to import tariffs into Canada, so we are put at a disadvantage versus all of these competitors.
Naturally, because of the price increase in the last year, we've passed on some increases to our client base, but there is a limit to the elasticity of the price increase that we can pass on, especially when our competitors are not doing that.
Mailhot products are a crucial component of large pieces of mobile equipment. Our products are used in core parts of the Canadian economy, such as waste removal, construction and snow removal. Several of our customers are large OEMs in Canada that employ many thousands of people. They are in a position where they're competing against foreign and U.S. competitors, so they can't just increase their price to their base. With us increasing our selling price to our customers, it's putting them at a less competitive advantage and into a situation where they have no choice but to source their hydraulic cylinders from suppliers other than us.
It puts us in a situation where we're less competitive, and we ourselves are thinking of our investment. We were thinking of our investment decisions and of putting at risk well-paid jobs that we have in Canada in welding, machining and different skilled trade areas that are in high demand. It puts us in a difficult situation.
During all of this process, we did some representations as a company to the finance department in Ottawa on the impact this has had. In our case, we had some very good news in mid-October.
There was an initiative by the Department of Finance to give relief to Canadian businesses from countermeasures on U.S. imports, and the HS codes we use are part of that initiative. Our situation was not good. Going forward into the future, we could not sustain the situation that we were in. We made some representations and, happily, the Canadian government has answered those requests and did put out an initiative to exempt some products for all companies that are using them in Canada.
Fortunately, the products we were using are on that list. We had the same request that I'm sure everybody else who's using steel in Canada had, as far as the impact of tariffs. In our case, I think the conclusion for now is positive and going in the right direction.