Evidence of meeting #43 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 dumping.
A recording is available from Parliament.
November 3rd, 2016 / 12:30 p.m.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Thank you.
Taking into account the fact that some of our largest producers here are foreign-owned companies—Essar and U.S. Steel, with U.S. Steel also having plants in the United States—how do they play the two markets in terms of their production? Do they drop production here when, for whatever reason, they feel that they can decide to do it in the U.S. instead of here?
The other question is, how has the dollar drop—down to 74¢ today, I guess—affected the industry?
Senior Director, Manufacturing Industries Directorate, Manufacturing and Life Sciences Branch, Industry Sector, Department of Industry
Certainly, we've had discussions with companies about how they operate. It varies from company to company. Obviously, certain restrictions such as Buy America do have an impact on the way products can flow. If, for instance, they're supplying a procurement contract in the United States, most likely it has to be sourced from the U.S. plant.
On the other side of things, for instance, on automotive supply chains, it's different. It depends on the product that they're looking for, the type of steel they're looking for, so it does vary.
With regard to the dollar, the dollar has benefited the Canadian producers. Again, steel is a global product. It is a commodity. It's also traded in U.S. dollars significantly, so the benefit has trickled down to manufacturers as well.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Just getting back to U.S. Steel, it's really not in our control. U.S. Steel can decide if they want to cut production here and increase production in the United States, and sell through their other plant, with U.S. Steel.
I want to ask another question. Within the industry, how important is proximity to your supply chain? China is so far away, and I don't know what their costs are for transportation, etc. How does that impact the price and our competitiveness?
Senior Director, Manufacturing Industries Directorate, Manufacturing and Life Sciences Branch, Industry Sector, Department of Industry
Transportation costs are obviously a very important part of the manufacturing supply chain. Being located near your customers is very important. I think the location, for instance, of some of the Ontario steel mills makes them well-placed for supplying automotive components. It does certainly factor in. Commodity-based products also have a bit of a different dynamic. That is a little more tricky to understand, and how products come in from various countries.
Conservative
The Vice-Chair Conservative Randy Hoback
I'm afraid we're out of time. Witnesses, I'm going to dismiss you now, and thank you very much.
Colleagues, before you go, Bill C-31, Canada-Ukraine free trade agreement, was introduced in the House today. I know when we did our planning, we never considered that as a priority or whether we were going to have to look at it before Christmas or not. When we come back after the break, maybe I'll ask the chair to set aside five minutes and just see if that's going to impact our timing. Maybe think a bit about whether you want witnesses or not for that as it comes forward. I am just giving you a heads-up and then we'll deal with that in the next meeting.
The meeting is adjourned.