International Trade Committee on March 9th, 2017

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

You seemed to be saying earlier that the problem in the west is not steel dumping, but rather transporting steel between the east and the west. I am not sure I understood you correctly.

[William Miller]

I'm not 100% sure I have the question correctly.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

It's with regard to the transport problem in the west and whether that does something to the cost of the steel.

[William Miller]

We have a transportation cost coming from eastern Canada to western Canada of approximately $120 a tonne if it's transported by rail. It's $180 to $200 a tonne if it's transported by truck.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

If you buy steel from Asia, from China, it is so much cheaper that it is not worth buying it from Ontario.

Is that correct?

[William Miller]

That's correct. It's more than 50% cheaper. When we transport material from any major port in China, we're paying about $45 per tonne to bring it in.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

You are comfortable buying steel from Asia and re-selling it here?

[William Miller]

Absolutely.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Yes? Okay. Thank you, I wanted to make sure I understood.

We talked about Australia earlier. You also said that the United States had already made changes to update their trade dispute regime, and that steel dumping is allowed in Canada.

Mr. Lee, without any changes to the trade dispute regime in Canada, are we likely to see a spike in steel imports in Canada?

[Dr. Ian Lee]

I'm sorry, I don't have that data with me right now.

I'm going to defer to the president of the Steel Producers Association, because he'll have that more technical information.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Okay.

Mr. Galimberti, would you like to reply?

[Joseph Galimberti]

To answer your question, I will choose the United States, because they have recently put forward two pieces of legislation under the former administration: the enforce act and the Leveling the Playing Field Act.

The enforce act, for instance, specifically sharpens the tools they have to identify circumvention behaviour, so organized scheming, essentially, to get around custom and tariff enforcement. You would do things like change tariff codes or misrepresent product.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

What can we do about import tariffs?

[Joseph Galimberti]

We don't have similar provisions here in Canada. We don't have a way to pursue circumvention in a way so that Canada can identify fraud through enforcement and be sort of individualized. Our applied monetary penalties are very low versus the United States where, because you are breaking the law, they actually put you in jail.

If you are organizing to send dumped product to North America and you have a Canadian system that has no way of tracking whether you're circumventing, that doesn't even collect the information, or you have the United States, where you can go to jail, you're going to pick Canada.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Okay. So there is an important difference.

You were just talking about the United States, the Buy American Act.

Do other countries have the same kind of tariff or non-tariff barriers?

You were just talking about the United States, but do other countries have similar systems that we could draw upon?

[Joseph Galimberti]

I believe there is nothing that would, from an industry perspective, be consequential. The United States is the principal market for our exports. I wouldn't know offhand of anything similar. I'm sure that they're out there. I'm sure that they're on other commodities.

I can report back, but I wouldn't know offhand.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Okay. Thank you very much.

[The Chair, Liberal, Mark Eyking]

Thank you, Madam Lapointe.

We're going to start a second round.

Ms. Ludwig, you have the floor. Go ahead.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

Thank you all, gentlemen, for your excellent presentations today.

We travelled across the country gathering information. We had consultations regarding TPP. One of the messages that I clearly heard in the west—and this question is to Mr. Miller—was about the infrastructure for transportation of shipping products to the west coast. Now there's an opportunity, with the unfortunate situation in Alberta with the decline in oil, for access to rail.

To what extent is Canada's transportation infrastructure adequate to accommodate current and future trade in steel, both interprovincially and with our trading partners?

[William Miller]

In what way is it adequate to transport steel?

I mean, we have a good transportation system within Canada, but we have a costly transportation system within Canada. Geographically, we're a big country, so the costs are extremely high within Canada for transporting any—

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Do you have any suggestions, Mr. Miller, or recommendations, for how to decrease the transportation costs?

[William Miller]

No. I think that would be a difficult task.

For the Canadian steel producers, it would be cheaper for them to export and sell to Europe, on a freight basis, than it would be to sell into western Canada.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Okay. Thank you.

Mr. Lee, thank you very much for your presentation. I'm keenly interested in your teaching in China. Aside from state-owned enterprises as well as the wages that are paid in that region, what have you learned from the Chinese when you've been teaching about some other competitive advantages that they have?

[William Miller]

I'm sorry, what have I learned from the Chinese? What was the last half...?

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

In terms of their competitive advantage, what are they teaching? I think you said you were teaching the EMBA program.