Good afternoon, honourable members of the committee. I'd like to thank you for the opportunity to speak to the viability of the Canadian steel industry and Stelco, in particular.
Stelco has a history of building Canada and the landmarks that dot our landscape. For over 100 years, our steel has contributed to the growth of our nation, both structurally and economically. From the cars we drive to the pipes that support our energy resource sector, from the Canadian Coast Guard College and Saint John Regional Hospital in the east to the Regina Agridome and Calgary International Airport in the west, and all the way the way to the tip of the CN Tower, Stelco steel can be found in plain sight from sea to sea.
The past dozen or so years have proven to be tumultuous ones for our company. Stelco emerged from creditor protection in 2006 during an unprecedented up cycle in the steel market, without having addressed the fundamental issues that led the company to initially enter creditor protection under CCAA in 2004.
In 2007, U.S. Steel acquired Stelco and transformed the operations into a satellite manufacturing location centrally managed from Pittsburgh. Stelco maintained little control over market development, raw material sourcing, or ultimately, it's profitability. U.S. Steel's multiple operating locations allowed Stelco's traditional markets to be served from a variety of locations. Servicing the marketplace with multiple options for manufacturing afforded U.S. Steel the opportunity to bring Stelco wages in line with North American standards. The result was three labour disruptions in the past 10 years and the corresponding negative impact on our financial performance.
However, being part of a multinational company did afford Stelco the opportunity to weather the financial crisis that commenced in 2008, and to benchmark and enhance operational excellence.
Today, our employees are safer than ever before. In 2007, there were almost 600 recordable injuries at our combined operations. In 2016, only nine cases were recorded. This improvement is not only a measure of vastly improved safety performance, but also reflects a necessary change in the core philosophy of our business. Employees are valued, not just viewed as an expense.
Similar results can be seen in our environmental performance. Over the past decade, we have continuously reduced our emissions through capital investment, operating practices, and the training of our employees. At our Hamilton facility, this has translated into an 80% reduction in air opacity incidents since 2007, and a 97% and 95% reduction in water and ground incidents respectively.
We have also invested to support the development of the next generation of high-strength steels, positioning Stelco to work with its customers—in particular, the auto sector—and to develop and manufacture the cutting-edge steels that will be required in the coming years. In fact, over the past five years, Stelco has developed the technology and processes to manufacture 20 different grades of these lighter, stronger, future-ready steels.
All this is to say that Stelco sits poised to compete with any company around the globe upon our successful emergence from credit protection. We will have addressed significant balance sheet liabilities, including the legacy obligations, and that will enable Stelco to be competitive as a stand-alone business.
Stelco will have new collective agreements with its unions to provide labour peace for an extended period of time. Our balance sheet will be clean, our cost of production will be low, and we will be well positioned to compete in the North American marketplace.
This brings us to our discussion here today. As I sit before you, I can attest that there exist many challenges facing our business that will impact our ability to compete internationally. Of particular concern are the recent developments in the Canada-U.S. trade relationship.
I think there is mutual agreement that we are entering into a critical period with respect to our bilateral relationship with the U.S. With the prospect of a renegotiation of NAFTA looming, and with provisions requiring steel to be melted and poured in the U.S. expanding beyond the traditional scope of the Buy America program and into other areas of procurement and the private sector, Canadian industry has reason to be concerned.
Prior to the 1987 Canada-U.S. Free Trade Agreement, both countries placed tariffs on steel products crossing the border. The cross-border integration of our customers, such as automotive, was substantially less. The combative approach to trade and the restrictions embedded in American law at the time constituted major impediments to Canadian steel's access to the U.S. market. The Canada-U.S. agreement recognized that our economies would mutually benefit from a reduction in trade restrictions. The solution was an agreement to less-restricted steel trade through the removal of tariffs on steel in both directions.
These principles were further enshrined, and they should remain as the cornerstones of NAFTA and any future agreement with the U.S. regarding the steel industry.
While I am encouraged by the position taken by our government in these early days of the new U.S. administration, I believe our focus should be on increasing collaboration with our largest trading partner. We would be working together to encourage growth in manufacturing for both our respective countries.
The reintroduction or the expansion of barriers to trade must be prevented. Our industries and economies are both served by an integrated relationship based on the foundation of market principles and strong trade rules. Together we should be working with our American partners to limit the ability of dumped or subsidized imports from countries that do not share those principles.
It's my hope that the budget tabled tomorrow by Minister Morneau will incorporate these measures to modernize our domestic trade remedy system so that we can work hand in hand. It has been recognized by the OECD and governments around the world that substantial overcapacity exists—