Evidence of meeting #10 for International Trade in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aluminum.
A video is available from Parliament.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Independently of what's happening with the trade deal with the United States and Mexico, is this just a question of needing some remedial action by the Canadian government to ensure that a heavily subsidized product isn't coming into Canada and putting people out of business? Is there a concern beyond that that connects directly to the new trade agreement with the United States and Mexico?
President, Northern Cables Inc.
It's both. We are actively working with our industry association on trade fairness, which is not related to the free trade agreement.
The issue is there's so little of a domestic manufacturing base left. We're a small company in Brockville. The rest of the people are owned out of Italy and France, and they won't petition the Canadian government for fair trade. We're the last people left.
On the free trade side, our concern related specifically to the agreement is that we would become a point of transshipment and then create an issue. We use Canadian aluminum and make cables and export them to the U.S. If that border closes because of the reputation of products coming from Canada that could hurt our business.
Chief Executive Officer, Northern Cables Inc.
I would add that the way we have to purchase aluminum is we purchase all of our raw materials direct from the mill, in the case of aluminum from Quebec.
We have to purchase it. We have to pay the London Metal Exchange price, plus a domestic industry cost called the Midwest premium.
When these cables enter Canada and they make a declaration to enter the country, they should be required to enter the country for no less than world fair market value. However, they are entering somehow below world market value. When we go against a competitor and we look at the price, we can barely buy the raw materials at the price level that they're already selling the finished cable for in the country.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Do you think that if there was action at the border to ensure that cable coming into the country is being sold at fair market value, there's a potential to grow the industry? Do you think we could get some of that back, or is there fierce competition from our continental partners?
President, Northern Cables Inc.
Canada has an advantage because a very large portion of the North American aluminum is actually smelted in Canada. There is a domestic industry.
There are other plants that make aluminum cable in Canada, but they've been bought by Italian or French companies. There is definitely room. We have no plan to go away. We're planning to expand and if we could sell more aluminum cables both in Canada and the U.S., we would be hiring people tomorrow.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
I apologize if you clarified this in your opening statement and I missed it. Does the U.S. welcome Chinese cable into their borders at the same rate as Canada? Do they provide some protection against the subsidized product coming from China?
President, Northern Cables Inc.
They did up until.... Then, about 18 months ago, two U.S. domestic manufacturers filed a complaint. About 90 days ago, the U.S. Department of Commerce found in their favour and imposed countervailing duties of between 33% and 165% on Chinese cable.
I know anecdotally from being in the U.S. that there are still people getting around it with transshipping. They ship it into Korea. They put little connectors on the end and sell it as an assembly. There are a lot of tricks, but at least their government has recognized the damage to the industry. In our industry, if you search the Encore-Southwire Department of Commerce ruling, there's quite a lot of information available.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Then there is action that Canada can take standing shoulder-to-shoulder with the United States on this. We wouldn't be going it alone.
President, Northern Cables Inc.
Most certainly, and that's part of this free trade agreement. We would encourage that.
We are working with Electro-Federation Canada, which is our recognized industry trade representative. Probably in the next 90 days we will be approaching federal representatives to actually file a complaint.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you guys very much.
As a construction electrician who has installed a lot of cable, I've appreciated the opportunity to understand a little better how it's supplied.
Conservative
Colin Carrie Conservative Oshawa, ON
Thank you very much, Madam Chair.
I want to thank the witnesses for being here.
We're the party of free trade and we're supportive of getting the agreement moving forward.
The challenge we're finding with these testimonies over the last few days is that the minister said she adequately consulted with different sectors, but we're finding out from the aluminum sector that they don't feel they were adequately consulted.
Real families are going to be really hurt by this agreement if it's not done right. There are businesses and sectors that are going to be negatively affected.
What we want to get from people on the ground, such as yourselves here today, is whether you feel that you were properly consulted. If there's an opportunity for you to give more input into the government on the implementation or the timing of it, to help families and businesses that you're aware of or your own business that may need support, is that something that you feel....
First, let me start with Honey Bee. Do you feel you were adequately consulted on this trade agreement?
General Manager, Honey Bee Manufacturing Ltd.
You start, Scott, and I'll finish it up.
Manager, Components, Systems and Integration, Honey Bee Manufacturing Ltd.
We weren't consulted until we went chasing for it. We saw news reports about IP terms in the agreement, which raised red flags, but we didn't initially understand what the impact would be.
It took some time and research to start to see where this was going to impact us. We started approaching government and the consultations that we had were, to be honest, more deferrals rather than engagement. They were courteous and professional about it, but it doesn't solve our requirements going forward. We are a little concerned that the type of engagement matters as much as if we were engaged.
I'll leave it at that, as far as the impact to the company is concerned.
General Manager, Honey Bee Manufacturing Ltd.
I want to add to that a little bit, Scott.
When we were given the opportunity to speak to a lot of the various associations that we're members of, and also some that we're not members of, quite honestly this was the information that fed back from them: “We don't know. We would love to be able to participate. We would love to be able to work with you, but we really don't know. You as a company know more than we do.” At least that's what they thought. As Scott said, we really took on the initiative about a year and a half ago to look at this and study it, because it was a business risk for us. It was a high red-flag risk. We just took it upon ourselves to get to the bottom of that.
The reason Scott is here today and the reason you're getting a lot of the good information is because of the time, effort and energy that has been put in by Scott and by the owners of our company to be able to say, “This is a problem; we don't know.” In terms of the information for you, I haven't seen that coming across my desk to be able to answer that question.
Conservative
Colin Carrie Conservative Oshawa, ON
We had an expert on IP and copyright in earlier. This is one of the things that people aren't talking about with this agreement. It kind of floated right underneath, but it's so important right now, especially with technological advances and with the new trade agreements, that we really do have to get it right. If you do have some ideas, I would welcome them. As we move forward, this implementation process will be ongoing. We want to make sure that the government gets it right, so please feel free to continue the dialogue after today. Thank you for being here.
Northern Cables, I was alarmed to hear what you had to say. For me, it seems to be a safety issue. With the growth in construction and everything that we're doing here in Canada, with our buy American shutout in this agreement, we want to make sure that Canadian businesses will be competitive across North America. Now, to hear that the Chinese are able to move their product into this country without oversight is troubling. You mentioned the CSA. Maybe we need to change the regulations somewhat so that we know we have good-quality product coming into the Canadian market.
Do you think it would be worthwhile with this agreement...? My colleague Mr. Lewis might be talking about this later on, but do you think the CBSA and the inspection authorities need to have more resources to make sure that there will be no workarounds with this new agreement?
February 25th, 2020 / 5:45 p.m.
President, Northern Cables Inc.
Well, the issue we have, Mr. Carrie, is that definitely we'd want to see any rules enforced, but first we'd want to see what the rules were. Right now we don't know how well the standards are being met on cables that are made to CSA. They come in with a CSA logo printed on them, but I don't know if they—
President, Northern Cables Inc.
We couldn't say that they're counterfeit. We're concerned, but that's kind of libellous, I guess, for us to say of another manufacturer. We're worried about the cost of their raw materials and the cost of the electricity they've used.
