Good afternoon. Thank you for allowing me to present before this committee.
My name is Jim Tully. I'm the executive vice-president of DECAST Limited.
DECAST is a manufacturer of precast concrete infrastructure products and is located just outside of Toronto. We directly employ over 500 people, and our supply chain affects another 3,000 people.
While NAFTA and now CUSMA should provide open markets to both sides of the border, history has shown us that this is not the case. There are several existing U.S. policies that have affected small to mid-sized companies like DECAST: buy America; buy American; the American Recovery and Reinvestment Act; and President Trump's executive orders on U.S. content. We've been affected over the last few years in the following ways.
Under buy American, for construction projects, contractors must use construction materials that are 100% manufactured in the U.S., with greater than 50% of materials coming from the U.S. Canada is exempt for contracts greater than $10 million; however, most of the projects that we bid on fall under this amount. Many states and municipalities also use similar geographic production requirements.
Under President Trump's executive orders, President Trump has clearly stated that he wants to buy American first and has incorporated this concept into three executive orders affecting buy America and buy American policies. These executive orders create more uncertainty for companies like DECAST.
The direct result of these policies has been that the Canadian market for infrastructure products is wide open to U.S. companies, allowing for predatory pricing and dumping. ln 2018, DECAST lost the equivalent of 41 full-time jobs on projects lost to imports of U.S. steel pipe. Our understanding of the pricing by U.S. manufacturers is that it was at or below the cost to manufacture. Just last week in Winnipeg, a U.S. pipe manufacturer from Texas undercut local pipe producers. Given the distance they had to ship, they are selling at or below their cost.
ln conclusion, to help manufacturers like DECAST Limited, Canada should impose domestic content preference on its infrastructure funding to provinces and municipalities, as recommended by the Canadian Manufacturers & Exporters. This type of domestic content preference could be implemented under the concept of reciprocity to account for true and open free trade.
Thank you for your time.