Evidence of meeting #5 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 agreement.
A video is available from Parliament.
5:40 p.m.
Liberal
Stéphane Lauzon Liberal Argenteuil—La Petite-Nation, QC
Okay.
I have a question for Ms. Cobden.
Steel companies have made large investments. How can the industry ensure that employees benefit financially from the investments? The jobs are fairly high paying positions. How can these agreements provide better conditions for our workers?
February 18th, 2020 / 5:45 p.m.
President, Canadian Steel Producers Association
As I've mapped out, the agreement does a number of things that drive demand, which is fantastic in terms of North American steel, not just Canadian steel. The agreement also does another thing. We were just talking about investments and the point I wanted to add into the conversation was that the agreement adds a level of certainty that we haven't seen in a while. Certainly in the steel and aluminum tariffs' situation, you understand the challenges we face around certainty.
The agreement really moves us forward in terms of having certainty, which then drives investments, which then drives growth, which then supports the ongoing, strong middle-class jobs that we create in the steel industry in this country. Everything builds off the others. Certainly at the time of the tariffs we were losing investments like crazy, and that's where the support of the government was so critical to maintain that, probably not sufficiently, but we did the best we could to maintain a certain level of movement forward. Some of those investments translated to great production increases. Some of the quality issues you mentioned, etc. Now this agreement takes us forward, especially in terms of the items I've identified and the business certainty that it creates. From my perspective I think that's the most important thing it does.
I hope that addresses your question.
5:45 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you, Madam Chair.
I want to thank the witnesses for joining us.
Your points of view are valuable.
I have a hypothetical question for Mr. Simard. Would it have been good to obtain, under CUSMA, the same protection for both aluminum and steel?
5:45 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
Certainly.
5:45 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
In concrete terms, what would have been the differences?
5:45 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
CUSMA, as we understand it, ensures that the 70% regional aluminum rate applies in two cases. In the first case, the rate applies when an automaker purchases its metal outright or purchases the metal for a processor that uses the metal for the automaker. In the second case, the rate applies when the automaker ensures that 70% of car parts were manufactured in the region.
In other words, either the automotive producer purchases its materials outright, which isn't the way that the market works, or the producer makes sure, through its suppliers, that the parts were manufactured here. We're talking about the manufacturing of the parts, not the manufacturing of the aluminum. It's not the same thing.
5:45 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
There's a difference between parts and molten aluminum, cast aluminum, and so on.
5:45 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Nevertheless, you proposed some solutions to handle the current provision, which doesn't resolve the issue of possible dumping by way of Mexico.
5:45 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
Yes. The dumping issue can be handled differently. It can be handled through the measures that I listed. When it comes to capturing value creation in the automotive ecosystem so that aluminum, the Canadian primary product, is used to keep pace with market growth, that's another issue. That's another situation.
The successive requirements for the regional content, the main parts, and so on, may help us carve out our place over time. It will be more difficult and more demanding than if there had been a definition.
5:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Your proposals include the creation of some type of monitoring body that would establish the source of the aluminum.
Can you elaborate on this?
5:50 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
In our view, the first step is to ensure that Mexico implements a system. The systems must be able to communicate with each other. If the three systems can't interact, it won't make sense. We won't be able to—
5:50 p.m.
Bloc
5:50 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
Exactly. This requires the alignment of the tariff codes. A product that crosses the border, if it isn't processed, must have the same tariff code when it enters and leaves the country. First, the three countries must have the chance to review the progress of the systems' implementation. This can't be done overnight. Second, we must ensure that the systems are interoperable. Third, we must be able to discuss the infamous transhipments of illegal products.
We're currently reacting to crisis situations. We decide whether to talk about these situations. We read about them in the newspapers. When we find out, it's too late. We're faced with a done deal. We therefore recommend the establishment of a type of trilateral committee consisting of people who come from each country and who work in international trade, along with industry representatives. The goal would be to provide regular updates on the situation in conjunction with the agreement.
5:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
You said that, with this in mind, the three countries have already been holding discussions.
5:50 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
We know that the Canadian government, through Ms. Freeland, was in contact with Mr. Lighthizer and his Mexican counterpart. Our peers in the American association are saying the same things as the American administration. At some level, discussions are taking place, and we share the same vision.
This is encouraging for us. However, we'll certainly continue to work and push to move things forward. With the Government of Canada, we're part of a working group that was established two years ago. We've just held a fifth meeting with these people. This gives us the chance to catch up with the unions and the government representatives.
5:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
As things stand, these measures would be essential and fundamental.
5:50 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
Yes, absolutely.
5:50 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Without these compensation measures, if we can call them that, CUSMA could be harmful. For example, we heard from representatives of the United Steelworkers earlier, and a few weeks ago, we met with people from the Alma region. If we failed to implement measures, wouldn't these concerns be well founded?
5:50 p.m.
President and Chief Executive Officer, Aluminium Association of Canada
I won't make any connection with the concerns. I'll simply say that, in any event, in the May 17 agreement to remove tariffs, the three countries committed to implementing a system. That's where we started. Once Canada had implemented its system, we wondered about the next steps. If we can proceed with those steps, we'll be able to close a major gap.
5:50 p.m.
Bloc
5:50 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you.
I partially want to pick up on a similar theme to try to get a better understanding.
I know you've shared some of this already today, so I may be asking you to repeat yourself somewhat. What I hear is that you're identifying two separate issues. There's the issue of the dumping of Chinese aluminum through Mexico into the North American market. Beyond that, there's the question of how you secure more Canadian primary production within that 70% content and the different measures that would be required in order to effect those different things.
I'm wondering if you can spell out a little more of what you think needs to be done on the anti-dumping side and if that's primarily through the vehicle of this agreement or through the agreement that was arrived at for the end of section 232 tariffs.
After that, I'm curious to hear a bit more about what we could be doing unilaterally, as it were—if there is anything within Canada—to ensure that a larger percentage of that 70% content requirement for aluminum is filled with Canadian primary production, and not just the melting and pouring but the smelting as well.
