International Trade Committee on Feb. 18th, 2020

[Ken Neumann]

Look, I don't want to be the fly in the ointment. The fact of the matter is that everybody is looking forward to getting ratification done, and my point is very simple. It's like closing the barn door after the horses have left. You have Canada and Mexico, who have already ratified the deal, and it was the United States that held it up because of some amendments. So, yes, I think the steel industry is right, but we're still hurting from the illegal tariffs that were imposed upon our members, the communities and the companies that you talked about. They're still hurting from those. There's $1.2 billion that the government has accepted, and the fact is: What are we going to do about that?

Yes, I think it's a fair comment. We've had an integrated market between Canada and the United States. You can't find a better neighbour, but what disturbs us is what they've done to the aluminum industries, and that is unfair. So I don't disagree with you that the steel industry is—

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

I agree with your point in relation to the steel sector.

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Lauzon, but the time is up.

We'll go on to Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Madam Chair.

I want to thank the witnesses for being here.

Ken, I'd like to ask you a question, because you brought up some things that are close to my heart. You brought up the automotive industry, and you know that in Oshawa this deal wasn't enough to save our plant, but the whole idea of competitiveness and value added are big issues, I think. When we're moving forward with this agreement, if there's something that we could do to support industries that may be negatively affected, I think would be so important.

Gerdau Ameristeel is in the Durham region, and they work mostly as a recycler, but you mentioned something about the buy American provisions. I know that our government under Mr. Harper was able to get an exemption from those provisions. Could you comment on how that's going to affect your members, not having that same exemption that we used to have?

The other thing about the value added is that we have this huge Kitimat LNG project. I think it's a $22 billion project, and my understanding is—and correct me if I'm wrong—that the government gave the Chinese an exemption on that as far as making certain components is concerned.

Could you expand on the value-added statement you made? Right now the whole idea of trade with China is a conversation. The Americans have completed what they're calling phase one of their U.S.-China deal.

I know I've asked a lot of things in this question, but maybe you could address the question about value added, the buy American clauses, and what we can do as a committee to help support the people who will be negatively affected by not having that exemption in the deal.

[Ken Neumann]

Perhaps Mark will answer some of that. Let me just deal with the China situation and the big project that's taking place in British Columbia.

You may have read some of our press releases. We're very disappointed with regard to the fact that it's a huge project that will create thousands and thousands of jobs and that will have steel coming from China. It will be shipped over in modules and then shipped up into the north. If you want to talk about the cost to the environment, if you want to talk about the jobs, it makes absolutely no sense. To me, if we're going to produce something in Canada, we've got the ability to do it, and we should do it with our members. We should do it with our steel.

Look at the Gordie Howe bridge. I was involved in that with Leo Gerard, my counterpart at the time. We made sure that the Gordie Howe bridge was going to be built from North American steel, and it was. We're talking about the bridge that's now going to be built in Surrey. Procurement is very important. This is what I said in my submission, that the government made no inroads in getting into some of the government contracts. That's something that needs to be on the radar. I'm still livid at the fact that somehow the United States used section 232 to say that Canada was a national security threat. You can't find a better neighbour than us. That's something we need to monitor. The fact is that it has an effect. We've seen it. You have the Champlain Bridge and some of that steel. Tell me why the steel has to come from China. You have a bridge that was built in British Columbia. Why does the steel have to come from China when you have the industry here?

The thing that we should all remember is that if you look at the aluminum industry or the steel industry, there ain't a single Canadian-owned company. These are all foreign companies. We deal with these companies, be it at negotiations or at.... We have to fight. We have to fight tooth and nail for investment. We want them to anchor, be it in aluminum or in steel, to make sure that those jobs are preserved. When we're competing with Arcelor, do we invest in the Soo, do we invest in Hamilton, or do we invest in some third world country? Those are the kinds of complications. If we don't have the support of the governments and make sure they're fighting on our behalf in regard to the U.S. to get access to their procurement....

Canada's steel capacity has shrunk. Now we have the issue with aluminum, which I'm very much concerned about. The powers that be somehow think they're going to be able to monitor that and see how that works out. The proof will be in the pudding on that one.

[Colin Carrie, Conservative, Oshawa, ON]

Do you have a quick comment, Mr. Rowlinson?

[Mark Rowlinson]

Just very quickly on the issue of procurement and buy American, you're correct that when President Obama introduced his buy American plans, Canada was granted an exemption. The U.S. procurement market is over 10 times the size of the Canadian procurement market. It is essential for Canadian producers in all manufacturing sectors and industries to have access to that procurement market.

It is disappointing to us in the extreme that this agreement does not guarantee us access to that procurement market. Rather, we will have to revert back to the WTO general agreement on procurement, which is a voluntary agreement. We have no real ability, therefore, to legally limit the United States' ability to implement buy American with respect to their procurement, which would limit Canadian access to that market.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much. I have been hearing from people who are really disappointed about that.

I do want to talk to the cattlemen and agri-food people about this clause where, if Canada does business with a non-market economy, we almost have to get permission from the United States to make those trade agreements.

You mentioned, Mr. Lowe, that you weren't too worried about the U.S.-China agreement. My understanding is that the Chinese have agreed to buy $75 billion more in manufactured products from the United States and $40 billion more in agriculture. I was glad to hear that you're not too concerned about it. Do you have a concern, though, that we will almost have to ask the Americans if we're going to have our own agreement with China? Does the fact that the China-U.S. agreement was made before this agreement have any implications?

[The Chair, Liberal, Judy Sgro]

I'm sorry, but to a long question I'll need a relatively short answer.

[Bob Lowe]

I'll turn this over to Fawn. We looked into that just this morning.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you.

[Fawn Jackson]

In terms of the China-U.S. question, when product is moving off of North America, I think that benefits all of us. That's because our markets are so integrated. That generally makes us more competitive in the international market. On that side of the question, we're looking forward to seeing how that agreement gets implemented.

On the first part of your question, perhaps I would turn it over to Claire and Brian to answer.

[Claire Citeau]

That particular clause is not something that CAFTA members have commented on, so I will not today.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Lauzon.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

I will share my time with my colleague.

Earlier you talked about steel and the difference between steel and aluminum. In terms of what we've heard today, support for signing CUSMA and ratifying it as quickly as possible is almost unanimous. That's also the position of the Canadian Steel Producers Association, as per a December 11, 2019 press release:

It will benefit Canadian steel producers by further strengthening manufacturing supply chains in North America and by improving on the terms of NAFTA.

That's what Canada's steel producers had to say.

How do you think the agreement will improve on the terms of NAFTA?

[Mark Rowlinson]

NAFTA clearly did a lot for the steel industry, just as this new agreement will. Our problem is that NAFTA did little to help steelworkers. What matters to us is whether the new agreement is really going to help our workers be competitive. Even though they are competitive, will trade activity be carried out in a way that's truly fair to workers? That's what matters to us.

There is no question that the steel industry fully supports this agreement. In fact, I believe you'll be hearing from its representatives shortly. I imagine the aluminum industry is also in favour of the agreement, even though it wasn't granted the same protections as the steel industry. It's clear that—

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Do you agree with me that the aluminum market has taken a major step forward? Aluminum wasn't part of the negotiations, and at least 70% of aluminum will be…. I have a question for you about the aluminum sector.

You said that Quebec's producers were among the best in Canada and that their quality was unparalleled. In addition, I would say that they are the greenest in Canada. How did they forge a top spot for themselves? Now, with the 70% requirement in the zone…. How will this agreement not make things better? Can you tell us whether there's been a significant improvement for aluminum, without drawing a comparison with steel?

[Mark Rowlinson]

The problem is not the quality of Canadian steel. The problem is that China produces 30 times more aluminum today than it did 20 years ago. That means the aluminum market has tremendous overcapacity, and China will want to find a market for that aluminum. It will sell it much lower than the market price. We are afraid China and other countries will dump their aluminum in Mexico. Eventually, it will hurt Canadian producers.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Are you aware that the negotiations can continue?

[The Chair, Liberal, Judy Sgro]

Mr. Lauzon, you indicated that you wanted to share your time. You have a minute and a half remaining.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

I'll ask a quick question.

The negotiations are still going to continue after the agreement is signed, and it will be possible to deal with product quality and market insurability, among other issues. I think it's important to ratify the agreement so the negotiations can continue. You know that, don't you?

[Mark Rowlinson]

Yes, I'm sure that the negotiations and discussions will continue. However, I would say that we are trade unionists and that, when we negotiate collective agreements, an agreement is an agreement. Once it's signed, it signed, so I don't think many changes will be made to the agreement going forward.

[The Chair, Liberal, Judy Sgro]

You have 40 seconds remaining.

[Rachel Bendayan, Liberal, Outremont, QC]

I have a brief comment, if I may.

The agreement already provides for a return to the bargaining table. That's in CUSMA.

Mr. Yussuff, I have very little time to ask you my questions. I see that the CLC has approximately 3.3 million workers. You represent approximately 3.3 million workers in Canada. Is that right?

[Hassan Yussuff]

Yes, including our friends the steelworkers. We're all part of the same family.