Thank you very much, Madam Chair.
Good afternoon, honourable members.
I'm pleased to be here today representing Fiat Chrysler Automobiles Canada, Ford Motor Company of Canada and General Motors of Canada Company.
Our members operate four assembly plants, as well as engine and components plants. They invest many billions of dollars in the development of zero-emission technologies and advanced vehicle safety technologies. We have over 1,300 independent dealerships across Canada, and we contribute quality employment opportunities for over half a million Canadians.
The CVMA has been a primary advocate of CUSMA, and we recommend passage of Bill C-4 without delay. The passage of CUSMA is essential to provide certainty to North American automobile manufacturers. The automotive provisions, as well as the side letters that provide protection from the U.S. section 232 tariff actions, are indeed critical elements to support automotive manufacturing competitiveness within the North American trade bloc.
It's important to remember that, for the auto sector in Canada, the alternative to reaching this agreement was the cancellation of NAFTA, the reimposition of tariffs on finished vehicles and parts, and likely section 232 tariffs on input materials. So, if we are anxious to see ratification, that is indeed why.
We again want to say thank you to the Canadian negotiators for working so closely with us and ultimately ensuring that we maintain Canada's auto sector as a truly integrated part of the North American industry. This agreement was existential for Canada's largest manufacturing and export industry.
The agreement reinforces the long-established integration of the auto industry supply chain necessary for its competitiveness and, importantly, the ongoing need for continued regulatory alignment with the United States of vehicle technical regulations that are integral to trade and the environment while ensuring greater consumer product choice and affordability.
The auto portions of the new agreement, including the rules of origin, the labour value content provisions and the section 232 side agreements, are things that all our members support and can adjust to over a reasonable time period so that we will remain compliant, enabling us to continue to enjoy duty-free access to the largest and most beneficial auto market in the world.
Since the Auto Pact of 1965, Canada's automotive industry and its supply chains have become deeply integrated with the United States and, over time, with Mexico. Vehicles are built seamlessly on both sides of the border. The resulting deep integration has led to a more competitive Canadian auto industry, greater consumer choice at more affordable prices and a strong North American trade bloc.
When the original NAFTA came into force in 1994, it provided a foundation for a strongly global competitive trade bloc. The geographic proximity of the three NAFTA partner facilities, the multi-billion dollar sectors, the parts sector and the just-in-time supply chains are critical to vehicle assembly operations in North America. It also created inherent transportation and supply chain logistics cost advantages.
Today, automotive manufacturing represents the second-largest Canadian export sector, with $54 billion in trade in 2019. Ninety-two per cent of the total value of that was to the United States. The United States is our number one automotive trade partner, and it's absolutely critical that a trade agreement be in place to provide the foundation for Canadian automotive production and exports in the future.
We must always keep in mind that Canada is one-tenth of a complex, fully integrated long-lead industry. Multi-billion dollar product plans and manufacturing investment plans generally begin over five years in advance of the start of production. Planners require regulatory certainty to make their decisions. They especially need Canada to maintain fully harmonized safety, vehicle GHG, criteria emissions regulations with the United States.
This remains imperative if we are to continue to be part of this fully integrated, long-lead, high-capital-cost industry. Put simply, we did not work this hard to modernize integrated rules of trade in North America to then take our eye off the ball and drift away with unique or different regulations. That could actually put us back to square one and leave us on the sidelines.
Canada's officials must also maintain a high degree of engagement with their counterparts in the U.S. and Mexico. We cannot relax our efforts to ensure that Canada is sufficiently competitive to win future manufacturing investments that anchor much of the Canadian automotive supply chain. Canada must have competitive, in fact, more competitive, costs of auto operation in Canada, including investment incentives, carbon costs, competitive labour agreements, taxes that keep pace with the United States, competitive electricity prices and competitive regulatory regimes.
It's important to remember that the auto sector is going through one of the most dramatic periods of change in its 100-year history for auto technology and mobility business models. We must work closely together with the Canadian industry and all levels of government to demonstrate that Canada is the best place anywhere to invest in the future of this important industry.
In closing, we fully respect the committee's need to hear Canadians and ask questions. We have worked with all parties over the last two years to discuss this very complex issue. We have been truly involved, and we appreciate your interest and open dialogue. We thank you for that, but we must ask you to ratify this agreement promptly.
I'd be pleased to answer any questions.