International Trade Committee on Oct. 28th, 2024

[Corey Parks]

I think it's like what we all experience. When you're faced with a smart economic decision about a premium tire with a bunch of retreads, you can do the math and say, “This makes sense, but I have to pay more today, versus pay less right now as I'm standing here looking at a flat tire.” I think it's almost that simple. That's part of why I said we're retooling our workforce to go out there and try to explain the value proposition of a retreaded tire versus a cheap, disposable tire. We're talking to farmers and loggers and ranchers and folks who are sometimes cash-strapped and need that tire right now, so they're happy to buy a below-cost tire.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Yes, that's what we're hearing from farmers and truckers, who are saying the carbon tax and other costs are making that more difficult, and therefore I'm sure they're looking for cheaper options.

Mr. Loomis, I wanted to switch gears for a second and talk about the need for Canadian steel. How much steel right now is being used in the EV megafactories that this government has announced it's subsidizing? Do we know the amount of Canadian steel? Is it in the contract, or do you know if workers are getting the benefit from these megafactories?

[Keanin Loomis]

It is not in the contract. They are not required to use Canadian-fabricated steel or Canadian steel, for that matter. We are hoping that companies like VW, for example.... We understand that a decision is imminent as to where they are going to get their fabricated steel and what companies they're going to be using in the building of that factory. We are very much encouraging them to look at the Canadian fabricators.

One of the issues is that there's a presumption that we don't have the capacity to fabricate. That's not true. In fact, we have a very cohesive industry in that a lot of our members can partner to make sure that we do have that capacity. The presumption for us going forward is that any government-funded project should be using Canadian-fabricated steel because they are taxpayer dollars—taxpayer dollars going into our communities at a four-times return, and that's a conservative estimate. We get a four-times return on investment in using Canadian-fabricated steel, plus there's much lower risk and fewer supply chain disruptions as well.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Yes, that's alarming to me, $50 billion and no Canadian steel. That's amazing.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Williams.

Mr. Arya, you have four minutes, please.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Parks, seeing you, I remember to check my appointment with Kal Tire. I should say that the service has been quite good. I've been using it for years.

I listened carefully to your comments. I understand we all need cheap products because everything is expensive. I also understand your point that we need to impose tariffs on the stuff that is coming in, which is below the cost of the raw materials, as you said.

At the same time, I don't want to be seen supporting a monopoly or an oligopoly. How many tire retreading companies are there in Canada?

[Corey Parks]

I don't know the number off the top of my head. My guess would be probably in the neighbourhood of 75 to 150.

[Chandra Arya, Liberal, Nepean, ON]

I'm glad to hear that, because when I just checked with my ChatGPT, it said that Bridgestone, Michelin and one or two other companies control 70% of the market, or something like that, but that is not the case. Is that right?

[Corey Parks]

What they control is.... There are only a few companies out there that make the tread, but the people who can do the retreading work.... There are a lot of mom-and-pop tire shops, independents that have what's called a “chamber” where they can cook the tire. They retread right there on the spot, and that was very common—

[Chandra Arya, Liberal, Nepean, ON]

I understand retreading. I was born and grew up in India, where it is a fact of life that most of us use only retreads in everything, whether it's cars or trucks.

I'll come back to you.

Mr. Loomis, your members also include steel manufacturers. Is that right?

[Keanin Loomis]

Not all of them are, but yes, some of them.

[Chandra Arya, Liberal, Nepean, ON]

Okay, I'll come to that. You did mention that there are certain steel products that are not manufactured in Canada. Did you say that we should not impose tariffs on them?

[Keanin Loomis]

No. Certainly, when it comes from China, a non-market economy, yes, we should.

[Chandra Arya, Liberal, Nepean, ON]

As far as products that are not manufactured in Canada are concerned, if they're coming from China, you want the tariff to be imposed. Is that right?

[Keanin Loomis]

That's correct.

[Chandra Arya, Liberal, Nepean, ON]

Did you say that for federal government contracts, we should stipulate that local steel has to be used?

[Keanin Loomis]

We should stipulate that the fabrication work is done in Canada by Canadian-certified fabricators.

[Chandra Arya, Liberal, Nepean, ON]

If the U.S. government were to stipulate that U.S. federal government contracts should use U.S. steel only, what would you think about that?

[Keanin Loomis]

That's certainly a concern for us. Again, if we had the trade—

[Chandra Arya, Liberal, Nepean, ON]

Don't you see that there's a big difference between not wanting the U.S. to impose the condition that local products should be used and wanting us in Canada to impose that? How is that possible when we want free trade, at least among allies?

[Keanin Loomis]

All we're asking for is reciprocity. Most of our work will be done in the U.S. That's just the nature of our business.

[Chandra Arya, Liberal, Nepean, ON]

You know, in the steel industry, the installed capacity has not gone up for the last 20 years because all of the Canadian steel companies are foreign-owned now. They don't want to increase the capacity in Canada. We have the raw material. We have the talent. We have everything, and they don't want to export anywhere other than the U.S. or Mexico, when we are signing free trade agreements all across the world. Why is that? How can we allow our steel industry to be strangled? That's the word I want to use, but I'm using it very carefully. The number of people working in the steel industry has been going down. There's no growth in installed capacity. This is all because of foreign ownership. What would you say about that?

[Keanin Loomis]

Certainly, there's been a lot of innovation in the industry, thus the workforce has been going down.

[Chandra Arya, Liberal, Nepean, ON]

The fundamental thing is—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Arya, but your time is up. Maybe Mr. Loomis can add a few things off-line.

To our witnesses, thank you very much for the very valuable information you have provided. We appreciate it.

We will now adjourn the meeting.