International Trade Committee on Oct. 28th, 2024

[Corey Parks]

We try to emphasize what it is we do best. On the one hand, it's service. We emphasize that piece as part of our strategy. The other is that we are the only manufacturer and retreader in Canada that's taking retreaded tires, using the buffing and putting it to Canada's only tire-derived polymer plant, which recycles that material and puts it back into the supply chain.

We think those are good citizen standards that we apply. Our ethics are around being good, sustainable corporate citizens.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Miao, go ahead for four minutes, please.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Madam Chair.

Thank you to our witnesses for being here today.

Mr. Parks, I'd like to ask if you can share more about the process of retreading those tires, because you mentioned how it's more sustainable compared to any other tires, especially the ones that are being imported from China.

[Corey Parks]

I sure can. A company buys a brand new tire. It can be an entry-level, a medium or a premium tire, but it's a tire with a good casing that is built with typical standards. They run that tire until the end of its tread life, and then they send it to us. We bring it in. There's a very complicated process to inspect it to make sure that there's no damage to what is called the casing. Then we put it into a buffer, and this machine buffs off all the old tread. You put some gum rubber around it, and you stick a new tread on it. You seal it, and you bake it for a couple of hours to make it into a new tire. Then it comes back and goes through another inspection process.

You can theoretically do that into perpetuity, but we generally retread three times on average. You can retread it up to five times. Some companies do it an unlimited number of times, but it all depends on the quality of the casing and whether there's been any damage to it during its life.

[Wilson Miao, Liberal, Richmond Centre, BC]

Is this applied only to commercial vehicles or also to passenger and light truck vehicles?

[Corey Parks]

In North America right now, it only applies to commercial tires. When we were all younger people, retreaded tires on passenger vehicles made more sense and were economically viable. Since the late 1990s or early 2000s, very little passenger tire retreading has gone on, because there's not enough material in the product to make it make sense to put the labour on top of it to retread it, whereas a truck tire has an enormous amount of steel, a lot of rubber, a lot of technology, frankly, and the bead that goes in that tire. That's why they cost so much money, because there's a lot that goes into it, and it makes sense to retread.

[Wilson Miao, Liberal, Richmond Centre, BC]

What would be the difference between electric vehicle tires compared to a regular gas vehicle, in the sense of the commercial side, if we are moving toward that transition?

[Corey Parks]

I'm not sure I fully understand the question.

[Wilson Miao, Liberal, Richmond Centre, BC]

My understanding is that electric vehicles have a different type of tire that they use, due to the grip. A gas vehicle has the tires that we've been using.

[Corey Parks]

That's correct. It's not necessarily a different type of tire; it's maybe a heavier construction. The torque on electric vehicles burns the rubber a lot quicker. You can actually peel the tread off the casing with that much torque, so you have to have a very quality tire to put on those vehicles.

We have not seen what the hypothetical new electric truck tire would look like yet. At least, I don't have any knowledge of what that would look like specifically. Generally, electric vehicles require a more quality, heavier-built, technological tire. That's what the Michelins, the Goodyears and the Bridgestones spend a lot of time doing—working on the technology.

[Wilson Miao, Liberal, Richmond Centre, BC]

Earlier, you mentioned tire dumping. Can you tell us what approach the U.S. is actually taking in regard to this disposable or single-use tire dumping?

[Corey Parks]

Unlike Canada, the U.S. does not have a regime for recycling that's anywhere near as robust as it is here in Canada. Here, you pay a good amount on the purchase of a tire to pay for the recycling. The recycling is run by contracts that the government has. In the U.S., it's all done privately. There's very little done on just general recycling.

Because of the tariffs, the U.S. doesn't have disposable tires the same way we do here. I spent a good part of my career in the U.S. working on this very same issue for an almost identical company. We did not have this issue of tires being dumped there after 2019.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, you have two minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Loomis, if you don’t mind, I’m going to ask you the question I wanted to ask you about the review of CUSMA, which is scheduled to take place next year.

Do you have any recommendations for Ottawa? In what areas should we exert more pressure?

[Keanin Loomis]

We were happy, frankly, to get out of the CUSMA negotiation fairly whole. It could have been so much worse. In that regard, I think the government did a really good job and was very deft at negotiating with a difficult negotiator.

We will see, obviously, in a couple of weeks whom we are facing. I think that, generally, we would like to do no harm and maintain our access to the U.S. market. That's the important thing for me. As well, we do need to be looking at the other partner in that tripartite agreement and at whether things have changed. The Canadian government was very much.... There was very little daylight between us and Mexico because of the interesting aspects of negotiating that deal.

I think it is going to be different this time around. I think we definitely should be working with the U.S. to understand the impacts of Chinese investment in Mexico, which has undermined a lot of the CUSMA agreement.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Desjarlais, go ahead for two minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Madam Chair.

To continue on that frame, you've mentioned several times now that Canada is not the bad guy here; it has to be Mexico. This is something that occurs often in various committees, not particularly this committee, where we see that attempt to maybe obfuscate—I don't want to attribute negative malice—what is our issue here. There are domestic steel production issues, like dumping from foreign enterprise into Canada. We have weaker safeguards than our American counterparts. That's a fact that's true.

You're also mentioning a very important fact, which is that in addition to Canada's vulnerabilities, Mexico is hyper-volatile in the action of disrupting our stability for supply chain security for steel manufacturers here.

Can you explain what you mean when you say “investment in Mexico”? Are you talking about investments into capital projects, or investments into innovation, science and technology, or investments into supply chain resiliency, for example? Where is that investment into Mexico and how is it damaging Canadian steel users, manufacturers and producers?

[Keanin Loomis]

My understanding is that there's a lot of Chinese investment into buying Mexican companies and thus using that ability to circumvent some of the rules or be the kind of—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Are they a front company? In this committee, we've heard many times about how there are these companies, shell companies almost, in a jurisdiction in order to just process material. Or are you talking about investments in real factory goods like manufacturing and production tools?

[The Chair, Liberal, Judy Sgro]

Give a brief answer, sir.

[Keanin Loomis]

I'm probably out of my depth a little bit here. I would like to ask the previous speakers, because they're much better at being China watchers and China analysts, for sure. I should probably not go any further.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will go to Mr. Williams for four minutes, please, and then Mr. Arya.

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

Thank you very much.

Mr. Parks, I must say I'm very alarmed today by your testimony. It seems that we have a significant risk to the nation's tire industry, a big industry with thousands of jobs. It seems that every other G7 nation is on top of this. This seems to be something that's gone below the radar.

I want to talk, just quickly, about competition in your industry. This is obviously having a major effect. In the last nine years, has your industry also found other rising costs that are threatening jobs in Canada? Are there other costs that are not helping you compete, let alone having cheap Chinese tires flood into the market?

[Corey Parks]

Nothing comes to mind that is big enough to note. There are rising costs that everybody experiences, sure, but there's nothing.... We buy a finished product. Certainly, the cost of the tread rubber that goes onto a retread has gone up significantly over the last nine years. We attribute that to oil. We attribute that to economics. It's made in the U.S. largely. But we've never seen anything like this before.

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

In terms of truckers and Canadian companies buying the cheaper product, they know it's not on a storefront. You don't see this out in flashing lights. It seems to be a submarket, and they're buying these cheaper tires. Is that because their costs have gone up and they're trying to save money? Why are they buying these cheaper tires?