International Trade Committee on Feb. 8th, 2024

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Sheehan is next, please.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much to our presenters. All of you are demonstrating how serious your work is in supporting our important supply chains.

Madam Chair, my first question is going to be to the CBSA.

You mentioned dumped products in your remarks. I'm from Sault Ste. Marie. We have the second-largest steel producer, Algoma Steel, and a very large, significant producer called Tenaris. After I was elected in 2015, I was called to a meeting at Algoma Steel, and they're going bankrupt because of dumped steel.

We set out to modernize the trade to fight dumped steel. In 2016, there were measures that were placed in the budget. Then in 2017, things like cost distortion and scope were in place. A whole bunch of things were in place. One of the things that we had to do was not just get that on paper, but also have CBSA hire some folks to deal with this.

Could you update this committee on the work that the CBSA officers do? These are the folks you don't see at the Sault Ste. Marie border who are securing our borders. They're working behind the scenes.

Through you, Madam Chair, what kind of work does CBSA do to intercept dumped steel and aluminum?

[Doug Band]

It's a pleasure to get to speak about this program. It's an important one for Canadian companies. As the member noted, steel is a very significant user of this program.

This program operates under the policy guidance and direction of the Department of Finance under the Special Import Measures Act. As of 2022-23, the duties that we have put in place as a result of our investigations help now to protect 30,000 Canadian jobs and over $11 billion in domestic production.

As was noted, the program has been under significant demand. We currently have 150 measures in force. That represents a 130% increase over the last 10 years, from 2013 to 2023. Steel investigations, not surprisingly, continue to be in high demand. They are our biggest user of the program. From 2020 to 2024 alone, over half of the 41 investigations we initiated dealt with steel products.

We are seeing demand from new, less traditional users as well. Examples are in renewable energy, such as solar panels and wind tower investigations, as well as in consumer goods, construction products and otherwise.

The member asked specifically, Madam Chair, what our officers do. I can tell you that there are three broad categories of what we do. The largest part of the organization, upwards of 50 people, focuses on the investigation work, on going out and understanding what's happening in the market. Are goods being dumped into the Canadian market? This simply means they are being sold at artificially depressed prices, lower than the cost for that company to actually produce that good and make a small profit in their own market. They're selling into Canada at a price lower than what they can sell it for in their own market, adjusted for profit and administrative costs.

For steel, obviously, I would defer to the finance department in terms of their comments on the global market, but steel continues to be a significant priority for us. We are in regular contact on a number of investigations with steel producers and the CSPA.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you for that. It's important not only to Algoma Steel but also to Tenaris. There were a handful of people working there when I was first elected. Again, it was about the dumped steel. They're up to multiple hundreds of folks working there too, and they are part of it. Directly and indirectly, 120,000 to 130,000 people in Canada feed into these supply chains, especially in EV car manufacturing, because we are now decarbonizing the steel industry.

I've forgotten your name. I'm sorry; I apologize. I talked to you about decarbonizing some industries, but the steel industry is also decarbonizing. Could you please provide comment on that and your thoughts on it?

[Sheryl Groeneweg]

Madam Chair, that's probably me.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

It is you. I'm sorry; I apologize.

[Sheryl Groeneweg]

That's okay. Thank you.

The steel industry is extremely important to Canada. The steel industry contributes a fundamental good that feeds into and supports other manufacturing. The dynamic right now in steel, as was described before, is that there is a non-market-based steel economy that's diminishing Canada's market-based steel economy. What that means is that our market-based steel producers are having a difficult time competing against subsidized steel that's coming into the Canadian market.

One of the features that's changing right now in the dynamics of the global steel trade is that there's a larger demand and pricing for decarbonized steels. The auto manufacturers and other clients that require steel inputs are seeking out net-zero or near-net-zero steel. Canada has made two significant investments to date, one in Algoma Steel and one in ArcelorMittal Dofasco. For Ontario, that should total about six million tonnes of GHGs that we are reducing.

That also means that those steel companies will have access to markets when carbon borders become a new measure for dividing up countries, companies that are pursuing means to address their Paris commitments and that are trying to address the carbon problem and maintain a high-quality product while at the same time avoiding the usual negative consequences of high-carbon and highly subsidized steel that's unfairly traded in a single market.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you, Sheryl.

[The Chair, Liberal, Judy Sgro]

Mr. Savard-Tremblay, you have two and a half minutes, please.

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

Thank you, Madam Chair.

My question is for the CBSA officials.

During the national supply chain summit in January 2022, there were calls for “an examination of border measures and clarity from CBSA to reduce complexity.” Did the examination take place, or is it under way?

[Jennifer Lutfallah]

Unfortunately, I'm not aware of the study that you're referring to. Perhaps you can give me a bit more detail.

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

I'm referring to the national supply chain summit, which took place in January 2022. One of the criticisms that emerged was the need for “clarity from CBSA”.

[Jennifer Lutfallah]

We're going to endeavour to provide you with a written response.

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

Very well. I appreciate that. I take it, then, you aren't aware as to whether an examination of border measures is under way.

[Jennifer Lutfallah]

No, I'm not.

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

In other words, the measures are not being examined, assessed, checked or double-checked in any way to ascertain their effectiveness or complexity, among other things.

[Jennifer Lutfallah]

I'm not aware of the study that you're referring to.

[Mike Leahy]

Are you referring to a particular sector, such as the maritime sector, or do you mean generally?

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

I want to know whether border measures are subject to any ongoing review, whether some sort of oversight mechanism is in place to examine or check them. Do you do any sort of performance review?

[Mike Leahy]

We have statistics, performance measures, for all our modes of entry. We can send you the reports.

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

In other words, you do a statistics-based impact assessment of the measures.

[Mike Leahy]

It's more of an analysis of the services we provide at all the ports of entry in the country.

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

Who does the analysis?

[Mike Leahy]

The agency.

If we're talking about border wait times, processing times and service standards at each port of entry—if that's what we're referencing—those are monitored by the—