Evidence of meeting #40 for International Trade in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was equipment.
A recording is available from Parliament.
Conservative
The Vice-Chair Conservative Adam Chambers
I call this meeting to order.
Thank you for being here today.
Before we get to our witnesses, we do have a matter of committee business to attend to. I'll ask the clerk to provide a brief statement, and then we will hold an election for the second vice-chair.
The Clerk of the Committee Grant McLaughlin
Thank you.
We need to elect a second vice-chair. I'll begin the process.
Pursuant to Standing Order 106(2), the second vice-chair must be a member of an opposition party other than the official opposition.
I am now prepared to receive motions for the second vice-chair.
Mr. Fonseca, you have the floor.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
I'd like to nominate Gabriel Ste-Marie as second vice-chair.
(Motion agreed to)
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you, colleagues. We are slowly reclaiming and bringing the finance team back together. We have a number of folks here today.
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, 2025, the committee is resuming its study of the forthcoming CUSMA review.
We have with us today, from the International Brotherhood of Boilermakers, Joseph Maloney, who is a representative of that organization. We have, from Nordic Paper Quebec Inc., Dany Larochelle, chief executive officer, joining us online today. Then, finally, from the North American Equipment Dealers Association, we have Nancy Malone, who is a vice-president of that organization. Welcome to you all.
We'll begin with opening remarks of five minutes each. I appreciate your sticking to our time constraints, and we'll have lots of time for committee members.
I would like to welcome Mr. Maloney to make his opening statement of five minutes.
Joseph Maloney Representative, Canada, International Brotherhood of Boilermakers
Thank you very much for the opportunity.
The International Brotherhood of Boilermakers has been building and maintaining Canada's industrial facilities since the 1890s. Our trade is a major builder in shipyards, petrochemical plants, pulp mills, steel plants, steel fabrication shops, mines, cement plants and conventional and nuclear power plants.
The boilermakers union in Canada represents approximately 12,000 highly skilled men and women who fabricate, install, maintain and inspect boilers, pressure vessels and the associated equipment that keep Canada's industrial sector strong. We have a very vibrant, four-year on average apprenticeship system, producing approximately 250 to 300 apprentices annually who train to a Red Seal standard.
As a union, we are the labour supplier for over 200 boilermaker-specific contractors. Our work picture would normally consist of new projects under construction and seasonal shutdown and turnaround maintenance work, which are normally each spring and fall. We were managing this work schedule quite well until about 2011, when the oil patch in northern Alberta experienced a major boom due to increased oil prices. This resulted in manpower shortages, particularly in Alberta, so we developed a temporary foreign worker program in partnership with our employers.
The boilermaker TFW program is unique, as the boilermakers is the only construction union to have established its own program at no cost to its employers. In developing our temporary foreign worker program, we wanted to make sure that there would be absolutely no exploitation of a worker. That meant not using headhunters or labour brokers.
Any TFW coming into Canada working as a boilermaker would work under the same terms and conditions as a Canadian boilermaker under our collective agreement in that province. Our TFW program has been recognized by IRIS, the international recruitment integrity system, which was created by the International Organization for Migration, a division of the United Nations, as a best practice regarding temporary foreign workers.
We focused first on our sister locals in the U.S. and then expanded our search to Ireland for high-pressure welders. As you know, the TFW program is employer-driven, and the employer must file an LMIA, or labour market impact assessment. From 2011 through 2018, we brought in 262 Irish temporary foreign workers, all high-pressure welders, who worked a total of just over 202,000 hours collectively, and we brought in 470 U.S. boilermakers, who worked a total of about 300,000 hours collectively. We brought them in primarily on shutdown work, where we were experiencing short-term, high-density labour demands. These TFWs worked for approximately three to four weeks. When the job was completed, they were returned home.
In 2019, employers were becoming reluctant to utilize TFWs, as the LMIA fee increased several times to the current level of a non-refundable $1,000 per applicant, which proved problematic. The explanation given for these increases was to offset the administration costs to the government. This fee presents an unnecessary expense and burden to our contractors. We raised concerns with the ESDC at the time, but unfortunately, the LMIA fee is still being charged.
Our ask is simple. Amend chapter 16 of CUSMA to include a construction-specific designation to allow unions like the boilermakers, in partnership with our employers, to access qualified boilermakers for short-term, high-density work demands with no LMIA fee attached, in the U.S. and abroad.
Also, update the existing H-2B visa program in the United States to be construction industry-specific to allow trades like ours, via U.S. employers, to access qualified Canadian boilermakers in short-term, high-density shutdown cycles. Currently, the H-2B visa program in the U.S. is available each January, and all of the visas are usually gone within a few days because construction is involved in there. They're also lumped in with agriculture and service workers.
Those are our requests. We're asking for a construction industry-specific program inside CUSMA that doesn't have an LMIA fee attached, and some kind of expedited system whereby we can bring people in from the United States.
Sometimes we'll get a call for a shutdown that we need 400 boilermakers for, and we may only have 300 available across Canada. It's the same thing when we go to Ireland for our welders. We go there because there's no language barrier, and they're also trained to the same standards we have here under the ASME welding codes.
Thank you.
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you, sir.
Mr. Larochelle, you have five minutes for an opening statement.
Dany Larochelle Chief Executive Officer, Nordic Paper Quebec Inc.
First of all, let me thank you for giving me the opportunity to speak before you. It is a privilege, and I thank you on behalf of Nordic Paper Québec.
The purpose of my remarks is to inform you of Nordic Paper Québec's operational and strategic situation in the context of the Canada–United States–Mexico Agreement—or CUSMA, the strategic role the company plays in the local economy, the risks affecting the North American and European markets, as well as the strengthening of anti-dumping mechanisms aimed at supporting the industry and protecting quality jobs.
Nordic Paper Québec is a highly specialized pulp and paper mill operating in a niche market: food-grade paper, a high-value-added specialty paper. As the only mill in Quebec and Canada to produce this type of paper, we have been doing business since 1953.
As I mentioned, the mill manufactures food-grade paper for molds, liners and paper separators. You'll find our products in the bacon industry, among others, as well as the blotting paper industry. Our paper is grease-resistant. This means you'll also find us in the paper industry for muffins, bread and pizza—along with any baked goods where grease resistance is required.
As for our certifications, we are accredited by the Food and Drug Administration, the Safe Quality Food Institute and the Forest Stewardship Council's forest certification system. We are also kosher certified, and our market is international.
The company serves customers outside Canada—85% of our production goes to the United States, about 5% goes to Canada and the rest goes to other parts of the world. Nordic Paper's annual production stands at approximately 14,000 tons of paper per year, generating revenue of about $45 million, primarily from exports. This is a valuable asset, both for Quebec and for Canada. We have approximately 70 skilled employees who work in various departments and hold stable, well-paying jobs.
In terms of our economic impact, our payroll is approximately $7 million dollars. We therefore stimulate the local economy and generate significant tax benefits for our country.
As for the risks associated with unfair practices, the closure of our plant would certainly hurt employment, the industrial base and the specialized manufacturing expertise we have here in Canada. Maintaining the current CUSMA terms is important. Nordic Paper wishes to retain the current rules without changes to preserve trade stability. The absence of tariffs facilitates the free movement of goods between Canada, the United States and Mexico. Predictable rules allow for investment and operational planning, ensuring competitiveness in the international market.
The instability we experienced in 2025 with the arrival of the new United States administration put a $500 million investment project in Quebec City on hold—a project to build a new food-grade paper mill. The instability we experienced in the months following the election of the new U.S. President led us to set this major project aside.
CUSMA is a fundamental pillar of stability for Nordic Paper Québec and for the specialty paper sector in North America. However, we would like to warn you about the impact of the dumping that Europe has just experienced. Chinese producers captured over 20% of the European food-grade paper market within a single year. We are beginning to fear that this will also happen in Canada, as low-cost Chinese products entering the country threaten fair competition and the viability of local manufacturers. This is what we have observed since the U.S. tariffs took effect. China turned to Europe, and is now turning to Canada to break into our market.
Dumping places significant pressure on margins and threatens the survival of specialized North American mills, because we cannot compete with the prices the Chinese are able to offer. Without effective protection, successful companies like Nordic Paper Québec cannot compete on a level playing field.
In terms of rapid growth, Chinese producers have swiftly increased their share of the food-grade paper market. As I mentioned, they captured 20% of the European market within a year. Low selling prices—which are often below cost—are putting significant pressure on North American and European producers. Consequently, this situation is leading to shrinking margins, reduced investment and plant closures.
There is also cause for concern: We currently know that an alliance between China, Asia and Russia is forming, and we expect markets to be flooded once everything is settled, because these countries have state-of-the-art factories that are more cost-competitive than ours. Therefore, we ask you to be watchful of Chinese dumping.
We would also like to conclude free trade agreements with South American countries, such as Argentina and Brazil, to facilitate our entry into those markets.
Thank you.
Nancy Malone Vice-President, Canada, North American Equipment Dealers Association
Thank you, Mr. Chair and members of the committee, for the invitation to appear here.
The North American Equipment Dealers Association, NAEDA, is an international trade association representing approximately 1,000 farm, industrial and outdoor power equipment dealers with 2,500 locations in the U.S. and Canada. Our Canadian division covers over 100 dealer groups with nearly 400 locations across the country. Our dealers are all sizes, from single-store locations to large multi-store organizations, selling dozens of brands of mainline and short-line equipment, and their collective sales total over $10 billion annually.
More importantly, agricultural equipment dealers in Canada employ more than 18,000 people who are located primarily in rural communities. The job opportunities they provide are professional in nature, highly trained and, in some cases, highly technical. More often than not, ag equipment dealerships offer some of the highest-paid job opportunities in rural communities.
Agricultural equipment dealers play a critical and often forgotten role in the overall ag value chain. At every phase of the farmer's or producer's activities, you'll find one of our dealer's tools or tractors, helping them get the job done faster, better and more safely than ever before, allowing even small farms to produce and compete at the highest market levels.
From our perspective, CUSMA has been an outstanding success. The economic integration and competitive benefits derived from tariff-free market access have brought stability and predictability to the regional equipment market supply chain, which have led to economic growth in each country. The ability for our dealers to hire, expand and invest depends on the certainty of this trade agreement moving forward. Therefore, we are happy to hear today's announcement, but we also strongly urge the Canadian government to make every effort to maintain the free and fair trade environment that CUSMA has provided to all signatory countries.
Our equipment has moved seamlessly back and forth across the border for decades. Farm equipment was exempted from both duties and tariffs even prior to the signing of NAFTA. The reality is that Canada is a net importer of large agricultural equipment, and for our dealers to diversify from their existing manufacturer partners would be extremely difficult. The ag equipment business is a highly competitive, multi-billion-dollar global industry with diversified manufacturers and supply chains, but it is also a mature market that has rationalized down to a handful of world-class manufacturers. New players or market disruptors are highly unusual in our industry.
The equipment purchased by Canadian dealers from primary mainline brands like John Deere and Case IH is 100% manufactured in the U.S. Other large international brands like New Holland, CLAAS and Kubota may have corporate roots outside of the U.S., but many of their machines are manufactured in the United States specifically for North American markets and then transported to Canada. It's not only the equipment, but most of our repair parts come through the global supply chain via the U.S. and end up on our dealers' shelves in support of Canadian customers.
Our tractors and tools can be found everywhere in the sector, and our dealers' ability to support their customers, who are agri-food producers and farmers, remains integral to Canada's food security. Therefore, we must ensure that this equipment continues to flow freely across the border.
Our dealers also serve as the main distribution network in Canada for domestic agricultural brands, and our own agricultural manufacturing sector is strong, but companies tend to produce short-line products or smaller tractors. In some cases, Canadian short-line products account for a significant share of dealers' whole goods revenues, making their long-term viability especially important to both Canada and the U.S., which receives 80% of Canada's ag equipment exports. Unfortunately, these manufacturers do not produce equipment that can substitute for the larger main lines, like John Deere. Consequently, many of our dealers have limited or no ability to source new mainline products domestically, either on a national or regional basis, or reasonably from non-U.S. sources.
We appreciate the measured and thoughtful approach the government has taken over the past year when it comes to the trade war. Particularly early on in the conflict, we were fearful that broad countertariffs would be imposed, and this would have been disastrous, as any countertariffs on farm machinery would have compounded prices for Canadian farmers, producers and, ultimately, consumers.
Unfortunately, today's global steel tariffs are having an impact on all the manufacturers, and therefore on dealers and customers. The larger global manufacturers have tried to absorb the bigger price shocks by spreading the tariff burden across their diverse product lines and global territories. If the global trade environment remains as complicated as it is today, it is likely that customers will be paying higher prices well into the future.
As the government considers its approach in the forthcoming trade negotiations with the U.S., members of NAEDA request that Canada fight to preserve the CUSMA language that allows farm equipment to freely cross our border. Our dealers play an integral role in supporting Canada's farmers and producers and we hope to continue that work for generations to come.
Thank you.
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you very much. We'll now move to our rounds of questioning. The first rounds are six-minute rounds.
Mr. McKenzie, you have the floor.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Thank you, Mr. Chair.
First, Ms. Malone, you somewhat concluded your remarks touching on the integrated nature of manufacturing. Can you expand a bit on that? I'm concerned. If most of the product that your members import is manufactured in the U.S., what then is the role of some of the tariffs that have been imposed on Canadian aluminum and steel that might head to the U.S. as inputs?
Vice-President, Canada, North American Equipment Dealers Association
The inputs come from all over the world. When you speak about mainline equipment—and when we say mainline, we mean large tractors—they source their inputs from all over the world. Once they are going into the U.S., all of these—it doesn't matter if they're coming from Canada, China or wherever—inputs are being tariffed. Therefore, in order for manufacturers to create and make their machines, the prices are going up, even if there are no tariffs once they're coming back and forth across the border. It compounds that issue if we were to impose something in a countertariff measure.
I don't know the value or the percentage of Canadian inputs into U.S. equipment, but it's a very competitive market, as we know, and there will be some issues if that remains in terms of keeping the prices of machinery at a somewhat acceptable level.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Has your organization been involved in consultations with the Government of Canada in respect of CUSMA?
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Can you explain or talk a bit about the nature of those consultations?
Vice-President, Canada, North American Equipment Dealers Association
We've participated since the beginning when the original tariff structure was imposed by the U.S. There were discussions with industry in terms of whether there ought to be countertariffs, so we got good reception from the department of trade and the ag department, and others, in terms of pointing out how, if they were to take our equipment as a.... John Deere and those types of manufacturers are big targets, but we had to walk them through and say that this was going to have a significant impact, not only on farmers but also on that middle layer of support, which is what our dealers are. They're very large employers and very large supporters of farmers and producers, and that was the education we provided. They were very receptive to it and understanding of that.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
I think at an early point the Mark Carney government intended to inflict some reciprocal tariffs on the U.S. product coming into Canada, but ultimately that was abandoned by the Carney government.
Vice-President, Canada, North American Equipment Dealers Association
Yes. That list of countertariffs was very large, very long and covered a lot of industries. Our industry would have been significantly impacted. At the end of the day, the only products that did get pulled in were some larger commercial mowers, and that has gone away now.
We do have one small piece of equipment that is still sort of hooked in on some of these countertariffs, but it's not significant in the grand scheme of things.
We need to be careful, because we cannot produce those products in Canada at this point.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Would your members like to see the CUSMA negotiation opened, successfully concluded and closed?
Vice-President, Canada, North American Equipment Dealers Association
Yes. I think today that Minister LeBlanc said that we should just continue on with 16 years of stability and address pain points individually as needed. We are looking for stability. We want predictability, as any business does. If we continue with our equipment moving under the protected status as it is right now, that will be extremely valuable for our dealers in terms of their ability to plan ahead with their manufacturers to make sure that there's equipment moving across the border in a seamless way.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Thank you very much.
Mr. Maloney, I have a similar question for you. Has your organization been involved directly with the federal government in consultations respecting the renewal of CUSMA?
Representative, Canada, International Brotherhood of Boilermakers
We have not about the renewal of CUSMA, but we certainly do support that. We've been in discussions with them on the temporary foreign worker program and how it relates to the construction industry.
Conservative
Representative, Canada, International Brotherhood of Boilermakers
It's always been very welcoming, but we just can't get to where we want to be.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
What do you think the principal barrier is to getting to where you'd like to be?