International Trade Committee on June 2nd, 2026

[Joseph Maloney]

The rules are right now that construction is lumped in with everybody else, and temporary foreign workers in construction are not segregated. When they established a $1,000 LMIA fee, we in the industry really understood that it was a penalty for the bad actors out there. Some of these actors were using temporary foreign workers as an everyday business cycle.

We bring in temporary foreign workers when we actually need them. To try to get a qualified boilermaker or high-pressure welder in Canada when there's none available...it's just not there. People say that they can weld, but they can't weld to our calibre. That's why we have to bring them in. Every day that a job goes on longer costs more to industry, which is more cost to the economy. When you get big shutdowns, like in the Fort McMurray area with Syncrude or something like that, every time those plants are shut down, it's millions of dollars a day.

If those things get extended out for two, three, four days or a week, it's a lot of money to the economy. They rely on us to do it, but when every boilermaker in the country is exhausted..., and we do go right across the country in a very exhaustive manner. That's why we like to have an expedited way to bring qualified people in.

Believe me, we meet them at the airport when they come here. We put them in housing. We set them all up, and then, when the job's finished, they're laid off. We take them back, and they're gone. There's absolutely no room for abuse. We monitor it.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you, sir.

[The Vice-Chair, Conservative, Adam Chambers]

Monsieur Lavoie, please go ahead.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for taking the time to join us today. This is very important.

I'll begin with some questions for Mr. Larochelle of Nordic Paper Québec. I met him a few weeks ago at a round table meeting with business owners from my riding, Beauport—Limoilou. It was extremely interesting. During the discussion, the recurring message centred on the difficulty of long-term planning. Long-term investments and trade uncertainty were topics that frequently arose. Businesses have to plan on a monthly basis.

Mr. Larochelle, what is your view on the update to the Canada–United States–Mexico Agreement, or CUSMA? Would updating and signing CUSMA help restore confidence among investors and bankers, for example?

[Dany Larochelle]

There's no doubt that having a new agreement—one that would be negotiated and upheld—would promote greater stability. When the new U.S. administration took office in early 2025, we certainly thought we had a contractual agreement, but I can tell you that it led to enormous instability. Even though we knew we had a contractual agreement, it cost us a project, which is currently on hold. Before resurrecting this project, we'll need the agreements we have to be more reliable and to be upheld. Above all, we must ensure they're upheld. I imagine that, as part of your process, you'll ensure that commitments are met by both parties and that the arrangements are reliable. That will help us.

I also think the government may need to put systems in place to provide us with more support. Given the instability of the whole situation, I can tell you that financial institutions are currently very cautious. They're asking for the shirt off our backs before they lend us any money. We need a little help to provide guarantees or be more reliable.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Yes, I know how bankers operate, Mr. Larochelle.

Before continuing on the topic of the CUSMA, I'd like to come back to one point. Earlier, you said something that raised a question for me. It related to Chinese dumping. In your opinion, are there currently any rules or barriers in place to prevent Chinese dumping? If not, should they be introduced? I'd appreciate a brief answer.

[Dany Larochelle]

I am not familiar with the current rules on this matter. Our company is owned by a Swedish corporation. We have factories in Sweden and Norway. Over the past year, I can tell you that Chinese dumping in Europe meant a 20% loss of market share—all within a single year. This phenomenon is starting to take hold in Canada.

A Montreal company receives paper from China that is of very high quality, but it comes without any accompanying certificates. For example, there is no way of knowing whether PFAS regulations are being followed—whereas we, in Canada, are subject to regulations. We must comply with all applicable regulations. Chinese products do not necessarily arrive with the proper documentation.

Now we're looking to the future. In recent years, we haven't really focused on the South American market, but given the global geopolitical situation, we're starting to look in that direction. There's a large population there. Brazil and Argentina are well-populated countries that we haven't focused on in the past. We're going to start looking into them. We know that, currently, China exports a lot of paper to these countries. We'd like to explore the possibility of reaching an agreement with Canada. That would allow us to engage in free trade, without paying duties. These countries have greater economic stability, which would enable us to trade with them and sell our paper there.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

That's very interesting.

Indeed, it's intriguing when you say that paper from China has started arriving in Montreal, but without certification. That might be an issue worth further investigation to see how the mechanism came about.

We've seen other sectors hit by Chinese dumping. There's even a wood furniture factory that was forced to close. We shouldn't let the same thing happen in your industry.

During the round table, many companies discussed market diversification, and they didn't see how it could be profitable or realistic given the current situation.

I understand that we're discussing CUSMA today. You mentioned South American countries. Mercosur is a different agreement. However, in your case, you are still seeking to diversify your market.

[Dany Larochelle]

Yes, we're looking into it. These are markets we hadn't been focusing on, but we now find ourselves having to consider them.

There's another thing we're seeing right now that scares us. When we were planning to install new machinery here in Quebec City, the business models or factory layouts we were shown involved factories that were recently built either in China or in Russia. There was nothing from the United States or Europe. Everything came from those countries. Our fear is that after the war—if there is a rapprochement between Asia, China and Russia, and those countries enter our market—the situation could become very challenging. It must be said that their factories are far more modern than ours. They've invested in their factories. Right now, these factories are operating at reduced capacity, but we're afraid that at some point they'll enter the market—both in the United States and in South America, or even in Europe. That worries us. Our industry will have to plan for the postwar period.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

I see that time is flying by. We have a few seconds left.

What would you like us to keep in mind when it comes to the CUSMA negotiations?

[Dany Larochelle]

I think that, for our sector, things are fine for now. We just need to keep making sure there are no tariffs and that no new ones are imposed by decree. That scared us at the beginning of the year. It hurt us last year, in 2025. In March and April 2025, it hit us hard.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Mr. Larochelle.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you.

Monsieur Ste-Marie, welcome to the committee. Congratulations on your appointment. It's nice to have you here.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Mr. Chair.

Mr. Chambers, it's a pleasure to see you in the chair, which you are handling with great aplomb.

I'd like to take a few moments to greet all my colleagues. It will be a pleasure to work with you. I will be serving on this committee only on Tuesdays until the end of the parliamentary session. On Thursdays, I sit on the Standing Committee on Industry and Technology, which meets at the same time. Naturally, this committee is of the utmost interest to me. I hope to rise to the challenge of working with all of you.

Welcome to the three witnesses.

Thank you for joining us. Your remarks and responses were perfectly clear. I believe we have fully understood your comments on each of your requests related to the CUSMA renegotiation.

My first questions are for Mr. Larochelle.

It's a pleasure to meet you and hear your comments. I'll try to pick up where Mr. Lavoie did such a good job of launching the conversation.

You mentioned your $500 million modernization project, which was put on hold not because of tariffs, but due to the uncertain environment. The project isn't moving forward—again because of the uncertain environment. Is that correct?

[Dany Larochelle]

Yes. What happened was that at the end of 2024 and the beginning of 2025, our order book was full. It was completely filled. We spent two years preparing this project. It took two years to get the project off the ground. There was market engineering, engineering to assess the costs. We were ready. We received our report in January 2025. March rolled around, and we were given to understand that tariffs would be imposed on our paper, even in Canada.

Within a month and a half, our order book went from full to about 25%. We even had to shut down operations in June and July 2025 as a result of this period of instability. The tariffs were in effect for perhaps three or four days, which isn't very long. However, we lost many orders because of the uncertainty, even from U.S. customers who didn't know whether the tariffs applied or not. Orders were either cancelled or postponed, which caused instability.

At the same time, we acquired new owners. When they took over in that context, it wasn't the right time to invest. We went from a full order book to factory closures. The situation has remained the same.

For now, our European sister factories are bearing the brunt of the tariffs. For them, it's been a disaster for the past six months, I'd say. This is quite significant because, given that the United States has imposed tariffs, these plants are unable to sell paper to the United States, which is the major market in our industry. For now, the project remains on hold.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Your group's mills in Europe are being hit by tariffs, unlike your mills, and they are not getting any orders because of those tariffs. Is that correct?

[Dany Larochelle]

That's correct.

Our Canadian customers, who are right in our backyard, are supplied by our mills in Sweden and Norway. For our part, we are focusing on the United States, since we don't have tariffs, or on Mexico. These mills fill the orders we would normally get for Canada; otherwise, they would have very few orders.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

From what we're hearing, this climate of instability and uncertainty is quite devastating for all sectors. Let's hope it ends as soon as possible.

You mentioned that when you didn't get any orders, there was inventory to clear out and customers were waiting to see what would happen. You also mentioned dumping. Are American customers turning to Chinese or Russian producers in large numbers?

[Dany Larochelle]

No, not yet. China has not yet entered the U.S. market. However, given the current situation, it has made a strong entry into the European market, and its prices are lower than production costs.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

I'm no expert, but to my knowledge, if there is Chinese dumping—for example, if a Montreal-based company receives goods without the necessary certifications—the manufacturers themselves must file a complaint alleging dumping and must demonstrate that it is causing them harm. It's a lengthy, complicated and costly process.

There is also another option. When market conditions are difficult, as is currently the case due to uncertainty related to the U.S. market, for example, the government can impose temporary tariffs, known as safeguard measures. I don't know if you have ever heard of this, but is it an option you might consider?

[Dany Larochelle]

I hadn't heard about that. If that happens, we'll definitely contact our representative and see what kind of assistance might be available.

Currently, what's happening in the European market is that the European Union has taken action against China regarding dumping. So there are legal proceedings under way, and the case will be heard by a trade tribunal.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

It's always a long and complicated process. Let's hope it works out.

You said that mills in China and Russia are more efficient than yours. Would the $500 million investment allow you to fully compete with China and Russia in terms of productivity?

[Dany Larochelle]

That's right. We had planned to build a state-of-the-art mill. We drew inspiration from the best practices used in the mills built in Russia and China, and we applied them here. This would have been the most efficient mill in North America.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

China often has a significant cost advantage because it exploits its workers—that is, its labour force—and adheres to lower standards. We need only think of the Uyghurs and certain cases involving children.

Do you feel that your competitors are engaging in these unfair and illegal practices under international law?

[Dany Larochelle]

I couldn't tell you that. The big advantage we had in Quebec and Canada was in terms of energy. Our production costs, thanks to energy, were very low compared to other places.

In terms of labour, I know that Chinese companies pay lower wages, but I don't know who they employ.