Evidence of meeting #8 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 china.
A recording is available from Parliament.
President, Global Automakers of Canada
I believe so, yes.
What we do have is an opportunity, with the tariffs in place, to grow our EV ecosystem, but we need to get on with it. We need to proceed with the provisions to get the minerals out of the ground faster, get swifter environmental assessments completed and so on and so forth.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
That would be about developing our own domestic supply chain, if you will.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Thank you very much. I appreciate those comments.
Mr. Kilby, I'm wondering if you're feeling, on the whole, that your segment of the industry is not receiving a great deal of attention.
I can't escape the image of you and other extruders being the little guys watching the ball go back and forth over top of you and being caught up in that battle. Is that something you're concerned about right now, a lack of attention from our federal government?
Chief Executive Officer, Dajcor Aluminum Ltd., Canadian Aluminum Extruders Coalition
Yes, that's very accurate.
Our industry is integral to the primary producers but is very different. Theirs is a global commodity, and it ships anywhere in the world as ingot or logs, whatever product they're selling. Our is more geographic. It's limited by trucking distances and those types of things that make it only competitive, to an extent, in our country. We all have our little zones of influence in our extrusion company, so yes it's....
I'm sorry;.I lost my train of thought. Could you repeat your question, please, just the essence of it?
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
That's no problem at all.
It's a big industry to be lost in, and I'm just wondering if the extruders are, perhaps, not given their due in the bigger picture.
Chief Executive Officer, Dajcor Aluminum Ltd., Canadian Aluminum Extruders Coalition
Coming back to the beginning here, yes, the primary aluminum smelters are the recognized industry in Canada. Everybody knows that industry.
What they don't realize is that there are aluminum casters and extruders that take that product and turn it into parts that go into the autos we drive, the trains we travel on and the office furniture we sit on. All that stuff is vertically integrated in the North American market here.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Generally, it's my sense from what you've described—and others before the committee today and on other dates—about transshipment is that product comes in from other parts of the world, particularly China, which has a particular disposition to, frankly, try to subsidize production from that country to the point that it will drive domestic production out of business in other countries. However, that product is coming in, and it gets lost, perhaps, once it's manufactured or remanufactured.
What can we do about that?
Chief Executive Officer, Dajcor Aluminum Ltd., Canadian Aluminum Extruders Coalition
It is a bit of a whack-a-mole problem for us, where we have to be vigilant on what China's doing now to move metal into the market. That was the reason for the U.S. trade case. That's the reason we were considering another trade case.
This sudden disruption is creating real immediacy. In the past, our industry has patiently gone through the rules-based system of a trade case. However, this time we really need urgent action to help keep that stuff out while we address the issues in a trade case, which we're willing to do, but we need some immediate barriers to keep it out so we have an industry to maintain.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Sir, I'm sure my colleagues from the House who are part of the government caucus, opposite us here at the moment, are hearing you and will take your concerns forward to the government of the day.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Thank you, Madam Chair.
Thank you to our witnesses.
We all know that in Canada we produce the best canola. We produce amazing cars. We have an amazing aluminum sector. We make that case, and I'll be asking each of you to make the case to our U.S. partners about the importance of this partnership. In my opinion, it's been about a level playing field in terms of our labour standards, our environmental standards, the way we do business and our people-to-people ties.
We had Linamar here at our committee. They're one of the biggest auto parts manufacturers and they have plants all over the world. They say that Canada's plants are their most productive plants in the world. That productivity and that competition, even with the United States, in a good way, actually brings everybody up and allows for the best products to be made at the best prices here in North America, and then in turn exported around the world.
I'll start with you, Mr. Adams. I'd like you to make the case for the CUSMA review and how important this is to not only Canada but also the United States, and how not having the right outcomes of that review will hurt the United States.
President, Global Automakers of Canada
What I would say, and you've pointed it out, is that a number of at least my members' plants have won international awards for their quality and whatnot of production in Cambridge, Woodstock and what have you. We produce a quality product. We produce a product by an excellent labour force. We also have the benefit of having a public health care system in Canada that actually supports the affordability of those products going into the United States as well. The challenge for the United States is that when you are trying to repatriate your industry, all you're doing is adding costs by undermining the existing supply chains that have actually benefited the United States over the course of the last 60 years since we've had a sectoral free trade agreement with the United States in the automotive industry.
Those are the types of arguments we need to be making to the United States. It's actually to their benefit to have Canada as a strategic partner for a competitive North American or U.S. automotive industry.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Thank you.
We don't want ourselves or our American friends to see the cost of a car go up. We've already heard that the average cost of a car here is getting close to $60,000. By disrupting the whole supply chain and the system that we have now, you will see those prices increase, as we've seen on home prices in the U.S. with softwood lumber, where it's added thousands of dollars to homes.
Mr. Kilby, what is the case that you would make to the U.S. on aluminum and our competitiveness?
Chief Executive Officer, Dajcor Aluminum Ltd., Canadian Aluminum Extruders Coalition
I have factories on both sides of the border. I can tell you that the productivity in Canada exceeds the one in the United States. They're both very good. We do optimize between plants where it makes sense geographically to optimize. These are things that are beneficial for Canada and the United States to keep the lowest-cost product.
If you look at the primary aluminum situation, it goes where the cheapest power is. Primary aluminum smelting needs cheap power. The U.S., with natural gas-fired power, is not a low-cost power country. Hydroelectric power resides in Canada. Cheap natural gas also resides in Alberta and British Columbia, where there are smelters.
If you're going to put incremental capacity anywhere, the best bet in an integrated North American market is to put it in Canada. Then you want to have the supporting industries around it. It makes really good sense that we stay integrated, to that extent. The U.S. is missing the boat on that and is unnecessarily paying an extra 50% on their metal. It seems just ludicrously not necessary.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
I hope they're also hearing this testimony in Washington, D.C.
Mr. Sherman, go ahead, please.
Senior Director, Government and Industry Relations, Canola Council of Canada
Look, I'll tell you that Canadian canola is good for American workers, it's good for American companies and it's good for American communities. We commissioned a study just last year. We know that Canadian-grown canola contributes $11.2 billion U.S. in economic activity in the United States annually and $1.2 billion U.S. in wages and supports 22,000 jobs. We know that we're having a real economic impact in the United States, which speaks to the strength of CUSMA.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
We'll go on to Mr. Savard-Tremblay for two and a half minutes.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
Mr. Sherman, I find what you just said intriguing.
You said that Canadian canola supports 20,000 jobs in the United States. I assume these are jobs in the industry that processes canola from Canada.
Which industry in the United States uses canola? Is it used for oil or canned foods? How is canola used?
Senior Director, Government and Industry Relations, Canola Council of Canada
Yes, that's an excellent question.
Food end uses have typically been our bread and butter when it comes to the United States. Just to give you an example, canola's impact on food end use has nearly doubled over the past decade, generating $8.7 billion in economic activity in 2022 and 2023.
We're also seeing a significant increase in canola oil exports to the United States as a result of the growing biofuel market down there. With the 45Z tax credit that was part of President Trump's One Big Beautiful Bill Act, we managed to get North American feedstocks covered as eligible for that production tax credit. We are seeing a significant increase in exports of canola oil for biofuel production down south.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
In contrast, is American canola also processed here? Are the quantities comparable?
Senior Director, Government and Industry Relations, Canola Council of Canada
No. It's a very small crop in the United States. About two million to two and half million metric tons are produced. We produce about 20 million metric tons. We're a factor of 10 in terms of production here.
There will be some integration maybe in that some of the research or development will be done in the United States. Seed will be exported to Canada for planting, but it's not seed that's used for crush to then be used for oil or meal.
The other thing I will say is that the U.S. is our top market for canola meal as a result of its very large dairy herds, particularly in California. We have seen significant benefits from exporting canola down there because Canadian canola is excellent for dairy herds. It helps produce additional litres of milk per day as part of the feed rations for dairy cows.