Evidence of meeting #36 for National Defence in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aircraft.
A recording is available from Parliament.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
Are you familiar with the testimony relating to many of the benefits of this initiative in terms of the high-tech industry and high-tech companies in Canada?
Assistant to the National President, Canadian Auto Workers Union
Yes. I'm aware that many of the companies we deal with, and many companies we're not dealing with, have been approached by, or met with, government about industrial offsets.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
Do you feel that Canada's aerospace industry—and this is a question for both of you gentlemen—would be better off with or without the F-35?
Assistant to the National President, Canadian Auto Workers Union
There is no question there has to be a replacement for the F-18. I'm not here really to debate whether or not the F-35 is the right aircraft or the wrong aircraft. There is no question there has to be a replacement, so it's going to be replaced.
Conservative
Assistant to the National President, Canadian Auto Workers Union
Absolutely, if we're going down that road.
Just to finish off, whether or not we need aircraft that carries bombs and missiles and has stealth capabilities, that's a discussion for another day, but if we need to replace the F-18, we'd best do it with what's best available.
President, Directing Business Representative, Organizer, International Association of Machinists and Aerospace Workers - District 11
It is the next generation we need, whether it be the JSF, the F-35, the F-22--whichever one of those aircraft is not necessarily.... I'll talk like my brother over here. It's not necessarily up to us; we're not the experts. The Canadian government and the Canadian military know what they need.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
There seems to be a disconnect. We've had industry association representatives here, we've had company representatives here, and they've said to us, “We can compete with any company in the world. Bring it on. In fact, let us operate within the MOU and not within this constrained system of one-to-one IRBs, because that's the floor.” They see limitless opportunities. They're completely confident in their ability to compete, but I haven't heard that from you today. Why do we have a disconnect?
President, Directing Business Representative, Organizer, International Association of Machinists and Aerospace Workers - District 11
They're confident because in the MOU it doesn't state that those companies, if they obtain contracts here, can't move them after.... That's what I believe. If I'm an employer and I'm manufacturing a part in a machine shop, and I can manufacture it here for $25 or I can manufacture it in Mexico or somewhere else for, let's say, $5 an hour, nothing stops me in that memorandum of agreement, from what I understand, from moving that—
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
Mexico is not one of the nine countries that's getting—
President, Directing Business Representative, Organizer, International Association of Machinists and Aerospace Workers - District 11
No. I'm giving you an example. Mexico is one, or Brazil. There are other countries that are low-cost countries that can build those parts.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
Yes, and if we're developing advanced technology here, as Mr. Hawn explained as well, we own that intellectual property. We will not only continue to manufacture that here, but we'll be involved in the support of that technology as well, moving forward.
President, Directing Business Representative, Organizer, International Association of Machinists and Aerospace Workers - District 11
Sir, my question to you is, is that a guarantee?
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
Well, again we heard.... First of all, sir, when you join the opposition, you're free to ask me questions.
President, Directing Business Representative, Organizer, International Association of Machinists and Aerospace Workers - District 11
I'm sorry.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
In the meantime, as you appear here, it's my job to ask you questions.
As I mentioned, we've heard, and heard very clearly, from industry that they see the opportunities without the guarantees. They see more opportunities, and that's been a compelling message that we've heard from each representative.
Richard Nadeau Bloc Gatineau, QC
Thank you, Mr. Chair.
Good afternoon, everyone.
I don't usually sit on this committee, but based on what I am hearing and the parallels, it's almost like a repeat of the Avro Arrow story. Canada has expertise, but that expertise is going to slip through our fingers. That's sort of the image I have of it.
The knowledge is her; the capital is elsewhere. This is really how I see it. I heard earlier that we would be sent 65 aircraft, the new F-35 model. Does the United States really have 2,000?
President, Directing Business Representative, Organizer, International Association of Machinists and Aerospace Workers - District 11
We are talking about roughly 2,000, if I am not mistaken.
Bloc
Richard Nadeau Bloc Gatineau, QC
That's a very powerful image.
Do you think you would be able to fight, to seriously compete—please, don't be offended by my words—with other factories for those contracts, if they are left on the free market? We are currently being told that there could be spinoffs—but perhaps there won't be any—that would not be able to match what we are putting forward, meaning the $12 billion. Are you able to compete with companies that can do the same thing as you elsewhere? We know that “elsewhere” means “in the United States”.
President, Directing Business Representative, Organizer, International Association of Machinists and Aerospace Workers - District 11
I am not an economist, but one thing that bothers me is the value of the dollar. We have received a lot of work from American companies that came here because it cost them 60¢ rather than $1. Now, it is more difficult for us to get contracts from the United States. We used to have a ton of contracts from the United States. But, more and more, the companies are going back there.
One of the reasons was that Quebec was considered to be a source of cheap labour for the United States. That's why we are going to have trouble competing with an American company when the dollar is at par. It is because of the current economic situation.
I believe we have the know-how, as you say, the skills and qualifications to do all that work. However, sometimes, it is not only about having the qualifications or skills, but it is also about political decisions.
The “military” is very important in the United States. Military contracts are given—I'm sorry, no pun intended—to taxpayers so that their politicians can be re-elected and say that they managed to provide a company with work, and so on.
Sometimes, it is not only a matter of decisions, of wondering whether we have the know-how or whether it makes sense economically. They are just “hogging the covers”. The softwood lumber industry is a great example of that.
We were able to do a lot of things here, but at some stage, the Americans decided to flex their muscles and impose a tariff. As a result, they cut a lot of Canadian companies out of the softwood lumber industry.
So these are often not logical or financial decisions. That is why we prefer to have official, signed guarantees.
We have some bargaining leverage at the moment: the planes have not been bought. It is important to look for guarantees in the memorandum of understanding.
Assistant to the National President, Canadian Auto Workers Union
There's no question that our employers have the ability and technology to do the work. I guess it's the question you ask them. No aerospace OEM or major aerospace player is going to sit before this committee and say they don't have the technology or they can't compete. Of course they're going to say they can compete, because they can.
The question is whether it's a level playing field. If I ask whether you would like the opportunity to have access to up to 3,000 aircraft or be stuck with 65 aircraft, everybody in their right mind is going to say they want access to 3,000 aircraft. But if you ask, “Do you want a guaranteed $16 billion or potential access to $12 billion”, people are going to say they want $16 billion.
