Thank you.
Good morning, honourable members of the committee, and thank you very much for the opportunity to present to you today on behalf of the Canadian Steel Producers Association as regards your study of Bill C-354, An Act to amend the Department of Public Works and Government Services Act (use of wood).
The CSPA is the national voice of Canada's $14 billion primary steel production industry. Canadian steel producers are integral to the automotive, energy, construction, and other demanding industrial supply chains in Canada. Our members produce roughly 13 million tonnes of primary steel and an additional one million tonnes of steel pipe and tube products on an annual basis. This provides direct employment to over 22,000 Canadians while supporting an additional 100,000 indirect jobs.
To start today, I think it's important to state that all of our members support a healthy Canadian construction industry. Wood, steel, brick, concrete, and other construction materials are all important links in a competitive Canadian business environment focused on meeting the needs of domestic supply chain stakeholders. With that open and competitive market balance in mind, the CSPA cannot support Bill C-354 as currently constituted. We are concerned that this legislation would create a permanent legislative preference for wood over other construction materials, which would undermine competition and ultimately inflate infrastructure costs by limiting the types of materials available for use on federal projects.
Further, we worry this bill will limit the design freedom of construction professionals in the selection of materials and create potential conflicts with Canada's National Building Code. We worry that the legislation could call into question Canada's obligations under domestic and international trade agreements, and we worry that the legislation threatens green procurement policies by discouraging ongoing assessments of total carbon and life-cycle footprint for the products that the Government of Canada uses in its projects.
The federal government is a significant purchaser of construction material across the country. Its activities affect the national economy and can influence the price and the availability of goods and services, including construction services within the marketplace. Moreover, the Government of Canada's decisions on procurement practices not only influence the practices of other levels of government, but also those of the private sector. As such, any change in federal procurement policy—in this case the creation of a permanent legislative preference for the use of wood over other construction materials—should be carefully considered so as to avoid unintended market consequences.
Our association believes that it is neither good nor acceptable public policy for our governments to promote one building material by excluding alternative, viable, and competitive Canadian materials from Canadian construction markets. We strongly believe that all construction material should operate on a level playing field, and in a competitive, fair, and open economic environment. We believe the proposed Bill C-354 to be philosophically contrary to the performance and procurement policies and methods currently employed by the Department of Public Works and Government Services to actively promote and ensure openness, fairness, and transparency. If enacted, we believe the bill would distort these fundamental equalities and send a clear discriminatory signal as regards other construction materials and industries.
As I indicated earlier, Bill C-354 will also limit and undermine the freedom of a design professional or experienced contractor to select the most appropriate construction material for an intended function and service. Legislation that compels or influences design professionals to specify the preferred product for use where it is not suited to the function or service has attendant risks. There becomes an increased likelihood of non-performance, permanent failure, and higher initial costs for construction, and elevated ongoing costs for repair and maintenance.
The National Building Code of Canada serves as the basis for specifying materials, testing, design, and construction. It is specifically designed not to limit the application and use of any material, component, or assembly. A “wood first” policy inherently undermines that neutrality by seeking to actively influence a designer's choice of construction material. The selection of appropriate building materials must remain under the purview of those qualified and licensed to practice in the area of building design and construction. The Canadian built environment is founded on that principle.
We also believe the bill implies significant unintended legal and trade consequences. By virtue of the federal Competition Act, the federal government has an obligation to maintain and encourage competition in Canada and to promote equitable opportunities for economic participation. This bill hinders competition and skews the market balance. It clearly violates the spirit of the Competition Act.
We should also be mindful of respecting Canada's trade agreements. The procurement requirements of Bill C-354 would likely violate several international trade agreements, including NAFTA, CETA, and the WTO agreement on government procurement.
At this very moment, while the Government of Canada is working to negotiate and implement globally inclusive agreements while at the same time resisting protectionist policies like Buy American, the implementation of a “wood first” policy is inconsistent with the direction of Canada's government and may be seen by other nations as a non-tariff barrier violating several areas of Canada's international agreements on trade.
The bill further seeks to grant preference to projects that promote the use of wood, taking into account the associated costs and reductions in greenhouse emissions. Appreciating that the government is working in partnership with industry across Canada towards a low-carbon economy, this bill remains commercially discriminatory.
Instead of focusing on the permanent establishment of a place of preference for a single building material, the government should consider the implementation of complete life-cycle analyses at the centre of all projects involving construction materials moving forward. A sustainable, circular economy is one in which society reduces the burden on nature by ensuring resources remain in use for as long as possible, and that once the maximum value has been extracted, the resources are then recovered and reused, remanufactured, or recycled to create new products.
As a permanent material that can be recycled over and over again without losing its properties, steel is fundamental to the circular economy and has inherent advantages throughout a full life-cycle analysis. While it is not our intent today to promote the use of steel over any other construction material in government projects, we would rather encourage the government to consider maintaining a fair, competitive construction market.
We would suggest the government can further support the entire domestic construction industry by implementing government-wide procurement policies that give significant recognition to the total carbon and life-cycle footprints of the products it uses in its projects.
In conclusion, while we all agree that we want our domestic economy to continue to grow and for all of our Canadian building products to be more widely used, we would also suggest that it remains our belief that no construction material or assembly should be awarded a legislated priority over others.
Professional judgment, practical application, fair competition, respect for our building codes, and the evolution of construction practices and product innovations should determine the best materials for the application and service.
With this in mind, we respectfully request that Bill C-354 or any similar legislation not be recommended for additional consideration by the House of Commons.
Thank you for your time, and I'm happy to take any questions the committee might have.