International Trade committee  Thank you. It's good to be here. As most of you know, APMA is Canada's national association of original equipment automotive suppliers. I represent about 300 companies that employ about 100,000 people in this country. Notably for the NAFTA negotiations, Canadian supplier firms employ 43,000 people in the U.S. in 120 plants and about 43,500 people in Mexico in 150 plants.

International Trade committee  Let me say something really quickly. The members I represent are commercial interests. Commercial interests that get hurt by improper use of statutory vehicles have access to a U.S. district court to go in and get an injunction. The government's pursuit of the same objectives at the WTO provides a really good cover for us.

International Trade committee  It's important to split domestic policy and foreign policy on this. I think the government is doing fine on foreign policy. We have to stop pretending that we're dealing with a rational counterparty. These people are caging children at the border, so discussions on auto tariffs are kind of weird.

International Trade committee  Thank you. I'll give you just a quick piece about the APMA. We represent over 230 companies, 95% of independent parts production in Canada, 96,000 employees in Canada, 42,500 in the U.S., and 43,800 in Mexico. We're here to talk about the section 232 duties on steel and aluminum, but I'm going to put them together with the threat to the automotive and the automotive parts sectors.

International Trade committee  I'm wrapping up right now. There's a lot of debate, and certainly a lot of debate within the auto parts constituency, on how to respond to the section 232 tariffs on steel and aluminium. While we have submitted applications for exemptions based on very strict protocols like the ones that Sean talked about, where availability isn't there, I think we need to be firm and resolute in our response on steel and aluminum.

Foreign Affairs committee  I'll be brief but to the point. The biggest risk is a politicization of the triggering of the negotiations based on ideology that isn't weighted by fact. As a specific example, we'll talk about rules of origin. We agree that the current scenario for NAFTA works for Canada and the U.S.

Foreign Affairs committee  I'm sorry. I'll respond in English. The electric vehicles, connected vehicles, autonomous vehicles always have wheels and doors and steering wheels—well, some have steering wheels—and all the different accoutrements that come with a regular vehicle. The parts sector in Canada, specifically the IT side of it—Toronto to Waterloo, and a very good node in Ottawa—together with the leadership of some organizations in the Montreal area, private and public, have been pushing for the marketplace adoption of these vehicles.

Foreign Affairs committee  I don't know what Stephen Poloz would say about that speculation, but I would certainly say.... I think sometimes we infer a sophistication from some of the commentary which in actual fact is informed speculation. I don't see the Canadian advantage in that, and I'm not—

Foreign Affairs committee  Let me give you the American context on that. The TPP debate finally ended up stumbling on a few pieces. Rules of origin as they pertain to automotive was one that didn't work for us, but worked for the Japanese. The idea was to have a better definition of what originating means, to tighten how they might dispute that and how they might audit that, and then by the way they'd lower it.

Foreign Affairs committee  He's a chemistry guy, but I'll say something about chemistry productivity. Generally, the biggest advantage we've had over American production, on a 30-year scale, is a predictable exchange rate that's hovered around 80¢. You'll hear companies in our business, especially the supplier business and the plastics, say that they can't take advantage of that because their feedstock is American, so the American funds choose the currency under which they supply.

Foreign Affairs committee  God, it's always one of those niggling pieces of trade discussions, and I'll go back to my sovereign nation comment here. In our business, especially when we're dealing with American customers, they dictate the currency more often than not these days, and we fight back.

Foreign Affairs committee  They'll take a look at the currency prospectus for today and five years out, and then say that the contract is in Canadian dollars, or the contract is in American dollars. You can say no, and then they'll buy from him. We push back. Big companies can push back. Of course, if you have the productivity and the product innovation, that enables you to say there's leverage on this side of the table.

Foreign Affairs committee  Canada is a sovereign nation. I think the expectation in all capitals around the world is that a sovereign nation over which you have no control can go and have any trade discussions anywhere at any given time. You're talking about the sensitivity of having a discussion with China while you're dealing with NAFTA.

Foreign Affairs committee  Thank you for having me. It's always a pleasure to be here in Ottawa to speak to a committee. We are talking about North American relations, ostensibly U.S.-Canada relations. I'll give you a little background on the automotive sector in Canada and how connected it is with the automotive sectors of the U.S. and Mexico.

Industry committee  That's right. Let me add another element to it about smaller companies. Typically, mould makers have less than 50 employees, and in some cases less than 20 employees, so you have a finite number of people who are making moulds and servicing the customer. Some of the bigger firms, and especially our bigger firms—our biggest firm is as big as any automaker—will have staff on board to help pursue a tax credit, and they understand the changes and they'll try to influence those changes.