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Evidence of the Standing Committee on International Trade

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Evidence of the Standing Committee on International Trade 43rd PARLIAMENT, 1st SESSION Standing Committee on International Trade EVIDENCE NUMBER 010 Tuesday, February 25, 2020 Chair: The Honourable Judy A. Sgro 1 Standing Committee on International Trade Tuesday, February 25, 2020 ● (1530) The lack of protection for Canadian aluminum in the Canada— [English] United States—Mexico Agreement, or CUSMA, is putting into jeopardy the expansion projects for phases 2 and 3 of the new The Chair (Hon. Judy A. Sgro (Humber River—Black AP-60 technologies. Creek, Lib.)): I am calling the meeting to order of the Standing Committee on International Trade. We know that Mexico produces no primary aluminum. However, nothing prevents them from buying aluminum from countries like Pursuant to the order of reference of Thursday, February 6, 2020, China, Russia, and so on, at a low price and then flooding the we are studying Bill C-4, an act to implement the agreement be‐ American market, our principal importer. About 85% of Sague‐ tween Canada, the United States of America and the United Mexi‐ nay—Lac-Saint-Jean's aluminum production is exported to the can States. United States, a large part of which goes to the automotive industry. Welcome to our fourth session. I now want to talk about the impact of the agreement on the The witnesses with us this afternoon for this panel are, from Daj‐ workforce. cor Aluminum, Mike Kilby, president and chief executive officer, by video conference from Chatham, Ontario. The Centre Électrolyse Ouest will have no operating permit after 2025 and is scheduled to be closed in the coming years. All the From KTG Public Affairs, we have Brian Topp. projects that are put on ice will affect several hundred direct and in‐ direct jobs providing good working conditions. The direct and indi‐ From Syndicat National des Employés de l'Aluminium d'Arvida rect impact on jobs affects workers from Rio Tinto, subcontractors, Unifor-Local 1937, we have Donat Pearson, president, and Éric construction workers, local suppliers and regional equipment sup‐ Gilbert, vice-president. pliers. Monsieur Pearson, I will turn the floor over to you. Any phases of the projects that Rio Tinto does not bring to com‐ [Translation] pletion have a number of impacts on the workforce. Mr. Donat Pearson (President, Syndicat National des Em‐ ● (1535) ployés de l'Aluminium d'Arvida Unifor - Local 1937): Good af‐ Mr. Éric Gilbert (Vice-President, Syndicat National des Em‐ ternoon, everyone. ployés de l'Aluminium d'Arvida Unifor - Local 1937): Accord‐ The Syndicat national des employés de l'aluminium d'Arvida was ing to a study commissioned by our union, the city of Saguenay, the founded in 1937. The first primary aluminum production facilities city of Alma, the Syndicat des travailleurs de l'aluminium d'Alma, were constructed in Arvida after the First World War, around 1926. and the Aluminum Valley Society, creating and maintaining jobs is very important, if you refer to the table. We can come back to the Currently, our union is made up of nine certified units. They are: table later to explain what it shows. the Complexe Jonquière—hourly and office workers, the Arvida Research and Development Centre, the Laterrière plant—hourly In 2024, the year halfway between 2020 and 2029, we can see and office workers, the spent pot lining treatment plant, Transport that the operations of phase 2 and 3 of the AP-60 plant in Jon‐ Ferroviaire RS Alma, the Petits Lingots Saguenay plant, and the quière, not considering the possible closure of the Arvida plant— Énergie Électrique Sud section. Our organization represents around the old plant—will generate, across Quebec, a total of 600 direct 1,500 active workers and more than 4,000 retirees. jobs in plant activities, 580 indirect jobs with suppliers and 326 in‐ duced jobs at the consumption end, for a combined total of Since 2006, a lot has been done, including the implementation of 1,506 jobs in person-years, and $505.1 million in new expenditures a new business model—the use of subcontracting—taking over the in the Quebec economy in 2024. new salary-funded retirement plan and the drug insurance program for active and retired employees, in order to maintain activity at the The average annual salary is $81,125 for direct jobs, $62,953 for Centre Électrolyse Ouest, and to provide a transition to the AP-60 indirect jobs and $40,828 for induced jobs, for a total payroll pilot plant. That project currently has 38 pots, from a possible of $98.5 million in 2024 or an average salary per job generated 200 pots and more. of $65,404 per year. 2 CIIT-10 February 25, 2020 In closing, ratifying this agreement with no protection for the Mr. Brian Topp (Partner, KTG Public Affairs): It's good to aluminum sector will have major negative impacts on our workers. see you. Our expertise in aluminum, the greenest in the world because of its low carbon footprint, as well as our research and development centres, are major assets that need to be protected. Let me begin by thanking you, Madam Chair and members of the For all those reasons, we are asking the Government of Canada, committee, for inviting me here today. My bet is that I was invited as well as the opposition parties, to establish a traceability mecha‐ to come and talk to you because I was serving on the minister's ad‐ nism for aluminum produced and cast in North America. The steel visory committee on this matter with a bunch of others. Let me also industry must be protected in a similar way to the steel industry. begin by telling you that I had quite an interesting ringside seat in [English] these negotiations. That being so, it's quite a pleasure to see that The Chair: Thanks very much, both of you, for that very quick you all get to join me in all this fun and decode these issues and presentation. It gives us more time for questions from the members. address them in the public interest. I'm grateful for this opportunity to share a few reflections and, if I may, offer the committee one We'll stay on aluminum for a minute and go to Mike Kilby, presi‐ piece of advice. dent and chief executive officer of Dajcor Aluminum. Go ahead, Mr. Kilby. Mr. Mike Kilby (President and Chief Executive Officer, Daj‐ cor Aluminum): Thank you, committee members, for allowing me I have two opening compliments. My first compliment is to say to attend remotely. This accommodation is much appreciated. that I really do think, having watched these negotiations, that Canada was extremely well served by its negotiating team. They The brief I've submitted has to do with the elimination of the deserve to be thanked for their work. Canada, in my view, had the 70% North American-sourced aluminum content for the automotive most experienced and thoughtful and prepared and competent set of industry. officials at the table. I'd say our officials had the important compar‐ ative advantage of being rationally led. If I can say this across the In my industry of aluminum extrusion, China has shown an unre‐ partisan fence, Minister Freeland did an excellent job in her role lenting desire to dump aluminum extrusion into the United States and thoroughly earned her recent promotion. It was a pleasure to market and the Canadian market. The European Union initiated its watch her work. own anti-dumping investigation in February 2020. Both Canada and the U.S. have anti-dumping and countervailing duties in place to stop this dumping. Mexico is a non-producer of aluminum. Mexico does not have My second opening compliment is to my own tribe's trade critic, aluminum extrusion anti-dumping duties with China. Therefore, the honourable Daniel Blaikie from Elmwood—Transcona, who is Mexico doesn't have an inherent interest in seeing the aluminum apparently talking in the House right now. Last week's agreement content not being sourced in North America. between the NDP opposition and the government over ratification The automotive market is the largest and fastest-growing market was another nice piece of bargaining, in my view, but it's also for aluminum extrusions as well. Aluminum sheet and castings are something else. It's an example, which I hope you're all watching, also impacted, as is raw aluminum, as you've just heard from the of how empowered, well-informed and responsible members of previous witnesses. Parliament can take advantage of their leverage during periods of minority government to open the windows and turn on the lights in Several events of tariff circumvention by China have been dis‐ this place and renew accountability and transparency and democrat‐ covered and stopped through our industry association, the Alu‐ ic debate; nicely done. minum Extruders Council, a U.S.-based association that most ex‐ truders in North America belong to. There are more in process. The elimination of the 70% aluminum content requirement for autos will open up a very big back door for those Chinese extru‐ About this agreement, I recommend that this committee refer sions to enter the U.S. and Canadian markets and will directly im‐ USMCA, the son of NAFTA, to the House of Commons for ratifi‐ pact jobs in the extrusion manufacturing, parts manufacturing and cation. I recommend this for three reasons. First, I think this agree‐ primary metal-producing industries in Canada and the U.S.A. ment should be ratified because it captures an extraordinary mo‐ ment in history. It's an extraordinary moment when the President of That's all I have in my notes.
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