OGGO Committee Meeting
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Standing Committee on Government Operations and Estimates
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EVIDENCE
Thursday, June 11, 2026
[Recorded by Electronic Apparatus]
[English]
Good morning, everyone.
Welcome to meeting number 45 of the House of Commons Standing Committee on Government Operations and Estimates, known far and wide, of course, as the mighty OGGO.
Today we're continuing our study on buy Canada.
We have witnesses in person and also online. Colleagues, if you're directing questions, please specify whether they're for our witnesses in person or our witnesses online.
I'll also just give you a gentle reminder to keep your headphones away from your microphones. Don't touch the microphones. As well, I have a reminder—and this is for all of us, including me—to not speak super fast; this is so that proper translation can be provided.
We have several opening statements.
We'll start with the CFIB and Ms. Auger, who is here in person, for five minutes, please.
Before we start, everyone, I'll ask, because we have so many opening statements, that you keep to the five minutes. I don't want to have to cut you off, but I will.
Ms. Auger, welcome to OGGO. Please go ahead.
Good morning. Thank you, everyone, for having the CFIB appear here today.
The CFIB is a non-partisan, not-for-profit organization representing more than 103,000 small and medium-sized enterprises across every industry and region of Canada.
My name is Michelle Auger. I'm director of trade and marketplace competitiveness at the CFIB.
Generally speaking, SMEs support the objective of strengthening domestic supply chains, especially in the context of the ongoing trade tensions and tariff pressures facing Canadian businesses. The federal government's efforts to advance a buy Canada approach are certainly a reasonable response aimed at supporting domestic industry and economic resilience.
It's important to make sure that SMEs are included. Federal procurement needs to be accessible, not just to large firms but also to the small businesses that drive jobs, innovation and local economies.
Today, SMEs are operating in a very challenging environment that is shaped by trade tensions, higher costs, labour challenges and growing regulation. Canada is also facing an entrepreneurial drought. More businesses are closing than are opening. Fewer owners are willing to invest, expand or encourage others to become entrepreneurs. In fact, CFIB data shows that 55% of small business owners would not recommend starting a business today. Procurement can be a powerful economic lever, but only if it improves access, increases competition and supports SME participation.
Only 12% of CFIB members are currently involved in selling goods or services to the federal government, with businesses in retail, wholesale and construction more likely to participate. However, significant barriers to awareness and participation remain. Based on a CFIB survey sent to our members just last week—this is preliminary data—regarding the new buy Canada policy, we found that 5% of SMEs said they were aware of new federal procurement opportunities and had actually applied, 31% were aware but had not applied, and 51% were completely unaware that these opportunities existed at all. The same survey showed that 77% of SMEs agree that federal procurement rules tend to favour large firms over small and medium-sized businesses; 66% agree that even with the buy Canada policy, the procurement process remains too complex for their business to participate; and 71% agree that lowering minimum contract sizes would make procurement opportunities more helpful for small businesses.
These results highlight a consistent message from SMEs: The effectiveness of a policy depends not just on the intent but also on whether the system is practical, accessible and easy to navigate.
A buy Canada approach can help strengthen domestic supply chains and regional development and expand opportunities for Canadian businesses. However, we are concerned that many SMEs may still be left out. The $5-million threshold coming into effect on June 15 is still very high for many SMEs, meaning that many will not be able to access or benefit from these new opportunities.
A key way to improve access for small businesses is to debundle contracts, allowing SMEs to compete for smaller, more manageable opportunities.
SMEs continue to face administrative burdens—for example, obtaining a security clearance or preparing policies that go beyond the occupational health and safety mandatory requirements, such as supplier codes of conduct, ethics policies, etc. These requirements can discourage participation in federal procurement. This points to the need for simpler tools, standardized templates and scaled requirements for smaller firms.
Another key concern with the buy Canada approach is the risk of focusing too narrowly on the raw materials while overlooking Canadian SMEs and the broader economic value they generate. As a result, small firms that create Canadian jobs and economic activity could be excluded from buy Canada procurement opportunities. To reflect the operational realities of SMEs, eligibility should instead focus on ensuring that Canadian-owned and operated businesses, regardless of where their inputs are sourced, have access to the buy Canada policy.
Finally, we're also concerned that conditions such as project labour agreements, union-exclusive community benefits agreements and prevailing wage requirements tied to specific collective bargaining structures would reduce competition and make it harder for many small businesses to participate.
In conclusion, SMEs support the intent behind the buy Canada policy, but it must work for businesses of all sizes, not just the large ones. To achieve that, the government needs to improve awareness and the accessibility of procurement opportunities, reduce any structural or administrative barriers, and ensure fair, competitive access for SMEs across the country.
Thank you.
Good morning, everyone.
Thank you very much, Mr. Chair and members of the committee, for having John and me here today. I'm Catherine Cobden, the CEO of the Canadian Steel Producers Association. John and I are very pleased to join you to discuss the importance of the buy Canadian policy to the Canadian steel industry.
First, let me say that the Canadian Steel Producers Association represents 100% of Canada's domestic steel production, from Alberta through Quebec, as well as significant steel users in our downstream market. One of them, Janco Steel, joins us today and will be sharing our five minutes.
Canada's domestic steel industry generates $15 billion in economic activity and supports 123,000 direct and indirect jobs across the country. As I sit here today, you will be aware that we are facing the most consequential trade action by the United States, with 50% section 232 tariffs on all Canadian steel exports. These tariffs have now been in place for over a year. In 2024, the U.S. was the destination market for over six million tonnes of steel. Today, our shipments to the U.S. have plummeted. We're now down 60%, and over 1,000 workers have lost their jobs.
In the face of this threat, the domestic industry's core strategy has been to pivot to the domestic market by addressing unfair steel trade in Canada and increasing market opportunities for Canadian producers. This is where the buy Canadian policy fits in. Mandating domestic steel in federal procurement for construction and defence projects gives us a much-needed market opportunity when we really require it. The government adopted appropriate thresholds and requirements in the policy—including proving that steel was melted and poured in Canada—that will ensure that it meets the intent.
We urge comprehensive implementation of the policy across all federal departments and relevant federal transfers, grants and contributions. We look forward to assisting the government to make sure exemptions are granted in limited circumstances that cannot be met by the domestic industry. We hope all levels of government in Canada will follow the federal lead and introduce mandated requirements that steel be melted and poured in the country.
In closing, I would like to say that the domestic industry does not believe this policy will create supply chain shocks or uncompetitive price escalations. We can produce what the country needs. We have the scale. We have the capacity.
Thank you for your attention.
I would like to thank the chair and the House standing committee for the invitation to speak here today on behalf of Janco Steel.
I've worked in the steel industry for 38 years in a commercial capacity and in my role right now, as a member of the trade subcommittee of the CSPA.
Janco is a steel service centre with production and manufacturing capacity, located in Stoney Creek, Ontario. We employ 325 Canadian workers, have over 600,000 square feet of plant space and serve the North American market. Ninety-nine per cent of the coil and plate we purchase is from the four Canadian steel mills, always. We truly value their partnership.
Traditionally, 30% to 35% of our business was sold into the United States, so you can imagine how challenging the past year has been for us, navigating the landscape of punitive steel tariffs. This buy Canadian policy is welcomed by Janco. In fact, we've already seen some benefits from this policy: an increase in inquiries requiring melted and poured Canadian steel and a general feeling in the market that investment in manufacturing is being supported by the government and industry.
From our perspective, we are navigating an evolving global trade landscape, and the buy Canadian policy can immediately stabilize domestic markets. Canadian manufacturers will now have the opportunity to participate in federal projects where bids will consider the value of using Canadian materials produced by Canadian companies benefiting Canadian workers—a goal we feel is aligned with the country's spirit of standing together, supporting our neighbours and building relationships that will drive demand for Canadian materials and goods.
Canada has the steel production capacity to support this policy, from mill to manufacturer. Where products are not domestically produced, we encourage creative dialogue within the Canadian manufacturing base. Engineered sections and beams made out of domestic coil and plate are a notable example.
Our steel industry is under attack. We need support, and this policy is a strong step forward. Buy Canadian is a logical and necessary policy. Without a strong, healthy steel industry, our country's sovereignty is threatened.
Thank you.
[Translation]
Thank you, Mr. Chair and members of the committee.
I appear before you today as director of public and government affairs for Canadian Manuracturers and Exporters - Quebec. We are a business association dedicated to the growth of Quebec's manufacturing sector. We rely on a network of more than 1,000 manufacturers of all sizes across the province. We also work with Canadian Manufacturers and Exporters - Canada, which has been around since 1871, to advocate for Canadian manufacturing.
From a manufacturing stand point, the policy being discussed today can provide several important benefits. First, it can strengthen domestic demand for domestically manufactured goods. Second, it can secure and boost Canadian supply chains, which are particularly important in the current context of trade and geopolitical volatility. Third, it can encourage investment, innovation and industrial capacity development in Canada.
That said, a poorly designed Canadian preference policy can also miss the mark. It should be used as a useful industrial policy lever to build Canadian manufacturing capacity, improve supply chain resilience and maximize the economic value created across the country.
In a context characterized by fragile supply chains, the increase in industrial policies from many of our trading partners and the pressure on our economic sovereignty, the manufacturing sector welcomes the modernization of public procurement. Moving away from the lowest bidder approach, it's important to keep in mind the country's economic benefits, our crisis response capacity, the creation of quality jobs and the preservation of industrial expertise in Canada.
The policy can improve the government's capacity when it helps develop a more stable and reliable offer in the country. In some sectors, especially in those where security of supplies matters and is currently at risk, a Canadian player offers real advantage in terms of time, compliance and risk management.
However, it's not just about purchasing cost. We must also always keep in mind the cost of a delay in supplies, the cost of excessive dependence on foreign policy chains, the cost of losing industrial capacity in strategic sectors in Canada, and a share of public spending that comes back to the economy in the form of jobs, investment and innovation.
The procurement policy we are discussing today may have varying effects depending on the sector. In sectors where Canada and Quebec already have a strong manufacturing base, it can have a very positive effect. This policy should make it possible, in Canada's strong manufacturing sectors, to justify investments to improve productivity and production capacity, to foster local innovation, to strengthen value chains across the country and to improve the ripple effect on all small- and medium-sized businesses in Canada.
We will need an approach tailored to each of the major manufacturing sectors. Some sectors aren't as present in Canada, and investments to develop this production capacity will have to accompany the policy. These types of investments should be based on each manufacturing sectors' situation and take into account current production capacity, growth potential and, above all, the strategic importance of the sector in question.
Public procurement is not necessarily enough to build a sustainable manufacturing capacity. For this policy to truly support manufacturing companies and strategic sectors in Canada, it must be accompanied by investment programs, innovation measures, support for automation and productivity and support for Canadian SMEs. We also need to invest in workforce training to be able to keep up with the new demand.
This policy holds promise, but it must be seen as part of a broader industrial strategy, not as a stand-alone measure. We need to encourage domestic industrial development only if it comes with other tools to help manufacturing directly.
To adequately support Canadian businesses in the manufacturing sector, the policy must take into account production capacity in Canada, the added value created in Canada and criteria adapted to each sector and its own reality. However, we will have to be careful not to impose a disproportionate administrative burden on businesses, especially on SMEs looking to increase production. The idea is not to require a product that is always 100% Canadian, but to make sure that a significant and verifiable share, as well as an economically useful share, of the value remains in Canada.
In conclusion, for the Quebec and Canadian manufacturing sectors, the Buy Canada Policy is a very useful tool to strengthen the industrial base, secure our supplies and better anchor economic value in the country. However, its effectiveness and how it will be carried out will require clear, proportionate rules adapted to the realities of the manufacturing sectors and, above all, accompanied by measures to support investment, productivity and innovation. This policy can provide real benefits. If—
[English]
Thank you, Chair, and thank you to our witnesses for joining us today.
My first question will be for Ms. Auger with the CFIB.
When we look at highly integrated supply chains for many of our SMEs on both sides of the border, do you foresee there being adverse effects with rigid content restrictions and the costs to small and medium-sized businesses?
Yes, our data does show that SME integration with the U.S. has been built for years. They've built in place business contracts that they cannot easily get out of. They have their supply chains, they have customer relationships, and despite a lot of our data showing that a lot of Canadian SMEs are diversifying—in fact 50% of SMEs have said that they are moving away from the U.S. market as much as possible in their supply chain—there still is a significant number of SMEs that just cannot lose that reliance on the U.S. market for supplies, for their inputs to their business operations.
We have been hearing under different jurisdictions that some small businesses get blocked out of procurement opportunities just because their inputs or part of the inputs in their business come from the U.S. or come from elsewhere. In fact, a local business here in Ottawa recently was blocked out of a municipal opportunity because parts of their inputs in building parks for our communities were from the U.S., and I think that goes back to my message that we have to look at the economic contribution that small businesses make in our communities. This business has close to 20 employees. There are engineers. These are good-paying jobs, but the business is losing out on these economic benefits.
This is where we need to leverage those added-value components. While not every little piece a business uses might be Canadian raw material, we need to ensure that those businesses can compete fairly for those procurement opportunities. As the federal government is setting that sort of gold standard for other jurisdictions, we just want to see that being applied across the board fairly.
Thank you very much. That certainly is consistent with what I've heard from small and medium-sized businesses when it comes to the buy Canadian policy.
You mentioned this in your opening comments, but I want to give you an opportunity to elaborate on the broader restrictions in procurement, particularly the requirement for unionized labour and how this may prevent small and medium-sized businesses from participating in federal procurement.
Thank you for giving me that opportunity.
What we are seeing and what we saw from the last federal budget is that certain federal funding programs are preferring businesses employing unionized labour over allowing any business to apply. We know that about 96% of SMEs in Canada are not unionized, and that goes for even construction businesses. They are legitimate businesses with legitimate workforces, and they just want to be able to compete for procurement opportunities.
In the federal budget, a communities benefit funding program was announced, and it was indicated that they would favour unionized labourers for those types of agreements. We're using taxpayer money to support a very small subset of our Canadian businesses. We need to make sure that the level playing field is open to all businesses to compete on procurement, and again, the federal government is setting that standard. We're seeing examples across jurisdictions. Even in B.C., there was a bill put forward in which they would prefer unionized labour for certain construction projects, and we're really just hoping that the government realizes that there are different types of businesses, and they are legitimate and they create jobs and contribute to our economy.
Yes. At our last meeting, we heard that the government is planning on creating an office for small and medium-sized businesses when it comes to buy Canadian.
Have you been involved at all in any consultations and been able to provide some of this feedback to the governing members?
We have, but it wasn't until we specifically reached out to ask who was working on developing this program. We sit on the supplier advisory committee, which is an industry group of representatives that helps advise the government on procurement policy programs. Just last week, we did get a snippet of what they're looking at doing, but it does feel like it's still very much in an initiation phase, where they're not too sure what direction is going to be taken.
I have one final question: For small and medium-sized businesses, how much of a dollar stays in Canada as opposed to for large multinationals?
For every dollar spent at a small business, 66 cents does stay within the local community, whereas only 11 cents would stay within the local community if it's spent at a large multinational. This is part of our messaging, because there is a lot of federal procurement or federal purchasing that does not go reported, especially those lower amounts under the $10,000 threshold.
There is an opportunity here. While it's not directly procurement-related, it's still federal government spending; it's purchasing. There's an opportunity for the federal government to maybe put in some guiding principle that all departments consider, when there are non-compete procurement opportunities or there is purchasing under that $10,000 value, that they're supporting local, supporting small businesses and can really be the champions.
Thank you, Chair. It's a pleasure to welcome our witnesses this morning. It's probably no surprise I'm going to spend my time talking about steel and the steel industry.
I'm a representative from Hamilton, Canada's steel city, and MP Hepfner is also here as another Hamilton representative. The steel industry, as was noted, is a significant employer. In Hamilton specifically, it provides 10,000 direct jobs and 40,000 indirect jobs.
I thought it was interesting in your opening remarks that both of you referenced buy Canadian as an opportunity for steel producers and manufacturers in Canada to really expand their domestic market.
My first question, Ms. Cobden, if I could start with you, is, what is the current state of the steel industry in Canada in terms of domestic sales versus international imports, and why is that such an opportunity for steel producers?
Thank you very much for the question.
For sure, the domestic industry battles every day with offshore imports for a competitive, level playing field. The most recent data is showing that we have about half of the domestic market, and offshore imports and imports from the U.S., for example, represent the other 50%. That shows us we have a significant opportunity to grow the market share for the domestic industry.
In the U.S., for example, their market share is closer to 80%. We have quite a gap, and I believe the number is quite similar in the EU as well. In the EU, their domestic industry is about, I believe, 75% to 80%. Canada, obviously, compared to those two trading partners, if you will, is not anywhere near those levels of market share.
Thank you.
There are a number of support programs for tariff-impacted industries, with steelmaking being, if not the most tariff-impacted, definitely one of the most. There are the strategic response fund, the strategic innovation fund, the regional tariff response initiative, the large.... There's a whole suite of supports for industries that are significantly tariff-impacted.
Mr. Young, I'm going to come to you with a question, because you mentioned building Canadian capacity into areas that are currently not available. You specifically mentioned Canadian sections and beams. I'm old enough that my steel construction handbook is from the 1990s and still has sections from Algoma Steel in it. I wanted to ask you, what opportunities are there for Canadian manufacturers and producers of steel to bring back some of that production capacity that we no longer have here?
Thank you, Mr. Danko, for that question and comment.
I did actually listen to a session, maybe two weeks ago, when you mentioned that when you served as a consulting engineer, one of the frustrations you found was that it was price-centred, and maybe it didn't help the local economy, or the national economy, in this case.
I don't want to put words in your mouth, but you mentioned the Algoma old book. You may have found at times that there wasn't any creativity in how there could possibly be local supply for some jobs. I said we've already seen benefits. There are webs and flanges being produced for pre-engineered beams. In that business, we have actually seen an order now—we just completed it—that would have typically gone from the United States, but because of the buy Canada policy, it had to be melted and poured in Canada.
If we get creative with this type of engineering—there are a lot of slick coil plates and all the coil from Algoma and the other three mills in Canada—we can produce a section that can be used. Some can't be, like for bridges—you would know what the specs are—but a lot can be used for buildings, and also base plates, etc.
This is my last question.
Ms. Cobden, obviously we're in a trade war with the United States. There's a lot of conflict in the United States, but for the steel industry in particular there are also a lot of things we have in common with the United States steel market. The interests of Canadian and American producers are more aligned than they are different. I was wondering if you could expand on some of the common ground that we have with the North American steel producers.
Thank you very much for that question. It puts me in the position of being able to explain why there's strong alignment with the U.S. industry despite the tariff war, in the sense that we are fighting the same challenge. The global challenge of overcapacity, predominantly out of China, is frankly one of the reasons the Trump administration put the tariffs in place in the first place. The Canadian domestic producers face the exact same problem.
Our hope is that through the USMCA or CUSMA discussions, we will see a return to what we have had in the past, which is standing shoulder to shoulder with the Americans to fight this global overcapacity challenge, which is destroying the domestic markets in each of our countries. That's the ultimate objective, but it's hard to predict how that will play out.
[Translation]
Thank you very much, Mr. Chair.
First of all, I'd like to thank all the witnesses for being here. We would need more than an hour with them, obviously.
I'll start with you, Ms. Auger.
It struck me when you said that more businesses were closing than opening. What about business succession? Is it a threat, or, on the contrary, is it a lever to maintain our manufacturing and industrial capacity?
Thank you for the question.
It isn't necessarily just now that we're seeing this decline where businesses are shutting down. The Statistics Canada data that we used in our analysis published in April demonstrate that, aside from the pandemic, we're in one of the most difficult periods for SMEs.
Entrepreneurs who are members of the Canadian Federation of Independent Business, or CFIB, tell us that costs have increased in each of their sectors, particularly because of everything that's going on with the United States. They're continuing to absorb the cost increases, but there's no respite. Right now, the priority for SMEs is to ensure that the government understands that SMEs can't necessarily access the programs in place to support certain industries.
Exactly.
We have submitted our budget brief to the Department of Finance. In that brief, we included a series of recommendations to give SMEs some respite regarding the costs. We also included specific recommendations on the investments that we would like to see in support of SMEs. I would be happy to send those recommendations to the clerk of the committee.
I look forward to reading that.
Mr. Prévost, I heard you talk about necessary investments. I understand that you're calling to implement a cross-cutting industrial policy.
The buy Canadian policy can't simply be an isolated measure. It has to be linked to support for SMEs, as well as funding [Technical difficulty—Editor] to improve productivity—
[English]
[Translation]
Perfect. I'm sorry.
I was saying that this policy has to be accompanied [Technical difficulty—Editor] innovation and improve businesses' productivity. That requires an industrial policy that targets the various sectors [Technical difficulty—Editor]—
[English]
[Translation]
Yes.
We'll start over, Mr. Prévost. Let us hope it works well, since you're near the window.
Describe for me the importance of having a cross-cutting industrial policy.
It is indeed important to take into account the realities of each of Canada's manufacturing sectors to reduce this dependence and improve the resilience of the supply chain. This policy needs to be accompanied by support for innovation to improve productivity and innovation within manufacturing companies. It has to be accompanied by other measures, not just a review of public procurement.
Ms. Auger, do you think Canada is concerned enough about the gradual loss of all its decision-making centres and its champions? In Quebec, at least, we're trying to keep them here.
How do you see this?
A lot of CFIB data show that SMEs currently feel forgotten by the federal government. They feel that programs are made for large-scale investments. We see a lot of investment in big projects and in certain sectors, but SMEs across Canada are feeling rather forgotten. Their operating costs keep rising. There's no respite. There's no investment program that truly targets SMEs, which have also been affected by the tariffs, regardless of the sector they're in.
I understand that the measures have to be unbundled, then. That's what you were talking about, right?
Yes. I'm talking specifically about procurement.
I have a very good example from a group of members working in the audiovisual sector. A few years ago, the federal government awarded a contract to an American company. Combined with customs duties, this means—
Some hon. members: Oh, oh!
A point of order, Chair.
We're at the end of the session, we're tired, we're conducting our proceedings in French with special witnesses, and there's noise. If my colleagues wish to discuss matters among themselves, I would ask that they do so outside, out of respect for the witnesses.
I'm sorry, Ms. Auger. Please continue.
These members feel a bit neglected. They no longer have access to government services because the contract was so large that they were unable to submit a bid. Had contracts been awarded on a more regional or local basis, more small and medium-sized enterprises would have been able to bid. That would have helped SMEs in every region make investments in supply chains.
A lot can be done to ensure that contracts are the right size and factor in the regions where SMEs are located.
In other words, what's needed isn't a one-size-fits-all approach; we need stability, which must be maintained.
[English]
[Translation]
Mr. Prévost, I was very surprised when Ms. Auger said that 50% of businesses weren't even notified when there were tenders they could bid on.
What do you think of the idea of decentralizing or unbundling this?
That would certainly give businesses of all sizes the opportunity to bid on such contracts. I think it should also be more widely advertised. That would support all businesses, regardless of size, by giving them the chance to bid on contracts.
[English]
Thank you very much, Mr. Chair.
Thank you to all the witnesses for being here today.
Ms. Auger, I want to start with you. We heard from a witness at our last meeting that it can sometimes cost up to $400,000 for a business to bid on a contract, only for them to find out that they didn't even get the contract. I'm wondering if your members are experiencing the same thing.
I can't give you a specific number, but what I can tell you is that the amount of time required for filling out and getting through the process increases costs for small businesses. You're being asked for documentation that is not OHS requirements. It's extra things that a business will not have in place. They don't have HR departments, and they don't have legal departments to help them go through all the paperwork and the requirements. They're spending so much extra time on making sure they've filled everything out.
There is this concept, too, from the SME world, where you're filling out everything but the federal government might prefer the best price over what is actually the best value overall: the solution that's needed for that procurement opportunity. That comment has come back to us several times when we look at qualitative data. They feel that the federal government is going to go with the cheapest option.
I think the question was asked earlier, but I wanted to build on it a bit. The spring of 2026 was the target for the small business procurement program. We're into June already, and there's still no movement on it, really. What signal does that send to the SMEs you represent that are maybe looking to get into this procurement game?
Yes, it's unfortunate that there are delays. I think it goes back to some of the federal government approaches currently being focused on large-scale investment and large businesses and, again, maybe not necessarily focusing on the small and medium-sized businesses, which are really struggling at a time when trade tensions and tariffs have been affecting them for the last year and a half.
We have been in discussion with that department and the bureaucrats, but it is still very much an initiating kind of idea of what's going to happen in terms of supports for SMEs. Even as it rolls out, I'm interested to see how it will all play out. We are well past the deadline. I mean, on June 21, summer starts, right?
Yes, exactly.
We saw a report recently, too, that business investment in Canada has actually gone down for five straight quarters. When you see a delay in implementation like this, what impact does that have for businesses that just aren't investing?
Yes, small businesses are not looking to invest right now. They don't have extra cash flow. They're really just staying afloat at this time.
There's no cost reprieve for small businesses. There are very few targeted measures for those that have been impacted by tariffs. There are certain sectors that have been focused on, but small businesses are also feeling left to fend for themselves at this time when every operational budget line has increased.
I've heard a concept. There's a very popular buzzword: a “shovel-ready” project. Rather than shovel-ready—because, again, that means hundreds of thousands of dollars and, in some cases, millions of dollars in permitting and engineering just to find out that you don't get approved—I've now heard the concept of a “shovel-worthy” project.
If a company already meets the criteria or they have capacity, that would mean they are “worthy”. It would be a lot easier to get the certainty they need to get the contract and then spend on the engineering and all the pieces that would be needed, because they have already proven that they have the capacity. Do you think that would be a better approach?
Yes, it could help, certainly, but there are still delays in getting clearances, like the security clearance, which takes so much time. It certainly is something worth looking at. Whether or not you can get a database of businesses that are shovel-ready or ready to provide, that would be great, but what that looks like and the extra paperwork that comes with that too, without even being guaranteed a procurement opportunity, would be something to think about.
Last, with the bundling issue—I know we're running out of time here—do you have any further comments on that? You touched on it earlier, but there's almost a reverse incentive if it's not fixed.
There is, a bit. You're right. I think there is opportunity where we don't create a monopoly whereby it's one business that owns one large contract.
What I was trying to say, on the EV side, is that it's now pushing a lot of EV companies in Canada to go out of business, because in B.C. they cannot participate in EV services for federally regulated buildings. They don't have access to those ones, even if they want to. If that contract had been debundled and localized, it would have given an opportunity to more businesses across the country to compete on those contracts.
It's not every circumstance that needs to be debundled, but it's looking at the ultimate goal with these contracts and seeing if there are several businesses that could fill those gaps. Does it have to be one? Could it be three?
Thank you very much, Chair.
Thank you to all of the witnesses who have joined us today.
I'll start with either Ms. Cobden or perhaps Mr. Cuddihy, if he wants to join in on the responses.
It strikes me that in a lot of the discussions with industry over the last year, particularly with Canadian steel producers, there has been discussion as well around the environmental advantages of Canadian steel production. I'd love to hear a bit about how sourcing steel domestically—of course, in light of the buy Canadian policy and the objectives around Canadian material—supports not only the economic outcomes we're striving for but also the environmental objectives. That is for either of you.
Thank you very much for the question.
When we talk about Canadian steel, we're talking about steel that can be produced in different ways, and those different approaches have different.... For example, greenhouse gas emissions have pathways associated with them, but they're producing different products.
When we look at the two primary manufacturing processes—blast-furnace steel versus scrap-based electric arc furnace steel—Canada is ranked first in the world on a greenhouse gas emissions intensity basis for blast furnaces and third in the world for electric arc furnaces. We're producing some of the best steel in the world from an environmental perspective.
That is amazing to hear, and we don't trumpet that quite enough, frankly. I think it's important in the current context, as obviously we strive with the buy Canadian policy to drive support for these Canadian materials, but the environmental objectives are incredibly important in that consideration as well.
Perhaps I'll go to either one of you. At a time when we are seeing many countries pursuing industrial strategies and domestic procurement preferences, as we have done with the buy Canadian policy, how important is it for Canada to be using procurement as a strategic tool, specifically as we have done in specific industries and in building that supply chain resilience?
It's extremely important, so thank you for that question.
Based on the conversation we've been having today, the point I'd like to underline to answer your question is the role of a steel plant, for example, as an anchor in the local economy, particularly for SMEs. I'm sure that MP Danko knows this very well. There are a significant number of SMEs that pop up around these massive anchor plants, such as a steel plant. The buy Canadian policy will help to ensure a domestic market for the domestic industry and thereby support the domestic supply chains, many of which are SMEs.
If I may add to that briefly, we talked about steel being melted and poured in Canada. One of the fundamental benefits of the way the federal government has approached the materials policy is that it's certainly melted and poured, which is very important for our producers, but it also speaks to fabrication in Canada, so it's that continuity throughout the supply chain.
Yes, absolutely. Thank you.
It also speaks not only to that supply chain resilience and to building that capacity, but also to that predictability as we move forward, which I think is so important.
Perhaps with that, I will pivot online, to Mr. Young.
Building on that comment around predictability, how important is predictability of domestic demand from major public procurements in helping Canadian companies predict future demand, make the necessary investments and have confidence in their own operations and their workforce?
Thank you for the opportunity to answer that.
Janco Steel's 30% to 35%, let's say, of our business that was going to the States would be anecdotal, I think, of the entire industry, even up to 60%, let's say. Some mills, at moments in time, would have been sending that much steel into the United States. All of us made decisions for infrastructure and building our businesses strategically, thinking there would be a free border. It has come to us now that we can't count on that.
To your point and your question of how important it is—
Yes.
It is extremely important. We are in a time that is just extremely nuanced, I guess, in feeling like there's a.... I'm being mindful, Mr. McCauley—
I have to cut you off there. If you could provide a lengthier response in writing, it would be appreciated.
[Translation]
Thank you, Chair.
This is unbelievable. I'm thinking out loud, wondering how our small and medium-sized enterprises can overcome the pressure exerted by lobby groups, which makes it very difficult for them to compete. Looking beyond that, how will such a measure benefit SMEs, given all the necessary filters? We need to understand which stakeholders will benefit from it.
Mr. Prévost, Ms. Auger, you may not be aware of this, but members of the Standing Committee on Access to Information, Privacy, and Ethics have been calling for a conflict‑of‑interest filter for weeks now because the Prime Minister owns approximately 2,000 shares. It's not okay, and it will never be okay.
How can SMEs deal with this if they believe this measure is designed for large corporations, lobby groups, and certain wealthy individuals?
The CFIB has a great deal of data, and it strives to provide as much of that data as possible to members of Parliament and federal departments. Yes, significant investments are being made, and they will eventually find their way into supply chains. However, we must ensure that the current business climate supports small and medium-sized enterprises so that future entrepreneurs will want to start businesses in Canada. That is not the case right now. The number of businesses is dwindling. We need to ensure that the foundations are in place for SMEs and that they can be truly competitive.
Mr. Prévost, let's be honest: If you don't know there's a competition, you don't submit a bid. At this point, 50% of SMEs aren't aware of competitions, so I have my doubts.
What do you think about lobbying and all the factors in decision-making that are beyond our control?
[English]
I'm afraid there's no time for a response, Mr. Prévost. As previously mentioned, maybe you can put your thoughts down in writing and send them to the clerk to be distributed and included in our report.
Mrs. Jansen, please go ahead.
I cannot help but notice that whenever the Liberal government creates a program, it seems to help the biggest companies while ignoring the small businesses that actually drive Canada's economy.
For example, the steel industry, with us today, contributes about $4 billion to Canada's GDP. Small and medium-sized businesses contribute hundreds of billions, something like 300 times more. SMEs make up 99% of all businesses in Canada. They employ nearly two-thirds of private sector workers and generate roughly half of our economic output.
If the goal is to strengthen the Canadian economy, create jobs and increase productivity, where would we get the biggest return? Is it by creating another targeted program for a handful of large companies or by making it easier for millions of entrepreneurs and small business owners to grow, hire and invest?
What makes this even more frustrating is that often these large businesses, for example, the steel industry, are largely foreign-owned, well over 50%, whereas SMEs are truly Canadian businesses. They're owned by Canadians and rooted in their communities. They reinvest their profits here at home, yet they're the last to receive attention.
The government calls this a strategy to support Canada, but when a program is designed around a relatively small segment of the economy, while businesses that generate half of our GDP are largely left out, it raises a fair question. Are we really focusing on where Canada gets the greatest economic benefit? If we want a stronger economy, the biggest opportunity isn't at the top—no shade on the steel industry—it's in the millions of small and medium-sized businesses that keep our country running every day.
My question, Michelle Auger, as we sit here today is this. Can a Canadian SME clearly identify what new opportunities this buy Canadian initiative creates for them?
Our data says no. There is preliminary data showing that the qualitative data that we've also received in our June survey shows that the opportunities that do exist are entirely too complex for them to apply. It's not worth the time and effort, and they don't have the extra staff or the cash to do it.
You're completely right: Canadian SMEs are the foundation of our communities across the country. They're the first to try to keep their doors open and keep their staff employed for as long as possible, even through the tough times. There really does need to be a shift in focus on Canadian SMEs, because when you look at the programs that have been announced to support SMEs, you have the regional development agencies and the RTRIs. Again, the criteria are so different from one to the other that you're picking winners and losers. We need to make sure that when programs are being created, whether procurement programs or others, the intent allows for good policy programs that make it easy for SMEs to get there.
Have you seen any evidence that procurement has become simpler for SMEs since the buy Canadian announcement?
You can go online, but the thresholds are so high right now on the buy Canada policy that a lot of the contracts are not reflective of SME realities.
The red tape is certainly one of the top priorities for small businesses and something to address at the federal level. We've been calling for removal of red tape for small businesses, getting them templates, streamlining those processes and even looking at reducing the amount of paperwork that is required. This needs to be taken into consideration.
My husband and I started a business, and I can tell you that we never tried to get any of these programs, because it was impossible. I had exactly that question: Would reducing paperwork help SMEs compete for a government contract?
I know the big guys have a massive team that can do this. If SMEs represent 99.7% of our economy, why are we not helping them with a program?
It's the number one ask when it comes to procurement.
The number one complaint we hear is how to create an ethics program. It's not something that's required under health and safety mandatory requirements. There are no templates. A business owner has to google online what an ethics program is and put it in place to meet the requirements of a procurement program. There are a lot of procurements that depend on those. It almost seems as though you're checking a box by handing in something that you've implemented within your business.
Thank you, all, for being here.
With regard to the CFIB, I have a great deal of respect for entrepreneurs who are starting a business and trying to make it in a global economic environment that is constantly changing. I have a lot of respect for the work you do.
Everyone who has come in here supports the buy Canadian plan. I'm assuming you support it.
The government has brought in policies to try to help small businesses. The regional tariff response initiative was briefly alluded to. We allocated $500 million to it. We've increased it by giving small businesses access to working capital, expanding into new markets and helping SMEs adjust supply chains and operations impacted by tariffs. We have streamlined the application process, and there's more work to do.
The buy Canadian plan is evolving, but we are trying to get as many Canadian companies involved in that as.... You touched on some of the work still left to do. Connecting the buy Canadian plan to the regional tariff response initiative and programs like it is exactly what we're trying to do to create that bridge for SMEs, so they can be prosperous moving forward while we navigate what everyone agrees is a changing global economic environment.
Can you touch on the linkage between programs like the regional tariff response initiative and buy Canadian?
Yes.
On September 5, the RTRI was announced as a measure to help support SMEs. When you start digging into the details of the various programs.... The RTRI was responsible for setting its own criteria across the country.
We know that the level of awareness of the RTRI is quite low. We have specific data, and I'm happy to circulate that data to the committee. I don't have those numbers off the top of my head. However, the awareness level remains incredibly low. We know 72% of our members, regardless of the sector they're in, have been impacted by tariffs in some form.
However, when you look at—
I'm sorry. Can I interject?
Whose fault is that? Isn't it your job to make sure your members know what programs are out there? We have to get that information out there.
Excuse me. Members of Parliament like me and others have tried to get that information out, but that's your job.
Have you looked at the criteria? Some of the criteria ask for 10 employees in order to apply. That's not a small business.
Excuse me. You just said that there hasn't been enough updating and that your client members don't know about it.
Whose job is that? It's your job.
In Quebec, you need to be only in manufacturing. They don't qualify. That's the problem. This program was targeted to small businesses. If you're in retail, you cannot apply at all.
It's five members or more, not 10. I might add that it's part of your job to communicate this to your members.
On a point of order, Chair, I think it's very disrespectful, when Ms. Auger is here explaining what the problems are with a program, that she's being badgered.
That is our time, colleagues.
We are going to suspend for a few moments to bring in our new witnesses. We have three opening statements to get through. We'll try to keep the suspension short.
We're suspended.
Thank you, everyone. We're back in session.
Before we start with our opening statements, just so you are aware, our witness from Unifor has not logged on yet. We're trying to locate him. In the meantime, we'll start with our witnesses who are here and hope to get them on board.
We'll start with you, Mr. Coutrouzas. Welcome. You have five minutes.
Again, colleagues, we have people online, so please state whom you're directing your questions to.
Sir, the floor is yours, please, for five minutes.
Good afternoon, Chair and members of the committee. Thank you for the opportunity to appear before you today.
My name is Nole Coutrouzas. I serve as the business manager for the Millwright Regional Council, representing 10,000 highly skilled millwrights across Canada who install, maintain and repair the equipment that powers Canada's economy. I also serve as president of the Hamilton-Brantford Building and Construction Trades Council and as vice-president of the Waterloo, Wellington, Dufferin and Grey Building and Construction Trades Council, representing an additional 30,000 skilled trades workers across Ontario.
I'm here to speak to one central point today: A true buy Canadian policy must include Canadian skilled trades labour, not just Canadian materials and manufacturing. Canadian workers must be at the centre of buy Canadian. When we talk about buy Canadian, the focus is often on goods, steel, equipment and materials, but those products do not install or maintain themselves. It is Canadian skilled trades workers who build, assemble, install and maintain the infrastructure and industrial systems that these investments depend on.
If public funds are being used for projects in Canada, there must be clear requirements that work is performed by certified journeypersons and registered apprentices, trades are recognized under provincial and territorial trades designations, and qualifications meet interprovincial or Red Seal standards, where applicable. Without these protections, buy Canadian becomes incomplete and risks excluding the very workers who deliver these projects on the ground.
Canada has built a world-class skilled trades system through apprenticeship training and interprovincial standards. Billions of dollars have been invested by governments and industry into workforce development, including such programs as the union training and innovation program, otherwise known as UTIP. However, there are no consistent requirements tied to federal funding to ensure that these standards are upheld on publicly funded projects. This creates a gap whereby work may be performed without proper certification. Trades standards may be undermined, with public investment and training not fully utilized. We should be maximizing that investment, not bypassing it.
Another critical issue is the use of international labour mobility pathways that allow foreign workers to enter Canada for industrial installation work. We have seen this on major projects that include such facilities as the NextStar project in Windsor, Ontario. Similar concerns are emerging with upcoming developments like the Volkswagen PowerCo plant in St. Thomas, Ontario.
Foreign technicians are brought in through such mechanisms as business visitor provisions for after-sales service, intra-company transfers and international mobility program streams tied to free trade agreements. These pathways are intended for highly specialized proprietary work. However, there is growing concern that they are being used to perform general skilled trades work, work that Canadian millwrights and other skilled trades workers are fully trained and available to do. This creates a backdoor pathway that bypasses the Canadian labour market, undermines domestic workforce participation and contradicts the spirit of buy Canadian.
Where a labour market impact assessment or any labour market access pathway is being considered, building trades unions should be formally notified and engaged to ensure that Canadian labour standards are upheld and that qualified local workers are given first opportunity to perform the work. These organizations can provide real-time, on-the-ground insight into labour availability and help ensure that policy intent is respected.
Let me be clear: Canadian trades support global investment, but not at the expense of Canadian workers being displaced from work they are fully qualified to perform. When Canadian skilled trades workers are employed, their wages are spent in Canada, they support local businesses and communities, and they contribute directly to Canada's GDP and tax base. When that work is performed by temporary or external labour with limited integration, a portion of the value is lost to the Canadian economy.
Buy Canadian is not just about procurement; it is about economic retention and growth. Canada already has the workforce. Policy must ensure that it is used. We have invested in it, we have trained it and we are ready to deploy it. If we are serious about a buy Canadian policy that strengthens our economy, then we must ensure that it includes Canadian workers, Canadian standards and Canadian opportunities.
Thank you for your time. I look forward to your questions.
Thank you very much, Mr. Chair. I appreciate the opportunity.
To the esteemed members of the committee, I would like to extend my appreciation for the opportunity to voice our council's views on the buy Canadian policy.
My name is Igor Delov. I'm director of government and stakeholder relations at the Provincial Building and Construction Trades Council of Ontario.
We represent 15 unions with a membership of 150,000 construction craft workers in every discipline of the sector, which accounts for 7% of Ontario's GDP.
With our signatory employer partners, we manage over 100 joint apprenticeship training centres, which prepare the safest, most qualified construction workers who build the homes, roads, bridges, schools, hospitals and energy systems that Ontarians depend on.
From a building trades perspective, we're encouraged by the current trajectory of project commitments being made by federal and provincial authorities. We welcome the federal announcement of $115 billion towards infrastructure investments in the next five years, which will result in the creation of thousands of training and apprenticeship opportunities and long-term careers in construction. We further salute the government's buy Canadian procurement policy framework, which will help catalyze domestic production and import substitution.
Requiring public procurement authorities to purchase verifiably Canadian-made materials, such as steel, aluminum and lumber, makes sense and will help protect and grow Canadian jobs. Furthermore, this initiative augments efforts that are under way to harmonize safety and training standards in recent legislation, like Ontario's Bill 2 and the federal government's Bill C-5, which are designed to secure seamless labour market credentials across Canada, including in the construction trades. The ultimate goal of harmonization is to achieve a single market, greater worker mobility and a stronger Canada. We support these objectives as long as we train to the highest health and safety standards.
Global geopolitical uncertainty seems to be a permanent feature of today's economy. Amid this upheaval, if implemented properly, a buy Canadian policy has the potential to bolster greater self-reliance to support communities right across our country while mitigating risks coming from external factors.
In addition to buy Canadian, the government would be well advised to implement a hire Canadian campaign. For years, the building trades have called on governments of all stripes to decrease our reliance on temporary foreign labour to build Canada's infrastructure. Relying on the international mobility program and the temporary foreign worker program while ignoring the domestic labour market situation is simply reckless. Under the auspices of the TFWP, temporary foreign workers tend to face exploitative practices, such as wage theft, unauthorized deductions, eroded labour standards, poor health and safety conditions, and substandard housing.
As we reimagine our procurement policy, we need to reimagine our human resource policy with a view to maximizing opportunities for Canadian residents to join the construction trades, especially at a time when youth unemployment is nearing 15%.
Our training providers have no shortage of domestic applicants living in their communities and seeking to enter the newest cycle of apprentice recruitment across most trades. In that sense, the buy Canadian approach can help spur work opportunities, not only in construction but also more broadly across the entire supply chain, from prefabrication shops to manufacturing facilities. There are pockets of trade-specific unemployment that we need to pay attention to so that we can deploy certified journeypersons to projects as quickly and seamlessly as possible. The government has taken steps to incentivize construction work travel through the labour mobility tax deduction for tradespeople, which is a great step forward.
More generally, however, the government must put Canadian workers first on publicly funded projects, without exception. The building trades do not accept governments, owners or employers using excuses like skill shortages, original equipment manufacturer expertise, warranty service requirements or proprietary technology to circumvent the hiring of skilled Canadian apprentices and journeypersons, including those from under-represented and underemployed communities.
Canadians live by the choices governments make, and we would submit to you that a buy Canadian, hire Canadian policy contains the long-term solution that our economy needs in order to revive growth and secure our economic future.
Thank you very much. I would be happy to answer the committee's questions.
You had one second to spare. Well done. Thank you.
We haven't gotten our Unifor witness logged in yet, so we'll start our rounds, and we'll keep trying to get Mr. Cloutier aboard.
We'll start with Mrs. Block for six minutes.
Thank you, Chair.
Thank you to the witnesses who have joined us today.
I want to circle back to a conversation we were having in the previous hour in regard to the regional tariff response initiative. I just want to put on the record that in Ontario, both southern and northern, the eligibility threshold is five or more employees. In Quebec, it's only manufacturing SMEs, and in the Prairies, it's 25% of total business impacted by tariffs. A business with 50-plus employees could be impacted at 20% but not be eligible for regional help. I just put that on the record, because we had quite a discussion in the last hour.
For the Millwright Regional Council, you mentioned in your remarks that you have concerns over labour gaps in the policy. Can you elaborate on that?
What I was referring to is essentially Canadian workers. A lot of money was being invested, whether provincially, federally or municipally, into training in the skilled trades, but the solution is aligning the policy to match putting Canadians first. In the free trade agreements, through the examples I gave, they're allowing foreign workers to come over for specialized trades. When we're seeing these specialized trades doing the exact same work our members and our workers do every single day, then that gets concerning, because now you're getting into the general trades. It's not specialized.
We're not saying there is no need for workers, especially specialists, to come. We're just saying that work that can be done here should be done by the people who are being trained here, spending the money here and investing here. The trade gap really is.... We hear about the shortage, but, quite frankly, we're not seeing the shortage. We're hearing about the shortage, but we're not seeing it yet.
The way we work is that we go job to job. Not every job is back to back. Last month, you could have asked me, and I could have said, “We're full-out. We're going. We're ready.” This week, it's a different conversation now. It's just the way the industry goes. We go where the work goes, and we need to have it, so that there's consistent work here. The work that is being done here needs to be done by the Canadian workers who are being trained by all of us.
Thank you.
How important are zoning and regulatory reforms, more broadly speaking than just for procurement things, such as housing construction, on which we've seen some worrying news about decreases in new starts? Can you comment on that?
My expertise is not really on the residential side. I'm more on the industrial and manufacturing side. From my conversations, I've heard that a lot of it comes, honestly, to the municipal side, with permitting. That's a lot of it, and then you add in that the people who are supposed to build the houses aren't building because, yes, there's demand but not the demand at the prices they're trying to get. That's really as much as I can speak about for the residential side or sides like that.
Thank you.
We saw the government boasting in the spring economic update that the Toronto line 2 trains will be 55% Canadian content. How much is normal for labour to take up in a given job or project?
For the budget, you're looking at probably around.... I don't know, but I would guess about 50% is usually your labour. The equipment takes a big chunk, but labour on any project, I would assume, would be your biggest expenditure.
Thank you.
I am just wanting to ask for a comment about an article by Michael Howlett and Andrea Migone of Simon Fraser University. In it, the authors note that, rather than trying to improve efficiency, “Government efforts instead have often focussed on layering additional requirements...on top of an already complex set of bid requirements.”
Can you comment on that?
Bid processing is out of my scope of expertise. I can speak from seven years ago, when I was on the tools and my example of that. In the current climate, I'm not comfortable answering about the budget or the estimates of it.
Thank you, Chair.
Thank you, Mr. Coutrouzas and Mr. Delov, for joining us. It's really important to have the perspective of organized labour when we're talking about buy Canadian. I think you both raised some fairly consistent points around buy Canadian procurement and how it also has to put Canadian workers first. I really appreciate the sentiment of “hire Canadian” also.
Mr. Coutrouzas, I'll start with you.
You talked about some of the challenges with foreign workers and prioritizing Canadian labour and Canadian labour availability. Billions of dollars of federal investment are going into build Canada strong, Build Canada Homes and the defence industrial strategy. For all of these programs, we need to make sure that we have labour availability for them and, through the buy Canadian policy, that federal procurement is prioritizing Canadian content.
Can you comment on how we can make sure we do prioritize Canadian workers for all the work that's coming through?
First off, the problem isn't with the companies; it's with policy.
These companies and corporations are basically using the loopholes and policies that are available to them to make these business decisions. They get foreign workers to come in by using the free trade agreements and labour mobility programs.
There used to be formal consultation with building trades unions before an LMIA was assessed or any form of mobility pathway was enabled. That went away a couple of decades ago. I tried to get the exact date when it stopped from some of the older members who are getting into retirement age. When we look at LMIAs or any of these programs, we have to search. There's LMIA.org and others.
A resolution to it would be to consult with the building trades affiliates, such as the millwrights, to confirm whether qualified Canadian workers are available and to ensure labour mobility pathways are limited to only specialized work. That's my goal here.
Then you'd tie federal funding to the use of certified trades and apprentices and require compliance with the Red Seal trades and the provincial trades standards. We all have a trade code. Every province and territory has trade codes for specific work, yet there's nothing in policy or in the buy Canadian policy yet that says Canadian workers should be doing it first.
That's what I'm trying to say. I'm not saying to not use foreign workers, because there is a time and a place, and we understand that. I'm saying that with all this money being invested in training us, we should be the ones who are doing it. That would be a direct return on investment.
Thank you.
I also want to give Mr. Delov a chance to answer the same question and to expand on it.
If we are insisting on public procurement supporting certified and qualified Canadian workers, fair wage policy and union workers in particular, how do we make sure that this is part of the procurement process, and if it does incrementally increase costs, how is that also taken into account when you're going out to tender on these projects?
I would echo my colleague's comments that the main focus is within the policies, so if we tweak the policies, the business response will be commensurate with those changes.
We've seen a lot of investments in the training capacity of our organized construction sector to enhance the ability of our affiliates to train the workers we'll need for the projects that are coming forward. In terms of meeting that capacity, the investments from the UTIP program and from the provincial skills development fund programs are all meant to augment the existing structure we have, whereby our workers and employers jointly contribute to our apprenticeship training trusts.
We have a very good infrastructure in place. I think really we need to zero in on our international trade agreement obligations and prioritize Canadian workers on that front, and also we need to focus on our general immigration policy, our existing temporary foreign worker program and our international mobility program. A lot of workers are coming in through those programs.
Investing in our workforce and giving Canadian workers the opportunity to go through an apprenticeship on a major project will have spinoff effects locally in the community for years and decades to come. It won't just create jobs; it will create careers for people who will become certified journeypersons at the end of their apprenticeships.
Mr. Danko, I would say to you, we have the infrastructure in place. I think we just need to make some adjustments in terms of how we prioritize the hiring of the people doing the work where the investment is being commissioned.
To follow up on that, if we're going to a buy Canadian procurement model, Canadian workers, presumably unionized or employed through a fair wage policy, would insist on higher wages, which I think is a good thing, but some of the criticism is that we're moving away from a low-bid public procurement model.
Mr. Delov, how would you respond to that kind of criticism, that there may be a higher price with a buy Canadian policy in place?
Thank you.
In a nutshell, labour costs on major projects account for about a fifth of the overall cost. I know that a 50% number was mentioned earlier, but I think it's closer to about 20%.
That's point number one.
Point number two is that the spinoff effects—
I have to cut you off there. We are past our time, but perhaps you can provide a further response in writing.
Madame Gaudreau, please.
[Translation]
Thank you very much, Chair.
Mr. Coutrouzas, would you clarify something for me?
You said that there used to be consultations with the unions and that there aren't any anymore. Do you know why?
[English]
It was something that I delved into. As I said, I'm a very firm believer in the people who have worked and gone on the same path as I have, that you learn the history. You try to learn, so I ask the questions. I do ask them.
We couldn't find specifically when it was. It was, again, through conversations, that it was probably the early 2000s, 2010, that we started to see the shift, where we weren't even being consulted or sent these LMIAs, because if there was an LMIA or any pathway, it would come to us first, and then we would be able to say, “That's not true,” because we had the labour force.
[Translation]
[English]
[Translation]
I'll stop my timer so I don't lose any of my time. I want to make sure we get the right information, even if it takes an extra minute. No worries.
You said it was in 2000 or 2010, right?
[English]
Yes. Again, I was talking about two separate people. They stopped receiving them between about 2000 and 2010.
[Translation]
[English]
[Translation]
[English]
Tell me when the communication barriers started to get obstructed and why we're not being involved with this anymore, because again—
[Translation]
Mr. Delov, I was elected in the Laurentians, where the forestry industry is very important, as you probably know. I even worked in that industry for several years.
Right now, there are mills that aren't running shifts, that are in danger of closing or that are short on cash. There are even people in the critical minerals sector—graphite comes to mind—who, just this morning, told us they were forced to reduce their workforce and that they used to have 80 employees. We can certainly buy Canadian, but the supply chains aren't stable. They need to be robust.
How is anyone supposed to build housing and homes—which requires resources—when companies aren't even able to keep up?
[English]
That's a really difficult question to address, but I would say that in general we do need to focus on maintaining access to our trading partners, including the United States, which is the obvious one and our biggest trading partner.
Despite all the difficulties in recent years, that should be a key priority for the government: either to renegotiate the free trade agreement or to come to an alternative arrangement with the U.S. bilaterally. The market fluctuations affect everybody. Construction is very cyclical. We have waves of unemployment.
[Translation]
Maybe my question wasn't clear. I'll rephrase it.
People want to buy Canadian, but companies are struggling to survive because they lack cash flow. Inventory management is a nightmare.
I understand that we can't change our agreements and our partnerships, particularly in North America, but shouldn't we be directly helping our local businesses upstream so that folks can put a seal of approval on their product, stating that they're buying Canadian and that these are local people—local business owners and local workers?
That was my question.
[English]
Yes. In a nutshell, I think the buy Canadian policy can help to alleviate some of those risks for local communities in forestry and mining as long as the federal government uses its great power of procurement to stimulate domestic economic activity to meet the market needs of whatever the projects are. I think it's a good approach that the government is taking.
I think we need to work more collaboratively among labour, business and government to help achieve that, and I think we need more coordination and dialogue to secure those markets domestically in parallel with what's happening on the international trade front.
Thank you.
[Translation]
I have a few seconds left.
I just wanted to tell you that, if government jobs are being cut and the use of outside contractors isn't being reduced, we need you to tell us how important it is to invest in our workforce and in developing skills and expertise, so that we can rely on our own employees. That's not the way things are going. That's why you're here with us today.
If you have any additional information to share with us, please submit it in writing. We'll include it in our report.
Thank you very much, Chair.
[English]
Thank you.
Mr. Patzer, go ahead, please.
I'm sorry, Mr. Patzer. Mr. Cloutier from Unifor has finally joined us.
Okay. Thank you very much.
Mr. Coutrouzas, at the end of your opening remarks you made a comment that Canadian workers, Canadian standards and Canadian industry need to be involved or to be a part of any buy Canadian strategy that there might be.
You gave that comment in the sense that it's maybe not included or not included in a way that it should be. I'm wondering if you have any further thoughts about that and how our workers, standards and industry might be excluded or impacted and not necessarily included in the way that the government is hoping.
I'll give you an example of what's happened. Say a piece of machinery gets manufactured in South Korea. Through the free trade agreements, they're allowed to bring specialists for that equipment into Canada to install, maintain, commission and everything. I'll use NextStar as an example again. We were working right beside one line that the foreign workers were working on.
They're meshing the discrepancy between a skilled worker and a general trades labourer to get their workers here and not utilize Canadian workers. It's a loophole. They're using loopholes through free trade agreements to get here. Again, it's not the company's fault; they're doing what they are entitled to do. It's your job to close those loopholes.
As I said, if we can't supply the manpower needed in order to complete these jobs, then there should at least be the opportunity for us, if these pathways are open and foreign workers come, that if it is a job that is a union job, it allows building trades or organizations like mine to make sure that, when they come over, they're not being exploited. A big issue with foreign workers right now is exploitation, both long-term and seasonal. We would make sure that they're paid right and that safety standards are up to speed with what our standards are. Right now, it's almost like, if you bring them in, the standards get lower.
The main thing is, when it talks about a return on investments, we spend the money here. We're the ones going to local shops. We're the ones buying vehicles here. We're the ones buying homes.
We're talking about billions of dollars that have been invested in some of these infrastructure projects. Again, I'll reiterate that the stance needs to be that we have the capabilities to do it. Canada is a great country. We develop our people properly. We give them hope that one day they will retire with dignity. When you have big infrastructure projects like these come and then we kind of get, “Well, you guys can get what they can't supply,” as in the skilled workers or their so-called skilled workers, it's just closing that gap where, again, we do it first and then enable pathways for those foreign workers to come in if we can't accommodate. To just bypass us completely and then go into these agreements to bring in foreigners is not right. It really isn't. I think it's morally wrong.
One, I get free trade. I understand it as a millwright, I should say. I'm not an expert on it, but I do understand it. I also understand that we're in a different situation right now, where we all question what free trade means when we have our biggest support partner to the south of us doing what it's doing and affecting us.
I think this is where we can all come together. It doesn't matter if we're part of the affiliation or not, but we can all come together and agree that Canadians should be first. We're in unprecedented times. Now should be the time that we maybe reassess some of these policies and make sure that the people who are devoting their life to a skill in Canada are utilized for that work.
That was really extended. I'm sorry, but I had a lot to digest on that one.
That's really good. I appreciate that.
Does your council have any very specific line items that would create those loopholes that you could maybe submit to this committee in a brief afterwards?
I can get that together for you.
I know NextStar, as I mentioned. If it's manufactured in, say, South Korea. I know that chapter 12 of the Canada-Korea Free Trade Agreement notes the labour mobility programs involved with that.
I can get you language on that as well.
Thank you, Mr. Chair.
It's good, Mr. Coutrouzas, that you're here to represent the Millwright Regional Council, and Mr. Delov the Provincial Building and Construction Trades Council of Ontario.
Both of you touched briefly on this matter of opportunity and future opportunity. I would welcome the thoughts of you both on what opportunities you view emerging from a buy Canada policy, both for the industries and for the workers you represent in your organizations. I'll ask Mr. Coutrouzas first and then have Mr. Delov expand on that.
Thank you.
I'd simply say that the most pressing thing right now for the Millwright Regional Council project-wise would be the St. Thomas Volkswagen PowerCo plant, because a majority of that work is.... The machinery install would be considered millwright work. Now, we're being bypassed. I don't know what the final agreements are or anything like that—it's been very quiet on that front—of any closed-door talks. If it ends up where it is.... With NextStar alone, we had roughly 150 displaced millwrights who should have been doing that work, and those numbers are probably going to be exponentially larger at a build like Volkswagen. That's my direct view on the impact.
As we go from east to west, companies are paying attention. They're paying attention to these loopholes. Whether we talk about the trans-Canada corridors, the LNGs, the refineries or building homes, these are the things for which we have the skills here. The people who work here, the people we're training here, have those skills. It needs to be addressed and, again, it's through policy. It really is.
To echo the comments of my colleague, Mr. Coutrouzas, I would just add that, across the whole supply chain, including in pre-fabrication in the broader manufacturing sector, a buy Canadian policy would stimulate Canadian jobs domestically and would put more people through our apprenticeship system as well, which we have in the building trades.
I know that small and medium-sized enterprises were mentioned earlier in the discussion. With regard to our affiliated signatory contractors, 80% of them have fewer than 20 employees. If we want to achieve business growth, a buy Canadian policy can really positively affect those numbers' going up in terms of businesses hiring more people to meet the work requirements, the project requirements. Employment levels will go up in construction as a result.
As I mentioned earlier, we have an issue with youth unemployment in particular, and having young people look at the building trades as a viable career option, as a first-choice option, would go a long way to improving overall employment throughout Ontario and throughout the country.
I really appreciate that comment. I think it's a very important comment—that we look at differences. You point out the differences with smaller contractors that have fewer employees, so that's an excellent comment. Actually, with regard to your point, they did talk, in the panel before, about the importance of ensuring that we look at differences in industry and in workers.
I'm wondering—just because you've opened up that line of comment—if you could both expand on that. Are there further differences that we should take into account as a buy Canada policy is developed, both from a broad perspective and also from an SME perspective? The policy has not yet been completely finalized. I would welcome your points of view on any differences that should be taken into account.
We may be running short on time, so maybe, Mr. Delov, you wouldn't mind expanding further. Then Mr. Coutrouzas can conclude.
Thank you.
We work very collaboratively with our contractor partners, our counterparts. I think the procurement rules, as they are, achieve a lot of benchmarks that are appropriate to secure fair pre-qualification. We want to expand on those to get more registered apprentices onto these publicly funded projects. That's a win-win, because there are spinoff effects in hiring apprentices. We want to see a greater expansion of registered apprentices being hired through our smaller contractor employers. That would go a long way in improving the whole system in construction.
I'm afraid that's our time, Mr. Coutrouzas, so you won't have a chance to chime in.
We'll go to Madame Gaudreau, please.
[Translation]
Thank you very much, Chair.
I'd like to let you know that our witness, Mr. Cloutier, has arrived.
Mr. Cloutier, I'd like to ask you a question or two, because I think this is actually pretty important. We don't want to know what happened. I'm sure you have a good reason. If you're available next Tuesday, we'd be happy to invite you back. We'll be discussing the same topic.
[English]
That's a good point. We'll try to get Mr. Cloutier back on Tuesday. We might have an opening. We're following up with Mr. Cloutier right now.
[Translation]
[English]
[Translation]
Thank you very much, Chair.
Mr. Cloutier, Paccar operates the last remaining truck assembly plant in Canada. Is that a symptom or a problem?
Is this an isolated case, or does it point to a broader problem of deindustrialization in Canada?
First, I apologize for running late. It wasn't my intention. I got the times mixed up because of the time zone difference. I'm currently in Edmonton.
Unfortunately, the Paccar plant—which is indeed the last remaining truck assembly plant—is not an isolated case. A similar decline has been observed in several sectors. One of the reasons is that we don't buy from domestic suppliers. For example, Paccar is struggling to secure contracts from the City of Laval, but because of the “lowest bidder” policy, these contracts may slip away, likely due to a difference of 1%.
When procuring goods and services, public service purchasers don't really seem willing to truly consider the impact of buying Canadian for this type of product. This is disastrous because the Paccar plant can produce about 100 trucks per day, yet it is currently making just 25.
So the question is this: For how long will fixed costs allow a facility that has a production capacity well in excess of 25 trucks per day to remain profitable?
If the Paccar plant goes, trucks will no longer be manufactured in Canada.
[English]
Mr. Delov, we're seeing warning signs across the housing sector. Metro Vancouver just recorded its weakest home sales market in decades. Pre-sale launches have collapsed, and we actually now have developers entering receivership on completed buildings. If projects stop moving forward, trades workers are going to lose their jobs regardless of what procurement policy Ottawa writes.
At the end of the day, trades workers need projects to actually move forward. Would you agree that an announcement from the government doesn't really help workers if the project is delayed or cancelled?
Yes, insofar as projects are delayed, paused or cancelled, that's not helpful. However, we do welcome shovel-ready projects, obviously, that we want to see our workers be employed on.
Buy Canadian sounds good, but it has to work on real job sites. Are you concerned that these rules would actually slow projects down instead of helping workers, and actually increase project costs, which we can see are already high?
I think, in fact, they would help spur greater economic activity domestically, so I think the buy Canadian provisions are a good thing overall.
With regard to delays and administrative roadblocks, I think we can all do better, including the government and the permitting authorities and so forth.
Just on your earlier comment regarding the housing, yes, we've seen a major residential construction housing slump in Ontario as well—I can't speak to B.C.—and this is concerning. To an extent, we're also trying to pivot on projects that are outside of the residential sector to keep our members employed.
Thank you.
The last time this happened was actually when my husband was trying to become an electrician—his dad was an electrical contractor, and it was in the Liberal downturn—and we ended up going into greenhouses instead, because there were no jobs. We're seeing that again with what's happening now, so I'm just wondering, how will this second Liberal-caused housing downturn impact the trades?
Residential accounts for a great share of our members' activity, including the training infrastructure that I talked about earlier. It is a major concern, but I think the good news is that with the major projects being under way in Ontario and other places, there are plentiful employment opportunities as a result of those projects, which we do welcome.
Is there a risk that buy Canadian could become another layer of red tape on top of an already very complicated construction and procurement system?
I would say that the short answer is no, because it would help spur domestic productivity and the domestic sourcing of the goods we need. I think we're very wealthy. We're blessed with softwood lumber and the industries with regard to steel and aluminum. If we can match the market need with the producers and what they have to offer, it will be good news for Canadians.
Federal procurement is already really complex. If buy Canadian adds more conditions without simplifying the process, couldn't that make infrastructure projects slower or harder to deliver? Therefore, you'd have fewer jobs for your construction workers.
Theoretically, yes, it's a concern.
I think this is a historic opportunity for business, government and labour to come together and reduce those red-tape obstacles. I think that if we approach this seriously and meet the test of the moment, we have a good opportunity in front of us.
On behalf of labour, I'll say that we want to be part of the solution in that regard. A lot of this remains to be seen as to how it unfolds in the next year, but our principal position is that we do support the buy Canadian policy. As I said earlier, we want to see that in conjunction with a hire Canadian policy as well.
I would say that it's the permanent uncertainty that I mentioned earlier. It's the sense that we have a lot of announcements, and we do have some pending projects, but we want to see shovels in the ground more quickly, and we want to see our employment numbers go up.
Yes, the industry is cyclical, but—
You're not concerned about the downturn in the housing market. That's not the main pressing problem right now.
I would say that it's a part of the problem, but there is a broader sense in which the other sectors are affected by this uncertainty. If we see projects starting, that would be—
Thank you very much, Chair.
Thank you to today's witnesses.
I'll start here in the room with Mr. Coutrouzas and then ask Mr. Delov the same question online.
We've heard a lot of great discussion here today around the buy Canadian policy. I'm going to jet up a thousand feet. I'm thinking about five years from now.
If we were to measure success in five years from now, I'm thinking about what that would look like. What outcomes would demonstrate that the buy Canadian procurement policies had been effective in strengthening industry, supporting workers and improving our overall economic resilience?
I know that's a big question.
Honestly, five years from now, success would be that all completed projects were completed by Canadian workers.
That enables them—because of fair wages and the prevailing wages that we offer and they're now afforded—to afford to put a down payment on a house or pay for the costs of food and whatnot. We can go into post-retirement pensions and the difference between pensions and RRSP matches and all of that, but it comes down to how we need Canadians to make money so we can spend our money here.
Yes, I represent a union. I obviously know my role, but everything we've talked about today hasn't been about being union or non-union. That's a point that I really want to make clear to everybody. We're talking here about Canadians working. Success would be that we gave five years of steady income to workers. That, to me, would be success. Also, if we weren't able to fill that, then we would have been able to reach out, get support from our free trade partners and enable them to help us. To me, that would be success in five years.
Incredible.
I forgot a shout-out to my union Local 93 hall, I believe it is, in Kanata. Kudos for the work they do.
I'll ask Mr. Delov the same question online.
Thank you.
Yes, I think graduating more journeypersons through that next four- or five-year cycle and having more apprentices registered and employed on these projects would be a fantastic win for communities throughout Ontario and Canada.
Earning and obtaining that journeyperson certificate means that those workers would have higher wages, better health and safety protections, great mentorship along the way and a lot of supports from our union. Having more durable long-term careers emerge from these opportunities would be a win five years from now.
We're just on time.
Thank you for being with us.
Mr. Cloutier, again, we'll reach out to you to try to reschedule you.
Before you go, if you don't mind responding in writing, we have an issue in Alberta and B.C. with illegal, trafficked workers being brought in on large, federally funded work sites. I wonder if you're able to provide any feedback to the committee, if you've heard anything anecdotally or otherwise, on that issue. I'd like to discuss it more, but we are out of time.
Thank you very much for being with us today.
If there's nothing else, we are adjourned.
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