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Chad Bunch
View Chad Bunch Profile
Chad Bunch
2019-06-12 15:43
Thank you, Mr. Chair.
I appreciate this opportunity and thank the distinguished members for your time. My name is Chad Bunch and I'm a mechanical engineer by trade. I'm also the Vice-President, Operations, of our family-owned and operated business, Bunch Welding Ltd. We are located in Leslieville, Alberta, and have been operating since 1981.
We primarily service the energy sector by fabricating structural steel and pressure piping. We employ roughly 250 to 350 people directly, depending on the season, mostly tradespeople. Our payroll typically consists of around $20 million annually, with our third party expenses also being around $23 million annually and a growing proportion at each year to payroll, so we're spending more money on third party expenses than we would on payroll.
Every year we typically purchase around two million pounds of steel directly, and we handle double that in carbon steel piping on behalf of our clients. Year over year since 2017, we've seen steel prices increase upwards of 60% per year for some steel categories and, I would say, at least a minimum of 30% for all the other categories.
By my count, in the last year we've seen about eight competitors, running similar businesses with similar numbers, shut down due to increased expenses and lack of profitability in spite of there being sufficient work. We're hearing things like people saying it's just not worth it.
Although this increases market share for us, this has obviously been devastating for the local economy by shrinking the amount of money going into things like housing, restaurants and tertiary services like massage therapists, etc.
I heard testimony yesterday that used the words “flexibility” and “process”. I understand that flexibility is required to add and remove tariffs as required. However, in the private sector flexibility translates to volatility, and volatility leads to drastic price swings, which are terrible for planning. Currently, there are no good legal mechanisms for small businesses like our own to pass the costs of tariffs on to the end users, unless it is expressly stated in contracts, which isn't always the case.
We're also usually outmatched when it comes to legal teams that our clients have, and our contracts are structured to protect them and obviously not us.
Regardless, our clients require cost certainty to determine whether projects are viable and make sense to proceed. This is impossible to do with the volatility in steel pricing, and in my view it's a significant impediment to whether investors decide to proceed with projects that our economy so desperately needs.
As a former federal public servant who worked in a quasi-judicial organization, I deeply respect our government employees and the work they do, but I also fully realize that government process is not fast and it's not easy, and when governments say words like “flexible” and “process” it scares me.
Unfortunately, it's just not practical for small businesses like our own to participate in processes, as we are often consumed with day-to-day operations of business and don't have the time and resources to commit to things that might seemingly be simple. It's because of this that small businesses don't get a voice at the table and, in my view, share a disproportionate amount of the burden from these changes.
I appreciate the difficulty that we Canadians are experiencing in the volatile world, and I recognize how profound and difficult these decisions are that you are required to make on behalf of all Canadians. I only respectfully ask that you please keep in mind small businesses and communities and the drastic effects of this flexible decision-making when you do it.
I appreciate your time. Thank you.
View Kim Rudd Profile
Lib. (ON)
Great. Thank you for your patience—I know it's not easy to be outside the room and listening to this without being able to see us all.
I'm going to ask you a question around SMEs' options—or optionality, maybe—to apply for exceptions and relief, within tariffs imposed over this past period of time. I know that in my riding of Northumberland—Peterborough South, I had one particular SME whose only product used in manufacturing was available only in the United States. He was able to go through that process and obtain that relief.
Can you talk a bit about whether or not you think that's an important tool within this process, especially for SMEs?
Chad Bunch
View Chad Bunch Profile
Chad Bunch
2019-06-12 16:29
Yes. I guess from our perspective we're a small player in that scheme. Processes like that are unfortunately cost prohibitive. We would have to hire somebody to go through that process. We're kind of a smaller player. To be able to get an exemption, you would have to basically go about reading the laws, reading the process and then putting somebody forward to actually to do it, just to even be aware of it. I don't know that this processes would work for smaller players like ourselves. They might work for some of the mid-sized and up—you know, the bigger players type of thing.
It's certainly welcome to see that there is some relief out there. If there were a quick way of being able to get relief, we would certainly take it.
I know there was a comment earlier about the uncertainty. From our perspective, the biggest thing is the volatility. If we knew what it cost and could be certain about the cost, that would help a lot in planning because at least we could price it in and know that it's certain.
View Kim Rudd Profile
Lib. (ON)
View Dean Allison Profile
CPC (ON)
Thank you very much, Mr. Easter.
I didn't know if you guys were coming today and thinking that we were going to ask about what's been collected and stuff. I know that you've been before our trade committee a few times—some of you have, anyway. Do you have any indication of how much money has been collected in tariffs, duties and from all of this stuff on steel to date? That's the first question.
Second, how much has actually been paid out to small and medium-sized enterprises? Do we have those numbers at all, or ballpark numbers? I know that you were before our committee back in the fall, and I know that that number has grown, so I'm just curious.
Patrick Halley
View Patrick Halley Profile
Patrick Halley
2019-06-11 15:52
There's a long list here. There have been remissions. There have been three orders, and that's $395 million. There was a duties relief program from the CBSA that I think is about $30 million. It's $31 million or $32 million.
Then there were the programs that were announced. There was a $100-million program announced in March for small and medium-sized enterprises. There was strategic innovation funding, from June 29, of $250 million, and there was another $250 million that was topped up—
View Dean Allison Profile
CPC (ON)
I'm aware of the programs that were announced. My question is related to how many dollars have actually gone out. I know that they've announced that most of the money was going to go out. Do you have any idea of what actually has gone out the door?
Patrick Halley
View Patrick Halley Profile
Patrick Halley
2019-06-11 15:53
No. We can get back to you. We can come back to the committee with the exact number.
View David de Burgh Graham Profile
Lib. (QC)
Thank you, Ms. Jordan, for being here for this. This is a very important issue we're discussing. I know we've talked about the Internet an awful lot, but I think cellphones are really what we're trying to get to here.
I'll continue with Brian's point for a bit. How do we get small companies, such as the ones in my riding, to get involved in cellphones, when it costs them $1 billion to get into the market?
Are we going to look at moving to a post-auction world for wireless spectrum?
Lisa Setlakwe
View Lisa Setlakwe Profile
Lisa Setlakwe
2019-05-16 9:19
I can add one thing to that. What we do hear from smaller companies when we are selling off spectrum is that we sell it in blocks that sometimes are not affordable for them. We are actually in the process of consulting on a smaller block size, so that these kinds of service providers can participate in spectrum acquisition.
View Terry Sheehan Profile
Lib. (ON)
Thank you very much, Minister, and congratulations on your appointment as the first Minister of Rural Economic Development for Canada. I think that underlines and highlights the commitment to the people of rural Canada. Obviously you're right in there, rolling up your sleeves. I appreciate that.
To Will Amos, the member for Pontiac, congratulations on your motion.
I would be remiss, Minister, not to mention the member for Nickel Belt, who was appointed as your parliamentary secretary.
I am from Sault Ste. Marie, in northern Ontario. Northern Ontario is 90% of the land mass of Ontario, and there are a number of geographical issues and a number of remoteness issues, but I'm not going to delve into those. I am going to specifically talk about first nations.
There was an announcement recently under the previous program. Matawa First Nations Management connects four or five remote first nations in the Ring of Fire. It was important to do that for education, health care and remoteness. You know that there are first nations that deal with high rates of suicide because of their remoteness, and one of the things we've read about is the ability to connect people. The ability for people to support one other is important.
Bernadette, with that, I want to also talk about something you alluded to about the private-public sector partnership, because the private sector is involved up there. This is just a general statement. How important is it to you philosophically for the private sector to be involved, not only the big ones but the small and medium-sized enterprises across Canada and in northern Ontario?
View Bernadette Jordan Profile
Lib. (NS)
Thank you, Mr. Sheehan.
With regard to indigenous communities, 190 of the connect to innovate program approvals were for indigenous communities. I think that's quite a significant amount and it's something I'm happy to see. Like you said, we know that in some of our more remote regions specifically, there are a lot of challenges. People there rely on the Internet for things like health care and support, so it's extremely important.
With regard to your question about small and medium-sized companies, I've seen such great, innovative programs coming out of smaller areas from these small companies. It's because they have a vested interest in their communities and they want to make sure that their communities are connected. Sometimes it's things like co-operatives. Other times it's municipalities that have started their own ISPs. I think it's extremely important to have them at the table as part of the conversations we are having with regard to connectivity.
I know that we have to look at...as I've said many times already today, there's no one-size-fits-all solution. Sometimes the best service will come from those smaller organizations. Sometimes it's going to come from the bigger companies. No matter how it comes about, though, it has to happen. I think that's the main thing I'd like to say: No matter who is connecting, we have to connect.
This isn't about a luxury anymore. This isn't about people binge-watching Netflix, although if that's what they want to do, that's great. This is about health care. This is about education. This is about banking. It's about growing businesses. It's about not having to go into a store. I was recently in a place in a rural area and I went to use my debit card. They said “Let's hope the phone doesn't ring.” They were still on dial-up. I mean, how do you grow a business when you don't have access to good-quality high-speed Internet? It's about safety.
All of the things you are saying are correct in terms of making sure we have all different partners at the table. We look at all different options when it comes to connecting people, but the ultimate goal is to connect them.
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