National Post (National Edition)
COVID BORDER CONFUSION COSTING CANADA
Automotive sector says it's losing millions in new contracts due to haphazard enforcement of rules on Windsor side
WINDSOR, ONT. • Automotive suppliers in southwestern Ontario are losing tens of millions of dollars worth of contracts due to what they claim is inconsistent enforcement of Canada's COVID-19 rules for crossing the U.S. border.
Though deemed essential workers, Canadian and American employees are frequently ordered to quarantine for 14 days and some U.S. clients are being refused entry, according to a number of manufacturing industry leaders.
“The government has totally dropped the ball on this,” Canadian Association of Mold Makers chair Jonathon Azzopardi said. “The problem is at the Canadian border not the U.S.
“We're inflicting economic pain on our own companies by essentially putting up a trade barrier against ourselves.
“We're in desperation mode. We're going to lose jobs because of this.”
Azzopardi emphasized the industry supports that health takes precedence, but companies need clear rules uniformly applied.
Sometimes border agents are
sticklers for paper work while on other occasions individuals are waved through after a single question about having any COVID-19 symptoms.
Industry officials also fail to see the difference between one of their engineers and a truck driver crossing the border when both are deemed part of the essential services supply chain.
Ashley Lemire, manager of media relations for the Canadian Border Services Agency, said being considered an “essential worker” or “essential employee” does not automatically mean the person is exempt from COVID border-crossing rules.
“In all cases the designation of an essential service provider is used, they must be entering for the purpose of that function, or clearly meet the class of persons as defined by the Canadian Public Health Officer,” Lemire wrote in an email reply.
“When assessing admissibility, CBSA border services officers take all relevant factors into consideration prior to making a decision. Decisions are made on a case-by-case basis and are informed by the individual circumstances of each traveller.”
The seemingly arbitrary nature of crossing rules is what Azzopardi would like changed.
He thinks the consequences of government not acting quickly are unemployment levels in the sector exceeding those during the beginning of the COVID-19 pandemic.
“Right now we have government programs helping us,” Azzopardi said. “Once these contracts are awarded, they're gone for five years.
“In five years, there'll be no work and no government supports. We're looking at a worse situation than now.”
Azzopardi said his own company ( Laval International) recently lost a $1.1-million contract while another Windsor-area business lost a $6.5-million deal.
A $14-million contract, which was to be spread across a few companies in the Windsor region, is now also in jeopardy because the U.S. company is concerned about border access.
“The loss of a $1.1-million contract represents 10 per cent of my annual sales,” Azzopardi said.
“If you lose three or four of those sized orders, you're going to see companies go out of business.”
Southwestern Ontario's mouldmakers, tool-and-die and industrial automation firms export $2.4 billion worth of goods annually to the U.S.
However, Automate Canada chair Shelley Fellows said this issue affects any business that exports to the U.S.
“We had a fabric company from Alberta contact us because they are having the same issues,” Fellows said.
Fellows said a quick survey of her membership last week on the topic produced 18 responses with half saying they've been negatively impacted.
Most of those lost contracts are seven, even eight-figure deals.
“Customers are becoming angry because no work is getting done and they're losing business or because they can't come over to do trials on new moulds or tools,” Fellows said. “This could have a lasting negative impact on investing in Canada.”
Automate Canada and CAMM have put out guidelines for their membership on how to navigate the border during COVID-19.
However, even when companies have all their required documents — such as a letter from the client and purchase order — problems still arise frequently.
“Companies are even checking with Public Health officials to make sure they've done everything they need to and it's still no guarantee they won't have problems,” Fellows said.
“We're deemed essential industries, but the workers aren't being treated as such.”
Cavalier Manufacturing's sales director Tim Galbraith said stories of inconsistent enforcement of quarantine rules or admission to Canada have become rampant.
Galbraith said Cavalier has `brethren' companies where the same employee with the same documents doing the same job is successful in clearing the Canadian border for Cavalier, but not for the other firm.
“You're at the whim of the interpretation of the rules by the individual border officials,” Galbraith said.
While losing valuable employees to two weeks of quarantine leaves the company short-handed, turning away U.S. clients bringing new business is short-circuiting the industry's economic recovery.
Galbraith said Cavalier has spent a decade courting an American firm, building its reputation through smaller jobs, and now has been designated as the preferred choice for a contract in excess of $10 million.
“We've been meeting constantly (via Zoom) with their senior management to convince them now the border won't be an issue to us completing the order,” Galbraith said.
“We lose our footing on this and it crushes the relationship. They'll move on to American suppliers.”
Galbraith said a Mexican firm would like to give Cavalier a job, but won't until senior executives can visit their Windsor plant to see the company's facilities.
Ro-Matt International president Steve Del Duca said last Thursday several officials from Volkswagen flew to Detroit from Tennessee to meet with one of their Tier I suppliers at the Ro-Matt plant in Oldcastle, Ont. RoMatt is building a piece of machinery for a local Tier I supplier to produce parts for the German automaker.
“They got turned away from the border and went back to Tennessee,” Del Duca said. “They'll be thinking, `Why bother with the border and Canadian companies?'
“It was already tough enough competing to get new business with the Buy America First policy, trade issues and tariffs on steel and aluminum. We don't need this.”
Del Duca said his firm has started having to house employees for weeks or a month at a time in the U.S. to do service or installation work rather than risk bringing them home and losing them for two weeks.
He added that story is becoming common in the industry and employees often sit for a few days in between jobs in the U.S.
“We're sending two employees to Texas and Arizona for a couple of jobs for three weeks rather than bring them back,” Del Duca said.
“We've added in that cost to our customers. They weren't too happy about that. The Americans won't put up with this for long and there's just not enough domestic demand to make up the lost business.”
Del Duca said taking a skilled technician and senior manager out of the rotation for five weeks (including quarantine upon return) adds stress on the employees as well as the firm.
Companies are also taking on the extra expense of contracting out service work to U.S firms to avoid border crossings. Some firms are also beginning to contemplate whether they'll have to acquire production facilities in the U.S. to maintain their customer base rather than expand in Canada.
“You don't buy a house just off an MLS listing, you want to see a plant in person,” Galbraith said. “This is no different. We've started talking about having to build plants in the U.S. and we're not alone if this isn't fixed.”
NOT ENOUGH DOMESTIC DEMAND TO MAKE UP THE LOST BUSINESS.