CEO’S TOUGH TALK ON STEEL
Large rolls of steel are shown at atlas tube in harrow on friday. atlas tube Ceo Barry Zekelman told MPS this week that Foreign Affairs minister chrystia freeland’s ego is getting in the way of ending American tariffs on Canadian steel and aluminum.
Billionaire steel executive Barry Zekelman ripped into the federal government’s handling of the steel and aluminum tariffs dispute with the U.S. while Canadian Association of Mold Makers president Jonathon Azzopardi warned of a bleak future for local industry if the 25-per-cent surcharge isn’t lifted quickly.
The two local businessmen made the comments to the House of Commons standing committee on international trade, which is holding hearings on how the tariffs are impacting Canadian companies. “These costs are making Canada uncompetitive,” said Azzopardi, who is also president of Laval Tool and chairman of the Automotive Parts Manufacturer’s Association. “We have no choice but to seek other competitive measures. We’re not seeing that in Canada. “In the short-term, Canadian suppliers will look for opportunities elsewhere — and we are.” Azzopardi said with a 25-percent tariff on the industry’s highest-cost input (steel), companies simply can’t survive.
He warned U.S. states are taking advantage of the predicament Canadian companies face by aggressively trying to lure their operations across the border. “We’re being approached by the U.S. more now than ever,” Azzopardi said. “They’re offering to fund our capital infrastructure and give us 10 years to repay the loan. With all the added costs (for steel and aluminum) it becomes a good opportunity for us.” Azzopardi said up to 70 per cent of material costs for tool and mould makers are for metals. With profit margins averaging 10 per cent, the U.S. tariffs are adding six to 10 per cent to the bottom line. Zekelman, CEO and chairman of Zekelman Industries, who wasn’t available for comment Friday, told the committee Thursday the Americans would quickly drop the tariffs if Canada agreed to a quota system on steel.
He said he shared this opinion based on his conversations with U.S. Trade Representative Robert Lighthizer and from dining with U.S. President Donald Trump. At the hearings, Zekelman, in a thinly veiled shot at Foreign Affairs Minister Chrystia Freeland, accused the government of dragging its feet and letting ego get in the way of negotiating a settlement. Essex MP Tracey Ramsay, who is vice-chairwoman of the international trade committee, said she agreed with Zekelman and Azzopardi’s comments. “Barry has connections to the highest levels in the U.S. and he’s been in contact with Minister Freeland, so it’s not speculation on his part,” said Ramsay, adding the committee will file a report on its study in the spring.
“He’s not asking for government supports. He feels like he’s an independent player in this and free to say the truth.” Zekelman has long banged the drum against low-cost producing countries, especially China, using Canada as a back door for dumping steel that can be then shipped into the U.S. market tariff-free. Both Zekelman and Azzopardi have lobbied for Canada to work in concert with the U.S. to curtail the “bad actors” in the over-production and dumping of steel.
“If we’d enacted the safeguards (against steel dumping) the government just announced back before the U.S. tariffs came into effect, we probably could’ve avoided all this,” Ramsey said.
The committee heard this week the consequences now are layoffs, reduced hours and the permanent loss of jobs.
“I know one (Windsor-Essex) company has already shipped some dies to the U.S.,” Ramsey said. The committee heard that only 74 applications have been made to access the support fund the federal government set up to aid businesses impacted by the tariffs. “Only $11,000 has been paid out from a benefit fund of $2 billion,” Ramsey. “About half a billion in tariffs have been collected and very little has trickle down to the ground to the businesses directly impacted.” Azzopardi said eliminating the tariffs is a must, but in the shortterm the government needs to come up with a quicker and easierto-use program to support industries affected by the tariffs. “Just one of our members has been approved, but he hasn’t received any money yet,” Azzopardi said. “What we’re seeing (is our members) are finding duty relief is such a bureaucratic nightmare that they abandon the application.” He suggested the government reduce the threshold for accessing the Strategic Innovation Fund from $10 million to $2 million. Azzopardi said by raising the minimum project value to apply to the fund to $10 million, the government eliminated 1,400 companies from eligibility in Southwestern Ontario alone.
He also said the Canadian tax structure needs adjusting if the nation intends to remain competitive with other producers.