Thank you, Madam Chair.

Thanks to the members of this committee for the opportunity to speak today on this issue.

My name is Troy Lundblad. I'm the department leader for research, public policy and bargaining support at the United Steelworkers union. With me, or rather with you, is my colleague François Soucy, the legislative staff representative in our Ottawa office.

Our union represents over 225,000 workers in Canada and 850,000 members across North America in virtually every economic sector, including steel, aluminum and manufacturing—sectors globally considered emissions-intensive and heavily exposed to trade. Today I'll focus on proposals to consider the implementation of a Canadian carbon border adjustment.

A CBA, or a carbon border adjustment, if implemented, would ensure that the price of imported products reflects the same carbon costs as those incurred by Canadian producers. The steelworkers union has for many years advocated for the implementation of a carbon border adjustment regime. Particularly in the context of the implementation of a domestic carbon price, a carbon border adjustment mechanism will help to protect Canadian industries and jobs and reduce global carbon emissions.

Such a framework would ensure that foreign producers bear equivalent carbon costs to Canadian producers, and it would prevent unfair competition in our domestic market. A CBA can and should be used in conjunction with other policy measures to position our industries for a competitive advantage in low-carbon production while protecting good Canadian jobs—for example, in steel and aluminum. The cost of inaction here is enormous and presents some serious risks. Without equivalent measures, low-cost, high-emissions imports will continue to undercut Canadian producers and jeopardize Canadian jobs.

Indeed, Canada's steel and aluminum sectors already enjoy a distinct carbon advantage over foreign producers. Our aluminum has the lowest carbon intensity in the world, emitting roughly one-tenth of the greenhouse gases as Chinese aluminum. Our steel industry, particularly our electric arc furnace production, has one of the smallest carbon footprints globally thanks to advanced technology and access to low emissions electricity grids in Quebec and Ontario.

However, it's also critical that a made-in-Canada carbon border adjustment mechanism be designed in a manner that reflects the realities of Canadian industry and our trading relationship with the United States. As the global economy rapidly shifts to decarbonize supply chains, Canada must align its policies to maintain access to its vital markets in the U.S. and in the EU. Adopting principles similar but not identical to those in the EU at the national level with the carbon border adjustment mechanism will also help protect Canadian industries and the jobs and communities they depend on.

In addition to the design and implementation of a carbon border adjustment, the USW urges this committee to consider other policies, such as those that promote buy-clean public procurement to prioritize low-carbon materials, such as Canadian steel and aluminum, in infrastructure products. We must also do more to strengthen trade enforcement by giving the Canada Border Services Agency more resources to monitor and prevent the dumping of high emissions imports that destabilize markets and undermine domestic production.

This isn't about greater protectionism but fair competition while promoting emissions reduction. All else being equal, one of the most significant contributions Canada can make to carbon emissions reduction is to meaningfully reduce the importation of dirty steel and aluminum into our domestic market. A carbon border adjustment mechanism can help to level the playing field and ensure that imports accurately price the environmental costs of their activities.

Canada is at a pivotal moment. We need policies that ensure access to key markets without being subject to carbon adjustment, while safeguarding our vital trade relationship with the United States. Our proposals would help grow our industry, secure good-paying jobs and position Canada as a leader in the transition to a low-carbon economy. The United Steelworkers urge you to act decisively to ensure that Canada's industries thrive in a fairer and greener global marketplace.

Thank you, and we look forward to your questions.

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