CIAC Presents to Finance Committee

May 28, 2020

Bob Masterson, CIAC President and CEO, had the opportunity to speak in front of the federal government’s Finance Committee on Tuesday, May 26th. In his remarks, Masterson spoke about the resiliency of Canada’s chemistry and plastics sectors, and how both sectors are essential to protecting Canadians—including medical and frontline workers—from the transmission of COVID-19

Thank you, Chairman Easter. I am pleased to be with you on behalf of Canada’s chemistry and plastics manufacturers. The chemistry sector generates nearly $60 billion per year, making us the third largest manufacturing sector in Canada.

I would like to extend our sector’s appreciation to Parliament and the Government of Canada for the extra-ordinary and timely measures taken to support Canadians and Canadian business during this unprecedented challenge.

I have three messages I wish to share with the Committee: Canada’s chemistry sector is resilient; it is highly responsive to Canadian’s needs; and it remains well-poised to lead Canada’s economic recovery.

Our sector is resilient. There have been no “material” impacts to our sector or its supply chains. Half of our members are reporting ‘normal’ levels of production; 30% have seen production decreases while still maintaining operations; and 20% report production increases. The sector has not required economic supports and has experienced very limited layoffs to date.

Second, our sector is highly responsive. Canada’s chemistry sector produces important water treatment and disinfection chemicals essential for public safety which have been in steep demand to support the COVID-19 response. Plastics also play an important sanitary role in the medical and food sectors. Demand for these products has increased significantly as a result of the COVID-19 crisis.

Our members have reconfigured value chains and production activities to assist in the COVID-19 response. For example, Shell Canada, BASF Canada and Proctor and Gamble have all reconfigured operations to make hundreds of thousands of litres of hand sanitizer, which they have donated to assist in the response.

Led by BASF Canada and Trimac – both CIAC members, our sector has supported the development of the Rapid Response Platform. This Platform matches PPE producers with those with PPE needs. In its first week of operation alone, more than 8,000 PPE matches were successfully completed through the platform.

Finally, while being resilient and responsible, the sector also stands poised to contribute to Canada’s economic recovery.

Currently, over $7 billion of capital investment in the sector remains underway and scheduled to come into production in late 2021 / early 2022.

We anticipate that a significant portion of the additional $11 billion in committed or announced capital investment that was deferred due to COVID will materialize to assist the recovery.

All our major facilities have deferred scheduled major maintenance activities and it will be of utmost priority to get these projects underway as soon as possible. These projects can involve thousands of contractor staff and total in the hundreds of millions of dollars.

In addition, Alberta, Ontario, Quebec and British Columbia are all looking towards the chemistry sector for significant additional investment growth beyond that already announced.

Let me close by offering advice on what Canada can do to support future growth in Canada’s chemistry and plastics sectors;

First, it is essential that the Government of Canada embrace the investment growth potential of the chemistry sector.

The Government of Canada should begin to work collaboratively and in a coordinated manner with the provinces to deliver a Team Canada approach to attracting global investment into Canada’s chemistry sector. Governments working together has benefited Canadians in the response to COVID-19. We need to see the same coordinated approach as we restart and grow our economy.

Second, while it needs to retain a focus on addressing the challenging issues of plastic waste, the Government of Canada must use tools other than the Canadian Environmental Protection Act and its Schedule 1 List of Toxic Substances to regulate plastic waste. Declaring plastics toxic in Canada will greatly undermine the confidence of global investors. It will deliver a message that Canada is indeed ambivalent about growing the sector, despite the resilience, responsiveness and economic opportunity demonstrated through this crisis.

I look forward to responding to your questions. Thank you again for the opportunity to speak with the Committee this evening.