Last year’s U.S. tax reform poses a substantial risk to the long-term viability of a large portion of Canada’s petrochemical and other chemical industry, as well as the Canadian economy at large, according to a PricewaterhouseCoopers report commissioned by the Business Council of Canada and released on September 12.
The impacts of U.S. tax reform on Canada’s economy, looks at numerous sectors in the Canadian economy. Key findings indicate that the U.S. tax reforms would put 635,000 jobs (3.4 per cent of Canada’s employment) at risk and potentially reduce Canada’s GDP by $85 billion (4.9 per cent of the economy).
The petrochemical sector will be particularly hard hit. The report indicates that with the U.S. tax reform, Canada is falling even further behind the U.S. in terms of competitiveness posing a “serious risk” to petrochemical manufacturing in Canada.
“The relative attractiveness of the U.S. is reflected in the fact that, capital expenditure in chemical manufacturing has decreased by 0.3 per cent in Canada over the past five years, while increasing by 10 per cent in the U.S.,” The report states.
These findings echo the concerns raised in CIAC’s 2019 Federal Pre-Budget Submission. The submission notes that although Canada used to enjoy an advantage through its marginal effective tax rate to help overcome construction, utility, labour and logistics disadvantages, that advantage is now gone with the U.S. tax overhaul. CIAC is calling on the government to take urgent action to ensure the Canadian chemistry sector remains competitive to keep business – and jobs – within Canada.
Read more in CIAC’s 2019 Federal Pre-Budget Submission
Read the full Business Council of Canada report
Last week, CIAC began its first series of meeting with key ministries in the new Ontario Government.
The meetings provided the opportunity to reinforce the important contributions that the chemistry sector plays in Ontario’s economy and outline pressing issues the sector is facing.
President and CEO of CIAC, Bob Masterson, and Director of Government and Stakeholder Relations for Ontario, Don Fusco, met with the Ontario Minister of Finance, Vic Fedeli, Minister of Economic Development Job Creation and Trade, Jim Wilson, and Minister of Municipal Affairs and Housing, Steve Clark.
“We were able to engage in substantive dialogue on how to improve the operating and investment environment for the Ontario chemistry industry and we were pleased that we were met with very well-informed and receptive responses. This is due in part to our past relationships and briefings when the ministers were opposition critics, but also because officials have done a great job briefing up on our materials,” said Mr. Masterson.
“I was very pleased at the degree to which the new Ontario Government seems to be hitting the ground running with us. We look forward to working with the new Ontario Government to promote its ‘open for business’ mandate in our sector.”
CIAC will continue to work with the new government and provide recommendations in the spirit of continuous improvement aligned to our Responsible Care® principles. We will also work to support the Ontario Government’s effort to deliver a practical and pragmatic regulatory framework ensuring the citizens of Ontario can enjoy a sustainable future where both the environment is safeguarded and the economy prospers.
Congratulations to Canadian aluminum sector leaders Alcoa, Alcana and Apple who, with the support of the Federal and Quebec Governments, have developed a new carbon-free aluminum production process that will eventually result in annual greenhouse gas reductions of more than six million tons in Canada alone.
“The process relies upon decades of research in totally new chemical reactions from those associated with carbon-based production methods,” said Vincent Christ, CEO of Elysis, the new joint venture.
This success illustrates that by working together, the resource, manufacturing and chemistry sectors can point the way to a more sustainable future while growing the economy, here in Canada, while at the same time reducing emissions. The new venture will be in Quebec and export the technology throughout the rest of the world.
On May 2, CIAC and Canadian Fuels Association met with local Ontario Progressive Conservative MPPs Bob Bailey (Sarnia-Lambton) and Monte McNaughton (Lambton—Kent—Middlesex and Critic for Economic Development and Growth) to reinforce competitiveness and the strength of the integrated refining and chemistry sector in Sarnia-Lambton, Ontario.
In the lead up to the June 7, provincial election, CIAC has been active with elected and government officials to provide input to assist in the development of public policy that improves Ontario’s competitiveness and supports more investment while maintaining robust environmental, health and safety requirements and other public interest protections.
Isabelle Des Chênes, CIAC Executive Vice-President, and Shannon Watt, Director of Environment and Health Policy, appeared before the Senate Committee on Energy, the Environment and Natural Resources on May 3, 2018. Senators are conducting a pre-study of the provisions of Bill C-74, the budget implementation bill, that deal with the government’s plan to price greenhouse gas emissions.
CIAC and its members support efforts to reduce global carbon emissions and have worked collaboratively with both provincial and federal officials to ensure that carbon policies and pricing mechanisms improve environmental performance, avoid double-regulation and maintain Canada’s competitiveness.
Ms. Des Chênes noted that “Canada should support a carbon policy that recognizes emission-intensive, trade-exposed sectors and encourages investments in the Canadian chemistry sector. Additionally, given the incredible investments in innovations and technologies to improve performance around air emissions and climate change, Canada’s proposed output-based allocation process should focus on benchmarking Canadian chemistry operations and performance against global competitors.”
Additionally, Ms. Watt reinforced the point that government needs to provide a comprehensive analysis of the cumulative impacts of the suite of climate change policies including the proposed Clean Fuel Standard.
Watch the CPAC recording: Fuel Suppliers Discuss the Carbon Tax
CIAC President and CEO Bob Masterson gave a brief overview of chemistry’s role in Canada’s transition to the low-carbon energy future at a panel for the Industrial Gas Users Association Spring Seminar in Montebello, Quebec on Tuesday, May 15.
The topic of the seminar panel was Heavy Industry is Necessary in Canada’s Low Carbon Future. Speakers touched on topics such as the Paris Accord, the Pan-Canadian Framework, as well as near-term and long-term targets.
“Demand for chemistry products are forecast to triple in the next 20 years. And it isn’t hard to see why: the products our members make enable our modern, more sustainable way of life,” Mr. Masterson told the crowd.
“We all need sound policies from our government that encourage growth while meeting the needs of our global commitments to sustainability. The world truly needs more good chemistry – made-in-Canada chemistry – to meet our low-carbon goals.”
The invitation only, two-day event included key natural gas stakeholders including users, pipelines and utilities, marketers, regulators and policy makers. Other participants in the panel discussion included the Mining Association of Canada, the Forest Products Association of Canada and the Canadian Steel Producers Association.
Au cours de l’année 2016, le Gouvernement du Québec a publié le Livre Vert ayant pour objectif de moderniser le régime d’autorisation environnementale. À ce moment, l’ACIC avait présenté un premier mémoire. De là est né la nouvelle Loi sur la Qualité de l’environnement (LQE), adopté le 23 mars 2017 et mise en vigueur le 23 mars 2018.
Dès l’automne 2017, le Ministère du développement durable, de l’environnement et de la lutte contre les changements climatiques (MDDELCC) a mis à jour vingt-deux (22) projets de règlements pour assurer la cohérence avec la nouvelle loi. Des journées de consultation ont été organisées auprès des différents groupes d’intérêts, des associations sectorielles et des entreprises pour obtenir leurs commentaires. En collaboration avec le Conseil Patronal de l’environnement du Québec, l’ACIC, avec la précieuse collaboration de ses compagnies membres, a amorcé la rédaction de mémoires pour ces projets de règlements. En priorité, l’ACIC a présenté un mémoire en collaboration avec le CPEQ quant aux mesures transitoires à mettre en place dans le cadre de la nouvelle loi et a présenté trois mémoires afin de présenter des commentaires spécifiques à ses opérations. Les trois (3) mémoires présentés visaient les projets de règlements suivants :
- Projet de règlement relatif à l’évaluation et à l’examen des impacts sur l’environnement de certains projets ;
- Projet de règlement relatif à l’autorisation ministérielle et à la déclaration de conformité en matière environnementale ;
- Règlement modifiant le Règlement sur les attestations d’assainissement en milieu industriel.
D’autres projets de règlements on fait l’objet d’analyse mais n’ont pas fait l’objet de mémoires considérant leur absence d’impact sur les opérations de notre industrie.
Tout au long de la rédaction de ces mémoires les objectifs de l’ACIC étaient :
- Assurer la compétitivité de notre industrie chimique au Québec ;
- Favoriser la simplification du régime environnemental ;
- Assurer l’utilisation efficiente des ressources en environnement de nos entreprises et du gouvernement ;
- Assurer la valeur ajoutée des demandes du ministère de l’environnement aux activités d’amélioration du développement durable.
Un travail de collégialité ayant permis de servir les intérêts de nos compagnies membres.
On April 24, the G7 Plastics Industry Coalition, including CIAC and representatives from our membership, met with government officials and other stakeholders in the plastics value chain to discuss Canada’s objectives for the G7 Plastics Charter, which the government plans to promote at the G7 in Quebec this June.
The event was organized by the Coalition, which was founded by CIAC, Canadian Plastics Industry Association (CPIA) and the American Chemistry Council Plastics Division (ACC PD), to represent industry perspectives in the global and domestic plastics dialogue. CIAC President and CEO Bob Masterson gave opening remarks for the workshop, setting the stage for collaborative discussion.
“It is undisputable that plastics do not belong in the ocean, nor in any other water way – period. It is indeed a significant waste of precious resources for plastics to be used once and then discarded as waste,” he told attendees. “However, plastics are not a scourge. They are, in fact, a fundamental contributor and key enabler to modern more sustainable living.”
Industry has a role to play in designing materials and applications for greater recovery, reuse and recyclability, Mr. Masterson told the audience, but addressing the issue of marine litter and plastic waste will require actions from society as a whole, not just industry.
“Our efforts will fail if the highly responsible and highly innovative plastics industry is set up as a villain for a marine litter issue that needs to be owned by every citizen and every government on the planet,” he said.
Also in attendance were: Carol Hochu of CPIA, Keith Christman of ACC PD, representatives from the Retail Council of Canada, the Canadian Beverage Association, Canada Fibres, Pembina Pipeline Corporation/ CKPC, InterPipeline, Emterra Group, Ice River Springs, Innovation, Science and Economic Development Canada, Natural Resources Canada and Environment and Climate Change Canada.
The day-long workshop was very well received by all attendees. CIAC and its partners in the G7 Plastics Industry Coalition will continue to regularly collaborate with the federal government and other stakeholders on the Plastics Charter in the lead up to the June G7 meeting.
Please join Shannon Watt, CIAC Director of Environment and Health Policy, on May 1 for what promises to be a lively discussion on the growing business of clean tech in Canada.
From building insulation and lighter plastics for vehicles, to solar panels and wind turbines, the products that will help move society to a more sustainable future need chemistry. Canada must fully develop the potential of its chemistry industry so it can deliver solutions to reduce emissions both within the industry, throughout Canada and around the world.
The Sixth Estate Before the Bell panel discussion
National Arts Centre, 1 Elgin Street, Ottawa Ontario
May 1, 2018. 7:30 to 9a.m. ET
- Shannon Watt, CIAC Director of Environment and Health Policy
- Industry experts from Export Development Canada, Business Development Bank of Canada, Ecotech Quebec and the Globe and Mail.
If you are not able to attend in person, watch live online here.