Construction steel lobby warns that tariffs could threaten major projects
August 15, 2018
Canadian Coalition for Construction Steel is encouraging the government to proceed carefully regarding new trade measures, as mills in Canada only have the capacity to supply about 50% of domestic demand.
The Canadian Coalition for Construction Steel (CCCS) has issued a release urging the federal government to make an evidence-based decision on any new action on imported steel products, warning changes could create steel shortages for the Canadian construction industry, impact major building projects, and put over 60,000 jobs at risk in the construction sector alone.
The government had previously announced that it was considering whether to impose new trade measures known as “safeguards,” limiting steel imports by way of tariffs and/or quotas. The government announced today that it will conduct 15 days of formal consultations before making any decision.
Following the government’s announcement, Jesse Goldman, legal counsel to CCCS, said: “We had urged the Government of Canada to engage in broad-based consultations before taking any new action, and we look forward to engaging constructively on this critical issue. We are confident that when the government has all the evidence, it will conclude that steel production in Canada is not at risk. Even if that changes at some point, there are already ample restrictions for unfairly traded steel.”
Goldman says that while it is important to keep Canada’s steel mills in business, “we are certain that – in the broader public interest of all Canadians – the government will make an evidence-based decision that balances the interests of producers and users. No government would put in peril the country’s construction sector that is vital to the national economy, employing nearly 1.2 million Canadians from coast to coast, including 500,000 unionized tradespeople.” Goldman adds that any safeguards need to ensure an adequate supply of construction steel.
Stability of supply has long been vital to the construction industry, as the mills in Canada have the capacity to supply only about 50% of domestic demand for construction steel. Historically, roughly half the balance has come from the U.S., and the rest from outside North America.
Supply issues for construction steel are particularly acute in British Columbia and Atlantic Canada, due to prohibitive overland transportation costs from Canadian mills located mainly in Ontario and Quebec. About 90% of construction steel used in B.C. comes from the U.S. or Asia, and all of Newfoundland’s supply is foreign.
This year, the tariff war with Canada started by the Trump administration curtailed the flow of American construction steel into Canada, creating shortages in this country and driving up prices by as much as 40%. Any move now to further restrict imports from other countries through safeguards could turn the current shortage into a supply crisis for the construction industry and its workers.