Canadian Coalition for Construction Steel Urges Caution on Tariffs, Quotas on Non-US Steel

OTTAWA, July 10, 2018 /CNW/ - Now that the Government of Canada has retaliated against unfair U.S. tariffs on Canadian steel and aluminum, the Canadian Coalition for Construction Steel is urging the Government to act cautiously before taking further action, including safeguards, which could severely disrupt the construction industry in Canada.

"We support the federal government's measured response to the U.S. tariffs and we understand the difficult choices the Government had to make in deciding which products to target," says Anoop Khosla, the Managing Director of Midvalley Rebar, a construction steel fabricator and Coalition member in Surrey, B.C.  "However, we are worried that the Government is considering safeguard measures – some combination of tariffs or quotas – on imports of rebar and other construction steel from Canada's other trading partners."

Canada's construction sector is vital to the Canadian economy, employing nearly 1.2 million Canadians, making it the largest employment sector for Canada's middle class. The industry depends heavily on imported steel products. Canada's steel producers only have the capacity to supply roughly 50% of Canadian demand for construction steel. Canada has historically relied on the United States for half of the remaining demand. For the rest, Canada has always needed and will continue to need steel imported from outside of North America. That need is more acute than ever now that U.S. imports are subject to Canadian retaliatory tariffs.

Construction steel prices have risen dramatically in the past six months and are already near record highs. Without access to imports from other countries – which is what a global safeguard would restrict – the Canadian construction sector will face shortages of many types of steel and still higher prices.

Vital infrastructure projects across the country and residential construction for our growing population, which depend on an adequate and affordable supply of steel are all at risk. For example, the Champlain Bridge replacement in Montreal requires steel plate and stainless steel rebar that is not produced in Canada. The Residential Construction Council of Ontario predicts that the cost of an average condominium unit could rise by as much as $10,000 - $12,000 due to increased steel costs.

Supply issues for construction steel are particularly acute for British Columbia and Atlantic Canada. Overland transportation costs in Canada are prohibitive and the vast majority of Canadian production is located in central Canada, far from many Canadian markets.

The CCCS is therefore urging the Government of Canada to engage in broad consultations with steel users and to make sure it has the full picture before imposing further supply restrictions on Canadians. 

Walter Koppelaar, CEO and Chairman of Walters Group, a steel fabricator and Coalition member in Hamilton, Ontario, offers a stark warning: "Many countries are affected by the U.S. tariffs, but putting up barriers to construction steel from those countries will be a self-inflicted wound to our economy. It will mean cancelled projects and higher construction costs for bridges, roads, and new homes. And for every job potentially protected in a Canadian steel mill, 10 or more downstream jobs will be put at risk."

About the CCCS

The CCCS represents construction steel suppliers, fabricators, service centres, and importers from across Canada. Our members are responsible for building affordable housing for Canadians, critical infrastructure like roads, bridges, airports and dams, and some of Canada's most iconic buildings like the Canadian War Museum and the new roof of the West Block of Parliament.

The CCCS is supported by national and provincial construction associations, engineering companies, builders, trade associations, and labour unions, which depend on the timely, adequate and affordable supply of steel for a sustainable Canadian construction sector.

The CCCS was formed out of concern that a global safeguard measure on construction steel will exacerbate national and regional supply problems, raise construction steel prices, and damage the Canadian economy.  

SOURCE Canadian Coalition for Construction Steel

Sarah Goldfeder, Earnscliffe Strategy Group; [email protected], 613-563-4455