Canadian Manufacturing

Steel coalition calls for cautionary action on tariffs or quotas on steel

Canadian Coalition for Construction Steel urges the Government of Canada to engage in broad consultations with steel users before imposing further supply restrictions

July 10, 2018  by CanadianManufacturing.com Staff

OTTAWA – The Canadian Coalition for Construction Steel has called upon the Government of Canada to act cautiously before taking further action against U.S. tariffs, including safeguards, which could severely disrupt the construction industry in Canada.

The CCCS said in a press release that it supports the government’s measured response to tariffs, but that there are concerns about the government considering safeguard measures – some combination of tariffs or quotas – on imports of rebar and other construction steel from Canada’s other trading partners, said Anoop Khosla, the managing director of Midvalley Rebar, a construction steel fabricator and coalition member in Surrey, B.C.

Canada’s construction sector employs nearly 1.2 million Canadians, making it the largest employment sector for Canada’s middle class, reports the CCCS. Canada’s steel producers only have the capacity to supply roughly 50% of Canadian demand for construction steel.

Then CCCS said that Canada has historically relied on the United States for half of the remaining demand and cautioned that Canada would still need to import steel from outside of North America.

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Construction steel prices have risen dramatically in the past six months. 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, reports the CCCS.

The coalition further cautioned that vital infrastructure projects, 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.

The CCCS said that 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 called for broad consultations between the government and steel users before further supply restrictions are imposed on Canadians.