Coalition worried further steel tariffs would limit supply

by Cindy Macdonald | July 11, 2018 3:12 pm

Welder in a steel fabrication shop.[1]
A group of steel suppliers, fabricators and importers have expressed concerns about the effect that any additional tariffs would have on the construction sector.
Photo courtesy Walters Group

Following the implementation of surtaxes[2] on certain steel and aluminum products from the U.S. as countermeasures to U.S. tariffs on Canadian steel and aluminum, the Canadian Coalition for Construction Steel is urging the government to be cautious about taking further action related to steel imports from other countries. The group says potential “safeguard measures” affecting imports from other trading partners 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, managing director of Midvalley Rebar[3], a construction steel fabricator and coalition member in Surrey, B.C. “However, we are worried 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.”

Canadian Coalition for Construction Steel is an ad-hoc group formed in response to the current tariff situation, representing construction steel suppliers, fabricators, service centres, and importers from across the country.

According to the coalition, Canada’s construction sector depends heavily on imported steel products. It says Canada’s steel producers only have the capacity to supply about 50 per cent of domestic 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,” says a coalition statement.

Construction steel prices have risen dramatically in the past six months and are already near record highs, the group reports. It is worried without access to imports from other countries, the construction sector will face shortages of many types of steel and still higher prices. For example, the group says the New Champlain Bridge replacement in Montréal uses steel plate and stainless steel rebar that are not produced in Canada.

Supply issues for construction steel are said to be particularly acute for British Columbia and Atlantic Canada.

The coalition is 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.

Walter Koppelaar, CEO of Walters Group[4], a steel fabricator and Coalition member in Hamilton, Ont., 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.”

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