Construction steel coalition urges caution on further tariff action

construction steel tariffs

The Canadian Coalition for Construction Steel is urging the federal government to use caution before taking any further tariff action, including safeguards, which could disrupt the construction industry.

The warning follows the Canadian government’s retaliatory tariffs on American steel and aluminum, which came into effect on July 1.

“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,” said coalition member Anoop Khosla, who is also the managing director of Midvalley Rebar, a construction steel fabricator 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 employs nearly 1.2 million Canadians, making it the largest employment sector for the country’s middle class.

According to the coalition, Canada’s steel producers only have the capacity to supply roughly 50 per cent of Canadian demand for steel used in construction. Canada has relied on the United States for half of the remaining demand. For the other half, Canada has imported steel from outside of North America.

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In a news release, the coalition explained construction steel prices are already near record highs. If a global safeguard were to restrict steel from outside of North America, the group fears the Canadian construction sector will face shortages of many types of steel and even higher prices.

For example, the Champlain Bridge replacement in Montreal requires steel plate and stainless-steel rebar that is not produced in Canada. As well, the Residential Construction Council of Ontario predicts that the cost of an average condominium unit could rise by as much as $12,000 due to increased steel costs.

The issue is particularly problematic for British Columbia and the Atlantic provinces, as a majority of Canadian steel is produced in central Canada, and land transportation costs are prohibitive.

The coalition is urging the Canadian government to engage in broad consultations with steel users and to make sure the full impact is understood before imposing further supply restrictions.

“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,” said coalition member Walter Koppelaar, CEO and Chairman of Walters Group, and a steel fabricator in Hamilton, Ontario.

“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.”