DRYWALL TARIFF UPDATE: Union decries ‘the evils of dumping’ at CITT hearings

The Canadian International Trade Tribunal (CITT) sure got an earful from both sides of the Western Canadian drywall tariff controversy this month. No sooner had Empire Drywall Ltd. Vice President David Campbell took his tale of layoffs, lost revenue, and product supply disruptions to Ottawa on behalf of consumers and trades alike, the union representing CertainTeed Gypsum Canada’s western employees got involved.

Kevin Sheptycki is assistant business manager for the International Brotherhood of Boilermakers (District 11), Western Canada
(photo: Twitter)

In a rebuttal to Campbell’s op-ed piece published in the Edmonton Journal on December 13th, Kevin Sheptycki of the International Brotherhood of Boilermakers repeated his argument made in Ottawa earlier in the month in his own op-ed published December 20th. “Canada should not change its 112-year-old policy of fighting the evils of dumping,” he wrote. “Our members have already lost over 100 well-paid, middle-class union jobs at idled gypsum plants in Western Canada and we cannot afford to lose 120 more.”

On behalf of his union members, Sheptycki attempts to make the case that a union job at CertainTeed Gypsum Canada is both sacred and more important than the jobs, wages and money/time lost by drywall wholesalers and independent contractors (some with union employees of their own), or any increased costs borne by consumers caused by new tariffs that run as high as high as 275%.

Union executive feels harm has been exaggerated
In fact, Sheptycki casts doubts on the claims made by those in the contracting industry. “The price increase for drywall on fixed contracts claimed at the CITT hearings is suspiciously high and should not be accepted without audit.” (Perhaps Mr. Sheptycki would like to look at Canadian Contractor magazine’s own survey of retail prices monitored on a same-store basis across Canada since the tariff was imposed.) Interestingly, Mr. Sheptycki had nothing to say about the basic commercial wisdom of one company locating three manufacturing facilities in the west. Is there not a case to be made for a corporate review matching manufacturing capacity and resultant plant efficiency to marketplace demand?

Drywall prices at the retail level have soared across most areas of Canada, up to 80% higher in Western Canada, since the tariff was imposed in September 2016 (source: Canadian Contractor magazine)

Mr. Sheptucki also seems to dismiss the tariffs as a red herring issue, and that recent changes to building codes and mortgage eligibility are the real reasons for Western Canadian building woes of late, not 275% tariffs on drywall. “These changes added much more to building costs than selling gypsum board at fair market prices and reducing or denying protection against illegal dumping will not lessen the impact of these other factors,” he writes.

Furthermore, he feels that public pressure to address consumer concerns, and “how contractor claims have been mixed in with damage evidence to confuse the injury inquiry” may distort or influence a fair (in his mind) decision by the Tribunal. “Public interest together with the injury analysis, could poison the well and prevent a fair outcome,” he writes, thereby discrediting in advance any decision by the Tribunal that does not go in his union’s favour.

Prices increases may be a one-way street
One thing Mr. Sheptycki may have right; believing prices for drywall will fall significantly if the tariffs are curtailed may be a faint hope; with the new higher prices establishing themselves across the country, rolling them back down to pre-tariff levels may require a long wait.

“What this tariff has done, it’s enabled drywall manufacturers to be able to increase their prices,” Angela Zuba, CEO of the Canadian Home Builders Association, Lethbridge Region, said in a media statement. “So regardless to whether or not this tariff stay increases or goes away, there are going to be significant increases to the prices of drywall.”

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