“Dump the dry wall tariff!” cry Western Canadian wholesalers and installers

Western Canadian contractors, wholesalers and dry wall installers have been outraged since early September when the Canadian Border Services Agency (CBSA) imposed extraordinarily high import tariffs of up to 275% on U.S.-made drywall at border points from Manitoba west to British Columbia.

The provisional tariff has resulted in documented evidence of higher product costs, causing consequential increases in house prices, lost profits on work previously committed to through contracts, layoffs, plus shortages and supply chain distortions.

How did this happen?
To recap, the tariff was imposed after CertainTeed Gypsum Canada requested protection from imported drywall they claimed was being ‘dumped’ on to the Canadian market, thus making it difficult for their Western Canadian manufacturing facilities to compete. In a press release, Matthew Walker, General Manager, CertainTeed Gypsum Canada said, “Dumping creates material injury to domestic manufacturers in the form of [market] share loss and price and margin suppression. Faced with increasing injury from dumping, we had to terminate Western Canadian employees, reduce investment in our manufacturing plants, mine operations and business, and put in jeopardy the continued viability of our plants.”

Suppliers, vendors and competitors have their say
Hearings opened in Ottawa in early December under the auspices of the Canadian International Trade Tribunal (CITT). The CITT states on their web site that the tribunal “is continuing its inquiry into the question of injury to the Western Canadian industry and will make an order or a finding by January 4, 2017. Provisional duties will continue to apply on imports of subject goods from US until the date of the CITT’s order or finding.”

David Campbell, Vice-President of operations for Empire Drywall Ltd. in Edmonton, claims the tariff “has already cost us almost a million dollars and the lack of available supply is negatively affecting our family-owned, third-generation business.”
(photo: Linkedin)

The Empire strike back!
In an op-ed article published in the Edmonton Journal on December 13^th, David Campbell, Vice-President of operations for Empire Drywall Ltd., one of Western Canada’s leading drywall contractors, claimed the tariff “has already cost us almost a million dollars and the lack of available supply is negatively affecting our family-owned, third-generation business.”

Campbell reports that during the first two weeks of December, the CITT Tribunal heard from a number of contractors, builders, suppliers, homebuilder and various individuals who have testified to the damage caused by the tariff. “The message to the tribunal was clear,” he wrote. “Canadian businesses of all sizes are suffering. The tariff has forced them to lay off employees, delay new hires, and re-examine the financial stability of their businesses.”

One entity benefits while all others suffer, claims Campbell
Campbell’s article claims that by receiving tariff protection, CertainTeed Gypsum Canada is the only entity to have benefited from the tariff, at every else’s expense. He further claims that “the company cannot meet more than 50 per cent of the industry needs in gypsum production. This means half of western Canadian drywall needs are not met. The lack of material could prevent other tradespeople like electricians and plumbers from coming in and finishing a job, creating major delays.”

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

It’s true; drywall prices have soared from coast to coast
While Campbell’s claim that “the tariff makes gypsum prices in Western Canada the highest in the world” is not supported by evidence presented in the Edmonton Journal, Canadian Contractor’s own research during the fall has confirmed that drywall prices have in fact risen all across the country since the imposition of the tariff, although Western Canada has borne by far the largest increases (see graph). Supply shortages resulting in alternate sourcing of product from Mexico or Asia finding their way into many homes in Western Canada, with their associated suspect quality, are further claims made by Campbell.

Weighing the evidence and the testimony
Now left to consider the evidence presented by all those impacted since the imposition of the tariff, the CITT will give its decision as to whether to continue or cancel the tariff in the first week of the year. Drywall users at all levels all across Canada are hoping for a good-news start to 2017.

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