Canadian Contractor

“No ‘tariff holiday’ for Western drywall”, workers’ union tells Trudeau

Union representing CertainTeed workers urges PM to maintain tariffs to protect jobs

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January 25, 2017 by John Bleasby

It didn’t take long for the International Brotherhood of Boilermakers to come out swinging against one of the key recommendations made last week by the Canadian International Trade Tribunal (CITT) regarding drywall tariffs, and to take their arguments to the very top. The union doesn’t like the concept of a ‘tariff holiday’ for U.S. importers and fears it will negatively impact their members working at CertainTeed Gypsum Canada’s Western operations.

Dumping confirmed, but punitive tariffs too high: CITT
The CITT report confirmed that ‘dumping’ of U.S. made drywall products into the Western Canadian market had occurred at prices far below those in the United States. However, it also expressed concern over the damage to the building industry and consumers, particularly in Fort McMurray, associated with the level of tariffs(up to 275%) imposed by the CBSA last September on drywall entering that market.

The CITT recommended a number of conciliatory moves to mitigate the economic and job losses that resulted, including rebates to importers, wholesalers, and consumers, a ‘tariff holiday’ until July 4th 2017 (longer for Fort McMurray), and a drop of tariffs to 43 per-cent after that. The CITT offered no details regarding how the multi-level rebate system or the ‘tariff holiday’ would be administered, and by whom, and neither has the government accepted any of the recommendations. A decision is expected within a few weeks.

“Dear Prime Minister…”
However, the International Brotherhood of Boilermakers which represents the unionized workers at CertainTeed Gypsum Canada, the company that originally requested tariff protection from dumped U.S. drywall imports, says that a ‘tariff holiday’ will cost their members jobs. They have appealed directly to Prime Minister Justin Trudeau and asked that these suggestions of a ‘tariff holiday’ be ignored.

In a letter sent to Trudeau on January 22nd, Rob Lauzon, the Brotherhood’s Assistant Director of Industrial Sector Operations wrote, “While your government has not accepted the tribunal’s recommendations, the pessimism and expectation of continued unabated dumping have generated has already had an adverse impact on our members.”  He says 20 union and non-union jobs are in the balance, with another 100 union jobs in Winnipeg and Calgary also at risk. “There are no other good middle class jobs available for our members.”

Any tariffs should not give any undue competitive advantages: CITT
At the CITT hearings, the Tribunal was swayed by evidence presented by industry end users that  the “full application of the high final duties risks making U.S. imports uncompetitive in Western Canada, driving U.S. imports out of the market. This would very likely reduce competition in the market and leave downstream customers with fewer choices” In turn, the CITT felt that CertainTeed, with continued tariff protection at those high levels would be able to raise their own prices even more than they had already done, making their business more profitable than another other in the Saint-Gobain international group, French owners of the Canadian operation. ”Any significant further price increase could hardly be justified by the need for protection from injury,” the CITT report said.

Union distrustful of U.S. importers
Nevertheless, the Brotherhood’s Lauzon says a six-month tariff holiday allowing the industry to re-adjust after the disruptive period of high tariffs would do more than just negatively impact their members. Lauzon is also concerned about potential deception by U.S. importers during the ‘tariff holiday’ period. “I am advised the remedy [tariff holiday] can be negated through the jiggery-pokery transfer pricing systems of multinational corporations,” he writes.

In the meantime, the Canadian Home Builders’ Association has reserved any public comments on the CITT recommendations for the time being, pending more detail regarding implementation details. In the meantime, the Western Canada Alliance of Wall and Ceiling Contractors reportedly both applauded the CITT’s recommendations and suggested the six-month tariff holiday be extended even longer, to allow more time for fixed-price contractors to adapt their pricing to the lower 43 per-cent level.

How did this story get from here to there?
Read our previous coverage…..

CITT final report on drywall tariffs released
Drywall tariffs may be reduced although remain: CITT preliminary report
Workers’ union decries “evils of dumping”
Dump the tariff!’ Empire strikes back!
Drywall costs soar 80% in Western Canada
How Western Canada’s drywall tariff is impacting prices

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