CITT says barriers must remain on dumped US drywall imports

US-made product has injured the Canadian industry; floor price with permanent variable duties established.

January 5, 2017   by Dan Healing

CALGARY – Higher construction costs across Western Canada, including in fire-ravaged Fort McMurray, Alta., stand to continue under a ruling by the Canadian International Trade Tribunal (CITT).

In its Jan. 4 decision, the tribunal found that American-made drywall dumped at less than normal prices into Western Canada over the past few years have injured the Canadian industry.

The ruling means that preliminary duties of up to 276% imposed by the Canada Border Services Agency (CBSA) on imports from the US last September will end, but will be replaced by permanent variable duties on any imports that fall below a floor price established last month.

“In terms of competitiveness, of course we want Canada to be at the top of its ability and, if this assists that, that would be fine, except that we get hurt in the process,” said Fort McMurray Mayor Melissa Blake.

“It means that people who have lost their homes or had extensive damage that need to do a replacement on things like drywall will be suffering with a couple of thousand extra dollars (in costs).”

She repeated her call for the federal government to offer grants to offset the impact of the drywall duties, noting that low oil prices have hurt the Fort McMurray economy and resulted in many layoffs in the city.

The duties were imposed after a dumping complaint by French-owned CertainTeed Gypsum Canada, the last drywall manufacturer in Western Canada with plants in Vancouver, Calgary and Winnipeg, and at two gypsum quarries, one in BC and one in Manitoba.

The company didn’t respond to a request for comment, but Canadian manager Matt Walker has said previously that its plants and quarries could be closed, at the cost of 200 jobs, if the dumping of US products for as little as half of the price south of the border continues.

It says it has hired 30 new employees since the duties were imposed.

Neal Pollock, spokesman for the Western Canada Alliance of Wall and Ceiling Contractors, said he is disappointed in the tribunal’s decision, which he said leaves his members as a captive market for CertainTeed.

He said contractors report increases in drywall prices of between 30% in Alberta and 55% in BC – costs they have had to absorb under contracts signed before the duties began.

David Lessard, vice-president of DCL Drywall of Edmonton, said his company was paying $286 per thousand square feet for half-inch-thick drywall before duties were imposed. He said now his company is paying $370 for the same product from the same supplier. A four-by-12-foot sheet that would have cost $13.73, therefore, now costs $17.76 – a difference of $4.03.

In a separate report also released Jan. 4, the tribunal found that preliminary duties have been “substantially reducing competition” in Western Canada to the detriment of Canada’s economic interests and consumers of drywall.

It recommends that the government consider refunding some of the duties paid so far to alleviate short-term pain for contractors and consumers, and that it consider a special remission of duties to residents of Fort McMurray.

Finance Minister Bill Morneau requested the accelerated report in October out of concern for the impact of higher prices on consumers, particularly in Fort McMurray, which lost 1,800 single-family homes and dozens of other structures in last spring’s devastating wildfire.

Department spokesman Jack Aubry said last week the minister will review the tribunal’s decision reasons and recommendations before determining its next steps. He wouldn’t say what options are being considered.

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