Solar module makers say duties necessary to survive Chinese imports
Manufacturers are calling for Canada to follow the EU and the US by imposing tariffs on Chinese imports that allegedly violate international trading rules.
TORONTO — A band of small Canadian solar panel manufacturers is banking on an upcoming trade decision in hopes of surviving an onslaught of low-priced Chinese imports.
The four Ontario companies say they hope a decision next week by Canada’s International Trade Tribunal will uphold duties on imports they say are priced below the Chinese companies’ actual cost of production.
“The best outcome for Ontario, for the entire solar community, is that there’s a level playing field – whatever that is,” says Geoff Atkins, who’s in charge of business development for Silfab Solar in Mississauga.
“Obviously, if there are tariffs imposed that balance that playing field, that’s certainly going to strengthen our position.”
The counter argument: anti-dumping tariffs on Chinese imports would keep Canadian prices higher and could make it more difficult to eliminate the gap between the cost of producing solar power and the price of buying electricity off the power grid.
But Atkins and others in Canada’s young solar manufacturing sector say Canada should follow the lead of the European Union and US, which have already imposed tariffs on Chinese imports that allegedly violate international trading rules.
Most of the Canadian makers of photovoltaic modules, which are used in solar panels that convert the sun’s rays into electricity, were created in Ontario within the last few years. They arrived as Ontario’s provincial government was working to stimulate the adoption of wind and solar power by paying above-market prices for electricity created from those sources.
In the third phase of Ontario’s feed-in-tariff program, or FIT 3.0, the domestic-content requirements were eliminated – removing one of the incentives for buying from Canadian producers and opening the market to imports from China.
“When you have a country like China with three times more capacity than the domestic market, . . . the risk of being absolutely eaten up is very, very high,” says Martin Pochtaruk, president of Heliene Inc. in Sault Ste. Marie, Ont., which employs more than 50 people.
Still, Pochtaruk says Heliene can survive if Canadian solar module prices are on par with those in the United States _ as they have been since Canada imposed temporary duties on Chinese imports in March following a complaint filed in late 2014 in defence of Silfab, Heliene, Solgate and Eclipsall, which was acquired earlier this year by Strathcona Energy Group.
An investigation by Canada Border Services Agency alleged in early June that about half a dozen Chinese companies, and a China-based subsidiary of Canadian Solar International, were benefiting to varying degrees from government subsidies – in contravention of World Trade Organization agreements.
“We’re obviously pleased with their findings,” says Silfab’s Atkins. “We believe it mimics what we experienced in the marketplace.”
Canadian Solar International, a Nasdaq-listed company based in Guelph, Ont., declined to comment prior to a report from the trade tribunal, to be released by July 3, that will determine whether the CBSA can continue to charge provisional duties set in March. The law firm acting for most of the Chinese companies didn’t respond to requests for comment.
Atkins also wouldn’t speculate on what the tribunal would decide but said the future of Silfab’s factory in Mississauga, which employs more than 125 people, could be in doubt if Canada doesn’t follow the US lead in imposing duties on the imports.
“We would be forced to look at other markets and, by being forced to look at other markets, we would likely be forced to evaluate where we’re situated,” Atkins said.
© 2015 The Canadian Press