Why we fight U.S. ‘dumping’

Later this month, a Canadian trade tribunal hearing will take place in Edmonton on the normally uncontroversial subject of drywall. This could have a very big impact on the future of Canadian jobs and manufacturing. At stake is whether Canada stands firm against U.S. dumping and unfair trade practices.

Cases of U.S. dumping into Canada are not common. The upcoming hearing will make a final determination on an initial determination by the Canada Border Services Agency (CBSA) that there has been injurious dumping. This could establish a precedent for future U.S. export trade to Canada.

The subject matter, drywall, on the face of it could not seem more mundane, but emotions are running high. Western Canadian contractors, accustomed to cheap U.S. drywall, are upset at the CBSA’s imposition of a provisional duty on the imports. The duty is intended to level the market playing field and has raised drywall prices in Western Canada. The tribunal will have to weigh the concerns of contractors against what it should see as a clear case of dumping and unfair trade. The integrity of Canada’s trade remedy process is at stake.

How did drywall become the focus of a heated North America trade dispute? Here’s some quick background context.

For over 60 years, my company, CertainTeed Gypsum Canada (CTG Canada), has been manufacturing drywall in Western Canada, with plants in Vancouver, Calgary and Winnipeg, and gypsum mines in B.C. and Manitoba. These are the last remaining drywall manufacturing plants in the West.

In April, CTG Canada filed a complaint in accordance with the Canadian government’s formal legal trade remedy process to counter foreign dumping of any kind. Canadian trade authorities define dumping as when goods are imported at “lower than the selling price of comparable goods in the country of export or when goods are sold to Canada at unprofitable prices.” This certainly is the case with recent U.S. drywall imports.

U.S. manufacturers have or causing material injury to Canada’s domestic industry. They imposed new and very high duties on U.S. drywall imports to Western Canada, ranging from 100 to 277 per cent. The size of the duties was intended to correspond to the significance of the price difference and it is worth noting that these are some of the highest duties ever imposed in a dumping case in Canada.

Despite these rulings, Ottawa made an unprecedented intervention into the normal trade-remedy process after substantial lobbying by the Western Canadian construction industry, but without consulting other parties. The Department of Finance that the provisional duty level should be reduced to mitigate the impact for Canadian contractors. We also formally requested that Fort McMurray, still rebuilding from this year’s massive fire, be exempted from any duties until the end of 2018.

Some have claimed the duties are having a “massive” impact on the price of construction in Canada. In fact the duty impact amounts to a fraction of a per cent increase in the average price of a new residential unit in Western Canada.

Meanwhile, economies in Alberta, Saskatchewan and Manitoba are struggling through tough times after the collapse in oil prices, with many businesses downsizing and some going bankrupt. We can ill afford for another domestic manufacturer to shut down its business due to unfair trade.

Without a firm federal response against U.S. dumping, it is very likely that Western Canada will lose its last remaining domestic drywall plants. Western Canadians will then be reliant on foreign drywall imports for construction. Losing these plants would harm domestic competition, customer choice and, eventually, prices.

Not standing firm against U.S. drywall dumping today will encourage further dumping in other industries tomorrow. That is why it is critical that we stand on guard for free and fair trade.