Feds’ lifting steel safeguards a threat, sector says

Ottawa looking at other ways to prevent dumping of cheap imports into Canada

Steelmakers in Hamilton and across the country will be devastated by a deluge of cheap imports because of a federal government decision to abandon trade safeguards, a steel producer spokesperson says.

“Without safeguards, there will be significant negative impacts on the steel industry in Canada, and will lead to the loss of thousands of jobs, put $1.1 billion in planned investments at risk, and see the erosion of our competitiveness,” said Catherine Cobden, president of the Canadian Steel Producers Association.

There is an estimated 450 million tonnes of excess capacity of steel in the world “looking for a home,” said Cobden, and lifting the safeguards will inevitably lead to more of that steel ending up in Canada.

The safeguards allow imports of different types of steel up to historical levels. But once those levels are exceeded trade penalties come into play.

In October, the federal government put the protective measures in place on seven varieties of steel on an interim basis while the issue was reviewed by the Canadian International Trade Tribunal.

This month, the tribunal decided the safeguards were justifiable in only two types of steel — steel plate and stainless steel — neither of which are generally produced by Hamilton’s two main steelmakers, Stelco and ArcelorMittal Dofasco.

Finance Minister Bill Morneau could have used statutory authority to ignore the finding and continue on with safeguards on all seven, but he decided to let the CITT decision stand and explore other ways to protect the industry.

This meant safeguards on the five varieties of steel — hot-rolled sheet, prepainted steel, concrete reinforcing bar, energy tubular products, and wire rod — were lifted as of Sunday.

Bob Bratina, who co-chairs the Canadian All-Party Steel Caucus, said “it’s not as simple as it seems.”

The government, he said, feels that defying the CITT decision would lead to World Trade Organization reprisals and lawsuits from Canadian companies that want to purchase the foreign steel.

So the government and industry, he said, are “considering other options that would have relatively the same effect as the safeguards,” said Bratina, who represents the riding of Hamilton East-Stoney Creek as an MP.

Cobden contends that numerous steel-producing nations that fall within WTO jurisdiction have safeguard trade measures in place in their respective countries “so we are trying to figure out why everyone else can do it and we can’t.”

“Canada’s failure to do so means we are more dangerously trade exposed than ever before ... Canada’s steel industry is disappointed with the government’s announcement to not take decisive action to put safeguards in place for all seven products,” she said.

United Steelworkers union National Director Ken Neumann agreed with the producers’ association that thousands of jobs are at risk in the steel sector from a surge in imports.

“Cargo ships are now undoubtedly bound for Canada to dump massive amounts of cheap, subsidized foreign steel into our market, threatening workers and producers across the country,” he said.