We can build steel modules for LNG plants

Local industry is qualified and cost effective, write Eric Bohne and Ed Whalen.

There are wild claims flying about as proponents of the liquefied natural gas industry attempt to convince the federal and British Columbia governments that fabricated steel products for potential LNG plants here simply have to be built in China.

Not only is that untrue, it also represents a serious threat to our existing vibrant steel fabrication industry in B.C. — which supports 5,000 direct and thousands more indirect jobs, with annual revenues of $1.5 billion. And across Canada it’s a $5 billion industry with 40,000 jobs.

Unfortunately, both LNG Canada (which is considering a $40 billion LNG plant in Kitimat) and Woodfibre (with a possible $1.6 billion project in Squamish) claim that LNG steel modules simply cannot be produced in Canada.

So they want the federal government to exempt it from anti-dumping duties of up to 45.8 per cent on fabricated steel components from China.

But Canadian steel fabricators can build those modules — and create good jobs and investment here in B.C. And we will do the job right the first time, something that Chinese steel has repeatedly failed at.

First, the anti-dumping duties imposed last year were the result of a thorough investigation by the Canada Border Services Agency and the Canadian International Trade Tribunal, which found that fabricated industrial steel components from China, South Korea and Spain were being illegally “dumped” in Canada — sold here for below the market price in the exporting countries.

The CBSA also found that various levels of the Chinese government subsidized steel components.

That’s unfair and illegal competition, designed to deprive B.C. and Canadian steel fabrication companies and workers of their jobs.

Fortunately, Canada’s three major political parties agree — illegally dumped Chinese steel is a threat.

“We are very concerned about the actions taken by China and the dumping of steel and aluminum on the global market,” Liberal Prime Minister Justin Trudeau said last month.

After a tour of Burnaby’s George Third and Son steel fabrication plant late last month New Democratic Party leader Jagmeet Singh agreed, stating: “We’ve got a strong and vibrant industry ... that needs to be protected.”

And opposition Conservative leader Andrew Scheer said last fall: “In the case of China ... you have a lot of government subsidies artificially lowering the costs potentially keeping Canadian companies from even starting up.”

Canada isn’t alone: last month the European Commission extended anti-dumping duties of 48 to 72 per cent on Chinese steel products by another five years after an investigation found continued unfair trade practices.

Let’s clear up other LNG claims. They argue that the 45.8 per cent dumping duties will make their projects unaffordable.

In fact, the 45.8 per cent is only the highest margin of dumping duties imposed on companies that refused to co-operate with the CBSA investigation; three co-operative exporters have dumping rates of just 2.4 per cent or less.

Canada can’t build steel LNG modules? Incorrect. Large and very complex steel modules have and can be assembled in Canada’s east coast — and our west coast can do the same, given our track record with some of the best and most complex industrial facilities in the world.

Think otherwise? Just look at the new Port Mann Bridge, the Rogers Arena or the Richmond Olympic Speed Skating Oval, which all used steel fabricated in B.C. and Canada.

What’s more, the fabricated steel needed for the LNG Canada project represents just half a year’s existing Canadian capacity — it is extremely do-able.

And fabricated steel represents just 1.6 per cent of the total project cost — any claims Canadian steel would cost extra “billions” is simply wrong.

Let’s be clear: the LNG industry requests for remissions and exemptions from duties and tariffs on Chinese steel products isn’t about making their projects go or not go — it’s about maximizing profits by unfairly using illegally dumped and subsidized foreign fabricated steel.

B.C. and Canadian steel fabricators and workers would welcome the LNG industry creating new projects here — but not at the cost of our own businesses and jobs.