A new trade dispute has broken out between Canada and the US that threatens to raise prices in Canada’s already overheated housing markets, said the Globe and Mail Thursday.
The Canada Border Services Agency imposed a provisional tariff as high as 277 per cent on US drywall imports in September after ruling that manufacturers were dumping the product, or selling it below the price in their home market, undercutting local suppliers.
The tariff has raised the price of drywall, or gypsum board as it’s also called, by as much as 30 per cent and is causing “chaos” and delays as contractors scramble for alternative sources. Some builders say the tariff could add as much as $13,000 to the cost of a new home, which would amount to a $2.6-billion increase to the roughly 200,000 homes built in Canada each year.
Canada – US Trade: Gypsum
Canada Border Services, which will issue a final report on the dumping on December 5, and the Office of the US Trade Representative declined to comment on the tariff, said the Globe and Mail Thursday. Finance Minister Bill Morneau has asked the Canadian International Trade Tribunal to fast-track a study on the impact of the duties. The study is due by January 4, the same day the tribunal issues a final ruling on the tariff. Morneau has final say on what duties are applied.
“Ensuring fair trade practices is important, but delays in reconstruction are a serious concern,” Morneau said in the House of Commons last month. “That is why I have asked the Canadian International Trade Tribunal to investigate whether or not tariffs are in the public interest immediately, instead of after its final determination is made.”
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It’s certainly interesting this has come in amid the lumber-trade dispute. This is the issue our entire industry is focusing on now. It has the potential to affect billions of dollars of building contracts.”
– Bob Finnigan, president of the Canadian Home Builders’ Association and a principal of real estate developer Heron Group of Companies to Bloomberg News November 8
CANADIAN GYPSUM WHOLESALERS
Wholesalers including Mississauga, ON-based CGC Inc have already increased their prices for certain panel products by as much as 30 per cent, documents sent to contractors show. Canada imported about $277-million worth of lime and gypsum products last year, about 97 per cent of it from US manufacturers, according to Statistics Canada.
The tariff was imposed this year after Canada’s largest drywall maker, CertainTeed Gypsum Canada Inc, filed a complaint to border services in April that they were being injured due to US dumping. The department launched an investigation with an initial finding that the foreign firms were, indeed, dumping.
Matt Walker, general manager of Mississauga-based CertainTeed Gypsum Canada, said to Globe and Mail in an e-mail statement through an external spokesperson that US companies have been selling product in Canada at as much as half the price they sell it south of the border.
CertainTeed Gypsum Canada is a unit of Malvern, Pennsylvania-based CertainTeed Corp., which in turn is a subsidiary of France’s Cie de Saint-Gobain. Walker said in September that US imports account for more than half the Western market in Canada.