On September 6, the Canadian Border Services Agency invoked the Special Import Measures Act, making a preliminary determination of alleged dumping with respect to gypsum board (drywall) originating from the United States.
The CBSA imposed a provisional duty on drywall ranging from 105.2 per cent all the way up to 276.5 per cent, effective immediately on certain U.S. gypsum board for use in British Columbia, Alberta, Saskatchewan, Manitoba, Yukon and the Northwest Territories.
This was not the problematic drywall being imported from China to B.C. a few years ago, but the U.S. based drywall that has been used for years in Canadian homes with no incidents.
It appears as though the issue at hand was that the drywall from the United States was being sold at a price that Canadian manufacturers weren’t able to match. The inference could be that the alleged dumping was done as a measure to negatively impact the Canadian industry.
However, who is actually benefitting from these duties? Certainly not the consumer, who is having to pay thousands more for drywall in a new home. It’s also not the new home builder or renovator, who may be able to pass the costs on to the consumer, but may also be locked into a fixed-price contract prior to the duty being imposed.
This action may not prove to be beneficial to Canadian drywall manufacturers, either, as there is some question as to whether they even have the capacity to adequately supply the Western Canadian market. It certainly won’t do anything to placate a president-elect who espouses getting rid of the North American Free Trade Agreement (NAFTA).
Perhaps cooler heads have prevailed. On October 13, the federal Minister of Finance asked that the Canadian International Trade Tribunal consider whether the imposition of these duties is contrary to Canada’s economic, trade or commercial interests. They were also to analyze whether the imposition of said duties would reduce competition in that market or cause significant harm to consumers.
The Tribunal is to report back to Cabinet by January 4 after receiving numerous reports by an early December deadline.
Competition is difficult at the best of times. But whether it’s agriculture, manufacturing or oil and gas, Canada stands tall in the international trade market.
Housing affordability is also difficult. Let’s not unnecessarily make it even more difficult.
Mike Moore is president of the Manitoba Home Builders’ Association.
