December 26, 2022

276% Drywall Tariff Rule Affects Western Canada Consumers, Builders

Trade Tribunal To Rule On 276% Drywall Tariff Affecting Western Canada Consumers, Builders

Anti-dumping duties on U.S. drywall imports into Western Canada have hiked prices for the building product.

But have also resulted in new manufacturing jobs, says the company whose complaint prompted the trade tariffs.

CertainTeed Gypsum Canada has added about 30 employees since duties began in September at its drywall plants in Vancouver, Calgary and Winnipeg to boost production, said spokesman Mike Loughery in an email.

“Shifts have been added and production has been increased to respond to market demand,” he wrote, adding he couldn’t comment for competitive reasons on how much output has been increased.

The Canadian International Trade Tribunal is scheduled to rule Wednesday on whether imports of drywall or gypsum board from the United States have injured the western Canadian industry, with reasons for the decision to follow 15 days later.

If the answer is yes, preliminary duties of up to 276 per cent on U.S. imports into Canada for use in B.C., Alberta, Saskatchewan, Manitoba and the Yukon and Northwest Territories could be made permanent.

Kevin Sheptycki, assistant business manager with the Boilermakers union that represents CertainTeed workers, said the jobs prove the duties are working and must be continued.

“For our members … and for CertainTeed to be able to continue to operate in the market and make a profit at a fair market price, we need the duties to stay in place.”

But Neal Pollock, spokesman for the Western Canada Alliance of Wall and Ceiling Contractors, said the duties are causing significant harm to the construction industry and should be removed.

He said contractors report increases in drywall prices of between 30 per cent in Alberta and 55 per cent in B.C., costs they have had to absorb under contracts signed before the duties began.

“The magnitude of the harm is significant,” said Pollock, president of industrial contractor TDL Drywall in Calgary.

“We need zero duties … and we also need some kind of a government-mandated refund for the duties that have already been paid.”

The preliminary drywall levy was imposed by the Canada Border Services Agency after it found that U.S. products are being “dumped” in Canada — meaning they are being sold for less than in their home markets.

Mississauga, Ont.-based CertainTeed, owned by a French corporation, is the only remaining manufacturer of drywall in Western Canada after two plants owned by Atlanta-based Georgia-Pacific in Alberta and B.C. were closed in 2009 and 2011. Georgia-Pacific is on record as opposing the duties on its U.S.-made products.

The tribunal held a nine-day hearing in Edmonton in early December to consider the matter.

The CITT is also expected Wednesday to issue a separate report into whether the duties are harming consumers, with findings and recommendations on remedies to follow.

Such reports are typically researched and written after a finding of injury, but the CITT employed a rare parallel process at the request of Finance Minister Bill Morneau.

He asked in October for an accelerated review over concerns the duties were causing higher drywall prices that are hurting consumers, especially those involved in rebuilding Fort McMurray, Alta., after last spring’s devastating wildfire.

Finance spokesman Jack Aubry said in an email the government will consider the CITT recommendations before deciding on a course of action, without saying what options are being considered.

CertainTeed argued in a written submission to the tribunal that the drywall duties would increase the cost of a typical new single family home by less than one per cent.

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